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Analysis

US Supply Chains – How to build more secure, resilient, next-gen U.S. supply chains (Eleftherios Iakovou and Chelsea C. White III, Brookings)

Tens of thousands of medical supply packages are sorted daily for regional and international shipping from the DHL Supply Chain facility in Southaven Monday, Oct. 5, 2020.Jrca5015Tens of thousands of medical supply packages are sorted daily for regional and international shipping from the DHL Supply Chain facility in Southaven, Mississippi, on Monday, Oct. 5, 2020.

Beginning in the 1990s and accelerating after the inclusion of China in the World Trade Organization in 2001, many companies globalized their sourcing and production and embraced lean manufacturing techniques to reduce costs. As supply chains moved abroad, global trade jumped from 39% of global GDP to 58% between 1990 and 2019. But this move toward globalization exposed companies to a plethora of supply chain risks, such as extreme weather events, labor disputes, cyberattacks, and supplier disruptions. Growing awareness of these risks slowed globalization—a phenomenon sometimes called “slowbalisation”—and between 2008 and today global trade as percentage of GDP shrunk from 61% to 58%. The COVID-19 pandemic and the economic crisis accompanying it has only accelerated these trends and revealed additional supply chain risks.

COVID-19 is not the first epidemic to disrupt supply chains—SARS, measles, swine flu, Ebola, and avian flu all resulted in business interruptions—but none of these epidemics disrupted global trade and domestic supply chains as much as COVID-19. The ongoing pandemic has highlighted structural problems in global supply chains. Chinese manufacturing of essential medical goods and equipment has revealed what some regard as a dangerous over-reliance on products critical to national health and economies. Surging customer demand for some goods (healthcare products and equipment, groceries, and household products) that often shifted geographically—moving from hotspot to hotspot—and dramatic decreases in demand for other goods (essentially everything non-healthcare) exposed the inability of supply chains to quickly shift production and logistics in response.

These stresses revealed the fragility of the modern supply chain and require a reset in the design of supply chain networks to improve resilience and agility. Companies and governments alike are realizing that efficiency at the expense of resilience cannot be the sole criterion around which supply chains are designed. Now more than ever, a new paradigm for competitive resilience is necessary in order for companies to redesign their supply chains for the long haul without reverting to their pre-pandemic practices.

Supply chain resilience

Supply chain resilience refers to the ability of a given supply chain to prepare for and adapt to unexpected events; to quickly adjust to sudden disruptive changes that negatively affect supply chain performance; to continue functioning during a disruption (sometimes referred to as “robustness”); and to recover quickly to its pre-disruption state or a more desirable state. To achieve supply chain resilience the following are important tenets:

  • Rapid detection, response, and recovery. Supply chains need to be able to quickly detect, respond to, and recover from changed conditions.
  • End-to-end, data-driven, supply chain control. Supply chain integration, transparency, and visibility are necessary but not sufficient conditions for enhanced resilience. Being able to view raw materials, semi-finished goods, and finished products starting from your “suppliers’ suppliers” to your “customers’ customers” is more important than ever. However, to extract value from these data requires action to be taken quickly.  Preparing for a disruption before it occurs (e.g., planning, scenario planning, war gaming) is key.  It may take months to determine what data to collect and how to convert these data into actions for rapid disruption detection, response, and recovery.
  • Redundancies, including emergency stockpiles, safety stocks, and diversified sourcing from offshored, nearshored, and/or reshored suppliers. These suppliers must be able to provide additional surge capacity when there are disruptions of supply to ensure business continuity.
  • Collaboration of private and public supply chain stakeholders.
  • Effective demand planning processes.

The leading multinationals have long recognized that managing supply chain risks is necessary for their sustained competitiveness. To this end, the last two decades have seen the development of supply chain risk management and risk mitigation strategies that have attracted growing interest from corporate management and boards. But this has not led to the broad adoption of supply chain risk management tools. A singular focus on operating margins and asset efficiency has resulted in sometimes brittle, lean, and offshored supply chains. Because more resilient, and hence more costly, supply chains built on high levels of redundancies can have a short-term negative effect on the bottom line, corporate boards and shareholders have often resisted them. Assuming a longer-term perspective may make investing in resilience a better value proposition, although a variety of issues, such as the financial condition of the firm, macro-economic conditions, S.E.C. reporting requirements, and investor impatience, could serve as barriers to such a perspective.

Toward a next-gen resilient supply chain

Supply chain resilience can be strengthened by increasing inventory levels of raw material, work-in-progress, and the final product; adding manufacturing and/or storage capacity to improve manufacturing surge capability; and increasing the number and ensuring the surge capability of suppliers of key materials or work-in-progress to mitigate potential supplier disruption. Such risk-mitigation techniques are expensive; however, competitive advantage will result if a firm’s supply chain resilience and agility is identical to the competition’s but at a lower cost. The level of investment a company makes in coping with risk will depend on the identified risks that the company is concerned about, the awareness that some risks the company might face are unimaginable, and the company’s appetite for risk.

New information and manufacturing technologies provide great potential for improving resiliency and productivity in response to real-time demand analysis. Real-time demand data can be used to determine transshipment decisions of raw materials, work-in-progress, and finished products in order to ensure inventories are kept in balance. Further, real-time decision making can rebalance relocatable production.  For example, for distributed multi-facility additive manufacturing systems, 3D-printers can be relocated as demand shifts geographically, in conjunction with delaying product differentiation (postponement) for a more agile supply chain.

The result is supply chain performance that blends the advantages of distributed supply chain systems (having inventory and/or manufacturing capacity close to demand to enable fast fulfillment) and centralized supply chain systems (to enable economies of scale, inventory and risk “pooling,” reduced total safety inventory, and reduced total capital expenditures). This performance is in contrast to lean supply chains that minimize cost but may be unable to effectively respond to and recover from unexpected and disruptive events. A dynamically resilient data-driven supply chain network will quickly detect, respond to, and recover from such changes by adjusting manufacturing capacity as needed. Such a supply chain will be resilient and either lean or agile, depending on need.

The role of government in supply chain resilience

Supply chain resilience has already emerged at the forefront of the United States’ research and development agenda. In identifying R&D priorities for federal agencies for fiscal year 2021, the Office of Science and Technology Policy at the White House has called for the development of resilient advanced military capabilities and improved resilience of critical infrastructure and U.S. advanced manufacturing to natural and man-made disasters, including cyber-attacks and exploitation of supply chain vulnerabilities.

Following the COVID-19 pandemic, policymakers are now calling for supply chains of critical goods, especially medical supplies and high-tech products, to be reshored to the United States. But the complete reshoring of such supply chains cannot be the answer. Domestic suppliers can also be disrupted. And such a move would make U.S. businesses less competitive, putting them at a disadvantage with businesses of other (often adversarial) nations that continue to embrace globalization and support key industries with aggressive industrial policies, including subsidies and currency manipulation. The result may be reduced appeal of U.S. products in foreign markets, increased costs to U.S. consumers, reduced shareholder value for investors, and the erosion of the United States’ global innovation leadership, as complete reshoring would hinder its openness to ideas, people, and sourcing of parts and may not make the U.S. economy more resilient to pandemic-type shocks.

The design and operation of a supply chain is highly dependent on the product. Functional products with long life cycles and relatively small demand variability require cost efficient supply chains that can be offshored. Innovative products with short life cycles and relatively high demand variability require market-responsive supply chains with nearshored or domestic sourcing and production. Products of critical importance to defense, security, health, and national competitiveness require the federal government to take a special interest in their supply chains. Today, such products include rare-earth metals, artificial intelligence, hypersonic weaponry, 5G technology, semiconductors, pharmaceuticals, synthetic biology, and specialized medical equipment.

The competitiveness, resilience, and security of these supply chains, embracing holistically R&D, planning, procurement, manufacturing, distribution, and maintenance along with the cultivation of a national manufacturing ecosystem of small to medium enterprises is key to U.S. national security. Achieving this requires an understanding of a given industry’s “clock speed”, which refers to the speed at which it introduces new products, processes and organizational structures; government and regulatory processes; and manufacturing operations for repair and maintenance, which are often not synchronized across these supply chains. Federal government interventions to cultivate supply chain resilience must work in tandem with a given industry’s clock speed.

As it responds to the pandemic, the United States has made some moves to improve its supply chain resiliency, including provisions in the CARES Act economic relief package to investigate U.S. medical supply chains. President-elect Joe Biden has announced a plan to rebuild U.S. supply chains that aims for broad-based resilience as opposed to pure self-sufficiency. Additionally, there have been multiple Senate hearings to examine the integrity and reliability of critical supply chains following the onset of the pandemic. There are a number of other policy interventions the U.S. government might take to promote more resilient and competitive supply chains. These interventions include:

  • Mapping supply chains that are critical to U.S. health and economic security in order to identify potential vulnerabilities and threats. Supply chain mapping provides visibility to “the suppliers’ suppliers” and can be laborious and time intensive, as it is often conducted on paper. Following the 2011 tsunami in Japan, for example, a team of 100 executives of a global semiconductor giant needed more than one year to complete this task. Embracing novel digital approaches to illuminate the relevant extended supply networks is imperative to help identify what data are important for the development of well-informed policy interventions and operations.
  • Investing to improve national logistics infrastructure, including its “hard” (ports, roads, rail networks) and “soft” infrastructure (the service industries that underpin logistics) with a focus on improved customs performance, supply chain reliability and service quality, cybersecurity, environmental sustainability, and skills shortages. These priorities would further raise the United States’s ranking in supply chain performance, global logistics connectivity, and competitiveness. Such long overdue investments unfortunately were not made in the globalization-driven economic boom of the 1980s, when policymakers failed to embrace long-term thinking.
  • Ensuring that IP law, R&D incentives, education and work force training infrastructure, and societal attitudes toward diversity and inclusion support the innovation ecosystem to accelerate idea creation and the process of turning ideas into useful products, services, or processes.
  • Establishing a “one stop shop” federal agency for harmonizing relevant regulatory interventions (e.g. relevant efforts by the General Services Administration, the Defense Logistics Agency, NIST, Department of Labor, DHS, the Federal Trade Commission, and the State Department), and the development of comprehensive national strategies for competitive, secure, and resilient U.S. manufacturing supply chains.
  • Further investing in public-private partnerships, such as the Manufacturing USA program, supporting a continuum of research from early (basic research) to late technology readiness levels (commercialization) to facilitate the transition of innovative technologies into scalable, competitive, and high-performing domestic manufacturing capabilities.

By contrast, China is already making significant investments to improve its supply chains, investing more than 1 trillion dollars to develop an advanced logistics network as part of its Belt and Road Initiative (BRI). This network of road and rail routes, ports, airports, and oil and gas pipelines linking Central and West Asia, the Middle East, Europe and East Africa provides both geostrategic and economic benefits. The advanced supply chain innovations and capabilities that BRI is unleashing include:

  • New trade routes and modal choices. The state-owned China Ocean Shipping Company (COSCO) is investing to expand capacity at the Greek port of Piraeus. With a new container terminal at Piraeus, cargo flows from China to Europe can be delivered directly from the Suez Canal to the port and then transported by truck and/or rail to European markets, avoiding lengthy maritime shipping through the Mediterranean Sea, the Strait of Gibraltar, and Northern Europe in order to reach the continent’s northwestern ports (Rotterdam, Hamburg, and Antwerp).
  • Novel supply chain designs and increased cross-border trade. While taxes and tariffs add friction to global trade, BRI works in the opposite direction, allowing developing countries that were otherwise disadvantaged to have an opportunity to embed themselves in global value chains. In East Africa, for example, Ethiopia can now play a major part in global supply chains for apparel and shoes due to BRI investments. As Ethiopia is a landlocked country without a seaport, Chinese firms have invested in a new logistics network of roads and an electrified railway line connecting Ethiopia to the nearest seaport in Djibouti. Additionally, Chinese firms have built the country’s largest industrial park focused on apparel and textiles, brought know-how for Ethiopian factories to improve their sustainability footprint, and helped attract global apparel brands to manufacture in the country.

BRI has attracted criticism for lacking transparency and accountability. It has often been used by China as a tool of “debt trap” diplomacy towards developing countries, where lending leads to the seizure of recipient countries’ strategic assets. As a result, the United States has an opportunity to fill a pressing gap in global trade and supply chain infrastructure by working with trading partners to promote a new generation of diversified, resilient, and competitive supply chains with a sophisticated portfolio of offshored, nearshored, and reshored manufacturing, an effort that would support employment, trade and national security.

Knowledge-sharing in the supply chain

In its efforts to strengthen the supply chain, the federal government could benefit by adopting best practices and state of the art strategies developed by industry and academia. Diffusion of best practices should not be limited from the private to the public sector. Commercial supply chains have much to learn from military logistics, including how to best deliver vaccines in the event of a future pandemic. Today, the old adage that the public sector has to rise up to the level of the private sector is no longer valid. As businesses are having to engage with a growing number of constituencies and to comply with demands for higher transparency, there is a confluence of policy management and business, and corporate leaders have much to learn from leaders of the public sector.

We have seen first-hand how public-private partnerships can benefit efforts to improve supply chain resilience. The new SecureAmerica Institute at Texas A&M University is one such a partnership, made up of a network of about 100 partners across several technical domains within the manufacturing base. The program employs a novel interdisciplinary paradigm to build on policy, economics, and supply chain management research and education. By bringing together academia, industry, and government, the United States has terrific opportunities to strengthen the competitiveness, security and resilience of its supply chains to further boost its global technological, military, economic, and geopolitical strength.

Eleftherios Iakovou is the Harvey Hubbell Professor of Industrial Distribution at Texas A&M University and the Director of Manufacturing and Logistics Innovation Initiatives at the Texas A&M Engineering Experiment Station.
Chelsea C. White III is the Schneider National Chair in transportation and logistics and is a professor at the H. Milton Stewart School of Industrial and Systems Engineering at Georgia Tech.

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DEMOCRACY – The West must live up to its own principles on democracy (Constanze Stelzenmüller, Brookings)

The West must live up to its own principles on democracy

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USA – There are too many ways to lose unemployment compensation (Lauren Bauer, Wendy Edelberg, and Stephanie Lu, Brookings)

There are too many ways to lose unemployment compensation

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Analysis

SOUTH KOREA – Chaebol reform still an uphill battle after Lee Kun-hee (Juliette Schwak, East Asia Forum)

Samsung chairman Lee Kun-hee passed away on 25 October this year. Hailed for transforming Samsung from a producer of cheap manufactured products into South Korea’s high-tech leader, Lee also symbolised many of the chaebol’s flaws.

A flag bearing the logo of Samsung flutters at half-mast in front of its office building in Seoul, South Korea, 28 October 2020 (Photo: Reuters/Heo Ran).The chaebol are large family-run conglomerates that were instrumental in South Korea’s industrialisation from the 1960s. They were subordinate to the state through credit allocation until the liberalisation of the early 1990s, when they became transnational corporations. Despite their global reach, their corporate structure remains family based.

Powerful chaebol families use complex cross-shareholdings, circular shareholding and inheritance of management rights to maintain control over the conglomerates. They have long resisted reforms, using their weight over South Korea’s GDP (over 80 per cent) to prevent any forceful government change.

The control that chaebol families have over the conglomerates creates fertile ground for state–business collusion. Indeed, the scandals that led to the impeachment of former South Korean president Park Geun-hye involved bribes received by Park’s confident, Choi Soon-sil, from Samsung. Lee Kun-hee’s son, Lee Jae-yong, was arrested for corruption, but he was released from jail in 2018.

This seems to confirm what large segments of the South Korean public decry: South Korean magistrates are relatively lenient with the chaebol. South Koreans often call their country ‘the Samsung Republic’ — they both admire the national accomplishments of the chaebol and lament their dominance over the country’s economy.

South Koreans are increasingly frustrated by the unequal access to socio-economic opportunities the chaebol have come to represent. In the wake of the candlelight protests against Park Geun-hye, many talked about a return to the dynastic social hierarchy of the Choson-era. South Korean society is increasingly polarised in terms of income but also in access to education, employment and real estate.

South Korea’s Gini index has been rising since the 1997 Asian financial crisis, reaching 0.304 in 2016, and labour is increasingly precarious. The chaebol have been concentrating wealth, while small and medium enterprises often struggle.

Successive governments have been aware of this concentration of income and opportunities, and of the unfair business practices used by the conglomerates. Every liberal president promises to reform the chaebol. Liberal academics and business people see the chaebol structure as detrimental to innovation. Chaebol reform has also long been demanded by civil society activists.

In 1980, the Monopoly Regulation and Fair Trade Act banned direct cross-shareholdings among companies that belonged to the same group. It also limited equity investments and reciprocal debt guarantees. Former South Korean president Kim Dae-jung had plans for chaebol reform to build on the Act, but this was jeopardised by the 1997 financial crisis.

The Kim government managed to appoint external directors to the chaebol, who could demand compulsory consolidated financial statements and attach legal liabilities to the position of chairman. But it did not curb family dominance. The conservative government of former South Korean president Lee Myung-bak abolished the total equity investment ceiling system and strengthened the concentration of chaebol economic power.

South Korean President Moon Jae-in appointed Kim Sang-jo, an academic who has long advocated chaebol reform, Chairman of the Fair Trade Commission.

For the Moon administration, chaebol reforms must address a number of issues. Reforms must improve minority shareholders’ rights and ability to nominate board members and improve corporate decisions. They must separate financial and industrial capital and strengthen the separation of ownership from management. And they must also put an end to circular shareholding practices that allow chaebol families to control an entire conglomerate without owning a majority of the shares.

It is likely that activists and critics of the chaebol will use Lee Kun-hee’s death as an opportunity to push for reforms. So far civil society organisations have been disappointed with the Moon administration’s chaebol policies. In 2018, the largest South Korean trade union, the Korean Confederation of Trade Unions, together with the Korean Metal Workers’ Union, called for a general strike to demand chaebol reform. Despite this pressure, it is unlikely that Lee’s death will make the task of chaebol reform easier.

Lee Jae-yong, Samsung’s heir, has been building up his dominance over Samsung since his father suffered a heart attack in 2014. He was arrested in 2017 on charges of corruption and he currently faces charges of fraud for the controversial 2015 merger deal between Cheil and Samsung CT. He is accused of making a fraudulent deal to ensure his control over the conglomerate. All this suggests that Lee Jae-yong is not reform-minded.

The Moon government plans to implement chaebol reform despite the ongoing pandemic. This summer it approved revisions to the Commercial and Fair Trade Act before passing the bills on to the National Assembly. The new legislation introduces a multi-representative litigation system, allowing minority shareholders of a parent company to file a suit against executives of a subsidiary.

The legislation would also introduce outside auditors to chaebol governance. Companies would need to separately select a minimum of one committee member external to the board. The largest shareholders’ voting rights will also be limited to 3 per cent.

Despite these legislative moves, circumstances are not favourable for chaebol reform. Despite Moon’s ambitious post-COVID-19 , the South Korean economy is still dependent on the chaebol for economic growth.

In a difficult economic context, government critics — including the business community — will surely see chaebol reform as secondary to economic growth. Chaebol reform now seems risky as the pandemic has made Samsung, through its affiliate Samsung Biologics, stronger. South Korea’s economy is more dependent on the chaebol than ever.

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USA/ROK – Resetting US–ROK security cooperation under Biden (Anthony Rinna, East Asia Forum)

Wasting no time outlining its position on the US Indo-Pacific alliance network, the incoming Biden administration has asserted that it plans to place renewed emphasis on US defence partnerships. Among the most critical allies for a US government that has labelled China and North Korea as ‘revisionist’ and ‘rogue’ states respectively is South Korea.

Joe Biden looks through binoculars to see North Korea from Observation Post Ouellette during a tour of the Demilitarized Zone (DMZ), the military border separating the two Koreas, in Panmunjom, 7 December 2013 (Photo: Reuters/Lee Jin-man/Pool).

This renewed emphasis on alliances has multiple implications for Seoul’s diplomatic relations with both the United States and its East Asian neighbours. This includes hope for a reinvigorated ROK–US alliance as well as apprehensions about serious discrepancies over North Korea policy. Apprehensions that Joe Biden could favour Japan over South Korea have emerged based in part on Biden’s track record while serving on the US Senate’s Foreign Relations Committee, although a deeper analysis reveals this to not be the case.

Against this background, the new US administration will also be forced to contend with a burgeoning rapprochement between Washington’s South Korean ally and its strategic rival, the People’s Republic of China. Deepened ties between China and South Korea over the past three years have not only affected Seoul’s willingness to endorse the US strategic vision for containing China, but may also undermine Washington’s efforts to foster trilateral collaboration between Seoul and Tokyo.

The launch of the ‘reset’ in China–South Korea ties roughly coincides with the ‘three no’s’ measure taken in response to the fallout in Beijing–Seoul relations over THAAD in 2017. As the end of 2020 approaches, Beijing has unmistakably conveyed that closer ties with Seoul are a priority issue.

In a year where world leaders have been reluctant to make state visits, Chinese Premier Xi Jinping has expressed a strong desire to visit South Korea by no later than mid-December 2020. Chinese foreign minister Wang Yi’s recent visit to Seoul may in part be setting the stage for a prospective official visit from Xi, which is largely contingent on the public health situation in South Korea. Beijing appears keen for Xi Jinping to convene a face-to-face with his South Korean counterpart before the US executive’s transfer of power is complete. In timing that was impeccably close to the US presidential election, representatives from the Chinese and South Korean foreign ministries convened in Beijing to discuss raising bilateral ties ‘to a new level’.

Beijing appears to be making a bid to upgrade relations with Seoul before a new alliance-oriented administration enters the White House. But Washington is wary of the potential effects Sino-South Korean engagement could have on weakening prospects for a reinvigorated relationship between Japan and South Korea.

The Biden administration’s main task in terms of inter-alliance policies in Northeast Asia will be seeking to soothe strained ties between Japan and South Korea. But pursuing diplomatic reconciliation between Seoul and Tokyo in the name of strengthening the US position in Northeast Asia runs contrary to China’s diplomatic interests.

Seoul’s unwillingness to come down in support of the US-led Quadrilateral Security Dialogue (Quad) for fear of damaging its relations with China may be behind insinuations from Japan’s leadership that South Korea is not a particularly valuable partner for Tokyo in the promotion of a free and open Indo-Pacific. It is possible that Beijing is attempting to strengthen ties with Seoul in order to disrupt Japan–South Korea relations. Warmer ties with China could make South Korea reluctant to participate in measures explicitly aimed at containing Chinese power regardless of prospective improvements in Seoul–Tokyo relations.

South Korea’s ambassador to Japan, Nam Gwan-pyo, allegedly said that the so-called ‘three no’s’ do not constitute a set of binding promises. This could indicate that Seoul remains open to increased security collaboration with Tokyo. While this statement must not be taken lightly, given the way the South Korean foreign ministry reacted to controversial remarks its ambassador to Washington recently made, there is merit in not automatically assuming such remarks are reflective of concrete government policy.

Whatever steps the Biden administration takes to reinvigorate the ROK–US alliance, China’s influence on the Korean Peninsula is likely be significantly strengthened in the future.

The Blue House has attempted to assuage concerns that developing ties with Beijing and withholding its support of Washington’s Indo-Pacific strategy need not be detrimental to the ROK–US alliance. But Washington will need to be realistic about the extent to which China–South Korea ties have developed and how that will shape Seoul’s willingness to partner with the United States beyond the relatively narrow mandate of jointly deterring North Korea.

The Biden administration’s actions towards Seoul have the potential to shape the tone of South Korea’s relations with both the United States and China for years to come. At the very least, Washington will be forced to confront the merits and risks of attempting to expand the scope of its security partnership with South Korea in its bid to contain China. Likewise, Seoul will most likely find its efforts to maintain a balance between China and the United States increasingly unsustainable.

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EGYPT – Egypt releases rights activists after global pressure (Al Jazeera)

Egypt released three staff members of a leading human rights organisation following a concerted international campaign to free them – including concern expressed by US President-elect Joe Biden’s team.

Police arrested the three on charges of “joining a terror group” and “spreading false news” after a public meeting with foreign ambassadors on November 3 to discuss human rights in the country.

The Egyptian Initiative for Personal Rights (EIPR) wrote on Thursday its three staff “were let go directly from Tora prison. Unusual. They are now either home or on the way home”.

The arrests underscored the extent to which President Abdel Fattah el-Sisi’s government has gone in silencing dissent and independent organisation amid years of arrests and other forms of intimidation.

The government of el-Sisi, a US ally with deep economic ties to European countries, has been waging the heaviest crackdown on dissent in the Middle East nation’s modern history, targeting not only Islamist political opponents but also pro-democracy activists, journalists and online critics.

Independent local rights groups have largely stopped operating. The 18-year-old EIPR is the most prominent organisation of the few still active, continuing to work on documenting civil rights violations, prison conditions, sectarian violence, and discrimination against women and religious minorities.

EIPR executive director Gasser Abdel-Razek, senior researcher Karim Ennarah, and office manager Mohamed Basheer – all detained within the same week but days apart – had been kept in pre-trial detention.

“After the submission of the necessary legal paperwork of registering the group as a non-profit organisation, the public prosecution has ordered the release of Gasser Abdel-Razek and members of the Initiative,” said a brief statement sent to the AFP news agency by a security and judicial source.

A fourth staff member, Patrick Zaky, was detained in February while on a visit to Cairo from Bologna where he was completing a Master’s degree. It is unclear whether he will also be released.

A new law regulating the work of civil society organisations was recently approved by Egypt’s cabinet after the arrests drew global condemnation including from allies such as Germany and France.

The United Nations urged Egypt to release them while the US State Department under outgoing President Donald Trump said it was “deeply concerned”.

Antony Blinken, Biden’s nominee for US secretary of state, tweeted last month “meeting with foreign diplomats is not a crime. Nor is peacefully advocating for human rights”.

Rights groups estimate about 60,000 detainees in Egypt are political prisoners including secular activists, journalists, lawyers, and academics arrested in the ongoing crackdown on dissent under el-Sisi.

It was not immediately clear if the release of the three rights activists meant charges against them had been dropped. Prosecutors often free activists on bail but keep charges hanging over their heads. The crackdown on the group continues on another front as well, with prosecutors seeking to freeze EIPR’s assets.

The arrests last month came after ambassadors and senior diplomats from 13 Western countries met with EIPR for talks the group said “discussed ways to improve human rights conditions in Egypt”.

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UN/YEMEN – UN sounds ‘wake-up call’ to save millions of Yemenis from famine (Al Jazeera)

The window to prevent a famine in war-torn Yemen is narrowing, with a new study showing that millions of people in the country will face some form of food crisis next year, according to United Nations agencies.

More than half of Yemen’s population of 30 million risks slipping into “worsening levels of hunger” by mid-2021, according to a joint statement published on Thursday by the World Food Programme, UNICEF and the Food and Agriculture Organization (FAO).

“These alarming numbers must be a wake-up call to the world. Yemen is on the brink of famine and we must not turn our backs on the millions of families who are now in desperate need,” said David Beasley, WFP’s executive director.

The conflict in the Arab world’s most impoverished nation began when Iran-backed Houthi fighters captured the capital of Sanaa in 2014, forcing the internationally-recognised government to flee.

The following year, a Saudi-led coalition supporting the government intervened to battle the Houthis and curb Iran’s influence in what has turned into a stalemated regional proxy war.

Since then, more than 100,000 people – fighters and civilians – have been killed.

The number of Yemenis poised to face an “emergency phase” of food insecurity – a prelude to famine – is expected to increase from 3.6 million to five million in the first half of 2021, said the UN statement.

The emergency phase means people are suffering “enormously”, with some of the most vulnerable dying of hunger, according to the statement.

The three UN agencies also warned that the number of Yemenis currently suffering famine-like conditions could triple from 16,500 to 47,000 between January and June 2021.

“Make no mistake, 2021 will be even worse than 2020 for Yemen’s most vulnerable people,” added Beasley.

“Famine can still be prevented – but that opportunity is slipping away with every day that passes.”

Humanitarian aid

In recent months, Yemen has witnessed a significant drop in humanitarian aid as key Arab donor countries failed to fulfil earlier pledges.

Last month, UN humanitarian chief Mark Lowcock told the UN Security Council that the $3.4m UN humanitarian appeal for 2020 for Yemen had received only $1.5bn, or about 45 percent.

By comparison, he said, last year at this time the UN had received twice as much – almost $3bn.

“Cuts to humanitarian support this year, including food assistance, have erased previous food security gains and left families with worsening food consumption gaps,” the agencies also said.

“Next year, cuts will continue and may be expanded, unless funding is urgently received.”

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IRAN/ISRAEL – Iran accuses West of backing Israel on scientist assassination (Barbara Bibbo, Al Jazeera)

Iranian Foreign Minister Mohammad Javad Zarif has accused Israel of killing its top nuclear scientist Mohsen Fakhrizadeh amid the silence and complicity of the West and also called on Iran’s Gulf neighbours not to support Israel against Iran.

“Why is the West supporting Israeli terrorism? Why is Israel committing acts of terror against Iran, including [killing] our nuclear scientist, without condemnation and consequences from the West?” said Zarif addressing Med2020, an international forum held in Rome, on Thursday.

“I want to ask our neighbours, are they ready to fight Israel’s fight with Iran?” said Zarif in reference to the recent agreements to normalise diplomatic ties between Israel and the United Arab Emirates and Bahrain.

“We are neighbours we will be in this region together, I don’t think they will allow Israel to bring the fight here.”

It was the first time Zarif spoke on an international platform after Fakhrizadeh’s killing last week, which caused outrage in the country and prompted the Iranian Parliament to demand its government to ramp up its nuclear programme.

While no party has claimed responsibility for the killing of Fakhrizadeh – viewed by Western powers as the architect of Iran’s abandoned nuclear weapons programme – Iran has accused Israel.

The assassination may complicate US President-elect Joe Biden’s intention to restore the Iranian nuclear deal. Outgoing President Donald Trump walked out of the agreement, signed by the previous administration, in 2018.

Zarif warned that the decision of the parliament would soon become law but could be reversed if sanctions against Iran were lifted and the US rejoined the nuclear deal without preconditions. But the US needed to take the first step, Zarif said.

“We did not withdraw, the US did,” said Zarif.

“Iran will go back to full compliance but the US must implement their obligations without preconditions. They must go back to full compliance and normalise Iran’s economic relations with the world. Stop making new conditions and outrageous demands. We showed the West our bona fides, now it’s time for the US to show theirs.”

‘International agression’

On Tuesday, the Iranian Parliament passed a bill demanding a stop to United Nations nuclear inspections and asking the executive to boost uranium enrichment.

Zarif said the killing of the scientist was an act of “international aggression” and that Iran had a right to suspend its compliance with the nuclear deal and restart enrichment since European countries were giving in to US pressures and not implementing their part of the agreement.

“Despite claims to the contrary, since Trump walked out Europeans were not able to implement their part the deal … for instance, they keep freezing our assets because of US sanctions. They are not buying our oil or setting up companies in Iran,” Zarif said.

Asked if he would re-engage with the new US administration after Biden expressed his willingness to restore the nuclear deal, Zarif said Iran would do its part but the US was no longer in a position to dictate conditions.

“Iran’s proposal [for re-engagement] has been on the table for a long time, but unfortunately it’s the blank check the US has given to its clients in the region that is preventing the restoration of peace.”

Zarif accused the US and the West of fuelling an arms race in the Gulf region and selling weapons worth hundreds of billions of dollars to Saudi Arabia and other Gulf countries.

He said Iran would not stay idle while its neighbours continue to build up their military strength.

“We want to engage with neighbours and once they understand that there will not be a blank cheque from Trump … they will start talking to Iran and and we will be able to address our mutual grievances past and present,” said Zarif.

Categorie
Analysis

BAHRAIN/ISRAEL/OCCUPIED WEST BANK – Bahrain open to imports from illegal Israeli settlements (Al Jazeera)

Bahrain’s imports from Israel will not be subject to distinctions between products made within Israel and those from illegal settlements in occupied territory, the Bahraini trade minister has said, drawing a rebuke from Palestinians.

Bahrain and the United Arab Emirates (UAE) formalised ties with Israel on September 15, in a United States-sponsored deal billed by the Gulf countries as being made possible by Israel’s shelving of a plan to annex illegal settlements in the occupied West Bank. Most world powers deem them illegal.

But Bahrain’s Industry, Commerce and Tourism Minister Zayed bin Rashid Al Zayani voiced openness to imports from settlements.

“We will treat Israeli products as Israeli products. So we have no issue with labelling or origin,” he told Reuters during a visit to Israel.

Under European Union guidelines, settlement products should be clearly labelled as such when exported to EU member countries.

The administration of US President Donald Trump last month removed US customs distinctions between goods made within Israel and in illegal settlements.

Al Zayani’s remarks were condemned by Wasel Abu Youssef of the Palestine Liberation Organization as “contradicting international and UN resolutions”.

He urged Arab countries not to import products from within Israel, either, in order to prevent it from “stretching into Arab markets to strengthen its economy”.

United Nations Security Council Resolution 2334, passed in 2016, called upon countries to “distinguish in their relevant dealings, between the territory of the State of Israel and the territories occupied since 1967”.

The stateless Palestinians hope to create their own independent country in the occupied West Bank, Gaza and East Jerusalem as part of a two-state solution, but the issue of Jewish illegal settlements on land captured by Israel in the 1967 war has long been a stumbling block in the now-stalemated peace process.

They now fear that the warming ties between Gulf states and Israel, along with Trump’s strong support for Israel, have badly damaged their aspirations.

It was not clear what other Gulf states’ positions on imports from the illegal settlements were.

But an Israeli winery that uses grapes grown on the occupied Golan Heights said in September that its labels would be sold in the UAE.

Israel expects trade with Bahrain to be worth around $220m in 2021, not including possible defence and tourism deals.

Al Zayani said Bahraini carrier Gulf Air was tentatively scheduled to begin flights to Tel Aviv on January 7, with shipping to follow.

“We are fascinated by how integrated [the] IT and innovation sector in Israel has been embedded in every facet of life,” he said.

He played down speculation in Israel that its citizens visiting Bahrain could be at risk of reprisals for the assassination last Friday of a top Iranian nuclear scientist, which Tehran blamed on Israeli agents.

“We don’t see any threats,” he said, “and therefore we don’t see any requirement for additional security or special treatment for Israelis.”

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