GEOSTRATEGIC PULSE

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Nr.198 Year IX/6 – 20 SEPTEMBER 2015 52,30 RON

Motto:“Opinions are free, but not mandatory” I. L. Caragiale

Bilingual-bimonthly publication of political analysis

A Spy for Eternity

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(in alphabetical order)

Mihaiu M RG RIT Political-military analyst, Project Direc-tor at EURISC Foundation- The Euro-pean Institute for Risk, Security and

Communication Management Refined political-military analyst, author of several studies and articles published in the specialized and civilian media concerning the military, the strategic

research, the national security strategy, the secret services and democracy, NATO Integration, etc.

Simion COSTEA PhD, Senior Lecturer – Deputy Dean of “Petru Maior” State University in Târgu

Mure Doctor in History, “Jean Monnet Professor” of Euro-pean Integration acknowledged by the EU, awarded with the Romanian Academy Prize for his work as historian of

European Integration. Chief Editor of “L’Europe unie” magazine (Paris), author and coauthor of numerous books, studies and articles.

Dan DUNGACIU PhD, Director - Institute of Political

Science and International Relations of the Romanian Academy

Master in Political Sci-ences, PhD in Sociology, with numerous training courses abroad at prestig-ious institutions in Great Britain, USA, Austria,

Greece, Italy. Researcher at the Insti-tute of Political Science and Interna-tional Relations of the Romanian Academy. Former counselor of Molda-vian President. Author and coauthor of numerous articles, studies and books.

Sergiu MEDAR Presidential Advisor for National Security at the Romanian Presidency (2006-2008), university professor, author of numerous studies

and articles on issues of national security, of the book “Defense Diplomacy” and coordinator of “Military Intelligence within the Current Security Context” volume – 2006. He is now dealing with aspects of “Corporate Security Management”

Vasile PU CA PhD Professor at Babe Bolyai Univer-

sity, Cluj-Napoca He teaches contemporary history, inter-national relations and negotiations. He worked as a diplomat in New York and Washington D.C., and then was a

member of the Govern-ment and chief negotiator for the Romanian member-ship to the European Un-ion, Chief of the European Affairs Department in the Romanian Government, member of the parliament. He is a consultant for sev-

eral Romanian and foreign companies, and the author of numerous books. He is a board member in many interna-tional expert organizations, he teaches at prestigious institutions of superior education abroad.

Vladimir SOCOR Senior fellow at The Jamestown Foundation and

Eurasia Daily Monitor Political analyst on East-European affairs, especially of the former Soviet republics and the CIS, specialized in political issues, ethnic conflicts and energy resources. Senior fellow at the Institute for Advanced Strategic

and Political Studies in Washington, author of numerous articles and works published in Wall Street Journal, and other prestigious publications. He is frequently a guest lecturer at Harvard University – National Security program at Kennedy School of Government and a member of the Euro-Atlantic Security Study Group.

Dieter FARWICK Senior Vice-President World Secu-

rity Network Foundation Brigadier General (ret), former advisor to Man-fred Worner, former Force Commander and Chief of Operations at NATO HQ and Director of German Federal

Armed Forces Intelligence Office. He is a member of the International Insti-tute for Strategic Studies (IISS), Lon-don. He is author of six books on geo-politics and security, and of numerous other articles and assessments.

Anis. H. BAJREKTAREVI Prof. (FH) Dr. Anis Bajrektarevic, Acting Deputy Director of Studies EXPORT EU-ASEAN-NAFTA Professor and Chairperson International Law and Global Political Studies University of Applied Sciences IMC-Krems

AUSTRIA Former MFA official and career diplomat (early ‘90) of BH, is a member of IFIMES International Institute, author of dozen presentations, speeches, seminars, research colloquiums

as vell a numerous public events (round tables, study trips, etc).

Adrian CONSTANTINESCU PhD in international economy and Master in public international law

Scientific researcher and head of department within the World Economy Institu-te, permanent deputy representative and chief negotiator of Romania to GATT/OMC, various other positions in diplomacy up to that of Ambassador in the

Kingdom of Sweden and the Republic of Macedonia. Author and co-author of some 20 books.

Murray HUNTER Associate Professor at University

Malaysia Perlis Entrepreneur, consul-tant, professor and researcher involved in the Asia - Pacific busi-ness for the last 30 years. He is an editorial member to nine

international academic journals and member of the advisory council of “Diplomatic Insight”, “4th Media” as well as of “Addelton Academic Publishers” in New York.

Dorian VL DEANU Ist degree senior researcher within the Romanian Academy. Associate university professor. Degree in economics and automation and computers, Doctor of Economics, author of over 100 works in macroeconomics. He developed the first strategy on public services at a national level. Author, co-author and coordinator of the first generation of legislation made by the

Romanian Government for public services (2002-2004).

Marian RIZEA Counter-intelligence officer on economics (Reserve Colonel), is Professor, Ph.D, Eng., at the Ecological University of Bucharest and Fellow Professor at the Oil and Gas University of Ploiesti, member of DIS-CRIFST of the Romanian Academy, expert in the security of classified intelligence, critical energy infrastructure and environment protection, risk

analyses and geopolitical studies. He is the author/co-author of 17 books and more than 250 articles published in the national and international specialized magazines.

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4 President Jean-Claude Juncker’s paternal slap on the cheek of Prime-Minister Victor Orban or about the different standards within the European Union - Corneliu PIVARIU

5 America from heavens to earth - Vasile DÂNCU

6 “Migrating Spring” or from “Marshall Plan” to “Merkel Plan” - Dumitru CHICAN

8 Russia spurns Ukrainian offer of constitutional status for Donetsk-Luhansk - Vladimir SOCOR 9 Simultaneous regional head elections in Indonesia 2015 - Igor DIRGANTARA 16 Caspian Basin the cose-

quences of the Caspian Sum-mit’s foreign military ban - Megan MUNOZ

19 CONSIDERATION - Who will take advantage of the torn and destroyed Syria? - Corneliu PIVARIU 20 Iraq: between the robbed state and the impossibility of change - Reza SHAHRESTANI 21 Moscow: the new political mekka of the Middle East? - Dumitru CHICAN

23 “The new Middle East” game: who wins and who loses? - Dinu COSTESCU 24 Syria: between “the plea” of

Staffan Di Mistura and the cri-teria of Bashar Al- Assad - Lamya FOUAD

29 BRICS Development Bank - Emilian M. DOBRESCU

34 The financial weapon - Paul S NDULESCU

41 Assault Rifle AK - 12 (Russia) - Cornel VAIDA

42 A Spy for Eternity: Frank Wisner.A sad espionage story of a man who thought he could change the word Author: George Cristian Maior Presented by Cornel VAIDA

CONTENT Geostrategic Pulse, No 198, Sunday 20 September 2015

II. The Current Geostrategic World-wide Outlook

III.The Main Factors of the Middle East Situation

V. The Secret Services of the 21st Century and Security

Issues

VI. Military Technology and Equipments, New Weapon

Devices

VII. Leading Articles, Studies and New Analyses

I. EDITORIAL

Today we learn that America is half myth and half reality. She has not lost the ability, yet, to push people to dream. She still is for many poor peo-ple across the world a land of promise.

As one of the largest democratic coun-tries, Indonesia will execute for the first time the regional head election simultaneously in the first wave. Indo-nesia should be recorded in the world democratic history because there will be 269 regions consisting of 9 prov-inces, 36 cities and 224 districts simul-taneously choose the regional head. Of course, there will be many chal-

The landscape of today's Arab - Is-lamic Middle East remind us, in the metaphorical comparison register, of the Aula Magna of the parliaments of failed states (and, not infrequently, of those states with old traditions of con-solidated democracy) where, for solv-ing divergent issues, the interpella-tions are replaced with invectives, blows and other handy blunt argu-ments …..

After several weeks of extensive popular demonstrations against chronic corruption and escalating de-terioration of the living standards, and demonstrations swept central and southern part of the country and still continue today, on August 9, the PM of the Iraqi government, Heydar Ab-badi announced – for the first time in 2003, when the American invasion “liberated” the country from under the dictatorship of the Baath regime of Saddam Hussein, a plan of reforms meant to “permanently cure Iraq” of the disease of widespread corruption and to reform from scratch the state institutions and the stiff paradigms according to which they function.

IV. Economic Horizon

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www.ingepo.ro Geostrategic Pulse, No 198, Sunday 20 September 2015

President Jean-Claude Juncker’s paternal slap on the cheek of Prime-Minister Victor Orban or about the different standards within the European Union

Corneliu PIVARIU

During one of the recent high level summits of the European Union, numerous televi-sions broadcasted and replayed the scene in which President Jean-Claude Junker friendly slapped the Hungarian Prime-Minister Victor Orban on his cheek, an eloquent response in images for this year’s (and not only this year’s) extended criticism of numerous European figures to the current Hungarian leadership. The meaning of the gesture would be “If you make a mistake, your father will forgive you because I have got a soft spot for you”.

However, the problem of the migrants/immigrants/refugees (??!!) from the Middle East and Asia strongly fell back and even though Brussels had debated it in May, it made no progress because of the well-known bureaucracy and complicated processes that impede promptitude in emergency situations. On 9 September, Jean-Claude Junker, the President of the European Commission, gave his first State of the European Union address in the European Parliament, though the media generally presented this speech as referring to the migrants’ crisis (the terms are randomly used, once migrants, then immigrants and then refugees, emphasizing even more the disorder of the approaches – since each of the terms refers to a specific situation and juridical approach) in the European Union. Generally, the address is valuable, but un-fortunately, the EU abounds in such speeches and lacks efficient action that would implement the good ideas. The same happened at the EU Justice and Home Affairs Council held on 14 September where the deci-sion made was…not to decide anything. I do not know exactly why, but considering this history, the reunion of the heads of state and government scheduled for the beginning of October on the same topic will end with similar results. Meanwhile, the hundreds of thousand of people that left from the Arab world and Asia and arrived in countries like Greece, Italy, Spain…are being used as means towards the achievement of certain political objectives both inside and outside the European Union. The high-rating media fully does its job and amplifies the phenomenon and hyperbolizes the situation, without considering the fact that the waves of peo-ple crossing the borders of the EU are in fact smaller than the ones that followed the same trend in 2003 and 2012 (see the Eurostat graphs – Commission services; EUROPOL 2013), when the total number of migration exceeded 1.5 million people. This way, another problem – migration - is being artificially added to the prob-lems of the Union (which is quite problematic in terms of unity), lacking any pragmatic and professional ap-proach. President Junker continues to support mandatory refugee quotas for all the member states, breaking an elementary principle of good leadership – full equality in rights and obligations for all the members of an organization, while numerous countries like the Visegrad members and Romania support the voluntary quo-tas. In other words, to refer only about Romania, we are to obey Brussels’ decisions, but when we comply with the established criteria (Schengen), we are not accepted. There is of course freedom of movement in the European Union, but there were also numerous Romanian gypsies brought back to Romania by plane. Euro-pean solidarity did not exist for them; this is an issue that Romania needs to solve, whereas the European solidarity that Brussels desires applies only to those coming from the Middle East. As for the mandatory quotas, I notice that at least one of the “accounting” criteria used to set the number of migrants for each country was the total Gross Domestic Product (GDP), even though the GDP per capita is a much more elo-quent criterion. Moreover, the overall sum included the numbers of people from countries where migrants have already arrived (mainly Greece, Italy, Hungary). The first reactions in certain countries are surprising – including in Germany – in relation with migrants and the numbers presented, there was public sympathy (leaving aside the real opinion of the entire popula-tion), but the enthusiasm faded away even in Germany after the first wave of approximately 15,000 people arrived in Munich and met problems with accommodation. Democracy is first of all about respecting a set of norms and principles and breaking them is not al-lowed regardless of the number of people. This is what Chancellor Merkel forgot to mention before stating that Germany would receive 800,000 refugees this year. Saudi Arabia offered to build 200 mosques in Ger-many instead of receiving some of the refugees. I will not mention here the situation of Christians in the Mid-dle East. All these refugees (?!) – 72% of which are young men, well dressed, with modern phones and carry-ing small bags as if being on a trip, rested and in a good mood – should clearly understand that they must respect the rules and laws of the countries that they go to. Generally the percentage of young men in a mi-gration is about 22%, the rest being women, old people and children. We did not ask them to come, they wanted it. And those who want to come into my house must respect my rules or go back. An extended analy-sis in the next issue.

EDITORIAL

Motto: “Opinions are free, but not mandatory”—I.L.Caragiale

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Vasile DÂNCU I was 13 or 14 when I first discovered that sociology is a real thing while I was reading Sinteza, a magazine which was

published by the US Embassy in Romania and which was sent to my father by his friends in Bucharest. It was like a window towards the light for me as I read every issue for several times, line by line, word by word. I found there a review on a sociology book which was making the analysis of subjectivity and its role in the construction of small communities. It marked my entire life and even though the commu-nists were about to extinguish sociology, I was not discouraged, and I took the road to a profession which was almost unknown and forbidden at that time. Over almost four decades, seeking a name for the magazine you’re reading at this moment, I re-membered the already gone name of that window of light towards freedom, which the US was sending us back then to save us from asphyxiation. We wanted, in a symbolic manner, to thank America for that ges-ture by reviving a name which for me personally was destiny and for many other Romanians it represented a breath of fresh air. Today we learn that America is half myth and half

reality. She has not lost the ability, yet, to push peo-ple to dream. She still is for many poor people across the world a land of promise. The election of Barack Obama as a child of the “American dream” meant a great semiotic operation, a battle from a great cogni-tive war in which America wanted to show that the American myth is real and it still gives rise to reality. The American Dream is ethic in its essence, it started somewhere in the sixteenth century and spoke about an ideal land where people coming from a Europe too tired of stratification and stagnation could find freedom and equal opportunities. Millions of people have believed in this promise and through migration they’ve founded one of the most powerful nations in our world. Even if a Nobel laureate in eco-nomics has recently said that “reality never reached the height of the American dream” the world still dreams about the hot fire which surrounds this myth. The surveys we conduct as sociologists show that the public perception on America is one of a strong state, a significant economic power, and mainly a military one on which many countries are counting. In the following pages of this issue you’ll certainly find the positive image of a great power, which intimi-

dates, generates respect and fear but also creates expectations. But beyond the positive data, the curious sociologist

must understand the data which define majorities in order to analyze the minor trends which may tomor-row become the major trend, growing slow and steady like the bamboo shoot which in just a few days becomes a sprout and then a full-fledged tree. Some of these trends will not develop, but an expla-nation which is short of minority values is incomplete. In other words, we also sought the empty side of the glass, not just the full one which has been provided by the percentages of over 50% that define a major-ity. Beside the large numbers of sympathy for Amer-ica of our dreams, the population of Romania some-how worn out by the continuous expectance to see the Americans coming, their investments or visas, apparently gives signs of a slight alienation from NATO partnership, the American friend and ally. Almost 20% of the Romanians don’t know who is

the president of the US, 97% of the Romanians had never visited the Promised Land overseas, and 14% are not even interested in overseas tourism. Asked if they are interested in what happens in the US, 56% of the Romanians say they’re not. While 27% of Ro-manians say that it does no good that the US is inter-fering in Romania’s internal political business, 29% believe that the Americans are wrong when they re-fuse to grant access visas for Romanian people and 56% cannot spontaneously name an American brand. But worse is that the representatives of the young generation, 20%, believe that the US is a monarchy and only 29% feel interested in what hap-pens in the US, compared to 41% representing the population over 35 years. Only 16% of Romanians would settle down in the USA if they would have the opportunity, 37% of the Romanians cannot indicate the name of an American personality and 61% are unable to give more than two names to this question. The way Americans are seen is not fabricated any-

more by movies and Hollywood, as it was before, the main source of information for the Romanians is now the Internet and the Internet does not create myths, it rather breaks those myths produced by traditional means. Without American cinema with its power to create positive myths and stereotypes, America loses an important image capital. But the most inter-esting data come into our sight if we analyze how Romanians perceive or understand the American

Geostrategic Pulse, No 198, Sunday 20 September 2015 www.ingepo.ro

The Current Geostrategic World-wide Outlook

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dream. Nearly half of the respondents, that is 49%, do not understand any of this phrase and only 7% understand the American dream in terms of equal opportunities and meritocratic society, and 6% only in terms of freedom, plus 1% who are mentioning democracy as a fundamental meaning. As for the rest, 4% say that the American dream is illusion, falsehood or propaganda, while the other see in it wealth or wellbeing far from its ethical essence. More important is the answer to the question re-

garding the model of developed country admired by most Romanians, the US is in second place, after Germany. For the Romanians, America is no longer that model which cannot be dethroned. Even if Ger-many didn’t provide ideologies and aspirational mod-els, but only a working model, of development and seriousness, the American Dream seems to fade against pragmatism. The Romanians want to be pro-tected by the Americans, but they tend to admire the Germans much more. In the first decade of the new millennium, the

Americans came up with the idea to conquer the world through seduction, through an old, but also new version of the American Dream. As long as the Americans were much farther away from us, the American dream was alive and was giving us excite-ment. America was a land of hope, a model, a coun-try which seemed to come down from Heavens. When the Americans reached us after 50 years of waiting, apparently the Earthly America was not de-livering the energy of the dream as it did once. Even if America hears from any of its Presidents that it is the greatest nation in the world, the Internet shows us a nation who has lost the exceptionality of the model of social mobility and of equal opportunities, where the school is no longer the social equalizer as it was before and where the social inequalities grow. America we see today beyond happy ending movies is the Earthly America and it started to lose the power of seduction, as she is no longer capable to reach the height of the American dream. While we are at that moment in time when we’re

celebrating 135 years of diplomatic relations be-tween Romania and the US, America is stronger than ever from an economic and military point of

view, but the American dream may need a re-fresh. Not because the loss of US’ soft power and smart power can affect the force of an alli-ance which also guarantees our security, but mostly for the world’s small nations and even for a Europe which got tired of its own project. An American Dream which enters in dissolution may mean the end of a world utopia and the entrance of history in an age of cynicism or absence of hope.

Ambassador Professor Dumitru

CHICAN When, alarmed by the rising tide of mi-grants coming from the existing anarchy in the Middle East, Africa, Afghanistan, and the Indian subcontinent, the au-

thorities Budapest decided to build a barbed wire dam along its border with the “outside world”- in this case against Serbia - to prevent the entry of the co-horts of migrants into its territory, Paris rushed to noisily criticize this measure which it termed “inhumane” and inapplicable to animals, not to men-tion human beings. When Slovakia declared its avail-ability to receive 200 expatriate Syrians in its terri-tory, provided that they are Christians, the an-nouncement was met with the same acid criticism and labeling with terms such as “racism” and “confessional segregation, while Chancellor Angela Merkel did not hide her deep discontent and indigna-tion and asked the Member States of the European Union to participate in the fair distribution of the bur-dens arising from the migration phenomenon, as the German politicians addressed the Cabinet in London threatening warnings to Britain’s refusal to take a consistent number of migrants stranded at the bor-ders between European states. The European Union offered a landscape of divi-

sion, discord and misunderstandings as regards the issue of the thousands of people who faced death at sea or on the unfamiliar and dangerous roads of ex-ile, banished from their homes and their countries by the scourge of war, poverty and the hope of survival and the possibility of a better life for themselves and their children. The European public opinion puts pressure on central and national authorities of the Union, animated by diametrically opposed reasons, which are divided between humanitarian considera-

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tions and opposition to receiving refugees, driven ei-ther by economic considerations, or by fear for dis-ruption of their own labor markets and the ghost of unemployment, or by the persuasive ideological influ-ences that are close to xenophobia and cultural, reli-gious and racial segregation. Alarmist slogans about the “invasion of the foreigners”, the loss of jobs be-cause of the newcomers, the deformation of cultural and social identity etc. are all included in the panoply of propaganda and they are nothing more than a virulent extension of the same paradigms used in the case of the “migration threat” that would be the mi-gration from Eastern European countries, paradigm accentuated by xenophobic nuances in the case of ethnic minorities – Rroma people, for example – coming from former European communist countries to the “consolidated democracies” of “Christian” Europe. The discussion about the problems faced by the

European Union in the context of the migration phe-nomenon and the internal debate that it generates cannot be objective and balanced as long as it does not address – in order to find an answer - a question less circulated but no less important: why, with very few exceptions (Turkey, Lebanon, Jordan), have the Arab states closed and locked the door to immigrants that they are otherwise sympathetic of, ignoring the fact that they have had a certain contribution, unmentioned for hypocritical “diplomatic reasons” to the emergence of the current exodus? And why would a good part of the regional Arabic media insist, almost imperatively, on the “debt" that the European Union, Australia, Canada etc. have to “unconditionally” and “unrestrictively” welcome the hundreds of thousands wandering on the thorny roads of exile? The comparative analysis of the me-dia comments and the official position in Europe, on the one hand, and the Arab-Muslim world, on the other hand, one can easily see that the debates, dis-putes, measures, and initiatives taking place in the Western “welcoming camp” are more visible, more intense and more concerning than the interest the Arab world has in this issue in and much less or not at all, in the countries of origin of the migration phe-nomenon, whose governments proclaim categorically to be representative for and defenders of all their citi-zens. And it is enough to mention, in this regard, the regimes of Damascus, Baghdad or the “dual” execu-tive and legislative Libyan regime. Then, in light of the plurality and diversity of the meetings and forms of debate taking place on the European continent, another question, no less important, can be asked: why wasn’t there even one meeting held – at the level of the ministers of Foreign Affairs, for example –

that would gather around the same discussion table representatives of the target states of the migratory wave and those of the Arab-Islamic states generating migrants and humanitarian tragedies? There is, even at project level, a common European-Arab plan for the coordination of the efforts and possibilities to identify potential mechanisms to deal as quickly as possible and without human victims of this contem-porary tragedy? To our knowledge, the answer is, in its entirety, negative. Unfortunately, the East-West “communication” on the subject is obstinately re-duced to exchanging accusations on the responsibil-ity that either of the two camps has - in terms of his-tory and the present time – and to the current situa-tion of the “greater new” Middle East. In addressing the problems arising from the over-

seas migration, the European Union bases its poli-cies on the provisions of the Dublin Agreement, signed in 1997 and whose fundamental principle is to transform Europe into an impregnable “fortress” against migration, considered an existential threat to the traditional, cultural, secular and Christian identity and values of the European community. Moreover, the stipulations of the mentioned document, which was not signed by all European countries, and the discourse of the extreme right currents and political parties (such as the Austrian Freedom Party or the National Front in France) are, against this back-ground, increasingly called upon to promote the idea of “European stronghold” in relation to the outside world. An idea which, endorsed by the feeling of “Islamophobia” and “Arabophobia” that the European public opinion experience after the wave of terrorist acts carried out in recent years, by the cells of the radical Islamic Jihad that has become, in the collec-tive western mentality, synonymous, if not even the true exponent of the essence and nature of Islam. In June 2015 the so-called quota system was

adopted, under which immigrants arrived on the con-tinent are to be shared fairly and proportionately among member countries of the European Union, while its “peripheral” member states as well as those in the European neighborhood, such as Jordan and Lebanon, should receive more consistent financial support for making this effort, which basically means turning them into “buffer states” in the face of the emigration still in a constituting stage in the regions of departure. The principle of “quotas" was agreed, but difficulties arose when it came to its implementa-tion, an issue which sparkled a fierce confrontation between countries willing to reduce as much as pos-sible the number of “assigned” refugees and pass a greater number of newcomers to on the shoulders of other countries. Such projects reminiscent of the fa-

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mous “Marshall Plan” that have been strongly sup-ported by Chancellor Angela Merkel proved, at least until now, bankrupt, bringing to light the truth that an issue so thorny as the current one cannot be solved by dividing the states involved between “paying states”, for the peace in their own backyard and “beneficiaries” of funds to become an additional de-fense bulwark of “fortified Europe”.

Vladimir SOCOR

Russian President Vladimir Putin has rejected Ukraine’s offer of constitutional status for the Donetsk-Luhansk territory as unacceptable.

Addressing an international economic forum in Vladivostok, on his way back from China on September 4, Putin dismissed Kyiv’s offer as inadequate in content; unilateral, instead of being negotiated by Kyiv with Donetsk-Luhansk; and as contraventions to the Minsk Two armistice on Ukraine’s part on both counts (Interfax, September 4). Russia’s Foreign Minister Sergei Lavrov had

rejected Kyiv’s offer on September 1, one day after the Ukrainian parliament’s approval of the constitutional amendment in the first reading. The Donetsk-Luhansk “people’s republics” were the first to spurn it, within hours of the Ukrainian parliament’s August 31 vote. This crescendo of rejections and their scathing tone

had evidently not been anticipated in Berlin, Brussels or by President Barack Obama’s administration in Washington. They had all pressured President Poroshenko and the Ukrainian parliament to appease Russia with this offer; and in the process, to put Poroshenko and his supporting coalition’s do-mestic political standing at risk (see EDM, August 6, 10, September 2, 3). It turns out to have been for naught. Putin now demands a new negotiation from scratch

on the constitutional status of Donetsk-Luhansk, and not only. Putin’s September 4 statement dismisses Ukraine’s constitutional amendment as “purely decla-rative, and not changing the essence of Ukraine’s structure of power.” This latter hint concerns Ukraine beyond Donetsk-Luhansk. The constitutional

provision regarding Donetsk-Luhansk is packaged with the decentralization of Ukraine’s entire adminis-trative-territorial system. Moscow wants to have its say in Ukraine’s entire decentralization process—a point that Lavrov made fully explicit in his own statement (see below). President Putin listed four demands, to be fulfilled

by Ukraine in this sequence (Interfax September 4): 1.) Kyiv and Donetsk-Luhansk must negotiate the

terms of Ukraine’s constitutional amendment on that territory’s special status; 2.) the same parties need to work out Ukraine’s law on local elections by mutual agreement (the elections are due tentatively on October 25); 3.) the Ukrainian parliament has to grant a general amnesty (this would, inter alia, enable the Donetsk-Luhansk leaders and paramilitary chieftains to become legitimate politicians); 4.) and Ukraine must enact a new law on that territory’s special status, again by negotiation with Donetsk-Luhansk, which would crown the foregoing three steps (such a law would supersede and invalidate the law enacted in September 2014 and amended in March 2015 by the Ukrainian parliament, which attaches clear democracy criteria to any special status of that territory). Whether Putin insists on a specific timetable for

Kyiv to meet these conditions is not yet clear. They all stem from the political clauses of the Minsk Two armistice agreement (February 12), whose political clauses Ukraine is supposed to implement by the end of December; whereas Russia and its proxies are not held to deadlines on the military clauses. Lavrov added clarifications in his speech opening

the academic year at the Moscow State Institute of International Relations (MGIMO). Speaking at the diplomatic academy, Lavrov declared that the special status of Donetsk-Luhansk (once adopted by Kyiv and Donetsk-Luhansk in “mutual agreement”) must be introduced as such into the constitution of Ukraine. Thus, the Donetsk-Luhansk authorities’ powers (among which, Lavrov cited: creating a people’s militia, appointing prosecutors, entering into special economic arrangements, among other Minsk Two stipulations) would be permanently guaranteed in Ukraine’s constitution. Beyond that territory, however, Lavrov alluded to

the federalization of Ukraine writ large, by a consensus between the West and Russia, as a would-be corollary to the Donetsk-Luhansk settlement. Citing (without attribution) “assertions that other regions of Ukraine deserve more powers,” Lavrov suggested, “We are willing to help. We have good relations with certain regions of Ukraine. Other

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countries have excellent relations with Kyiv and political forces in the Verkhovna Rada [Ukrainian national parliament]. If Western countries, the United States and the European Union together, with their decisive influence on Kyiv, summon all those political forces and strongly advise them to behave, then the Minsk armistice will be complied with” (Interfax, September 2). The Ukrainian legislature approved the

constitutional amendment, on August 31, in the first reading by a wide margin—265 votes in favor, out of 368 deputies attending—amid political commotion outside the parliament building (Ukrinform, August 31, September 1). The Donetsk and Luhansk “people’s republics” (“DPR” and “LPR”), however, have dismissed the vote in Kyiv as “the Verkhovna Rada’s own internal affair,” as well as “irrelevant to the ‘DPR-LPR.’ ” Meanwhile, Donetsk and Luhansk are moving apace to build elements of “statehood” and special relations with Russia (Donetskoye Agentstvo Novostey, August 31–September 4). The “DPR-LPR” maintain that Kyiv’s debates and

enactments regarding “their” territory are invalid, if Kyiv acts “unilaterally,” instead of negotiating directly with Donetsk-Luhansk. They base their position on the letter of the Minsk Two armistice, which indeed demands mutually agreed solutions—i.e., gives Donetsk-Luhansk the veto over Kyiv. Western diplomacy looks incoherent in attempting

to deal with this matter. On one hand, US, German and other European diplomats are pressuring Kyiv into unilateral concessions, needlessly complicating Kyiv’s political situation, instead of anticipating rejection by Moscow and Donetsk-Luhansk of such “unilateralism.” On the other hand, the Obama administration ensured that the Minsk Two armistice was approved by a United Nations Security Council resolution, as Russian officials are delighted to remark from time to time. And German Chancellor Angela Merkel, in her annual end-of-summer press

conference, asked Kyiv to “work out the law on [local] elections in such a way as to be acceptable to the separatists” (Bundeskanzlerin.de, August 31). Those “separatists,” however, would turn into legalized and legitimized leaders, if local elections are staged and validated in the “DPR-LPR” in October, for which Western diplomacy seems inclined to set the stage. First published by Eurasia Daily Monitor Volume: 12

Issue: 159

Igor DIRGANTARA Abstract As one of the largest democratic countries, Indonesia will execute for the first time the regional head elec-tion simultaneously in the first wave. Indonesia should be recorded in the

world democratic history because there will be 269 regions consisting of 9 provinces, 36 cities and 224 districts simultaneously choose the regional head. Of course, there will be many challenges to be faced. There are some crucial issues on the implementation of simultaneous elections in Indonesia on December 9, 2015, namely: the high intensity of the conflict, the neutrality of the election organizers, list of election voters, dualism management of political parties, can-didates dolls, dynastic politics, money politics, elec-tion offenses and disputes. Keywords: Regional Head Election simultaneously,

Political Party, General Election Commission (KPU), the Constitutional Court, the Election Supervisory Body (Bawaslu), list of voters, (DPT), Money Politics, Political Dynasty, Candidate Dolls, Political Cam-paigns , Regional Election Conflict and Dispute. Indonesia is one of the largest democratic countries

in the world. Legislative elections and presidential election 2014 have passed quite well, although there are still many problems in terms of implementation. Mass media is also one of the freest in the world. The General Election Commission (KPU) is now pre-paring the implementation of the Regional Head Election simultaneously in the first wave on Decem-ber 9, 2015, for the regional head and regional dep-uty head towards the end of the term of service in 2015 and the first half of 2016. Registration of candi-dates for regional head election in the first wave si-

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multaneously had started on July 26-28, 2015, pro-vided that the candidate promoted by political parties with seat acquisition of 20 percent or 25 percent of valid votes, got a decree from the central leadership of the party, got the management Decree of political parties in Regency, City and the Provincial Level. This simultaneous election modelis the first time in

Indonesia, even in the world. Indonesia should be recorded in the history of world democracy because there will be 269 regions consisting of 9 provinces, 36 cities and 224 regencies simultaneously elect re-gional heads. That is, about 53 percent of the total 537 number of provinces and regencies / cities in Indonesia that will carry out elections simultaneously at the end of the first wave of 2015 into the ideal de-sign, ie the simultaneous nationwide to choose the House of Representatives, Regional Representa-tives, the President and Vice President, as well as simultaneously to choose the regional heads and the DPRD at the provincial, regency and city level. After the elections simultaneously in 2015 in 269 regions, there will be followed by a second wave of simulta-neous elections in February 2017 in 99 regions, the third wave in June 2018 in the 171 regions. Then an-other one wave will be implemented simultaneously again until towards the national elections in 2027. Of course this is not an easy thing to do, because

there are a lot of challenges to be faced. Some have suggested that the implementation of simultaneous elections should be postponed for various reasons, including budget issues, human resources, and han-dling disputes. Financial Supervisory Agency (BPK), for example, has issued a number of recommenda-tions related to audit issues and the preparation of elections simultaneously in 2015 concerning, among others, about the unpreparedness of the budget, the signing of the regional grant agreement, plan budg-ets, grants account and security costs. Nevertheless, the president Jokowi ensure the im-

plementation of the first wave of simultaneous elec-tions later remains on schedule, considering the preparations have been riped and in accordance with the stages. The Government and the Commission determined to rectify the deficiencies discovered by the CPC. Therefore, perhaps it is only natural disas-ters, social conflict, or war which could make simulta-neous elections in Indonesia withdrew from the schedule. This paper saw eight crucial problems in the implementation of the first wave of simultaneous elections that will start on December 9, 2015.

1. High Intensity of Conflicts The elections simultaneously are heavier than the

legislative and presidential elections. Competition of elections at lower levels is prone to security prob-lems. The political dynamics in these areas are more difficult to predict. Because the strength of the local politicians have started immeasurable, both in terms of number of supporters, the distribution of influence, as well as the patronage of the party elite in central power. Approximately 827 pairs of regional leader’s candidates will compete in the first wave of simulta-neous elections. Based on data from the Ministry of Internal Affairs,

the losses on recapitulation of the post-election in 2013-2014 at the provincial and regency and city level tend to increasingly high, the number of victims died are 59 people, injured are 230 people, damage to residential houses are 279 units, the damage to local government offices are 30 units, six police of-fice units, and Election Commission (KPU) offices are 10 units, 159 public facilities in disrepair, also 11 offices of political parties, 3 offices of mass media, 25 vehicles, and also 1 shopping stores. Potential conflicts especially in areas that have a conflict-prone maps, such as in Sumatra, Madura, Central Sulawesi, Maluku, East Nusa Tenggara and Papua. Assault incidents of Eid prayer congregation and the burning of mosques in Karubaga, Tolikara, Papua, on July 17, 2015 can be a leasson to anticipate ahead of elections later. So effective coordination between the Central Government, Local Govern-ment, Election Commission, the Election Supervisory Body (Bawaslu), police, military, and also the State Intelligence Agency (BIN) is needed. The main challenge for the holding of simultaneous

elections later is to minimize conflicts in its imple-mentation. Conflict pattern occurs mostly among election participants and supporters accompanied by anarchy and destruction of public facilities. Source of conflict is generally from unelected elite or who can not accept the victory of another candidates. Poten-tial conflicts in 2015 elections is very high because it is done in areas involving various parties and only lasted one lap. No elections are devoid of conflict. Not neutrality of the electoral administration in the area is also a source of conflict.

2. Neutrality of Regional Election Organizers The regional head office in autonomy era is so at-

tractive in the eyes of search powers for extraordi-nary authority to manage the full regional head of each region. That position could make a regional head like a little king with great power. Organizing simultaneous elections is the biggest celebration in the reign of President Jokowi, which can create an

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aura of competition and passion of the candidates to contest. The organization of elections in the regions are

mostly technical work, such as the nomination of candidates, ballot paper making and ballot boxes, sending results of the voting on the national commit-tee, counting, distribution of seats and so on. The existence of the impartial or independent election or-ganizing committee greatly determines the quality of democratic elections. The General Election Commis-sion (KPU) and the Election Supervisory Body (Bawaslu) is the institutions established by the gov-ernment and given the freedom to organize the stages of the election. From the data of Election Hon-orary Council (DKPP) until now there are 207 elec-toral organizers who had been fired. DKPP has re-ceived 740 complaints related to codes of conduct of legislative elections and the presidential election in 2014, which contains 3,960 names of election organ-izers, both of the KPU and Bawaslu at the level of the central, provincial, and district and city. Election organizers simultaneously in the regions

later should be neutral in carrying out each stage of the election, instead of 'collusion' with the local bu-reaucracy or into a successful team of competing candidates of regional heads. Neutrality of the elec-tion organizers will make the elections simultane-ously be qualified, credible, and avoid conflict. The responsibility of organizing regional elections should be able to increase voter participation and minimize potential fraud that might occur, such as inflation and the reduction of noise, phantom voters, multiple vot-ing, or voters who eliminated their right to vote.

3. List of Permanent Voters List of Permanent Voters (DPT) will remain a crucial

issue and the object of the dispute. Moreover, polling stations (TPS) are very vulnerable in the intervention, especially in remote areas. The most crucial is the population data that until now have not been able to cover the entire population, especially those living outside the area. Ministry of Internal Affairs has sub-mitted a list of Potential Voters in Elections (DP4) to the Commission which are used as data in arranging voter registration of simultaneous election. The num-ber of voters have been recorded in the Ministry of Internal Affairs until now has reached 102 068 million people. The amount represents the total number of potential voters in the list that will follow the election of 269 Regional Head and Deputy Regional Head on December 9, 2015. Total registered voters exceeded 50 percent of the voters that gives right to vote on the 2014 Presidential Election. Total 269 regions that

hold elections have exceeded 50 percent of the total of 514 regions in Indonesia. Unfortunately, the election system in Indonesia do

not consider the mobility of the population that is al-ready very high. Residences are still statically de-fined. In fact, many people are outside the official ad-dress, including overseas, because of jobs and edu-cation. Governments need to create the population administration system and Pilkada system that can accommodate the mobility of people who are very varied. There is injustice to the voters in the regional election system. Article 56, paragraph 3 Perppu No. 1/2014 on the election of Governors, Regents, and Mayors, said if voters have more than one residence, the voter must select one residence listed in the voter list based on E-ID Card or certificate of domicile from the village chief. But there is a different treatment if a person wants to run for governor, regent or mayor. The candidates can run in an area that is not domi-cile. For example, when the election for Governor of Jakarta in 2012, Joko Widodo (Jokowi) was still served as mayor of Solo. Someone is possible to be a candidate for regional head in areas that is not domicile. It means, residential status can be more than one place. However, this flexibility does not ap-ply to voters. Another problem is that not all people have e-ID Card because it is outside the eligible categories such as bums, beggars, migrant workers, domestic workers, and the like. They do not have an e-ID card so they can not involve in the election. It means, not all people have the right to vote because of their poverty. Not to mention also a matter of vot-ers who have died but are still registered as voters, or voters who are registered at two different loca-tions.

4. Dualism of Management of Political Parties The General Election Commission (KPU) had to re-

vise Commission Regulation (PKPU) Number 9 of 2015 on the nomination by adding a 'reconciliation limited' for the sake of allowing the party who has' double management, such as the Golkar Party and the United Development Party (PPP) to nominate candidates for regional heads together. In addition the candidate must submit the same pair, the two camps double management of political parties must also file the candidate pairs at the same time. Before the revision, regional head candidates must come from the political parties whose staff are recognized by government or have the Decree of the Minister of Justice and Human Rights (Menkumham). Dualism of leadership in the Golkar and PPP can also cause serious problems for vulnerable civil suit and of inter-

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ests of each camp. Actually, the laws on political par-ties does not recognize dual management. While the stages of the elections are still running, the conflict in the body of Golkar and PPP whose legitimacy will be decided later in the court that had the legally en-forceable decision (inkracht). Why did the Commission need to accommodate the

participation of Golkar and PPP in the simultaneous elections of 2015? The votes of both parties (Golkar and PPP) reached more than 26.5 million votes in the 2014 election. That is, the two parties accounted for more than 21 percent of valid votes in the elec-tion. Achievement of seats from the two parties reach 130 seats. This means exceed the number of seats of the Struggle Indonesian Democratic Party (PDIP) as the winner of the election that is only about 118 seats. At the local level, PPP as a whole has 1,400 seats, while Golkar has about 3,000-seats. Judging from these data, Golkar and PPP are quite significant in political and legal decision-making, at the local level and the central level. PKPU revision is done not only to facilitate the dual-

ism of leadership in the party of Golkar and PPP alone to participate in the elections, but also to com-ply with the decision of the Constitutional Court (MK). Thus, the revision also includes rules to permit family of incumbent to advance in the election, and requires that members of the parliament (DPR / DPD / DPRD) resigned their positions when they have been deter-mined as candidates by the Commission. Previously, members of parliament (DPR / DPD / DPRD) are only required to report to the leadership of each insti-tution. Of course this affects the political map of the nomination from all the political parties participating in the elections simultaneously in 2015. Many parlia-ment members who subsequently withdraw as candi-dates for regional heada, otherwise a lot of the family members from the incumbents, even former inmates come forward to compete in the simultaneous elec-tions next December 9, 2015.

5. Doll Candidates Another problem is the possibility if there is only

one single candidate in an region. Commission Regulation No. 12 of 2015 set the whole stage of re-gional elections are stopped and postponed on next simultaneous election in 2017, if there is only a sin-gle candidate for the regional head after the exten-sion of registration for 3 days. Steps must be done because the elections are held simultaneously in De-cember 2015. Automatically, if there is one region that stage is only delayed, it will affect the overall im-plementation. However, the goal of the simultaneous

election of regional heads is simultaneously inaugu-ration, so that the end of their services are also si-multaneous. There should be no regions that fol-lowed, except participate again in 2017. The Com-mission does not want to wait until the region has additional candidates for regional heads for a limited time. If the elections in an region later have to be 'put on hold, then the position will be filled by the regional head of the temporary officials, or officers while be-ing taken from staff transfer. There are 15 regions that potentially have only a single candidate in the simultaneous elections in the first wave. Incumbent candidates are too strong making the

whole political parties carry the same pair to run for regional heads. But it could happen in regions with strong incumbent do stratagem in order registering candidates not just one pair, namely by generating candidate pairs for regional head doll (false) as a challenger, could be independent pathway or request some political party that carried them. Legally regula-tion doll candidate is not problematic in the Commis-sion if it meets the requirements. However, from a political education, it is a setback to democracy. Single candidate is likely to occur in simultaneous

elections later. This is evident from the higher mini-mum support candidates from political parties to 20 percent of parliament seats, or 25 percent of valid votes of the election results last year. Conditions that make the coalition become more stringent. In addi-tion, individual candidates from independent pathway will also a difficulty become competitor, because of time constraints and the severity of a support condi-tion. Especially against the strong incumbent sup-ported by political parties it is tantamount to wasting the cost. Until recently, most political parties chose to sup-

port a strong candidate to win. In this simultaneous regional election, coalition parties of supporting the government, namely the Superb Indonesian Coali-tion (KIH) is very liquid with balancing coalition par-ties of government, or the Red and White Coalition (KMP) in proposing candidates for regional head. However, 'political dowry' that is raised each political party is also still looks like the tip of the iceberg that is difficult to remove. Many unscrupulous parties will utilize the elections to gain political dowry from the prospective regional heads. Instead, many pairs as regional head candidates that offer dowry can be able to qualify the support of 20 percent. The issue is initially exists in poor political party cadres and the weak party funding. People can only vote for candi-dates who submitted it. If the incumbent is qualified and well developed, it deserves to be reelected. The problem is that no quality incumbent but also prepare

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candidates for a doll that can be defeated in the next election. Prospective doll could be the choice of strat-egy for winning in the simultaneous elections. It is also the solution to anticipate a strong candidate for the regional head to remain chosen without delaying the implementation of the next elections in 2017. Candidates 'dolls' can also appear with the only aim to break down opponents who are considered the dominant voice in an region, especially in the region of three pairs of prospective candidates. But if the elections take place with only one candidate it could be a bad precedent for election implementation in other regions, because there are local leaders who have the power to monopolize the political parties in the regions. There is no choice of candidates, cer-tainly not democratic.

6. Political Dynasty The Constitutional Court (MK) removes the restric-

tion clause on prohibition of incumbent family or po-litical dynasty in the election law. According to the Court, the 1945 Constitution gives equal rights to all citizens to use their constitutional rights, namely the right to vote and be elected, including former in-mates. The Constitutional Court's decision could open up a gap of one family control of certain re-gions, because the political rights of the incumbent relatives in the election is not removed. In 2013 there were as many as 61 regional heads, or 11 percent of all regional heads in Indonesia having kinship politi-cal networks or political dynasty. Ironically, from ex-periences that occur in almost every contestation of the elections that followed by the incumbent, often found the game of local budgets to the needs of the campaign. PNS subordinates that are supposed to apply neutral are often the incumbent winning team. Mobilization and politicization of civil servants are inevitable. The potential for corruption and violations or abuse of power by local bureaucracy increases. Because the Constitutional Court's decision is final

and binding, then today society need to be given the political aspects of socialization and education in or-der to more critically assess the regional head candi-dates who will compete in the simultaneous elections later. However society that has the rights to vote de-termine how the future of the regional head candi-date who comes from a political dynasty. Moreover, the people of Indonesia are still many irrational vot-ers. Gaetano Mosca once wrote in his book "The rulling Class", that almost in every class or nation will always be a tendency to build a tradition handed down in reality, if not in law. Oligarchy is an inevitable Iron law. And political dynasty in Indonesia is a ne-

cessity in a democracy now because it comes from the old oligarchy and patrimonial culture. The emer-gence of dynastic politics is directly proportional to the unhealthy political competition. Increasingly un-fair rules of the game in political contestation, pro-motes wider political dynasty.

7. Money Politics The democratic process in Indonesia raises many

opportunities for corruption. Because the democratic process in this country requires a huge cost. Re-gional election always had negative tendencies, ie transactional politics. In fact as many as 346 regional heads and deputy regional heads tangled legal cases. A total of 11.45 percent of the approximately 500 regencies thick with dynasty politics. In addition, many of the elections results in the past were broken joint between the head and deputy head of the re-gions. Currently there is no criminal chapter on money politics and the criminal chapter on the politi-cal dowry thus causing dirty political practices in the elections. Simultaneous Regional Election 2015 budget swell

to Rp 7 trillion compared to the implementation of the previous elections. There are three factors that influ-ence. First, the inflation factor that can affect the value of the goods in the regions. Secondly, amount-ing to 65 percent of the total budget for the elections will be used to pay salaries of Voting Committee (PPS), District Election Committee (PPK) and Voting Organizer Group (KPPS). Third, based on Law No. 8 of 2015 on Regional Elections, the local government is obliged to bear almost all participants of the elec-tion campaign costs in 2015. Only two types of elec-tion campaigns are borne by participants themselves, ie limited campaign and dialogue campaign. Implementation of the simultaneous election is origi-

nally meant to reduce the high cost of politics and money politics turn out to be an illusion. Financing campaign charged to revenue and expenditure budget can actually increase money politics. Re-gional head candidates would have more funds in view of campaign financing that become the respon-sibility of Regional Election Commission. By doing so, the candidates will have more funds to carry out the practice of vote-buying. Money politics also can occur when optimizing campaigns at the limited meeting. They can take advantage of unlimited meet-ings, where money politics is packaged in such a way in the meeting. Simultaneous regional elections in 2015 will be rife of money politics, in addition to political dowry, voters buying, that are also used to bribe electoral administration in the regions.

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In addition, the use of campaign funds would also be a vulnerable point for the implementation of simul-taneous elections, and misused to improve electabil-ity of candidates. Election campaign is more widely used as imaging media, not apply for a work pro-gram. Also the 'game' between the candidates by state officials still leaves a problem in any election in Indonesia until now. Education and political sociali-zation to voters take lack of decent places. Misap-propriation of budgetary funds and state facilities can also occur, such as social grants (Bansos), school operational funds (BOS), and funds from the budget, as well as vehicle or building facilities into a cam-paign tool.

8. Violations and Dispute of Election Elections Supervisory Board (Bawaslu) is not given

the authority to execute the offense. Therefore, Bawaslu action is limited to giving recommendations. If the violations are administrative, submitted to the Commission and forwarded to the police. Simultane-ous handling of cases of electoral violations this year will refer to the two laws. In addition to using the Law of the Elections, a number of violations will be proc-essed by using the Criminal Code, such as inflate the voices and the problem of money politics. Money politics will be charged under Article 149 of the Criminal Code concerning bribery in elections, under penalty of nine months in prison. Perpetrators of votes are subject to Article 263 of the Criminal Code on forgery penalties of six years in prison. If there is a criminal offense, the police soon take over. For ad-ministrative violations, the Provincial Election Super-visory Committee (Panwaslu) directly provide recom-mendations to the Local Commission. Statements relating to the code of conduct is directly forwarded to DKPP. For disputes between participants and the Commission, the case will be solved alone by the Supervisory Committee. Another important aspect is the matter of time limits

of 45 days (including holidays) for the Constitutional Court (MK) in handling disputes of the election re-sults. The Court will not be able to handle the dispute lawsuit of election results if more than 50 percent of the simultaneous election resulted in the Court, moreover there are 269 elections in the first wave later on December 9, 2015. The assumption, the

Court had only 37 minutes to finish the one case. Therefore, it is quite natural that the Court then asks the number of days increased to 60 working days from receipt of the request. It also became one of the driving so that the revision of Law No. 8 of 2011 re-garding the Constitutional Court is limited, because the Court has not set the authority in dealing with election disputes. To date the Court only handles election disputes. The Supreme Court (MA) - man-dated to adjudicate election disputes in the regional election law - considered not ready to settle the dis-pute in 2015 simultaneous regional elections, be-cause of its human resources.

Closing The successful indicators of the simultaneous and

massive regional elections in Indonesia later can take place peaceful and relatively free of the various modes of cheating. Credibility of regional election organizers is at stake in the regions, let alone a first test of the simultaneous elections held. Likewise with the Constitutional Court which was given the role of resolving disputes of regional election results, the future should be promoted for a special agency to resolve election disputes outside of the Constitu-tional Court or the Supreme Court. The government also needs to regulate population administration sys-tem that can accommodate a very varied population mobility to be put into list of legitimate voters. There-fore, updating the voters' data is an absolute neces-sity. Conflict, money politics and political dynasty, will

still color the implementation of simultaneous re-gional elections on December 9, 2015 in Indonesia. Corruption Eradication Commission (KPK) has an important task to verify the entire State Officials Wealth Report (LHKPN) registered by the regional head candidates, to be opened and made known to the wider community at large. Public participation is essential to oversee and monitor the regional head candidates, misappropriation of funds related to so-cial assistance and grants for the campaign and cap-ture votes. Neutrality of Civil Servants (PNS) also must be enforced, by prohibiting engage in campaign activities, whether a member or involved in it. Minis-try of Administrative and Bureaucratic Reform can open a complaint service about the involvement of

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civil society in influencing voters and give strict pun-ishment for civil servants who become involved in the election. KPU through an independent auditor should audit all finance of political parties, especially con-cerning the funding of cadres and outsiders. Bawaslu from central and local levels should optimize their role to take action against the perpetrators of money politics. In prediction, candidates of independent pathway

has also difficulties in this simultaneous election. Due to increasing electability, there are more advanta-geous for the candidate promoted by political parties. Independent candidates must have a minimum re-quirement of 80 percent popularity. Moreover, if you look at previous experience, very few candidates were elected as regional heads coming from inde-pendent paths. Even if elected, they will also have difficulties when running the government program, because they have to deal with Parliament who comes from political parties. Problems can also arise if there is a candidate who is a cadre of a particular political party, but it was carried forward as a candi-date by the other political parties because his own political party to support another candidate. Looking ahead to reform political parties should continue to be done in a comprehensive manner, especially con-cerning rules, campaigns and financial budget. Law also needs to be changed, do not need a quota of 20 percent of seats, but every political party that has seats in parliament could propose regional head can-didates. Or political parties and coalitions of political parties can still register the candidate with the mini-mum quota of 20 percent of parliament seats, but with a maximum of 50 percent of the seats. Terms of candidates from independent pathway also needs to be alleviated. In addition, the recruitment process of political parties also need to be open and democratic. In the future, the General Election Commission (KPU) should continue to conduct a study for the im-plementation of electronic elections (e-voting, e-

recap, e-counting) and build public confidence (trust) for these technologies. Of course, all have to start first with the integrity and independence of the elec-toral administration which is currently implementing in the first wave of simultaneous elections on Decem-ber 9, 2015 later. Igor Dirgantara is Lecturer at Faculty of Social Poli-

tics, University Jayabaya, Jakarta, and Director Sur-vey & Polling Indonesia (SPIN).

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the-indonesias-election-2014-igor-dirgantara 2. h t t p : / / w w w. m o d e r n d i p l o m a c y . e u / i n d e x . p h p ?

option=com_k2&view=itemlist&task=user&id=272:igordirgantara 3. http://www.glocal.org.hk/archives/author/igor-dirgantara 4. http://www.ina.or.id/images/stories/magazine/2013jul/

alook-ahead.pdf 5. http://www.geopoliticalmonitor.com/voting-trends-in-

upcoming-indonesian-elections-4936/ 6. http://www.ia-forum.org/Files/PAMIMP.pdf 7. http://www.tnp.no/norway/global/4358-mood-wisdom-and-

passions-of-middle-class-in-upcoming-indonesian-election 8. h t t p : / / w w w . o r b u s . b e / i n f o /

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KPU-Proposes-Simultaneous-Regional-Head-Elections-on-December

11. h t tp: / / www.repub l i ka .co . i d/be r i ta / en /na t i onal -politics/14/08/10/na32u0-at-least-202-regions-in-indonesia-to-hold-local-elections-in-2015

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Megan MUNOZ Last September brought with it ma-jor changes to the hotly contested Caspian Sea region. These changes were revealed at the IV Caspian

Summit held on September 29th in Astrakhan, Russia. Of the greatest significance was the unanimous

vote by the “Caspian 5” (Russia, Iran, Azerbaijan, Turkmenistan, and Kazakhstan) to no longer allow foreign military presence in the Caspian region and that all issues that were to arise would be solved between the littoral states only. The political declaration, according to an announcement by Vladi-mir Putin and signed by all five presidents “sets out a fundamental principle for guaranteeing stability and security, namely, that only the Caspian littoral states have the right to have their armed forces present on the Caspian1.” Iran’s President Hassan Rouhani echoed this senti-

ment stating “there is consensus among all the Caspian Sea littoral states that they are capable of maintaining the security of the Caspian Sea and military forces of no foreign country must enter the sea2.”The five further agreed to expand cooperation on the Caspian Sea in terms of meteorology, natural disasters, and environmental protection3. The declaration also revealed clear formulations on the delimitation of the seabed with each country having exclusive sovereign rights to a 15 mile area4. This puts to rest an issue that had been contested since the breakup of the Soviet Union and the emergence of the new independent states5. Apart from being a unique body of water in terms of its bio and ecological resources, the Caspian Sea comes with a massive amount of oil and gas reserves, an

estimated 18 billion tons with proved reserves of four billion tons. These numbers put the Caspian Sea directly behind the Persian Gulf in terms of the world’s largest oil and gas reserves6. This corresponds with what prof. Anis H.

Bajrektarevic described as the lowest common denominator of 5 littoral states in both theatres – the Caspian and Arctic. “The Five will be: (i) Dismissive: Erode the efforts of international community/external interested parties for creation of the Antarctica-like treaty (by keeping the UNCLOS referential); (ii) Assertive: Maximize the shares of the spoils of partition – extend the EEZ and continental shelf as to divide most if not the entire body of water only among the Five; and (iii) Reconciliatory: Prevent any direct confrontation among the riparian states over the spoils – resolve the claims without arbitration of the III parties. (preferably CLCS)7. Therefore, no wonder that this declaration also

outlined many corresponding projects in the works for this region – a major one being the joint construction of a railroad that would encircle the Caspian Sea, connecting key Caspian ports and cutting transportation time in half. The five states also signed an emergency prevention and response agreement which called for joint efforts in responding to emergencies in the region. Additionally, plans were revealed for a joint emergency response exercise to take place in 2016 that will test the capabilities and partnerships between the nations and develop procedures of notifying and coordinating rescue units8. Disguised underneath these projects, exercises,

cooperation, and initiatives is a very real threat to the United States and NATO. Russia and Iran have long

1. Dettoni, J. (2014). “Russia and Iran Lock NATO Out of Caspian Sea.” The Diplomat. Retrieved from http://thediplomat.com/2014/10/russia-and-iran-lock-nato-out-of-caspian-sea/ 2. Ibid. 3. PressTV. (2014). “No foreign military force must enter Caspian region: Rouhani.” PressTV.ir. Retrieved from http://www.presstv.ir/detail/2014/09/29/380453/no-foreign-force-in-caspian-region/ 4. Belinksi, S. (2014). “Caspian Sea Could Be Key To Russian Control Of Eurasian Energy Markets.” Oilprice.com. Retrieved from http://oilprice.com/Energy/Energy-General/Caspian-Sea-Could-Be-Key-To-Russian-Control-Of-Eurasian-Energy-Markets.html 5. PressTV. (2014). “No foreign military force must enter Caspian region: Rouhani.” PressTV.ir. Retrieved from http://www.presstv.ir/detail/2014/09/29/380453/no-foreign-force-in-caspian-region/ 6. TASS, (2014) “Real breakthrough reached at 4th Caspian Summit – Putin.” TASS Russian News Agency. Retrieved from http://tass.ru/en/russia/751856 7. Bajrektarevic, A. (2014), The Caspian Five and the Arctic Five—Critical Similarities, Geopolitics of Energy, CERI Canada 34(4)2014. 8. Sputniknews. (2014). “Countries bordering the Caspian Sea will hold joint emergency exercises in 2016, Russian President Vladimir Putin said Monday.” Sputniknews.com Retrieved from http://sputniknews.com/military/20140929/193422433.html

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felt threatened by the possibility of a foreign military presence in the Caspian Sea and Moscow was determined to find a way to ensure it would not lose any more influence in the global energy sector (this in light of Europe slowly but surely diversifying away from Russian gas after the Ukrainian crisis began). The best way to do this was to bring these nations into the fold of Kremlin interests, while making them feel their own interests were also being served. By strengthening relations in their own backyard Russia has been able to increase influence and gain back power in the region. Shutting NATO out of the region also significantly increases Kazakhstan, Azerbaijan, and Turkmenistan’s dependence on Moscow in many different aspects9. Another added bonus is that a clear alliance made up of Iran, Russia, Turkmenistan, and Azerbaijan, Ukraine (absent any ‘outsider presence’) would be comparatively easy to control10. The effects of this agreement have already resulted

in major changes to relations between Caspian nations and the United States. For years Azerbaijan has welcomed American-Azeri relations by stepping up logistical support for NATO operations in Afghanistan and even serving in Afghanistan as part of the ISAF, but relations have clearly cooled between the two nations. There were also serious talks between Kazakhstan and the United States for building a base on the border in Aktau that would cater to the needs of the United States and NATO troops, but since the signing of this declaration the project has been halted. Finally, the geopolitical shift in the region has resulted in the closing of the North route for NATO military equipment being sent to Afghanistan11. Prior to this Caspian Summit agreement the United States had played an active role in helping Azerbaijan, Turkmenistan, and Kazakhstan bolster their military defenses and develop their own navies12. The maintaining of close relations in this region was of great political and stra-tegic importance to the United States, not only due to its vast oil and gas riches (originally outside of Russia’s control) but its strategic location that connects it with many regions of Western interest. Other ways that Russia has benefited from this deal

include: the creation of a rapid response force

unfurling along the Caspian Sea coast as a means to extend influence over the Nagorno-Karabakh enclave and its troops in the Armenian Gyumri base; jumpstarting cooperation with Giorgi Margvelashvili, the new Georgian Prime Minister; maintaining the ability to block Georgian and Azerbaijan pipelines; improving relations with Turkmenistan; beginning plans for building a pipeline with Turkey (named the Turkish Stream) out to Europe, which will compete with the Trans-Anatolia Gas Pipeline project (sponsored not coincidentally by the US, EU, and Azerbaijan)13. The United States has another reason to worry

about being blocked from the region – Chechnya. In Azerbaijan, jihadists from the Jamaat (Community) Group are already operating and maintaining connections with Chechen Islamists, the Caucasus Emirate, and Syria’s Islamic State: the attack on Eurovision in 2012 and the murder of several Shiite clerics all carry their hallmarks. This insurgency is threatening to turn the region into one of the most ungovernable locations in the world where neither aggressive use of military/intelligence force (counterterrorism operations courtesy of Russia) nor engaged economic assistance has helped the situation. With the United States not being able to join together with forces in the region this threat will not just remain present but will likely only continue to grow14. Arguably, the signing of this agreement to ban

foreign militaries has been the biggest game-changer to take place in the Caspian over the last 20 years. The West not being able to be involved in the region not only decreases energy development and security in the oil and gas-rich Caspian sea basin, but also wounds in several other respects: it reduces the ability to deter adversaries in the region against attacks; it weakens what were growing U.S. alliances; it allows Moscow to project its power over the other Caspian nations with little interference; it cuts off access to ports for deployments to the Middle East; it does not allow for responses to humanitarian crises in the region; and it does not allow for the U.S. to project its own power and reach as easily as it once did. All of these make the United States and

9. Belinksi, S. (2014). “Caspian Sea Could Be Key To Russian Control Of Eurasian Energy Markets.” Oilprice.com. Retrieved from http://oilprice.com/Energy/Energy-General/Caspian-Sea-Could-Be-Key-To-Russian-Control-Of-Eurasian-Energy-Markets.html 10. Ibid. 11. Armanian, N. (2015). “Turning point in Eurasia: Azerbaijan distances itself from the USA and the EU.” TheFifthColumnews.com. Retrieved from http://thefifthcolumnnews.com/2015/06/turning-point-in-eurasia-azerbaijan-distances-itself-from-the-usa-and-the-eu/ 12. Ibid. 13. Ibid. 14. Cohen, A. (2012). “Anti-Terrorism Operation in North Caucuses Exposes Russia’s Vulnerabilities.” TheDailySignal.com. Re-trieved from http://dailysignal.com/2012/10/23/anti-terrorism-operation-in-north-caucasus-exposes-russias-vulnerabilities/

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Megan MUNOZ of Bellevue University, Nebraska. She works as an intelligence analyst for the state of New Jersey, previously served as an intelligence analyst in the United States Air Force for 10 years, and remains a reservist.


NATO much weaker than before the Summit began. Round One in this heavyweight prize fight has clearly gone to the Russian bear. First published by: www.moderndiplomacy.eu (Fully titled as: For Members Only The

Consequences of the Caspian Summit’s Foreign Military Ban)

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Who will take advantage of the torn and destroyed Syria?

Corneliu PIVARIU

After more than four years since its beginning, the civil war in Syria gets new nuances, some of which have resulted from the last four years and others from the regional and global developments. As we have mentioned in other previous articles, Syria is a destroyed country that – unfortunately for the Syrian people – will never recover again, at least in terms of the social and economic life before 2011. In this context, we notice in quite a surprise the nerve of the Syrian president who dares to blame Europe for the refugee cri-sis, when in fact he is the main responsible for it just as he is responsible for 250,000 Syrian deaths (most of whom have probably voted for him). There is no limit and no reason in politics. Bashar al-Assad, who should have been arrested and sentenced by now by an International Court of Law, will probably become a case for study in a few years. This is what a failed ophthalmologist “managed” to do as doctor and politi-cian. The “achievements” of Bashar al-Assad would not have been possible without the support of his main allies Iran, the Lebanese Hezbollah and Russia. At present, the Syrian army no longer has the capacity of carrying out important operations on several fronts in the country, while the Iranian and Russian troops have increased significantly in the recent months in order to compensate for the difficulties of the Syrian army (approximately two months ago the government in Damascus declared general amnesty for all the de-fectors and other criminal categories if they joined the army). Thus, the regular Syrian army receives other criminals except the traffickers and criminals from the famous Shabiha (the Ghosts) – Alawi militia. The ini-tiative belonged to the lonely inhabitant of the Kassioun palace, but it did not have the expected results. Iran, which had a positive result after the negotiations concerning his nuclear program, may focus even better on the support given to its precious ally in order to achieve the dream of Shiite expansion, while the commander of Pasdaran (Guards of the Revolution) – General Mohammad Ali Jafari recently went to Moscow in order to discuss military cooperation with Russia. In the first decade of September 2015, about two battalions of Pasdaran elites were deployed in Zabadani region (west from Damascus and near the highway Damascus-Beirut). An important number of Iranian troops are deployed in Damascus, along with numerous “advisors” of the special forces, the republican guard and the Syrian intelligence services. Ap-parently Teheran wants to make sure that it can control all the Syrian elements – loyal to the dweller on Kassioun, so that it avoided a possible removal from the interior. The Lebanese Hezbollah continues to support Assad’s regime, being deployed mainly at the border with Lebanon and on the shores near port Tartus. Prior to 2011, Russia had approximately 10,000 military advisors in Syria (particularly on aviation, air-defense, missiles, navy and intelligence services), but in the first phase of the civil war it decided to with-draw some of these elements (especially the accompanying families). However, the developments in August and September 2015 indicate an unprecedented Russian military deployment in Syria. According to recent information, insufficiently confirmed, the international airport in Damascus has been under Russian military control since mid-September. The Bassel al-Assad military base (named after Bashar’s brother, who had been prepared by Hafez al-Assad as his successor, but died in January 1994 in a car accident) in Latakia shelters an intensive military air traffic while development work of the airport is being carried out in order to finalize a new runway and extend the existing one so that high capacity military aircraft could land and take off from this airport. According to the images and interceptions presented by Stratfor on 17 September, a battalion of Russian troops has already been deployed on the airport, along with an artillery battery (for de-fense in case of land operations), four military helicopters (two attack helicopters Mi-24Hind and two trans-port helicopters Mi-17Hip) – possibly for search and rescue missions for pilots if Russia decides to use its military aviation in the Syrian airspace. About two more Russian battalions are deployed in Hama. Control of the line Damascus-Homs-Tartus-Latakia is one of Moscow’s priorities for the survival of Assad’s regime and, if necessary, its withdrawal in the Kardaha feoff (declaring an Alawi state on the Syrian coastline). Latakia will also become Russia’s deep operational base in the Mediterranean, along with the one in Tartus (where the works carried out in 2005-2010 indicate the existence of an underground submarine base). Both the US and Turkey are worried about the possible Russian military intervention in the Syrian airspace. The Israeli Prime-Minister Benjamin Netanyahu scheduled a visit to Moscow at the end of September in order to discuss with President Putin about the situation in Syria, desiring guarantees that Moscow would not inter-fere in Israel’s actions against the Hezbollah (which will lose in case Syria is divided). Of course, the Islamic State still controls important Syrian oil and gas reserves and localities. Thus, Syria as it is today will not remain the same. There will be some significant changes in the Middle East.

CONSIDERATION

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Reza SHAHRESTANI

After several weeks of extensive popular demon-strations against chronic corruption and escalating deterioration of the living standards, and demonstra-tions swept central and southern part of the country and still continue today, on August 9, the PM of the Iraqi government, Heydar Abbadi announced – for the first time in 2003, when the American invasion “liberated” the country from under the dictatorship of the Baath regime of Saddam Hus-sein, a plan of reforms meant to “permanently cure Iraq” of the dis-ease of widespread corruption and to reform from scratch the state institu-tions and the stiff paradigms accord-ing to which they function. Among the measures applied im-

mediately that have surprised by their severity, the following were ob-served:

- abolition of the four posts of vice-president of the state, dismissal and deprivation of legal immunity of the persons which have detained it, namely former prime minister Nouri Al-Maliki, leader of the political coalition “Rule of Law”, Osama Najifi, from the party Unionist Alliance, Iyad Allaoui, former prime minister of the National Alliance and Saleh Mutlaq, from the Arab Alliance;

- abolition of the position of deputy Prime Minister and the dismissal of the holders, respectively A'raji Al-Baha (the Sadrist current) and Roznuri Shawish (Kurdistan Democratic Party);

- abolition of the position of secretary general of the Government and the dismissal of the holder and of the two Deputy General Secretaries;

- immediate and drastic reduction in the number of safety and security official staff, belonging to the president and to ministers, prefects, CEOs etc. i.e. a total of 25,000 people receiving salary from the state budget with monthly allowances equivalent to $ 1,500. There have been cases (head of state, Prime Minister Al-Maliki etc.) whose bodyguards and pro-tection staff amounted to approx. 1000 people / offi-cial;

- drastic reduction of the allowances granted to the minister and deputy positions paid $ 10,000 monthly, income totaling cca.720.000 during an en-tire term;

- elimination from personal records of the Ministry of Defense of approx. 25,000 fictitious names that were listed as receiving monthly salaries;

- abolition of the “quotas” in accessing decision-making positions in the government, civil, military, security, and local pub-lic administration etc, on confes-sional and political principles. In the same vein, it is envisaged to disso-lute the current parliament and or-ganize new legislative elections un-der international and regional con-trol; - creation of special “integrity” com-missions to investigate in depth and sheltered from political pressures and interference, all corruption cases and prosecute discovered and docu-mented cases. Three days later, on August 12, Prime Minister Al-Abbadi required

the parliament special powers to amend the Constitu-tion (which, under the current conditions, is made only by popular referendum). Indicative of the state of institutional and moral an-

archy experienced by Iraq is the question that quite a few observers both local and foreign ask in the con-text of the campaign initiated by Prime Minister Ab-badi: is Iraq suffering from corruption or is it itself in a state where the mane of “Iraqi state” should be re-placed by that of “corruption-state”?, built with accu-racy in the 13 years when Prime Minister Nouri Al-Maliki was single-handedly at the country’s leader-ship, surrounded by his numerous camarilla and cli-entele. It is true that the giant pressure that he was sub-

jected to form the protesting population and the open support and encouragement from the spiritual leader of the supreme Shiite Iraqi confession, Ali Sistani, had a decisive role in determining the measures taken by Heydar Abbadi (who declared his decision to implement and promote them “even at the cost of his life”), but it is equally true that it was precisely these elements of pressure prove by themselves the


The Main Factors of the Middle East Situation

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advanced and complex networks of corruption that affect the functionality of the state and of the society from the highest to the smallest levels. Protest dem-onstrations were triggered by the serious shortages faced by the population in the provision of electricity - sector whose modernization has cost, at least in documents, funds of over $ 40 billion. But the social discontent is more deeply rooted in a country eroded by corruption and which functions based on confessional and political sympathies, with 325 MPs, 4,000 CEOs and 740 deputy ministers. The extent of the mentioned meas-

ures and the levels that they affect require PM Abbadi the start and imple-mentation of a genuine war against corruption, parallel with the war al-ready underway against the terrorism practiced by the Islamic State. The “big fish” whose head is required

in this process of “purification” is called Nouri al-Maliki, whom another deputy chairman of the State, Baha Al-A'ragi, also dismissed, publicly accused of have fraudulently spent $ 1 trillion funds from public money. “Previous governments led by Nouri al-Maliki”, argued the quoted source, “scattered about $1 trillion, of which $ 800 billion were oil revenues in the period from 2004 to 2014 and 200 billion were spent without any registration or proof of the destina-tion for which this amount simply vanished”. From the political point of view, there are several

commentators who believe that “reformism” pro-claimed by Prime Minister Heydar Abbadi and the campaign of accusations against his predecessor are directed, to a large extent, towards halting and reduc-ing the influence and discretionary control which Iran exercises on the political, social and economic life of Iraq, while Nouri Al-Maliki himself is exercising his powers under the supervision and guidance of the regime in Tehran and, even directly, of General Qas-sem Soleimani, commander of Al-Quds Brigade – the outside arm of the Revolution Guardians in Iran. (When, in the context of the “nuclear” negotiations, the United States urged the spiritual leader supreme Ali Khamenei to remove al-Maliki as head of the cen-tral government in Baghdad, he responded by wel-coming Al-Maliki to Tehran, blamed of the debacle suffered in Mossul by the Iraqi army before the de-tachments of the Islamic State). And the appointment of the former premier as vice-president of the state was made following strong pressure from Tehran, in order to maintain his immunity of jurisdiction and to

avoid judicial measures against him. The eradication of corruption at intimate levels of

the “deep state” - as Iraq was dubbed in Nouri al-Maliki’s rhetoric depends decisively on the extent to which the reforms proclaimed by Prime Minister Abbadi can become a credible and functional reality. A depth which, unfortunately, does not refer to the

rule of law and to the sovereignty of the law, but at the malignant corruption that has penetrated the so-cial, institutional and moral integration of the “free” and “democratic” Iraq. And the war against “the corrupt-state” announces even more complex and lengthy, since it involves a hard to achieve change of an entire official, bureaucratic decision-making and identification building – equally difficult – of the substitutes uninfected by the corruption bug. And the war parallel to the Islamic terrorism and with the omnipotence religious and party militias will not only be an additional barrier to overcome for Iraq to regain

indeed, the value of “deep state of law”.

Ambassador Professor Dumitru CHICAN

Since the middle of the year, the Rus-sian diplomacy in the Middle East has proven a dynamics rarely encoun-tered in terms of its openness to dia-logue and “exchange of views” with level representatives of some of the main regional and international actors involved, in varying degrees of depth, during the conflict developments in

the Arab political geography. Started in June, with visits to Moscow of the Crown Prince of Saudi Arabia and of the Minister of Defense in Riyadh, who is also son of King Salman, contacts followed by multiparty meetings in Doha at the level of foreign ministers of Russia, the US and Saudi Arabia, the Russian-Arab contacts continued through successive visits to Mos-cow of the Jordanian ruler, King Abdullah II, of the Egyptian President Abdel Fattah of El Sissi and of the UAE crown prince, Prince Mohammed Bin Zayed Al-Nahyan. Saudi King Salman Bin Abdulaziz Al-


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Saud is also expected to visit the capital of the Rus-sian Federation in autumn this year, after being re-united with President Barack Obama in early September at the White House. As expected, recent con-

tact and talks at the high-est level that, especially the leaders of Jordan, Egypt and the United Arab Emirates had in the capital of the Russian Federation with President Vladimir Putin, have focused the attention of observers and commentators who did not hesitate to talk about a true Arab political “pilgrimage” towards the “new Mecca” of regional Russian diplo-macy, even if their presence on the banks of the Volga of the Hashemite sovereign and of Prince Mo-hammed Al-Nahyan were officially occasioned by their participating of this year’s edition of the interna-tional military fair “Max 2015”, held in Russia, while the visit of the Egyptian leader Abdel Fattah El-Sissi was intended to achieve a agreement established a long time ago, especially related to the Egyptian-Russian bilateral relationships and contacts. This period of dialogue raised the question whether,

especially during the short period of time in which they occurred, these dialogues were unreportedly aimed at achieving a “transshipment” of the Russian diplomatic train from the traditional track which it has performed on another line with a trajectory that is more adapted to the existing regional realities of the Middle East, the deep meaning of this interrogation being summarized by a derived question: it is to be expected that the Russian Federation carries out a radical review of the essence of its policy in affairs of the Arab-Islamic world in order to draw Moscow closer to the expectations, realities and hopes of the states and peoples in this part of planetary political geography and “snatch” the files of the Middle East from the monopolizing supremacy of the US? The optimistic approach and interpretation of the

possible answers speak without hesitation of a “revival” that occurred in President Vladimir Putin’s Middle-Eastern policy, aimed to restore the relations of the Russian Federation with the Arab-Islamic world, at least at the parameters that the former The Soviet Union had during the Cold War with the Arab regimes during the height of Nasserism, pan-Arabism and Baath socialism or during the nasserist-Islamic-socialist mix founded by Muammar El-Gaddafi.

According to the same optimistic observers, such a reversal will result directly predictably in a beneficial rearrangement of the Russian approaches of the “hot” issues of the Middle East and, above all, in the files of Syria, Yemen, Libya and of the campaign against the extremist j ihad ist phenomenon, especially given the sharp discrediting of the American regional policy, especially after the signing of the “nuclear deal” with the “new

regional enemy of the Arabs”, the Iranian Islamic regime. Such a point of view is argued by the camp of the

pessimistic analysts who consider that assertions such as those mentioned above are simple emotional exaggerations, stemming rather from desire than re-ality, which means, ipso facto, it is risky to expect Moscow to undergo dramatic position upheavals, simply because it was not the leadership in Kremlin that made the recent and intense “pilgrimages” in the capitals of the Middle East, but it was the Arab lead-ers who rushed knocking at the gates of Moscow, after longer or shorter periods of absence. Beyond speculation and interpretation, an analysis

of the known positions of the recent guests of Vladi-mir Putin - the leaders of Jordan, Egypt and the United Arab Emirates - does not identify any serious signal indicating that these bilateral dialogues have exceeded the strict framework of “bilateral state rela-tions” and “mutual information on regional develop-ments”. This assessment can be responded by the fact that,

from the position of “Mecca” of middle-eastern diplo-macy, the latter has achieved important success in terms of propaganda and image, including, for exam-ple, the opened support by Egypt and the veiled one by the other influential regional actors such as the Arab Gulf monarchies and Jordan, in terms of the proposal put forward by Vladimir Putin to create a new anti-terrorist coalition to include President Ba-shar Al Assad’s Syrian regime. However, the Rus-sian diplomacy is quite aware that neither Egypt, nor Jordan, nor the United Arab Emirates are holding the levers to decide on conflicting regional issues or to influence their evolution without taking into account the share the other dynamic regional players have (Iran, Turkey and Israel) not to mention the traditional extra-regional actors including, not least, the United

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States, the European Union and its “hard core” France, Germany and the UK. Or a “new alliance” against terrorism, in which the powers mentioned do not hold a major role cannot have a serious chance of success. All these considerations must be supplemented by

the reality that neither Egypt, Jordan nor the United Arab Emirates and, especially Saudi Arabia and the Arab Gulf Monarchies have the necessary leeway and sovereign decision, since they are, in a way, “captive” of the system of interests, relationships, axes and alliances they are either part of or depend-ent on. In other words, they cannot evolve in the Mid-dle East area completely independently of the inter-sected interests and influences and share of the ma-jor international and regional actors which are the United States, the European Union, Turkey, Saudi Arabia and the Islamic Republic of Iran. On the other hand, it can be argued that Kremlin’s

encouragement and support of the diversification and intensification of the bilateral or multilateral dialogue with the Arab states of the Middle East is fundamen-tally driven by the desire of the Russian Federation to show that it is not politically isolated, that it has the ability to influence and to make new regional allies and to establish and promote profitable and balanced relationships with the partners in the area. The Russian - Arab dialogue, as it has been

conducted so far and judging by its evolution potential, can only bode well for unlocking the deadlock of the conflict files in this part of the world, provided that all participants in this communication process show political will and abandon old paradigms of suspicion and distrust in approaching bilateral relations. So far, the results of the contacts in the last half of

this year are still far from allowing the assessment that, in addressing problems and regional policies, the Russian Federation’s position and diplomacy are oriented towards a “rupture” from the traditional pat-terns and towards a deep re-problematization of its

future strategy. We must not disregard the fact that, for the new Russian “Mecca” of the Middle Eastern diplomacy, this region still remains, an important ex-change currency in the games of global power and influence for the other influential stakeholders on the international and regional scene.

Dinu COSTESCU The landscape of today's Arab - Islamic Middle East

remind us, in the metaphorical comparison register, of the Aula Magna of the parliaments of failed states (and, not infrequently, of those states with old tradi-tions of consolidated democracy) where, for solving divergent issues, the interpellations are replaced with invectives, blows and other handy blunt arguments used until either until one of the parties leaves "the field of operations" or until all combatants, exhausted in corpore, give up the fight or postpone it and return to their seats, casting murderous glances and each thinking himself the winner. Winner in a battle which, as fragile as deceptive, for "creating the new Middle East" where, from a decade and a half, there have been no losers, nor winners, only the category of the direct and collateral victims, represented by the states of this Middle East and by their people. Especially in the last year, the war against the Is-

lamic state has become the cover under whose shel-ter and in whose name the so called and real "wars through intermediaries" are fought, be it political, mili-tary, electronic, psychological or intelligence services confrontations, while "the Islamic Neo-Caliphate" geographically advances, issues its own currency, destroys cultural history and identities and gives the actors in "the aula magna" new opportunities for re-sorting to blunt arguments. The culture and the ideology of the radical extrem-

ism of Islamic ideological origin does not serve any national or social, economic and spiritual prosperity purpose of the nations in this part of the world, and the anarchy that such a vacuum- chaotic in itself - causes does nothing more than serve in a way as dramatic as it is effective, precisely the theoretical paradigms of "the constructive anarchy" launched under certain historical circumstances after the end of the Cold War and consciously or simply reactively adapted by all the influential and potent actors in-volved in the regional developments, which individu-ally act to create their own model of the new Middle


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East. It is a many-player competition, whose partici-pants are determined to use all means - including and primarily the deeply immoral ones - until the op-posite side or sides will deplete arguments, forcedly giving up the confrontation, or actually leaving "the battlefield" to leave room for the most powerful and aggressive. Speaking of today's Middle East and of the major

competing sides, we can synthetically identify three fronts or groups of fighters committed to tip the bal-ance of the centers of regional power, influence and decision exclusively in their favor:

1.First of all, it is about the Middle East led by the United States of America, on one hand, and by the Russian Federation, on the other, which, once the old hostilities between the Western community and the Islamic Iran were removed, accredited the new rules of the game, different and even diametrically opposed in terms of tactics, politics and media but, which essentially have similar objectives even though they could differ in detail: approving conflictual con-fessional foundations of the new morphology of the Arab Middle East and resolving the active conflicts in Syria, Iraq, Libya, Yemen depending on the extent to

which they can serve as instruments and currency in the strategic chaffers about the new configuration of the global geostrategy of the third millennium.

2. Second, it is about what could be considered a derivation of the first axis of the competition for the future of the Arab-Islamic Middle East, namely the prospect of the relocation and the reconsideration that the United States and the European Union, on the one hand, and the Russian Federation, on the other, have in mind regarding the role, the place and the strategic advantages that the Islamic Iran can provide for the regional political games both based on the political agreement reached between the Western community and the theocratic regime in Te-hran, and in terms of the approaches to achieve a resolution as profitable and with minimal costs of the politico-military crises in which the above mentioned actors are involved in one way or another and it is particularly about the troubled situation in Iraq, about the civil war in Syria and the envisaged denouement of the war in southern Arabian Peninsula, to which we could add in a later stage the tackle of the "peripheral" cases of Libya and Lebanon.

3. Third, we shall discuss the group of influential

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regional actors: Saudi Arabia, Turkey and Iran, whose competitive and regional scale interests are as complex as well known to be developed within the parsimonious area of these lines. Another dramatic and overwhelming image of the

Middle East subsequent to the “Arab spring” is pro-vided by the huge wave of migration which, being caused by the perpetuation and the degrada-tion to unsustainable limits of the security and social situation in this part of the political geog-raphy, more threateningly knocks on the gates of Western Europe that is too little prepared to face such a humanitarian phenomenon with the prospect of becoming an unprecedented event since the last World War. The illegal emigration from the Middle East

and the neighboring Asian regions to the old continent is not a new issue. Its numerically significant debut coincided with the onset of the Arab spring in the northern African conti-nent and had an increasing trend from hun-dreds of people in 2010-2011 to approx. half a million people only in the first half of this year.

But the figures provided by the local and international bodies also include the thousands of migrants who have been killed in the Mediterranean waters or along the sinuous routes of the exodus in search of a better and safer life. Nevertheless, the reaction of the states that became targets for migration, was limited to discursive and bellicose statements which, how-ever, serenely ignored the reality that the solution to this crisis should not be looked for in Europe but, first of all, in the states supplying emigrants, as one over-looked the reality that Europe has had its consistent contribution to the genesis and the evolution of the general crisis of the Middle East following the Arab Spring, and in this regard, Libya is the most convinc-ing example. More recently the old method of resort-ing to the conspiracy theory was launched and widely circulated, the one accused this time being the Rus-sian Federation considered to be causally behind this worrying phenomenon, as "revenge" for the eco-nomic and political sanctions that the European Community subjects it to, the aim of this plot, accord-ing to the spread theory, being to flood the West un-der the waves of this human tsunami, to clutter the Schengen area and to destabilize the entire social, security, economic, cultural and identity establish-ment of the Member States of the European Union and the union itself. There are no arguments to this effect. For it is obvious that the advantage of the con-spiracy theories is precisely that they do not need proofs and arguments to be launched. And in this logic of the false unnecessity of argumentation, noth-ing hinders the assumption that for the European Community and its decision making bodies it is eas-ier to hide from the society their inability, their hesita-tions and their involvement in creating the premises that are presently visible through "the great north-ward migration" we are witnessing today. Speaking of the gray picture of today’s Middle East,


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we would be tempted to recall the old adagio accord-ing to which "the one who sows the wind, shall reap the whirlwind". But this assertion should be re-phrased as an interrogation, which is more appropri-ate to the criticality of the situation in question: “What will they reap, those who, at the outset, sow whirl-wind?” It ought to be said it is high time that first, the actors

on the edge and inside the Arab regional spectrum understood that the bet with the hypocritical theories of democratization and import civilization is lost, and there can be no true winners, but only a perdant hu-man community in terms of its hopes for stability and peace.

Lamia FOUAD, Beirut

For the first time since assuming his mandate as an international mediator towards solving the crisis in Syria, in early August, Staffan di Mistura presented the United Nations, the Arab League and the key in-ternal actors of the Syrian Civil War - the regime of Bashar Al-Assad and the political opposition – with a "roadmap" which, based on the ideas set out in the final statement of the "Geneva I process" is meant to provide a peaceful alternative, detailed and written in a highly academic style, for the perpetuation of the tragedy in Syria. Developed after the "historic" politi-cal reconciliation between the Western community and the Islamic Republic of Iran and in the context of the summer of 2015 experienced an intense and un-precedented campaign of bi and multilateral diplo-matic contacts between the main regional and inter-national actors involved in the evolution of the Syrian crisis - United States, Russian Federation, Saudi Arabia, Iran, the Syrian regime and the political oppo-sition – the new plan proposed by the Swiss-Italian diplomat retained, as was natural, the attention of the analysts and the media and the novelty that he brings is limited to determining a phased timetable and to establishing an "International Contact Group" for following up the implementation of the proposals put forward in the new "roadmap”. For the practical benefits of the new vision of Staf-

fan Di Mistura, a particularization of its form and sub-stance is not irrelevant. Formally, the "roadmap" is focused on two main

documents: the first is "the political executive frame-

work" for the implementation of the "Declaration of Geneva I" adopted in June 2012 and the second ad-dresses the mechanisms and the means of action of the four working groups proposed to be composed of representatives of the government, the opposition and the civil society in Syria, which would become active starting with mid-September this year for a pe-riod of three months, i.e. in principle until mid-December, during which the parties will agree on the duration and the objectives of the three steps pro-posed to achieve a final agreement:

- the period of the preliminary negotiations when the following aspects would be agreed upon: the general and sustained military cease of operations, the establishment of measures of approach and co-ordination between all combatant forces (except the radical terrorist Islamic formations), the establish-ment of the forms of integrating them into a national structure, the reform of the military institution and of the other security sectors, the agreement upon a "transitional authority" and their powers;

- the transitional phase for which the document provides mainly the following: the strengthening of the measures to maintain the ceasefire, the estab-lishment of a timetable for stopping the military, logis-tical and human resources support for all the combat-ant entities and the withdrawal of all foreign combat-ants, the establishment of a "Military Council for Transition" and a "Provisional Governing Authority" with absolute management powers in all civil, military and security sectors, including the Military Council. The Authority will be composed of representatives of the regime, of the political opposition and of the local armed formations, established on a parity basis. Be-sides these two management and political and mili-tary coordination bodies, this "roadmap" proposes the establishment of a "Syrian National Congress" to contain representatives of the regime, the military and the political opposition and the civil society. The tasks of this structure will also cover the embarkment and conduct of a national overall dialogue for rebuild-ing confidence, revision of the constitution towards its further adaptation, the elaboration and submission of instructions and guidelines for the Provisional Gov-erning Authority, which also has the powers of a Leg-islative forum substituting the current Parliament (People's Council) whose sessions works will be sus-pended throughout the stages of transition. Di Mistura’s plan also provides for “maintaining and

reforming the existing state institutions including, in a prominent place, the army, the security and the jus-tice sector”. For building confidence, the document proposes rejecting any measures of dissolution (modeled on the Iraqi precedent) of the Arab Social-

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ist Baath Party and agreeing by consensus to a list containing the names of the 120 officials who, for various degrees of involvement in the current conflict cannot hold any decision position during the transi-tion period. The same framework circumscribes the proposal to abolish “some” of devices and security and intelligence structures currently in operation. Ac-cording to the plan proposed by the international me-diator, parliamentary and presidential elections under the auspices and control of the United Nations will be held during this stage. The second document, regarding the technical as-

pects of the process relates in particular to the estab-lishment and operation of four sectoral working groups, namely:

- Group (or committee) for security issues and non-discriminatory protection;

- Committee for military and counterterrorism; - Group for political and legal problems - Group for institutional reform, reconstruction and

development, whose success depends fundamen-tally on public support, financial assistance and eco-nomic, advisory and investment cooperation etc., from the international community. Related to this, paragraph 20 of the document states the interna-tional community’s commitment that to end financial and economic sanctions imposed to the current Syr-ian regime during the transitional period and to ac-tively engage in solving urgent issues such as the return of refugees and displaced persons to their homes, or assisting the Provisional Governing Body in eliminating terrorist groups or ensuring a decent minimum (housing, food, health and social services) to the population affected by the war. It is certainly premature to issue estimates and fore-

casts regarding the chances that Staffan di Mistura’s plea for peace has in terms of success and prospects of a new failure. The development of a new “roadmap” for Syria is in itself a positive step that benefits form the nuances of the encouraging ap-proach occurring on regional and international level regarding the end of the Syrian civil war. But, as re-sulting from the reading of the texts discussed, the implementation of their provisions depends to an ex-tent on the political will of the great decision-making regional and extra-regional actors which Staffan Di Mistura’s “roadmap” is addressed to as it is to the internal actors of the domestic Syrian arena. The analysis of new proposals cannot overlook the fact that, for the first time, with the implied or explicitly stated consent of the great powers, the United Na-tions, the League of Arab States and the influential regional states, the documents no longer cling to the haunting idea of Bashar Al-Assad’s person and his political future, an issue which has been at the core of the debates about the fate of a country and a peo-ple, practically leaving it up to the direct belligerents to find a consensus on the subject. Of course, proposals and ideas that bear the signa-

ture of the international mediator are not exhaustive and certainly not universally accepted. And difficul-ties in the way of peace have not changed at all. But, at the same time, no one expects Stafan Di Mistura to be a “deus ex machine”, a miracle worker, as no one expects the “happy end” of the Hollywood films from one day to another.


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Emilian M. DOBRESCU1 BRICS Development Bank is a multilateral development bank, an

alternative to the services offered by the World Bank and the International Monetary Fund. BRICS Devel-opment Bank changes the traditional balance imple-mented by the IMF and the World Bank to the global economy. With this bank, the 5 great emerging states of the world decide on the common usage of their reserve currencies in order to prevent possible crises in their balance of payments as well as currency or monetary crises. BRICS Development Bank is a useful instrument of

support for the development of cooperation, com-merce and mutual investments. The group holds a special place in the global economy. It represents the biggest market in the world. The population of the BRICS countries represents 42% of the world’s population (approximately 2.99 billion people). These countries have enormous natural resources, a good industrial basis with well-prepared people that pro-duce approximately 30% of the global GDP, while the BRICS imports and exports represent about 20% of the world trade, totaling 6.140 billion dollars. The capital of BRICS Development Bank is 1000 billion dollars, but the share of the BRICS countries cannot be reduced to less than 55%. Preliminaries In 1989, Nicolae Ceau escu launched the idea of

setting up an investment bank of the developing countries after having withdrawn Romania from the IMF and banned by law the foreign debt of the coun-try. His project was supported by the leaders of nu-merous so-called third-world countries as well as by certain Arab oil producing countries2. The principle of creating this bank and the idea of

common currency reserves was agreed on only in 2012. Negotiations have been dragged on ever since that moment and the 5th summit form March 2013 in

Durban (South Africa) ended in semi-failure3. This international financial institution was set up on 27 March 20134. The new bank will start operating for loans in 2015. On 2 September 2013, in Moscow, the main emerg-

ing economies – BRICS countries (Brazil, Russia, India, China and South Africa) discussed the issue for the first time, prior to the G20 head of state and government reunion that took place on 3 and 4 Sep-tember 2013 in Saint Petersburg, on the possibility of setting up common currency reserves in order to pro-tect themselves from the volatility of the currency ex-change. The Russian Foreign Minister Sergei Lavrov said at the time during a press conference that “Our leaders will examine the implementation of objectives set at the Durban summit held in March 2013, refer-ring to the creation of a BRICS development bank and the establishment of common currency re-serves”. These currency reserves would allow BRICS countries to fight off the negative influence of fluctua-tions on the currency market, according to the head of the Russian diplomacy. The currencies of the main emerging countries, in-

cluding the Indian rupee and the Brazilian real have been significantly decreasing for several months, while the investors were redirecting their attention towards the US, expecting an increase in the basic interest of the biggest global economy. Under these circumstances, the central banks of certain emerging countries initiated a massive acquisition of local cur-rencies in order to protect the rate of exchange. Separately, the Russian Vice-Minister of Finance,

Sergei Storchak, said that BRICS countries agreed basically on their future development bank, which would have an initial subscribed capital of 50 billion dollars, but final details would require several months to be established. Sergey Storchak said that “We must not start from the idea that the bank will be-come operational as fast as we imagine. It could take several months for that, maybe even a year”. Accord-ing to the Russian official, the issues that have not yet been agreed on refer to the structure and division


Economic Horizon

1. Department Scientific Secretary at the Romanian Academy and scientific consultant at the National Economy Institute of the Romanian Academy 2. Dan Constantin, “Ideea lui Ceau escu, finalizat dupa 25 de ani: BRICS lanseaz o banc cu un capital de 100 miliarde dolari”, www.jurnalulnational.ro, retrieved on 12 July 2013 3. Powell, Anita, “BRICS Leaders Optimistic about New Development Bank. Voice of America”, retrieved 27 March 2013 4. Source: Wikipedia.com, retrieved on 15 July 2014, 13:28

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of the capital, the headquarters and the managerial team of the new bank. At the beginning of June 2014, BRICS emerging

countries (Brazil, Russia, India, China and South Af-rica) reiterated their agreement on the setting up of this development bank5, in order to “compete with the international economic institu-tions that fail to represent them properly”, announced Russia6. Discussions about the func-

tioning of the “new develop-ment bank” were the priority of the 6th BRICS countries sum-mit that was held on 15-16 July 2014 in Fortaleza, Brazil, being attended by high level officials of all the BRICS countries. A decision made was at the BRICS summit on the setting up of the BRICS Development Bank and of a reserve fund, as counterpart of the World Bank and the International Monetary Fund, as well as the western hegemony7. The presidents of the BRICS countries – Dilma Rousseff, Brazil; Vladimir Putin, Russia; Xi Jinping, China, Jacob Zuma, South Africa and Manmohan Singh, Prime-Minister of India – are the figures that decided the creation of the BRICS Development Bank. The establishment of the Development Bank could

serve the will of the BRICS countries to reform the number of votes and share8 of representation in the International Monetary Fund (IMF). The unpredict-able decisions of the US Federal Reserve and of the European Central Bank represent the main reasons for the establishment of currency reserves at the BRICS Development Bank. In order to support the currency of a country at a difficult fluctuating time, a decision has been made about the creation of a re-serve currency pool. The funds are not to be trans-ferred anywhere. The money will be deposited in the accounts of BRICS countries central banks. When-ever necessary, each of the countries will be able to use this money.

The characteristics of the BRICS Development Bank BRICS Development Bank offers financing for infra-

structure projects and contributes to the creation of a “contingent reserve arrangement” of 100 billion dol-lars, which would help member countries counteract

the possible future financial shocks9. The bank is special-ized in infrastructure and it is open to other UN member countries as well. The capital of the BRICS member coun-tries needs to be higher than 55%. The capitalization of the bank is an important objective and the financing will be shared equally, while the initial capital was established at 100 billion dollars and is to be com-pleted for 7 years. The cur-rency reserve of the bank of-

fers essential protection against the fluctuations on the financial markets. The initial 100 billion dollars of the bank come from: China – 41 billion, India, Brazil and Russia – 18 billion each and South Africa – 5 billion. With a capital of 100 billion dollars, the BRICS De-

velopment Bank is a rival of the World Bank, which has, in its turn, a capital of 163 billion euro and it represents an alternative in the international financial system dominated by the United States and Europe. The other objective of the BRICS countries – the es-tablishment of a common currency reserve – is an alternative to the operations of the International Monetary Fund (IMF) and can be organized as a common currency fund of the five BRICS member countries. By creating this common currency fund, the BRICS members reached the conclusion that it is very important to have another “financial buffer” ex-cept the one offered by the International Monetary Fund. The headquarters of the new bank was set to be in

Shanghai (China). The president of the financial insti-tution is Russian and his appointment lasts five years, whereas decisions are made only with the agreement of four out of the five BRICS member

5. Smith, David, “BRICS eye infrastructure funding through new development bank”, London, The Guardian, retrieved 3 April 2013 6. Agence France Presse, on www.HotNews.ro, retrieved on 9 July 2014, 16:03 7. Anca Dumitrescu, “Statele BRICS ar putea înfiin a o banc de dezvoltare i un fond de rezerv ”, source: Mediafax, 15 July 2014, 18:57 8. The IMF quota represents a country’s contribution to the capital of the fund as well as its share in the IMF decisions. The repre-sentation quotas can decide on the dimensions of the loan that the country receives from the IMF. Since the creation of the IMF, the US has the biggest quota as compared to any other country, namely 17.08, which gives it the veto; any decision or any initiative of the IMF is adopted only if it received 85% of the votes. 9. * * *, BRICS bank to be headquartered in Shanghai, www.en.itar-tass, retrieved 11 July 2014

31

countries. The highest college structure is the Gover-nors’ Council, while the executive structure is the Board of Directors. The Ministers of Finance from the five BRICS member countries are the ones that form the Board of Directors, initially presided by Brazil. The bank also has a regional headquarters in South Africa and it does not exclude the possibility to ac-cept other nations in the future; the sixth member country of BRICS bank is Iran. The BRICS bank has three levels of leaders: the

Governors’ Council (Presidents’ Council); the Council of Directors and the Chairman. BRICS bank Presi-dents’ Council had its first meeting in Ufa (the Rus-sian Federation) in April 2015. The Russian Minister of Finance, Anton Siluanov, was appointed President of the BRICS bank Governors’ Council. The viewpoint of the IMF The establishment of a BRICS development bank is

an initiative that the IMF is interested in monitoring. Efforts for the mobilization of resources for infrastruc-ture and sustainable development in the developing countries are important steps that need to be contin-ued. The issue to be taken care of – the inequality in infrastructure in the developing countries is a factor that blocks sustainable growth, especially in Africa. The IMF did not follow the example of the World

Bank, which welcomed the initiative and announced itself ready to cooperate with the new bank in order to reduce poverty in the developing countries. South Africa’s viewpoint The BRICS countries stand as a significant force in

terms of the finances of the world. “Their power is amplified by the fact that it represents 42% of the world’s population, approximately 30% of the GDP and 40% of the planet’s currency reserves” said Jacob Zuma, South Africa’s President, at the Durban summit in July 2013.

Brazil’s viewpoint Dilma Rousseff, the President of Brazil, received the

leaders of the other BRICS countries in Fortaleza, on 16 July 2014, where the establishment of the Devel-opment Bank was announced. The BRICS bank will finance the great infrastructure projects of the BRICS countries, which represent 42% of the world popula-tion and fifth of the global resources, while the funds are set to meet certain situations in financial crises. The Russian President Vladimir Putin, the Chinese leader Xi Jinping, the South-African President Jacob Zuma and the Indian Prime-Minister Narendra Modi met South African heads of state on 15 July 2014 in Brazil. China’s viewpoint China supports another development bank project,

next to the BRICS bank, namely the Asian Infrastruc-ture Investment Bank, an institution that aims at con-tributing to the improvement of infrastructure on the Asian continent and to increase the country’s influ-ence in the region. The Chairman of the World Bank, Jim Yong Kim,

said that the financial institution that he was leading was opened to cooperation with any development bank, whether it was the BRICS Development Bank or the Asian Infrastructure Investment Bank. India’s viewpoint “Russia and India Report” magazine considered in

2013 that a development bank controlled by the BRICS would make the financial global system more rightful since the emerging economies are net credi-tors of the developed countries, even though the global wealth remains in the possession of the latter. Another argument in favor of this bank is that

BRICS countries have huge reserves of dollars which could be depreciated because of the lack of new emissions by the American Federal Reserve; there-fore this money could be better used for the financing of development projects. The same publication considers that the financial

institution could “detox” the global financial system which is full of toxic products and scandals for the manipulation of interest rates. The same source ar-gues that the World Bank and the IMF have not man-aged to eradicate poverty in any country during their entire activity because the purpose of the IMF is not to help, but to create poverty and dependency, on the one hand, and on the other hand because when they try to have positive contributions, they fail to un-


32


derstand that the weak countries do not need large projects, such as the ones that they promote, but they need small investments that solve the real prob-lems. Russia’s viewpoint According to “Russia Today”, the bank is a financial

institution aimed at protecting the interests of the group from the speculative pressures of the system as well as a reply of the emerging countries to the discretionary policies implemented by the Interna-tional Monetary Fund. The development bank will allow access to preferential credits for investment projects and it will provide a protection fund of up to 200 billion dollars. The Russian President Vladimir Putin said at the opening of the G-20 summit held in July 2013 in Saint Petersburg that “In its final phase – the initiative of establishing a reserve currency fund of the BRICS countries – agreed to increase its capi-tal to 100 billion dollars”. On the same occasion, the Russian Minister of Finance, Anton Siluanov said that the main divergent opinions have been solved and the BRICS leaders are prepared to sign the agreement on the establishment of this bank. “We need to introduce amendments about the legislation; including on the budget law and decisions must be ratified. It is a process that takes time and if it does not end by 2015, it will be ready in 2016”. The Rus-sian Minister of Foreign Affairs, Sergei Lavrov, said that the bank “will help avoiding the negative impact that the fluctuations on the currency market could have on our economies”. At the beginning of the first week in July 2014, Rus-

sia’s Minister of Finance, Sergey Storchak said that “There are many difficult details that must be solved. They are systemic, complicated topics and negotia-tions are difficult. We must understand that the bank will not begin to operate as fast as we would believe. It could take months, maybe even a year”. In mid-March 2015, the Russian Federation ratified the agreement on the functioning of the BRICS Develop-ment Bank with an initial capital of 100 billion dol-lars10. Project Double Eagle The Russian Minister of Foreign Affairs said on 2

April 2014 that President Putin ordered the immedi-ate launch of “Project Double Eagle”, according to which the global energy resources would be pur-chased in gold11. According to “Project Double Ea-

gle”, the Central Bank of the Russian Federation would produce 5 ruble gold coins containing .1244 Troy Ounces of .900 pure gold, with a diameter of 18 mm, emblazoned with a shielded and crowned dou-ble eagle, which would become the world’s alterna-tive to both the US dollar and euro for the purchasing of energy supplies. “Project Double Eagle” includes also the creation of

a national payment settlement system which would allow Russia to build a foundation that could very soon offer an alternative to the Society for Worldwide Interbank Financial Telecommunications (SWIFT) system. Sberbank, the biggest bank in Russia and Eastern Europe no longer gives loans in foreign cur-rencies, which means that Russia voluntarily broke away from the petrodollar. As for the SWIFT system, the “glue” that connects

the global monetary system to the dollar, this “bank of the central banks” operating as a mediator of cur-rency exchanges and considered to be the pivot point for global commodity and energy transactions tied to the reserve currency, it could be destroyed in a very short period of time by this new system based on gold. Conclusions. Consequences. BRICS Development Bank will become functional in

2015 and it requires that each of the participant countries put up a capital equal to the capital they want to take out, except for China (the biggest con-tributor) and South Africa (the smallest) which will be able to take out half and the double of their contribu-tions, respectively. The BRICS Development Bank changes the traditional balance created by the IMF and the World Bank in the global economy. With this bank, the 5 emergent countries decided to bring to-gether and share their currency reserves in order to fight possible crises in their payments as well as cur-

10. After Adrian Co ereanu, source: “Alternativa României” 11. Valentin Covalciuc, “Înfuriat, Putin ordon „Proiectul Vulturul Bicefal” pentru a distruge economiile SUA i UE”, source VotP, http://www.whatdoesitmean.com/

33

rency or monetary crises. Martyn Davies, Chief Execu-

tive Officer for “Frontier Advi-sory” in Johannesburg said that “The deepest rationale for the BRICS is the creation of new Bretton Woods-type insti-tutions that are inclined to-ward the developing world. There is a shift in power from the traditional to the emerging world. There is a lot of geo-political concern about this shift in the western world”. The BRICS countries, with cumulated cur-rency reserves of 4,400 billion dollars and grouping 43% of the world’s population, are trying to get more influence in the global economic and financial sys-tems. Charles Robertson, from the Renaissance Capital

Investment Bank said: “If it becomes functional, such an institution will change the situation. South Africa or India will have access to exchange reserves that would make them resist falls on their markets” as it happened in 2013 after the developments in the American monetary policies. The initiative is also in-teresting because this is the first multilateral institu-tion headquartered in China. The Development Bank would be the first extraordinary achievement of the BRICS countries, which in 2013 dealt with important outputs of capital after the Federal Reserve has re-duced the program of quantity easing, in relation with whom it failed to find coordination12. The new BRICS Development Bank is an important step towards the post-crisis world order. Bibliography:

1.* * *, Agence France Presse, taken over from www.HotNews.ro, retrieved on 9 July 2014, 16:03

2.* * *, BRICS bank to be headquartered in Shanghai, www.en.itar-tass.co, retrieved 11July 2014

3.Constantin, Dan, “Ideea lui Ceau escu, finali-zat dupa 25 de ani: BRICS lanseaz o banc cu un c a p i t a l d e 1 0 0 m i l i a r d e d o l a r i ” , www.jurnalulnational.ro, retrieved on 12 July 2013

4.Covalciuc, Valentin, “Înfuriat, Putin ordon „Proiectul Vulturul Bicefal” pentru a distruge economiile SUA i UE”, source VotP, http://www.whatdoesitmean.com/

5.Dumitrescu, Anca, “Statele BRICS ar putea înfi-in a o banc de dezvoltare i un fond de rezerv ”, source: Mediafax, 15 July 2014, 18:57

6.Powell, Anita, “BRICS Leaders Optimistic about New Development Bank. Voice of America”, retrieved 27 March 2013 7.Smith, David, “Brics eye in-frastructure funding through new development bank”, Lon-don, The Guardian, retrieved 3 April 2013 8.Surdu, Alexandru, “ rile BRICS î i lanseaz banca de

dezvoltare”, www.bursa.ro, retrieved on 10 July 2014, 07:50


Ph D Emilian M. DOBRESCU, born in 1954, is during the last 25 years, Scientific Secretary of the Romanian Academy, De-partment of Economics, Law and Sociology. His key qualifi-cation is Economic Integration, General Management, Social

Economy, Sociology of Management. He also car-ried out assessment and synthesis of the researches undertaken by the national institutes and their inter-relation in the transition from communism to market economy. He has participating in reaching practical solutions to complex economical problems, inte-grated from a socio-human point of view. He has co-ordinated scientific activity with a Program of the World Bank dedicated to the Restructuring Scientific Research Activity in Romania. He is familiar with the management and operational procedures. He has an extensive experience in the field of organizational and institutional programs and evaluation of various national programs. He has specialist skills in the fol-lowing areas: 1. Scientific activity co-ordinator in fields as: Economic, Law and Sociological Sciences. Studies on Scientometry considering all the men-tioned aspects of the situation in Romania today. Synthesis of social and financial aspects and their inter-relation in the transition from communism to market economy; 2. Practical solutions to complex economical problems, integrated from a socio-human point of view; 3. Evaluation of social impact assessment for strategies and national plans and their implementation; 4. Assessment of social, eco-nomic and educational programs; 5. Coordinating research teams; 6. Preparing curricula for graduated and post-graduated courses aimed on social, eco-nomic and educational objectives.

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Paul S NDULESCU

By mid-April 2014, Russia annexed Crimea, then using a hybrid war, conducted military actions in the

eastern regions of Ukraine, Donetsk and Luhansk, establishing an de facto occupation. The vast major-ity of countries, led by the US and the European Un-ion have not recognized the annexation of Crimea, took a stand against the Russian assault on Ukraine and took "deterrent" actions against Moscow, but also mentioning that military action against it is ex-cluded. In his turn, Vladimir Putin warned that Russia would be willing to use the nuclear weapons, exe-cuted a series of large-scale military exercises on the border with the European Union and moved on to economic retaliation. Given the forces and means at its disposal, Moscow could easily escalate the con-flict and conquer a much larger portion of Ukraine, if not the entire country. Why didn't it do it? Was it about the fear of the Ukrainian army? Highly unlikely. Or about the fear of the EU, NATO and the US? But, all the Western countries and the North Atlantic Alli-ance announced that they excluded a military inter-vention in favor of Ukraine. So, as it did to the Cri-mean Peninsula, Russia would have occupied a terri-tory, and the world ought to get used to this in the coming decades. Why then it didn't do it? Is there a threat as powerful

as the military one that stopped Russia, at least for now? Is there this non-military weapon so powerful to scare even the mighty Russia? The reasons why Russia stopped for the moment are more complex, but we believe that yes, there is such a tool! The Fi-nancial weapon! But, is there for real a financial weapon? Can the

finances be employed as a weapon? Yes, the fi-nances are used as a weapon, and on this front there is a bayonet fighting, even among allies, with signifi-cant recoil beyond the intentions of those who use it. In geo-political language, large-scale financial instru-ments are called "financial weapons of mass destruc-tion", borrowing Warren Buffett's characterization for derivatives. Money itself has great power. To exist, each individ-

ual is obliged to ensure their basic needs: food and water, shelter, clothing, followed by the need for se-curity, affection, appreciation, hygiene, healthcare,

education. Add to this the need to accumulate, which is becoming stronger and stronger. In the modern world, these needs are achieved by the money avail-able to each individual. The higher the number, the more necessities it can provide. People accumulate as they earn money. This

means that each individual will be able to accumulate beyond the basic needs, only after many years. A second way, the most common is to borrow money from a lender, usually a bank. One is getting quickly the goods he/she needs, but throughout his/her life, much of his/her earnings will go to the lender, which will charge interest and fees. For durable goods, the most common of which being the real estate, the loss will be covered by the increasing value of the asset, but almost certainly this growth will be lower than the interest paid. The same is true for companies regardless of their

size. Money is the blood of companies. If they want to grow quickly and on a large scale, the companies need bank loans, too. Any action affecting their earnings, hinders the indi-

viduals and the firms, especially if they are already in debt. The greater the loss, the greater the difficulties! And if the situation is widely multiplied, it causes problems locally, nationally or globally. The Great Financial Crisis that started in August 2007 and was characterized by a severe lack of liquidity had the go-off in the US housing bubble, driven by the banks facilitating household borrowing. The effects were equivalent to the planetary use of a weapon of mass destruction out of control! Like the individuals, firms and countries need

money to operate. For the state money is the blood, too. Therefore, if you cause a financial hemorrhage, the state body is likely to die. Budget revenues come mostly from taxes imposed on citizens and busi-nesses. The richer a country is, the more expendi-tures can afford, including for the military system. Even if the percentage is low, if the national budget is huge there is a lot of money allocated to the military. For example, US allocated in 2014 3.3% of its federal budget for military spending. But due to the US budget size, this means about USD 600 billion, i.e. 41% of the total world military spending or the equivalent of total military spending of the next 14 countries. By comparison, North Korea allocates 15.8% of the state budget for military spending, but

The Secret Services of the 21st Century and Security Issues

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that mean only USD 6 billion. But 15.8% is a very high percentage, harming other budget categories. In 2014, Russia had a defense budget of USD 70 bil-lion, i.e. 3.7% of the national budget, and China USD 129 billion, or 1.2% of the national budget. The same as the individuals and the companies, to

meet the necessities or to accelerate their develop-ment, the states borrow. At first and simplified glance, it would seem that the richest countries are playing the lender role for the poorer countries. That is totally untrue. Things are more complicated. Look-ing at the external debt of the countries of the world, we find that all are indebted. The US has a debt of USD 18.540 billion, i.e. 106% of GDP. Britain has a debt of 406%, France 222%, Germany 145%, Nor-way 141%, Italy 124%, Switzerland 229%, Hong Kong 334%, Iceland 724% and Luxembourg 3,443%. Although they are in debt, the countries are them-selves creditors, so it may happen that by making the subtraction some countries with high debt are actu-ally net creditors, such as Norway, Luxembourg, Switzerland and Italy. China has a foreign debt of 37.5% and Russia of "only" 23%. Does that put them in a good position compared to the more indebted Western countries? Apparently not, given that Russia is the subject of financial sanctions by the US and EU. At the state level, the financial weapon is the only

effective alternative to military action, particularly when the latter option is not usable, as for Russia. But the financial weapon is used not only to strike harshly the opponent while avoiding war, but as an instrument of pressure, also. The financial penalties came to be the first measure for the external political crises. They are preferred because they are easy to use, exert a very powerful pressure and have limited collateral consequences, that can be controlled. On 01.05.2015, Ian Bremmer, president of the Eurasia Group said: "The U.S. dollar has been a much stronger lever of American power internationally than our combat forces have been over the course of the past couple of years." Along with emphasizing its effi-ciency, the Eurasia Group ranked the weaponization of finance fourth among the top business risks in 2015, after the politics of Europe, Russia and the ef-fects of the Chinese economic slowdown. However, the efficiency of financial and economic

sanctions was often disputed. Most commonly, the economic sanctions are aimed for the regime change. Statistically, this is obtained in 4% - 34% of the cases. The fact is that penalties, any kind they are, especially the financial ones, are affecting the vast majority of the concerned population. If the situation is prolonged, it leads to sharp drop in the

living standards of the population, consumption de-crease, lower production, increased unemployment, all leading to high social unrest, that to keep under control governments should take police policy that will increase public discontent, with all the ensuing consequences. In 2006 the United Nations Security Council

adopted Resolutions 1696 and 1737, followed by Resolutions 1747 in 2007, 1803 and 1835 in 2008, 1929 in 2010, 1984 in 2011 and 2049 in 2012, which imposed and subsequently aggravated sanctions against Iran because that country refused to suspend its uranium enrichment program. One should recall that the 2003 military intervention on Iraq was moti-vated by the same concern regarding the possession of Weapons of Mass Destruction, this time by the government in Baghdad. For Tehran it was decided to be used another instrument, a non-military one - the financial, economic and weaponry and military equipment sanctions, although it was kept open the option for military intervention. For starter were tar-geted the investments in Iran's oil and oil products, the export of these products and the ongoing trade relations with this country, but later were introduced sanctions on the banking and insurance products. The result? Although it took nine years, in July 2015 it was signed an agreement with Iran for nuclear non-proliferation. That is very much because we are talk-ing about an Islamic country, whose state policy de-clares the elimination of Israel, that in 1979 attacked and occupied the US embassy in Tehran, taking 52 hostages and held them captive 444 days, and that even now is pursuing an anti-Western, especially anti-American policy. If the sanctions hadn't been effective, would the agreement have been signed and would Iran have waived the nuclear weapons? What would have been the alternative? An armed conflict whose short-term results were obvious, but with the medium and long term consequences ex-tremely difficult to control. It is believed that the sanc-tions imposed on Iran have given the best results in the history of using this weapon. On the other hand, there were imposed sanctions

against Cuba, but without the desired results. The warming of the relations between the US and Cuba in 2015 and the resumption of the diplomatic rela-tions were not the result of the sanctions imposed on Havana. Sanctions were imposed on North Korea, too. On

10.14.2006, United Nations Security Council adopted Resolution 1718 which imposed a series of economic and trade sanctions following the nuclear test Py-ongyang carried out on 09.10.2006. It followed Reso-lutions 1874 in 2009, 1985 in 2011 and 2087 in 2013.

36

Unlike the sanctions imposed on Iran, the North Ko-rean and Cuban ones did not have the desired re-sults, mainly because China had not complied with the UN resolutions and provided the Pyongyang with goods and funds. And because North Korea is dis-connected from the global economy and is a dictato-rial regime. There were common sanctions approved by the UN

in resolutions against Syria and South Sudan, also with ambiguous results. US applied sanctions against a long list of countries: Yugoslavia, Belarus, Burma, Central African Republic, Ivory Coast, Cuba, Congo, Iran, Iraq, Lebanon, the Liberian government of Charles Taylor, Libya, North Korea, Somalia, Sudan, South Sudan, Syria, Russia, Venezuela, Yemen and Zimbabwe, but used the financial weapon, too, against organizations that are in drugs trafficking, terrorism, cyberattacks, nuclear proliferation, traffick-ing diamonds, and against transnational criminal or-ganizations. What is the conclusion? Are the financial sanctions effective or not? The answer is a complex one, based on different

results, as we have seen. Fact is that the results of the financial penalties are not immediate. Fact is that in the medium and long term, the population of the targeted country will suffer. Fact is that its economy will be affected, the budget will have less money, which will hit the military system, would limit weapons program, reducing the risk of a military conflict. There is also the possibility that the entailed government, having no other choice and in desperation, would go to war, even though it knows it has no chance of suc-cess, but hoping for a draw, yielding it longer time for survival - see the tensions North Korea caused in recent weeks. For the sanctions imposed

on a country to be effective, international cooperation is needed, but sometimes some countries are reluctant such as China. But if 20 years ago it seemed to be justified to say that the efficiency is low, now with sanctions focusing and the interconnection of economies to the global economy, their efficiency is much higher. Using financial weapon against states entails high

risks as a result of erroneous calculations of side ef-fects and because it is a new tool that Washington now learn how to use, as a Eurasia Group report says.

If, until now, the financial sanctions were widely used for an entire country, in the last 10 years the US has refined this weapon to be more efficient, target-ing it very exactly where it has the greatest effect. This is well seen in the Russia case, on which it was decided to be used the financial weapon as a result of its aggression against Ukraine. The US Treasury targeted specific financial products, belonging to cer-tain Russian entities. According to Elizabeth Rosenberg, a former senior adviser to ex- Treasure Under Secretary David Cohen, chief of the Office of Terrorism and Financial Intelligence, it was "necessary to find a really narrow target set in order to make sure the pain falls exclusively or primarily on Russia" and as little as possible on US or European companies. The innovative solution was found in September 2014 to impose sanctions that included prohibitions on dealing in certain Russian equity and debt instruments to put pressure on the Bank of Rus-sia. Its efficiency is well felt; according to the latest as-

sessments, following the applied sanctions, the Rus-sian economy this year will be in a big downtrend. The GDP will be by 3.3% lower than last year, in July 2015 the Russian incomes were lower by 9.2% com-pared to the same period last year, and lower oil prices are reducing the budget revenues and are put-ting strong pressure on the ruble, which recorded the lowest quotations in the last two decades. The wors-ening of the standard of life makes the tensions in Russia to grow. Even if Russia intends to resume its general offen-

sive towards the West, the financial difficulties will make it to delay the operations, to limit them or to execute them in steps. In all the scenarios, one of the

effects of the financial sanc-tions is that it saves time. The financial intelligence is critical for the use of the fi-nancial weapon. Following the 11.09.2001 terrorist at-tacks, the US created in the Department of Treasury, the Office of Terrorism and Fi-nancial Intelligence. The ap-pointment on 02.09.2015 of its Treasury Undersecretary David Cohen as deputy di-

rector of the CIA underscores the growing impor-tance of the financial intelligence. The financial intelligence very accurately exposes

the vulnerabilities of adversaries, whether countries or individuals, all of whom need access to the global


37


financial system. It is easier to track the money flows than to follow the individuals or to monitor their phone calls. By the fi-nancial intelligence it may find out how the organizations are functioning, their compo-sition, strength, the links between them and by tracking their money can be carried out the best blows on them. Cleverly using the financial intelligence

makes the financial weapon very efficient and reduces the financial collateral losses. David Cohen said at a conference held at the Royal United Services Institute in London in June 2014 that the US strategy for the implementation of financial sanctions "is premised on the simple reality that all of our adversaries, to one degree or another, need money to operate, and that by cutting off their finan-cial lifelines, we can significantly impair their ability to function". As a result, the Office of Foreign Assets Control of the US Department of the Treasury, which implements the US sanctions, has become a key player in Washington's foreign policy. Here are some of the ways used as financial weap-

ons: - Freezing (blocking) the accounts of companies

or individuals; - Determining the stock price decrease; - Deterring investment and trade; - Serious damaging the country's national cur-

rency quotation target; - Causing the decrease of the country rating, that

leading to the decrease in investment and higher in-terest loans;

- Eliminating the banks of the target country from the SWIFT banking system. Andrey Kostin, VTB Bank President and CEO considered in December 2014 that eliminating Russia from the SWIFT system is equivalent to declaring war;

- Eliminating the target from the dollar-based fi-nancial system. Such a measure is compared to a nuclear attack executed on that country's financial system. The US can use this leverage, mainly due to the petrodollars regime that makes the US dollar the global currency reserve, yet. Most countries prefer the dollar as the currency of payment in trade. BRICS countries (Brazil, Russia, India, China and South Africa) are trying to upgrade to a multipolar international financial system, but the results will be seen only in the long term;

- Very precise sanctions phasing in time and in conjunction with other unfavorable developments in the amerced country, to achieve maximum efficiency.

Proof that the financial levers of the US government are very strong is the fact that in June 2014, BNP Paribas SA, the seventh largest bank in the world, agreed without challenging in court, to pay a penalty of 8 97 billion USD (!) because, according to US alle-gations, it carried out prohibited transactions with Su-dan, Iran and Cuba between 2004-2012. Although it seems an unusual pairing, the financial

weapon is used by their specific means, but with strong financial effect, by terrorist organizations, too, by targeting key areas of the economy of the con-cerned country. Executing attacks on the touristic sights in Tunisia, Egypt and Thailand, the terrorists wanted to determine foreign tourists to avoid these countries, which is equivalent to a travel ban and leading to large financial losses. For example, the direct contribution of the tourism industry in Tunisia's economy in 2014 was 7.4% of GDP and the total contribution reached 15.2% of GDP, providing jobs in the tourism industry to 6.8% of the country's labor, while its total contribution reached 13.9%. In the case of Thailand, the consequences are even more seri-ous, because the direct contribution of tourism in this country's economy was 9% of GDP, the total contri-bution was 20.2% of GDP, the direct employment was 6.6% of the labor and the total workforce contri-bution was 15.4%. Interestingly, on 08.30.2015, ISIS launched a 54

minutes video, produced to professional standards, declaring war against the US financial system, di-rectly and immediately targeting the dollar, implicitly declaring war against the US. ISIS calls on the world markets to stop using the dollar and revert to the fi-nancial system of the medieval Muslim caliphates. The proposed currencies are: the gold dinar (weighing 4.25 grams of 21 carat gold, worth USD 139); the silver dirham, with three denominations, currently in use in some Muslim countries (Morocco, the United Arab Emirates, and parts of Libya); a cop-per coin called fulus with two denominations used for small transactions; gold trinkets in lieu of coins. Al-though it seems a ludicrous statement, the war ISIS is declaring against the Western financial system and

38

economies is deadly serious. They are having four goals and means in their view:

1. The implementation of an Islamic state and world order governed by its fundamentalist values;

2. In the occupied territories, ISIS has natural re-sources, including oil, uranium, gold and silver, which they are trying to use in their reach for affluence and control of the world’s economic levers;

3. By controlling the arms and oil black markets in the Middle East, Africa and parts of Europe, ISIS has the necessary leverage for forcing the concerned traders to accept payment in gold dinars. It is very likely that they will agree, since some of them already trade in bitcoins, a virtual currency with no national, economic or banking backing;

4. ISIS has many followers among the rich and powerful of the Gulf emirates. If they start trading in gold dinars in their international business transac-tions, the Islamists would soon start infiltrating the world’s financial system. Already the day after the launch of the ISIS declara-

tion of war, on 8.31.2015, the radical international pan-Islamic political organization, Hizb ut-Tahrir of Britain, advised to consider the benefits of returning to the old Gold Standard for resolving the sovereign debt crisis threatening the Eurozone, instead of “printing counterfeit money on keyboards.” Returning to the Gold Standard system is practically

impossible, but the ISIS declaration of war against the Western financial system shows how crucial the financial weapon is for the world today. There is another collateral aspect of the financial

weapon which has a very strong recoil and high po-tential, totally unwanted by the rich countries. The great poverty in which entire populations are strug-gling creates all prerequisites for very large social movements. Maybe poverty has played its role, among other factors, for triggering the wave of revo-lutionary movements in the Arab world, started in Tu-nisia in December 2010. But poverty gives birth and nurtures fierce hatred towards the West and creates a very easy nursery for the Islamic terrorist organiza-tions, apart from the religious and ideological motiva-tions. Just to get an idea, 10% of the planet's citizens hold

85% of its wealth. Furthermore, 1% of people own 40% of the world's wealth. Holders of wealth are con-centrated in Europe, the US and East Asian coun-tries. More than 30% live in the US, 27% in Japan, 6% in the UK and 5% in France. At the other ex-treme, half of the planet's adult population owns less than 1% of its wealth. Near the lowest poverty are

Indonesia with 1,400 USD / capita and India with 1,000 USD / capita. For comparison, the Japanese have 181.000 USD / capita, Americans 144.000 USD / capita and the British 127.000 USD / capita. As a consequence, we are witnessing a massive

illegal migration from poor neighboring Arab coun-tries to the rich EU. This phenomenon will certainly accelerate and escalate so that the whole European area will soon have very big problems. In addition to the sanctions imposed on third parties,

the developed countries are fighting very tough be-tween them on the financial front. They are using all the means at their disposal. In addition to the meas-ures taken by governments to attract massive invest-ments in their countries, to obtain better conditions for the financial investments made by the companies under their registration, they are using their curren-cies to determine good conditions for their economic growth, too. A strong currency helps the imports and draws back the exports. So, countries periodically try to devalue their currencies and there is a struggle between them, called currency war or competitive devaluation, to increase their exports. Higher exports mean high domestic production, low unemployment, large budget revenues. On the other hand, higher import prices caused by currency devaluation, lower citizens purchasing power and, in addition, the de-valuation may attract other countries' retaliation. And competitive devaluation may lead to lower overall world trade, with repercussions for all countries. Countries with very strong export, such as Ger-

many, which obtains about 50% of its GDP from ex-ports, are very interested in a currency with a low and stable exchange rate, but also in a wide market, where to enjoy the exemption from import duties. For Germany, the European Union market is a dream, that it very strict controls. The first Currency War took place in 1930s during

the Great Depression when countries tried to devalue their currencies, in order to stimulate their economy. This action taken by a country virtually pushed its unemployment into another, and determined the af-fected country to reduce its currency quotation, also. The consequence has been a reduction in the world trade and everything that followed. According to Guido Mantega, the Brazilian ex-finance minister, but also to many other government officials and analysts, a global currency war began in 2010 and would have ended by mid 2011. It had been used a complex of fiscal policy measures which included the direct inter-vention of governments to impose capital controls and, indirectly, the quantitative easing. There was even a rhetorical conflict between the US and China


39


on the yuan's artificial devaluation. In January 2013, Japan announced measures to

lead to yen devaluation, which initiated the concern for the outbreak of a second currency war, this time the tensions being high not between the US and China, but between Japan and the EU. By February 2013 after the G7 and G20 have issued statements that they will avoid competitive devaluation, the con-cerns were in some sort reduced. But after the Euro-pean Central Bank launched in January 2015 its quantitative easing program, which entails also the Euro devaluation, the discussions about a currency war have intensified again. Following the Western sanctions and the per-

ception of high country risk by the businesses, which led to the withdrawal of funds, the Rus-sian ruble devaluated too much to be beneficial for the Russian exports, which already consists vastly of oil (whose price has fallen steeply, from 99.50 USD / barrel in early 2014, to 39 USD / barrel in August 2015), natural gas and military equipment. So, ruble fell more than 50% against the US dollar since the beginning of 2014, although the Central Bank of Russia tried to halt the depreciation by increasing the reference rate from 6.5% to 17%. At this mo-ment the rate is 11%. Another consequence of the financial penalties is the decreasing of Mos-cow's federal reserve. If, at the beginning of 2014, Russia had a reserve of USD 510 billion, by the end of July 2015 this had fallen to USD 357 billion. We cannot conclude without saying that in the

financial market there are non-state actors, but with huge funds - the banks. As a matter of fact, the planet's entire activity is conducted through banks. Working with the "blood" of the economy, the banks are vital and cannot disap-pear. They are divided into central / national banks and commercial banks. The commercial banks seek only profits, but they are instrumen-tal in the countries' financial fight. They are an intrinsic part of the financial weapon. But, be-side this "ordered" activity, due to the size of their available funds, the commercial banks through their actions can affect countries' de-velopment or of the whole world. Suffice to re-call that the Great Financial Crisis that began in 2007, was initiated mainly by the US banks' easiness to give sub-prime loans. The Greek situation, too, is all due to the easiness with which banks are granting loans to states, although they have all the tools nec-essary to determine whether the debtor is solvent or not. If, for loans credited to individuals, banks are

held accountable and, if it turns out that they bor-rowed more than the customer could pay, they bear part of the loss, for states such a liability is missing and the banks are requesting the payment of all debts with interest, even if it affects the entire popula-tion. But this is another topic that is not the subject of this discussion. To have a more or less accurate image we should

also show you what are the total assets of the 20 largest commercial banks in the world.

The International Monetary Fund, the World Bank Group (comprising the International Bank for Recon-struction and Development, the International Devel-opment Association, the International Finance Corpo-ration, the Multilateral Investment Guarantee Agency

Rank Bank name Total assets (USD billion)

1 Industrial & Commercial Bank of China (ICBC)

3,451.74

2 China Construction Bank Cor-poration

2,819.24

3 Agricultural Bank of China 2,716.10

4 HSBC Holdings 2,670.00

5 JPMorgan Chase & Co. 2,600.00

6 Bank of China 2,584.24

7 BNP Paribas 2,526.98

8 Bank of China 2,463.08

9 Mitsubishi UFJ Financial Group 2,337.04

10 Crédit Agricole Group 2,143.88

11 Barclays PLC 2,114.13

12 Bank of America 2,104.53

13 Deutsche Bank 2,078.13

14 Citigroup Inc 1,842.53

15 Japan Post Bank 1,736.34

16 Wells Fargo 1,687.16

17 Mizuho Financial Group 1,640.71

18 Royal Bank of Scotland Group 1,635.93

19 China Development Bank 1,614.99

20 Société Générale 1,591.00

40

and the International Centre for Settlement of Invest-ment Disputes) and the European Bank for Recon-struction and Development are not listed as they have lower capital. For example, in 2010 the IMF had "only" SDR 476.8 billion (about USD 755.7 billion). By comparison, in 2014, Japan had a GDP of USD 4,616 billion, Germany USD 3,859 billion, UK USD 2,945 billion, France USD 2,846 billion, Italy USD 2,148 billion and Russia USD 1,857 billion. Interest-ing, isn't it? It is even more interestingly if we compare the

Gross World Product (GWP), which in 2014 was around USD 87,250 billion at purchasing power par-ity (PPP) and USD 77,301 billion in nominal terms, with the assets held by the top 20 banks in the world: USD 44,358 billion. But in the whole world there are around 15,000 banks, so the global banking system's total assets are much higher than that! Importantly, according to McKinsey & Company, the global debt has grown in the third quarter of 2014 to USD 199,000 billion, increasing by USD 57,000 billion (17%) in the last seven years of Great Global Finan-cial Crisis. In the second quarter of 2014 the whole planet was indebted 286% of its GWP, compared to 269% in the fourth quarter of 2007. This indebted-ness poses new risks to the financial stability of the world and undermines the global economic growth. Very worrying, the increase in debt is accelerating! Conclusions Because money is an indispensable tool for all the

human activities, their control has become an extraordinarily powerful weapon in today's globalized world. Even if the military force at hand elimi-nates the risk of an armed at-tack from the amerced state, then by only financial sanc-tions, in time, a state can be kneeled. This is clearly true for small,

medium and even large coun-tries. But it is harder applicable to the Russia and China super-powers, for two reasons. First, because they will fight back on this front, taking measures to counter the sanctions and to apply in turn kicks. And sec-ondly, because the sanctions against them are not sustain-able in the long term, without

affecting the states that apply them. And ample so-cial movements, followed by political instability, caused by extreme poverty, in a country that has nu-clear weapons, such as Russia or China are not very comfortable for the Western states. The penalties imposed to Russia were the only ef-

fective means available in response to Moscow's ex-pansionist tendencies towards the West. By applying them, several purposes are reached at once: Rus-sia's increased weapons program is stopped, and if it seeks to keep the pace, it will do it in the detriment of its own people; having the budget revenues decreas-ing in the medium term it is much less likely for Mos-cow to escalate the hybrid intervention it started last year in Ukraine; finally, in the long-term, after they will get used with the current anti-Western propa-ganda, the Russians might turn against their own government, that won't be able to provide them ade-quate living standards. If all of the above are applicable to Russia, they are

certainly valid for any other lesser country. Therefore, the financial weapon will be used increasingly more frequent, more visible or veiled. Not at all unimportant for the people of the world is

the increasingly aggressive role the banks have and that will increase. Although a non-state actor, the banks have all the necessary tools in the new world: they hold the majority of global financial assets and are playing both the role of the financial heart of the world and the role of the communicating vessels for the money blood, at all levels of the social life.


41

The Kalashnikov AK-12 (formerly K-200) is the newest derivative of the Soviet/Russian AK-pattern series of assault rifles and was proposed for possible general issue to the Russian Army. In late September 2013, the AK-12 was passed over by the Russian mili-tary, but it was announced in December 2014 that it had passed state tests and now is being evaluated by Russian Army as well as its competitor the A-545 (modernized AEK-971). The AK-12 uses the same gas-operated long-stroke piston system of previous Kalashnikov rifles, but many features are radically differ-

ent from other guns in its family. The light version has the ability to change calibers by swapping barrels. The standard caliber is 5.45×39mm and can be changed to 7.62×39mm and 5.56×45mm. Other intermedi-ate calibers are expected. The heavy version will fire the larger 7.62×51mm NATO cartridge. It is fed through standard AK-74M 30-round magazines and can accept RPK-74 45-round magazines. The 7.62 So-viet-chambered version is compatible with AKM/RPK 30-round and 40-round magazines and 75-round drums. Magazines specifically for the AK-12 under development include a 30-round magazine with bolt-catch actuator, a 60-round quad-stack magazine, and a 95-round drum. An export version of the AK-12 is planned. Models for the civilian market are also being produced. An ex-perimental self lubricating nano-composite coating is also being tested on the AK-12 rifle. As the AK-12 sys-tem is designed to replace a number of current small arms, the following variants are under development: PPK-12, a submachine gun; AKU-12, a short barreled carbine; RPK-12, a squad automatic weapon, cur-rently only produced in 7.62×39mm; SVD-12, a designated marksman rifle, currently only produced in 7.62×51mm NATO; and AK-12/76, a 12 gauge shotgun. Other forms of modularity in the AK-12 system are likely to include interchangeable barrel lengths and cali-bers (5.45×39mm, 5.56×45mm NATO, 7.62×39mm and 7.62×51mm NATO). Specifications:

Presented by Cornel VAIDA

Weight 3.3 kg (7.28 lb) Length 945 mm (37.2 in) (725 mm stock folded) Barrel length 415 mm (16.3 in); Interchangeable

Action Gas-operated, long stroke gas piston, rotating bolt Rate of fire 650 (full auto) or 1000 (3-round burst) rounds/min

Muzzle velocity 880–900 m/s (2,887–2,953 ft/s) with 5.45×39mm

Effective firing range 600 m


Military Technology and Equipments, New Weapon Devices

42

A Spy for Eternity: Frank Wisner. A sad espionage story of a man who thought he

could change the word Author: George Cristian Maior

Published by RAO, Bucharest, 2014 The book was launched on 21st November 2014, at the Gaudeamus International Book Fair, and the au-thor says that: “You will discover the biography of the total spy, which is always interesting, but also from the perspective of our national history. It is really relevant as Wisner’s activity started in Romania after 23 August 1944. At first he was deployed within the American military mission in order to manage the issue of American pilots dead on Romanian territory. But the thing that really got me interested into Wisner is the fact he was the first American official to warn the Government in Washington seriously on the So-viet Union’s tendency to take political control over this area of Europe. Do not forget that America and the USSR were allies at that time. Franck Wisner had that courage and he fought for the independency of this people much more than others, as archives are clearly documented his activity. What is relevant about Wisner is that he was one of the CIA pioneers, as he was the first director of the CIA Secret Opera-tions. He always remembered his Romanian experi-ence and before he died he left an impressive letter on the values and virtues of our people saying that he believes Romani-ans deserve freedom.” Frank Wisner wrote: “I am thinking often about Romania. It was one of the most inter-esting and pleasant experiences.” In September 1947 CIA was created, then the Policy Planning Headquarters was es-tablished with the task to elaborate strategies on the strategic objec-tives and issues, as well as the National Security Council. How-ever, another organi-zation was needed in order to deal with clan-

destine operations aimed to diminish the influence of the Soviet Union in South-East Europe, and so the Office for Special Projects appeared on 1948, led by Wisner. Then the structure was named Office for Politics Coordination, meant to fight the activities un-der cover of the USSR and of their satellites by means of operations such as: propaganda, economic warfare, sabotage, annihilation, subversive acts, support given to the elements and groups of anti-communist resistance. Frank Wisner was accompanied by former employ-ees from the Strategic Services Office, of liberal ori-entation, but also by students coming from universi-ties such as Harvard, Yale and Princeton. On the atmosphere within the OPC, a future CIA director declared that it was “an atmosphere of a templar chevaliers meant to save the West from the commu-nist darkness”. In October 1948, Wisner came up with a temporary definition for the OPC policies, as his clandestine activity was about to unfold in several directions: psychological warfare, political warfare, economic warfare, and direct preventive actions. In fact, the volume is the history of a hero, a vision-ary, someone who contributed significantly to the modernization of the American espionage service and fought all his life against the communist threat.

Presented by Cornel VAIDA


Leading Articles, Studies and New Analyses

43

Geostrategic Pulse, No 197, Saturday 5 September 2015 www.ingepo.ro

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Corneliu PIVARIU - Director and Editor-in-Chief of the Geostrategic Pulse

President-General Director of INGEPO Consulting Author of books on strategic intelligence, terrorism and the situation in Iraq, of other studies and articles on the strategic information and the current geopolitical developments. Training on regional security at Harvard University-Kennedy School of Government. Member of the International Institute for Strategic Studies—London.

Dumitru CHICAN Ambassador, University Professor,

Director for the Middle East at the Geostrategic Pulse

An entire active career in the Romanian diplomacy, with permanent missions in numerous Arab countries. Other special missions abroad, such as Envoy of the Romanian Chief of State. One of the Romanian best experts in the Arabic language, the Arab culture and world. Author of several works and tranlations in and from Arabic, published in Romania and abroad. One of his latest books appeared in the UAE and was declared the best editorial issue at the International Book Fair in Sharjah and the best book in 2008.

Cornel VAIDA- Director INGEPO Consulting

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