Category Archives: Issues

Congress can’t stop Iran sanctions unraveling

Barbara Slavin writes: For months now, Russia has been a constructive member of the international consortium negotiating with Iran, often proposing creative fixes to technical hurdles.

But this week, just as the Senate Foreign Relations Committee was taking up sensitive Iran-related legislation, Russia announced that it was going forward with an old contract to sell Iran an air defense missile system that could make it less vulnerable to foreign attack.

The deal to supply the S-300 is not illegal under UN sanctions, which prohibit selling offensive heavy weaponry to Iran. The message the Kremlin is sending is that Russia is not willing to wait for the conclusion of negotiations on Iran’s nuclear program to lock in the benefits of resumed trade with the Islamic Republic.

It is unfortunate that the government of Vladimir Putin didn’t wait a few months longer. Critics of the Iran deal have been quick to pounce on the announcement as proof that the Barack Obama administration was somehow duped by Moscow and that the Iran framework so laboriously negotiated over the past 13 months is a “sucker’s deal.”

A more insightful way to read Russia’s act is to see it as a recognition of reality that the elaborate web of multilateral sanctions imposed on Iran over the past five years is unraveling and only an egregious Iranian effort to break out and build a nuclear weapon could arrest that momentum. [Continue reading…]

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Mohamed Soltan — an American citizen abandoned by President Obama

In an open letter to President Obama on his 26th birthday, November 16, 2013, Mohamed Soltan wrote from a cell in Cairo’s infamous Tora Prison:

Dear President Obama,

Last week, I underwent a procedure to remove two 13” metal nails that were placed in my left arm to help support and repair the damage sustained from a gunshot wound I suffered at the hands of Egyptian security forces. The bullet that punctured my arm was paid for by our tax dollars. I was forced to undergo this procedure without any anesthesia or sterilization because the Egyptian authorities refused to transfer me to a hospital for proper surgical care.

Mohamed-SoltanAfter the nails penetrated the skin at my elbow from below, and ripped through my shoulder muscle from above. The doctor who performed this procedure is a cellmate. He used pliers and a straight razor in lieu of a scalpel. I laid on a dirty mat as my other cellmates held me down to ensure I did not jolt from the pain and risk permanent loss of feeling and function in that arm. The pain was so excruciating, it felt like my brain could explode at any given point. I was finally given two aspirin pills almost an hour later when the guards found my cellmates screams for help unbearable.

I share these details here because my mind drifted to 2007 as I stared at the ceiling of my cramped cell after surgery. During your first presidential campaign, I was moved by your message. I was so passionate about everything you represented. Finally, “change we can believe in.” I saw you, as many Americans did then, a true civil servant looking to put the disadvantaged first, and to pioneer a new model of governance. I felt I was part of the making of a great chapter in my country’s history. You were someone I wanted to stand behind, someone I wanted to support, so I volunteered and worked for your campaign in Ohio, a crucial swing state. As an O.S.U. student, I went door-to-door, made phone call after phone call, urged people to join the movement that would revolutionize American politics. It was time to go back to a government “for the people, of the people.”

Now as I sit in this crowded cell, I can’t help but ask myself, was I naïve to think you were a departure from the norm? As domestic and foreign policies I disagreed with passed during your terms, I chalked it up to the negative consequence of bipartisanship, but now after months of being held without cause in Egypt’s infamous prisons and so little [regard for] my Americanness, let alone humanity, shown, I am beginning to think I was just another silly, idealistic college kid who believed the world can look a whole lot different, with a leader such as yourself at the head of it.

Your abandonment of me, an American citizen who worked tirelessly towards your election, and a staunch supporter and defender of your presidency, has left a sting in me that is almost as intense as the sharp pain emanating from my recently sliced arm.

Last weekend Soltan was sentenced to life imprisonment:

An Egyptian court on Saturday sentenced an American citizen, Mohamed Soltan, to life imprisonment for supporting an Islamist protest against the military ouster of President Mohamed Morsi of the Muslim Brotherhood in the summer of 2013.

The presiding judge, Mohammed Nagi Shehata, sentenced more than 35 other defendants in the case to the same penalty and also confirmed death sentences in the same case for about a dozen defendants, including the Muslim Brotherhood’s top spiritual guide, Mohamed Badie, 71, as well as Mr. Soltan’s father, Salah Soltan.

Gehad el-Haddad, a spokesman for the Muslim Brotherhood, was also sentenced to life in prison. Members of the Soltan family have said they will appeal the decision, and other defendants are expected to appeal as well.

The verdict is the latest in a long series of similarly harsh sentences handed down at mass trials of dozens or hundreds of defendants accused of participating in violent protests or riots in the aftermath of the military takeover, often based on only police testimony or cursory evidence. Thousands more remain imprisoned without convictions. The sweeping penalties have drawn outraged denunciations from rights groups and milder rebukes from Western diplomats.

But the case of the younger Mr. Soltan, 27, is exceptional because he is an American citizen.

The verdict comes just days after President Obama released hundreds of millions of dollars in military aid for Egypt that had previously been suspended in response to the military takeover and subsequent repression.

The White House released a brief statement:

The United States condemns the life sentence issued today in Egypt against American citizen Mohamed Soltan. We call for Mr. Soltan’s immediate release from prison. We remain deeply concerned about Mr. Soltan’s health, which has suffered during his 20 month-long incarceration. The President is deeply committed to the welfare of all U.S. citizens abroad and we will ensure that Mr. Soltan continues to receive consular support until he can return safely to the United States, per his wishes.

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Iranians cannot build democracy in the shadow of war

Akbar Ganji writes: The vast majority of the Iranian people aspire to have democracy and, thus, want to make a peaceful transition from an Islamic theocracy to a democratic state. They deserve to have democracy and no one should put obstacles in their way. The Iranians know that they must build democracy in Iran. They also know that they cannot walk on water, or create a peaceful democracy in the shadow and threat of war.

But there are western governments, as well as members of the Iranian opposition in diaspora that want Iranians to go through hellfire to achieve their aspirations. More Iranians reject this, because they have closely followed the experiences of other nations in their region over the past decade or so, and see that the Middle East is soaked with blood. They know the fates of Afghanistan, Iraq, Libya, Syria and Yemen – nations that were either invaded by the United States, bombed back to the Medieval age (Libya) or destroyed by a sectarian war instigated by US allies in the Middle East (Syria).

None of these nations has become a democratic state. The state of human rights in all of these nations is far worse than before their crippling wars. Their national security systems have collapsed and terrorism has spread. The only “fruits” of the military intervention in the Middle East and North Africa over the past 15 years have been civil wars, terrorism and disintegration of nation states. Since the attacks of 11 September 2001, at least 1.3 million people have been killed in Afghanistan, Iraq and Pakistan. Millions of people have either been injured or have become internal refugees within their own countries or abroad.

Iranian people want democracy, but they are keenly aware that security and peace are the prerequisites for building democracy and respect for human rights. Iranians rejoiced after the joint political statement by Iran and P5+1 was read in Lausanne, Switzerland by Federica Mogherini, the High Representative of the European Union for Foreign Affairs, outlining the framework of the agreement between the two sides over Iran’s nuclear programme.

Why were the Iranian people so happy and celebrating in the streets? Was the announcement a great victory for their nation? It surely was not politically, because Iran made many concessions, and received comparatively little in return.

But it was indeed a great victory for Iran and Iranians, if we look at it from a democracy angle. In the view of Iranians, the negotiations between Iran and P5+1 was a “wrestling match” between war and peace. War was defeated by peace, and its threat was destroyed. It was a hopeful sign for Iranians everywhere.

When a nation such as Iran is threatened by the US and Israel for over two decades, and suffers from the most crippling economic sanctions in history, democracy becomes an impossible dream for its people, who live instead in terror and fear of war. Even now, after the announcement of the Lausanne agreement, Israeli leaders continue to threaten Iran with military attacks. [Continue reading…]

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Iranian president: We are in talks with ‘the major powers,’ not the U.S. Congress

The Washington Post reports: Iranian President Hassan Rouhani said Wednesday that Tehran was negotiating a comprehensive nuclear deal with world powers, not the U.S. Congress, and called a Senate committee’s vote to give Congress the power to review any potential deal a domestic U.S. matter.

The Iranian leader, speaking in a televised speech in the northern Iranian city of Rasht, also repeated earlier statements that his country will not accept any comprehensive nuclear deal with world powers unless all sanctions imposed against it are lifted.

“We are in talks with the major powers and not with the Congress,” Rouhani said, Iranian state television reported. Rouhani said the U.S. Congress’ power to review a nuclear deal with Iran was a domestic U.S. matter, the Reuters news agency reported.

He said Iran wanted to end its isolation from the world by constructing “constructive interaction with the world and not confrontation.”

Rouhani’s comments came one day after a Senate committee voted unanimously to give Congress the power to review a potential Iran nuclear deal after a June 30 negotiating deadline, in a compromise with the White House that allows President Obama to avoid possible legislative disapproval of the pact before it can be completed. [Continue reading…]

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We must talk to terrorists to restore their humanity — and ours

By Simon McMahon, Coventry University; Heaven Crawley, Coventry University, and Math Noortman, Coventry University

The twin towers, Madrid, July 7, Charlie Hebdo… the list of terrorist political acts and their victims feels endless. When people are killed and lives threatened for political motivations, demands for immediate reprisals and military counter-measures usually follow suit.

Military force and policing is our default tactic – and talking to terrorists, by contrast, feels counter-intuitive. After all, surely talking to murderers, criminals and fanatics will only legitimise their aims and tactics.

And yet, from Nelson Mandela’s African National Congress to Gerry Adams’ Sinn Fein to Yasser Arafat’s Palestinian Liberation Organisation, history shows that talking with terrorists has often been a prerequisite for peace.

A recent debate organised by Coventry University’s Centre for Trust, Peace and Social Relations brought together a former terrorist, the daughter of a victim of a terrorist bomb attack and experts on extreme violence to discuss whether we should in fact talk to terrorists.

The resounding conclusion was that there is no choice other than to talk to terrorists to bring their violence to an end. But, for genuine dialogue which addresses root causes as well as violent symptoms we need to shift our own ways of thinking too. We need to talk with those who are defined or labelled as terrorists, not simply to or at them.

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Inside Yarmouk refugee camp

The Daily Beast reports: Bombs and shells from all sides continue to rain down on Yarmouk, the Palestinian refugee camp on the outskirts of Damascus, as residents say the so-called Islamic States is taking ever-greater control. The jihadist assault that started April 1 has left residents trapped amid the rubble without medical aid or food while street fighting and heavy shelling by ISIS has overwhelmed Palestinian and Free Syrian Army forces trying to protect the camp. And to make matters works, the Syrian regime has been dropping barrel bombs and intensifying its own artillery barrages, raising fears it will invade with ground forces.

“It’s an absolute horror and I’m terrified,” says 27-year-old Tarek over Skype from near ISIS’s front lines. He is a longtime camp resident who became an activist in 2011 with the anti-regime protest movement. A human-rights organization put The Daily Beast in contact with him and he asked to be quoted only by a pseudonym for obvious security reasons.

Tarek worries that a regime ground invasion could trigger wide-scale massacres committed by the troops of President Bashar al Assad along with jihadist reprisal killings. He describes a situation of chaos in a camp — really a densely populated urban neighborhood — that has been increasingly crippled by the regime’s siege and bombardment since Free Syrian Army forces and Palestinian rebels rose up in December 2012.

“The streets are abandoned and filled with rubble as people hide in their homes,” Tarek says. Many residents have run out of food and water. There are desperate scenes as some of those come out to scour the area under sniper fire and shelling and look for wells. [Continue reading…]

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Libya migrants: Hundreds feared drowned in Mediterranean

BBC News: About 400 migrants are feared drowned after their boat capsized off Libya, survivors have told Save the Children.

The Italian coast guard rescued 144 people from the boat on Monday and launched an air and sea search operation in hopes of saving others.

Hundreds more migrants rescued from boats in the Mediterranean are due to arrive in Sicily during the day.

More than 8,000 migrants have been picked up since Friday, and more boats are heading for the Italian coast.

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Playing for Palestine

Ismail Khalidi writes: As you enter through its main gate under a pair of fluttering Palestinian flags, the Cisterna municipal stadium looks like any run-down soccer field in the West Bank or the Jordan Valley. The parking lot is unpaved and the cars entering for the afternoon game send up yellow clouds of dust. The stadium itself is simple and small, an outdated concrete bowl that officially holds 12,000 people (though, according to statistics, rarely more than a few thousand), most of whom sit on concrete bleachers that encircle the pitch. The concentric rows of stone bleachers even seem to conjure the ancient terraced slopes of Palestine, where for millennia farmers have sculpted the hillsides to cultivate olive trees and other sturdy crops in the dry Mediterranean climate. Here and there sprigs of grass inch through cracks in the dilapidated concrete and stone as a couple hundred of us settle in to brave two hours of scorching heat for the afternoon match.

The team that calls Cisterna home takes the field in uniforms adorned with the Palestinian flag (and its colors of red, black, green and white) and a prominent gold map of historic Palestine emblazoned across the front of their jerseys. The players, for their part, look like your average Palestinians, as do the fans, some of whom are already taunting the opposing team’s players with witty asides and double entendres before the opening whistle. Cigarette smoke, a given at any Palestinian gathering, lingers over certain sections as vendors walk back and forth hawking Palestine-themed paraphernalia. Meanwhile, a group of five young kids plays soccer along the aisles, using an empty plastic bottle as their ball. At half-time Arabic music blares through a tinny PA system. Taking it all in, one could perhaps take comfort in the fact that, despite the hardships of living under military occupation, it’s apparently still possible for Palestinians to find a modicum of normality, if only for 90 minutes of soccer.

But Cisterna municipal stadium is not in Nablus, Gaza, Jericho or Jerusalem, but in Santiago de Chile, roughly 8,000 miles away from Palestine/Israel. And the home team, Club Deportivo Palestino, is in the Chilean premiere league. The opposing team on this day, Huachipato, hails from the Southern Coastal city of Talcahuano. [Continue reading…]

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American academia — liberal in name but conservative in practice

The Daily Beast: The academy might seem like a bastion of American liberalism but an extensive database of faculty salaries compiled by The Chronicle of Higher Education paints a damning picture of gender inequality at U.S. colleges and universities.

Not only does the data reveal a substantial gender pay gap at both private and public schools, it also shows that male-dominated college faculties disproportionately rely on the labor of women in instructor and lecturer positions.

Women may keep our colleges running but the American university is still an old boys’ club.

The Chronicle of Higher Education’s new tool displays faculty and staff salary data from over 4,700 colleges and universities stretching from 2003 to 2013. The federal data powering the database isn’t brand new but it provides the starkest and most accessible visualization yet of the gendered distribution of labor in the American academy.

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Why has Russia lifted its ban on delivery of S-300 surface-to-air missile system to Iran?

The Wall Street Journal reports: The Kremlin lifted its self-imposed ban on the delivery of a powerful missile air-defense system to Iran on Monday, stoking sharp criticism from the White House and Israel and casting fresh doubt on the international effort to curb Tehran’s nuclear program.

U.S. lawmakers seized on Moscow’s announcement Monday to warn Russia was among a host of foreign countries using the prospect of a nuclear deal to begin seeking out lucrative business deals that could bolster Iran’s military and economy.

Any delivery of an air-defense system would complicate airstrikes on Iranian nuclear facilities by Israel or the U.S. should the diplomatic track fail.

Iran thinks that Russia will deliver the missile system this year, Ali Shamkhani, secretary of Iran’s Supreme National Security Council, told the Interfax news agency in Moscow on Tuesday.

The U.S. Senate is set to vote this week on legislation that would provide Congress with the power to approve, amend or kill any agreement that seeks to curb Iran’s nuclear program in exchange for a lifting of international sanctions.

Supporters of the bill, Republican and Democrat, said Russia’s lifting of its ban on the S-300 surface-to-air missile system could be just the beginning of countries testing the sanctions regime and a United Nations arms embargo on Iran.

“Before a final nuclear deal is even reached, [Russian President] Vladimir Putin has started to demolish international sanctions and ignore the U.N. arms embargo,” said Sen. Mark Kirk (R., Ill.), who sponsored legislation that seeks to impose new sanctions on Iran if a final deal isn’t reached by June 30.

Russian Foreign Minister Sergei Lavrov said the defensive systems didn’t come under the U.N. arms embargo, and that Russia implemented the S-300 ban voluntarily. “This was done in the spirit of good will to stimulate progress in the negotiations,” he said, adding that it was no longer necessary.

The State Department also said that the embargo imposed on Iran in 2010 didn’t prevent the delivery of S-300s. But the White House warned that the missile system, while defensive, could enhance Iran’s ability to challenge key U.S. allies in the Middle East, such as Israel and Saudi Arabia.

It said that Secretary of State John Kerry raised the issue with Mr. Lavrov on Monday.

Still, the Obama administration was measured in its criticism, noting that it didn’t believe the proposed missile sale would jeopardize the nuclear negotiations. [Continue reading…]

Some analysts may interpret Putin’s move as an effort to undermine the nuclear deal with Iran, but one can argue that on the contrary, the planned delivery of S-300 missiles may make the conclusion of the deal a fait accompli.

With an elastic clock, Benjamin Netanyahu has long favored a breathless time is running out narrative when it comes to closing the door on Iran’s nuclear capabilities.

If no deal is signed and within a few months Iran’s newly-reinforced defense systems make its nuclear sites extremely difficult to attack, 2015 is probably the last year that Israel could launch or instigate air strikes on Iran. It has never been plausible that it could conduct such attacks on its own, but the timing for it to enlist the support of others has probably never been worse.

The U.S. and Iran are effectively on the same side in a war against ISIS. American forces currently in Iraq would definitely become very vulnerable if the U.S. soon started bombing Iran.

Moreover, as Yemen becomes a quagmire for Saudi Arabia, an attack on Iran would likely become the tipping point for the current matrix of regional conflicts to start hopelessly spinning out of control.

Putin’ intention in approving the delivery of S-300 missiles at this juncture might simply be to push Russia first out of the gate in the race to cash in on the rewards from the inevitable ending the economic embargo on Iran.

Those who currently argue that the framework agreement is not good enough are rapidly being confronted with the reality that either the deal gets struck by the end of June or within a fairly short period Iran will see dwindling incentives for making any deal. Time is on Iran’s side.

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Netanyahu told cabinet: Our biggest fear is that Iran will honor nuclear deal

Haaretz reports: Prime Minister Benjamin Netanyahu said at a recent meeting of the security cabinet that if a comprehensive nuclear agreement between Iran and the six world powers is indeed signed by the June 30 deadline, the greatest concern is that Tehran will fully implement it without violations, two senior Israeli officials said.

The meeting of the security cabinet was called on short notice on April 3, a few hours before the Passover seder. The evening before, Iran and the six powers had announced at Lausanne, Switzerland that they had reached a framework agreement on Iran’s nuclear program and that negotiations over a comprehensive agreement would continue until June 30.

The security cabinet meeting was called after a harsh phone call between Netanyahu and U.S. President Barack Obama over the agreement with Tehran.

The two senior Israeli officials, who are familiar with the details of the meeting but asked to remain anonymous, said a good deal of the three-hour meeting was spent on ministers “letting off steam” over the nuclear deal and the way that the U.S. conducted itself in the negotiations with Iran.

According to the two senior officials, Netanyahu said during the meeting that he feared that the “Iranians will keep to every letter in the agreement if indeed one is signed at the end of June.”

One official said: “Netanyahu said at the meeting that it would be impossible to catch the Iranians cheating simply because they will not break the agreement.” [Continue reading…]

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My missing family in Syria: Naming and shaming in Yarmouk

Ramzy Baroud writes: Members of my family in Syria’s Yarmouk went missing many months ago. We have no idea who is dead and who is alive. Unlike my other uncle and his children in Libya, who fled the NATO war and turned up alive but hiding in some desert a few months later, my uncle’s family in Syria disappeared completely as if ingested by a black hole, to a whole different dimension.

I chose the “black hole” analogy, as opposed to the one used by UN Secretary-General Ban Ki-moon – “the deepest circle of hell” – which he recently uttered in reference to the plight of Palestinians in Yarmouk following the advances made by the notorious Islamic State (IS) militias in early April. If there is any justice in the hereafter, no Palestinian refugee – even those who failed to pray five times a day or go to church every Sunday – deserves to be in any “circle of hell”, deep or shallow. The suffering they have endured in this world since the founding of Israel atop their towns and villages in Palestine some 66 years ago is enough to redeem their collective sins, past and present.

For now, however, justice remains elusive. The refugees of Yarmouk – whose population once exceeded 250,000, dwindling throughout the Syrian civil war to 18,000 – is a microcosm of the story of a whole nation, whose perpetual pain shames us all, none excluded.

Palestinian refugees (some displaced several times) who escaped the Syrian war to Lebanon, Jordan or are displaced within Syria itself, are experiencing the cruel reality under the harsh and inhospitable terrains of war and Arab regimes. Many of those who remained in Yarmouk were torn to shreds by the barrel bombs of the Syrian army, or victimised – and now beheaded – by the malicious, violent groupings that control the camp, including the al-Nusra Front, and as of late, IS. [Continue reading…]

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ISIS ‘withdraws from Yarmouk camp’

Channel 4 News: An activist inside Yarmouk camp in Damascus tells Channel 4 News that Islamic State militants have largely withdrawn from the centre of the camp and handed control to other jihadis.

They are still fighting Aknaf Beit al Maqdis, a local militia allied to Hamas, on the outskirts of Yarmouk.

“Today there are no more IS militants inside Yarmouk,” said “Mustafa Ahmed”, who uses a pseudonym to disguise his identity. “Most of the militants are at the frontline between IS and the Aknaf brigades in the south eastern part near the hospital.”

Last Wednesday night Syrian government aircraft dropped barrel bombs on the Palestine Hospital, the only functioning healthcare facility in Yarmouk, after IS militants started to use it as a base.

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In the rubble of Gaza, militias prepare for inevitable war with Israel

Bel Trew reports: The fighters in Gaza are preparing for a new war every day. It could come at any time: In the past few weeks, Israeli planes and drones have been increasingly circling the 26-square-mile coastal enclave. The Israel Defense Forces have repositioned troops at the eastern borders, an area almost entirely flattened during last summer’s 51-day war.

“The war could start any minute,” says Abu Mujahid. “There is a lot of kinetic movement, so all the fighting groups evacuated the bases, we’ve postponed training sessions, and many of the men have moved underground.”

“There are people right now under your feet,” his wiry second-in-command, Abu Saif, 28, adds with a toothless grin.

Gaza today is a powder keg waiting to explode. The key aspects of the cease-fire agreement that ended the war last summer remain unfulfilled — both Israel and Hamas feel that only more violence can force their enemy to assent to their demands. Meanwhile, the reconstruction of Gaza has stagnated due to Israeli restrictions on letting material into the territory, as well as the rivalry between Hamas and Fatah, sapping Gaza residents’ hope for a better future and leading them to believe that there is no alternative but armed struggle. [Continue reading…]

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‘Empty words’: Donors fail to deliver pledged Gaza aid

Al Jazeera: Just a quarter of the $3.5bn in aid pledged to rebuild Gaza in the wake of last summer’s devastating war has been delivered, according to a new report.

The report from the Association of International Development Agencies, released on Monday, found that only 26.8 percent ($945m) of the money pledged by donors at the Cairo conference six months ago has been released, and reconstruction and recovery have barely started in the besieged coastal enclave.

“The promising speeches at the donor conference have turned into empty words,” said Winnie Byanyima, executive director of Oxfam, which was among the report’s signatories.

“There has been little rebuilding, no permanent ceasefire agreement and no plan to end the blockade. The international community is walking with eyes wide open into the next avoidable conflict, by upholding the status quo they themselves said must change.”

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Four Blackwater guards sentenced in Iraq shootings of 31 unarmed civilians

The Washington Post: A federal judge Monday sentenced a former Blackwater Worldwide security guard to life in prison and three others to 30-year terms for killing 14 unarmed civilians in a Baghdad traffic circle in 2007, an incident that fomented deep resentments about the accountability of American security forces during one of the bloodiest periods of the Iraq war.

U.S. District Judge Royce C. Lamberth of the District rejected a claim of innocence by Nicholas A. Slatten, 31, of Sparta, Tenn., who received the life sentence after being convicted of murder in October for firing what prosecutors said were the first shots in the civilian massacre.

The three others — Paul A. Slough, 35, of Keller, Tex.; Evan S. Liberty, 32, of Rochester, N.H.; and Dustin L. Heard, 33, of Maryville, Tenn. — were sentenced to 30 years plus one day after being convicted of multiple counts of manslaughter and attempted manslaughter.

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Fossil fuel divestment makes good financial sense

Hunter Lovins argues that investors don’t need to decide whether they believe in climate change: In early 2012 Seeking Alpha, an energy industries financial advisory service with more than three million registered clients cautioned against panicking and selling coal stocks, concluding that even though Peabody Coal’s stock value had fallen 45%, it was nicely undervalued, and after all, such companies had always grown: “Currently, Peabody Energy’s share price is at just over $36 (£25), but I think it has the potential to hit the $45 barrier before the end of 2012 because its Australian interests are likely to be snapped up by China and Indian Steel companies”, the advisors wrote. Seems like a strong argument for staying invested in coal, doesn’t it?

Unfortunately for Peabody’s investors, their trust in China’s insatiable hunger for coal was ill-advised: A 2015 report by the Institute for Energy Economics and Financial Analysis, (IEEFA) noted that although “China’s coal demand grew 10% annually over the decade to 2011, the rate of growth halved to 4-6% in 2012 and 2013. In 2014, China’s coal demand has actually declined by 2.1% year-on-year.”

I know these are a lot of numbers for a simple bar talk. And, usually, the China argument doesn’t even come up before the third drink when everyone feels they can win any fight just by quoting a big number. But the changing reality in China might make you want to wait with that second sip.

“While real economic growth exceeded 7%, electricity demand grew by less than 4%”, the IEEFA study said. Rapid supply diversification saw China’s coal consumption decline 2% and coal imports fall by 11% in 2014.

China’s coal demand will permanently peak by 2016 and decline thereafter, the report predicts.

“Coal companies’ underperformance against the global equity market is unprecedented,” said IEEFA’s Tim Buckley. “A more than 50% decline in coal prices has seen most listed coal companies globally lose 80-90% of their equity market value in the last four years. While the sun will undoubtedly rise for renewable energy in 2015, for coal, there remains a lot further to fall.”

Today Peabody Energy, the world’s largest private-sector coal company, is trading below $5 per share. Investors betting that coal will rebound are very likely to find their assets stranded.

Conversely, renewable industries are prospering. A recent study by Agora Energiewende, a German think-tank, found that solar electricity is already a low-cost renewable energy technology. Large-scale photovoltaic installations in Germany fell from over 40 cents per kilowatt-hour (c/kWh) in 2005 to 9 c/kWh in 2014. Even lower prices have been reported in sunnier regions of the world. Most interesting for investors, solar will soon be the cheapest form of electricity in many regions of the world. Even conservative scenarios which assumed no dramatic technological breakthroughs saw no end to cost reduction, with costs of 4-6 c/kWh expected by 2025, and 2-4 c/kWh by 2050.

Deutsche Bank analyst, Vishal Shah, agrees, predicting that rooftop solar will be the cheapest electricity option for everyone in the US by 2016. [Continue reading…]

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CEO sets minimum wage of $70,000 for all his employees

The New York Times reports: The idea began percolating, said Dan Price, the founder of Gravity Payments, after he read an article on happiness. It showed that, for people who earn less than about $70,000, extra money makes a big difference in their lives.

His idea bubbled into reality on Monday afternoon, when Mr. Price surprised his 120-person staff by announcing that he planned over the next three years to raise the salary of even the lowest-paid clerk, customer service representative and salesman to a minimum of $70,000.

“Is anyone else freaking out right now?” Mr. Price asked after the clapping and whooping died down into a few moments of stunned silence. “I’m kind of freaking out.”

If it’s a publicity stunt, it’s a costly one. Mr. Price, who started the Seattle-based credit-card payment processing firm in 2004 at the age of 19, said he would pay for the wage increases by cutting his own salary from nearly $1 million to $70,000 and using 75 to 80 percent of the company’s anticipated $2.2 million in profit this year. [Continue reading…]

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