Privatization: the Atlanticist Tactic to Attack Russia

Paul Craig Roberts & Michael Hudson

Two years ago, Russian officials discussed plans to privatize a group of national enterprises headed by the oil producer Rosneft, the VTB Bank, Aeroflot, and Russian Railways. The stated objective was to streamline management of these companies, and also to induce oligarchs to begin bringing their two decades of capital flight back to invest in the Russia economy. Foreign participation was sought in cases where Western technology transfer and management techniques would be likely to help the economy.

However, the Russian economic outlook deteriorated as the United States pushed Western governments to impose economic sanctions against Russia and oil prices declined. This has made the Russian economy less attractive to foreign investors. So sale of these companies will bring much lower prices today than would have been likely in 2014.

Meanwhile, the combination of a rising domestic budget deficit and balance-of-payments deficit has given Russian advocates of privatization an argument to press ahead with the sell-offs. The flaw in their logic is their neoliberal assumption that Russia cannot simply monetize its deficit, but needs to survive by selling off more major assets. We warn against Russia being so gullible as to accept this dangerous neoliberal argument. Privatization will not help re-industrialize Russia’s economy, but will aggravate its turn into arentier economy from which profits are extracted for the benefit of foreign owners.

To be sure, President Putin set a number of conditions on February 1 to prevent new privatizations from being like the Yeltsin era’s disastrous selloffs. This time the assets would not be sold at knockdown prices, but would have to reflect prospective real value. The firms being sold off would remain under Russian jurisdiction, not operated by offshore owners. Foreigners were invited to participate, but the companies would remain subject to Russian laws and regulations, including restrictions to keep their capital within Russia.

Also, the firms to be privatized cannot be bought with domestic state bank credit. The aim is to draw “hard cash” into the buyouts – ideally from the foreign currency holdings by oligarchs in London and elsewhere.

Putin wisely ruled out selling Russia’s largest bank, Sperbank, which holds much of the nation’s retail savings accounts. Banking evidently is to remain largely a public utility, which it should because the ability to create credit as money is a natural monopoly and inherently public in character.

Despite these protections that President Putin added, there are serious reasons not to go ahead with the newly-announced privatizations. These reasons go beyond the fact that they would be sold under conditions of economic recession as a result of the Western economic sanctions and falling oil prices.

The excuse being cited by Russian officials for selling these companies at the present time is to finance the domestic budget deficit. This excuse shows that Russia has still not recovered from the disastrous Western Atlanticist myth that Russia must depend on foreign banks and bondholders to create money, as if the Russian central bank cannot do this itself by monetizing the budget deficit.

Monetization of budget deficits is precisely what the United States government has done, and what Western central banks have been doing in the post World War II era. Debt monetization is common practice in the West. Governments can help revive the economy by printing money instead of indebting the country to private creditors which drains the public sector of funds via interest payments to private creditors.

There is no valid reason to raise money from private banks to provide the government with money when a central bank can create the same money without having to pay interest on loans. However, Russian economists have been inculcated with the Western belief that only commercial banks should create money and that governments should sell interest-bearing bonds in order to raise funds. The incorrect belief that only private banks should create money by making loans is leading the Russian government down the same path that has led the eurozone into a dead end economy.  By privatizing credit creation, Europe has shifted economic planning from democratically elected governments to the banking sector.

There is no need for Russia to accept this pro-rentier economic philosophy that bleeds a country of public revenues. Neoliberals are promoting it not to help Russia, but to bring Russia to its knees.

Essentially, those Russians allied with the West—“Atlanticist Integrationists”— who want Russia to sacrifice its sovereignty to integration with the Western empire are using neoliberal economics to entrap Putin and breach Russia’s control over its own economy that Putin reestablished after the Yeltsin years when Russia was looted by foreign interests.

Despite some success in reducing the power of the oligarchs who arose from the Yeltsin privatizations, the Russian government needs to retain national enterprises as a countervailing economic power. The reason governments operate railways and other basic infrastructure is to lower the cost of living and doing business. The aim of private owners, by contrast, is to raise the prices as high as they can. This is called “rent extraction.” Private owners put up tollbooths to raise the cost of infrastructure services that are being privatized. This is the opposite of what the classical economists meant by “free market.”

There is talk of a deal being made with the oligarchs. The oligarchs  will buy ownership in the Russian state companies with money they have stashed abroad from previous privatizations, and get another “deal of the century” when Russia’s economy recovers by enough to enable more excessive gains to be made.

The problem is that the more economic power moves from government to private control, the less countervailing power the government has against private interests.  From this standpoint, no privatizations should be permitted at this time.

Much less should foreigners be permitted to acquire ownership of Russian national assets. In order to collect a one-time payment of foreign currency, the Russian government will be turning over to foreigners future income streams that can, and will be, extracted from Russia and sent abroad. This “repatriation” of dividends would occur even if management and control remains geographically in Russia.

Selling public assets in exchange for a one-time payment is what the city of Chicago government did when it sold the 75 year revenue stream of its parking meters for a one-time payment. The Chicago government got money for one year by giving up 75 years of revenues. By sacrificing public revenues, the Chicago government saved real estate and private wealth from being taxed and also allowed Wall Street investment banks to make a fortune.

It also created a public outcry against the giveaway. The new buyers sharply raised street parking fees, and sued Chicago’s government for damages when the city closed the street for public parades or holidays, thereby  “interfering” with the rentiers’ parking-meter business. Instead of helping Chicago, it helped push the city toward bankruptcy. No wonder Atlanticists would like to see Russia suffer the same fate.

Using privatization to cover a short-term budget problem creates a larger long-term problem. The profits of Russian companies would flow out of the country, reducing the ruble’s exchange rate. If the profits are paid in rubles, the rubles can be dumped in the foreign exchange market and exchanged for dollars. This will depress the ruble’s exchange rate and raise the dollar’s exchange value. In effect, allowing foreigners to acquire Russia’s national assets helps foreigners to speculate against the Russian ruble.

Of course, the new Russian owners of the privatized assets also could send their profits abroad. But at least the Russian government realizes that owners subject to Russian jurisdiction are more easily regulated than are owners who are able to control companies from abroad and keep their working capital in London or other foreign banking centers (all subject to U.S. diplomatic leverage and New Cold War sanctions).

At the root of the privatization discussion should be the question of what is money and why should it be created by private banks instead of central banks. The Russian government should finance its budget deficit by having the central bank create the necessary money, just as the US and UK do.  It is not necessary for the Russian government to give away future revenue streams in perpetuity merely in order to cover one year’s deficit. That is a path to impoverishment and to loss of economic and political independence.

Globalization was invented as a tool of American Empire. Russia should be shielding itself from globalization, not opening itself to it. Privatization is the vehicle to undercut economic sovereignty and increase profits by raising prices.

Just as Western-financed NGOs operating in Russia are a fifth column operating against Russian national interests, so are Russia’s neoliberal economists, whether or not they realize it. Russia will not be safe from Western manipulation until its economy is closed to Western attempts to reshape Russia’s economy in the interest of Washington and not in the interest of Russia.

The Urgent Need For Complete Abolition Of Nuclear Weapons

John Avery

On August 6, 1945, at 8:15 in the morning, an atomic bomb was exploded in the air over the city of Hiroshima in an already-defeated Japan. The force of the explosion was equivalent to twenty thousand tons of T.N.T.. Out of a city of two hundred and fifty thousand people, almost one hundred thousand were killed by the bomb; and another hundred thousand were hurt.

In some places, near the center of the city, people were completely vaporized, so that only their shadows on the pavement marked the places where they had been. Many people who were not killed by the blast or by burns from the explosion, were trapped under the wreckage of their houses. Unable to move, they were burned to death in the fire which followed.

As Suano Tsuboi, one of the survivors of the Hiroshima nightmare, remembered later, “I had entered a living hell on earth. There were people crying out for help, calling for members of their family. I saw a scchoolgirl with her eye hanging out of its socket. People looked like ghosts, bleeding and trying to walk before collapsing. Some had lost limbs. There were charred bodies everywhere, including in the river. I looked down and saw a man clutching a hole in his stomach, trying to stop his organs from spilling out. The smell of burning flesh was overpowering.”

Three days later, Nagasaki was also detroyed. The motive for the nuclear bombings seems to have been, not so much to defeat Japan, as (in the words of the Manhatten Project's military commander, General Leslie Groves) “to control Russia”.

A few days after the terrible events of 6 and 9 August, 1945, the French writer Albert Camus commented: “Our technical civilization has just reached its greatest level of savagery. We will have to choose, in the more or less near future, between collective suicide and the intelligent use of our scientific conquests. Before the terrifying prospects now available to humanity, we see even more clearly that peace is the only battle worth waging. This is no longer a prayer, but a demand to be made by all peoples to their governments - a demand to choose definitively between hell and reason.”

Even if the horrible nuclear destruction of the two Japanese cities had been justified as a means of ending the war quickly, even if Japan had not already been sueing for peace, the end does not justify the means. In Gandhi's words, “The means may be likened to a seed, and the end to a tree; and there is the same inviolable connection between the means and the end as there is between the seed and the tree.”

Mahatma Gandhi's assertion that the end achieved iinevitably reflects the means used to achieve it is confirmed particularly clearly by the history of nuclear weapons. The terrible destruction of Hiroshima and Nagasaki was tragic in itself, but even more disastrous is the nuclear arms race which followed. It continues to cast an extremely dark shadow over the future of human civilization and the biosphere.

In 1946, the United States proposed the Baruch Plan to internationalize atomic energy, but the plan was rejected by the Soviet Union, which had been conducting its own secret nuclear weapons program since 1943. On August 29, 1949, the USSR exploded its first nuclear bomb. It had a yield equivalent to 21,000 tons of TNT, and had been constructed from Pu-239 produced in a nuclear reactor. Meanwhile the United Kingdom had begun to build its own nuclear weapons.

The explosion of the Soviet nuclear bomb caused feelings of panic in the United States, and President Truman authorized an all-out effort to build superbombs using thermonuclear reactions - the reactions that heat the sun and stars. The idea of using a U-235 fission bomb to trigger a thermonuclear reaction in a mixture of light elements had first been proposed by Enrico Fermi in a 1941 conversation with his Chicago colleague Edward Teller. After this conversation, Teller (perhaps the model for Stanley Kubrick’s character Dr. Strangelove) became a fanatical advocate of the superbomb.

After Truman’s go-ahead, the American program to build thermonuclear weapons made rapid progress, and on October 31, 1952, the first US thermonuclear device was exploded at Eniwetok Atoll in the Marshall Islands. It had a yield of 10.4 megatons, that is to say it had an explosive power equivalent to 10,400,000 tons of TNT. Thus the first thermonuclear bomb was five hundred times as powerful as the bombs that had devastated Hiroshima and Nagasaki. Lighter versions of the device were soon developed, and these could be dropped from aircraft or delivered by rockets.

The Soviet Union and the United Kingdom were not far behind. In 1955 the Soviets exploded their first thermonuclear device, followed in 1957 by the UK. In 1961 the USSR exploded a thermonuclear bomb with a yield of 58 megatons. A bomb of this size, three thousand times the size of the Hiroshima bomb, would be able to totally destroy a city even if it missed it by 50 kilometers. Fall-out casualties would extend to a far greater distance.

A 15 megaton thermonuclear device, detonated by the United States at Bikini Atol in the Marshall Islands in 1954, caused fallout that produced radiation sickness and fatalities on the Japanese fishing boat Lucky Dragon, which was 130 kilometers distant from the explosion. In England, Prof. Joseph Rotblat, a Polish scientist who had resigned from the Manhattan Project for for moral reasons when it became clear that Germany would not develop nuclear weapons, was asked to appear on a BBC program to discuss the Bikini test. He was asked to discuss the technical aspects of H-bombs, while the Archbishop of Canterbury and the philosopher Lord Bertrand Russell were asked to discuss the moral aspects.

Rotblat had became convinced that the Bikini bomb must have involved a third stage, where fast neutrons from the hydrogen thermonuclear reaction produced fission in a casing of unenriched uranium. Such a bomb would produce enormous amounts of highly dangerous radioactive fallout, and could be made arbetrarily large with little expense because of the use of unenriched uranium. Rotblat became extremely worried about the possibly fatal effect on all living things if large numbers of such bombs were ever used in a war. He confided his worries to Bertrand Russell, whom he had met on the BBC program.

After discussing the Bikini test and its radioactive fallout with Joseph Rotblat, Lord Russell became concerned for the future of the human gene pool if large numbers of such bombs should ever be used in a war. To warn humanity of the danger, he wrote what came to be known as the Russell-Einstein Manifesto.

On July 9, 1955, with Rotblat in the chair, Russell read the Manifesto to a packed press conference. The document contains the words: “Here then is the problem that we present to you, stark and dreadful and inescapable: Shall we put an end to the human race, or shall mankind renounce war?... There lies before us, if we choose, continual progress in happiness, knowledge and wisdom. Shall we, instead, choose death because we cannot forget our quarrels? We appeal as human beings to human beings: Remember your humanity, and forget the rest. If you can do so, the way lies open to a new Paradise; if you cannot, there lies before you the risk of universal death.”

Lord Russell devoted much of the remainder of his life to working for the abolition of nuclear weapons. Here we see him speaking to a CND demonstration at Trafalgar Square. Image source: mueralainteligencia.com

Lord Russell devoted much of the remainder of his life to working for the abolition of nuclear weapons, as did Joseph Rotblat. In 1995, 50 years after the tragic destruction of Hiroshima and Nagasaki, Joseph Rotblat was awarded a Nobel Peace Prize for his lifelong efforts to abolish both nuclear weapons and war itself. He shared the prize with Pugwash Conferences on Science and World Affairs, an organization which had been established as a consequence of the Russell-Einstein Manifesto.

In his acceptance speech, Sir Joseph (as he soon became) emphasized the same point that had been made in the Russell-Einstein Manifesto - that war itself must be eliminated in order to free civilization from the danger of nuclear destruction. The reason for this is that the knowledge of how to make nuclear weapons can never be forgotten. Even if they were eliminated, these weapons could be rebuilt during a major war. Thus the final abolition of nuclear weapons is linked to a change of heart in world politics and to the abolition of the institution of war.

The testing of hydrogen bombs in the Pacific half a century ago continues to cause cancer and birth defects in the Marshall Islands today. Fallout from the bombs contaminated the island of Rongelap, one of the Marshall Islands 120 kilometers from Bikini. The islanders experienced radiation illness, and many died from cancer. Even today, half a century later, both people and animals on Rongelap and other nearby islands suffer from birth defects. The most common defects have been “jelly fish babies”, born with no bones and with transparent skin. Their brains and beating hearts can be seen. The babies usually live a day or two before they stop breathing.

The environmental effects of a nuclear war would be catastrophic. A war fought with hydrogen bombs would produce radioactive contamination of the kind that we have already experienced in the areas around Chernobyl and Fukushima and in the Marshall Islands, but on an enormously increased scale. We have to remember that the total explosive power of the nuclear weapons in the world today is roughly half a million times as great as the power of the bombs that destroyed Hiroshima and Nagasaki. What is threatened by a nuclear war today is the complete breakdown of human civilization.

Besides spreading deadly radioactivity throughout the world, a nuclear war would inflict catastrophic damage on global agriculture. Firestorms in burning cities would produce many millions of tons of black, thick, radioactive smoke. The smoke would rise to the stratosphere where it would spread around the earth and remain for a decade. Prolonged cold, decreased sunlight and rainfall, and massive increases in harmful ultraviolet light would shorten or eliminate growing seasons, producing a nuclear famine. Even a small nuclear war could endanger the lives of the billion people who today are chronically undernourished. A full-scale war fought with hydrogen bombs would mean that most humans would die from hunger. Many animal and plant species would also be threatened with extinction.

Today, the system that is supposed to give us security is called Mutually Assured Destruction, appropriately abbreviated as MAD. It is based on the idea of deterrence, which maintains that because of the threat of massive retaliation, no sane leader would start a nuclear war.

Before discussing other defects in the concept of deterrence, it must be said very clearly that “massive nuclear retaliation” is a form of genocide and is completely unacceptable from an ethical point of view. It violates not only the principles of international law, common decency and common sense, but also the ethical principles of every major religion.

Having said this, we can turn to some of the other faults in the concept of nuclear deterrence. One important defect is that nuclear war may occur through accident or miscalculation, failures of computer systems, misinterpretation of radar signals, insanity of a person in charge of the weapons, uncontrollable escalation of a conflict, or because of terrorism. This possibility is made much greater by the fact that, despite the end of the Cold War, 2,000 missiles are kept on “hair trigger alert” with a quasi-automatic reaction time measured in minutes. There is a constant danger that a nuclear war will be triggered by an error in evaluating the signal on a radar screen.

Incidents in which global disaster is avoided by a hair's breadth are constantly occurring. For example, on the night of 26 September, 1983, Lt. Col. Stanislav Petrov, a young software engineer, was on duty at a surveillance center near Moscow. Suddenly the screen in front of him turned bright red. An alarm went off. It's enormous piercing sound filled the room. A second alarm followed, and then a third, fourth and fifth, until the noise was deafening.

The computer showed that the Americans had launched a strike against Russia. Petrov's orders were to pass the information up the chain of command to Secretary General Yuri Andropov. Within minutes, a nuclear counterattack would be launched. However, because of certain inconsistent features of the alarm, Petrov disobeyed orders and reported it as a computer error, which indeed it was. Most of us probably owe our lives to his brave and coolheaded decision and his knowledge of software systems. The narrowness of this escape is compounded by the fact that Petrov was on duty only because of the illness of another officer with less knowledge of software, who would have accepted the alarm as real.

Narrow escapes such as this show us clearly that in the long run, the combination of space-age science and stone-age politics will destroy us. We urgently need new political structures and new ethics to match our advanced technology.

Modern science has, for the first time in history, offered humankind the possibility of a life of comfort, free from hunger and cold, and free from the constant threat of death from infectious disease. At the same time, science has given humans the power to obliterate their civilization with nuclear weapons, or to make it uninhabitable through anthropogenic climate change. The question of which of these paths we choose is literally a matter of life or death to for ourselves or our children.

Will we use the discoveries of modern science constructively, and thus choose the path leading towards life? Or will we produce more and more lethal weapons, which sooner or later, through s technical or human error, or through uncontrollable escalation of a conflict, will result in a catastrophic nuclear war? The choice is ours to make. We live at a critical moment of history, a moment of crisis for civilization. No one alive today asked to be born at a time of crisis, but history has given each of us an enormous responsibility to future generations.

Of course we have our ordinary jobs, which we need to do in order to stay alive; but besides that, each of us has a second job, the duty to devote both time and effort to solving the serious problems that face civilization during the 21st century. We cannot rely on our politicians to do this for us. Many politicians are under the influence of powerful lobbies. Others are waiting for a clear expression of popular will. It is the people of the world themselves who must choose their own future and work hard to build it. No single person can achieve the changes that we need, but together we can do it.

The problem of building a stable, just, and war-free world is difficult, but it is not insoluble. The large regions of our present-day world within which war has been eliminated can serve as models. There are a number of large countries with heterogeneous populations within which it has been possible to achieve internal peace and social cohesion, and if this is possible within such extremely large regions, it must also be possible globally.

We must replace the old world of international anarchy and institutionalized injustice by a new world of law. We also need a new ethic, where loyalty to one's family and nation is supplemented by a higher loyalty to humanity as a whole.

We know that war is madness. We know that it is responsible for much of the suffering that humans experience. We know that war pollutes our planet and that the almost unimaginable sums wasted on war prevent the happiness and prosperity of mankind. We know that nuclear weapons are insane, and that the precariously balanced deterrence system can break down at any time through human error or computer errors or through terrorist actions, and that it definitely will break down within our lifetimes unless we abolish it. We know that nuclear war threatens to destroy civilization and much of the biosphere.

The logic is there. We must translate it into popular action. The peoples of the world must say very clearly that nuclear weapons are an absolute evil; that their possession does not increase anyone's security; that their continued existence is a threat to the life of every person on our planet; and that these genocidal and potentially omnicidal weapons have no place in a civilized society.

Modern science has abolished time and distance as factors separating nations separating nations. On our shrunken globe today, there is room for one group only - the family of humankind.

Australian public hospitals face growing funding crisis

Mike Head

Years of under-funding and cost-cutting pressures applied by successive Australian governments have produced lengthening waiting times in the country’s public hospitals, including for critical, potentially life-saving, emergency care.

According to the Australian Medical Association’s annual hospital report card for 2015, the “growing funding crisis” is set to intensify in 2017, when the health system faces a funding “black hole” as a result of the latest cuts imposed by federal Liberal-National government.

The AMA report found emergency department waiting times worsened in 2014–15, with only 68 percent of emergency department patients classified as “urgent” being seen within half an hour. In other words, gravely-ill patients were not treated within medically safe times. The outcomes remained well outside the 80 percent target adopted by the state governments, which have the frontline responsibility for public hospitals.

Of all emergency department visits, just 73 percent were completed in four hours or less, further endangering patients’ lives and health. This was no improvement over 2013–14 and far short of the 90 percent target for 2014–15 set by the state governments themselves.

So-called elective surgery waiting times improved marginally, with the average patient now waiting 35 days for surgery. But that figure has deteriorated since 2001, when patients waited 27 days on average. Many of these patients are suffering painful and debilitating conditions.

AMA vice president Dr Stephen Parnis provided some idea of what these waiting times mean in human terms: “[Y]ou see elective cases that present to emergency because they’ve become emergencies. The arthritic hip that leads to a fall that becomes a fractured hip, with the complications and risks going up exponentially. The gall bladder that should have come out a few months ago that has turned infective and led to inflammation of the pancreas. These are life-threatening conditions that could be avoided.”

The statistics almost certainly understate the extent of the waiting list crisis because governments and health authorities have sought to avoid public outrage by fudging the figures. Many patients must wait to see specialists before being considered for operations or are placed on “waiting to wait” lists to produce artificially low results.

The AMA report provided a revealing indicator of the protracted running-down of the public hospital system. It showed an ongoing decline in the number of hospital beds per 1,000 people aged more than 65, who are those most in need of hospital care. Since 1993-94, this bed ratio has been cut by more than 42 percent.

Total public hospital bed numbers increased by just 256 in 2013–14, not enough to cope with a growing population, so that the bed ratio per 1,000 of the population as a whole fell to 2.51, from 2.57 in 2012–13. This ratio had not improved since 2009–10.

AMA president Professor Brian Owler condemned the federal government for cutting funding by fixing its allocations to Consumer Price Index (CPI) adjustment and population growth. The CPI is consistently much lower than rising cost of medical care, which necessarily reflects the expense of new medical technology, procedures and medicines.

The Coalition government has abandoned funding guarantees that were made under the National Health Reform Agreement struck with the states and territories by the previous Labor government in 2011. That reversal, to take effect from July next year, will reduce promised federal funding by $1.8 billion over four years, and by an estimated $57 billion over the next decade.

Owler said: “In a struggling public hospital system that’s failing to meet its performance targets that sort of slowdown in funding growth will mean that they will be under further strain, and I think we’ll start to see further clinical services being cut.”

This “black hole” would be deepened by the impact of further announced health care cuts. These include an ongoing freeze on the Medicare rebates paid to general practitioners (GPs), designed to compel growing numbers to charge their patients upfront fees, rather than “bulk-billing” the government; and pathology and diagnostic imaging cuts of more than $650 million over the next four years.

These measures will force more patients, unable to pay for GPs and diagnostic tests, to seek treatment at public hospital emergency departments, putting even further strain on them.

While billions of dollars were allocated for military hardware, health spending fell to 15.97 percent of total government outlays in the 2015–16 federal budget, down from 18.09 percent in 2006–07.

In blaming the Liberal-National government for the hospital crisis, Owler made no mention of the financial constriction applied by the previous Labor governments from 2007 to 2013, even though the data he presented pointed to the damaging impact of their cuts.

Owler said federal funding for public hospitals grew by just 0.9 percent in 2013–14, “well below inflation and virtually stagnant.” This was on top of a 2.2 percent reduction in 2012–13, which was the last full year of Labor rule.

There has been a relentless drive, initiated by the “health care reform” agenda of the Labor governments, to reduce hospital funding. The central purpose of these “reforms” was to push down the cost of health care.

One of the primary mechanisms was the uniform introduction of “casemix” funding, whereby hospitals no longer receive block funding to meet the needs of the growing populations they serve. Instead, they are paid only for each procedure actually performed, and according to nationally-set “efficient” prices.

By forcing hospitals to compete with each other for this funding, the system is designed to continually lower the prices, placing pressure on medical staff to increase their workloads and throughput, inevitably compromising patient care.

By 2011, it was clear, from official data produced by the Council of Australian Governments (COAG) Reform Council, that waiting times were lengthening as part of this process. Between 2007–08 and 2009–10, median waiting times for elective surgery in public hospitals rose from 34 to 35 days, which is the current figure.

For patients needing coronary artery bypass surgery, one of the most serious “elective” procedures, the median waiting time lengthened from 14 to 15 days between 2007–08 and 2009–10. Patients waiting for knee replacement surgery—usually in pain and having difficulty walking—suffered the longest delays. Median waiting times increased from 156 to 180 days.

This shocking reality will only worsen as the latest cuts take effect. Confronted by rising fees and longer waiting times, working class, poor and vulnerable patients will inevitably delay or avoid treatment and testing, preventing timely diagnoses and giving rise to more serious diseases, complications and unnecessary deaths.

As well as meeting the demands of big business for austerity, the health cuts are designed to coerce more people into paying for their own care, via private health insurance, and to boost the profits of private hospital and health care companies.

Italian steel work faces closure or sell-off

Marianne Arens

The Italian government is seeking a buyer for the steel corporation Ilva and its largest factory in Taranto (Apulia). The steel giant needs a new owner by the end of June 2016. Potential buyers have until February 10 to express their interest, Industry Minister Federica Guidi said on January 4.

With 12,000 employees, Ilva is the third largest steel corporation in Europe. Another 8,000 workers are employed by subcontractors. The 110-year-old operation, which used to belong to the state corporation Italsider, was sold to the Riva Corporation in 1995.

Ilva has been under forced administration by the government for two years. Legal proceedings against the Riva family, which owns the corporation, are currently under way due to tax evasion as well as environmental contamination which has caused hundreds of deaths. Assets amounting to 1.2 billion euros, which Riva deposited in Swiss accounts, were originally set aside for the renovation of the factory and the elimination of the worst environmental damage in Taranto but were not released by the Swiss banks and authorities.

Workers at the factories in Taranto (Apulia), Cornigliano (Genoa), and Novi Ligure face closings, layoffs and massive wage cuts. Ilva State commissioners reported on January 11 that over 3,500 employees will be laid off “temporarily.” The measures affect 1,713 workers in the strip mills and pipe mills, 831 workers in the furnaces, and 975 workers in management, repairs and maintenance.

Last year, on average 2,000 workers were temporarily released from work. These short-term steel workers received, for many years, up to 80 percent of their wages financed through the national Cassa Integrazione. Since 2005, a factory “solidarity contract” has provided a certain guarantee of jobs and income. However, starting in January 2016, the so-called Jobs Act, Matteo Renzi’s government labour law reform, made the special operational guarantees obsolete. Short-time workers face massive wage cuts of 20 percent and, longer term, the complete cessation of their earnings.

The planned sale will make the rehiring of “temporarily” laid off workers highly unlikely. Worldwide, there is an oversupply of steel, prices are falling and the competition is fierce. Possible interested buyers such as AcelorMittal, JSW Steel or Marcegaglia might rapidly lay off more workers or close additional plants.

The steel workers are under pressure from all sides, and the situation will inevitably lead to explosive class conflicts.

City hall occupation in Genoa

A protest by steel workers from Cornigliano at the beginning of the year is an anticipation of coming class struggles.

On Monday morning, January 11, 2016, 500 steel workers occupied the city hall in Genoa and demanded a guarantee of their “solidarity contract” for which they had made great sacrifices when the blast furnaces and the hot rolling mill were shut down. Since then, a cold rolling plant and two zinc coating shops are in operation in Cornigliano and 1,600 steel workers are still employed there.

A demonstration was originally supposed to lead to a prefecture but was diverted to the feudal Palazzo Tursi, the seat of the city government, at the last moment. The workers pushed on the door of the council hall with their shoulders and tried to occupy it. They repeated chants against Premier Matteo Renzi (Democratic Party/PD), and Genovese Mayor Marco Doria prevented the local secretary of the Democratic Party, Alessandro Terrile, from fleeing. Shortly before this, at a regional party gathering, Terrile had called for the removal of the special guarantees of the Ilva steel workers: “We cannot allow ourselves to increase payments for the Ilva workers,” he had insisted.

Afterwards, the combined efforts of a union secretary and Fiamma Spena, the prefect of Genoa, succeeded in convincing them to end the occupation.

The unions demanded a national round table, to which the Renzi government and the steel union would have to be invited. Maurizio Landini, head of the largest metal union, FIOM, told the press: “we demand that the government gather together unions and workers in order to discuss the future of the entire steel sector.”

The next day, Mayor Doria said that the actions of the workers had initially left him speechless. He vehemently condemned the occupation as an “attack on the democratic institution of the community of Genoa.” Marco Doria, a former member of the Communist Party (PCI), is close to Matteo Renzi’s Democratic Party. He is a descendant of the Genovese noblewoman Andrea Doria, the former owner of the magnificent town hall, which the workers had so disdainfully occupied.

Doria said with regard to the steel company Ilva that it was “in a comatose condition.” The fall of the steel corporation had previously “only been prevented with the combined forces of the national community.” Doria claimed that the head of the government, Renzi, would ensure that when Ilva was sold, “the protection of today’s jobs” would be ensured “by the introduction of a social clause.”

The myth of the Riva rescue

Doria is not the only one who is spreading the myth of an Ilva rescue by the “national community” and trying to make the state takeover sound positive. The British Labour “left winger” Jeremy Corbyn had claimed that in the matter of Ilva, one had to learn from the Renzi government. “The Italian government could have easily taught [the British] that one can intervene, either temporarily or permanently, and that there are numerous ways to rescue economic infrastructure … ”

There are as many lies as words in this statement. The Renzi government and its predecessors have rescued neither “economic infrastructure” nor jobs and certainly not the health of the workers. There is a reason why the laws, which provide legitimacy for the billion-euro tax gifts for the Ilva Corporation, are called “Riva rescue.” The government is acting in the interests of the Italian bourgeoisie and is imposing the costs on the working class.

Another striking example of the same phenomenon took place when Renzi named steel engineer Marco Pucci as the transitional general director of Ilva. Pucci was sentenced to six and a half years in prison in May 2015 because of his responsibility for the terrible accident at ThyssenKrupp eight years ago.

On December 6, 2007, seven workers were burned alive when an explosion caused a terrible fire in the ThyssenKrupp plant in Turin. The catastrophe could have been prevented through simple safety precautions, but nothing more was invested in the plant because it was slated for closure. Marco Pucci was, at that time, one of the responsible managers.

For more than eight years, the proceedings have been delayed by one or another authority. Pucci remains free to this day and is awaiting another appeal judgment. Until a short time ago, he led the ThyssenKrupp plant AST in Terni. The relatives of the dead steel workers protested against his appointment as Ilva general director and shortly thereafter Pucci resigned his post.

Workplace accidents

This case highlights the attitude of the government to the life and health of the steel workers. In the two years in which Ilva has been under state oversight, the government has not lifted a finger to solve the environmental problems or to improve plant safety. Quite the opposite: scarcely at any time in the past have there been so many workplace accidents.

Angelo Iodice (54), steel worker and security officer, died on September 4, 2014, when a transport carriage came loose from its anchoring and rolled over him. Alessandro Morricella (35) was smothered with glowing cast steel during a routine check of a furnace. He died after four days in a coma. Only a few days afterwards, a temporary worker was scalded by hot steam.

On November 17, 2015, Cosimo Martucci (48), a temp agency worker, died after being hit by a steel pipe that had fallen from the hook of a long haul truck. Only hours later, there was another accident in a continuous casting hall in which, luckily, no workers were hurt.

A similar accident, which recalls the accident at ThyssenKrupp in 2007, took place only a week before. On January 14, 2016, there was an explosion in the continuous casting plant, which led to an emission of 20 tons of fluid steel. Surprisingly, no one was hurt.

A worker reported: “First we heard a roar and then saw flames coming out of the 1,600 degree steel until it was about three meters away from us. A co-worker fell while we were running away.”

The security guard who sent the shocked workers to a sick station, reported that tears were running down their faces. “It is impossible to imagine what would happen if the explosion had taken place on the other side of the hall where the workers were standing,” he said. He blamed the corporation, which had not carried out any security measures and had drawn no conclusions from a related incident on November 18, when an almost identical accident took place in the same department.

This same inhumane attitude is also evident in the treatment of steel workers, their families and the entire city of Taranto. The Ilva steel plant has been allowed to perpetrate an environmental catastrophe of the first order there without any opposition.

When the EU Competition Commissioner initiated an investigation of the Italian government on January 20, because it had bailed out the steel company Ilva with two billion euros, Minister Guidi answered that the main reason this money was paid was to deal with the “environmental emergency.” But the residents of Taranto have not seen any change: streets, squares, cars, gardens, school yards and kindergartens are still covered with red dust. The emissions from the factory are responsible for at least 400 premature deaths.

An unemployment level of over 20 percent in the region forces the steel workers to continue with clenched teeth. An Ilva steel worker summed up the dilemma faced by the workers: “Either you die from cancer here or your family must go hungry.”

Job losses mount in US steel and aluminum industries

Samuel Davidson

One month into the new year and job losses continue to mount in the US steel and aluminum industry as manufacturers post record losses amid a massive fall in prices and continuing slump in domestic and world demand.

Last month, US Steel, the nation's largest steel producer, announced that it is laying off 677 workers from its Lone Star Tubular Operations in Texas, as it plans to idle the mill in March. The plant was idled last year but returned to production for a short while. The company has not stated if or when the plant will be brought back online.

In a statement, US Steel said the layoffs were due to the downturn in the oil drilling industry. Oil prices are down to $27 a barrel, a drop of over 70 percent from just 2 years ago.

Last month US Steel reported fourth quarter losses of $1 billion, bringing its total losses to over $1.5 billion for the year. Last year the steel maker cut back operations at 8 plants, including idling blast furnaces in Gary, Indiana, Fairfield, Alabama and Granite City, Illinois.

US Steel began laying off 2,000 steelworkers at its Granite Works in Illinois the day after Christmas and it has not said when or even if the workers will be called back.

Also in December, AK Steel began layoffs of 600 steelworkers at its Ashland, Kentucky works. Fewer than 200 workers remain at the mill and their future is uncertain.

In January, Republic Steel laid off 200 steelworkers at its rolling mill in northeast Ohio. In a statement, the company blames the action on the drop in demand from the energy sector. The company also produces specialty steel for the automotive industry.

Also last month, Shenango Inc. closed its coke plant near Pittsburgh, causing 173 workers to lose their jobs. The plant, owned by Michigan-based DTE Energy, said it was closing the plant because of the fall in demand from the steel industry.

This trend will only continue as Arcelormittal, the world’s largest steelmaker, reported Friday that it lost $8 billion last year, as sales dropped nearly 20 percent over 2014. The company was forced to write down over $4 billion in assets as the value of its iron ore and other holdings have also collapsed. Arcelormittal is the second largest steel producer in the United States.

The company’s stock value has fallen more than 50 percent during the past year and took another five percent drop on Friday after the announcement was made. Billionaire chairman and CEO Lakshmi Mittal, whose family owns nearly 40 percent of the company, said that “throughout the year we have rigorously focused on implementing a series of measures aimed at reducing costs and ensuring the business is adapted for these tough market conditions.”

Last fall, aluminum and parts manufacturer Alcoa announced that it was splitting into two companies and cutting thousands of jobs. The company has been hit hard by falling prices and demand for aluminum. Since December, 2014 Alcoa stock has fallen by more than 50 percent, from over $17 to under $8 today.

The company plans to split its still profitable parts manufacturing, which makes parts for autos and airplanes, from its core aluminum manufacturing business, which has been experiencing massive losses.

Last month, Alcoa announced the layoff of 600 workers at its southwestern Indiana mill along the Ohio River, as it prepares to close its smelter by the end of March. Another 1,200 workers work at the site’s power plant and rolling mill, but how long those jobs will remain is unclear.

Alcoa is also laying off 900 workers at two of its smelters in Washington State, near Seattle. Late last year, the company gave layoff warnings to 465 workers at its Ferndale facility and 415 workers at its smelter in Wenatchee.

The US benchmark for hot rolled steel continues to fall, as demand for the steel from China drops as its economy slows and the much promised economic recovery fails to materialize. In the past year the benchmark price has fallen by 50 percent and it is down 75 percent from its 2007 high before the economic meltdown.

The United Steelworkers, which represents most of the steelworkers who have lost and are losing their jobs, has pledged to work with the steel companies to return them to profitability at the expense of jobs and living standards of its members.

The USW is currently isolating 2,200 steelworkers locked out of their jobs by ATI for nearly six months, and another 450 steelworkers locked out by Sherwin Alumina for over 16 months.

The union recently signed a new three-year contract with US Steel that froze wages and cut the medical benefits of current workers while doing nothing for the thousands of workers who have lost their jobs.

The USW is currently negotiating a contract for its 13,500 members at Arcelormittal. The old contract expired last September. The USW has offered millions of dollars in concessions, but the company is demanding even more.

In place of the defense of workers’ jobs and living standards, the USW, which represents a privileged layer of bureaucrats, is promoting a reactionary campaign of nationalism and chauvinism. It seeks to place the blame for the crisis in steel on Chinese steelworkers, who themselves are facing layoffs and job cuts. In this way the union attempts to divert attention from the real cause of the crisis while lining up the sons and daughters of workers to be used as cannon fodder as the Obama administration pushes for war with China.

Steelworkers in China, the US, Japan, India and everywhere in the globe are facing the same problems, brought about not by the workers of other countries, but by the fundamental contradictions of the capitalist system.

In place of nationalism, chauvinism and war, workers need an international socialist policy which unites the workers of the world in a common struggle to defend jobs and living standards.

MOFCOM Scholarships in China for Developing Countries (Masters & PhD) 2016

Brief description: Ministry of Commerce of People’s Republic of China of offering the MOFCOM Scholarships for Masters and PhD degrees to develop talents from developing countries, starting from 2016

Eligible Field of Study: Each applicant can choose one same major in three universities out of the 26 designated universities as their desired option.

About Scholarship

MOFCOM Scholarship is set up by Ministry of Commerce of People’s Republic of China to further strengthen the communication and cooperation between China and other countries as well as to develop talents for developing countries. Starting from 2015, MOFCOM Scholarship mainly sponsors the young and the middle-aged talents from recipient countries to pursue their postgraduate degree education in China and entrusts China Scholarship Council to administer the Scholarship.

Scholarship Offered Since: 2015

Scholarship Type: Masters and PhD Scholarships

Selection Criteria and Eligibility

To be eligible, applicants must:

• be a citizen of a country other than the People’s Republic of China, and be in good health;
• be a bachelor’s degree holder when applying for master’s program;
• be a master’s degree holder when applying for doctoral program;
• be under the age of 45 when applying;
• have sufficient English or Chinese proficiency which meets the academic requirements of the program.

Number of Scholarships: several

Value of Scholarship:

• tuition waiver;
• on-campus accommodation;
• stipend:
• 3000RMB per month per master student,
• 3500RMB per month per PhD student;
• medical insurance
• one-time round-trip international air tickets

Duration of Scholarship: Master’s program for 2-3 years or PhD program for 3-4 years.

Eligible Countries: developing countries

To be taken at (country): Each applicant can choose one same major in three universities out of the 26 designated universities as their desired option. CSC will place each applicant in one university only based on their desired option and universities’ requirements.

Application Deadline: The Economic and Commercial Counselor’s Office (ECCO) of the Chinese Embassy in your country will be open for application until 30th April 2016

Offered annually? Yes

Application Requirement (in Chinese or English)

1. Application Form for MOFCOM Scholarship;
2. Photocopy of highest diploma;
3. Photocopy of academic transcripts;
4. A Study Plan or Research Proposal with a minimum of 400 words;
5. Photocopy of Foreigner Physical Examination Form;

How to Apply

• Step 1: Visit csc.edu.cn/laihua or www.campuschina.org  and click “Application Online for International Students”.
• Step 2: Read “Tips for online application” carefully before clicking “NEXT” to the registration page.
• Step 3: After registration, log in with your user name and password. Click “Application Forms”and choose “MOFCOM Scholarship”.
• Step 4:  Put 00010 as your Agency Number.
• Step 5: Please fill all the required information truly, correctly and completely following the navigation bars on the left of the page.
• Step 6: After completing the application form, please click “Preview” and check your Application Form carefully before submitting it.
• Step 7: Download the completed Application Form by clicking “Download Application”and print two hard copies.
• Step 8: Prepare other supporting documents as required and send the full package of application documents (two sets of hardcopies) to the Economic and Commercial Counsellor’s Office (ECCO) of the Chinese Embassy.
• Step 9: You can make changes to your application by clicking Retrieve Application on the left of the page. But you have to make sure to submit it again by clicking Confirmation of Submit after finishing all the changes. Otherwise, the retrieved application will become invalid and your new application will not be accepted either.

Visit Scholarship Webpage for details to apply

Sponsors: Ministry of Commerce of People’s Republic of China

Important Notes: Scholarship winners must register for English-taught program if such program is available. When only Chinese-taught program is available, students should take Chinese language training courses for one to two years before moving on to their degree study.

Scholarship winners will get the admission package from ECCO of the Chinese Embassy by the end of August, 2016, and must register at the host university before the deadline which is usually September, 2016.

Afghan Peace Process: Headed Down a Blind Alley?

Monish Gulati

The second meeting of the Quadrilateral Coordination Group (QCG) of Afghanistan, Pakistan, the US and China on the Afghan peace and reconciliation process was held in Kabul, Afghanistan, on January 18, 2016, a week after the first round of discussions concluded in Islamabad, Pakistan. The second meeting of the QCG had called on all Taliban groups to "accept the government's call for peace through dialogue" and end the senseless violence against the Afghan people.

The QCG meetings do not include Taliban representatives, and are part of a three-step process:

a. Formulating a roadmap

b. Inviting the armed opposition to the negotiating table 

c. Implementing the peace plan

The roadmap would include identification of the Taliban factions for negotiations, a timetable and incentives to be offered. It is expected that two more rounds of these “preparatory meetings” will take place. The third QCG meeting will be held on 06 February 2016, in Islamabad.

Though the unstated objective of the QCG meetings is to build trust between Afghanistan and Pakistan, little progress has been made on this front, and consequently, there appears to be no clarity on how to shape the peace process. Also lacking is the consensus on incentives that can persuade the Taliban to give up violence and pursue a political approach. Furthermore, it is still unclear as to which Taliban groups are willing to join the peace process. The dissident Taliban faction under Mullah Akhund has already rejected the offer for peace talks, conditioning it with the withdrawal of the US troops from Afghanistan. The situation is also complicated by the fact that some Taliban have joined Islamic State–Khorasan (IS-K), the Islamic State’s franchise in Afghanistan.

Differences between Afghanistan and PakistanRegarding peace talks, there exist differences between Kabul and Islamabad on matters relating to the roadmap. The Afghan government believes that the onus is on Pakistan to see the deal with the Taliban while Pakistan feels it can only facilitate to the extent that it can convince but not compel the Taliban for negotiations. It is for the Afghan government to find common ground with the Taliban and clinch the deal through appropriate political concessions.

Differences also exist between the two countries on to methods to deal with irreconcilable Taliban factions. Furthermore, quite understandably, the Afghan government, given the territorial gains made by the Taliban in the recent fighting, wants a timeline approach. Conversely, Pakistan wants open-ended peace talks without pre-conditions. Afghans are reportedly looking at a two-month period for breakthrough in talks.

Other TangiblesWhile a conditional ceasefire agreement in the next few weeks is extremely crucial to the continuation of the peace process given the Taliban fight-talk approach, the growing activities of the IS in Afghanistan too increase the importance of the current peace initiative and a time-bound progress.

The resurgence of al Qaeda, and its strengthening relationship with the Taliban, is another issue of urgent concern. First, al Qaeda chief Ayman al Zawahiri pledged allegiance to the new Taliban Chief Mullah Mansour, who accepted it. The latter also appointed al Qaeda affiliated Sirajuddin Haqqani as one of his two deputies.

Second, and more significantly, as per the US’ reports, in 2015, the Taliban permitted al Qaeda to run at least three training camps inside Afghanistan.

Pakistan adds to the density of the issue by claiming that terror strikes inside its territory are being orchestrated by militants based in Afghanistan, a part of the pattern of cross-border terrorism that is undermining peace efforts in the region.

Key DevelopmentsThere have been some key developments between the second and the third QCG meetings. The Taliban continues to increase its territorial gains both in the north and south of Afghanistan, with 40 Afghan districts under their direct control, and another 39 at the risk of meeting the same fate.

On 24 January 2016, the Taliban, met with Afghan lawmakers and civil society members at an informal two-day organised by Pugwash in Doha. They reiterated their preconditions for the resumption of peace talks with Kabul. These included removing from international terror blacklists their leaders, all bounties on their heads, and the release of an unspecified number of prisoners. The Taliban's spokesperson called the talks “positive.” Afghan government officials did not attend the meeting.

The other “preliminary steps needed for peace” demanded by the Taliban includes the reopening of its political office in Doha and its recognition as the only entity authorised to carry out negotiations on its behalf. The Taliban said it is serious about peace and establishing an “independent Islamic system,” committed to “civil activities,” free speech, and “women's rights in the light of Islamic rules, national interests and values.” The Taliban also claimed that it does not allow its territory to be used to “harm others,” and it is not open to power-sharing with the government in Kabul.

Significantly, while there appears to be an increased Chinese interest in the ongoing reconciliation process, the US is signalling that it is recalibrating its mission in Afghanistan to prolong its military presence.

Given the entrenched position on all sides, the third QCG in Islamabad appears headed down a blind alley.

Forecast 2016: Pakistan

Salma Malik

The tragic overhang of the army school massacre was the inheritance 2015 carried from the previous year. However, the silver lining to this dark macabre cloud was not only the collective resolve of the Pakistani nation to not bow to the terrorists and extremist mindsets but also the unanimity of decisions by key stakeholders with regard to a concerted counter-terrorism strategy. The efforts brought forth a 22-point National Action Plan (NAP) that comprehensively covered all areas through which terrorism and anti-state activities could be reduced and ended, such as private militias; financial regulations; border security; legislations; activities of banned outfits; intelligence sharing; border management; communication and media responses; networks and their activities; banning of hate speech as well as rehabilitation and post-conflict resettlement of displaced people. Consequently, the moratorium on death penalty was lifted and since then, several executions have taken place in both terrorism related and other cases.

Owing to the NAP as well as the military’s counter-terrorism operation, Zarb-e-Azb, 2015 was a relatively secure and calm year in comparison to the preceding years. Yet, the dozen plus major incidents that took place were a reminder that terrorists not only continue to possess the potential to defy the security forces but also to inflict heavy physical losses. Every strike was significant, be it an attack on paramilitary and law enforcement agents in Khyber Pakhtunkhwa or Balochistan; attacking religious institutions such as mosques or churches in the heart of Punjab; or the cold blooded murder of daily commuters and pilgrims in Karachi or Balochistan. The non-state actors chose soft targets to deter and terrorise. Each of these incidents drew public debate and criticism over what more needed to be done, the faith in the military’s ability to eradicate terrorism remained very strong.

More so, this unflinching faith and confidence is in the person of the army chief, who according to common people and media, solely holds the answers to all our problems.

However, counter-terrorism strategies can never be successful without significant support from allies and neighboring states. The upswing in Pak-Afghan relations, especially after December 2014 incident, unsurprisingly plummeted, when like a rabbit out of a hat, the news of the Afghan Taliban chief Mullah Omar’s death was “intelligently” reported and ended up predictably collapsing the dialogue facilitated by Pakistan between the Afghan government and the Afghan Taliban.

Notwithstanding the tall claims that the road to peace in Kabul passes through Islamabad, this development left few concerned neighbors and allies deeply relieved, as increasing cozy and congenial Islamabad-Kabul ties were not in anyone’s interests. The second and most concerning issue for keen observers, has been the setting up and progress on the China Pakistan Economic Corridor (CPEC), which resulted in a lot of debate, speculations, foreign tours by a neighboring Chief Executive to all possible economic partners, and ironically, once again a resumption of terrorist activities.

Diplomacy

As regards significant diplomatic visits, firstly US President Barack Obama’s ‘only-to-Delhi’ trip, which was indeed a fascinating study in its own right, not to be rivaled by Indian Prime Minister Narendra Modi’s “surprise” 25 December stopover in Lahore to enjoy the double celebration of his counterpart’s birthday and granddaughter’s wedding. One must not underwrite this visit as trivial, given that it was the first in over a decade by an Indian prime minister, the previous being Prime Minister Atal Behari Vajpayee’s, in 2004; and more importantly, Modi’s highly strategic official visits to Russia and Afghanistan, before visiting Lahore. The presence of top Indian steel magnet Sajjan Jindal in the highly exclusive meeting becomes logical, given India’s heavy investment in copper and iron mines in Afghanistan, of which several of Jindal’s companies hold significant shares. One must note that Jindal played a significant role in bringing about a rapprochement between the two leaders. By no means a small task, as, until mid-2015, it seemed that New Delhi had totally decided to ex-communicate Pakistan.

At the onset of 2016, two major setbacks were witnessed: first, very predictably, a terrorist strike at the Indian air force base in Pathankot, India, shortly followed by the attacks at the Bacha Khan University in Khyber Pakhtunkhwa, Pakistan. Once again, accusations were hurled, cross-border complicity immediately voiced and proven, with readily available evidence comprising telephone calls, receipts etc. The immediate casualty was the postponement of the scheduled foreign secretary level talks. Have these two events prophetically set the agenda for the rest of 2016? Can we optimistically forecast positive developments vis-à-vis key areas? Or a return to the older pattern of moving one step forward, two steps back.

As regards terrorism, many who held faith in the efforts by the government, now appear skeptical, criticising the establishment for being caught napping. The military has also deliberately kept the media’s access to Zarb-e-Azb fairly limited, which has again had people curious about how successful the military has been in weeding out terrorists. However, the adoration and love for General Raheel Sharif remain steadfast, with his popularity enhancing manifold, after the recent announcement of his not seeking extension in military service – a decision, which demonstrates that all the admiration did not turn his head, and is reflective of military professionalism. Where on one hand the message that it is the institution and not an individual who matters, it also puts the military on a timeline somewhat parallel to Obama’s withdrawal announcement from Afghanistan. Would this signify a wait and watch approach by the terrorists, who would, from time to time, carry out signature strikes and keep the situation turbulent?

Although countering terrorism can never be time-lined, 2016 has to be a year where all the stakeholders pool their genuine efforts to realise the goals of the NAP and exterminate terrorism and militancy for good.

 

Regional IssuesIndeed, a very clichéd and naïve wish list, given the umpteen domestic as well as external spoilers, ranging from legitimate political actors to interest groups, friendly, allied, as well as adversarial states, who stand to benefit from a strife-ridden Pakistan, which is never strong and stable enough to actualize and enjoy the benefits of promising projects such as the CPEC hold. Where on one hand the thrust and continuity of the military’s counter-terrorism strategy will be affected by the next army chief, on the other, the civilian establishment has to take the ownership of, and work hard to realise the NAP’s objectives. Otherwise, Pakistan would continue to remain domestically insecure – a scenario that could be exacerbated by the prospect of new terrorist threats emerging within and beyond the region such as the Daesh or its affiliates.

Afghanistan, Pakistan and IndiaTo that end, Afghanistan is extremely critical to achieve domestic stability in Pakistan. The improved institutional linkages with regards cooperation on terrorism, intelligence sharing, and other related aspects are welcoming. Yet, more is always better. Would Washington and New Delhi feel comfortable with a stronger Kabul-Islamabad bondage? Logically not. Yet, with India realising that Pakistan (and more specifically the Nawaz Sharif family enterprise) is critical to its successful access and speedy extraction of iron and copper from Afghanistan, there might actually be an economic route to stability and betterment in relations. Should we expect monumental breakthroughs? Not in the India-Pakistan case. Could there be more Pathankots? Unfortunately, the probability is high. The more these two countries or their leadership move towards rapprochement, more would be such stage managed episodes, or interventions by spoilers. Furthermore, the chances of the bilateral dialogue remaining a nonstarter and conditional, are high.

How would the US-Pakistan relationship progress in the coming months? Islamabad must keenly observe the trends shaping the US’ November 2016 presidential elections. Who the next commander-in-chief would be is important vis-a-vis Islamabad’s Kabul policy as also to the approach the new president and his team will take towards Saudi Arabia, Iran and Daesh. Pakistan is already in an extremely precariously balanced situation, where owing to a multitude of issues, it is committed to support the Washington-backed Riyadh alliance. Yet, it can neither afford to antagonise Iran, neither as a neighbor, nor as the custodian of Shia ideology, especially at a time when after decades, the lifting of nuclear-related sanctions have opened chances for economic exchange and energy sale.

The second important factor in the Washington-Islamabad bilateral would be the nuclear energy cooperation. Would Pakistan settle for a strategic partnership agreement? Most unlikely; but Pakistan would like to be judged for the positive measures undertaken in safety and security matters, as opposed to constantly be reminded of history.

Obama, in his last State of the Union address mentioned Afghanistan and Pakistan as likely to remain unstable in the coming decades. Should this be taken as an introduction of new factors of instability ensuring increased American military presence and turmoil for Afghanistan? With Pakistan remaining equally affected?

Overview
Despite opportunities such as the CPEC that has the potential for stabilising and enhancing Pakistan’s economic potential, for being highly instrumental in employment generation, to help increase support infrastructure that will strengthen energy potentials and minimise the grounds for extremism, 2016 can either steer Pakistan towards stability and progress or keep it deeply preoccupied with internal as well as external challenges.

With certain aspects such as a further drift in Saudi-Iranian relations, which are beyond its control, Islamabad has and can play a good mediator role. The need is to think prudently, strategise, and implement policies that defeat terrorism, instability and adversarial interests, and move towards the path to progress.