Category: Kuwait

  • Turkey may become major sukuk source for Gulf investors

    Turkey may become major sukuk source for Gulf investors

    Turkey may become major sukuk source for Gulf investors

    Friday, 04 November 2011

    Turkey which has not seriously underperformed the Gulf credit, has also a positive outlooks from the rating agencies, and this make it a potential source for Sukuk market for the Arab Gulf. (File Photo)

    By Shaheen Pasha and Rachna Uppal
    Reuters Dubai

    Strong demand for a sukuk issued by Turkish bank Kuveyt Turk last month underlines how Turkey may become a major source of Islamic bonds for Gulf investors who are keen to diversify geographically.

    The $350 million sukuk, issued at par and carrying a profit rate of 5.875 percent, was only the second sukuk issued from Turkey. But it attracted orders totaling over $550 million ̶ and Gulf investors accounted for nearly 70 percent of final subscribers, according to data released by the lead arrangers.

    That may presage an important shift in investor interest. Traditionally, Gulf investors have not focused on bonds from Turkey, instead preferring debt from names in the immediate region with which they are most familiar and comfortable.

    Now, however, the relatively comfortable way in which Turkey’s economy is coping with global weakness ̶ combined with strong appetite for sukuk in general, since they have proved less volatile during this year’s market instability than conventional bonds ̶ may be changing Gulf investors’ priorities.

    “Turkish government USD paper and bank paper have been in issuance for a number of years now, but have not been a focus of MENA market players as there have been plenty of more locally- issued and better-understood names out there,” said Mark Watts, head of fixed income at National Bank of Abu Dhabi.

    “There are signs that this is changing as the ever-present hunt for yield forces investors to widen their horizons. Sukuk from Turkey is a relatively new phenomena for GCC investors… Turkey’s performance dynamics mean that any smart fund manager will want to take a look at gaining exposure.”

    Stability

    Sentiment towards Turkish debt, like that towards other countries, has been hit by jitters over the European debt crisis; five-year Turkish sovereign credit default swaps surged to 251 basis points, 30 points wider on the day, in response to news on Monday that Greece would call a referendum on its bailout.

    But Turkey, which is rated BB, Ba2 and BB+ by the three major rating agencies, slightly below investment grade, with positive outlooks from all of them, has not seriously underperformed Gulf credits. Its CDS are tighter than unrated Dubai and BBB-rated Bahrain, though wider than AA-rated Abu Dhabi and Qatar.

    Also, the profile of sukuk investors favors a hold-to-maturity investment which makes secondary market trading of Islamic bonds less liquid, but also less volatile. This has helped sukuk in general perform better than many conventional bonds in recent months.

    The yield on the first Turkish sukuk, a $100 million, three-year bond issued in 2010 by Kuveyt Turk , an affiliate of Kuwait Finance House , is down about 55 bps since end-2010 and up only 20 bps since the start of September, when the Greek crisis began worsening further. This is probably because there is minimal trading in the bond — but it still underlines how sukuk, with their more conservative investor base, are less vulnerable to wide price swings.

    By contrast, the yield on Turkey’s 7 percent, $1.5 billion conventional sovereign bond, issued in 2008 and maturing in March 2019, is up about 4 bps this year and 30 bps higher than its level at the start of September.

    “The pricing in the (conventional) bond market is difficult. There is liquidity around in the sukuk market, so there might be better pricing,” said Debashis Dey, partner at law firm Clifford Chance in Dubai.

    A further attraction of Turkish sukuk is that legislative changes by Turkey this year have created a relatively favorable environment for Islamic debt issuance ̶ in some important ways, more favorable than the environment in the Gulf.

    For example, last month’s sukuk from Kuveyt Turk was able to combine asset-backed elements, including the sale and transfer of tangible real estate to an onshore special purpose vehicle, with asset-based elements; this increased the perceived safety of the bond for investors. In the Gulf, factors such as high land transfer fees make asset-backed deals more expensive and difficult.

    Outlook

    Turkey’s Bank Asya has completed roadshows for a potential five-year sukuk of up to $300 million, and one United Arab Emirates-based trader said there was “decent” interest from Gulf accounts in a deal. The trader said any issue was likely to come after the Eid al-Adha holidays in the region next week. Asya has mandated Citi and UBS for the deal.

    Another bank, Albaraka Turk , has awarded a mandate for a sukuk of around $200 million which it wants to issue before year-end, its general manager Fahrettin Yahsi told Reuters in September.

    For Turkey to become a major issuer of sukuk, however, it will have to move beyond bank issues of sukuk to issues by a wide range of companies. This may prove difficult, at least in the short term with the global economy so weak; the International Monetary Fund expects Turkey’s economic growth to slow to 2.5 percent next year from 7.5 percent this year.

    “We have recently almost exclusively seen Turkish financial institutions come to market to raise funds, either through conventional or Islamic paper,” said Rizwan Kanji, debt capital markets partner at law firm King & Spalding, who advised on the Kuveyt Turk sukuk.

    “One primary reason may be because the Turkish banking sector is highly regulated and supervised and therefore faring relatively better than other non-financial sector-related industries in Turkey.”

    Another big question is whether the Turkish government will issue a sovereign sukuk, which could give a big boost to the market by providing a benchmark off which other Turkish Islamic debt could price.

    “It’s time for the Turkish government to issue a sovereign sukuk as a starter and that will hopefully be followed by other institutions and banks,” said Mohieddine Kronfol, chief investment officer at Franklin Templeton Investments in Dubai.

    “Certainly if that happens it will be very good for Turkey and very good for the Islamic banking industry.”

    A sovereign sukuk may be a step the country is not yet ready to take, however. Prime Minister Tayyip Erdogan’s ruling AK Party, a socially conservative but economically liberal party with roots in political Islam, might well favour such an issue, and the government has previously indicated it could issue a sukuk to diversify its funding options.

    But issues such as pricing and Turkey’s desire to satisfy appetite for its conventional debt may continue to delay a sovereign sukuk. Also, a need to accommodate secular sentiment ̶ because of Turkey’s secular tradition, Islamic banks are referred to in the country as “participation banks” ̶ means the government may wait a while.

    “I think the fact that they are a secular nation and they made an effort to leave religion out of financial factors has been a contributing factor” to the lack of a sovereign sukuk so far, Kronfol said.

    “But it doesn’t make sense, especially since you have countries like Luxembourg and France issuing guidelines to issue sukuk.”

    Legislation for a Turkish sovereign sukuk is in place but there has been no clear signal from the government on its intentions for the past couple of years. The Treasury’s new financing programme for 2012 includes the sentence, “Depending on market conditions, new external or domestic debt instruments may be issued.”

  • Kuwaiti-Turkish Forum concludes in Istanbul

    Kuwaiti-Turkish Forum concludes in Istanbul

    Kuwaiti-Turkish Forum concludes in Istanbul

    Economics 10/13/2011 5:13:00 PM

    Kuwaiti-Turkish Forum concludes in Istanbul  By Taha Auda (with photos)
    Kuwaiti-Turkish Forum concludes in Istanbul By Taha Auda (with photos)

    ISTANBUL, Oct 12 (KUNA) — The Kuwaiti-Turkish Forum concluded Thursday in Turkey’s capital Istanbul, by calling for to expanding bilateral cooperation in all fieldd.

    Dean of the Diplomatic Corps and Kuwaiti Ambassador to Turkey Abdallah Al-Thuwaikh stressed the importance of exchanging expertise in all domains between Kuwait and Turkey.

    He said Kuwait is willing to increase its investment in Turkey thanks to the blooming Turkish economy.

    Al-Thuwaikh told KUNA Kuwaiti citizen can now purchase apartments or land in Turkey following relevant talks between Kuwaiti and Turkish leadership, adding that Turkey will announce a relevant law as soon as possible.

    The forum is the first of its kind to be held in Istanbul and comes as part of Turkey’s desire to have closer political, economical and trade relations with Arab countries. (end) ta.hs KUNA 131713 Oct 11NNNN

    via كونا : Kuwaiti-Turkish Forum concludes in Istanbul – الشؤون الإقتصادية – 13/10/2011.

  • On the desert trail of Tony Blair’s millions

    On the desert trail of Tony Blair’s millions

    An explosive new TV documentary reveals the apparent conflict of interests that allows the former prime minister, now a Middle East peace envoy, to earn millions.

    tonyblair
    A bit rich: Mr Blair has said that he is worth 'considerably less' than £20 million Photo: REUTERS

    By Peter Oborne

    One of the first letters arranging Tony Blair’s 2008 visit to Colonel Gaddafi, the now deposed Libyan despot, was written on the notepaper of the “Office of the Quartet Representative” – the formal title of the former British prime minister, reflecting his role as Middle East peace envoy.

    Mr Blair flew into Tripoli in a jet arranged by the Libyan government, and was met by British diplomats. Yet a well-placed source has told The Daily Telegraph that his visits were little to do with Middle East peace, saying instead that the “visits were lobby visits for banking deals with JP Morgan” the US investment bank that pays Mr Blair a consultancy fee of a reported £2 million a year. However, Mr Blair’s official spokesman categorically denied that Blair lobbied Saif al-Islam, Gaddafi’s son, on behalf of the bank, insisting that the visits were largely to do with African affairs.

    Much remains mysterious about Mr Blair’s repeated visits to Tripoli over the past few years. But they display the essential characteristic of the jet-setting billionaire lifestyle he has enjoyed ever since leaving Downing Street in June 2007: an extraordinary confusion of public duty and private interest.

    Was Mr Blair in Libya – as the headed notepaper would suggest – to discuss Middle East peace with Gaddafi? Was he working on behalf of his Governance Initiative, which claims it “pioneers a new way of working with African countries”? Was he sounding out deals for J P Morgan, as the well-placed Telegraph source insists? Or was he there on behalf of his own very lucrative money-making concern, Tony Blair Associates (TBA), whose professed objective is to provide “strategic advice” on “political and economic trends and government reform”?

    This confusion of motive and identity follows Mr Blair almost everywhere he goes, as we found when researching our forthcoming Channel 4 Dispatches film, The Wonderful World of Tony Blair.

    Let’s take the example of Mr Blair’s visit to the Emir of Kuwait, part of a wider Middle Eastern tour, made on January 26, 2009. He was introduced to the Emir – who is said to feel a profound sense of gratitude to the former British prime minister because of his role in deposing Kuwait’s greatest enemy, Saddam Hussein – in his capacity of Quartet Representative. And, indeed, Blair is charged by the Quartet with raising Middle Eastern funds to plough into Palestinian projects.

    Yet, puzzlingly, by his side was a figure who has nothing to do with the Quartet whatever: Jonathan Powell. Mr Powell, who used to be Downing Street Chief of Staff when Mr Blair was prime minister, today has a new role as senior adviser to Tony Blair Associates, the vehicle through which Mr Blair channels many of his money-earning interests. Mr Powell was perched on a sofa during the meeting.

    Shortly afterwards, the Emir handed Tony Blair Associates a lucrative consultancy deal to provide advice on the future of the Kuwaiti economy. Nobody knows how much this deal – which was kept secret for two years – is worth. Because the TBA contract was handled by the Emir’s personal office, it is exempt from scrutiny by Kuwait’s normally rigorous financial regulatory body.

    Few Kuwaitis are prepared to speak out publicly, because it is illegal to criticise the Emir. But Nasser Al Abolly, a leading Kuwaiti pro-democracy campaigner, said he had heard from good sources that Mr Blair had been paid 12 million dinars, about £27 million. “I believe this amount is exorbitant,” Abolly told us, adding that much of Blair’s eventual report was not original and had come up with many of the same recommendations as earlier reports on the future of Kuwait – an observation echoed by other Kuwaiti politicians. A spokesman for Mr Blair insists that the sum involved was far less than £27 million, though declined to say how much TBA had been paid.

    Mr Blair’s job as representative for the Quartet – the international diplomatic group that represents the US, Russia, the United Nations and Europe in their common attempt to forge peace in the Middle East – is riddled with this type of very troubling ambiguity.

    Let’s take the example of the deal trumpeted by Mr Blair as one of his greatest achievements in his role as Quartet Representative – his success in persuading the Israeli government to open up radio frequencies so that the phone company Wataniya Mobile can operate in the West Bank.

    Wataniya Mobile’s chief executive officer Bassam Hanoun cannot praise Mr Blair too highly. He told us that the Wataniya network had been built, “but it was dead, not operational” – until Mr Blair’s forceful intervention with Israeli ministers.

    Yet Wataniya’s owner, the Qatari telecoms giant QTEL, is a major client of one of the former prime minister’s most significant paymasters, JP Morgan. When QTEL bought Wataniya Mobile’s parent company, Wataniya International, in 2007, the company did so with a $2 billion loan that JP Morgan helped to arrange, and the bank stood to make huge profits once the radio frequencies were released.

    A near identical conflict involves a second major Palestinian project for which Mr Blair is lobbying heavily – the development of a huge gas field off the shore of Gaza worth more than $6 billion. Once again, he is fighting to overturn an Israeli edict blocking development, and again there is a potential conflict of interest. British Gas, which owns the rights to operate the field, is a major client of, yes, you guessed it, JP Morgan.

    JP Morgan insists it has never discussed either the Wataniya or the British Gas deal with Mr Blair – while the former prime minister insists that in both cases he was, in any case, wholly unaware of the JP Morgan connection.

    Nevertheless, the conflict is glaring – and Mr Blair would be unable to get away with this kind of confusion if he were a public servant in Britain, or working for an international organisation such as the World Bank or the IMF.

    Dr Nicholas Allen, a senior politics lecturer at the University of London, specialising in parliamentary ethics, told us: “It is not altogether clear that Blair is separating very clearly his work as the representative of the Quartet and his business interests. Clearly, if he was holding a ministerial office in Britain, that kind of conflict – even the appearance of that kind of conflict, the appearance of that influence – wouldn’t be tolerated.”

    Dr Allen says that no fewer than six out of seven of the Nolan principles – the code of ethics for public servants enforced by Mr Blair when he was prime minister – “appear to be undermined by Blair’s conduct”.

    This immunity from ordinary standards comes despite the fact that Mr Blair is partly funded by the British taxpayer and gets the support of British civil servants. It all sounds uncannily similar to the notorious so-called “sofa government” – the confusion of formal roles and identities in the run up to the Iraq invasion for which, as prime minister, Mr Blair was censured by the former cabinet secretary Lord Butler.

    It must be acknowledged that Mr Blair does much philanthropic and public spirited work through his Africa governance initiative, his Faith Foundation, and also for the Quartet (even though we found very few Palestinians who were prepared to speak well of him). However, these admirable objectives have been compromised and tarnished by his apparent drive to make money.

    The Quartet cannot occupy more than one week a month of Blair’s schedule, perhaps less. He has earned a reported £6 million – though some in the City insist the real figure may be much higher – from JP Morgan since his consultancy started in 2008. Add in an estimated £1.5 million from advising the insurance group Zurich Financial services on its climate initiative.

    He has advised Mubadala, one of Abu Dhabi’s most prominent sovereign wealth funds, and the luxury goods concern LVMH. In the television programme, we calculate that the Blair family property portfolio alone – with seven houses ranging from his manor house in Buckinghamshire to his London house in Connaught Square – is worth over £14 million. And then comes a further reported £9 million or more from speeches.

    It is impossible to tell how much Tony Blair Inc is worth exactly because his finances are carefully hidden behind complex financial structures. Mr Blair himself is on record as saying that he is worth “considerably less” than £20 million. There is some reason to be sceptical of this claim.

    Mr Blair insists that his conduct since stepping down as prime minister has been honourable, above board and beyond reproach. But this much can surely be said: when Blair joined the Quartet, he was handed a priceless opportunity to earn a place in history by making a genuine commitment to world peace. He has made some progress. Yet he seems to treat his post as envoy for the Quartet as a part-time post, by allowing his private commercial interests to merge with his public duty. And – as ever – the old maestro is getting away with it.

    Additional reporting by Sasha Joelle Achilli. Watch Peter Oborne reporting for ‘Dispatches: The Wonderful World of Tony Blair’ on Monday at 8pm on Channel 4.

    www.telegraph.co.uk, 23 Sep 2011

     

     

  • KAC eyes increasing flights to Istanbul, Al-Madinah

    KAC eyes increasing flights to Istanbul, Al-Madinah

    KAC eyes increasing flights to Istanbul, Al-Madinah

    Communications 5/18/2011 5:19:00 PM

     

    KUWAIT, May 18 (KUNA) — The Kuwait Airways Corporation (KAC) is looking forward to increasing the number of its flights to the Turkish city of Istanbul, and Saudi city of Al-Madinah to meet the soaring demand for these two cities, Chief Executive Officer and Managing Director of KAC Hamad Al-Falah said Wednesday.

    Further, Al-Falah said, in his address which was delivered today on the new services offered by KAC in summertime, that KAC is serviously considering the launching of a direct and permanent flight to the Austrian capital of Vienna as a result of the increasing demand passangers for this destination, and as many passangers head to the nearby Czech republic to receive treatment at its spa facilities.

    Al-Falah also said that political events which are currently seen by the Arab region had its impact on the schedule of KAC flights to some destinations with seeing a huge decrease in the number of passangers heading to them, though he added that such drop started to dwindle some time ago, particularly regarding Beirut and Cairo.

    On the new services which KAC intends to launch during summertime, Al-Falah said that KAC will change the quality of food provided on its flights in what makes all kinds of food more fresh than ever, while asserting the KAC modernize the movies displayed on its planes every three months.

    Finally, Al-Falah said that KAC needs nearly 30 new aircraft to keep up with increasing demand, and to catch up with other competing airlines, particularly those belonging to the Gulf Cooperation Council (GCC) Arab states. (end) fnk.na.aff KUNA 181719 May 11NNNN

    via كونا : KAC eyes increasing flights to Istanbul, Al-Madinah – النقل والإتصالات – 18/05/2011.

  • Egypt’s Revolution: Creative Destruction for a ‘Greater Middle East’?

    Egypt’s Revolution: Creative Destruction for a ‘Greater Middle East’?

    F. William Engdahl, February 5, 2011
    Fast on the heels of the regime change in Tunisia came a popular-based protest movement launched on January 25 against the entrenched order of Egypt’s Hosni Mubarak. Contrary to the carefully-cultivated impression that the Obama Administration is trying to retain the present regime of Mubarak, Washington in fact is orchestrating the Egyptian as well as other regional regime changes from Syria to Yemen to Jordan and well beyond in a process some refer to as “creative destruction.”

    The template for such covert regime change has been developed by the Pentagon, US intelligence agencies and various think-tanks such as RAND Corporation over decades, beginning with the May 1968 destabilization of the de Gaulle presidency in France. This is the first time since the US backed regime changes in Eastern Europe some two decades back that Washington has initiated simultaneous operations in many countries in a region. It is a strategy born of a certain desperation and one not without significant risk for the Pentagon and for the long-term Wall Street agenda. What the outcome will be for the peoples of the region and for the world is as yet unclear.
    Yet while the ultimate outcome of defiant street protests in Cairo and across Egypt and the Islamic world remains unclear, the broad outlines of a US covert strategy are already clear.
    No one can dispute the genuine grievances motivating millions to take to the streets at risk of life. No one can defend atrocities of the Mubarak regime and its torture and repression of dissent. Noone can dispute the explosive rise in food prices as Chicago and Wall Street commodity speculators, and the conversion of American farmland to the insane cultivation of corn for ethanol fuel drive grain prices through the roof. Egypt is the world’s largest wheat importer, much of it from the USA. Chicago wheat futures rose by a staggering 74% between June and November 2010 leading to an Egyptian food price inflation of some 30% despite government subsidies.
    What is widely ignored in the CNN and BBC and other Western media coverage of the Egypt events is the fact that whatever his excesses at home, Egypt’s Mubarak represented a major obstacle within the region to the larger US agenda.

    To say relations between Obama and Mubarak were ice cold from the outset would be no exaggeration. Mubarak was staunchly opposed to Obama policies on Iran and how to deal with its nuclear program, on Obama policies towards the Persian Gulf states, to Syria and to Lebanon as well as to the Palestinians.1 He was a formidable thorn in the larger Washington agenda for the entire region, Washington’s Greater Middle East Project, more recently redubbed the milder sounding “New Middle East.”

    As real as the factors are that are driving millions into the streets across North Africa and the Middle East, what cannot be ignored is the fact that Washington is deciding the timing and as they see it, trying to shape the ultimate outcome of comprehensive regime change destabilizations across the Islamic world. The day of the remarkably well-coordinated popular demonstrations demanding Mubarak step down, key members of the Egyptian military command including Chief of General Staff Lt. Gen. Sami Hafez Enan were all in Washington as guests of the Pentagon. That conveniently neutralized the decisive force of the Army to stop the anti-Mubarak protests from growing in the critical early days.2

    The strategy had been in various State Department and Pentagon files since at least a decade or longer. After George W. Bush declared a War on Terror in 2001 it was called the Greater Middle East Project. Today it is known as the less threatening-sounding “New Middle East” project. It is a strategy to break open the states of the region from Morocco to Afghanistan, the region defined by David Rockefeller’s friend Samuel Huntington in his infamous Clash of Civilizations essay in Foreign Affairs.
    Egypt rising?

    The current Pentagon scenario for Egypt reads like a Cecil B. DeMille Hollywood spectacular, only this one with a cast of millions of Twitter-savvy well-trained youth, networks of Muslim Brotherhood operatives, working with a US-trained military. In the starring role of the new production at the moment is none other than a Nobel Peace Prize winner who conveniently appears to pull all the threads of opposition to the ancien regime into what appears as a seamless transition into a New Egypt under a self-proclaimed liberal democratic revolution.

    Some background on the actors on the ground is useful before looking at what Washington’s long term strategic plan might be for the Islamic world from North Africa to the Persian Gulf and ultimately into the Islamic populations of Central Asia, to the borders of China and Russia.
    Washington ‘soft’ revolutions

    The protests that led to the abrupt firing of the entire Egyptian government by President Mubarak on the heels of the panicked flight of Tunisia’s Ben Ali into a Saudi exile are not at all as “spontaneous” as the Obama White House, Clinton State Department or CNN, BBC and other major media in the West make them to be.

    They are being organized in a Ukrainian-style high-tech electronic fashion with large internet-linked networks of youth tied to Mohammed ElBaradei and the banned and murky secret Muslim Brotherhood, whose links to British and American intelligence and freemasonry are widely reported.3

    At this point the anti-Mubarak movement looks like anything but a threat to US influence in the region, quite the opposite. It has all the footprints of another US-backed regime change along the model of the 2003-2004 Color Revolutions in Georgia and Ukraine and the failed Green Revolution against Iran’s Ahmedinejad in 2009.

    The call for an Egyptian general strike and a January 25 Day of Anger that sparked the mass protests demanding Mubarak resign was issued by a Facebook-based organization calling itself the April 6 Movement. The protests were so substantial and well-organized that it forced Mubarak to ask his cabinet to resign and appoint a new vice president, Gen. Omar Suleiman, former Minister of Intelligence.
    April 6 is headed by one Ahmed Maher Ibrahim, a 29-year-old civil engineer, who set up the Facebook site to support a workers’ call for a strike on April 6, 2008.
    According to a New York Times account from 2009, some 800,000 Egyptians, most youth, were already then Facebook or Twitter members. In an interview with the Washington-based Carnegie Endowment, April 6 Movement head Maher stated, “Being the first youth movement in Egypt to use internet-based modes of communication like Facebook and Twitter, we aim to promote democracy by encouraging public involvement in the political process.”4

    Maher also announced that his April 6 Movement backs former UN International Atomic Energy Aagency (IAEA) head and declared Egyptian Presidential candidate, ElBaradei along with ElBaradei’s National Association for Change (NAC) coalition. The NAC includes among others George Ishak, a leader in Kefaya Movement, and Mohamed Saad El-Katatni, president of the parliamentary bloc of the controversial Ikhwan or Muslim Brotherhood.5

    Today Kefaya is at the center of the unfolding Egyptian events. Not far in the background is the more discreet Muslim Brotherhood.

    ElBaradei at this point is being projected as the central figure in a future Egyptian parliamentary democratic change. Curiously, though he has not lived in Egypt for the past thirty years, he has won the backing of every imaginable part of the Eyptian political spectrum from communists to Muslim Brotherhood to Kefaya and April 6 young activists.6 Judging from the calm demeanour ElBaradei presents these days to CNN interviewers, he also likely has the backing of leading Egyptian generals opposed to the Mubarak rule for whatever reasons as well as some very influential persons in Washington.

    Kefaya—Pentagon ‘non-violent warfare’

    Kefaya is at the heart of mobilizing the Egyptian protest demonstrations that back ElBaradei’s candidacy. The word Kefaya translates to “enough!”
    Curiously, the planners at the Washington National Endowment for Democracy (NED)7 and related color revolution NGOs apparently were bereft of creative new catchy names for their Egyptian Color Revolution. In their November 2003 Rose Revolution in Georgia, the US-financed NGOs chose the catch word, Kmara! In order to identify the youth-based regime change movement. Kmara in Georgian also means “enough!”

    Like Kefaya, Kmara in Georgia was also built by the Washington-financed trainers from the NED and other groups such as Gene Sharp’s misleadingly-named Albert Einstein Institution which uses what Sharp once identified as “non-violence as a method of warfare.”8

    The various youth networks in Georgia as in Kefaya were carefully trained as a loose, decentralized network of cells, deliberately avoiding a central organization that could be broken and could have brought the movement to a halt. Training of activists in techniques of non-violent resistance was done at sports facilities, making it appear innocuous. Activists were also given training in political marketing, media relations, mobilization and recruiting skills.
    The formal name of Kefaya is Egyptian Movement for Change. It was founded in 2004 by select Egyptian intellectuals at the home of Abu ‘l-Ala Madi, leader of the al-Wasat party, a party reportedly created by the Muslim Brotherhood.9 Kefaya was created as a coalition movement united only by the call for an end Mubarak’s rule.

    Kefaya as part of the amorphous April 6 Movement capitalized early on new social media and digital technology as its main means of mobilization. In particular, political blogging, posting uncensored youtube shorts and photographic images were skillfully and extremely professionally used. At a rally already back in December 2009 Kefaya had announced support for the candidacy of Mohammed ElBaradei for the 2011 Egyptian elections.10

    RAND and Kefaya

    No less a US defense establishment think-tank than the RAND Corporation has conducted a detailed study of Kefaya. The Kefaya study as RAND themselves note, was “sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Department of the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.”11

    A nicer bunch of democratically-oriented gentlemen and women could hardly be found.
    In their 2008 report to the Pentagon, the RAND researchers noted the following in relation to Egypt’s Kefaya:
    “The United States has professed an interest in greater democratization in the Arab world, particularly since the September 2001 attacks by terrorists from Saudi Arabia, the United Arab Emirates, Egypt, and Lebanon. This interest has been part of an effort to reduce destabilizing political violence and terrorism. As President George W. Bush noted in a 2003 address to the National Endowment for Democracy, “As long as the Middle East remains a place where freedom does not flourish, it will remain a place of stagnation, resentment, and violence ready for export” (The White House, 2003). The United States has used varying means to pursue democratization, including a military intervention that, though launched for other reasons, had the installation of a democratic government as one of its end goals.
    However, indigenous reform movements are best positioned to advance democratization in their own country.”12

    RAND researchers have spent years perfecting techniques of unconventional regime change under the name “swarming,” the method of deploying mass mobs of digitally-linked youth in hit-and-run protest formations moving like swarms of bees.13

    Washington and the stable of “human rights” and “democracy” and “non-violence” NGOs it oversees, over the past decade or more has increasingly relied on sophisticated “spontaneous” nurturing of local indigenous protest movements to create pro-Washington regime change and to advance the Pentagon agenda of global Full Spectrum Dominance. As the RAND study of Kefaya states in its concluding recommendations to the Pentagon:
    “The US government already supports reform efforts through organizations such as the US Agency for International Development and the United Nations Development Programme. Given the current negative popular standing of the United States in the region, US support for reform initiatives is best carried out through nongovernmental and nonprofit institutions.14

    The RAND 2008 study was even more concrete about future US Government support for Egyptian and other “reform” movements:
    “The US government should encourage nongovernmental organizations to offer training to reformers, including guidance on coalition building and how to deal with internal differences in pursuit of democratic reform. Academic institutions (or even nongovernmental organizations associated with US political parties, such as the International Republican Institute or the National Democratic Institute for International Affairs) could carry out such training, which would equip reform leaders to reconcile their differences peacefully and democratically.

    “Fourth, the United States should help reformers obtain and use information technology, perhaps by offering incentives for US companies to invest in the region’s communications infrastructure and information technology. US information technology companies could also help ensure that the Web sites of reformers can remain in operation and could invest in technologies such as anonymizers that could offer some shelter from government scrutiny. This could also be accomplished by employing technological safegaurds to prevent regimes from sabotaging the Web sites of reformers. “15

    As their Kefaya monograph states, it was prepared in 2008 by the “RAND National Security Research Division’s Alternative Strategy Initiative, sponsored by the Rapid Reaction Technology Office in the Office of the Undersecretary of Defense for Acquisition, Technology, and Logistics.
    The Alternative Strategy Initiative, just to underscore the point, includes “research on creative use of the media, radicalization of youth, civic involvement to stem sectarian violence, the provision of social services to mobilize aggrieved sectors of indigenous populations, and the topic of this volume, alternative movements.16

    In May 2009 just before Obama’s Cairo trip to meet Mubarak, US Secretary of State Hillary Clinton hosted a number of the young Egyptian activists in Washington under the auspices of Freedom House, another “human rights” Washington-based NGO with a long history of involvement in USsponsored regime change from Serbia to Georgia to Ukraine and other Color Revolutions. Clinton and Acting Assistant Secretary of State for Near Eastern Affairs Jeffrey Feltman met the sixteen activists at the end of a two-month “fellowship” organized by Freedom House’s New Generation program.17

    Freedom House and Washington’s government-funded regime change NGO, National Endowment for Democracy (NED) are at the heart of the uprisings now sweeping across the Islamic world. They fit the geographic context of what George W. Bush proclaimed after 2001 as his Greater Middle East Project to bring “democracy” and “liberal free market” economic reform to the Islamic countries from Afghanistan to Morocco. When Washington talks about introducing “liberal free market reform” people should watch out. It is little more than code for bringing those economies under the yoke of the dollar system and all that implies.
    Washington’s NED in a larger agenda

    If we make a list of the countries in the region which are undergoing mass-based protest movements since the Tunisian and Egyptian events and overlay them onto a map, we find an almost perfect convergence between the protest countries today and the original map of the Washington Greater Middle East Project that was first unveiled during the George W. Bush Presidency after 2001.
    Washington’s NED has been quietly engaged in preparing a wave of regime destabilizations across North Africa and the Middle East since the 2001-2003 US military invasions of Afghanistan and Iraq. The list of where the NED is active is revealing. Its website lists Tunisia, Egypt, Jordan, Kuwait, Libya, Syria, Yemen and Sudan as well, interestingly, as Israel. Coincidentally these countries are almost all today subject to “spontaneous” popular regime-change uprisings.
    The International Republican Institute and the National Democratic Institute for International Affairs mentioned by the RAND document study of Kefaya are subsidiary organizations of the Washington-based and US Congress-financed National Endowment for Democracy.
    The NED is the coordinating Washington agency for regime destabilization and change. It is active from Tibet to Ukraine, from Venezuela to Tunisia, from Kuwait to Morocco in reshaping the world after the collapse of the Soviet Union into what George H.W. Bush in a 1991 speech to Congress proclaimed triumphantly as the dawn of a New World Order.18

    As the architect and first head of the NED, Allen Weinstein told the Washington Post in 1991 that, “a lot of what we do today was done covertly 25 years ago by the CIA19

    The NED Board of Directors includes or has included former Defense Secretary and CIA Deputy head, Frank Carlucci of the Carlyle Group; retired General Wesley Clark of NATO; neo-conservative warhawk Zalmay Khalilzad who was architect of George W. Bush’s Afghan invasion and later ambassador to Afghanistan as well as to occupied Iraq. Another NED board member, Vin Weber, co-chaired a major independent task force on US Policy toward Reform in the Arab World with former US Secretary of State Madeleine Albright, and was a founding member of the ultra-hawkish Project for a New American Century think-tank with Dick Cheney and Don Rumsfeld, which advocated forced regime change in Iraq as early as 1998.20

    The NED is supposedly a private, non-government, non-profit foundation, but it receives a yearly appropriation for its international work from the US Congress. The National Endowment for Democracy is dependent on the US taxpayer for funding, but because NED is not a government agency, it is not subject to normal Congressional oversight.
    NED money is channelled into target countries through four “core foundations”—the National Democratic Institute for International Affairs, linked to the Democratic Party; the International Republican Institute tied to the Republican Party; the American Center for International Labor Solidarity linked to the AFL-CIO US labor federation as well as the US State Department; and the Center for International Private Enterprise linked to the free-market US Chamber of Commerce.
    The late political analyst Barbara Conry noted that,
    “NED has taken advantage of its alleged private status to influence foreign elections, an activity that is beyond the scope of AID or USIA and would otherwise be possible only through a CIA covert operation. Such activities, it may also be worth noting, would be illegal for foreign groups operating in the United States.”21

    Significantly the NED details its various projects today in Islamic countries, including in addition to Egypt, in Tunisia, Yemen, Jordan, Algeria, Morocco, Kuwait, Lebanon, Libya, Syria, Iran and Afghanistan. In short, most every country which is presently feeling the earthquake effects of the reform protests sweeping across the Middle East and North Africa is a target of NED.22

    In 2005 US President George W. Bush made a speech to the NED. In a long, rambling discourse which equated “Islamic radicalism” with the evils of communism as the new enemy, and using a deliberately softer term “broader Middle East” for the term Greater Middle East that had aroused much distruct in the Islamic world, Bush stated,
    “The fifth element of our strategy in the war on terror is to deny the militants future recruits by replacing hatred and resentment with democracy and hope across the broader Middle East. This is a difficult and long-term project, yet there’s no alternative to it. Our future and the future of that region are linked. If the broader Middle East is left to grow in bitterness, if countries remain in misery, while radicals stir the resentments of millions, then that part of the world will be a source of endless conflict and mounting danger, and for our generation and the next. If the peoples of that region are permitted to choose their own destiny, and advance by their own energy and by their participation as free men and women, then the extremists will be marginalized, and the flow of violent radicalism to the rest of the world will slow, and eventually end… We’re encouraging our friends in the Middle East, including Egypt and Saudi Arabia, to take the path of reform, to strengthen their own societies in the fight against terror by respecting the rights and choices of their own people. We’re standing with dissidents and exiles against oppressive regimes, because we know that the dissidents of today will be the democratic leaders of tomorrow…”23

    The US Project for a ‘Greater Middle East’

    The spreading regime change operations by Washington from Tunisia to Sudan, from Yemen to Egypt to Syria are best viewed in the context of a long-standing Pentagon and State Department strategy for the entire Islamic world from Kabul in Afghanistan to Rabat in Morocco.
    The rough outlines of the Washington strategy, based in part on their successful regime change operations in the former Warsaw Pact communist bloc of Eastern Europe, were drawn up by former Pentagon consultant and neo-conservative, Richard Perle and later Bush official Douglas Feith in a white paper they drew up for the then-new Israeli Likud regime of Benjamin Netanyahu in 1996.
    That policy recommendation was titled A Clean Break: A New Strategy for Securing the Realm. It was the first Washington think-tank paper to openly call for removing Saddam Hussein in Iraq, for an aggressive military stance toward the Palestinians, striking Syria and Syrian targets in Lebanon.24

    Reportedly, the Netanyahu government at that time buried the Perle-Feith report, as being far too risky. By the time of the events of September 11, 2001 and the return to Washington of the arch war hawk neoconservatives around Perle and others, the Bush Administration put highest priority on an expanded version of the Perle-Feith paper, calling it their Greater Middle East Project. Feith was named Bush’s Under Secretary of Defense.
    Greater Middle East orthographic projection

    Behind the facade of proclaiming democratic reforms of autocratic regimes in the entire region, the Greater Middle East was and is a blueprint to extend US military control and to break open the statist economies in the entire span of states from Morocco to the borders of China and Russia.

    In May 2005, before the rubble from the US bombing of Baghdad had cleared, George W. Bush, a President not remembered as a great friend of democracy, proclaimed a policy of “spreading democracy” to the entire region and explicitly noted that that meant “the establishment of a USMiddle East free trade area within a decade.” 25

    Prior to the June 2004 G8 Summit on Sea Island, Georgia, Washington issued a working paper, “G8-Greater Middle East Partnership.” Under the section titled Economic Opportunities was Washington’s dramatic call for “an economic transformation similar in magnitude to that undertaken by the formerly communist countries of Central and Eastern Europe.”

    The US paper said that the key to this would be the strengthening of the private sector as the way to prosperity and democracy. It misleadingly claimed it would be done via the miracle of microfinance where as the paper put it, “a mere $100 million a year for five years will lift 1.2 million entrepreneurs (750,000 of them women) out of poverty, through $400 loans to each.” 26

    The US plan envisioned takeover of regional banking and financial affairs by new institutions ostensibly international but, like World Bank and IMF, de facto controlled by Washington, including WTO. The goal of Washington’s long-term project is to completely control the oil, to completely control the oil revenue flows, to completely control the entire economies of the region, from Morocco to the borders of China and all in between. It is a project as bold as it is desperate.

    Once the G8 US paper was leaked in 2004 in the Arabic Al-Hayat, opposition to it spread widely across the region, with a major protest to the US definition of the Greater Middle East. As an article in the French Le Monde Diplomatique in April 2004 noted, “besides the Arab countries, it covers Afghanistan, Iran, Pakistan, Turkey and Israel, whose only common denominator is that they lie in the zone where hostility to the US is strongest, in which Islamic fundamentalism in its anti-Western form is most rife.27 It should be noted that the NED is also active inside Israel with a number of programs.

    Notably, in 2004 it was vehement opposition from two Middle East leaders—Hosni Mubarak of Egypt and the King of Saudi Arabia—that forced the ideological zealots of the Bush Administration to temporarily put the Project for the Greater Middle East on a back burner.

    Will it work?

    At this writing it is unclear what the ultimate upshot of the latest US-led destabilizations across the Islamic world will bring. It is not clear what will result for Washington and the advocates of a USdominated New World Order. Their agenda is clearly one of creating a Greater Middle East under firm US grip as a major control of the capital flows and energy flows of a future China, Russia and a European Union that might one day entertain thoughts of drifting away from that American order.

    It has huge potential implications for the future of Israel as well. As one US commentator put it, “The Israeli calculation today is that if ‘Mubarak goes’ (which is usually stated as ‘If America lets Mubarak go’), Egypt goes. If Tunisia goes (same elaboration), Morocco and Algeria go. Turkey has already gone (for which the Israelis have only themselves to blame). Syria is gone (in part because Israel wanted to cut it off from Sea of Galilee water access). Gaza has gone to Hamas, and the Palestine Authority might soon be gone too (to Hamas?). That leaves Israel amid the ruins of a policy of military domination of the region.28

    The Washington strategy of “creative destruction” is clearly causing sleepless nights not only in the Islamic world but also reportedly in Tel Aviv, and ultimately by now also in Beijing and Moscow and across Central Asia.

    1 DEBKA, Mubarak believes a US-backed Egyptian military faction plotted his ouster, February 4, 2011, accessed in www.debka.com/weekly/480/. DEBKA is open about its good ties to Israeli intelligence and security agencies. While its writings must be read with that in mind, certain reports they publish often contain interesting leads for further investigation.

    2 Ibid.

    3 The Center for Grassroots Oversight, 1954-1970: CIA and the Muslim Brotherhood ally to oppose Egyptian President Nasser, www.historycommons.org/context.jsp?item=western_support_for_islamic_militancy_202700&scale=0. According to the late Miles Copeland, a CIA official stationed in Egypt during the Nasser era, the CIA allied with the Muslim Brotherhood which was opposed to Nasser’s secular regime as well as his nationalist opposition to brotherhood pan-Islamic ideology.

    4 Jijo Jacob, What is Egypt’s April 6 Movement?, February 1, 2011, accessed in http://www.ibtimes.com/articles/107387/20110201/what-is-egypt-s-april-6-movement.htm

    5 Ibid.

    6 Janine Zacharia, Opposition groups rally around Mohamed ElBaradei, Washington Post, January 31, 2011, accessed in .

    7 National Endowment for Democracy, Middle East and North Africa Program Highlights 2009, accessed in http://www.ned.org/where-we-work/middle-east-and-northern-africa/middle-east-and-north-africahighlights.

    8 Amitabh Pal, Gene Sharp: The Progressive Interview, The Progressive, March 1, 2007.

    9 Emmanuel Sivan, Why Radical Muslims Aren’t Taking over Governments, Middle East Quarterly, December 1997, pp. 3-9

    10 Carnegie Endowment, The Egyptian Movement for Change (Kifaya), accessed in http://egyptelections.carnegieendowment.org/2010/09/22/the-egyptian-movement-for-change-kifaya

    11 Nadia Oweidat, et al, The Kefaya Movement: A Case Study of a Grassroots Reform Initiative, Prepared for the Office of the Secretary of Defense, Santa Monica, Ca., RAND_778.pdf, 2008, p. iv.

    12 Ibid.

    13 For a more detailed discussion of the RAND “swarming” techniques see F. William Engdahl, Full Spectrum Dominance: Totalitarian Democracy in the New World Order, edition.engdahl, 2009, pp. 34-41.

    14 Nadia Oweidat et al, op. cit., p. 48.

    15 Ibid., p. 50.

    16 Ibid., p. iii.

    17 Michel Chossudovsky, The Protest Movement in Egypt: “Dictators” do not Dictate, They Obey Orders, January 29, 2011, accessed in https://www.globalresearch.ca/the-protest-movement-in-egypt-dictators-do-not-dictate-they-obey-orders/22993

    18 George Herbert Walker Bush, State of the Union Address to Congress, 29 January 1991. In the speech Bush at one point declared in a triumphant air of celebration of the collapse of the Sovoiet Union, “What is at stake is more than one small country, it is a big idea—a new world order…”

    19 Allen Weinstein, quoted in David Ignatius, Openness is the Secret to Democracy, Washington Post National Weekly Edition, 30 September 1991, pp. 24-25.

    20 National Endowment for Democracy, Board of Directors, accessed in

    21 Barbara Conry, Loose Cannon: The National Endowment for Democracy, Cato Foreign Policy Briefing No. 27, November 8, 1993, accessed in .

    22 National Endowment for Democracy, 2009 Annual Report, Middle East and North Africa, accessed in http://www.ned.org/publications/annual-reports/2009-annual-report.

    23 George W. Bush, Speech at the National Endowment for Democracy, Washington, DC, October 6, 2005,accessed in http://www.presidentialrhetoric.com/speeches/10.06.05.html.

    24 Richard Perle, Douglas Feith et al, A Clean Break: A New Strategy for Securing the Realm, 1996, Washington and Tel Aviv, The Institute for Advanced Strategic and Political Studies, accessed in www.iasps.org/strat1.htm

    25 George W. Bush, Remarks by the President in Commencement Address at the University of South Carolina, White House, 9 May 2003.

    26 Gilbert Achcar, Fantasy of a Region that Doesn’t Exist: Greater Middle East, the US plan, Le Monde Diplomatique, April 4, 2004, accessed in https://mondediplo.com/2004/04/04world

    27 Ibid.

    28 William Pfaff, American-Israel Policy Tested by Arab Uprisings, accessed in http://www.truthdig.com/report/item/american-israeli_policy_tested_by_arab_uprisings_20110201/

    http://www.engdahl.oilgeopolitics.net/print/Creative%20Destruction%20Washington%20Style.pdf

  • Can Turkey show Arab states the way to a brighter future?

    Can Turkey show Arab states the way to a brighter future?

    By Marco Vicenzino, who provides geo-political risk analysis and regular commentary for global media outlets and is director of Global Strategy Project (THE GUARDIAN, 12/12/10):

    Although Palestinian survival has been largely sustained by Arab countries, it is the Turkish government of Recep Tayyip Erdogan that has emerged as the Palestinians’ most resolute spokesman. By backing its rhetoric with diplomatic muscle, Turkey most recently influenced Brazil and Argentina to recognise an independent Palestine. Other Latin American countries will soon follow. In addition, Turkey is actively harnessing international support to end the Israeli blockade of Gaza.

    Despite general public sympathy for the plight of Palestinians, Turks are not united on ways of showing this support. Secular Turks allege that religiously inspired NGOs, with government encouragement, exploit the Palestinian cause to promote and strengthen themselves domestically and abroad. The recent flotilla fiasco off Gaza provides a prime example.

    It is common in the Middle East to attribute Arabs’ misfortunes to western colonialism and nearly four centuries of Ottoman rule. While significant antipathy toward the west persists, there has been a considerable shift in Arab public opinion toward Turkey in recent years. Turkey is increasingly looked upon by Arabs as “what we should be”.

    It has garnered enormous respect for its achievements and growing influence in the region. Although a majority Sunni state, Turkey thus far has been able to rise above the Sunni-Shia divide evident in many Arab and Muslim-majority states – shrewdly converting it into valuable political and diplomatic capital.

    After several false dawns, the Arab street remains largely cynical and frustrated. While pride in ancestors’ achievements provides some comfort, it is usually overwhelmed by current realities.

    Few if any leaders provide inspiration. Slow strides in Iraq seemed destined to be followed by greater slowness and fewer strides. Despite transparent elections, Palestinian infighting undermines real hope. After decades of martial law, ambiguity surrounding Egypt’s succession hangs like a dagger over its future. Assad’s fiddling with free markets and tight grip in Syria provides no vision or certainty for the next generation. Considerable progress in Jordan is difficult to replicate beyond its borders as its ability to influence others is limited by internal challenges and regional realities. Despite apparent progress, Lebanon remains a fragile powder-keg that could explode at any moment. The resource-rich pre-emerging market of Libya remains subject to the whims of an ageing autocrat whose stability is questioned clandestinely at home and openly abroad.

    The constantly recurrent question in western policy circles is whether Turkey can serve as a model for Arab states.

    While Turkey can serve as an inspiration and provide useful lessons, it cannot be a model. The unique dynamics and historical context within which the modern Turkish republic developed cannot be replicated. Contemporary Turkey is still evolving democratically. Internal power struggles, the Kurdish issue and the broader path to reform are just some reminders of the arduous road ahead. The government must strike a balance. With enormous challenges at home, it must avoid overreach abroad.

    With the overwhelming majority of Arab populations under the age of 30 confronting a bleak future, a demographic timebomb is ticking in the region. This further underscores the need for Turkey’s leadership to encourage its private sector to seize the initiative in the Middle East and unleash its potential. By creating opportunities it can help relieve regional pressures and contribute to a soft landing.

    Change in the broader Middle East will occur most effectively through an evolutionary process marked primarily by economic growth and not imposition of external designs. Gradually, over time, the potential for further reforms will increase. When needed, Turkey’s politicians should provide a gentle touch but leave it to its businessmen to produce results. After all, Turkey’s most effective ambassadors come from its private sector.

    For four centuries ending with the first world war, major decisions dictating the course of Arab history were largely made from Istanbul. History will not repeat itself. However, after nearly a century of absence, the return of real Turkish influence to Arab capitals, in a more benign form, must be welcomed. It is also fundamentally essential to the gradual transformation of a region whose instability poses a constant threat to global order.

    via Can Turkey show Arab states the way to a brighter future? « Tribuna Libre.