LGBTQ Persons and the Promise of the Universal Declaration of Human Rights 

Opinion

Dec 12, 2023 
By Jessica Stern and Suzanne Goldberg

U.S. special envoy to advance the human rights of LGBTQI+ persons; senior advisor to the special envoy

The Universal Declaration of Human Rights' 75th anniversary comes amid many profound challenges to human rights worldwide. Yet the Declaration's commitment to all persons' dignity and human rights still deserves recognition as a north star for our shared future, including the future of lesbian, gay, bisexual, transgender, queer, and intersex (LGBTQI+) persons.

As the United States' special envoy to advance the human rights of LGBTQI+ persons and senior advisor to the special envoy, we see every day how being LGBTQI+ can determine a person's ability to enjoy their human rights and fundamental freedoms, depending on where they live and the overlapping forms of discrimination and hostility they face. We see, too, how U.S. diplomacy presses, visibly and behind the scenes, for protection against negative targeting based on sexual orientation, gender identity, and intersex status.

As President Joe Biden told the U.N. General Assembly earlier this year, we must continue working to ensure that "LGBTQI+ people are not prosecuted or targeted with violence because of who they are." These rights are part of our shared humanity, he added, and "when they are absent anywhere, their loss is felt everywhere."

Earlier this year, we met with activists from Uganda, where the Anti-Homosexuality Act requires individuals to report anyone suspected of "homosexual behavior," imposes a 20-year prison sentence for "promotion" of homosexuality, and even imposes the death penalty in certain cases. As a recent U.S. business advisory noted, because of the law, landlords are reportedly evicting private and commercial tenants on suspicion of being LGBTQI+.

In September, we met with a lesbian activist from the Kyrgyz Republic, where LGBTQI+ organizations are facing increased restrictions under the state's anti-propaganda law. We also met a transgender woman from Indonesia who detailed severe risks to safety and livelihood faced by the transgender community there. Their experiences reflect the heartbreaking repression that LGBTQI+ persons often face from both governments and local communities when law enforcement refuses to provide protection.

Yet there is also hope, including a growing number of nations overturning laws criminalizing LGBTQI+ relationships. In the past two years, courts in five countries have struck down their sodomy laws—Mauritius just two months ago, and Antigua and Barbuda, Barbados, St. Kitts and Nevis, and Singapore in 2022, while Vietnam officially rejected designation of LGBTQI+ identities and relationships as medically or psychologically abnormal.

Video shows Russian riot police raiding gay bar, local outlets report

The weekend raid was one of several that have occurred since the country’s highest court designated LGBTQ activists as extremists last month.

Yekaterinburg, Russia. 

Alexander Zemlianichenko Jr. / Xinhua News Agency via Getty Images


Dec. 12, 2023, 
By Matt Lavietes

Russian police raided another gay bar over the weekend, video posted by a Russian media outlet showed, less than two weeks after the country’s highest court designated LGBTQ activists as extremists.

The video, shared Saturday by local news outlet Ura.ru, appears to show riot officers entering a darkly lit bar or club and then abruptly cutting the music and turning the lights on. The officers can be heard yelling, and then about a dozen or so patrons and bar staff can be seen filing out of the venue. The video was taken inside Fame, a gay bar in Russia’s fourth largest city, Yekaterinburg, according to the news outlet. Ura.ru, which is also based in Yekaterinburg, had historically been critical of the Russian government, but the outlet has more recently been described as “Kremlin-friendly."

Gay bars in Moscow were similarly raided by Russian police the previous weekend. Clubgoers’ identification documents were reportedly checked and photographed by police.

A representative from the Russian Embassy in Washington, D.C., did not immediately return a request for comment.

The raids are part of a decadeslong crackdown on LGBTQ rights in the nation under the leadership of President Vladimir Putin, who has been in power for almost a quarter century. They also come less than two weeks after the ruling by the nation’s Supreme Court that designated gay and trans activists and the LGBTQ “movement” as extremists.

Under Russian law, those found guilty of participating or financing extremism can be sentenced to up to 12 years in prison, according to the international advocacy group Human Rights Watch. The ruling is seen by critics as effectively banning any form of organized advocacy on behalf of LGBTQ rights.

“It’s a bleak, bleak part of history for Russian LGBTQ society, unfortunately,” said Renat Davletgildeev, an LGBTQ activist and journalist who fled Russia last year. “And we are only on the first step on the way to hell.”

A ban on consensual same-sex intimacy was outlawed in Russia after the fall of the Soviet Union in 1991. But in more recent years, the Russian government has passed a series of laws restricting LGBTQ rights.

In 2013, the Russian government passed legislation that has become known worldwide as the nation’s “gay propaganda law,” making it illegal “to spread information about nontraditional sexual behavior” to minors.

Police detained more than 100 gay and bisexual men in Chechnya, a republic of Russia, and subjected them to torture in 2017, according to human rights groups. The Russian and Chechen governments have both maintained that the persecution never took place.

As part of a referendum to allow Putin to stay in power until 2036 if he chooses to, Russians in 2020 voted in favor of a constitutional amendment that defines marriage as exclusively between a man and a woman.

Last year, Russian lawmakers expanded the “gay propaganda law” to apply to adults, effectively banning public symbols or gestures of “nontraditional sexual relations.” Those found to be in violation of the law could face up to 400,000 roubles ($6,500) in fines. A Russian court also disbanded the nation’s largest LGBTQ advocacy group, the Russian LGBT Network, last year.

In July, Putin signed a measure into law that would ban gender-affirming care in Russia.

While acknowledging the deterioration of LGBTQ rights in Russia, Tanya Lokshina, an associate director at Human Rights Watch, described the police raids on gay bars as “particularly extreme.”

“They’re not going to go after each and every LGBT person who exhibits their sexual orientation,” she explained in an interview with NBC News last week. “But, they’re going to go after some people — which will make it clear to everyone else — that you have to shut up or else because that’s the way the Russian government operates.”

Critics of the recent Supreme Court ruling said they were not surprised by its timing, arguing that it is aimed at further vilifying LGBTQ people ahead of the upcoming presidential elections in March. Putin announced his candidacy for the election he is all but certain to win last week.

“They need to feed this idea of the country surrounded by enemies who want to destroy us,” Maria Alyokhina, a member of Russia’s activist punk rock group Pussy Riot, said in a reference to the Kremlin.

Alyokhina, who is queer and has been arrested for her activism several times, escaped Russia last year disguised as a food delivery person in order to slip past a police guard while she was under house arrest. She said the recent Supreme Court ruling will force LGBTQ Russians to go further into hiding.

“In Russia, there is a dark joke that there is no level of bottom,” she said. “So, it definitely can be worse, and with this terrible law it would be worse.”

NO JUSTICE NO PEACE!

Flint charge against ex-Michigan Gov. Snyder formally dismissed

BY RACHEL FRAZIN - 12/12/23 

FILE – The Flint water plant tower is seen, Thursday, Jan. 6, 2022, in Flint, Mich. A Michigan Supreme Court order that charges related to the Flint water scandal against former Gov. Rick Snyder, his health director and seven other people must be dismissed is the latest development in the crisis that started in 2014. That was when the city began taking water from the Flint River without treating it properly, resulting in lead contamination. (AP Photo/Carlos Osorio, File)

A judge formally dismissed a charge against former Michigan Gov. Rick Snyder (R) related to the Flint water crisis, formally closing the case against him. 

Judge William Crawford dismissed a charge Monday of willful neglect of duty against Snyder after a 2014 water supply switch led to lead contamination in the city of Flint’s water supply.

The dismissal is not a surprise, since the Michigan Supreme Court in October declined to revive the case against Snyder. At that time, prosecutors declared the Flint water prosecutions closed. 

The state’s high court had previously taken issue with the indictment process for Snyder and other officials, finding that a “one-man grand jury” was wrongly used.

The dismissal does not affect civil proceedings; Flint residents were awarded a more than $600 million in a settlement finalized earlier this year. 

Flint’s drinking water was contaminated after the source of its water supply was shifted to the Flint River in 2014. The water wasn’t adequately treated, and this caused lead from pipes to leach into the city’s drinking water.

This exposed about 99,000 residents to lead, which can damage the brain and nervous system and is particularly harmful to children.

 

U$A

Nearly half of 5 million veterans screened found to have potential toxic substance exposure

BY RACHEL FRAZIN - 12/12/23 

FILE – An Afghan National Army pickup truck passes parked U.S. armored military vehicles, as smoke rises from a fire in a trash burn pit at Forward Operating Base Caferetta Nawzad, Helmand province south of Kabul, Afghanistan, April 28, 2011. The House has approved a significant expansion of health care and disability benefits for millions of veterans who were exposed to toxic burn pits while serving in Iraq and Afghanistan. (AP Photo/Simon Klingert, File)

Nearly half of the 5 million veterans that have been screened by the Department of Veterans Affairs (VA) under a new law have reported at least one possible exposure to toxic substances during their military service.

Announcing the 5 million screening milestone, the VA revealed that 2.1 million veterans — or 43 percent of those screened — were potentially exposed to such substances during their service.

A variety of toxic exposures can come up in these screenings, but the most common were exposures to burn pits and Agent Orange.

Exposure to burn pits and other airborne hazards that can be encountered during military service can cause a variety of cancers including those affecting the brain, neck, kidneys and pancreas. 

Agent Orange is a herbicide that was used during the Vietnam War. It can cause bladder cancer, blood cancers, Parkinson’s disease and birth defects. 

The screenings were launched as part of the PACT Act, a 2022 law that expanded benefits for veterans who were exposed to toxic substances.

VA Secretary Denis McDonough said in a written statement that the screenings are aimed at improving health care and detecting “potential health challenges as early as possible.”

 

U$A

A quarter of freshwater fish at risk of extinction, assessment reveals

BY LAUREN SFORZA - 12/12/23 

Bill Schaefer/Getty Images

A new assessment has found that 25 percent of freshwater fish are at risk for extinction due to climate change and pollution.

The latest update to the International Union for Conservation of Nature’s (IUCN) Red List of Threatened Species was published Monday and included the first-ever global assessment of freshwater fish. It found that 3,086 out of 14,898 assessed species — 25 percent — are at risk of extinction.

The assessment found that 17 percent of threatened freshwater fish species are affected by climate change, which includes shifting seasons, decreasing water levels and rising sea levels. The rising sea levels can lead to more seawater moving up rivers and therefore affecting the freshwater species.

It also found that pollution affects 57 percent of freshwater fish that are at risk for extinction. Dams and water extraction impacts 45 precent of threatened freshwater fish, overfishing threatens 25 percent and invasive species and disease put 33 percent at risk, according to the assessment.

The latest update also warned that the Atlantic salmon is facing increasing threats to their habitats. It said that new evidence suggested that the global population of the species dropped 23 percent between 2006 and 2020.

Now, the threat level of the Atlantic salmon has been moved from “Least Concern” to “Near Threatened.” It pointed to climate change, dams and invasive species as the reasons for the declining population.

Kathy Hughes, co-chair of the IUCN SSC Freshwater Fish Specialist Group, said that freshwater ecosystems must be “well managed” to “maintain food security, livelihoods and economies in a climate resilient world.”

“Freshwater fishes make up more than half of the world’s known fish species, an incomprehensible diversity given that freshwater ecosystems comprise only 1 percent of aquatic habitat,” Hughes said in a statement. “These diverse species are integral to the ecosystem, and vital to its resilience. This is essential to the billions of people who rely upon freshwater ecosystems, and the millions of people who rely on their fisheries.”

 

From White House to West Coast, cease-fire protests follow Biden across US

BY ALEX GANGITANO - 12/12/23 

Chants of “genocide Joe” and “cease-fire now” have followed President Biden at stops across the U.S. in recent weeks as protesters demanding a cease-fire in the Israel-Hamas war attempt to bring their message directly to the chief executive at home.

From campaign fundraisers to Christmas tree lightings, Biden stops in Colorado, Massachusetts, Nevada, California, and Pennsylvania included demonstrators in each location, shouting “shame” and “Biden, Biden, you can’t hide; we charge you with genocide.” 

Protests for a permanent cease-fire have occurred at the White House, too. Protesters with a “Jewish Elders to Biden: Stop the Genocide, Ceasefire Now!” sign chained themselves along the White House fence Monday, following weeks of demonstrations around the complex.

In Philadelphia on Monday, outside the Hilton hotel that hosted a campaign reception, some protesters — one of the largest of such recent visits — held up a big sign that read, “genocide Joe & Netan-Nazi,” the latter a reference to Israel Prime Minister Benjamin Netanyahu. It was unclear if Biden saw the sign as he was shuttled out of the venue.

While in Las Vegas, Nev., and Santa Monica, Calif., on Friday, Biden was met with dozens of protesters chanting “cease-fire now,” accusing him of genocide, and holding signs and Palestinian flags. During one fundraiser on his West Coast swing, a protest at a nearby park included a sign that read, “no voters for mass murderer.”

On Dec. 5 in Boston, a protest was taking place down the street from the Shubert Theatre, where Biden was speaking at a fundraiser that featured a performance by musician James Taylor. Hundreds of protesters held up Palestinian flags, yelled out that Biden had blood on his hands and compared him to a war criminal. 

It was unclear if Biden would have seen or heard the protest, because it wasn’t right outside the venue, but attendees who waited in line to enter the theater would have heard chants and likely walked past it and signs that read, “Wanted Joe Biden. The people charge genocide!”

In November, Biden was met with protesters chanting “genocide Joe” in Washington, D.C., about two dozen protesters in Denver with signs saying “free all Palestinian political prisoners” and “end all U.S. aid to Israel,” and a small group of protesters in Nantucket, Mass., holding “free Palestine” signs. 

The demonstrations illustrate the some of the blistering response at home to Biden’s approach to the Israel-Hamas war, which has exposed splinters in the Democratic party. It also comes as many Arab Americans have indicted they don’t plan to support his reelection bid, even if they voted for him in 2020, because the U.S. refuses to back a cease-fire in a war that has killed more than 15,000 people in Gaza since the attack on Israel by Hamas on Oct. 7.

A former Biden aide said the president is aware of protests when he travels and that every trip includes a protest plan, regardless of the event he’s attending. The advance teams and the Secret Service work with local law enforcement on the ground to manage protest situations ahead of the president’s or first lady’s visits, and the advance team is in constant communication with the president’s trip director, who keeps him and his inner circle informed.

Biden hasn’t publicly addressed the many demonstrations against his Israel policy, but he commented Monday on another recent protest in Washington — a pro-Israel demonstration on the National Mall. 

“We must hold to the core values that make us Americans: equality, justice, freedom, dignity, respect. Values that, from the inception of our nation, have shaped the culture, the contributions, and the values of Jewish Americans … including nearly 300,000 Jews who peacefully rallied on the National Mall last month with enormous pride, unity … even joy in the face of extraordinary pain,” he said during a Hanukkah celebration at the White House.

The White House has stressed the right for Americans to peacefully protest, especially throughout the conflict, and also noted the pro-Israel protest Wednesday.

“President Biden respects the right of all Americans to speak out and make their voice heard, as long as their conduct is peaceful. That’s true whether it’s nearly 300,000 Americans rallying on the National Mall in agreement with his support of Israel’s responsibility to defend itself, or the groups that have protested at White House events,” White House spokesman Andrew Bates said.

The cease-fire protests have also followed other officials. Protesters pushing for a cease-fire were in the Senate on Monday, with one climbing a statue inside of the Hart Senate Office Building. And, a Delaware state representative interrupted Vice President Harris during a holiday reception Monday with a cease-fire banner.

Demonstrations against White House policies are inevitable, part of American culture and something that all politicians expect. But the former aide added that while protests do weigh on the president, it’s nothing new given he and his family’s decade in politics.

“They’ve seen and heard the worst things imaginable that could be said about yourself or your spouse or possibly accused of — in the fall of 2020 during the campaign but also anytime they visit a community, no matter how red or blue,” the source said.

The White House in October began to shift its strategy to amplify its concerns about civilians in Gaza amid the Israeli aerial bombardment and subsequent ground invasion. Since then, they have focused on getting humanitarian aid into Gaza and stressed that any civilian death is too many. National security spokesperson John Kirby said Tuesday that the administration is concerned about new reports that Israel used white phosphorus munitions supplied by the United States in an attack in Lebanon.

It’s unclear whether the constant sounds and sights of protests following the president and his team impact any of that decision-making. And pressure has come from elsewhere as well. 

Recent polling showed that the majority of Americans disapprove of Biden’s handling of the Israel-Hamas conflict, and that 50 percent of voters aged 18-29 expressed their disapproval. And some lawmakers, especially in key swing states such as Michigan, have called for longer cease-fires after the recent pause in fighting to release hostages.

The former Biden aide said that protests may be considered when deciding policy.

“I’m sure it weighs on him in terms of policy and politics, but I don’t know it’s personalized in the same way it is for those who haven’t worked in elected office or the public eye for as long as he has,” the source said.

Brett Samuels contributed.

Going Big: Assessing the Growth Ambitions of the Saudi Public Investment Fund

Saudi Arabia’s Public Investment Fund is likely to become the world’s largest sovereign wealth fund by the end of the decade, but raising the resources to fund its ambitious domestic investment program may increase economic and financial risks.

Tim Callen

Dec 12, 2023
Visiting Fellow, AGSIW



The Saudi Public Investment Fund has become synonymous with big and bold investments at home and abroad. The PIF’s spending has upended major segments of the global sports market through its purchase of the English Premier League team Newcastle United, its takeover of four domestic football clubs and the large salaries being paid to attract global stars to the Saudi Pro League, the creation of LIV Golf, and investments in mixed martial arts. Sports, however, are a small part of the PIF’s portfolio amid heavy spending to develop the futuristic city of Neom, establish companies in new and emerging sectors of the domestic economy, such as tourism, defense, and alternative energy, and invest in the global technology sector through the SoftBank Vision Fund and companies such as Lucid Motors and Magic Leap.

As its global and domestic footprint has grown, the PIF’s assets under management have risen rapidly. It is currently the world’s seventh-largest sovereign wealth fund. Looking ahead, the PIF aims to reach 4 trillion riyals ($1.1 trillion) of assets under management by 2025 and 7.5 trillion riyals ($2 trillion) by 2030.

Given the wealth available to the Saudi government, it is likely the PIF will reach these asset targets and become the world’s largest sovereign wealth fund by the end of the decade. However, while achieving these asset targets may be important for political reasons, they are largely irrelevant from an economic standpoint. The targets could be achieved simply by moving assets to the PIF from other public entities – an accounting transaction with little economic value.

What matters for growth and diversification is whether the PIF can make large and efficient investments that help diversify the Saudi economy. Therefore, the PIF’s target of investing at least 150 billion riyals ($40 billion) a year in the domestic economy by 2025 is of greater importance. The PIF has stepped up its domestic investments in recent years, and more broadly there has been some progress toward economic diversification. But can the PIF’s multiyear domestic investment program be financed without increasing the economic and financial risks facing the kingdom?
Rapid Growth, Underpinned by Government Asset Transfers

The PIF’s assets under management increased from 835 billion riyals ($223 billion) at the end of 2017 to 2.7 trillion riyals ($720 billion) at the end of June 2023. At the end of June, international assets accounted for 22% of the PIF’s assets under management (9% in 2017) and domestic assets 78%. International investments include holdings in about 50 U.S.-listed companies with a market value of $36 billion at the end of September, $23 billion in the SoftBank Vision Fund, and $10 billion in the Blackstone U.S. Infrastructure Fund (both at the end of December 2022). Holdings of Saudi equities account for one-third of assets under management, while a growing share of domestic investments are in companies in new and emerging sectors of the economy, the PIF’s five “giga-projects,” and real estate and infrastructure

.

Sources: PIF financial statements, investment circulars, and author calculations.

Unlike sovereign wealth funds in some other oil exporting countries, the PIF does not directly receive a share of the country’s oil export revenue through well-established transfer mechanisms. Almost all oil revenue in Saudi Arabia accrues to the central government budget, and the PIF only receives dividends from its equity stake in Aramco, the national oil company. The PIF’s expansion has therefore been financed from other sources as intended in the PIF’s 2021-25 strategy.

A significant part of the PIF’s growth has come from asset transfers and capital injections from the government and central bank. The government’s transfer to the PIF of 8% of Aramco’s equity accounted for about 32% of the growth in assets under management between the end of December 2017 and the end of June 2023. A further 17% came from capital injections sourced mainly from the proceeds of the 2019 Aramco initial public offering and the central bank’s foreign exchange reserves. Returns on the PIF’s investment portfolio accounted for 31% of the increase and borrowing 5%, with the remaining 15% unexplained

.

Sources: PIF financial statements, investment circulars, and author calculations. The asset and capital transfer estimates were compiled from the PIF’s 2020, 2021, and 2022 financial statements, media reports, and other sources. The compounded annualized rate of return used is 8.4%, as reported by the PIF. The unexplained residual is likely due to the exclusion of some asset transfers that may not have been publicly disclosed or where there is no public clarity about their assessed value and the more accurate recent valuation of some assets that in 2017 were either unaudited or excluded from the accounts.

About one-half of the PIF’s growth has therefore come at the cost of a reduction in assets held elsewhere in the public sector. The public sector’s net asset position and the broader economy will only be better off if the PIF manages the transferred assets more efficiently on a risk/return basis. Further, while the capital injections provided assets that the PIF could reinvest in potentially higher return assets, Aramco equity is very difficult to liquidate. From the Aramco equity stake, the PIF receives dividends, potential capital gains, and perhaps an increased ability to borrow, all of which are important, but little investment flexibility.

A Growing Impact on the Domestic Economy

The PIF plans to invest a minimum of 150 billion riyals ($40 billion) in the domestic economy annually by 2025 and is on course to achieve this. It reportedly deployed around 120 billion riyals ($32 billion) in 2022, compared to an estimated 32 billion riyals ($8.5 billion) from 2018 to the first quarter of 2019. The PIF’s domestic spending in 2022 was equivalent to 10% of central government spending, 11% of total investment, and over 80% of central government capital spending.

The sale of existing assets – so-called capital recycling – has been a key source of financing for new investments. Capital recycling does not affect the asset size of the PIF (as long as there is no difference between the sale price and the value of the asset in the PIF’s accounts), but it frees up resources for new investments.

The PIF has sold its stakes in the Saudi Basic Industries Corporation and the National Gas and Industrialization Company, sold part of its stake in the Saudi Telecom Company, and raised funds through the IPOs of Tadawul and ACWA Power. The SABIC sale raised 259 billion riyals ($69 billion), with the other transactions adding smaller amounts. The use of these proceeds to finance new investments can be seen in the drawdown of assets in the PIF’s “Treasury” pool, which holds more liquid investments. These declined from a peak of around 480 billion riyals ($128 billion) in 2020 (after the SABIC sale) to 130 billion riyals ($35 billion) at the end of June.

The quality of the PIF’s domestic investment is critical for spurring growth and diversification. International Monetary Fund analysis has indicated that the growth benefit of past government investment in the Gulf region has been quite small. The PIF’s governor, Yasir al-Rumayyan, has suggested that PIF investments are more efficient in the sense they have an economic multiplier – the amount that gross domestic product increases for each riyal invested – of between 1 and 2 compared to 0.3 for the central government. If this is the case, it is good news for the Saudi economy, although there is insufficient information available to confirm this claim.
Can the PIF’s Targets Be Met?

There is little doubt the PIF can reach its targets for assets under management. Indeed, they could be reached overnight with the transfer of additional Aramco equity to the PIF – 10% to 12% to meet the 2025 asset target and 40% to 45% to meet the 2030 target. The PIF could also revalue land it has received from the government, some of which is held on its books at a nominal value of 1 riyal. As the Neom, Qiddiya, and Red Sea development projects mature, it would be quite reasonable for the PIF to revalue these lands, even if it will be difficult to derive an accurate value given the unique nature of the assets.

Yet while these transactions would help the PIF meet its targets for assets under management, they would not help it finance new investments in the domestic economy. For this, sizable new capital injections of around 1 trillion riyals ($270 billion) could be needed by 2030. A rough calculation suggests that it may be possible to raise this sum from the sources that have been tapped in the past – foreign exchange reserves, government reserve deposits, proceeds from the Aramco IPO, and borrowing – but doing so would likely entail accepting higher economic and financial risks.

Source: Author calculations. The scenario assumes the PIF’s investments in the domestic economy average 150 billion riyals a year during 2023-25 and then gradually increase to 200 billion riyals a year by 2030, that the share of foreign investment in the portfolio is 24%, and the rate of return is a compounded annual rate of 8.4%. It further assumes that dividends, capital recycling, and a reduction in “Treasury” assets provide 75 billion riyals per year to fund new investment and the rest of the needed resources come from capital injections or borrowing. In this scenario, the PIF would need capital injections of just over 1 trillion riyals by 2030. Net borrowing is assumed to be 30 billion riyals a year during 2024-30, and proceeds from a second Aramco share sale are assumed to be 150 billion riyals.

Foreign Exchange Reserves

Saudi reserves are estimated to be around 560 billion riyals ($150 billion) above the level standard IMF metrics for reserve adequacy would suggest are needed. Saudi Arabia, however, experiences high volatility in its export revenue because of its reliance on oil and has a fixed exchange rate. It is therefore prudent to keep a higher level of reserves to guard against the possibility of a sharp and prolonged downturn in the global oil market.Government Reserve Deposits

Standard metrics are not available for the minimum size of Saudi government deposits, but if it is assumed that covering three months of government spending is appropriate, this would suggest a transfer of around 80 billion riyals ( $21 billion) from these deposits could be possible. Again, the inherent volatility of the Saudi economy means that any reduction in deposits – which are already much lower than a decade ago – would increase risks to the fiscal position if oil prices were to drop sharply.Second Aramco Share Sale

Selling a further stake in Aramco is possible, although the Israel-Hamas conflict, growing concerns about climate change, and potential obstacles to an international issuance make this more likely to occur on the domestic market. This could constrain the size of any issuance given the domestic market is smaller than those in London or New York.Borrowing

The PIF’s Islamic bond issuance in October raised just over 13 billion riyals ($3.5 billion), and demand heavily exceeded supply. Given the PIF’s low debt, there is considerable scope for additional borrowing, although the authorities will need to carefully manage the overall public sector borrowing envelope given potential future demands from the central government and other public sector entities. Also, notably, investment financed by borrowing increases both the assets and liabilities of the PIF – only if the rate of return on investment exceeds the cost of debt will borrowing result in an increase in net assets.

There may be other sources of capital the PIF can access. Saudi Finance Minister Mohammed Al-Jadaan has suggested that fiscal surpluses could be transferred to the PIF, although prospects for surpluses are currently slim – in the 2024 budget, the Ministry of Finance projects a fiscal deficit in each of the next three years. Other sources of capital may also be available, although the lack of transparency across the broader public sector makes them difficult to identify. Lastly, the General Organization of Social Insurance has considerable foreign and domestic assets that are invested to meet current and future pension liabilities. It is essential that these assets continue to be kept separate from the PIF and that the pension fund’s investment decisions remain independent.

Investment Targets

There is little doubt that the PIF can meet its 2025 and 2030 asset targets, but whether they are met or not should be of little concern to economic policymakers. What matters for the success of the Vision 2030 economic transformation agenda is investment in the domestic economy. The PIF’s annual investment target should be prioritized over its target for assets under management, and the size of its domestic investment should be regularly disclosed to track progress toward the target.

Finding the capital to finance the PIF’s domestic investment plans, however, may be challenging and could entail accepting a higher degree of economic and financial risk. The costs and benefits of new capital injections and additional borrowing will need to be carefully assessed to ensure that unnecessary risks are avoided in the quest for growth. Indeed, the PIF cannot be looked at in isolation from the rest of the public sector. The finalization of ongoing work to introduce a comprehensive public sector asset-liability management framework is essential to help manage the risks that could emerge as the PIF continues its rapid growth.

Related

Increased Spending Raises Risks to the Saudi BudgetTim Callen

Oct 4, 2023

Public Investment Fund Grows, Bets Big on TechRobert Mogielnicki  Jan 12, 2022

A New Era for Gulf Sovereign Wealth Funds?  October 14, 2021

Tim Callen
is a visiting fellow at the Arab Gulf States Institute in Washington.
The views represented herein are the author’s or speaker’s own and do not necessarily reflect the views of AGSIW, its staff, or its board of directors.

U.N. Seeks Repayment of $63.6 Million From Former Official

The official was fired after investing millions in U.N. funds in housing and energy projects that went badly. He is contesting the order.

Vitaly Vanshelboim in 2016. He has been ordered to repay millions to the U.N. after he lost vast amounts of funds.

Credit...Eugene Gologursky/Getty Images

By David A. Fahrenthold and Farnaz Fassihi
David A. Fahrenthold reported from Washington, and Farnaz Fassihi from New York.
Dec. 12, 2023

The United Nations has ordered one of its former officials to repay $63.6 million personally, after he lost a vast amount of U.N. funds by entrusting them to a man he met at a party, according to court filings.

The huge financial penalty that the U.N. is seeking to impose on the former official, Vitaly Vanshelboim — once the second-in-command at the U.N.’s logistics agency — is the latest fallout from a scandal that The New York Times first reported last year.

Mr. Vanshelboim and his boss, seeking to raise their profile within the U.N., amassed millions for the organization by charging governments and other U.N. agencies extra for construction jobs. Then they invested about $60 million with companies all linked to a British businessman named David Kendrick, defying internal warnings and dangerously concentrating their risk.

The investments were meant to finance renewable energy and housing projects. But they went poorly, according to U.N. audit reports. An inquiry last year found that the U.N. had recouped only about 10 percent of its investment.

Hours after The Times reported on the disastrous investments, Mr. Vanshelboim’s boss, Grete Faremo, resigned.

Mr. Vanshelboim, who is Ukrainian, was fired by the U.N. in January, after an internal investigation. In a recent filing with the U.N.’s internal court system, Mr. Vanshelboim revealed other aspects of his punishment: He said he was fined a year’s salary and told to repay $63,626,806 personally. If he does not repay the money, the filings said, he will not be eligible for a U.N. pension.

Mr. Vanshelboim has asked the U.N.’s court system, which often handles personnel disputes, to overturn the firing, the fine and the order to repay. The court will hold a virtual hearing on the case early next year.

Mr. Vanshelboim declined to comment. He has not been charged with any crime

Much of Mr. Vanshelboim’s case is not public. The available documents do not say how the U.N. calculated what he owes.

Under U.N. rules, staff members who are found to be “willful, reckless or grossly negligent” can be made to reimburse “any financial loss suffered by the United Nations as a result of the staff member’s conduct.” In this case, Mr. Vanshelboim’s office invested $60 million, but got $6.2 million back. It also gave $3 million to a nonprofit run by the businessman’s daughter.

The businessman, Mr. Kendrick, has denied any wrongdoing. A lawyer for Mr. Kendrick said that his companies are still working on the projects funded by the U.N. and “very significant progress has been made.”

Stéphane Dujarric, a spokesman for Secretary General António Guterres of the U.N., declined to comment on the case, citing the internal dispute and what he said were criminal investigations in Denmark and Finland — the locations of U.N. offices that handled the investments.

A review by the accounting firm KPMG commissioned by the U.N. last year blamed the bad investments, in part, on a “culture of fear” that prevented underlings from raising questions about what Mr. Vanshelboim and Ms. Faremo were doing.

That was echoed by a former staff member who talked to The Times last year, who said the investments were a product of a U.N. culture in which bosses held unquestioned power. “What do you call it when you believe you’re God?” said Jonas Svensson, a former employee.

Since the scandal broke, the U.N. has shuttered the investment program that Mr. Vanshelboim and Ms. Faremo created, and required their logistics agency — the Office of Project Services — to give back money it had stockpiled.

The U.S. mission at the U.N. has demanded transparency about the findings of the internal investigations into Mr. Vanshelboim’s conduct and criticized the U.N. for not making more details about his case public.

“We welcome attempts to recover lost funds,” said Ambassador Chris Lu of the U.S. mission to the U.N., adding that the United States wants changes to the business model and governance of the Office of Special Projects.


David A. Fahrenthold is an investigative reporter writing about nonprofit organizations. He has been a reporter for two decades. More about David A. Fahrenthold


Farnaz Fassihi is a reporter for The New York Times based in New York. Previously she was a senior writer and war correspondent for the Wall Street Journal for 17 years based in the Middle East. More about Farnaz Fassihi

Inside the Little-Known U.S. Arms Control Center in Daily Contact With Russia

U.S. State Department  in Washington, D.C. 

Nicholas Kamm—AFP/Getty Images

BY MATHIAS HAMMER

DECEMBER 12, 2023 

On Sept. 11, 2001, the U.S. prepared for a dramatic and sudden military response to the worst attack on American soil in the country’s history.

But there was a problem. Normal military communications between the U.S. and Russia had been severed after a hijacked plane crashed into the Pentagon. As the U.S. sought to move its military forces to the highest state of peacetime readiness, there were concerns that this might raise alarm bells in Russia.

One line to Moscow was left standing.

“At this time the United States has moved to DEFCON THREE (3). This is not directed at Russia, this is due to current emergency situations,” the message read, sent to the Russian Ministry of Defense, on the banks of the Moskva River.

Since 1988, the State Department’s Nuclear Risk Reduction Center (renamed the National and Nuclear Risk Reduction Center in 2021) has maintained a direct line to the Russian Armed Forces.

In the corner of their office today, in a windowless room on the fifth floor of the State Department in Washington D.C., hangs a framed printout of the message sent to Moscow. It's the clearest distillation of the NNRRC’s task to date, State Department officials say: to avoid the chance of misunderstandings leading to an accidental conflict between the two superpowers.

Established after a string of near-misses that nearly led to an all-out nuclear conflict during the Cold War, the NNRRC became the central nervous system for the U.S.’s arms control efforts, receiving thousands of notifications every year about weapons movements, warhead numbers, and military exercises from Russia and other partners. Today, the center takes in messages from over 50 countries in service of a range of treaties covering nuclear, conventional weapons, chemical, and cyber issues.

Read More: The Collapse of Global Arms Control

Even so, there is little doubt that the connection to Moscow is the center’s most important line. The NNRRC has two back-up facilities and its lines to Russia go along both satellite and undersea cables to ensure that the system stays up and running no matter what.

At any given time, a handful of case officers staff the center, sending regular messages to their Russian counterparts. On a series of large monitors, messages arrive in a mix of Russian and uneven English every two hours. The walls of the center are lined with rosy-tinted pictures from the tail end of the Cold War, depicting the signings of the founding of the NNRRC and other arms control agreements. During this golden age of arms control, the U.S. and the USSR were able to cooperate on a key set of treaties that contributed to an 85% reduction in the nuclear stockpiles controlled by the Kremlin and the White House. Today, that era feels increasingly distant.

Soviet General Secretary Mikhail Gorbachev and U.S. President Ronald Reagan sign the INF Treaty in the East Room of the White House.

Bettmann Archive

One of the Only Remaining Lines to Russia

Few parts of the U.S. government are in as regular contact with Moscow as the NNRRC, and communications between the U.S. and Russia have slowed down dramatically since Russia’s invasion of Ukraine. Russia has opted out of a number of landmark arms control agreements, and as the U.S. and Russia stop sharing information about their military forces, arms control experts fear that the risk of nuclear miscalculation is once again on the rise.

Up until March of this year, the NNRRC received more than 1,000 messages annually from Russia, overwhelmingly under the New START Treaty. But after Russia suspended New START and a number of other arms control agreements, the day-to-day updates about Russia’s nuclear forces have stopped coming in. All that is left is the occasional notification about ballistic missile launches, a last holdover from an era where Russia and the U.S. cooperated on arms control.

So far, it appears that Moscow is content to keep on staffing its NRRC. A State Department official says that the day-to-day communications have continued unabated. “It seems that they share our view that there is a great value in maintaining this line,” says the official.

President Barack Obama delivers remarks about the New START Treaty during a news conference with Secretary of State Hillary Clinton, left, and Defense Secretary Robert Gates at the White House on March 26, 2010. 

Chip Somodevilla—Getty Images

“The fact that the Russian government is committed to keeping the NRRC platform going is really one of the small positive signs that we have to keep holding on to at this point,” says Rose Gottemoeller, former Under Secretary of State for Arms Control and International Security and co-author of a recent report on the NNRRC.

But the total notifications coming from Russia following the suspension of New START will likely amount to less than 10% of what they were in 2019, before COVID caused a temporary reduction in communication, officials say.

“A massive reduction in notifications,” says William Alberque, an arms control expert at the International Institute for Strategic Studies, “means a massive reduction in the sharing of information that the two sides use to prevent accidental conflict or ruinous arms races and an increase in the risk of potential conflict.”

Read More: Here’s How Bad a Nuclear War Would Actually Be

Over time, nuclear experts fear, each side's picture of the other’s nuclear arsenal will grow ever more opaque, increasing the chance of misunderstanding. “That lack of certainty may actually encourage things like an arms race,” says Alberque.

While “we don't depend on notifications alone to understand the status of the Russian strategic nuclear force,” Gottemoeller says, “we have lost something there. There's no question about it.”
Moscow Remains Silent

While the NNRRC continues its task of reducing the risk of accidental nuclear escalation, it was not designed as an arena for nuclear negotiations or to prevent purposeful escalation. For this, more traditional diplomatic efforts are needed.

For months, the administration has been pushing to bring an uncooperative Russia back to the table for arms control talks. In June, National Security Advisor Jake Sullivan said the U.S. is seeking dialogue with both Russia and China on nuclear arms “without preconditions.” Jill Hruby invited international observers to the nuclear test site in Nevada, to prove that the U.S. is not breaking the three-decade long ban on nuclear testing. And Washington D.C. has sent a set of informal arms control proposals to Moscow, Russian officials have confirmed.

Soviet Foreign Minister Eduard Shevardnadze, center, signs the Nuclear Risk Reduction Center Agreement in the White House's Rose Garden in Washington, D.C. on September 15, 1987.

Mark Reinstein—Corbis/Getty Images

So far, however, there’s been nothing but crickets from Moscow. The Russian embassy in Washington, D.C. did not respond to a request for comment. “They may not engage with us, and that’s a challenge,” says a senior State Department official, requesting anonymity to speak candidly. And when asked about the U.S. proposal by Izvestia, a Russian newspaper, Russia’s Deputy Foreign Minister Sergei Ryabkov said, “the situation is not conducive to the exchange of notifications, even on such key issues.”


Few arms control experts expect a quick reopening of talks between the U.S. and Russia. “Unless this situation in Ukraine comes to some kind of solution which both U.S. and Russia can live with,” Russia and the U.S. seem unlikely to return to the table for serious talks, says Andrey Baklitsiy, an arms control expert at the UN Institute for Disarmament Research.

Read More: She's Spent a Decade Fighting to Ban Nuclear Weapons. The Stakes Are Only Getting Higher

But in the absence of an arms control breakthrough, the NNRRC will continue its work maintaining and preserving the emergency line between the U.S. and Russia. Many experts say that establishing a similar risk reduction line with Beijing and other nuclear states could be a realistic move towards reducing the world’s growing nuclear risks.

At the NNRRC, they are taking steps to prepare for such an eventuality. The center is experimenting with machine translation in the case they eventually reach the limit of how many languages they can staff the center with 24/7.

In the meantime, watch officers will remain quietly at their computers, monitoring the lines.

Japan's Zero Fighter Might Be the Best World War II Fighter



December 12, 2023 

Today, there are fewer than twenty surviving Japanese Zero fighters from World War II in the world, and only a handful are in factory original condition. Most are in museums were restored wrecks, and the aircraft that are still airworthy have had their engines replaced with American units.

by Peter Suciu 


Japan’s Zero was a legendary fighter that made the U.S. military very nervous in the opening days of World War II in the Pacific Ocean after Pearl Harbor. But did it become obsolete? When Mitsubishi AGM Rei-sen entered service in 1940, western military experts shrugged off the reports that the Japanese military possessed a world-class warplane. How wrong they were. The aircraft – better known as the “Zeke” or “Zero” – dominated the skies in the early stages of the Second World War. The single-seat, low wing monoplane proved to have been the most capable carrier-based fighter in service at the time, and it gave the Japanese naval forces almost guaranteed air superiority.



The A6M, which was designed by Horikoshi Jiro, was also noted for being the first carrier-based fighter able to best its land-based opponents. However, beginning in 1943, the tide turned against the Zero with the introduction of more capable Allied fighters.

Japan's Zero Fighter: It Was Fast and Agile

The A6M was produced by Mitsubishi Heavy Industries and was first powered by a Nakajima Sakae radial air-cooled engine of 14 cylinders (two staggered rows of seven) that developed 1,020 horsepower. It was hardly a powerful engine, but designers did everything possible to reduce weight.


However, the effort to make it fast and light also meant that it had very little armor and was vulnerable to even the lightest caliber enemy armament. That wasn’t a problem when the aircraft’s speed and agility allowed it dominate the skies, but as more capable Allied aircraft went up against the Zero, it proved deadly for the Japanese pilots. It certainly was never even able to gain mastery over the Grumman F4F Wildcat, whose heavier armament and robust construction compensated for its slightly inferior performance and agility.

Later models of the aircraft were equipped with a 1,130-horsepower engine to turn its three-blade constant-speed propeller. The aircraft’s top speed was 350 miles per hour (565 km/h) at nearly 20,000 feet (6,100 m).

The Zero was armed with two 7.7-millimetre machine guns and two 20-millimetre cannons in its wings; it could carry two 132-pound (59.9-kilogram) bombs under the wings.

Zero Isn’t Really Its Name

The aircraft was never officially designated the “Zero,” and it wasn’t even known as such by the pilots that flew the aircraft. The Mitsubishi A6M Rei-sen was officially designated by the Imperial Japanese Navy as the “Rei-shiki-kanj -sent ki – Type 0 Carrier Fighter,” and the more common moniker comes from the fact that it was essentially named for the Japanese year 2600 (1940).

Japanese military equipment of the era was named for the year – as noted by such weapons as the Type 99 light machine gun that was introduced in 1939. Interestingly, the same year the Mitsubishi A6M was introduced, the Imperial Japanese Army introduced the “Hyaku-shiki kikan-tanj ,” also known as the Type 100 submachine gun. It remains entirely unclear why the IJN used “0” while the IJA used “100” for the same year.


Most Produced Japanese Aircraft of the War

More Zeroes were manufactured during the Second World War than any other Japanese aircraft, and production continued until the very end of the conflict. Sources vary, but somewhere between 10,499 and 10,939 were produced during the war in the Pacific.

Some 125 Zeros participated in the sneak attack on Pearl Harbor on December 7, 1941 and only nine failed to return.

Almost Zero Survive

Today, there are fewer than twenty surviving Zeros in the world and only a handful in factory original condition. Most in museums were restored wrecks, and the aircraft that are still airworthy have had their engines replaced with American units. Only the Planes of Fame Museum in Chino, California has an intact Zero with the original Sakae engine.

The aircraft is so rare that movie and TV productions have had the single-seat North American T-6 Texan – heavily modified and painted with Japanese markings – stand-in for the Zeros. Such aircraft were seen in the film Tora! Tora! Tora! and The Final Countdown, as well as the TV series Black Sheep Squadron.



An original A6M5 Type 0 Model 52, a variant built in the latter stages of the Second World War, did appear in the 2001 Michael Bay epic Pearl Harbor, the model is anachronistic for the era. In addition, that aircraft and the other replicas used in the film were painted green in color, as if they were Japanese Army aircraft. In fact, the Zeros of the IJN that raided Pearl Harbor were silver, but Bay said he liked the way the aircraft looked and that it would help audiences differentiate the “good guys from the bad guys.”

About the Author
Peter Suciu is a Michigan-based writer who has contributed to more than four dozen magazines, newspapers and websites. He regularly writes about military hardware, and is the author of several books on military headgear including A Gallery of Military Headdress, which is available on Amazon.com. Peter is also a Contributing Writer for Forbes.

Main image is from Shutterstock as well as the first intext image. All others are Creative Commons.