Thursday, December 31, 2015

Abayomi Azikiwe, PANW Editor, Quoted in Mercury News Daily: Major Overhaul Expected for Chicago’s Police Dept.
Dec 31, 2015
Adam Mitchell

Emanuel noted that on audio recordings of communications between dispatchers and officers on the scene that night, several officers are heard “frantically” asking for a Taser before officer Jason Van Dyke shot 17-year-old Laquan McDonald.

Activists were skeptical Wednesday that the changes would reverse decades of problems and mistrust between Chicago residents and police.

Mayor Rahm Emanuel says every Chicago police patrol auto will be equipped with a Taser following a series of high-profile shootings by officers.

A not guilty plea by a white Chicago police officer charged with the murder of a black teenager past year illustrates the “arrogance” and “combative” nature of USA police, an African-American journalist in Detroit says. The shooting occurred in October of a year ago. Officers will also be encouraged to call in additional personnel during incidents, Escalante said.

The mayor said: “Our police officers have a very hard and risky job”.

Ted Pearson is a leader of the Chicago Alliance Against Racist and Political Repression, which advocates for the city to have a civilian police accountability council that isn’t appointed by the mayor.

On Monday, the father of another teen fatally shot by a Chicago police officer filed a wrongful death lawsuit against the city. Yet that didn’t stop the latest shooting.

“There’s a difference between whether someone can use a gun and when they should use a gun”, Emanuel said at the news conference.

Chicago police fatally shot a 19-year-old man and 55-year-old woman over the weekend, again putting a spotlight on one of the nation’s largest police departments and raising questions about whether its officers are too…

“These deaths by the hands of police are gaining a horrendous reputation for the United States both domestically as well as internationally”, said Abayomi Azikiwe, editor at the Pan-African News Wire. A 55-year-old neighbor, Bettie Jones, was accidentally hit and killed by gunfire.

Emanuel and Interim Police Superintendent John Escalante on Wednesday will announce a “major overhaul” in policy covering police responses to incidents and the use of physical and lethal force, a mayoral spokeswoman said.

Police have said no officers or vehicles on the scene were equipped with one. That announcement came after a court forced the city to release a video from 2014 showing a police officer shooting a black 17-year-old, Laquan McDonald, 16 times.

Currently, about 20 percent of Chicago officers who respond to service calls have access to stun guns. According to Chicago Police spokesman Anthony Guglielmi’s emailed statement, the training will begin on June 1.
Kim Jong Un in Rare Show of Grief Over Aide's Death
Mr Kim Jong Un paying his last respects to Mr Kim Yang Gon, whom he described ashis faithful helper and close comrade-in- arms. Mr Kim Yang Gon died in a traffic accident on Tuesday. A state funeral was held yesterday. PHOTO: REUTERS

North Korean leader's public display of sorrow reflects his close ties with key confidant

SEOUL • North Korean leader Kim Jong Un has expressed deep sorrow over the death of a top aide, displaying unusual intimacy towards his "close comrade-in-arms whom nobody can replace".

Mr Kim Yang Gon, a top party official and key confidant to Mr Kim Jong Un, and who oversaw relations with the South, died in a traffic accident on Tuesday, official media said. A state funeral was held yesterday.

Leader Kim has earned a reputation for ruthlessness after having his uncle executed and sacking other high-ranking officials in a purge to consolidate his reign, which began in 2011 when he replaced his father Kim Jong Il.

Analysts have said that foul play in the death of Mr Kim Yang Gon could not be ruled out, citing possible jealousy among political rivals.

But the tone used in official news reports yesterday was in stark contrast to those announcing past political purges, with Mr Kim Yang Gon described in glowing terms.

North Korea's state-run newspaper Rodong Sinmun carried a front page picture showing a grieving Mr Kim Jong Un touching the face of his aide, whose remains were laid on a bier decorated with flowers.

"He could hardly repress his bitter grief for a long while, his hands on the cold body of the revolutionary comrade," the official news agency KCNA said.

"He said Mr Kim Yang Gon was his faithful helper and close comrade-in-arms whom nobody can replace," it added.

Other photos showed Mr Kim, accompanied by party and military officials, bowing deeply in front of the bier during their visit on Wednesday.

The KCNA's 2013 announcement of the death of Mr Jang Song Thaek, meanwhile, condemned him as a "traitor" to the nation and derided him as "despicable human scum... worse than a dog".

The North did not reveal details about the accident said to have killed Mr Kim Yang Gon, but a disproportionately high rate of fatal crashes among the North's powerful elite has been attributed to reckless driving, often under the influence of alcohol.

Their vehicles sport distinctive plate numbers allowing them to flout traffic laws, while they often attend inner-circle feasts or parties without chauffeurs, according to defectors.

Meagre infrastructure, including dark, potholed streets in the suburbs where such exclusive parties take place, are also to blame, the South Korean daily Joongang Ilbo said.

Mr Kim Yang Gon's predecessor, Mr Kim Yong Sun, who helped arrange the first North-South summit in 2000, also died in what was described as a traffic accident in 2003.

Mr Ri Je Gang, another top party official, also reportedly died in a car crash in 2010, at a time when he was rumoured to be involved in a power struggle with Mr Jang.

Mr Jang himself survived a car accident in 2006 before being executed.

Iran's IRGC Denies Firing Rockets Near U.S. Warship in Persian Gulf  
2015-12-31 19:18:00

TEHRAN, Dec. 31 (Xinhua) -- Iran's Islamic Revolution Guards Corps (IRGC) on Thursday denied that its forces had fired rockets near a U.S. aircraft-carrier in the Persian Gulf, according to IRGC's website.

"Over the past week or the period claimed by the Americans, the naval forces of the IRGC have not had military exercise and have not launched any rocket or missile in the Strait of Hurmoz" in the Persian Gulf, the chief of IRGC's public relations, Ramezan Sharif, was quoted as saying.

"The dissemination of such false news, under the present circumstances, is more like a psychological warfare," Sharif said.

Western media reported on Tuesday that the IRGC fired rockets near the U.S. aircraft-carrier Harry S. Truman as it was about to enter the Persian Gulf on Saturday.

The report came when U.S. Treasury Department announced on Wednesday that it was considering sanctions against a number of Iranian and international individuals and agencies for their alleged involvement in developing Iran's ballistic missile program.

Iranian Foreign Ministry Spokesman Hossein Jaber Ansari said here on Thursday that his countyr will respond to any new U.S. sanctions and interfering measures over its defensive missile program.

It is believed that the U.S. move is a response to Iran's recent test of a ballistic missile.

"Such a move is illegal, unilateral and tactless, and Iran has already noted this point to the United States," Jaber Ansari was quoted as saying by official IRNA news agency.

"Iran's missile program has nothing to do with the recent agreement over Iran's nuclear program, and nothing can prevent Iran from its legitimate and legal right to strengthen its defensive foundations and national security," he said.

In October, Iran announced the tests of long-range Emad missile which could be guided and controlled until hitting the target with high precision.

Later, Iran's Defense Minister Hossein Dehqan said the Emad missile was "totally conventional," dismissing a United Nations experts' report in December that Iran violated the UN Security Council Resolution 1929 by test-firing the Emad missile capable of delivering a nuclear warhead.

The UN report said the Emad ballistic missile has a range of "no less than 1,000 km with a payload of at least 1,000 kg."

Under Resolution 1929, Iran is prohibited from working on ballistic missiles capable of delivering nuclear warheads.

Dehqan also said the October test was based on Iran's own interests for enhancement of its deterrent power. "Iran will not accept any restrictions in this regard," he added.

Tehran is believed to have the largest ballistic missile arsenal in the Middle East and has developed a 2,000-km missile.

Iran and six world powers -- Britain, China, France, Germany, Russia and the United States -- signed a historic nuclear deal in July to imposes limits on the Iranian nuclear program in return for lifting of economic sanctions.

Under the deal, Iran will also receive natural uranium from Russia and Kazakhstan to be used in nuclear reactors for future energy production.

Earlier, a total of 11 tons of low-enriched uranium has been shipped to Russia from Iran while Norway has helped verify a shipment of 60 tons of raw uranium to Iran, as part of the nuclear deal.

Board members of the United Nations nuclear agency on Tuesday adopted a resolution to close the investigation into whether Tehran once had a nuclear weapons program, upon a review of Iran's implementation of its commitments under a nuclear deal endorsed by the UN Security Council in July.

Also this month, after a 12-year investigation of Iran's suspected nuclear plans, the International Atomic Energy Agency (IAEA) decided to close the process in light of the nuclear deal.

Board members of the United Nations nuclear agency adopted a resolution to close the investigation into whether Tehran once had a nuclear weapons program, upon a review of Iran's implementation of its commitments.
China’s Latest Military Endeavor Will Put It In An Exclusive Club
National Security/Foreign Policy Reporter
5:56 PM 12/31/2015

The Chinese Defense Ministry announced Thursday that it is in the process of building its second aircraft carrier, making China the fourth country to have multiple active aircraft carriers — joining India, Italy and the U.S.

Defense Ministry spokesman Yang Yujun told media that the new carrier is a Chinese design and will be built in the port city of Dalian. Once complete, the ship will be first domestically built aircraft carrier in the Chinese navy. Yujun did not specify a completion date for the ship.

“China has a long coast line and a vast maritime area under our jurisdiction. To safeguard our maritime sovereignty, interests and rights is the sacred mission of the Chinese armed forces,” said Yang, according to a Reuters report.

The new ship’s blueprint is based on China’s current aircraft carrier, the Liaoning. The new ship will have a displacement of approximately 50,000 tons, which is 10,000 less than the Liaoning. Originally a Soviet-era Kuznetsov class ship called the Varyag, China purchased the Liaoning in 1998 and refitted it in 2012.


The Defense Ministry’s announcement comes as China continues to assert itself in the South China sea. Several man-made islands have been created in the area, allowing the Chinese military to create new staging areas and secure what is thought to be a trove of natural gas and oil lying beneath the sea.

A recent Department of Defense report has stated that China “could build multiple aircraft carriers over the next 15 years.”

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Cleveland Balancing Safety, Rights of Tamir Rice Protesters
CLEVELAND — Dec 31, 2015, 4:00 PM ET

Photo: Lee Patterson, left, of Baltimore, joins demonstrators in Baltimore, Tuesday, Dec. 29, 2015, in protest of recent police shootings, including a grand jury's decision not to indict two white Cleveland police officers in the fatal shooting of Tamir Rice, a black 12-year-old boy who was playing with a pellet gun.

Cleveland officials said Thursday they're balancing public safety with protesters' First Amendment rights as small groups of people continue to criticize a decision not to indict police officers in the fatal shooting of 12-year-old Tamir Rice.

"This is what happens in a democracy," said Police Chief Calvin Williams. "People have the right to get out there and express themselves, and it's our job as a department, as a city, to protect them while they're doing that."

Protests over the Tamir Rice decision in Cleveland have been small so far compared to other cities that experienced unrest after police shootings or unpopular verdicts.

The size of crowds has dwindled from more than 100 people Monday after the grand jury's decision to between 45 and 50 on Wednesday, Williams said.

Decisions on arrests will hinge on whether actions jeopardize safety and if protesters ignore police requests to disperse in such situations, Williams said.

Protesters have been allowed to lay down on streets to block them, but weren't allowed for safety reasons to walk onto an expressway that cuts across downtown, said Williams and Cleveland Mayor Frank Jackson.

Rice was shot in November 2014 at a Cleveland recreation center while playing with what turned out to be a pellet gun.

In announcing the grand jury decision, Cuyahoga County Prosecutor Tim McGinty said it was "indisputable" that the boy was drawing the pistol from his waistband when he was gunned down. McGinty said Tamir was trying to either hand the weapon over to police or show them it wasn't real, but the officer who shot him, Timothy Loehmann, and his partner, Frank Garmback, had no way of knowing that.

Tamir was shot by Loehmann within two seconds of the officers' police cruiser skidding to a stop near the boy.

McGinty said police radio personnel contributed to the tragedy by failing to pass along the "all-important fact" that a 911 caller said the gunman was probably a juvenile and the gun probably wasn't real.

Also Thursday, Jackson said a review of any administrative charges against the officers will be done deliberately.

"We will take whatever time is necessary in order to do this fairly, justly, due process at its core, to come to the right decision," Jackson said.
Biafra: Why I Can’t Release Kanu – Buhari
December 30, 2015
Nigerian Vanguard

By Emmanuel Aziken, Emma Ujah, Clifford Ndujihe, Dapo Akinrefon, Charles Kumolu, Godfery Bivbere, Joseph Erunke, Nkiruka Nnoorom, Emmanuel Elebeke, Jonah Nwokpoku, Ediri Ejoh & Prince Okafor

ABUJA—President Muhammadu Buhari, on Wednesday, explained why he cannot release leader of the Indigenous People of Biafra, IPOB, Nnamdi Kanu.

The President disclosed that Kanu has two passports, one Nigerian, one British and came to the country without using any passport.

President Buhari also made a robust defence of the integrity of all 36 ministers in his cabinet challenging anyone with a contrary view to present evidence against such a minister.

Speaking in his first media chat, the president said the first gains of the war against corruption would become evident by the end of March, next year, even as he accused erstwhile National Security Adviser, Col. Sambo Dasuki (retd.) of having allegedly committed atrocities against Nigeria through reckless disbursement of billions of government funds.

The president made his first dismissal of the agitation for Biafra stating that Igbo were in strategic position in the cabinet including holding the petroleum and labour portfolios besides the stewardship of the Central Bank of Nigeria, CBN.

President Buhari also assured of the administration’s readiness to implement the N5,000 monthly transfer to vulnerable Nigerians even as he said the campaign promise did not emanate from him but from his then running mate, Vice-President Yemi Osinbajo. He also frowned at the allocation of N47.7 billion for the purchase of vehicles by the National Assembly even after the lawmakers had collected car loans from the government.

The president, who expressed his readiness to negotiate with any credible leadership of the Boko Haram sect for the release of the kidnapped Chibok girls also disclosed his readiness to consider a ban on the use of hijab should the trend of bombing through young veiled girls continue.

Noting the dire economic conditions facing the country, President Buhari was, nevertheless, against the immediate devaluation of the naira even as he revealed that N1.5 trillion had been recovered into the federation account through the implementation of the Treasury Single Account.

The president also spoke on the fate of the Islamic cleric, Sheikh Ibraheem El-Zakzaky, saying that he had allowed the Kaduna State government and the military authorities to take the lead in the investigations. He affirmed that the cleric had over time overstepped his bounds to the distress of the communities he lived.

On the panel that interviewed the president yesterday were Kayode Akintemi, Channels TV; Dr. Ngozi Anyaegbulam, Media World International; Munir Dan Ali, Daily Trust and Ibanga Isine, Premium Times.

On the ministers

“I don’t think I tolerate corruption, I don’t think I picked anybody that I know will embarrass my government. But if you have any evidence about any of my ministers, I accept responsibility for the 36 ministers that I have.

“I don’t think I took anybody among the ministers who has got a case in court. Tell me one out of the 36. I don’t think I will deliberately make that mistake.”

Asked if he would sack any of the ministers if he or she is charged to court for corruption, he said:

“No, I will insist that the case go through the courts.”

On the location and condition of the Chibok girls, he said he would be prepared to negotiate with credible elements in the Boko Haram leadership if there is precise intelligence that could help return the girls to their parents. He, however, affirmed that presently he did not superior intelligence on the fate of the girls.

“We are still keeping our options open. If a credible leadership of Boko Haram can be established and they tell us where those girls are, we are prepared to negotiate with them without any pre-condition. This we have made absolutely clear. But while they are keeping the Chibok girls, they must not get away with the idea that we will not attempt to secure the rest of Nigeria.

“We have no firm intelligence on where they are physically and what condition they are in. But what we believe from our intelligence, they keep taking the girls around, they are not keeping all the girls in one place, we don’t know how many divisions they made of them and where they are.

On the crisis in Kaduna involving followers of the Shite leader, Sheikh El-Zakzaky, he said:

“I expect the Kaduna State Government to set up a judicial inquiry because it happened in Kaduna, in one of the cities and it has been there for the last twenty years from what I have been reading from papers. They will occupy a federal highway, sometimes from Kano to Kaduna. This is what I heard.

“We have a system of investigation, the military that was involved too have a tradition of investigation and I am the head of the federal government, I have to wait for the official report before I can come out as head of the federal government and make a statement. So I am allowing the Army and the Kaduna State government to submit their report of inquiry. Meanwhile it does not mean that the police, the SSS and other directorate involved are not doing their own part of constitutional role.
Frowning at the activities of the group, he said:

“Unfortunately it is very serious. How can any group proclaim statehood in a state? I don’t want to speak about it in details now, I better leave it still after the report of the inquiry but there are a number of clips I saw, where some excited teenagers were visually hitting the chest of a general, mounting road blocks and threatening them with missiles.

On the contentious issue of subsidy, the president said that by the end of the next quarter that there would be no more talk about subsidy in the price of petroleum.

Money recovered

“Money has been recovered but whatever we recover, has to end up in court because I feel personally that Nigerians are entitled to know the truth and the truth will be what the court has discovered by the submission made to them in terms of documentation and the documentation includes the bank statement of where our money was lodged, when it was lodged and how much. Whether it is petrol from NNPC or Customs and Excise or money directly from the Central Bank of Nigeria.”

Told that he was limited in his disclosure of his assets, the president said that he had declared his assets at least four times in the past.

The president expressed reservation on proposals by the National Assembly to commit N47.7 billion to purchase new vehicles after members had collected car loans from the government.

N5,000 monthly stipend for the less privileged

“When my VP was quoted, how can I come here and disown it? First, I believe in getting facts, how many are involved? How are we going to do it? Is it state by state or geo-political zone by geo-political zone? In trying to get the bottom of the problem, a lot of work has to be done and if it is undertaken, we have to look at it very well.”

On Dasuki, Kanu and others

Asked on the alleged flouting of court orders by the state on the issue of Dasuki and detained Biafran agitator, Nnamdi Kanu, he said:

“Technically, if you see the kind of atrocities those people committed, if they jump bail? I am sorry to say this publicly…the former president just wrote to the governor of the CBN and said give N40 billion to someone while you have two million Internally Displaced Persons, what kind of country do you want to run?

“The one you called Kanu, do you know he has two passports? One Nigerian, one British and he came to this country without using any passport? Do you know that he brought sophisticated equipment into this country and started broadcasting for Radio Biafra? There is a treasonable charge against him and I hope the court will listen to the case.

Biafra and marginalisation of Ndigbo

“They say they are marginalised but they have not defined the extent of marginalisation. Who is marginalising them? Where? Do you know? Choosing a minister is not a matter of ethnicity, it is a matter of the constitution. I am limited by what the constitution says that there must be a member of the executive council from each state. There is a lot of partisan politics in it. Who is the Minister of State for Petroleum? Is he not an Igbo? Who is the governor of the CBN? Is he not an Igbo? Who is the Minister of Labour? Who is the Minister of Science and Technology? What do they want? I stood elections and I won, I am limited by the constitution, I have a member of every state in the Federal Executive Council and I have to listen to them when I sit as chairman. That is the limit the constitution gave me”.
Ohanaeze Youths Decry Army Harassment of Home-bound Igbos at Onitsha
30 Dec 2015
Emmanuel Ugwu, Umuahia

Following the harrowing experience that Igbos returning home for Christmas and New Year celebrations have been passing through in the hands of soldiers deployed to Onitsha Bridge head, the Ohanaeze Youths Council (OYC) has called for the end to the harassment of innocent people.

The OYC made the call on Wednesday in a press release jointly signed by its National President, Mazi Okechukwu Isiguzoro and National secretary, Okwu Nnabuike.

They noted that the officers and men of the 302 Battalion of the Nigerian Army at Onitsha “appear to have an ethnic agenda” in that town.

“In the past one month these raw soldiers have killed more than twenty (20) unarmed Igbo youths. This time around they waylay Igbos returning home for Xmas and New Year holidays and rough handle a lot of them,” the OYC lamented.

According to the Ohanaeze Ndigbo youth wing, the Nigerian troops at Onitsha have been behaving like an army of occupation in an otherwise peaceful commercial city thereby making it difficult for people to exercise their freedom of movement.

It questioned the rationale for subjecting home bound Ndigbo to harassment and intimidation, saying that the authorities should explain if it has become unlawful for Ndigbo to return home for the annual yuletide celebrations.

Said OYC: “We can no longer tolerate this brazen act in our own land (as) we are neither at war nor a conquered people.  Mr. President should intervene in this matter before it turns into another thing. We have the right to protect the dignity of our people."

Kanu’s Family, IPOB Refute Alleged Apology by Detained Activist

30 Dec 2015
Emmanuel Ugwu, Umuahia

The Indigenous Peoples of Biafra (IPOB) and the family of detained Biafra activist, Nnamdi Kanu, on Wednesday debunked media reports that the IPOB leader had apologized to President Muhammadu Buhari over Biafra agitation.

The alleged apology by Kanu was reported in a national newspaper on Wednesday, thereby creating the impression in the minds of his followers that he has recanted.

But in a swift reaction IPOB vehemently denied the media report, calling it "a blatant lie and cheap propaganda by its sponsors to create the wrong impression that Kanu is backing out of the Biafran project". It pointed out that Kanu has never referred to Mr. President as a terrorist hence the issue of apologizing to him could not have arisen, adding that the media report should be disregarded.

In the statement issued by IPOB spokesman, Emma Powerful, made available to journalists in Umuahia, the pro-Biafra organization said that it was obvious that the alleged apology was planted in the said newspaper by the Federal Government to weaken Biafran agitators.

"The purported report that Kanu has apologised to Buhari over Biafra is not only a tissue of lies but a lame attempt by the enemies of Biafra to cause disaffection among the agitators.
No Respite Yet for Troubled Naira
The Nation, Nigeria
December 31, 2015

The desperation of the Central Bank of Nigeria (CBN) to defend the naira at all costs comes with heavy burden on the economy and bank customers. Despite spending over $33.5 billion in seven years to stabilise the local currency, restricting debit card use overseas and planning to stop weekly dollar allocations to Bureaux de Change (BDCs), the CBN is yet to stop naira’s woes. COLLINS NWEZE examines naira’s slide and those benefiting from the trend.

Aminu Abudulkadir, a currency speculator, was preparing for the Suri (2’oclock) prayer when he got a text message that made him richer. His business partner, Abubakar Idirs, had on December 18, informed him that the naira was exchanging for N280 against the dollar in the parallel market.

Abudulkadir hurriedly said his prayer, moved to the vault where he kept $50,000 to confirm it was intact.  He then called five of his most trusted aides and gave them $10,000 each to exchange to naira. “I made N82 extra on every dollar sold because I bought at N198 to a dollar,” he said, adding that the transactions concluded within three hours fetched him N4.1 million profit.

The naira has been exchanging at N199 to a dollar in the official market, but in the parallel market, the local currency is facing the highest level of volatility in its over 50 years’ history.

It was not only devalued by 35 per cent in the last 14 years, but in 2001 alone, its value was slashed 27 per cent, followed by an eight per cent cut last November. The local currency first hit double digits in 1991, moving from N9.9 to N17.2 to a dollar the following year. That constituted a significant 73.7 per cent change. Thereafter, a continuous slide ensued, attaining triple digits in 2000. Although it was considerably stable between 2000 and 2003 (below N120 to a dollar), the recent adverse global capital flows and drop in oil price, among other factors, have culminated in the current all-time low.

An economist, Bismark Rewane, explains why the naira is on the downside. “As oil prices dipped, the Central Bank of Nigeria (CBN) has prioritised stability of exchange rate in the official market. It has drawn an exclusion list of avoidable imports from being funded in the official market. With the foreign exchange demand for the items transferred to the parallel market, rates in that market have soared”.

Besides, other factors like terms of trade, inflation differential, public debt, current-account deficits, interest rates, political stability and the overall economic health determine the exchange rate of a currency.

The fall in crude oil prices has reduced Nigeria’s dollar earnings, making it difficult for the apex bank to fund imports. Record oil prices had helped Nigeria to build the largest currency reserves in sub-Saharan Africa. The price peaked at $63 billion in September 2008. But, after attaining a record-high of $147 in July of that year, Nigeria’s crude oil prices – bonny light, have plummeted.

As at December 29, oil was trading below $38 per barrel and the foreign reserves level has declined to $29.48 billion, $33.5 billion lower than the September 2008 figure.

A large chunk of the reserves went to Bureaux De Change (BDCs) operators as weekly allocations to help close the rising gap between the official and parallel market rates. The BDCs got between $75, 000 and $30, 000 weekly from the CBN. There are, however, a grand plan to stop funding the BDCs in the New Year.

Today, oil sits at $37 a barrel. Goldman Sachs recently agreed it could tumble as low as $20 a barrel, a level that would decimate the already heavily damaged economies of Nigeria, Saudi Arabia and Russia. The Organisation of Petroleum Exporting Countries (OPEC) predicts the price won’t go back above $100 until 2040.

These weak economic indicators and forecasts have continued to put the local currency under severe pressure from internal and external factors but the CBN is not giving up, except that its measures seem overboard, with varied implications for bank customers and the economy.

Battling to save the naira

The CBN had imposed some currency control measures to save the naira. In June, it curbed access to the interbank currency market for importers bringing in a variety of goods. In an effort to conserve its dollar reserves, the bank said importers could no longer get hard currency to buy 41 items, ranging from toothpicks and rice to steel products and private jets.

One of such measures – total ban on the use of debit cards abroad – has caused panic in both local and international markets with customers feeling the pangs of the policy, which was meant to conserve foreign reserves and protect the local currency.

Michael Osinachi was in Dubai shopping when he got news of CBN’s ban on the use of debit cards abroad on Twitter. She quickly called her account officer in GTBank to confirm the authenticity of the information, and his fears were confirmed.

It was after her debit card was rejected at the point of paying for the goods in shopping mall that the intensity of the policy dawned on her. Left with only $500 cash, she boarded the next flight to Lagos to save herself from embarrassment.

“Nigerians always go on holidays to Dubai, Las Vegas, shop in London, and take their kids to Disney World in Florida now and again. Over the years, we have come to rely on our debit cards anytime we are outside the country. But, that opportunity is now gone,” she lamented.

Thousands of bank customers share Osinachi’s experience outside the country. Also affected were web-based businesses that require to regularly pay for server space and web hosting in Europe or America using their debit cards.

The Chief Executive Officer (CEO) of  InvestAdvocate, Peter Obiora, said the policy shift has made it difficult for him to pay for server space for his online web business. He said unlike previously when he could use his debit card to pay for such transactions to be approved,  now, the card must be linked to a dollar-denominated domiciliary account that must be funded locally.

Former executive director, Keystone Bank, Richard Obire, said that just like a coin, the debit card restriction has two sides because Nigeria is integrated into the global economy, and her citizens should get intangible services that promote businesses. The use of naira-denominated debit cards abroad, he said, is one of such benefits.

He said that instead of making a blanket restriction on card use abroad, the CBN and other commercial banks should look at the countries where the biggest volume of forex is spent, and what it is being used for. Obire said Nigeria still gets over $20.8 billion annually from Diaspora remittances, and other forex inflows from other sources.

For instance, the World Bank Migration and Remittances Factbook 2016 showed that Nigerians living abroad sent home $20.8 billion in 2015. The figure, it said, is by far the largest volume of remittances to any country in Africa and the sixth largest in the world.

“The United States is the biggest remittance sending nation to Nigeria, followed by the United Kingdom. Nigerians received $5.7 billion in remittances sent from friends and family members in the US and $3.7 billion from the UK in 2015 and the rest across the world. Nigeria is also the third largest destination country for migrants from other African nations,” Obire said, adding that the card ban could hurt and halt such remittances.

The former bank chief said the restriction could also stall CBN’s plan to promote Small and Medium Enterprises (SMEs) and the over N220 billion allocated to the sector.

He said: “We have been talking about promoting SMEs, but this policy will reverse all the gains made over the years. Recall that the SMEs always have to pay for one service or training or the other from abroad, and this will the limit the extent of such exposures,” he said.

Obire lamented that when he tried to renew a website fee with an international company, although his bank, First City Monument Bank (FCMB), grudgingly approved the transaction, but it collected twice the amount paid previously.

“In the past, the fee was N15,000 but the last time I did it, the bank collected N38,000 after dollar conversion. How many SMEs can withstand such hike in the name of remitting funds to foreign partners,” he said.

The former bank chief said that before the card restriction, SMEs operators can easily use their cards and make simple transfers to foreign partners. He said that while the CBN and banks have the right to protect the foreign reserves and the naira, they must also consider the interest of customers and their businesses.

Standard Chartered Bank had in an e-mail message to customers, stressed that their naira debit cards will no longer be used for international transactions.  It attributed the decision to limited forex supply in the market. It said the action, remains a temporary measure that will be reversed when the forex supply improves.

Equally, Diamond Bank e-mailed its customers, urging them to spend from their domiciliary accounts. The bank also promised its customers unlimited all-year-round spending from their dollar and pounds sterling accounts across all channels like web, Point of Sale (POS) terminals and Automated Teller Machines (ATMs) among others.

The CBN position

The CBN says forex scarcity forced commercial banks’ to place a restriction on the use of ATM cards abroad by their customers. The apex bank which admits it has no powers to reverse the banks’ decision on the use of the ATMs abroad, has thrown its weight behind the commercial bank’s position. According to it, it would assist in reducing the pressure on the naira.

CBN’s Director, Monetary Policy Department, Moses Tule, explained that the restriction might continue until the country’s forex earnings improved. He hinted that if banks had not taken the decision to restrict the use of ATM cards abroad, some of them would have been experiencing challenges meeting the demand of their overseas’ customers.

Such occurrence, he said, would have caused huge liabilities in the balance sheet of the banks, thus affecting their operations.

Tule said much as the CBN sympathised with Nigerians for inconveniences they experience in carrying out transactions abroad, there was little the bank could do to reverse the decision of the banks.

 “The limitation on the use of debit or credit cards outside the country was not a limitation that was placed by the CBN. They were restrictions that banks placed because they have to settle whatever transactions you make with your debit cards with their corresponding banks in foreign currency. And if the banks do not have the foreign currency to do that, then you create a liability problem for them,” Tule explained.

The priority of the CBN, he said, would be to use the forex to settle matured Letters of Credit for the importation of petroleum products and other raw materials.

Stakeholders speak

The Managing Director, Afrinvest West Africa Plc, Ike Chioke, believes the incorporation of a long-term diversified strategy in fiscal policy is required to cushion shocks in various segments of the economy.

For him, the persistent pressure on the naira could have been minimised if a counter fiscal policy had been developed, as the CBN cannot continue to defend the naira with foreign reserves.

“To reduce this pressure, an inward looking policy (tax incentives, infrastructure development and production subsidy) should be emphasised to reduce the dependence on imported goods”, he said.

He explained that asides from oil receipts, the development of the Agricultural sector will in the short term reduce the forex burden of food imports and on the long run, enhance foreign receipts if its comparative advantage in the sector is efficiently deployed.

But, an executive of the Nigerian Export-Import Bank, Chinedu Moghalu, said the sharp rises in the dollar exchange rate have been in the parallel market as the volatility has not been allowed to extend to the official market where the most economically important transactions are funded. “Although the dollar exchanged for N280 at the BDC in the week before Christmas, and even retreated immediately, by the way – at the official market, the dollar has continued to exchange at N199 to dollar since March,” he said.

For him, the CBN has taken a position – backed by the administration of President Muhammadu Buhari – which is to protect the official market from speculation and damaging devaluation.

 “But the reality is that, as a people, we have to make adjustment in our tastes. Not only should we be ready to replace foreign products with local substitutes; we must be prepared to let go of some exotic products, even where there is no direct alternative. It is part of the demand of building a virile country and a sustainable economy,” he said.

Consumers, exporters react

With 9.4 per cent inflation rate in November, the fate of the naira is already impacting on the cost of goods and services. Investigations showed that the prices of some food items like chilli pepper, tomato and onion has soared by over 100 per cent in Lagos markets in ahead of the  the Christmas celebration, same period the naira exchanged at N280 to a dollar. An independent survey on cost of farm produce showed that a basket of chilli pepper is now N25, 000 against N12, 000 it sold a month ago.

A big basket of tomato, which previously ranged between N8, 000 and N11, 000, now sells for between N13, 000 and N17, 000. A medium-size basket of fresh pepper now sells for N12, 000, from N8, 000. A jute bag of onions cost N35, 000 from its initial price of N25, 000.

However, for exporters, naira’s slide against the dollar means increased cash flow and higher profit margins.

The Managing Director, Sunyprofit International Limited, Sunday Anjorin, who exports Nigeria timer to China and Vietnam, captured the excitement that came with the decision. “The fall in naira value is creating more millionaire-exporters than ever before. We now have more naira after exchanging our dollar inflows,” he said.

Anjorin said although exporters’ cash flow will rise, “the celebration may be cut short given that their cost of production will equally increase, because the cost of raw materials will become exorbitant, making nonsense of the higher profit margins.” Still, he said timber operators would take advantage of the naira slide and increase their profit margins.

Also to benefit are multinational oil companies and their expatriate workers, whose salaries are in dollars. People who receive forex through Western Union and MoneyGram are also to benefiting from the naira woes.

CBN measures take tolls

But the National Bureau of Statistics (NBS) says Nigeria exports plunged in the third quarter from a year ago and imports also fell, as currency controls introduced by the CBN start to bite.

The balance of trade in the third quarter was N645 billion, down from N2.87 trillion in the third quarter a year ago. Exports fell by 50.3 per cent in the third quarter from a year ago and imports declined 7.3 per cent, the NBS said. The fall in crude oil exports, which accounted for 69.1 per cent of total domestic exports this year, hit the economy the most.

“The sharp decline in exports and slight decrease in imports contributed to a continued fall in the country’s trade balance, by 32 per cent,” the NBS said.

Global payment companies groan

Global payment companies like Visa, MasterCard, InterSwitch (owners of Verve cards), are also losing businesses because of the policy shift. The companies, he said, have made massive investments in Nigeria and always get fees, when the cards are used abroad.

The General Manager, IBM Africa, Taiwo Otiti, said Visa International and other global payment firms, have made huge investments in Nigeria, including increase in sophistication of technology deployed in the country. He said: “The standard for Visa in Nigeria is the strictest in the whole payment system worldwide. The Visa stipulated a very, very high standard for Nigeria and this costs a lot of money,” he said.

Visa Country Manager in West Africa, Ade Ashaye, said the firm invests heavily in advanced fraud, fighting technologies and continues to develop and deploy new and innovative programs to mitigate fraud and protect cardholders in Nigeria.

He said the global payment firm’s efforts have helped in scaling down fraud rates, enabling account holders to use Visa with confidence across the world. “In fact, with technological innovations and advances in risk management, global fraud rates have declined by more than two-thirds in the past two decades. VisaNet has an enhanced ability to identify fraud on individual accounts and coordinated attacks on multiple accounts across the system, enabling issuers to stop potential fraud at checkout, before it occurs,” he said. Also, Visa and MasterCard are already working on introducing “digital tokens” instead of account numbers for processing purchases made online and with mobile devices in Nigeria. Tokens provide an additional layer of security and eliminate the need for merchants, digital wallet operators or others to store account numbers.

Interswitch, owners of Verve card, explained that as a second layer of defence, it had also introduced Scorebridge, a fraud management system that enables Electronic Financial Transaction (EFT) messages to be processed through predefined Artificial Intelligence. This helps in determining the transaction’s risk and probability of a fraud.

These investments, analysts said, were targeted at getting increased use of card transactions, locally and internationally.  Obire insist the ban on card use abroad, is, therefore, a disincentive for further research and investment by the global technology firms in the economy.

Why crisis persists

 Rewane believes that besides the dwindling crude oil prices and reduced forex earnings, the decision by the CBN to peg the naira in the official market, resist further devaluation, lower interest rates and increase credit to the real sector, has heightened the exchange rate crisis.

Although pundits’ debate whether the naira is overvalued or undervalued, the real issue is that the CBN’s control of the local currency prevents it from being responsive to economic fundamentals.

“While every economy is controlled in some way, the CBN’s refusal to allow the exchange rate and other relative prices adjust to terms of trade shocks, seems to be disrupting the country’s fundamental economic structure,” Rewane said.

To him, the sharp decline in oil prices has created trade shocks experienced by many oil producing countries and this has led to the readjustment of most emerging market currencies. “The naira is overvalued at its current official exchange rate of N199 by about 12 per cent. The CBN insists on pegging the naira at this rate despite slowing economic growth, reduced forex earnings, dwindling oil prices, depleting external reserves and increasing inflationary pressures,” he said.

But, this is not the first time Nigeria has suffered from an overly controlled currency. From 1981 to 1985, during a similar period of control and oil shocks, relative prices did not adjust to restore internal and external balances. This led to low production, economic distortions, massive retrenchment and poverty.

In contrast, from 1986 to 1991, when the Structural adjustment Programme (SAP) was introduced, the exchange rate was flexible. Economic data showed that there was increased output, better employment figures and less poverty. Both periods had negative oil price shocks.

Other economists insist that Nigeria’s current managed floating exchange rate regime combines features of both the fixed and flexible exchange rate. They explain that a lightly managed floating exchange rate regime is advocated given that the exchange rate becomes determined essentially by demand and supply forces, while allowing the CBN to intervene occasionally to moderate excessive fluctuations, which are prone in developing countries, including Nigeria.

Analysts insist that with the exchange rate at the parallel market depreciating to as low as N280 to a dollar, it may be time for the CBN to take another look at its stance on the exchange rate management.

Pundits forecast that should oil prices fall below $30 per barrel, an exchange rate adjustment would be inevitable and given the current macroeconomic headwinds, a lightly managed floating exchange rate policy may be more suitable for the naira to regain its lost glory.

Wednesday, December 30, 2015

El-Zakzaky Not in Our Custody, Says Kaduna Prisons
December 31, 2015
Godwin Isenyo, Kaduna

The authorities of the Kaduna Prisons on Wednesday distanced itself from purported claim that the leader of the Islamic Movement in Nigeria, otherwise known as Shi’ite, Sheikh Ibraheem El-Zakzaky, was in the prison.

While dismissing the claim, the Controller of Kaduna Prisons, Abubakar Argungu, however, said 191 members of the IMN were in the custody of the prison.

“We only have 191 followers of the Shi’ite leader in our custody. But we do not have their leader, Ibrahim El-Zakzaky, with us,” Argungu said.

Meanwhile, the Kaduna State Government said on Wednesday that it would soon announce members of the Judicial Commission of Inquiry into the recent clash in Zaria between the Nigerian Army and Sheikh Ibraheem El-Zakzaky-led Islamic Movement in Nigeria.

In a statement issued by Governor Nasir el-Rufai’s Special Assistant on Media and Publicity, Samuel Aruwan, the government said it had completed the composition and terms of reference of the proposed commission.

It added that effort was being made to contact all the nominees for the membership of the commission as well as the secretariat and resource persons.

The statement partly read, “The Kaduna State Government has largely completed work on the composition and the terms of reference of the proposed Judicial Commission of Inquiry.

“However, the government is still engaged in extensive consultations that are required prior to a formal announcement.

“Efforts are also being made to contact all the nominees for membership of the commission, as well as the secretariat and resource persons that will support the work of this important inquiry.

“These consultations and contacts have been impacted by the holidays. Therefore, the Kaduna State Government will be delaying the announcement of the membership of the Judicial Commission of Inquiry until early in the New Year.

“Best efforts have been applied to ensure that the announcement is made within the two-week window envisaged when the decision to establish the commission of inquiry was made. But it has now emerged that a little more time is required.”

El-Zakzaky running a parallel govt for 40 years – Gumi

December 30, 2015
Sunday Aborisade, Adelani Adepegba and Godwin Isenyo

A renowned Kaduna-based Islamic cleric, Sheikh Ahmed Gumi, on Tuesday accused the leader of the Islamic Movement in Nigeria, Ibraheem El-Zakzaky, of running a parallel government in the North.

Gumi, while speaking with newsmen in Kaduna, alleged that for the 40 years of its existence, the Shi’ite sect had been conducting military training for its members.

According to him, the Islamic Movement in Nigeria is operating a state within the state.

He said, “The Shiites have been embarking on military training and producing cadets and soldiers.

“The Islamic Movement of Nigeria does not recognise the corporate entity of Nigeria. The group is not registered. They operate above the law and they get direct foreign aid.”

The cleric recalled that the late President Umaru Yar’Adua told him of the massive importation of weapons to different parts of the country and made mentioned of Iran as supplying arms to the El-Zakzaky-led movement.

Gumi maintained that he had last year written a letter, warning about the danger of blocking highways by the Shi’ite sect “where his (El-Zakzaky) followers travelled on foot from all over the country to Zaria.”

He added that the blockage of roads as allegedly done by the Shi’ites “is an abomination in Islam.”

While warning that the North would continue to be under-developed if the Shi’ite and Boko Haram groups were not eradicated, Gumi said, “The strife and unnecessary blocking of roads and shouting slogans on the way increases the tension in the North.”

The cleric noted that the bloody clash between the Army and the Shi’ites was a divine intervention to prevent the recurrence of “another Boko Haram.”

Meanwhile, some members of the Shi’ite Islamic group were arraigned at the Chief Magistrate’s Court 1, Kaduna, on Tuesday, where they were charged with criminal conspiracy and inciting public disturbances.

It was learnt that they had been remanded in prison.

The Shi’ites clashed with troops in the convoy of the Chief of Army Staff, Lt. Gen. Tukur Buratai, two weeks ago, where about 62 persons reportedly lost their lives.

Their leader, El-Zakzaky was subsequently taken into custody by the Army before he was released to the police for investigation.

The Force Public Relations Officer, Olabisi Kolawole, told one of our correspondents on Tuesday that the Shi’ite members were being prosecuted for incitement and public disturbances among other charges.

She said, “Some Shi’ite members have been arraigned in court where they were charged with criminal conspiracy and inciting public disturbances among others. They have been remanded in prison custody and the case adjourned.”

The Army had accused the Shi’ite followers of attempting to assassinate the Chief of Army Staff, but the Islamic movement said soldiers simply attacked “defenceless people.”

Also, members of the Senate ad-hoc committee on the clash between the Nigerian Army and members of the Shi’ite Islamic sect, met behind closed doors in Abuja on Tuesday but refused to disclose details of their deliberation to journalists.

Efforts by some reporters covering the Senate to interview the Chairman of the committee, Senator Ahmad Lawan, on the details of the meeting failed as he refused to pick his calls.

The senator was also not available when journalists besieged his office since the venue of the meeting was not disclosed.

However, a member of the committee who pleaded anonymity, confirmed that the meeting was held and resolved to carry out a fact-finding mission to the scene of the attack in Kaduna on Monday.

The senator also explained that members of the committee would also visit the state Governor, Mallam Nasir el-Rufai; Emir of Zaria and prominent members of the sect.

Meanwhile, a member of the senate panel, Senator Abu Ibrahim, had confirmed to journalists, early on Tuesday that the committee would meet with some Shitte members to find out their roles in the bloody clash.

He said, “Yes, we are meeting to have first-hand information on the matter from members of the sect but the meeting will not be opened to members of the public because of its sensitive nature.”

Ibrahim confirmed that his committee had been meeting regularly, and would make its findings public as soon as the necessary information had been obtained from all the affected persons, groups and institutions.
Kaduna Government Perfects Plan to Probe Soldiers, Shi’ites Clash
By Saxone Akhaine
Northern Bureau Chief
Nigerian Guardian
December 31, 2015 3:50 am

• Islamic group denies having military wing

From the Kaduna State government came yesterday an announcement that it would soon come out with the terms of reference and names of members of the judicial commission of inquiry to investigate the recent violent clash between Soldiers and members of the Islamic Movement in Nigeria (IMN), Shi’ites in Zaria.

A statement signed by a Special Assistant to the Governor of Kaduna State, Mallam Samuel Aruwan, said: “The government has announced that it is working on concluding the establishment of a judicial commission of inquiry into the recent clash in Zaria between the Nigerian Army and Sheikh Ibraheem El-Zakzaky’s movement.

Th government has largely completed work on the composition and the terms of reference of the proposed inquiry, however, the government is still engaged in extensive consultations that are required prior to a formal announcement.”

According to the statement, “efforts are also being made to contact all the nominees for membership of the commission, as well as the secretariat and resource persons that will support the work of this important inquiry.

These consultations and contacts have been impacted by the holidays.

Therefore, the state government will be delaying the announcement of the membership of the commission until early in the New Year. Best efforts have been applied to ensure that the announcement is made within the two-week window envisaged when the decision to establish the commission of inquiry was made. But it has now emerged that a little more time is required.

“The government expresses its appreciation for the positive response the public has given to the establishment of the commission of inquiry. The government will be providing further updates as this process unfolds.”

Meanwhile, the Islamic group has condemned a comment allegedly made by the Army hierarchy to the effect that members of Shi’ites have a military wing which is a threat to Nigeria nation.

While reacting to the comment, the Spokesman of the Shi’ites, Mallam Ibrahim Musa, stated: “The Nigerian government, in order to justify its brutal attacks on the Islamic Movement of Nigeria and its leadership, has yet again released a three-minute propaganda video clip to buttress the fraudulent claims that IMN has a military wing that is a threat to the Nigerian nation.

“They are frantically searching for ways to cover up their crimes or worst still, even justify it through these mischievous propaganda campaigns.”
Oil Workers Flay Proposed PIB, Reject Layoff Plan
By Yetunde Ebosele
Nigerian Guardian
December 31, 2015 1:15 am

Oil workers, under the aegis of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), have condemned the proposed Petroleum Industry Bill (PIB), describing it as anti-labour.

Besides, the workers vowed to resist the plan by the Federal Government to retrench workers, especially employees of the Nigerian National Petroleum Corporation (NNPC) as a result of the restructuring agenda in the proposed PIB.

According to them, the planned sack was not in tandem with the “change” that the government promised Nigerians, especially in the area of job creation.

Reacting to the official release of the proposed draft institutional and legal frameworks for reforms in the oil and gas industry by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, PENGASSAN’s acting General Secretary, Lumumba Okugbawa, said the provisions in the proposed PIB are not only anti-labour but is at variance with the national interest.

Okugbawa, who commended the renewed effort by the Minister to rejuvenate the reforms after several failed attempts in the past, noted that PENGASSAN has always been in support of the reforms in the oil and gas industry but with a caveat that it must be transparently done to make sure that stakeholders in the oil and gas industry are carried along.

He however added that, PENGASSAN will not support any reforms that jeopardises the welfare of its members, noting that, the restructuring will be resisted if it negatively affects the Association’ members.

On the planned to sack half of the current NNPC’s employees, Okugbawa said the plan if carried out will further compound the unemployment situation in the country, adding that, there is nothing wrong with the unbundling of the NNPC to bring about greater efficiency and effectiveness, if only the unbundling and repositioning of the corporation would be done with human face.

We have said on many occasions that the problem of the NNPC is not the workers but the high level of political interference in the corporation and we are satisfied that the current government has promised to give the corporation free hand to operate for better service delivery to the Nigerian nation.

Some of the inconsistencies noted by PENGASSAN in the draft bill include:
·A subtle ploy in Section 87 (Transfer of Staff) to retrench or drop some of the work force transiting to the new Nigeria Petroleum Regulatory Commission (NPRC) with the contentious clause ‘’transfer of certain employees’’;
·inability to specify the role or status of the Petroleum Equalisation Fund (Management Board) which hitherto is vested with the responsibility of ensuring uniform pricing of petroleum products in Section 3 of the draft Bill;
·apart from the uncertainty of the agency’s institutional role, the draft bill as currently drafted will create job loss as no provision for absorption or transfer of service for the work force is contemplated; and
·cessation of employment and transfer of staff should be automatic and guaranteed as provided by the Public Service rules and constitution of the Federal Republic of Nigeria.

To this end, the oil workers called on the Minister of State for Petroleum Resources to engage the national body of the union as a matter of priority on the anomalies noticed in the draft Bill and quickly address the contentious sections of concerns to the unions, especially as it affects job loss, so as to avert industrial crisis in the industry.
Guinea is Finally Declared Ebola-free
BY Omar Mohammed
December 30, 2015
Quartz Africa

Two years after the first case of Ebola was detected, triggering the worst outbreak of the virus in history, Guinea, the country where the outbreak began, has finally been declared free of the disease, the World Health Organization (WHO) declared on Tuesday (Dec. 29).

“WHO commends the government of Guinea and its people on the significant achievement of ending its Ebola outbreak,” Dr. Mohamed Belhocine, WHO Representative in Guinea, said in a statement.

The last patient diagnosed with Ebola in the country, a three-week old girl, has tested negative of the virus twice within the last 42 days, the yardstick experts use to determine whether someone is free of the infection.

What researchers have declared the worst outbreak of Ebola began in eastern Guinea and quickly spread to neighboring Sierra Leone and Liberia, claiming over 11,000 lives in the process. Guinea alone lost 2,500 people to the disease.

The announcement is being viewed as an important milestone in the fight against the outbreak where at one point real fears of a global contagion gripped communities across the world.

“This is the first time that all three countries – Guinea, Liberia and Sierra Leone – have stopped the original chains of transmission that were responsible for starting this devastating outbreak two years ago,” Dr. Matshidiso Moeti, WHO Africa director, said.

Guinea now enters into a 3-month period of “heightened surveillance” to contain any new instances of infections to ensure they do not spread.
Burkina Faso's Christian Kabore Sworn In As President
Dec 29 2015 8:47PM
Nigeria Daily Trust

Burkina Faso’s new president was sworn-in on Tuesday in front of thousands of cheering supporters.

Roch Marc Christian Kabore won elections last month, the first since long-serving ruler Blaise Compaore was ousted in a popular uprising last year.

Mr Kabore was an ally of Mr Compaore before the two fell out.

About 20 soldiers were detained recently for plotting to free the jailed leader of September’s short-lived coup, Gen Gilbert Diendere, officials said.

Several African heads of state attended Mr Kabore’s inauguration in the capital, Ouagadougou.  Mr Kabore said he would defend the constitution and “ensure justice for all”.

He once served as Mr Compoare’s prime minister, but gained popularity after opposing his bid to change the constitution and run for a third term.

Mr Compaore fled to Ivory Coast after being forced out of office.

Gen Diendere, a powerful ally of the ousted president, staged a coup in September.  He was forced to return power to a transitional government seven days later, after the army sided with protesters opposed to the coup.

China’s Stock Market Still a Draw After Tumultuous Year
Investors are still buying stocks and the Shanghai Composite Index is up almost 10%, despite the summer’s crash

Wall Street Journal
Dec. 28, 2015 6:46 a.m. ET

Even if Chinese investors got burned in the selloff this year, the stock market, for many, still hasn’t lost its appeal.

The Shanghai Composite Index is on track to end the year as one of Asia’s best-performing major benchmarks, up 9.3% as of Monday’s close, despite losing as much as 43% of its value over the summer. That outpaces many other major global benchmarks, including a year-to-date gain of 0.1% in the S&P 500 and a 4.7% decline in London’s FTSE 100.

The Shanghai benchmark’s smaller counterpart has recorded even more spectacular gains. The Shenzhen Composite Index has risen 63% this year while the ChiNext, composed of growth stocks and sometimes referred to as “China’s Nasdaq,” is up 86%.

By a number of metrics—including trading volume, account openings and the amount of borrowed money used to invest—Chinese investors remain committed to buying stocks, a turnaround from past crashes that sent investors fleeing and left the market languishing, at times for years.

This time, Beijing’s barrage of measures to rescue its cratering markets seemed to convince China’s domestic investors that government support would continue, analysts say.

“When we asked people would they invest in stocks, the answer was yes, because the government is supporting the market,” said Francis Cheung, head of China-Hong Kong strategy at CLSA Ltd.

Beijing’s role in China’s stock performance even preceded its massive rescue, which some analysts estimate cost hundreds of billions of dollars. The government drummed up support for stocks leading up to the market peak, which helped lift Shanghai 151% in the 12 months through June.

When prices started sliding over the summer, Chinese authorities told government investors—the so-called “national team”—to buy. Hundreds of companies even voluntarily suspended trading of their shares rather than let them fall.

To be sure, many of Beijing’s measures to stop the selling also rattled investors, including steps to crimp any trading practices deemed overly risky, such as gray-market financing and short selling, the practice of using borrowed shares to bet that prices will fall. Authorities have arrested high-profile investors and brokerage heads to probe causes of the summer’s stock crash.

But for retail investors, who account for 85% of Chinese stock-market trading volume, confidence that government buying would continue convinced them to come back to the market and helped accelerate Shanghai’s recovery. Mainland shares re-entered a bull market, defined as a rise of 20% from a recent low, in November.

The recovery marks a contrast from the crash of October 2007, when the Shanghai Composite lost as much as 71% from peak to trough over the course of a year. That recovery took longer, too, with the benchmark rising as much as 96% by August 2009, and didn’t recover previous highs.

After the 2007 crash, market volumes fell by more than a third in the following six months and took two years to reach the same level of trading activity. Thereafter, trading volumes remained thin.

In the six months from July to December this year, however, daily trading volumes fell on average by 11% compared with the prior six-month period, according to data from Thomson Reuters.

The number of new trading accounts has also started to recover more quickly this year compared with the months after the 2007 crash.

Investors opened about one 10th the number of new accounts in February 2008 as they did in October 2007, when the selloff started. While new account openings in Shanghai have fallen to 3.18 million in November from 8.78 million in June, the levels since the selloff still outstrip almost every month since the start of 2008.

A practice unique to the latest rally was margin trading, the use of borrowed money to fuel stock purchases. Peaking at 2.2 trillion yuan ($339.5 billion) in June, margin lending amplified gains on the way up, but also accelerated losses as investors rushed to sell positions to repay their brokers.

Authorities reined in brokers’ lending during the summer, but since then, such borrowing has started to tick up again as investor confidence recovers.

Retail investors’ clutch over the market—which has hovered around current levels since 2007—can spark wild swings in trading. That is one reason why China’s government has sought to lure more foreign institutional investors into its domestic equity markets over the past decade.

Yet appetite for Chinese stocks has dwindled among global investors, who were given broader access than ever before through a much-hyped trading link launched in November 2014 to connect the Shanghai and Hong Kong stock exchanges. A planned extension of the program to the Shenzhen stock exchange is expected in 2016.

After a promising start, investors pulled money from Chinese stocks during three months out of the five months since July, and are on track to record a fourth month of outflows during December.

Write to Gregor Stuart Hunter at
Warren Buffett Faces Worst Year on Stock Market Since 2009
Stephen Foley
Financial Times

Investment guru Warren Buffett is headed for his worst year relative to the rest of the US stock market since 2009, with shares in his conglomerate Berkshire Hathaway down 11 per cent with two more trading days to go.

The underperformance comes in Mr Buffett's Golden Anniversary year at the helm, when he told investors for the first time that they should judge his record based on Berkshire's share price, rather than just the book value of the company, which had been his preferred yardstick for decades.

Mr Buffett urged them to make that judgment based on the long term, rather than on a single year, reflecting investing mentor Benjamin Graham's view that the stock market may be a "weighing machine" in the long run, but in the short term it is a "voting machine".

But in 2015, the market has been voting negatively on Berkshire's prospects for weathering the decline in commodity prices, according to Jim Shanahan, analyst at Edward Jones.

Although Berkshire has no oil and gas subsidiaries, its railroad business transports oil, coal and agricultural products, and its manufacturing arm sells products to the shrinking oil industry. Weak results from Berkshire's insurance divisions in the middle of the year may also be due to lower oil prices, Mr Shanahan said, since lower petrol prices mean drivers and truckers are on the road for longer and having more accidents.

"They are impacted by the weak resources sector and commodity prices in general," he said.

Berkshire has also been hit by big declines in two of its largest stock market investments: American Express, which is down by 24 per cent this year; and IBM, which is down 13 per cent.

Mr Buffett's operating results have not been poor, however, with Berkshire's net earnings up 18 per cent to $18.6bn in the first nine months of the year, and book value up 3.3 per cent.

The fall in Berkshire shares this year comes against a 3 per cent return from the S&P 500, including dividends. It is only the 11th negative year since Mr Buffett seized control in 1965, and the worst underperformance relative to the S&P 500 since 2009, when the wider stock market recovered much more sharply from the effects of the financial crisis.

In a change to the format of his annual letter to shareholders this year, Mr Buffett displayed Berkshire's annual share price record as well as its book value.

"Over time, stock prices and intrinsic value almost invariably converge," he wrote in February. "In our view, the increase in Berkshire's per-share intrinsic value over the past 50 years is roughly equal to the 1,826,163 per cent gain in market price of the company's shares."
Oil and Gas Stocks Lead Decline in US Indexes as Energy Prices Turn Lower Again
Dec. 30, 2015, at 4:52 p.m.
By ALEX VEIGA, AP Business Writer

The latest downturn in crude oil prices put investors in a selling mood Wednesday, pulling U.S. stocks lower for the second time this week.

The market decline, which wiped out some of the gains from a rally the day before, came on lighter-than-usual trading ahead of the New Year's Day holiday.

Energy companies fell the most among the 10 sectors in the Standard & Poor's 500 index, 1.5 percent. The sector is down 23.8 percent for the year. Southwestern Energy fell 6.8 percent, while Consol Energy sank 5.6 percent.

The price of oil shed 3.4 percent on Wednesday, extending its losses for the year to nearly 40 percent.

"You have oil prices affecting the market negatively today," said Quincy Krosby, market strategist for Prudential Financial. "You throw in exceedingly low volume and it's a recipe for skewing the market, in this case to the downside."

The Dow Jones industrial average fell 117.11 points, or 0.7 percent, to 17,603.87. The S&P 500 index dropped 15 points, or 0.7 percent, to 2,063.36. The Nasdaq composite lost 42.09 points, or 0.8 percent, to 5,065.85.

The day's market action cut into the S&P 500's slim gain for the year. The index remains essentially flat with an increase of 0.2 percent this year. The Nasdaq is up about 7 percent, while the Dow is on track to end 2015 with a loss of 1.2 percent.

The major stock indexes headed lower from the get-go on Wednesday as investors tracked the latest swings in oil and natural gas prices.

Benchmark U.S. crude fell $1.27 to close at $36.60 a barrel in New York. It's down 39 percent this year. Brent crude, which is used to price international oils, slid $1.33, or 3.5 percent, to close at $36.46 a barrel in London.

Several energy companies closed lower, including Noble Energy, which fell $1.18, or 3.5 percent, to $32.22, and Southwestern Energy, which tumbled 46 cents, or 6.8 percent, to $6.30.

Consol Energy shed 46 cents, or 5.6 percent, to $7.78. Natural gas company Chesapeake Energy fell 18 cents, or 3.9 percent, to $4.40.

In other energy trading in New York, wholesale gasoline fell 5 cents, or 3.6 percent, to $1.23 a gallon, while heating oil declined 5 cents, or 4.5 percent, to $1.079 a gallon. Natural gas slumped 15.6 cents to $2.214 per 1,000 cubic feet.

Traders found good reasons to bid up other stocks.

Weight Watchers International vaulted 19 percent after announcing an advertising campaign featuring Oprah Winfrey, who owns a 10 percent stake in the company. The stock added $3.68 to $23.05.

In Europe, trading volumes were low on the last full day of the year ahead of the New Year's holiday. Many European markets will be open only for a half day on Dec. 31. Germany's DAX fell 1.1 percent, while France's CAC 40 lost 0.5 percent. Britain's FTSE 100 slipped 0.6 percent.

Precious and industrial metals prices ended mixed. Gold lost $8.20 to $1,059.80 an ounce, silver fell 9 cents to $13.84 an ounce and copper gained 1 cent to $2.15 a pound.

Bond prices edged higher. The yield on the 10-year Treasury note fell to 2.29 percent.

In currencies, the dollar rose to 120.55 yen from 120.39 yen late Tuesday. The euro slipped to $1.0924 from $1.0939.

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Oil Bogs Down Wall St. as S&P 500

Wall Street dropped on Wednesday as Brent crude slid towards 11-year lows and Apple weighed on the S&P 500 index, which clung to a meager gain for 2015.

The S&P energy sector .SPNY was the poorest performer among the 10 major sectors, down 1.47 percent after forecasts of a short winter in North America and Europe piled pressure on the oversupplied commodity.

Shares of Exxon (XOM.N) lost 1.33 percent while Chevron (CVX.N) dipped 1.27 percent.

Apple (AAPL.O) was the heaviest drag on the S&P 500 and Nasdaq Composite, falling 1.31 percent. Fears of potentially soft iPhone sales have helped push that stock down 9 percent in the past month.

Wednesday's losses undid much a broad rally in the previous session that was similarly influenced by tech and energy stocks.

Netflix (NFLX.O) and (AMZN.O), the S&P 500's top two performers in 2015, dipped 2.02 percent and 0.70 percent respectively.

Nike (NKE.N), this year's best-performing Dow component, fell 1.57 percent.

"There is no consistency and no upside follow-through, which is disturbing, but that's been the pattern all year," said Donald Selkin, chief market strategist at National Securities in New York.

The major indices deepened their declines in the last few minutes of trade. The Dow Jones industrial average .DJI finished 0.66 percent weaker at 17,603.87 points and the S&P 500 .SPX lost 0.72 percent to 2,063.36.

The Nasdaq Composite .IXIC dropped 0.82 percent to 5,065.85.

For the year, the S&P 500 held onto modest 0.2 percent gain, while Nasdaq was up about 7 percent. The Dow, however, was down about 1.2 percent in 2015.

Hobbled by growing global supply and lower demand in Asia, the energy sector has fallen about 24 percent this year, easily the S&P's worst performer. Hurt by a rout in commodities, the materials index .SPLRCM has fallen 10 percent in 2015.

Trading volumes were low and were expected to remain thin on Thursday, the last trading day of the year.

Volume on U.S. exchanges was 4.6 billion shares, compared to a 7.4 billion average over the last 20 trading days, according to Thomson Reuters data.

Billionaire investor Carl Icahn's Icahn Enterprises LP (IEP.O) agreed to buy Pep Boys-Manny Moe & Jack (PBY.N) for about $1 billion, hours after Bridgestone Corp (5108.T) quit the race for the U.S. auto parts retailer. Pep Boys fell 2.90 percent and Icahn Enterprises (IEP.O) dipped 0.97 percent.

Fairchild Semiconductor (FCS.O) rose 3.7 percent after it received a revised offer from the Party G Group, with new terms on termination fees if the takeover fails to secure regulatory approvals.

Weight Watchers (WTW.N) soared 19 percent, extending gains for the third day after the company launched an advertising campaign last week featuring Oprah Winfrey.

Declining issues outnumbered advancing ones on the NYSE by 2,183 to 898. On the Nasdaq, 2,010 issues fell and 826 rose.

The S&P 500 index showed 15 new 52-week highs and no new lows, while the Nasdaq recorded 54 new highs and 58 new lows.

(Additional reporting by Abhiram Nandakumar in Bengaluru; Editing by Nick Zieminski)
Military to Military: Pentagon Defied Obama on Regime-Change in Syria
Seymour M. Hersh on US intelligence sharing in the Syrian war

London Review of Books

Barack Obama’s repeated insistence that Bashar al-Assad must leave office – and that there are ‘moderate’ rebel groups in Syria capable of defeating him – has in recent years provoked quiet dissent, and even overt opposition, among some of the most senior officers on the Pentagon’s Joint Staff. Their criticism has focused on what they see as the administration’s fixation on Assad’s primary ally, Vladimir Putin. In their view, Obama is captive to Cold War thinking about Russia and China, and hasn’t adjusted his stance on Syria to the fact both countries share Washington’s anxiety about the spread of terrorism in and beyond Syria; like Washington, they believe that Islamic State must be stopped.

The military’s resistance dates back to the summer of 2013, when a highly classified assessment, put together by the Defense Intelligence Agency (DIA) and the Joint Chiefs of Staff, then led by General Martin Dempsey, forecast that the fall of the Assad regime would lead to chaos and, potentially, to Syria’s takeover by jihadi extremists, much as was then happening in Libya. A former senior adviser to the Joint Chiefs told me that the document was an ‘all-source’ appraisal, drawing on information from signals, satellite and human intelligence, and took a dim view of the Obama administration’s insistence on continuing to finance and arm the so-called moderate rebel groups. By then, the CIA had been conspiring for more than a year with allies in the UK, Saudi Arabia and Qatar to ship guns and goods – to be used for the overthrow of Assad – from Libya, via Turkey, into Syria. The new intelligence estimate singled out Turkey as a major impediment to Obama’s Syria policy. The document showed, the adviser said, ‘that what was started as a covert US programme to arm and support the moderate rebels fighting Assad had been co-opted by Turkey, and had morphed into an across-the-board technical, arms and logistical programme for all of the opposition, including Jabhat al-Nusra and Islamic State. The so-called moderates had evaporated and the Free Syrian Army was a rump group stationed at an airbase in Turkey.’ The assessment was bleak: there was no viable ‘moderate’ opposition to Assad, and the US was arming extremists.

Lieutenant General Michael Flynn, director of the DIA between 2012 and 2014, confirmed that his agency had sent a constant stream of classified warnings to the civilian leadership about the dire consequences of toppling Assad. The jihadists, he said, were in control of the opposition. Turkey wasn’t doing enough to stop the smuggling of foreign fighters and weapons across the border. ‘If the American public saw the intelligence we were producing daily, at the most sensitive level, they would go ballistic,’ Flynn told me. ‘We understood Isis’s long-term strategy and its campaign plans, and we also discussed the fact that Turkey was looking the other way when it came to the growth of the Islamic State inside Syria.’ The DIA’s reporting, he said, ‘got enormous pushback’ from the Obama administration. ‘I felt that they did not want to hear the truth.’

‘Our policy of arming the opposition to Assad was unsuccessful and actually having a negative impact,’ the former JCS adviser said. ‘The Joint Chiefs believed that Assad should not be replaced by fundamentalists. The administration’s policy was contradictory. They wanted Assad to go but the opposition was dominated by extremists. So who was going to replace him? To say Assad’s got to go is fine, but if you follow that through – therefore anyone is better. It’s the “anybody else is better” issue that the JCS had with Obama’s policy.’ The Joint Chiefs felt that a direct challenge to Obama’s policy would have ‘had a zero chance of success’. So in the autumn of 2013 they decided to take steps against the extremists without going through political channels, by providing US intelligence to the militaries of other nations, on the understanding that it would be passed on to the Syrian army and used against the common enemy, Jabhat al-Nusra and Islamic State.

Germany, Israel and Russia were in contact with the Syrian army, and able to exercise some influence over Assad’s decisions – it was through them that US intelligence would be shared. Each had its reasons for co-operating with Assad: Germany feared what might happen among its own population of six million Muslims if Islamic State expanded; Israel was concerned with border security; Russia had an alliance of very long standing with Syria, and was worried by the threat to its only naval base on the Mediterranean, at Tartus. ‘We weren’t intent on deviating from Obama’s stated policies,’ the adviser said. ‘But sharing our assessments via the military-to-military relationships with other countries could prove productive. It was clear that Assad needed better tactical intelligence and operational advice. The JCS concluded that if those needs were met, the overall fight against Islamist terrorism would be enhanced. Obama didn’t know, but Obama doesn’t know what the JCS does in every circumstance and that’s true of all presidents.’

Once the flow of US intelligence began, Germany, Israel and Russia started passing on information about the whereabouts and intent of radical jihadist groups to the Syrian army; in return, Syria provided information about its own capabilities and intentions. There was no direct contact between the US and the Syrian military; instead, the adviser said, ‘we provided the information – including long-range analyses on Syria’s future put together by contractors or one of our war colleges – and these countries could do with it what they chose, including sharing it with Assad. We were saying to the Germans and the others: “Here’s some information that’s pretty interesting and our interest is mutual.” End of conversation. The JCS could conclude that something beneficial would arise from it – but it was a military to military thing, and not some sort of a sinister Joint Chiefs’ plot to go around Obama and support Assad. It was a lot cleverer than that. If Assad remains in power, it will not be because we did it. It’s because he was smart enough to use the intelligence and sound tactical advice we provided to others.’

The public history of relations between the US and Syria over the past few decades has been one of enmity. Assad condemned the 9/11 attacks, but opposed the Iraq War. George W. Bush repeatedly linked Syria to the three members of his ‘axis of evil’ – Iraq, Iran and North Korea – throughout his presidency. State Department cables made public by WikiLeaks show that the Bush administration tried to destabilise Syria and that these efforts continued into the Obama years. In December 2006, William Roebuck, then in charge of the US embassy in Damascus, filed an analysis of the ‘vulnerabilities’ of the Assad government and listed methods ‘that will improve the likelihood’ of opportunities for destabilisation. He recommended that Washington work with Saudi Arabia and Egypt to increase sectarian tension and focus on publicising ‘Syrian efforts against extremist groups’ – dissident Kurds and radical Sunni factions – ‘in a way that suggests weakness, signs of instability, and uncontrolled blowback’; and that the ‘isolation of Syria’ should be encouraged through US support of the National Salvation Front, led by Abdul Halim Khaddam, a former Syrian vice president whose government-in-exile in Riyadh was sponsored by the Saudis and the Muslim Brotherhood. Another 2006 cable showed that the embassy had spent $5 million financing dissidents who ran as independent candidates for the People’s Assembly; the payments were kept up even after it became clear that Syrian intelligence knew what was going on. A 2010 cable warned that funding for a London-based television network run by a Syrian opposition group would be viewed by the Syrian government ‘as a covert and hostile gesture toward the regime’.

But there is also a parallel history of shadowy co-operation between Syria and the US during the same period. The two countries collaborated against al-Qaida, their common enemy. A longtime consultant to the Joint Special Operations Command said that, after 9/11, ‘Bashar was, for years, extremely helpful to us while, in my view, we were churlish in return, and clumsy in our use of the gold he gave us. That quiet co-operation continued among some elements, even after the [Bush administration’s] decision to vilify him.’ In 2002 Assad authorised Syrian intelligence to turn over hundreds of internal files on the activities of the Muslim Brotherhood in Syria and Germany. Later that year, Syrian intelligence foiled an attack by al-Qaida on the headquarters of the US Navy’s Fifth Fleet in Bahrain, and Assad agreed to provide the CIA with the name of a vital al-Qaida informant. In violation of this agreement, the CIA contacted the informant directly; he rejected the approach, and broke off relations with his Syrian handlers. Assad also secretly turned over to the US relatives of Saddam Hussein who had sought refuge in Syria, and – like America’s allies in Jordan, Egypt, Thailand and elsewhere – tortured suspected terrorists for the CIA in a Damascus prison.

It was this history of co-operation that made it seem possible in 2013 that Damascus would agree to the new indirect intelligence-sharing arrangement with the US. The Joint Chiefs let it be known that in return the US would require four things: Assad must restrain Hizbullah from attacking Israel; he must renew the stalled negotiations with Israel to reach a settlement on the Golan Heights; he must agree to accept Russian and other outside military advisers; and he must commit to holding open elections after the war with a wide range of factions included. ‘We had positive feedback from the Israelis, who were willing to entertain the idea, but they needed to know what the reaction would be from Iran and Syria,’ the JCS adviser told me. ‘The Syrians told us that Assad would not make a decision unilaterally – he needed to have support from his military and Alawite allies. Assad’s worry was that Israel would say yes and then not uphold its end of the bargain.’ A senior adviser to the Kremlin on Middle East affairs told me that in late 2012, after suffering a series of battlefield setbacks and military defections, Assad had approached Israel via a contact in Moscow and offered to reopen the talks on the Golan Heights. The Israelis had rejected the offer. ‘They said, “Assad is finished,”’ the Russian official told me. ‘“He’s close to the end.”’ He said the Turks had told Moscow the same thing. By mid-2013, however, the Syrians believed the worst was behind them, and wanted assurances that the Americans and others were serious about their offers of help.

In the early stages of the talks, the adviser said, the Joint Chiefs tried to establish what Assad needed as a sign of their good intentions. The answer was sent through one of Assad’s friends: ‘Bring him the head of Prince Bandar.’ The Joint Chiefs did not oblige. Bandar bin Sultan had served Saudi Arabia for decades in intelligence and national security affairs, and spent more than twenty years as ambassador in Washington. In recent years, he has been known as an advocate for Assad’s removal from office by any means. Reportedly in poor health, he resigned last year as director of the Saudi National Security Council, but Saudi Arabia continues to be a major provider of funds to the Syrian opposition, estimated by US intelligence last year at $700 million.

In July 2013, the Joint Chiefs found a more direct way of demonstrating to Assad how serious they were about helping him. By then the CIA-sponsored secret flow of arms from Libya to the Syrian opposition, via Turkey, had been underway for more than a year (it started sometime after Gaddafi’s death on 20 October 2011).​* The operation was largely run out of a covert CIA annex in Benghazi, with State Department acquiescence. On 11 September 2012 the US ambassador to Libya, Christopher Stevens, was killed during an anti-American demonstration that led to the burning down of the US consulate in Benghazi; reporters for the Washington Post found copies of the ambassador’s schedule in the building’s ruins. It showed that on 10 September Stevens had met with the chief of the CIA’s annex operation. The next day, shortly before he died, he met a representative from Al-Marfa Shipping and Maritime Services, a Tripoli-based company which, the JCS adviser said, was known by the Joint Staff to be handling the weapons shipments.

By the late summer of 2013, the DIA’s assessment had been circulated widely, but although many in the American intelligence community were aware that the Syrian opposition was dominated by extremists the CIA-sponsored weapons kept coming, presenting a continuing problem for Assad’s army. Gaddafi’s stockpile had created an international arms bazaar, though prices were high. ‘There was no way to stop the arms shipments that had been authorised by the president,’ the JCS adviser said. ‘The solution involved an appeal to the pocketbook. The CIA was approached by a representative from the Joint Chiefs with a suggestion: there were far less costly weapons available in Turkish arsenals that could reach the Syrian rebels within days, and without a boat ride.’ But it wasn’t only the CIA that benefited. ‘We worked with Turks we trusted who were not loyal to Erdoğan,’ the adviser said, ‘and got them to ship the jihadists in Syria all the obsolete weapons in the arsenal, including M1 carbines that hadn’t been seen since the Korean War and lots of Soviet arms. It was a message Assad could understand: “We have the power to diminish a presidential policy in its tracks.”’

The flow of US intelligence to the Syrian army, and the downgrading of the quality of the arms being supplied to the rebels, came at a critical juncture. The Syrian army had suffered heavy losses in the spring of 2013 in fighting against Jabhat al-Nusra and other extremist groups as it failed to hold the provincial capital of Raqqa. Sporadic Syrian army and air-force raids continued in the area for months, with little success, until it was decided to withdraw from Raqqa and other hard to defend, lightly populated areas in the north and west and focus instead on consolidating the government’s hold on Damascus and the heavily populated areas linking the capital to Latakia in the north-east. But as the army gained in strength with the Joint Chiefs’ support, Saudi Arabia, Qatar and Turkey escalated their financing and arming of Jabhat al-Nusra and Islamic State, which by the end of 2013 had made enormous gains on both sides of the Syria/Iraq border. The remaining non-fundamentalist rebels found themselves fighting – and losing – pitched battles against the extremists. In January 2014, IS took complete control of Raqqa and the tribal areas around it from al-Nusra and established the city as its base. Assad still controlled 80 per cent of the Syrian population, but he had lost a vast amount of territory.

CIA efforts to train the moderate rebel forces were also failing badly. ‘The CIA’s training camp was in Jordan and was controlled by a Syrian tribal group,’ the JCS adviser said. There was a suspicion that some of those who signed up for training were actually Syrian army regulars minus their uniforms. This had happened before, at the height of the Iraqi war, when hundreds of Shia militia members showed up at American training camps for new uniforms, weapons and a few days of training, and then disappeared into the desert. A separate training programme, set up by the Pentagon in Turkey, fared no better. The Pentagon acknowledged in September that only ‘four or five’ of its recruits were still battling Islamic State; a few days later 70 of them defected to Jabhat al-Nusra immediately after crossing the border into Syria.

In January 2014, despairing at the lack of progress, John Brennan, the director of the CIA, summoned American and Sunni Arab intelligence chiefs from throughout the Middle East to a secret meeting in Washington, with the aim of persuading Saudi Arabia to stop supporting extremist fighters in Syria. ‘The Saudis told us they were happy to listen,’ the JCS adviser said, ‘so everyone sat around in Washington to hear Brennan tell them that they had to get on board with the so-called moderates. His message was that if everyone in the region stopped supporting al-Nusra and Isis their ammunition and weapons would dry up, and the moderates would win out.’ Brennan’s message was ignored by the Saudis, the adviser said, who ‘went back home and increased their efforts with the extremists and asked us for more technical support. And we say OK, and so it turns out that we end up reinforcing the extremists.’

But the Saudis were far from the only problem: American intelligence had accumulated intercept and human intelligence demonstrating that the Erdoğan government had been supporting Jabhat al-Nusra for years, and was now doing the same for Islamic State. ‘We can handle the Saudis,’ the adviser said. ‘We can handle the Muslim Brotherhood. You can argue that the whole balance in the Middle East is based on a form of mutually assured destruction between Israel and the rest of the Middle East, and Turkey can disrupt the balance – which is Erdoğan’s dream. We told him we wanted him to shut down the pipeline of foreign jihadists flowing into Turkey. But he is dreaming big – of restoring the Ottoman Empire – and he did not realise the extent to which he could be successful in this.’

One of the constants in US affairs since the fall of the Soviet Union has been a military-to-military relationship with Russia. After 1991 the US spent billions of dollars to help Russia secure its nuclear weapons complex, including a highly secret joint operation to remove weapons-grade uranium from unsecured storage depots in Kazakhstan. Joint programmes to monitor the security of weapons-grade materials continued for the next two decades. During the American war on Afghanistan, Russia provided overflight rights for US cargo carriers and tankers, as well as access for the flow of weapons, ammunition, food and water the US war machine needed daily. Russia’s military provided intelligence on Osama bin Laden’s whereabouts and helped the US negotiate rights to use an airbase in Kyrgyzstan. The Joint Chiefs have been in communication with their Russian counterparts throughout the Syrian war, and the ties between the two militaries start at the top. In August, a few weeks before his retirement as chairman of the Joint Chiefs, Dempsey made a farewell visit to the headquarters of the Irish Defence Forces in Dublin and told his audience there that he had made a point while in office to keep in touch with the chief of the Russian General Staff, General Valery Gerasimov. ‘I’ve actually suggested to him that we not end our careers as we began them,’ Dempsey said – one a tank commander in West Germany, the other in the east.

When it comes to tackling Islamic State, Russia and the US have much to offer each other. Many in the IS leadership and rank and file fought for more than a decade against Russia in the two Chechen wars that began in 1994, and the Putin government is heavily invested in combating Islamist terrorism. ‘Russia knows the Isis leadership,’ the JCS adviser said, ‘and has insights into its operational techniques, and has much intelligence to share.’ In return, he said, ‘we’ve got excellent trainers with years of experience in training foreign fighters – experience that Russia does not have.’ The adviser would not discuss what American intelligence is also believed to have: an ability to obtain targeting data, often by paying huge sums of cash, from sources within rebel militias.

A former White House adviser on Russian affairs told me that before 9/11 Putin ‘used to say to us: “We have the same nightmares about different places.” He was referring to his problems with the caliphate in Chechnya and our early issues with al-Qaida. These days, after the Metrojet bombing over Sinai and the massacres in Paris and elsewhere, it’s hard to avoid the conclusion that we actually have the same nightmares about the same places.’

Yet the Obama administration continues to condemn Russia for its support of Assad. A retired senior diplomat who served at the US embassy in Moscow expressed sympathy for Obama’s dilemma as the leader of the Western coalition opposed to Russia’s aggression against Ukraine: ‘Ukraine is a serious issue and Obama has been handling it firmly with sanctions. But our policy vis-à-vis Russia is too often unfocused. But it’s not about us in Syria. It’s about making sure Bashar does not lose. The reality is that Putin does not want to see the chaos in Syria spread to Jordan or Lebanon, as it has to Iraq, and he does not want to see Syria end up in the hands of Isis. The most counterproductive thing Obama has done, and it has hurt our efforts to end the fighting a lot, was to say: “Assad must go as a premise for negotiation.”’ He also echoed a view held by some in the Pentagon when he alluded to a collateral factor behind Russia’s decision to launch airstrikes in support of the Syrian army on 30 September: Putin’s desire to prevent Assad from suffering the same fate as Gaddafi. He had been told that Putin had watched a video of Gaddafi’s savage death three times, a video that shows him being sodomised with a bayonet. The JCS adviser also told me of a US intelligence assessment which concluded that Putin had been appalled by Gaddafi’s fate: ‘Putin blamed himself for letting Gaddafi go, for not playing a strong role behind the scenes’ at the UN when the Western coalition was lobbying to be allowed to undertake the airstrikes that destroyed the regime. ‘Putin believed that unless he got engaged Bashar would suffer the same fate – mutilated – and he’d see the destruction of his allies in Syria.’

In a speech on 22 November, Obama declared that the ‘principal targets’ of the Russian airstrikes ‘have been the moderate opposition’. It’s a line that the administration – along with most of the mainstream American media – has rarely strayed from. The Russians insist that they are targeting all rebel groups that threaten Syria’s stability – including Islamic State. The Kremlin adviser on the Middle East explained in an interview that the first round of Russian airstrikes was aimed at bolstering security around a Russian airbase in Latakia, an Alawite stronghold. The strategic goal, he said, has been to establish a jihadist-free corridor from Damascus to Latakia and the Russian naval base at Tartus and then to shift the focus of bombing gradually to the south and east, with a greater concentration of bombing missions over IS-held territory. Russian strikes on IS targets in and near Raqqa were reported as early as the beginning of October; in November there were further strikes on IS positions near the historic city of Palmyra and in Idlib province, a bitterly contested stronghold on the Turkish border.

Russian incursions into Turkish airspace began soon after Putin authorised the bombings, and the Russian air force deployed electronic jamming systems that interfered with Turkish radar. The message being sent to the Turkish air force, the JCS adviser said, was: ‘We’re going to fly our fighter planes where we want and when we want and jam your radar. Do not fuck with us. Putin was letting the Turks know what they were up against.’ Russia’s aggression led to Turkish complaints and Russian denials, along with more aggressive border patrolling by the Turkish air force. There were no significant incidents until 24 November, when two Turkish F-16 fighters, apparently acting under more aggressive rules of engagement, shot down a Russian Su-24M jet that had crossed into Turkish airspace for no more than 17 seconds. In the days after the fighter was shot down, Obama expressed support for Erdoğan, and after they met in private on 1 December he told a press conference that his administration remained ‘very much committed to Turkey’s security and its sovereignty’. He said that as long as Russia remained allied with Assad, ‘a lot of Russian resources are still going to be targeted at opposition groups … that we support … So I don’t think we should be under any illusions that somehow Russia starts hitting only Isil targets. That’s not happening now. It was never happening. It’s not going to be happening in the next several weeks.’

The Kremlin adviser on the Middle East, like the Joint Chiefs and the DIA, dismisses the ‘moderates’ who have Obama’s support, seeing them as extremist Islamist groups that fight alongside Jabhat al-Nusra and IS (‘There’s no need to play with words and split terrorists into moderate and not moderate,’ Putin said in a speech on 22 October). The American generals see them as exhausted militias that have been forced to make an accommodation with Jabhat al-Nusra or IS in order to survive. At the end of 2014, Jürgen Todenhöfer, a German journalist who was allowed to spend ten days touring IS-held territory in Iraq and Syria, told CNN that the IS leadership ‘are all laughing about the Free Syrian Army. They don’t take them for serious. They say: “The best arms sellers we have are the FSA. If they get a good weapon, they sell it to us.” They didn’t take them for serious. They take for serious Assad. They take for serious, of course, the bombs. But they fear nothing, and FSA doesn’t play a role.’

Putin’s bombing campaign provoked a series of anti-Russia articles in the American press. On 25 October, the New York Times reported, citing Obama administration officials, that Russian submarines and spy ships were ‘aggressively’ operating near the undersea cables that carry much of the world’s internet traffic – although, as the article went on to acknowledge, there was ‘no evidence yet’ of any Russian attempt actually to interfere with that traffic. Ten days earlier the Times published a summary of Russian intrusions into its former Soviet satellite republics, and described the Russian bombing in Syria as being ‘in some respects a return to the ambitious military moves of the Soviet past’. The report did not note that the Assad administration had invited Russia to intervene, nor did it mention the US bombing raids inside Syria that had been underway since the previous September, without Syria’s approval. An October op-ed in the same paper by Michael McFaul, Obama’s ambassador to Russia between 2012 and 2014, declared that the Russian air campaign was attacking ‘everyone except the Islamic State’. The anti-Russia stories did not abate after the Metrojet disaster, for which Islamic State claimed credit. Few in the US government and media questioned why IS would target a Russian airliner, along with its 224 passengers and crew, if Moscow’s air force was attacking only the Syrian ‘moderates’.

Economic sanctions, meanwhile, are still in effect against Russia for what a large number of Americans consider Putin’s war crimes in Ukraine, as are US Treasury Department sanctions against Syria and against those Americans who do business there. The New York Times, in a report on sanctions in late November, revived an old and groundless assertion, saying that the Treasury’s actions ‘emphasise an argument that the administration has increasingly been making about Mr Assad as it seeks to press Russia to abandon its backing for him: that although he professes to be at war with Islamist terrorists, he has a symbiotic relationship with the Islamic State that has allowed it to thrive while he has clung to power.’

The four core elements of Obama’s Syria policy remain intact today: an insistence that Assad must go; that no anti-IS coalition with Russia is possible; that Turkey is a steadfast ally in the war against terrorism; and that there really are significant moderate opposition forces for the US to support. The Paris attacks on 13 November that killed 130 people did not change the White House’s public stance, although many European leaders, including François Hollande, advocated greater co-operation with Russia and agreed to co-ordinate more closely with its air force; there was also talk of the need to be more flexible about the timing of Assad’s exit from power. On 24 November, Hollande flew to Washington to discuss how France and the US could collaborate more closely in the fight against Islamic State. At a joint press conference at the White House, Obama said he and Hollande had agreed that ‘Russia’s strikes against the moderate opposition only bolster the Assad regime, whose brutality has helped to fuel the rise’ of IS. Hollande didn’t go that far but he said that the diplomatic process in Vienna would ‘lead to Bashar al-Assad’s departure … a government of unity is required.’ The press conference failed to deal with the far more urgent impasse between the two men on the matter of Erdoğan. Obama defended Turkey’s right to defend its borders; Hollande said it was ‘a matter of urgency’ for Turkey to take action against terrorists. The JCS adviser told me that one of Hollande’s main goals in flying to Washington had been to try to persuade Obama to join the EU in a mutual declaration of war against Islamic State. Obama said no. The Europeans had pointedly not gone to Nato, to which Turkey belongs, for such a declaration. ‘Turkey is the problem,’ the JCS adviser said.

Assad, naturally, doesn’t accept that a group of foreign leaders should be deciding on his future. Imad Moustapha, now Syria’s ambassador to China, was dean of the IT faculty at the University of Damascus, and a close aide of Assad’s, when he was appointed in 2004 as the Syrian ambassador to the US, a post he held for seven years. Moustapha is known still to be close to Assad, and can be trusted to reflect what he thinks. He told me that for Assad to surrender power would mean capitulating to ‘armed terrorist groups’ and that ministers in a national unity government – such as was being proposed by the Europeans – would be seen to be beholden to the foreign powers that appointed them. These powers could remind the new president ‘that they could easily replace him as they did before to the predecessor … Assad owes it to his people: he could not leave because the historic enemies of Syria are demanding his departure.’

Moustapha also brought up China, an ally of Assad that has allegedly committed more than $30 billion to postwar reconstruction in Syria. China, too, is worried about Islamic State. ‘China regards the Syrian crisis from three perspectives,’ he said: international law and legitimacy; global strategic positioning; and the activities of jihadist Uighurs, from Xinjiang province in China’s far west. Xinjiang borders eight nations – Mongolia, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan and India – and, in China’s view, serves as a funnel for terrorism around the world and within China. Many Uighur fighters now in Syria are known to be members of the East Turkestan Islamic Movement – an often violent separatist organisation that seeks to establish an Islamist Uighur state in Xinjiang. ‘The fact that they have been aided by Turkish intelligence to move from China into Syria through Turkey has caused a tremendous amount of tension between the Chinese and Turkish intelligence,’ Moustapha said. ‘China is concerned that the Turkish role of supporting the Uighur fighters in Syria may be extended in the future to support Turkey’s agenda in Xinjiang. We are already providing the Chinese intelligence service with information regarding these terrorists and the routes they crossed from on travelling into Syria.’

Moustapha’s concerns were echoed by a Washington foreign affairs analyst who has closely followed the passage of jihadists through Turkey and into Syria. The analyst, whose views are routinely sought by senior government officials, told me that ‘Erdoğan has been bringing Uighurs into Syria by special transport while his government has been agitating in favour of their struggle in China. Uighur and Burmese Muslim terrorists who escape into Thailand somehow get Turkish passports and are then flown to Turkey for transit into Syria.’ He added that there was also what amounted to another ‘rat line’ that was funnelling Uighurs – estimates range from a few hundred to many thousands over the years – from China into Kazakhstan for eventual relay to Turkey, and then to IS territory in Syria. ‘US intelligence,’ he said, ‘is not getting good information about these activities because those insiders who are unhappy with the policy are not talking to them.’ He also said it was ‘not clear’ that the officials responsible for Syrian policy in the State Department and White House ‘get it’. IHS-Jane’s Defence Weekly estimated in October that as many as five thousand Uighur would-be fighters have arrived in Turkey since 2013, with perhaps two thousand moving on to Syria. Moustapha said he has information that ‘up to 860 Uighur fighters are currently in Syria.’

China’s growing concern about the Uighur problem and its link to Syria and Islamic State have preoccupied Christina Lin, a scholar who dealt with Chinese issues a decade ago while serving in the Pentagon under Donald Rumsfeld. ‘I grew up in Taiwan and came to the Pentagon as a critic of China,’ Lin told me. ‘I used to demonise the Chinese as ideologues, and they are not perfect. But over the years as I see them opening up and evolving, I have begun to change my perspective. I see China as a potential partner for various global challenges especially in the Middle East. There are many places – Syria for one – where the United States and China must co-operate in regional security and counterterrorism.’ A few weeks earlier, she said, China and India, Cold War enemies that ‘hated each other more than China and the United States hated each other, conducted a series of joint counterterrorism exercises. And today China and Russia both want to co-operate on terrorism issues with the United States.’ As China sees it, Lin suggests, Uighur militants who have made their way to Syria are being trained by Islamic State in survival techniques intended to aid them on covert return trips to the Chinese mainland, for future terrorist attacks there. ‘If Assad fails,’ Lin wrote in a paper published in September, ‘jihadi fighters from Russia’s Chechnya, China’s Xinjiang and India’s Kashmir will then turn their eyes towards the home front to continue jihad, supported by a new and well-sourced Syrian operating base in the heart of the Middle East.’

General Dempsey and his colleagues on the Joint Chiefs of Staff kept their dissent out of bureaucratic channels, and survived in office. General Michael Flynn did not. ‘Flynn incurred the wrath of the White House by insisting on telling the truth about Syria,’ said Patrick Lang, a retired army colonel who served for nearly a decade as the chief Middle East civilian intelligence officer for the DIA. ‘He thought truth was the best thing and they shoved him out. He wouldn’t shut up.’ Flynn told me his problems went beyond Syria. ‘I was shaking things up at the DIA – and not just moving deckchairs on the Titanic. It was radical reform. I felt that the civilian leadership did not want to hear the truth. I suffered for it, but I’m OK with that.’ In a recent interview in Der Spiegel, Flynn was blunt about Russia’s entry into the Syrian war: ‘We have to work constructively with Russia. Whether we like it or not, Russia made a decision to be there and to act militarily. They are there, and this has dramatically changed the dynamic. So you can’t say Russia is bad; they have to go home. It’s not going to happen. Get real.’

Few in the US Congress share this view. One exception is Tulsi Gabbard, a Democrat from Hawaii and member of the House Armed Services Committee who, as a major in the Army National Guard, served two tours in the Middle East. In an interview on CNN in October she said: ‘The US and the CIA should stop this illegal and counterproductive war to overthrow the Syrian government of Assad and should stay focused on fighting against … the Islamic extremist groups.’

‘Does it not concern you,’ the interviewer asked, ‘that Assad’s regime has been brutal, killing at least 200,000 and maybe 300,000 of his own people?’

‘The things that are being said about Assad right now,’ Gabbard responded, ‘are the same that were said about Gaddafi, they are the same things that were said about Saddam Hussein by those who were advocating for the US to … overthrow those regimes … If it happens here in Syria … we will end up in a situation with far greater suffering, with far greater persecution of religious minorities and Christians in Syria, and our enemy will be far stronger.’

‘So what you are saying,’ the interviewer asked, ‘is that the Russian military involvement in the air and on-the-ground Iranian involvement – they are actually doing the US a favour?’

‘They are working toward defeating our common enemy,’ Gabbard replied.

Gabbard later told me that many of her colleagues in Congress, Democrats and Republicans, have thanked her privately for speaking out. ‘There are a lot of people in the general public, and even in the Congress, who need to have things clearly explained to them,’ Gabbard said. ‘But it’s hard when there’s so much deception about what is going on. The truth is not out.’ It’s unusual for a politician to challenge her party’s foreign policy directly and on the record. For someone on the inside, with access to the most secret intelligence, speaking openly and critically can be a career-ender. Informed dissent can be transmitted by means of a trust relationship between a reporter and those on the inside, but it almost invariably includes no signature. The dissent exists, however. The longtime consultant to the Joint Special Operations Command could not hide his contempt when I asked him for his view of the US’s Syria policy. ‘The solution in Syria is right before our nose,’ he said. ‘Our primary threat is Isis and all of us – the United States, Russia and China – need to work together. Bashar will remain in office and, after the country is stabilised there will be an election. There is no other option.’

The military’s indirect pathway to Assad disappeared with Dempsey’s retirement in September. His replacement as chairman of the Joint Chiefs, General Joseph Dunford, testified before the Senate Armed Services Committee in July, two months before assuming office. ‘If you want to talk about a nation that could pose an existential threat to the United States, I’d have to point to Russia,’ Dunford said. ‘If you look at their behaviour, it’s nothing short of alarming.’ In October, as chairman, Dunford dismissed the Russian bombing efforts in Syria, telling the same committee that Russia ‘is not fighting’ IS. He added that America must ‘work with Turkish partners to secure the northern border of Syria’ and ‘do all we can to enable vetted Syrian opposition forces’ – i.e. the ‘moderates’ – to fight the extremists.

Obama now has a more compliant Pentagon. There will be no more indirect challenges from the military leadership to his policy of disdain for Assad and support for Erdoğan. Dempsey and his associates remain mystified by Obama’s continued public defence of Erdoğan, given the American intelligence community’s strong case against him – and the evidence that Obama, in private, accepts that case. ‘We know what you’re doing with the radicals in Syria,’ the president told Erdoğan’s intelligence chief at a tense meeting at the White House (as I reported in the LRB of 17 April 2014). The Joint Chiefs and the DIA were constantly telling Washington’s leadership of the jihadist threat in Syria, and of Turkey’s support for it. The message was never listened to. Why not?