Tuesday, March 22, 2022

WHERE INFLATION COMES FROM
Record number of British manufacturers raising prices, says CBI

BY PA NEWS AGENCY

Workers in a factory

The proportion of British manufacturers expecting to increase prices has jumped to its highest level since records began in 1975, according to data from the country’s biggest business group.

The latest monthly Confederation of British Industry (CBI) survey revealed planned price hikes over the next three months, underlining the rapidly increasing scale of inflation pressures on British firms.

It said its survey, which had responses from 229 businesses, showed a net balance of 80% of manufacturers are raising the price of orders booked for the next three months from March, compared with 77% last month.

The question, which was first asked in January 1975, deducts the number of firms saying they will raise prices from those saying they will lower them.



Manufacturers also reported an improvement in their order books for the month to a balance of 26, matching record levels from November.

Firms also told the CBI that output volumes continued to grow at a “robust pace” over the three months to March.

Anna Leach, CBI deputy chief economist, said: “This survey highlights strong order books and output growth, but the cost pressures facing manufacturers have been amplified by the conflict in Ukraine.

“The Government must use tomorrow’s spring statement to provide relief to both energy intensive industries and vulnerable consumers.

“To deliver a fundamental reset to UK growth, we need to see significant action to incentivise investment, a key driver of productivity growth and the only way to sustainably increase real wages.”

Tom Crotty, group director at Ineos and chair of the CBI manufacturing council, said: “It is positive to see that total order books remained strong in March, with export orders above normal to the greatest since extent since March 2019.

“Manufacturing output volumes also grew at a significant pace in the first three months of 2022.

“However, the Ukraine conflict has created further headwinds to an already challenging context for the manufacturing sector.”
Zambia’s democracy is still under attack
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But now by President Hichilema, the man who vowed to rescue it.


President Hakainde Hichilema of Zambia meeting supporters. Credit: Hakainde Hichilema/Facebook.

When Hakainde Hichilema won Zambia’s August 2021 election, many hoped the assault on democracy that had characterised his predecessor Edgar Lungu’s rule would come to an end. While in opposition, Hichilema had presented himself as a reform-minded politician determined to restore the rule of law, launch an anti-corruption campaign, strengthen democratic institutions, and protect human rights.

Nearly seven months into his five-year term, however, the new president is turning out to be a major disappointment. A pattern of worrying developments suggest that democracy is not returning to Zambia despite what many seem to believe.

Maintaining the anti-democratic status quo

Since taking office, Hichilema’s administration has shown little appetite to change the laws that enabled the authoritarian tendencies of his predecessor.

These include the law on defamation of the president, which makes it an offence to publish “any defamatory or insulting matter…with intent to bring the President into hatred, ridicule, or contempt”. This crime, punishable by up to three years’ imprisonment, has been widely interpreted and used to deter legitimate criticism. It has undermined media freedom, led to the arrest of critical voices and, especially under Lungu, created a culture of self-censorship.

Another such law is the Cyber Security and Cyber Crimes Act, which was hurriedly enacted by the Lungu administration on the eve of last year’s election. It violates the right to privacy by allowing the authorities to tap ICT devices, effectively turning everyone into a suspect, and confiscate electronics without proper procedural safeguards.

Finally, the Public Order Act (POA) requires any person who intends to convene a public meeting to “give police at least seven days’ notice” and other details. This colonial-era law has been used by successive administrations to restrict the rights to assembly and free speech. Under Lungu in particular, opposition meetings and demonstrations were repeatedly curtailed under the pretext of this act. Violations are punishable by up to six years’ imprisonment.

In opposition, Hichilema vowed to repeal the first two of these statutes immediately and reform the POA on assuming office. Under Zambian law, repealing an act of parliament requires a simple majority, and the governing United Party for National Development (UPND) holds 99 of the National Assembly’s 164 seats. In power, however, Hichilema has shown a studied disinterest in fulfilling these promises.

Undermining the media

Under Lungu, numerous critical media outlets were shut down. The Post, Zambia’s leading independent newspaper since the re-introduction of multiparty democracy in 1991, was forcibly closed in June 2016, less than two months before a general election, under the pretext of a disputed tax bill. Prime TV, the country’s leading private television station, was forcibly closed in April 2020 in the “public interest”, although no specific charges were laid out.

Hichilema’s administration is yet to close any media stations, but it has overseen four worrying developments.

First, the government has introduced a 16% Value Added Tax on newspaper sales, for both print and electronic copies. This move is widely seen as targeted at three private newspapers, since state-owned publications face no consequences for failure to meet their tax obligations. With the economy performing poorly and media outlets already struggling, this move threatens to raise the price of newspapers out of the reach of more Zambians and collapse the industry.

Second, the government has continued with the Lungu-era harassment of the private media. This January, the private TV station KBN published a leaked audio of a phone conversation between Hichilema’s political aide, Levy Ngoma, and permanent secretary in the Ministry of Home Affairs, Josephs Akafumba. In it, the two were heard plotting to use state institutions to undermine the opposition Democratic Party ahead of a by-election. Ngoma suggested the scheme was sanctioned by the president and vice-president.

Authorities initially claimed the audio was fake. When this failed, they accused the journalists of having tapped the pair’s phones. Instead of interrogating Ngoma and Akafumba, police arrested the reporters who had leaked the conversation. In what has become characteristic fashion, Hichilema, who no longer holds press conferences and has adopted Lungu’s unwanted legacy of addressing the country through press aides and on airport tarmacs, spoke through deafening silence.

Third, officials have intimidated independent media. Last month, the UPND MP Heartson Mabeta threatened News Diggers, arguably the most influential private newspaper, with closure after the publication ran a story quoting the UPND secretary general saying the party did not sign a contract with anyone to guarantee them employment. In a country reeling with record unemployment, the public backslash was huge, especially after the paper published the recording of the interview. Mabeta accused the newspaper of malice and warned that it risks meeting same fate as The Post if it did not change course. No one from the government or the UPND distanced themselves from the MP’s threats.

Fourth, the UPND has emulated its predecessor’s legacy of denying coverage to opposition parties in the state-run media. In opposition, Hichilema pledged to stop this culture by transforming the state media into genuine public platforms, establishing legal safeguards for editorial independence, and reviewing legislation that undermine their governance structures and leave them vulnerable to political interference. In power, however, it has been business as usual.

Assaulting free speech

As under Lungu, the assault on free speech under Hichilema has gone beyond just the media.

In December 2021, for instance, police arrested opposition Patriotic Front (PF) official Raphael Nakacinda after he advised the oft-traveling Hichilema to “put your buttocks down” and address the high cost of living. In January 2022, police arrested Morris Lungu, a 42-year-old taxi driver, on a charge of defamation for saying that “if there is a president who is a fool, it is the one who is there”. And, last month, 24-year-old Saliya Laisha was arrested following allegations she accused Hichilema of having sacrificed six youths, who died in unclear circumstances while on a boat cruise on Lake Kariba, “so that he can work well as has failed to do so”.

These arrests on charges of defamation have a chilling effect on even those who are not targeted as they show the costs of criticising officials. Many would prefer to self-censor than risk months or even years in protracted legal cases. The casualty is free speech and poor citizen participation in governance.

Dismantling the opposition

Given how opposition parties were continuously obstructed by Lungu, it was expected that Hichilema would behave differently. This has not been the case so far.

On 15 March 2022, for instance, the Deputy Speaker of the National Assembly banned 30 opposition lawmakers from parliament for 30 days. This followed their peaceful protest in November 2021, when the PF MPs noted that the finance minister had referenced constitutional provisions that no longer exist and asked for these anomalies to be corrected. When this request was rejected, the lawmakers converged in front of the Speaker’s mace, leading to a suspension of business for about 20 minutes. On resumption, the finance minister corrected the error and the debate proceeded peacefully.

Two MPs from the ruling party, however, then asked the Speaker if it was acceptable for the opposition MPs to remain in parliament when they had “intentionally disrespected it”. They claimed, without evidence, that “the only permissible means for Members to express displeasure was by walking out of the House”. The Speaker’s decision, reserved to a later date, was finally delivered on 15 March.

Protests are a commonplace tactic in multiparty democracies, and the form they can take is hardly prescribed anywhere. To treat the action by the PF MPs as a major offence highlights Zambia’s new slant towards repression in which any dissent is prohibited. The Deputy Speaker has the authority to reprimand lawmakers for misconduct, but she failed to establish how their protest amounted to contempt rather than legitimate protest, and why the first-time offenders warranted the maximum punishment of a month-long ban and suspended salaries.

If the 30 MPs challenge their suspension, the matter is unlikely to be decided before the expiry of the ban due to the slow pace of the courts. In December 2021, for instance, 9 PF MPs filed an urgent legal challenge to the Speaker’s decision to ban them from taking their seats before election petitions in their constituencies are resolved. The Constitutional Court only ruled on the matter today, three months on, siding with the PF complainants. The Deputy Speaker may well have factored these timings into her calculations.

The ongoing suspension of 39 of the PF’s 51 MPs suggests an organised effort to weaken the main opposition or intimidate it into submission. It also means there is effectively no opposition party in the National Assembly currently.

The suspensions also appear to be motivated by a desire for revenge. In June 2017, the then PF-aligned Speaker suspended 48 UPND lawmakers for boycotting Lungu’s state of the nation address. At the time, Hichilema and the UPND condemned the move as a brazen assault on democracy.

The recent onslaught on democratic rights under Hichilema has not attracted much outrage. This is largely because broad sections of civil society and international (mainly Western) actors support the new government, think it is too early to criticise the new administration, or simply consider the PF as undeserving of sympathy given its own terrible record on similar issues. When Shebby Chilekwa, a PF member and suspect in a murder investigation, recently complained that he had been tortured by the police while in detention and showed his scars, not even major human rights bodies expressed outrage.

Another example of the UPND undermining the opposition occurred this January. Days before the Kabwata parliamentary by-election, a candidate from a small opposition party, the United Progressive Party (UPP), announced his “withdrawal” from the race under highly dubious circumstances. Given the UPP had nothing to gain from this surprise move, many speculate the UPND induced this move for two reasons.

The first would have been to facilitate a new election date when Hichilema would have been available to campaign for his party’s candidate. Some argue that the president’s failure to dedicate ample time to a previous by-election in October 2021 cost the ruling party the seat. The second reason suggested was to allow the UPND to change its relatively unpopular candidate, Andrew Tayengwa, following internal party opposition to his rule.

As it was, any possible plan almost failed to come to fruition as the Electoral Commission refused to postpone the by-election, arguing that the UPP candidate had not resigned – a move that would have required re-organising the election – but merely withdrawn from the race. A few days later, however, the electoral body claimed to have received a letter from the UPP candidate, who had otherwise disappeared, categorically stating he had indeed resigned from the party. The Electoral Commission postponed the poll to 3 February.

For this delayed by-election, the UPND re-adopted Tayengwa – perhaps afraid its ruse would be too obvious otherwise – but deployed Hichilema alongside several cabinet ministers to literally camp out in Kabwata constituency. The ruling party narrowly beat the PF, while the UPP failed to run, explaining that it had expended its resources in the previous campaign.

This episode suggests that as well as pressuring state institutions to directly get involved in an internal party matter – the same tactics once used against the UPND – the ruling party is instigating divisions within opposition parties and over-stretching their meagre resources in the same way the PF did while in government. Opposition parties with little power are potentially being used to manipulate electoral law to suit Hichilema’s party. Again, the UPND is using the same tactics as the PF, but without the consequences of criticism from civil society and international actors.

Weakening civil society

Over the years, Zambia’s democracy has benefited from a robust and effective non-state sector capable of checking the power of the government. Such actors assumed principled positions that aligned with those adopted by the UPND when in opposition. The election of Hichilema has affected the effectiveness of civil society in two main ways.

The first is that many of the critical voices from academia, civil society and the church who spoke truth to power under Lungu have failed to remain impartial since Hichilema’s election. Previously neutral voices have become part of the choir of praise or gone silent. Others have been co-opted into government through appointments to parastatal boards, public bodies such as human rights commissions, or presidential advisory entities. One or two have applied for positions that can only be conferred by the president and are therefore unlikely to speak out unless their bids fail. Some remain in the long queue for appointments to public office, including diplomatic service.

The second is that previously effective civil society organisations that were seen as having aligned themselves to Lungu, such as the Law Association of Zambia, now lack legitimacy to critique the actions of Hichilema. The result is a weakening civil society and the ironic situation in which the PF, the party that almost collapsed the country’s democratic institutions, finds itself slowly becoming the new defender of the public interest.

Hichilema has shown himself to be out of his depth on many key issues. He only appears positive in contrast to the disastrous Lungu, but as memories of the PF’s terrible record fade, the new president’s shortcomings may dawn on more people. If the public become disenchanted with the UPND, voters are more likely to see the PF differently, especially if the former governing party manages to resolve its leadership question and comes out of its elective conference united. If Hichilema’s political position becomes threatened, he may resort to bribery, repression, or both. Unless civil society wakes up soon or new progressive voices emerge, Zambia’s democracy may return to the same position it was in under Lungu.

Nurturing corruption

Hichilema has demonstrated a lack of commitment to fighting corruption in three main ways.

The first is the lack of example. Despite being elected a platform of anti-corruption, accountability and transparency, Hichilema has so far failed to disclose the value of his assets. Along with Lungu, he is the only major party nominee and president to do so.

This is especially concerning as Zambian presidents have generally used state power to accumulate wealth. In less than 16 months in power, for instance, Lungu’s net worth grew from K10.9 million ($0.62million) in 2015 to K23.7 million ($1.34 million) when he ran for re-election in 2016. He refused to reveal his net worth ahead of last year’s vote, perhaps due to fears that knowledge of his opulence would increase calls for the removal of his immunity if he lost the election. Although there is no evidence to suggest Hichilema has started stealing public funds or using public office to promote his private interests, his reluctance to publish his net worth is concerning given his extensive business interests.

The second is that over six months in office, Hichilema’s anti-corruption strategy has been chaotic at best and non-existent at worst. The grand corruption of the Lungu era is well known yet not a single member of the former regime has been taken to court on serious corruption charges. Hichilema continues to accuse PF leaders of having presided over a corrupt administration, but mostly to delegitimise the opposition party’s reputation rather than to signal plans to prosecute those who looted public funds. Moreover, members of the kleptocratic networks that were deeply involved in high-level corruption under Lungu have since transitioned and cultivated new allies in the governing party.

The third is that Hichilema has ignored accusations of the corruption in his own government. When opposition parties presented evidence showing executive involvement in an inflated fertiliser contract awarded to one of the president’s business associates, for instance, Hichilema kept quiet. The president has also backtracked from his commitment to delink the presidency from the Industrial Development Corporation (IDC), the holding company of all parastatal bodies in the country. In opposition, Hichilema condemned Lungu and, earlier, Michael Sata for their failure to amend the IDC Act, which allows the president to chair the board of the parastatal, providing opportunities for patronage or corruption and undermining corporate governance. In power, Hichilema no longer sees anything wrong with this arrangement.

Failure to tackle political violence

Under Lungu, political violence around election was commonplace. The perpetrators were usually PF supporters, while UPND supporters were typically the victims. The police rarely arrested PF cadres but were quick to unleash brutality on opposition members, occasionally culminating in fatalities.

Again, Hichilema pledged to end this culture of political violence, but if the two by-elections since his election are any indicator, very little has changed. The polls in both Kaumbwe, Eastern Province, Kabwata, Lusaka, featured violent activities that saw suspected UPND cadres beat opposition supporters. As under the PF, none of the culprits were arrested even when the victims identified the perpetrators and formally lodged reports to the police. The political violence in Kabwata was even preceded by clear threats of violence from senior UPND members, none of whom has been arrested or reprimanded by the party’s leadership.

The false narrative of democratic resurgence

Although it may have slightly improved under Hichilema, Zambia’s democratic trajectory remains most concerning. Based on its early track record, the Hichilema administration has shown a lack of willingness to make structural changes to strengthen accountable, democratic governance. As a result, Zambian institutions will remain as susceptible to manipulation as they were under Lungu.

The recent narrative of a democratic resurgence in Zambia does not adhere to the reality, one that has seen the intimidation of independent media, the arrest of critics for insulting the president, the use of state institutions to undermine the opposition, the weakening of civil society, and the continued corruption in government. Contrary to what many are saying, Zambia is not returning to democracy. Not yet.

 THE SEARCH FOR IMMORTALITY

Chinese scientists, int'l counterparts breed youngest human cells in vitro

Xinhua

An international team led by Chinese scientists has successfully produced the youngest human cells in vitro, which may pave the way for advances in organ regeneration.

The study published Tuesday in the journal Nature announced the discovery of a rapid, controllable method to convert stem cells into bona fide 8-cell embryo-like cells, without relying on genetic engineering.

A team of researchers from China, Britain and Bangladesh converted pluripotent stem cells, or an "adult" version of early embryonic cells, back to a more "juvenile" version of cells with developmental potential, tantamount to fertilized eggs in their Day 3 developmental stage.

Totipotent 8-cell stage embryo-like cells recreate the embryonic state of a fertilized egg after only three divisions, making them the youngest human cells acquired in vitro ever known, said Li Wenjuan, from the Chinese Academy of Sciences, who is one of the corresponding authors of the paper.

Cells described as "totipotent" mean that they have the potential to create all types of cells within embryonic and extra-embryonic tissues, according to the researchers.

"These cells can not only differentiate into placental tissue but also potentially develop into more mature organs," Li said.

The researchers also transplanted the 8-cell stage cells subcutaneously into adult mice, and those cells developed into complex teratomas, according to the study.

The experiment was facilitated by the single-cell sequencing technology developed by Shenzhen-based BGI-Research. Ethical review had given clearance to the relevant study.

Satellite photos show Yemen rebels hit Saudi oil site again

By Jon Gambrell | AP

In this satellite photo from Planet Labs PBC, damage is seen after an attack by Yemen’s Houthi rebels targeting Saudi Aramco’s North Jiddah Bulk Plant in Jiddah, Saudi Arabia, Tuesday, March 22, 2022. Yemen’s Houthi rebels this week struck the exact same oil storage tank in the Saudi Arabian city of Jiddah that they previously hit some two years earlier, satellite photos show.
(Planet Labs PBC via AP)


DUBAI, United Arab Emirates — Yemen’s Iran-backed Houthi rebels this week struck the same oil storage tank in the Saudi Arabian city of Jiddah they had previously hit a year and a half ago, satellite photos showed Tuesday.

Satellite photos by Planet Labs PBC, analyzed by The Associated Press, show the damage on Sunday to the North Jiddah Bulk Plant, which sits just southeast of the city’s international airport, a crucial hub for Muslim pilgrims heading to Mecca.

That same storage tank — owned by the state oil behemoth Saudi Arabian Oil Co., known as Saudi Aramco — was hit by what the Houthis described as a cruise missile in a November 2020 attack.

Sunday’s attack has renewed questions about the kingdom’s ability to defend itself from Houthi fire as a yearslong war in the Arab world’s poorest country rages on with no end in sight. It also comes as Saudi Arabia issued an unusually stark warning that it is unable to guarantee its oil production won’t be affected by further attacks — which could push global energy prices even higher amid Russia’s war on Ukraine.

“There is little to suggest that the attack will have an immediate impact on oil supply,” said Torbjorn Soltvedt, an analyst with risk consultancy Verisk Maplecroft. “But there is no doubt Saudi Arabia is using it as an opportunity to put pressure on the U.S. at a testing time for U.S.-Saudi relations.”

Both Saudi government officials and Aramco did not respond to questions Tuesday.

The Houthi attack on Sunday represents one its most-intense barrages of the war, which has seen the kingdom launch punishing airstrikes in Yemen that have been criticized internationally for killing civilians. Among the targets was a petrochemicals complex in Yanbu on the Red Sea coast, which Saudi officials said led to a disruption of production for the world’s biggest oil exporter.

Another target was the North Jiddah Bulk Plant, which stores diesel, gasoline and jet fuel for use in Jiddah, the kingdom’s second-largest city some 285 kilometers (177 miles) southeast of Yanbu on the coast. It accounts for over a quarter of all of Saudi Arabia’s supplies and also supplies fuel crucial to running a regional desalination plant.

Saudi authorities earlier described the attack as causing a “limited fire in one of the tanks, (which was) brought under control without causing casualties.” The Houthis said they used Quds-2 land-attack cruise missile in the assault.

Planet Labs PBC photos, taken Monday, showed what likely was white, fire-suppressing material surrounding the tank, which appeared damaged on its southern-facing side. A new, detailed photo taken Tuesday showed that debris and material partially cleared away, with a hole clearly punched through the scorched tank.

At the time of the 2020 attack, the tank, which has a capacity of 500,000 barrels, held diesel fuel, according to a recent report by a U.N. panel of experts examining Yemen’s war. Repairing it after the last attack cost Aramco some $1.5 million.

The U.N. experts described the facility as a “civilian target,” which the Houthis should have avoided after the 2020 attack.

“While the facility also supplies the Saudi military with petroleum products, it is mostly supplying civilian customers,” the panel said. “If the plant had been out of service of a significant period, the impact on the kingdom’s economy as well as on the welfare of the residents of the Western region would likely have been significant.”

Cruise missiles and drones remain difficult to defend against, though the U.S. recently sent a significant number of Patriot anti-missile interceptors to Saudi Arabia to resupply the kingdom amid the Houthi attacks.

In September, the AP reported that the U.S. had removed its own Patriot and THAAD defense systems from Prince Sultan Air Base outside of Riyadh.


Follow Jon Gambrell on Twitter at www.twitter.com/jongambrellAP.


 SOUTH AFRICA

WATCH | E-hailing operators want to sit at the table when pricing ratios, driver vetting are determined

Shonisani Tshikalange

Reporter

22 March 2022 

E-hailing operators for companies including Uber, Bolt and DiDi embarked on a three-day “apps off” protest across SA from Tuesday, calling for the government to introduce industry regulations to improve their working conditions.

In Gauteng, drivers are marching to the offices of the department of trade & industry and to the Union Buildings today. Spokesperson Vhatuka Mbelengwa said the department must correctly define e-hailing companies. 

“Is Uber a tech company or a transport company? We want a framework in which we can hold them accountable. When we speak about regulations, we are talking about conditions that will manage the relationship within the sector,” he said.

Mbelengwa said they want joint decision-making platforms on issues such as fair pricing and vetting of drivers.

“Tech companies can’t take decisions autonomously. They must consult with us because we are the bulk investors in this industry.

“It is our money that buys these assets and our money that maintains them. We spend on the fuel. It is the sacrifices of grandparents, parents and siblings at home to make sure there is a vehicle available. These efforts should be appreciated by government. In this country that lacks opportunity, can we at least be protective of the limited opportunities that might be brought about,” he said.

Drivers for e-hailing platforms including Bolt, InDriver, DiDi and Uber embarked on an 'apps off' shutdown of services from Tuesday.
Drivers for e-hailing platforms including Bolt, InDriver, DiDi and Uber embarked on an 'apps off' shutdown of services from Tuesday.
Image: Alon Skuy/Sunday Times

Foreign-based app companies “are being given free will to do as they please within SA and this can’t be correct,” Mbelengwa said.

“We are simply saying to government: appreciate and value our lives, appreciate the domestic investment, the billions we have put into this sector so we can empower ourselves.”

Drivers are also concerned about their an unsafe working environment amid violent rivalry at times in the transport sector.

“We can’t continually be put at odds with other participants within public transportation and government does nothing,” Mbelengwa said.

He said they will head to Gauteng transport MEC Jacob Mamabolo’s office on Wednesday.

“On Thursday we are shutting down the industry. No-one must work, but we also think if there is goodwill, whether from government or app companies, they can take Thursday as an opportunity to respond or express themselves and open the door to engagement.”

E-hailing drivers gathered in Marabastad, Pretoria, ahead of a march to the department of trade and industry and the Union Buildings.
E-hailing drivers gathered in Marabastad, Pretoria, ahead of a march to the department of trade and industry and the Union Buildings.
Image: Alon Skuy/Sunday Times

Mbelengwa apologised to customers for the disruption to services. 

“We are saying please be patient with us. A regulated industry protects domestic investment and a few days inconvenience may result in an environment where there will be increased safety.”

Uber and Bolt have previously publicly stated the measures they have taken to ensure rider and driver safety and explained their driver vetting policies, which include professional driving permits, police clearance certificates and criminal background checks.

Business Times recently reported that new entrant DiDi charges drivers a commission of 13% on each ride, compared with about 20% to 25% for Bolt and Uber drivers.

Earlier this month, Uber’s head of mobility operations for sub-Saharan Africa, Kagiso Khaole, said the company was actively engaging with its drivers on issues that affected their income.

“Our commitment to them is to continuously find ways to maximise their earning potential while meeting the needs of riders.”

Nazanin Zaghari-Ratcliffe: Iranian arms dealing continued in the UK even after notorious tank deal fell apart in 1979

Published: March 22, 2022 
THE CONVERSATION

Following her release from detention in Iran, Nazanin Zaghari-Ratcliffe, held hostage since 2016, said: “what happened now should have happened six years ago”. She was referring to the fact that her release had been secured at the same time as the British government paid Iran a debt it had owed since the first day of her detention – and had in fact owed since the 1970s.

Zaghari-Ratcliffe was tragically used as a pawn in this decades-long dispute over almost £400 million.

My research has explored the history of the Anglo-Iranian arms trading relationship and has found that London continued to be a global hub for Iran’s arms purchasing efforts even after the 1979 Iranian revolution. This is perhaps surprising given what we know about Zaghari-Ratcliffe’s case. Received wisdom is that the UK failed to follow through on arms deals with Iran due to concerns over the politics and provocative actions of the new Iranian regime. These revelations from the archives make this narrative harder to swallow.
A contentious tank deal

Iran was a major customer for British weapons in the 1970s. Between 1971 and 1976, the Iranian government ordered 1,500 Chieftain tanks and 250 armoured recovery vehicles from Britain at a cost of around £650 million. These orders – and the associated funds – were lodged with British state-owned arms company International Military Services Ltd (IMS Ltd).

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At the time, Iran was dramatically expanding its arms purchases, having cashed in on the 1973 oil crisis that saw prices quadruple. The Shah of Iran – the monarch ruling the country – was using the proceeds to pursue domestic modernisation, including through defence and arms procurement. Journalist Anthony Sampson described Iran in the mid-1970s as “the salesman’s dream”. The country spent over US$10 billion on tanks, aircraft, missiles and all manner of weaponry between 1974 and 1976, and planned a further US$10 billion spend by 1981.

When the Shah of Iran was toppled in 1979, Britain did not see through on its arms deal. Alamy

The 1979 revolution that toppled the Shah saw the US halt arms sales to Iran. The UK – at least in some regard – followed suit. British tank transfers ceased and the bulk of the 1970s contract went unfulfilled. Only 185 of the Chieftain tanks ordered by the Shah had been delivered.

However, IMS Ltd held onto the Iranian government’s money – eventually said to be around £400 million when interest is taken into account. A long series of legal battles have been fought over these funds.

Zaghari-Ratcliffe was detained nearly four decades later and, over the years, the link to the 1970s tank debt has gradually emerged. Zaghari-Ratcliffe was first told that the connection was being drawn between her imprisonment and the debt by her Iranian interrogators in 2016. Meanwhile, the British government remained cagey and avoided the question of a link. Now, however, it has formally confirmed that it paid the debt in the same statement announcing the release of Zaghari-Ratcliffe and fellow detainee Anoosheh Ashoori.

The post-revolution arms network

While Britain halted the transfer of the Chieftain tanks when the Shah fell, the arms trading relationship with Iran did not cease entirely during the 1980s.

Indeed, by the time Iran was fighting a bloody war with Iraq that would last for most of the decade and claim up to a million lives, Britain, and London in particular, had a central role in Iran’s arms procurement networks.

My research shows that Iran was running a military procurement office in the heart of Westminster to supply its war machine. The office, hosted in the National Iranian Oil Company building, was located over the street from the Department for Trade and Industry, and a stone’s throw away from Westminster Abbey and the Houses of Parliament.

British government documents from 1985 note 60 to 70 arms dealers worked to broker arms deals in the building alongside over 200 oil company representatives. Contemporary press reports suggested millions of dollars of business flowed through the office, although British officials were reluctant to specify how much of Iran’s alleged US$1.2 billion annual arms purchases were handled in Westminster.

While few actual weapons systems appear to have been transferred through the offices, a search of the building in 1982 by the Metropolitan Police did uncover explosive fighter jet ejector seat parts in the basement.

Some evidence even suggests a link between IMS Ltd, the Chieftain tank deal and the Iranian offices. In the mid-1980s some spare parts for the tanks were supplied to Iran, with the name of Iran’s London office found on some leaked paperwork linked to the transaction.

The official British rules on arms transfers to Iran and Iraq during the war were complicated. Guidelines from 1984 suggested that Britain would not supply “lethal” equipment, that existing contracts should be fulfilled where possible and that transfers should not exacerbate or lengthen the conflict.

Richard Ratcliffe, pictured during his hunger strike towards the end of his wife’s captivity. Alamy

British officials were well aware of the Iranian office, and were frequently pressured to act against it by the US government. However, British intelligence struggled to understand what exactly was going on inside the building, and no clear evidence could ever be found of a breach of British law.

The desire to avoid a diplomatic spat with Iran but also the potential for a flourishing commercial relationship with Iran in other areas –- particularly supplying the National Iranian Oil Company – prevented British action.

It was only in 1987, following a series of Iranian provocations, including attacks on oil tankers and British diplomats in Tehran, that Margaret Thatcher’s government pulled the plug on Iran’s arms dealing operations in Westminster.
Insights from the archives

It is clear that challenging diplomatic relations and international sanctions on Iran over recent decades have made resolving the tank debt complicated. But the largely forgotten story of Iran’s London arms procurement office makes the British government’s unwillingness or inability to pay somewhat challenging to comprehend. Any narratives that suggested it was impossible to engage with the question of the debt skip over rather a lot of other activities that continued throughout the period in question.

I’ve been able to scrape together information about Iran’s audacious 1980s procurement operation at the heart of Westminster thanks to the rules that make government records public after 30 years. In another 30 years’ time, the archives might help to shed some further light on the events of 2022, as well as the years Zaghari-Ratcliffe and Ashoori spent imprisoned. They might tell us why it took so long for them to be reunited with their families.

Author
Daniel Salisbury
Senior Research Fellow at the Centre for Science and Security Studies, King's College London
Disclosure statement
Daniel Salisbury receives funding from the Leverhulme Trust.





Dancing with the Three Powers

Tuesday, 22 March, 2022 -
Abdulrahman Al-Rashed

In Moscow, the illuminated signages of all but a few US brands have dimmed. Unlike its peer Burger King, McDonald's has closed over 847 branches across Russia. Major companies like Apple, Boeing, Adidas, the Marriott Hotels, and Citibank have followed suit. The political climate has reached unprecedented levels of tension. From both the Russian and the American viewpoints, this is an existential conflict where all means, bar direct armed confrontation, are utilized.

While Iran stands on the verge of leaving its decades-long confine of international isolation and boycott, Russia is being hit by harsher Western economic sanctions and isolation. On the Chinese side, the conflict with the US rages on.

As tensions soar, the world is rediscovering the key role that petroleum sources and passages play in geopolitical conflicts and re-establishing the importance of building alliances.

By the end of last year, environmental slogans and calls to lower oil production took over the international scene. Today, the calls have shifted to demanding more oil production.

Saudi Crown Prince Mohammed bin Salman had previously broached the issue of the future of Saudi Arabia and petroleum in light of the major shifts taking place in the world and the allegedly ebbing role of petroleum and plummeting oil incomes, saying Saudi Arabia is boosting its non-oil resources, but oil will remain a necessity for the world until the 2050s.

The current oil shock was not only prompted by the Ukraine war, but also by consumer markets’ return to full capacity after a two-year near-hiatus due to COVID-19.

To a certain degree, there are no new, resolute choices today more than in the past century. Energy sources are still relevant, maritime passages are still vital for traffic, and geopolitical balances still occupy a significant portion of the considerations of major powers and war institutions like the NATO.

The truth is, oil was never left out of the equation in conflicts, and its significance will only increase with the continued Chinese-US conflict and the Russian-Western war in Ukraine, which transported us and the whole world to a new stage. These recent developments call for a deeper consideration of how a key petroleum-rich region can avoid conflicts and remain in the shade of tensions.

Navigating such a complex situation may prove difficult. Most oil exports from the Gulf region - especially from the Kingdom, its largest country - go to India and China, yet ties with Europe and the US remain strong. At the same time, achieving a balance in the oil market requires cooperation between Gulf states and Russia, which is currently engaged in a dangerous head-to-head with the West. As such, there is not much room for political maneuvering. Our needs dictate strong ties with all three major powers: the US, China, and Russia.

Making things more complex is the involvement of Iran, a rival we do not trust, in the game, in its dual capacity as an oil-exporting country and a commercial partner should its disagreement with the West come to an end. Major powers will need oil as a political tool, which could turn the Middle East region into a tug-of-war scene.

It's not right to compare the current developments to the Cold War (1947-1991). During the Cold War, we were aligned with the Western camp given our common interests: the West was the biggest oil importer and the protector of oil passages. Today, though China has taken the West’s place as the biggest importer, it is not willing to wage wars for oil, which increases the risks and possibilities of regional clashes. As such, the interest of this region lies in maintaining a reasonable relation with all three conflicting major powers, since they are all partners of ours. Nonetheless, when tensions are heightened as is the case in Ukraine today, achieving this aspiration could prove challenging for us.

We realize that our impact on global developments outside our region is limited. When considering our choices, the solution of taking sides could prove difficult, and in any case, discussing such an option now would be premature. We realize that major powers will eventually come to realize the limits of their power and the risks they are bringing upon themselves. We also realize that they will eventually understand that the continuation of the crisis is neither in their own interests nor in the interests of the world. We can only hope they will get to this realization before it is too late.


Abdulrahman Al-Rashed is the former general manager of Al-Arabiya television. He is also the former editor-in-chief of Asharq Al-Awsat, and the leading Arabic weekly magazine Al-Majalla. He is also a senior columnist in the daily newspapers Al-Madina and Al-Bilad.
America’s Economy in the European Mirror
 
Paul Krugman
Tuesday, 22 March, 2022 -

Last week Eurostat, the European Union’s statistical agency, released a revised estimate of the euro area’s February inflation rate. It wasn’t a happy report: Consumer prices were up 5.9 percent from a year earlier, more than most analysts had expected. And it’s going to get worse, as the effects of the Ukraine war weigh on food and energy prices.

Britain hasn’t yet released its February inflation number, but the Bank of England expects it to match the rate in the euro area.

Of course, US inflation is even higher, with February consumer prices up 7.9 percent from a year earlier. These numbers aren’t exactly comparable, for technical reasons, but inflation in the US does seem to be running around two percentage points higher than in Europe. I’ll come back to that difference and what might explain it. But surely the fact that inflation is up a lot in many countries, not just America, is worth noting.

After all, the entire Republican Party and a fair number of conservative Democrats insist that the recent surge in US inflation was caused by President Biden’s big spending policies. Europe, however, had nothing comparable to Biden’s American Rescue Plan; last year the euro area’s structural budget deficit, a standard measure of fiscal stimulus, was only about a third as large, as a percentage of G.D.P., as America’s.

So why is inflation up in Europe?

Part of the answer is rising energy prices. Last week I noted that Kevin McCarthy, the Republican House minority leader, has declared that gasoline prices “are not Putin gas prices. They are President Biden gas prices.” Let me elaborate on the absurdity of that claim, using British data.

In late December 2020 gasoline in Britain cost 116 pence per liter — $5.94 a gallon. By mid-March that was up to $8.23 a gallon. Over the same period US gas prices rose from $2.24 to $4.32. Taking Britain’s high gas taxes into account, the price increases were similar, even though Joe Biden is not, as far as I know, the British prime minister.

But it’s not just energy prices. US inflation has been driven up in part by pervasive supply-chain problems, with a big shift of demand toward goods straining ports, shipping capacity and more; these same strains, which have lasted much longer than many of us expected, have afflicted Europe, too.

So what does high inflation in Europe tell us? First, that a large part — maybe two-thirds — of the acceleration in US inflation reflects global forces rather than specifically American policies and developments. Second, because these global forces may abate if we finally emerge from this dark tunnel of pandemic and war, US inflation may eventually decline substantially even without drastic changes in policy. (Notice how I avoided using the word “transitory”? Oh, wait.)

That said, inflation is running hotter on this side of the Atlantic. Why? One main factor, almost surely, is that the economy of the United States has recovered faster than that of Europe. In the fourth quarter of 2021 real gross domestic product in the US was 3 percent larger than it had been before the pandemic, while the euro area had barely recovered its losses. And in case you’re wondering, you don’t need to discount those numbers for faster US population growth; our working-age population has in fact stagnated since 2019, largely thanks to a collapse in immigration.

And US economic growth has helped workers as well as G.D.P. Although hourly real wages have been eroded by inflation, total labor compensation is up 13.6 percent since the eve of the pandemic, compared with only 5.2 percent in Europe.

Now, excess inflation suggests that recent US economic growth has been too much of a good thing. Our economy looks clearly overheated, which is why the Federal Reserve is right to have started raising interest rates and should keep doing it until inflation subsides.

But while overheating is a problem, we shouldn’t let it overshadow the good things that have happened. We recovered fast from the pandemic recession and seem to have avoided the long-term “scarring” effects that many feared. Most though not all of the inflation we’re experiencing reflects probably temporary global forces, and multiple indicators — consumer surveys, professional forecasters and financial markets — suggest that longer-term expectations of inflation remain “anchored,” that is, inflation isn’t getting entrenched in the economy.

There’s still the question of why Americans feel so lousy about the economy, or at least tell pollsters that they feel lousy (they’re spending as if they’re optimistic). We’re not unique in this respect: European consumer sentiment has also taken a hit in the face of inflation, although nothing like the plunge we’ve seen here. But that’s a topic I’ll return to another day.

For now, I’d just urge Americans to look at their economy in the European mirror. Recovering from the pandemic was always going to be tough, and Vladimir Putin has made it tougher. But under the circumstances, we’re actually doing relatively OK.

The New York Times
Medvedev stated the meaninglessness of negotiations with Japan on the topic of the Kuril Islands


Today, 14:35In the world
Photo: Вконтакте

Deputy Chairman of the Security Council of the Russian Federation Dmitry Medvedev (pictured) supported the refusal to negotiate with Japan on a peace treaty and ownership of the Kuril Islands. The ex-president noted that this is a “historically justified, overdue and fair” decision.

“Obviously, we would never have found any consensus with the Japanese on the island topic. This was understood by both us and them. So the negotiations about the Kuriles have always been of a ritual nature. The new version of the Constitution of Russia directly states that the territories of our country are not subject to alienation. The issue is closed”, - Medvedev said on his Telegram channel.

He stressed that in the light of anti-Russian sanctions, the negotiations "have lost all meaning." The former president stressed that by imposing sanctions following the United States, the Japanese demonstrated "with whom they would agree on a hypothetical text of a peace treaty".

Medvedev stressed that instead of meaningless negotiations with Japan, it is more important to develop the Kuriles. He noted significant improvements in recent years, which are visible from the outside and felt by the local population.

“I have repeatedly visited our islands, made decisions about their support, I have seen real changes for the better - from schools to roads and airports. But more importantly, people who live there see it. It will continue to be so!”, - Medvedev summed up.

Yesterday it became known that Russia refuses to negotiate a peace treaty with Japan. Moscow is also withdrawing from the dialogue on establishing joint economic activities in the South Kuriles. This was reported by the Ministry of Foreign Affairs of the Russian Federation. The reason for this was the Japanese sanctions against Russia.

As for Dmitry Medvedev, he created a Telegram channel in mid-March, and the main topic of his publications is Russophobia and Russia's relationship with other countries of the world. Already in his first post, he said: "The frenzied Russophobia of the West, apparently, will never reach the bottom". He later criticized the Polish program for "de-Russification of the Polish and European economy".