LCCC ENGLISH DAILY NEWS BULLETIN
February 06/19

Compiled & Prepared by: Elias Bejjani

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Bible Quotations For today
Is there unrighteousness with God? May it never be! For he said to Moses, “I will have mercy on whom I have mercy, and I will have compassion on whom I have compassion
Romans 09/14-18/ What shall we say then? Is there unrighteousness with God? May it never be! For he said to Moses, “I will have mercy on whom I have mercy, and I will have compassion on whom I have compassion.” So then it is not of him who wills, nor of him who runs, but of God who has mercy. For the Scripture says to Pharaoh, “For this very purpose I caused you to be raised up, that I might show in you my power, and that my name might be proclaimed in all the earth.” 18 So then, he has mercy on whom he desires, and he hardens whom he desires.

Titles For The Latest English LCCC Lebanese & Lebanese Related News published on February 05-06/19
Lebanon's New Government is A mere Iranian Tool
Debate over Possible Macron Visit to Lebanon
Lebanon: Salameh Says Dollar Offered in Market Since Govt Formed
Rahi from UAE: Wars Don’t Emanate From Religion
PSP Boosts Ties with 'Allies' amid Standoff with Hariri
Jumblat: Rehabilitation of Prisons Must Be Included in Policy Statement
Report: PSP Says Berri Willing to 'Back' Jumblat
Bassil Says Aoun President Thanks to Hizbullah, FPM Won't Accept 'Syria in Lebanon'
As Hariri-Jumblat Row Heats Up, Soaid Calls for 'Opposition Front'
Concrete Blocks Outside Interior Ministry Removed
Rahi from Abu Dhabi: We have prayed for the sake of peace
Salameh Assures Economic Progress in Wake of Government Formation
Electricity Cuts to Worsen if EDL Funds Not Secured
Kanaan after bloc meeting: We are positively open to all, seek productivity for the benefit of Lebanese
Future bloc stresses government solidarity: Political, media polarization tampers with public interest, confidence required internally and externally
Is Qatar Seeking to Make a Political Comeback in Lebanon?
Lebanon Moves a Step Closer to $11bn Economic Boost
Report says “soft-exit” from Lebanese debt possible, but only with tough reforms

Litles For The Latest English LCCC Miscellaneous Reports And News published on February 05-06/19
Pope Francis Holds Historic Public Mass in UAE
Catholics in UAE Greet Pope with Cheers and Tears
U.S. Ambassador To Germany: "Horrific Actions" Of Iran Equal To Isis
U.S Rabbi In UAE Quotes Ministers Saying Israel Ties "Just Around Corner"
Oil Hits Highest Levels in 2019 after Venezuela Sanctions, OPEC Cuts
Iran criticizes Greece, Italy for not buying its oil despite US waivers
Iran dismisses EU concern about missile tests as ‘non-constructive’
Iran Refuses to Link FATF to EU Trade Mechanism
Astana Guarantors Agree on Syria Constitutional Committee
Pentagon: ISIS in Syria Could Regroup in 6 Months
Sources: Proposal to Deploy 10,000 Arab, Kurdish Fighters in East Syria
Israeli Military Object 'Deduction Law'
Russia to Develop New Missile Systems in 2 Years after Treaty Pullout
Lima Group Calls for Venezuela Regime Change without Force
Yemen Foes in New Talks on Troubled Prisoner Swap Deal

Titles For The Latest LCCC English analysis & editorials from miscellaneous sources published on February 05-06/19
Lebanon's New Government is A mere Iranian Tool/Elias Bejjani/February 05/19
Is Qatar Seeking to Make a Political Comeback in Lebanon/Michael Young/Carnegie Middle East Center/February 05/19
Lebanon Moves a Step Closer to $11bn Economic Boost/Sunniva Rose/The National/February 05/19
Report says “soft-exit” from Lebanese debt possible, but only with tough reforms/TK Maloy/Annahar/February 05/19
U.S. Ambassador To Germany: "Horrific Actions" Of Iran Equal To Isis/Jerusalem Post/February 05/19
U.S Rabbi In UAE Quotes Ministers Saying Israel Ties "Just Around Corner"/Jerusalem Post/February 05/19
The Best Economic Policy for the Working Class/Karl W. Smith/Bloomberg/February 05/19

Latest LCCC English Lebanese & Lebanese Related News published on February 05-06/19
Lebanon's New Government is A mere Iranian Tool
Elias Bejjani/February 05/19
Hezbollah Secretary-General, Sayyed Hassan Nasrallah, alleged yesterday in a speech aired via his Iranian terrorist organization "Al-Manar TV" that the new Lebanese Government is not controlled by Hezbollah.
Definitely, and without any doubt, Nasrallah's camouflaging rhetoric of denial is not only false, but also deceiving by all means and in all domains.
In reality and based on actual facts that are related to the political, national, and strategic affiliations of the thirty ministers of the newly formed cabinet, we can loudly and freely, say that this New Government is a mere Iranian tool no more no less.
The Government was announced after Hezbollah's on going Iranian Mullah's obstacles, intimidations and procrastinations that went on evilly for nine months in a bid to serve Iran's regional and local terrorist agenda.
There is nothing in this new government that is "Lebanese" by any means except its name.
In reality and actuality it is an Iranian mere governing tool as was the status of the previous one.
It is worth mentioning that the State of Lebanon is an Iranian occupied and oppressed country.
Meanwhile all those politicians and so called corrupted political parties who participated in the new government are practically mere Trojans and have no patriotic or free saying in any matter being major or minor...and espcially in regards to Hezbollah's occupation.
Twenty ministers out of the thirty portfolios that the new government is composed of are filled either by Hezbollah active members, allies or by individuals that are picked and nominated by its leadership.
While the other 10 portfolios are designated to ministers that represent three political parties that has already succumbed to the occupier, Hezbollah, and accepted to recognize its occupation and control in exchange for trivial and marginalized governing power shares.
Sadly this new government is going to be practically like the previous one, just a mask and a cover for Hezbollah's occupation and a tool for Iranian Mullah's expansionism and terrorism schemes that are totally anti-Lebanese, anti-Arab and anti peace..

Debate over Possible Macron Visit to Lebanon
Beirut – Khalil Fuleihan/Asharq Al-Awsat/Tuesday, 5 February, 2019/Lebanese sources wondered on Monday whether the birth of a new government in Lebanon would lead to French President Emmanuel Macron’s visit to Beirut this month, upon an invitation from his Lebanese counterpart Michel Aoun.
Macron had repeatedly informed Lebanese officials that no visit would be scheduled in the absence of a cabinet. Last week, Hariri announced his 30-member government following nine months of bickering among political forces over shares.Still, the Presidential Palace in Baabda has not received any response form the Elysee confirming a date for Macron’s official visit or a decision to postpone it. Sources at the French presidential palace told Asharq Al-Awsat that Macron was currently canceling trips outside France in light of his efforts to address the concerns of the “gilets jaunes” (yellow vests movement) protests. Circles at the Baabda Palace expected a response from Paris, although no French officials have headed to Beirut recently to prepare for Macron’s visit. A prominent official advised the Lebanese against making conjectures about the visit because the government has yet to receive parliament’s vote of confidence. Macron was scheduled to arrive in Lebanon any time between February 11 and 14. Both Aoun and Prime Minister Saad Hariri place importance on Macron’s visit as it offers a great push for the implementation of the decisions taken at last year’s CEDRE conference that was hosted by Paris, the official said. Meanwhile, Italian Prime Minister Giuseppe Conte is expected in Beirut within 72 hours to visit Italian forces operating in the United Nations Interim Force in Lebanon (UNIFIL). He will also seize the opportunity to express to Aoun, Speaker Nabih Berri and Hariri his support for the formation of a government, said an Italian diplomatic source.

Lebanon: Salameh Says Dollar Offered in Market Since Govt Formed
Beirut- Asharq Al-Awsat/Tuesday, 5 February, 2019/US dollars are being offered in Lebanon's local market to buy Lebanese pounds since the formation of a new government, Lebanese al-Jadeed television quoted the central bank governor, Riad Salameh, as saying on Tuesday. Lebanese leaders agreed a new national unity government last week after nearly nine months of political wrangling over how to share out cabinet portfolios. Prime Minister Saad al-Hariri has said bold reforms must now be taken to address problems in the heavily indebted state, which has suffered from years of low economic growth and has some of the world's worst debt and balance-of-payment ratios. The Lebanese pound has been pegged against the dollar at its current level for more than two decades. "After the formation of the government the dollar has been offered in the local market to buy pounds and this restores the strength of the role of national currency in savings," Salameh said from the presidential palace. Presidential sources said President Michel Aoun had discussed the monetary situation at a meeting with Salameh. Moody's said on Monday the government formation was positive for the country's credit rating as it should help unlock an $11 billion, five-year international support package offered last year. The international institutions and foreign governments that pledged the support, mostly in the form of concessional loans, want to see government reforms to put the state finances on a sustainable path. Lebanon's 150 percent debt-to-GDP level and its near 25 percent current account gap - a figure that effectively shows how much a country borrows from the rest of the world - are its most worrying statistics. Moody's estimates the interest bill from its debt alone absorbs roughly half of all government revenues and represents about one-third of total government spending. The current account gap meanwhile is worth around $15 billion in real money terms according to Goldman Sachs, and although $500 billion of aid from Qatar and as much as $3.5 billion from Saudi Arabia might cover some of it, there is still likely to be an $11 billion black hole in the finances. For the time being, it can easily be covered by the country's near $40 billion of central bank reserves, which are equivalent to 71 percent of GDP and enough to cover 13 months of imports. It also has gold holdings of $11.8 billion, the second highest in the MENA region after Saudi Arabia. But with a pegged currency, plundering that cash or gold could cause problems, said Reuters. Authorities must hold sufficient dollar buffers to maintain faith in the exchange rate, while ensuring steady inflows to keep coffers topped up.

Rahi from UAE: Wars Don’t Emanate From Religion
Naharnet/February 05/19/Maronite Patriarch Beshara al-Rahi said that the United Arab Emirates merits the honor to receive Pope Francis on a historic visit and to witness the signature of a declaration in the name of Muslims and Christians in the Arabian Peninsula, the National News Agency reported on Tuesday. “This event is highly important, since the Middle East is considered as a region of war and conflicts between religions,” Rahi said during the mass service chaired by Pope Francis at Sheikh Zayed Sports City Stadium in Abu Dhabi. "Today, the UAE tells the world that we are brothers, that religions are a source of brotherhood and that wars do not originate from religion," added the Patriarch. "Christians must show the true image of Islam in their community and Muslims must in turn show the true image of Christianity," he concluded.

PSP Boosts Ties with 'Allies' amid Standoff with Hariri
Agence France Presse/Naharnet/February 05/19/Progressive Socialist Party leader ex-MP Walid Jumblat is seeking to strengthen his relations with his “allies” amid an unprecedented confrontation between him and Prime Minister Saad Hariri, a media report said. “Jumblat intends to enhance his ties with the Marada Movement and the Lebanese Forces and he has already started moves in this regard,” political sources told Asharq al-Awsat newspaper in remarks published Tuesday. “He dispatched MP Marwan Hamadeh and Minister Akram Shehayyeb to meet with Parliament Speaker Nabih Berri on Sunday and on Monday he sent Shehayyeb to meet with Lebanese Forces leader Samir Geagea to put them in the picture of the stances he took after the government's formation,” the sources said. And as the supposed allies remained silent on Jumblat's second day of bickering with Hariri, the political sources said they expect support for Jumblat from Berri, whereas Marada and the LF would only back the PSP leader on the electricity file.

Jumblat: Rehabilitation of Prisons Must Be Included in Policy Statement
Naharnet/February 05/19/Progressive Socialist Party leader ex-MP Walid Jumblat said the issue of rehabilitation of Lebanon’s prisons must be included in the government policy statement. “I don’t think it would be considered wrong to include an article in the policy statement having to do with rehabilitation of prisons, and the construction of new ones,”said Jumblat in a tweet.On Monday, the ministerial panel drafting the new cabinet's policy statement held its first meeting. According to Information Minister Jamal al-Jarrah, the statement could be finalized on Tuesday.
Detention conditions in Lebanon’s prisons are very hard in light of poor ventilation, overcrowded cells and limited drinking water and medical care. An example is Roumieh prison which is the largest and most notorious Lebanese prison located in Roumieh, Matn district. It was designed to hold 1050 inmates, but currently holds way above its capacity.

Report: PSP Says Berri Willing to 'Back' Jumblat
Naharnet/February 05/19/The Progressive Socialist Party said that Speaker Nabih Berri is “willing to back” PSP leader ex-MP Walid Jumblat after a series of fiery tweets with Prime Minister Saad Hariri over the future performance of the government, the Saudi Asharq al-Awsat reported on Tuesday.Sources close to the PSP, spoke of “attempts to block the party and its leader,” which they said Berri will not let that happen. Two PSP figures who visited Berri two days ago after Jumblat’s press conference, said the Speaker has assured them that he won’t let Jumblat “become isolated,” they told the daily. “Berri, a key ally, is not going to leave Jumblat alone to face blockade attempts. The Speaker is willing to play a role and prevent that. But he is going to let things take their natural course for now, because of the fierce statement campaigns by both parties,” PSP sources said. Hariri and Jumblat’s war of words stepped up after the Cabinet was formed last week. Jumblat criticized Hariri and Foreign Minister Jebran Bassil and accused them of hegemony, unilateralism and disregard for the Taef Accord. Both Hariri and Bassil had blasted Jumblat in return.

Bassil Says Aoun President Thanks to Hizbullah, FPM Won't Accept 'Syria in Lebanon'
Free Patriotic Movement chief MP Jebran Bassil announced Tuesday that “had it not been for Hizbullah, General (Michel) Aoun would not have become president.”“And Hizbullah must admit that had it not been for the FPM, it would not have managed to persevere in the face of Israel, terrorism or the isolation attempts,” Bassil added at a Mar Mikhail Church ceremony marking 13 years since the historic “memorandum of understanding” was signed between the two parties. “This agreement was not aimed at isolating anyone. It rather paved the way for national agreements with everyone and there are articles related to sovereignty that have been fulfilled as others remain pending,” Bassil added. “Partnership with Hizbullah protects national unity and the country and it is important. That's why we always return to it,” the FPM chief went on to say.Turning to the thorny issue of Lebanon's relation with Damascus, Bassil said: “The FPM will never accept Syria's presence inside Lebanon but will stand by it, the same as it did over the past eight years, when it is behind the border.”

As Hariri-Jumblat Row Heats Up, Soaid Calls for 'Opposition Front'
Naharnet/February 05/19/The former coordinator of the March 14 General-Secretariat, ex-MP Fares Soaid, on Tuesday called for forming an “opposition front” against Prime Minister Saad Hariri, Foreign Minister Jebran Bassil and Hizbullah, as an unprecedented war of words between Hariri and Druze leader Walid Jumblat continued to flare up. “I understand the dismay of certain political parties over the firmness of the alliance between PM Hariri and President (Michel) Aoun-Bassil and I call on them to rise up, seeing as they have parliamentary blocs, they are leaders of respectable parties, they own media outlets and they enjoy Arab and foreign ties,” Soaid tweeted.“There is one path towards opposition – confronting Hizbullah's weapons. The rest is secondary,” the former lawmaker added. MP Hadi Abu al-Husn meanwhile said that “Lebanon cannot bear new fronts but rather solidarity for the sake of rescuing what's left of the state.”“We will see where we will be in the government,” the said in an interview on MTV. “We will be in a confrontation against any additional attempt at wasting public money or at harming the political system and the Taef Accord,” Abu al-Husn added. “We will be with those who agree with us, and those who are against are free in their choice,” the lawmaker went on to say. Jumblat has escalated his stances against Hariri and the Free Patriotic Movement in recent days, engaging in an unprecedented war of words with the premier. Ties between the former allies have been strained over several files. Jumblat was reportedly dismayed after Hariri refrained from informing him that Ghassan Atallah of the FPM had been allocated the ministry of the displaced during their meeting on the eve of the new government's formation. A pro-Damascus figure has meanwhile been allocated the refugee affairs portfolio. Political sources told Asharq al-Awsat newspaper in remarks published Tuesday that Jumblat is seeking to strengthen his relations with his “allies” amid the confrontation with Hariri. “Jumblat intends to enhance his ties with the Marada Movement and the Lebanese Forces and he has already started moves in this regard,” the sources said.“He dispatched MP Marwan Hamadeh and Minister Akram Shehayyeb to meet with Parliament Speaker Nabih Berri on Sunday and on Monday he sent Shehayyeb to meet with Lebanese Forces leader Samir Geagea to put them in the picture of the stances he took after the government's formation,” the sources added.

Concrete Blocks Outside Interior Ministry Removed
Naharnet/February 05/19/Cement blocks, barbed wire and explosives detection equipment that were placed at the entrance of the Interior Ministry, narrowing a Hamra street in Beirut’s neighborhood, were removed on Tuesday.Media office of outgoing Interior Minister Nouhad al-Mashnouq, said in a statement that he requested related security officials at the ministry to remove the blocks that were initially placed for “security reasons.”The statement said that Mashnouq had been working on a file relted to counter-terrorism, which put his life in danger. “The reasons exist no more,” it said.Mashnouq will hand over the Interior Ministry to Rayya Hassan on Wednesday.According to al-Jadeed TV channel, Hassan has first taken the decision on Monday morning.According to a statement reportedly released by her media office, she was planning on announcing it on Wednesday.

Rahi from Abu Dhabi: We have prayed for the sake of peace
Tue 05 Feb 2019/NNA - Maronite Patriarch Cardinal Bechara Boutros Rahi on Tuesday deemed today's mass service led by his Holiness Pope Francis in Abu Dhabi as a historic day, praying for the sake of peace. Patriarch Rahi's words came in his address at the ceremony held in his honor by Lebanon's Ambassador to the UAE, Fouad Chehab Dandan, at Embassy in Abu Dhabi, attended by the UAE Ambassador to Lebanon, Hamad Saeed Al Shamsi, representatives of the Christian and Islamic communities and the Lebanese community members in Abu Dhabi. In his delivered word, Patriarch Rahi lauded the Lebanese expatriates who are highly recognized worldwide for their creative mind and instructive knowledge. Rahi saluted President of the Republic, Michel Aoun, and Prime Minister, Saad Hariri, for the long-awaited government formation, thanking all the Lebanese parties and components which facilitated the birth of the new government. The Patriarch wished the new government success with great challenges ahead. On the other hand, Rahi deemed today's mass service led by his Holiness Pope Francis for the sake of peace as a "historic day par excellence." "Today we have prayed for peace and the cessation of war and for the return of the displaced to their homeland," Rahi concluded.

Salameh Assures Economic Progress in Wake of Government Formation
Kataeb.org/Tuesday 05th February 2019/U.S. dollar has been offered in the Lebanese market since the formation of a new government, Central Bank Governor Riad Salameh said on Monday. Speaking following a meeting with President Michel Aoun, Salameh noted that U.S. dollars are being offered in the local market to buy Lebanese pounds, stressing that this consolidates the strength of the national currency in savings. Eurobonds have also increased by 10 percent compared to before the government formation, Salameh noted.

Electricity Cuts to Worsen if EDL Funds Not Secured
Kataeb.org/Tuesday 05th February 2019/Lebanon will experience widespread and complete power outages if the Parliament fails to approve the needed funding for Electricite du Liban by mid-February. Lawmakers will have to approve a bill allowing the Finance Ministry to release funds ($1.8 billion) to EDL to buy the fuel necessary for Lebanon’s power plants.MTV channel quoted EDL sources as saying that electricity production has already been reduced from 1900 to 1780 megawatts, warning that electricity supply will be tapered off by additional 150 megawatts should no solution be reached soon. Power plants will shut down gradually and electricity rationing will worsen as of February 10, the sources warned.

Kanaan after bloc meeting: We are positively open to all, seek productivity for the benefit of Lebanese
Tue 05 Feb 2019/NNA - MP Ibrahim Kanaan said after the weekly meeting of the "Strong Lebanon" parliamentary bloc that "there is a better partnership in the government, but the lesson remains in implementation and achievement. We hope that the rules will be known. When elections are held, their results must be reflected in the legislative authority. It is the only criterion that must be adopted.""On the eve of the anniversary of signing the Mar Mikhael Agreement, we proved that we hold the intention of understanding with all the forces with whom we seek to preserve the country. We emphasize all the agreements that we have made," Kanaan said, stressing that his bloc is "open to everyone positively. Our battle today is that of productivity for the benefit of all the Lebanese. This is our responsibility.""We have an action plan based from which we seek tangible results," he added. "We extend our hand to all the forces and pledge to be the anchor for any useful, good and constructive project for Lebanon and the Lebanese," Kanaan asserted on behalf of the Strong Lebanon bloc.

Future bloc stresses government solidarity: Political, media polarization tampers with public interest, confidence required internally and externally
Tue 05 Feb 2019/NNA - The Future parliamentary bloc held its regular meeting this Tuesday at the Center House in DT, under the chairmanship of MP Bahia Hariri, with talks touching on the latest political developments and the overall situation in the country.
The bloc's statement in the wake of the meeting expressed satisfaction with the formation of the government and "the immediate launching of workshops that the Lebanese are eagerly waiting for.""The political, economic and reform foundations announced by PM Saad Hariri form a solid basis for protecting the government's program," the bloc said, noting that "discussions are taking place at the meetings of the Ministerial Statement Committee, and have achieved major progress and reflected government cooperation and solidarity; qualities that build for a new stage of joint work and integrated efforts to get out of the state of anxiety that prevails over the country."Conferees stressed "the importance of government solidarity at this critical juncture in the history of the country and the region," calling on "all partners at the table of the Council of Ministers to abide by the obligations of this solidarity and stop the political and media polarization which would harm public interests and tamper with the confidence that the State needs both internally and externally."The statement stressed that "the confidence of the citizens in their government and the bet on putting the performance of the new government above all partisan and personal interests is a matter that is equivalent to the importance of the confidence vote that will be required by the government from the House of Representatives. This confidence cannot become a reality without transforming the Cabinet into a daily workshop integrated with the legislative workshop at the Parliament, so that the State (...) can bring the investment program for economic and service development into force, away from waste, corruption and manipulation of the law."

Is Qatar Seeking to Make a Political Comeback in Lebanon?
Michael Young/Carnegie Middle East Center/February 05/19
I don’t think Qatar is “coming back” so much as “nudging in,” as it has not traditionally had an interest in or influence over Lebanon in the way that Saudi Arabia has. The recent purchase of Lebanese bonds, which now have junk status, was opportunistic. It was basically a low-cost investment (and probably a rather poor one) to buy goodwill in Lebanon at a time when Saudi Arabia and the United Arab Emirates have not shown signs of support for the country.
Of course, the Qatari purchase then prompted Saudi Arabia and its finance minister Mohammed al-Jad‘an to verbally commit to providing financial support for Lebanon. There is a larger trend of Gulf financial intervention (in the form of direct central bank deposits, investment commitments, oil and gas transfers) in the region and beyond (including the Horn of Africa and Pakistan) that is an effort to buy allegiance, but also to experiment in the export of Gulf development models that are state-centered, profitable for state-related firms, and often personalistic to create ties between leaders. This is upending traditional development finance and its conditionality mechanisms, which have served to hold governments accountable to some structural reform.
Qatar’s decision to invest $500 million in Lebanese government bonds is the latest political attempt at outmaneuvering its archrival Saudi Arabia in a country where Saudi hubris and miscalculations have left a void. Doha is trying to fill this void in the old-fashioned way, through cash. The new Saudi leadership views Lebanon as a black hole in which there is no political return for financial assistance. It is unlikely to match Qatar’s temporary relief.
This Qatari salvo should be seen in the context of its regional offensive to enhance its defenses against the blockade imposed by Saudi Arabia, the United Arab Emirates, and their allies in 2017, and by balancing this alliance off through stronger relations with countries such as Iraq, Jordan, and Sudan. Qatar is also trying to exploit the resentment many Lebanese felt in 2017, when the Saudis summoned Lebanese Prime Minister Saad al-Hariri to Riyadh and forced him to resign after accusing him of failing to check Iranian influence in Lebanon.
The emir of Qatar, Sheikh Tamim bin Hamad Al Thani, was one of a very small number of heads of state to attend the recent Arab Economic and Development Summit in Lebanon, and the only one from the energy-rich Gulf states. Sheikh Tamim’s presence reflected a longstanding Qatari policy of pursuing Arab solutions to Arab problems. This is a continuation of the approach followed by Sheikh Tamim’s father and predecessor, Sheikh Hamad bin Khalifa Al Thani, and his longtime foreign minister, Sheikh Hamad bin Jasem Al Thani, during the 1990s and the first decade of this century. The blockade of Qatar by four regional states, led by Saudi Arabia and the United Arab Emirates, has freed Qatar of the constraints of aligning with narrower Saudi- or Emirati-led interests in the Gulf Cooperation Council. It has also given the Qataris the space to follow a pan-Arab approach to regional developments.
Feeling increasingly confident after the failure of the Saudi-led blockade against Qatar, Doha is moving to take an assertive posture in the region. It aims to restore some of the influence it lost during the years of the Arab uprisings after 2011. Qatar also appears to be interested in regaining its pre-2011 role as mediator, and its recent moves in Lebanon, as well as in Gaza, Afghanistan, and Sudan, should be seen in this context.
The heavy-handed Saudi approach to Lebanon under Crown Prince Mohammed bin Salman has backfired, leaving a vacuum for Qatar. In addition to scoring a political victory against Riyadh, Qatar may be keen to maintain its soft power credentials in Beirut as a long-term investment in a strategic country widely believed to be the gateway to Syria’s reconstruction. It is well positioned on account of its history of aid to and political mediation in Lebanon, which gives it a more neutral standing among most Lebanese factions.
Not really. The emir of Qatar’s 24-hour visit to Beirut during the recent Arab Economic and Development Summit filled a void, marked by the conspicuous absence of most Arab leaders from the gathering, particularly the king of Saudi Arabia. The subsequent $500 million pledge to buy Lebanese bonds buoyed hopes that the visit indicated clear support for Lebanon, whose economic and financial woes are deepening as its domestic political scene is being held hostage to regional power plays and the personal ambitions of some of its leaders. The inability to form a government has undermined faith in the country’s institutions and weakened its economic and financial fundamentals. Had Qatar been looking to support Lebanon, the $500 million would have been deposited at the central bank at favorable or low interest rates. Rather, the bonds purchase will bring Qatar high interest rates, guaranteeing a favorable return on investment in the short term.

Lebanon Moves a Step Closer to $11bn Economic Boost
Sunniva Rose/The National/February 05/19
Monday 04th February 2019, 02:33 (EET) Lebanon Moves a Step Closer to $11bn Economic
After nine months of political deadlock, the formation of a new government in Lebanon on Thursday removes a major obstacle to receiving nearly $11 billion in international funding that should allow the heavily indebted country to move forward with economic reform.
The funds pledged at the Cedre conference in Paris last April, coupled with expected investments from the private sector estimated at $7bn, will serve to finance Lebanon’s ambitious eight-year capital investment programme (CIP) comprised of 250 projects to revamp the country’s crumbling infrastructure.
In return, Lebanon, which has the third-highest debt-to-GDP ratio in the world, has promised to reduce its fiscal deficit by 1 per cent of its GDP per year over the next five years.
In line with the CIP, the cabinet’s first step will be to entirely redesign the country’s inefficient electricity sector, Nadim Munla, economic adviser to Prime Minister Saad Hariri, told The National.
The state-run national utility company, Electricite du Liban (EDL), never recovered from the damage to its infrastructure in the 1975-1990 civil war and has been unable to provide regular power supply ever since. Subsidising the EDL's losses represents the treasury’s third-largest expenditure, after servicing debt and public sector salaries. In 2017, the power utility cost the treasury $1.33bn, a jump of 43.3 per cent from the previous year caused by increased fuel imports and prices.
“The electricity file is the government’s top priority," said Mr Munla. “I assume it will be put on the table in the next few weeks." He added that over the next two years, there will be power purchasing agreements with private companies such as Siemens and General Electric and that electricity production will gradually shift from fuel oil to imported gas.
Electricity reform generates unanimous enthusiasm among Lebanese economists. “Electricity will become cheaper even for the poor, because they won’t have to pay for generators anymore," said Charbel Cordahi, economist and chief financial officer of the telecom operator Touch. The Lebanese pay from $50 to more than $100 a month for power from unregulated private generator operators.
However, some analysts, such as Jad Chaaban, associate professor at the American University of Beirut, caution against Lebanon borrowing further. “The government could finance infrastructure projects by cutting down on EDL subsidies and debt payment as well as tackling tax evasion," he said. “That would save between $3bn to $4bn a year."
Hazar Caracalla, another of Mr Hariri's economic advisers, argues that the concessional interest rates on loans under Cedre, at 1.7 per cent, are much lower than market rates which can exceed 10 per cent.
“It’s true that we are borrowing money, but this money is going towards infrastructure projects that will generate growth and jobs. Coupled with fiscal consolidation, it will allow us to see a decrease of our deficit-to-GDP ratio," she said.
But Moody's Investor Service warns that fiscal consolidation will be difficult “in the context of very weak growth”. “As long as deposit growth remains weak, potentially because of lingering uncertainty about the capacity of the government to shore up macroeconomic stability, Lebanon’s fiscal and external positions will remain amongst the weakest across the sovereigns that we rate," vice president Elisa Parisi-Capone said on Friday.
To provide a more attractive environment for foreign investors and the private sector, Lebanon committed to passing a series of much needed laws to improve governance. Some legislation, particularly regarding commerce, has not been updated since before the civil war, and the country suffers from rampant clientelism encouraged by its sectarian power structure.
“The investment climate suffers from red tape, corruption, arbitrary licensing decisions, complex customs procedures, high taxes, tariffs and fees, archaic legislation, and inadequate intellectual property rights protection," Forbes said in its latest ranking of the best countries to do business, in which Lebanon came 92nd out of 161 countries.
Five of the laws were passed by parliament last September, Mrs Caracalla said, and the remaining eight will be hopefully be “approved and ratified during the course of this year”.
However, despite the laws’ laudable goals to improve transparency and fight corruption, Mr Chaaban argues that they do not hold accountable the one Lebanese body that exclusively manages all foreign-funded projects: the Council for Development and Reconstruction (CDR).
“Since 1990, the CDR has spent $14bn – and we don’t know where the money went," he said. “The new laws might set up anti-corruption courts and protect whistle-blowers, but if they don’t tackle corruption top down, they will remain simple cosmetic changes."
Lebanon created a ministry of state for combating corruption in December 2016 but, in an ominous sign of the new cabinet’s priorities, it was not renewed this week.

Report says “soft-exit” from Lebanese debt possible, but only with tough reforms
TK Maloy/Annahar/February 05/19
According to IIF analysts, developments in 2018 and early 2019 exposed the significant vulnerabilities of the Lebanese economy, “The heavy public debt overhang, large fiscal and current account deficits, and reliance on deposit inflows for deficit financing remain the core vulnerabilities.
BEIRUT: The nine-months of political horse-trading are over, now comes perhaps the even more difficult task of economic reform including enacting some sort of austerity spending program and improving tax collections, according to the Washington DC-based Institute of International Finance. The IIF issued a report over the weekend focusing on detailed scenarios for the Lebanese economy based on the possible reforms.
According to IIF analysts, developments in 2018 and early 2019 exposed the vulnerabilities of the Lebanese economy. The group noted in their executive summary statement: “The heavy public debt overhang, large fiscal and current account deficits, and reliance on deposit inflows for deficit financing remain the core vulnerabilities. The risks associated with these imbalances have increased in recent years in the face difficult external environment.”The IIF report said that although the long-awaiting formation of the new cabinet last week "will most likely facilitate" Lebanon’s faster access to the $11 billion of concessional loans and grants that were pledged by the international community at the April 2018 CEDRE conference to develop the country’s infrastructure. But added that "such lending is contingent on the implementation of deep fiscal and structural reforms to improve long-term fiscal sustainability, rebuild confidence, and foster higher growth. "“A soft exit out of the debt overhang is possible and the (Lebanese) authorities now recognize the urgency of committing to meaningful and widespread reforms to improve long- term fiscal sustainability and rebuild confidence. Based on the circumstances of Lebanon’s challenged economy, the IIF prepared two possible scenarios. Scenario A assumes substantive fiscal adjustment and structural reforms (including improvement in the business climate, and addressing corruption decisively), which would unlock the funding pledged by the international community. Scenario B presumes that the government makes limited reforms. Under Scenario A, growth is expected to accelerate to 2 percent in 2019 and 5 percent by 2023, the fiscal deficit will narrow gradually from 11 percent of GDP to 8.1 percent in 2019 and 4.3 percent by 2023.
Additionally, debt will be placed on a steady downward trajectory, nonresident capital inflows will improve significantly, and official reserves could increase to $54 billion by 2023.
Such a scenario will help to restore confidence and support the Lira peg, the IIF said.
Under scenario B, growth could pick up gradually to 3 percent by 2023, official reserves may continue their decline (but remain adequate for the next two years), and public debt will remain around 150 percent of GDP. In this case, Lebanon may continue to be highly vulnerable to volatile swings in investor confidence. The IIF added with a note of cautious optimisms that “Resilience in the face of financial strain is nothing new for Lebanon.” Adding: “While the country has faced several episodes of severe financial pressure in the past 30 years, triggered by political events and external shocks, it has continued to service its debt on the back of: implicit support from international donors; the priority of up- holding its track record of having never defaulted on foreign-currency debt and deposits; a creditor base dominated by domestic commercial banks and the BdL; and a loyal and vibrant diaspora.”It noted that foreign currency reserves excluding gold stood at $39.7 billion at the end of 2018 (equivalent to 71 percent of GDP and enough to cover 13 months of imports). Gold holdings of $11.8 billion, the second highest in the MENA region after Saudi Arabia, provided an additional buffer. When final data is compiled for 2018, the GDP growth rate is expected to mark at slightly below 1 percent.
As the cabinet assumes powers, the Lebanese citizenry still remains pessimistic of any near-terms fix or of the long-term political will of new leaders to make the hard but necessary reforms. At risk, is a government debt that could continue upward above 150 percent and would lead to a possibly collapsing economy, and a markedly devaluing Lira. Numerous crisis warnings on this front were issued by economists and the international rating agencies who downgraded Lebanon's sovereign debt bonds. The Institute of International Finance is the global association of the financial industry, with close to 450 members from 70 countries. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. IIF members include commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks and development banks.

Latest LCCC English Miscellaneous Reports & News published on February 05-06/19
Pope Francis Holds Historic Public Mass in UAE
Agence France Presse/Naharnet/February 05/19/Pope Francis held a historic public mass for an estimated 170,000 Catholics at a stadium in the capital of the United Arab Emirates on Tuesday, capping the first ever papal visit to the Gulf where Islam was born. The pontiff waved at the enthusiastic crowd carrying yellow Vatican flags and banners as he rode in an open-top Popemobile into Zayed Sports City Stadium, where an altar with a large cross was set up for the unprecedented open-air service in a country that normally restricts worship to inside churches. The UAE borders Saudi Arabia, the birthplace of Islam, but unlike its larger neighbour, which outlaws all non-Muslim places of worship, Abu Dhabi allows Christians among its large migrant workforce to practise their faith discreetly. Francis, who has made outreach to Muslim communities a cornerstone of his papacy, wrapped up his historic three-day visit with the mass. The pope's public comments in Abu Dhabi have centered on calls to end wars across the Middle East and protect the rights of all citizens. In a homily on Tuesday, he turned to the tens of thousands of migrant workers living in the Emirates. "It is most certainly not easy for you to live far from home, missing the affection of your loved ones, and perhaps also feeling uncertainty about the future," the pope said. "But the Lord is faithful and does not abandon his people."
More than 135,000
Pope Francis' trip has been warmly welcomed by Filipino and Indian Catholics among the UAE's huge migrant workforce. About one million Catholics live in the country, or about one in 10 of UAE residents. Asian nationals make up some 65 percent of the population and are crucial to all sectors in the oil-rich Gulf state, from construction to services and hotels. The son of Italian immigrants who was raised in Argentina, Jorge Bergoglio -- or Pope Francis -- has paid particular attention to migrants and refugees during his papacy. Inside the stadium on Tuesday, 50,000 Catholics with tickets to the mass cheered the pope on, with one small group hoisting a pink posterboard which read: "We the Catholics of Yemen love you".Another 120,000 gathered outside, watching via video link on large screens. Parishes across the UAE said 135,000 tickets to the pope's mass were distributed to parishioners. Some 4,000 tickets had been given to Muslims to attend the mass, according to the local churches. A choir sang hymns as the pope, joined by priests of different nationalities, began the service at around 10:30 (0630 GMT), broadcast live on Emirati television. The UAE invited the pope to visit as part of its 2019 "Year of Tolerance" which has its own designated ministry. Tolerance Minister Sheikh Nahyan bin Mubarak greeted the crowd at the stadium.
Yemen war
On Monday, the pope called for an end to wars in the turbulent Middle East, including in Yemen and Syria, at a meeting with a top sheikh and rabbi in the UAE. All religious leaders had a "duty to reject every nuance of approval from the word war", he told the interfaith meeting. "I am thinking in particular of Yemen, Syria, Iraq and Libya," he said. Yemen is in the grip of what the UN calls the world's worst humanitarian crisis, triggered by the intervention of Saudi Arabia, the UAE and their allies in a civil war between the government and Shiite Muslim rebels. While the pope did not openly discuss politics, he called for "the full recognition" of the rights of people across the Middle East, a potential reference to Christian minorities and communities including Shiites in Saudi Arabia, refugees, migrants and stateless peoples. "I look forward to societies where people of different beliefs have the same right of citizenship and where only in the case of violence in any of its forms is that right removed," he said. At their meeting Monday, the pope and Sheikh Ahmed al-Tayeb, the imam of Cairo's Al-Azhar, Sunni Islam's prestigious seat of learning, signed a document on "human fraternity for world peace", hailed by the Vatican as an "important step forward in the dialogue between Christians and Muslims". It called for "freedom of belief", the "promotion of a culture of tolerance", the "protection of places of worship" and "full citizenship" rights for minorities.

Catholics in UAE Greet Pope with Cheers and Tears
Agence France Presse/Naharnet/February 05/19/Abu Dhabi's main stadium was a sea of yellow-and-white Vatican flags on Tuesday as Pope Francis arrived in warm sunlight to lead an open-air mass for tens of thousands of Catholics. Over 135,000 worshipers, including from war-wracked Yemen, erupted in cheers as the pontiff was driven into the Zayed Sports City Stadium. Standing in the back of a white Mercedes convertible with the hood down, the first pope to visit the Arabian Peninsula delivered blessings to those fortunate enough to secure tickets to the unprecedented open-air service. He has used his visit to the United Arab Emirates to reach out to Muslims as well as highlighting Yemen's devastating conflict, in which the UAE is a key player. One member of the congregation held a large pink poster reading: "We the Catholics of Yemen love you".In the middle of the arena, a simple cross stood on an altar along with a statue of Mary carrying a baby Jesus. "If I talk to you about this, I will cry," said Lucy Watson, a 61-year-old Indian volunteer at the stadium. "This is my faith, and Jesus is everything to me," she told AFP. "This is a once-in-a-lifetime opportunity to see the pope in my own eyes."'Walked for hours' Between 135,000 and 170,000 Christians from parishes across the UAE boarded 2,000 buses in the early hours of Tuesday morning to head to the capital Abu Dhabi, along streets lined with Vatican City and UAE flags. By 8:00 AM (0400 GMT), worshipers of some 100 nationalities had filled the stadium. Many families brought along children and the stadium thronged with people wearing white caps imprinted with the pope's name and the date of his visit. The UAE borders Saudi Arabia, home to the holiest sites in Islam, but unlike its neighbor allows Christians to practice their faith discreetly. The fervor was palpable among the congregation, which erupted into cheers and tears when the pope arrived. "I came from Dubai. I left my house about midnight and went to the church" to get the bus, said Rosie McFadden, 27, from Scotland. "Then (I) walked for about three hours when I got here," she said. "I know (people) who had a tough year last year, and I'm praying for them to have a good one this year."More than 85 percent of UAE residents are expatriates, including about a million Catholics -- the vast majority of them from the Philippines and India. Four thousand Muslims also attended the mass. A handful of women in traditional black abayas could be seen carrying Vatican City flags as men in long white gowns walked to their seats.
'Miracles can happen'
While the crowd was instructed not to carry banners or flags other than that of the Vatican, the Palestinian flag could be spotted near the Yemen poster. At an interfaith meeting in Abu Dhabi on Monday, the pope called for an end to wars including in Yemen. The UAE is part of a Saudi-led coalition fighting on the side of the government in the Arab world's poorest country, battling Huthi rebels in a conflict that has pushed millions of Yemenis to the brink of starvation. Pope Francis, the son of Italian immigrants and raised in Argentina, has also made caring for migrants and refugees a key focus of his papacy. "It is most certainly not easy for you to live far from home, missing the affection of your loved ones, and perhaps also feeling uncertainty about the future," he told the vast congregation during in his sermon Tuesday. "But the Lord is faithful and does not abandon his people." His words hit home for many in Abu Dhabi.
"This is a big world leader, and he's come for the peace," said Patrick Pareira, a 58-year-old Indian citizen who has lived in the UAE for 38 years. "This is a message of peace for all the world."Kaushala Fonseka, 25, from Sri Lanka, told AFP that "miracles can happen, that's all I can say." Her father Gregory nodded and added: "Any time. They can happen any time."

U.S. Ambassador To Germany: "Horrific Actions" Of Iran Equal To Isis
Jerusalem Post/February 05/19
"The recent press reports that the Iranian regime publicly hanged a 31-year-old man for being gay should be a wake-up call for anyone."The most high-profile US ambassador in Europe, Richard Grenell, compared on Saturday the Islamic State's brutality with the execution sprees in the Islamic Republic of Iran. The US ambassador to Germany wrote in the federal republic's largest circulation paper BILD: "The recent press reports, first carried by The Jerusalem Post, that the Iranian regime publicly hanged a 31-year-old man for being gay should be a wake-up call for anyone who supports basic human rights. Politicians, the UN, democratic governments, diplomats, and good people everywhere should speak up – and loudly," adding "Iran’s horrific actions are on par with the brutality and savagery regularly demonstrated by ISIS."Islamic State has engaged in public executions of gay men, including tossing gay men from buildings. Iran's mullah regime and the Islamic State despise the LGBT community and both prescribe capital punishment for gays and lesbians.  As of 2016, the LGBT human rights advocacy organization OutRight Action International documented 90 murders carried out by the Islamic State during the period 2014-2016. According to a 2008 British Wikileaks dispatch, the Islamic Republic of Iran executed “between 4,000 and 6,000 gays and lesbians” since the 1979 Islamic revolution in Iran. Grenell wrote: "This is not the first time the Iranian regime has put a gay man to death with the usual outrageous claims of prostitution, kidnapping, or even pedophilia. And it sadly won’t be the last time they do it either. Barbaric public executions are all too common in a country where consensual homosexual relationships are criminalized and punishable by flogging and death. In Iran, where children as young as nine can be sentenced to death, gay teenagers are publicly hanged in order to terrify and intimidate others from coming out."He noted, "Being gay is a death sentence in eight countries and criminalized in 70 more. LGBT status or conduct means arrest, imprisonment, and violence for people who are simply dating or falling in love. Governments that are members of the United Nations have an obligation to protect, respect, and uphold the dignity and fundamental freedoms of their people."The Post first reported in the major media about the Iranian regime's public hanging of a 31-year-old man based on the clerical regime's lethal anti-gay law.  Grenell said in his opinion column: "While a student at Evangel University, a Christian liberal arts college in Missouri, I was taught by biblical scholars that 'all truth is God’s truth, no matter where it is found.' The truth for LGBT people is that we were born gay. Enshrined in the Universal Declaration of Human Rights is the idea that all of us are born free and equal in dignity and rights. People can disagree philosophically about homosexuality, but no person should ever be subject to criminal penalties because they are gay." He concluded his article noting, "India, Trinidad and Tobago, Angola, and Belize have recently decriminalized consensual same-sex sexual conduct. But there’s still much more work to be done. Reasonable people can help by speaking out when young gay men are publicly hanged in Iran or shot in Chechnya. And government officials must work harder to demand that UN members decriminalize homosexuality."

U.S Rabbi In UAE Quotes Ministers Saying Israel Ties "Just Around Corner"
Jerusalem Post/February 05/19
Schneier said that the UAE used the papal visit to “officially recognize” the small Jewish community of the Emirates. The “overriding consensus” among ranking ministers in the United Arab Emirates is that relations with Israel are “around the corner,” US Rabbi Marc Schneier said on Monday. Speaking with The Jerusalem Post from Abu Dhabi where he was one of dozens of religious leaders whom Pope Francis addressed at an interfaith gathering on the second day of the pope’s three-day historic visit to the Gulf state, Schneier said he sat with a number of UAE ministers who said they were “looking forward” to ties with Israel, and that it was “not a question of if, but a question of when.”Schneier is the rabbi of the Hampton Synagogue in New York and spends a good deal of time in Persian Gulf countries as head of the Foundation for Ethnic Understanding, an organization that promotes Jewish-Islamic ties. He said that the UAE used the papal visit to “officially recognize” the small Jewish community of the Emirates. “There was a celebration of the publication of a book celebrating tolerance and religious diversity in the UAE that included a guide to the different faith communities in the Emirates,” he said. “For the first time, it recognized the Jewish community.” Schneier said that there was “no question” that the formal recognition of the Jewish community is a “result of the warming of relations between the UAE and Israel.” The rabbi said there has been a gradual recognition by Gulf leaders that Israel is at the very core of Judaism, not just a 70-year-old political reality, and that “if they want authentic dialogue with the Jewish people, they must recognize that Israel is a religious issue for Jews, not a political one.” Dubai houses a synagogue in an unmarked home in a quiet residential area that serves a small community of Jewish expats in the UAE. The facility has a synagogue with a Torah scroll, a kosher kitchen, and rooms for guests. Schneier addressed the small Orthodox congregation on Friday night. During the Saturday services the congregation does not recite a prayer for the welfare of the State of Israel – as many congregations both in Israel and the Diaspora do – but rather a prayer for the welfare of the UAE government and its military forces. Many congregations abroad regularly offer a prayer for the well-being of the state and army of the country where they are located.

Oil Hits Highest Levels in 2019 after Venezuela Sanctions, OPEC Cuts
London - Asharq Al-Awsat/Tuesday, 5 February, 2019/Oil prices jumped to their highest level in 2019 on Monday following expectations of a tightening of global supply due to US sanctions on Venezuela and production cuts led by OPEC. Brent crude futures dropped 24 cents, or 0.38 percent, to settle at $62.51 a barrel. US West Texas Intermediate (WTI) crude futures fell 70 cents, or 1.27 percent, to settle at $54.56 a barrel. Higher crude oil prices helped drag Asian refinery margins to their lowest levels since 2010 on Monday, Refinitiv data showed. Output declines from the Organization of the Petroleum Exporting Countries (OPEC) as they make good on their pact to curb a supply overhang were compounded by falling US oil rig counts and sanctions on Venezuelan oil sales. After examining details posted by the US Treasury Department, experts believe sanctions will sharply limit oil transactions between Venezuela and other countries and are similar to those imposed on Iran last year. OPEC oil supply fell in January by the largest amount in two years despite sluggish production declines from Russia, according to a Reuters survey. Russia did not meet its oil target for the output cuts, Energy Ministry data showed on Saturday. Production last month dropped to 11.38 million barrels per day (bpd), but that was only down by 35,000 bpd from its October 2018 level that is the baseline for the pact. Russia’s second-largest oil producer Lukoil said on Monday its oil output in 2018 remained roughly unchanged at 85.6 million tonnes, excluding production at Iraq’s West Qurna-2 oilfield. Its production in Russia rose to 81.41 million tons from 81 million in 2017. Lukoil’s natural gas production rose to 33.54 billion cubic meters (bcm) from 28.86 bcm in 2017. In other news, Norwegian oil company Aker BP, partially owned by UK’s British Petroleum, has hit oil and gas at its exploration well in the North Sea offshore Norway. The company said that preliminary analysis indicates a gross discovery size of 45-153 million barrels oil equivalents. The major part of the discovery is in license 869 on the Norwegian Continental Shelf, while a part is on the UK-Norwegian border. Aker BP is the operator and holds 60 percent interest in license 869, with 20 percent owned by its partners Lundin Norway and Var Energi each.

Iran criticizes Greece, Italy for not buying its oil despite US waivers
Reuters/Tuesday, 5 February 2019/Iran’s oil minister on Tuesday criticized Greece and Italy for not buying its oil despite US waivers and said they had not offered Tehran any explanation for their decision. The United States granted the two countries exemptions along with six others - Turkey, China, India, Japan, South Korea and Taiwan - allowing them to temporarily continue buying Iranian oil as Washington re-imposed sanctions on Iran’s banking and energy sectors. “No European country is buying oil from Iran except Turkey,” Oil Minister Bijan Zanganeh was quoted as saying by the ISNA news agency. “Greece and Italy have been granted exemptions by America, but they don’t buy Iranian oil and they don’t answer our questions,” he said. Zanganeh said the US sanctions on Iran were more difficult than the Iran-Iraq war in the 1980s, but said Tehran will not allow the United States to reduce its oil exports to zero.

Iran dismisses EU concern about missile tests as ‘non-constructive’
Reuters, London/Tuesday, 5 February 2019/Iran dismissed on Tuesday the European Union’s unease about its missile program and rights abuses, calling it “non-constructive”, as Europe seeks to shield Iran from US sanctions while containing its regional policies. The EU said on Monday it was gravely concerned by Iran’s ballistic missile tests and called on it to stop activity that deepened mistrust and destabilized the region. The Iranian foreign ministry said Iran’s missile program was “defensive and deterrent” and Iran would never negotiate over it with other countries. “Clear threats against the Islamic Republic is not constructive, efficient and helpful, and it is not in line with regional security and real interests of Europe,” Iran’s foreign ministry said in a statement published by the Tasnim news agency. The EU said in its 12-point statement that it was committed to the landmark 2015 nuclear deal with Iran that
US President Donald Trump pulled out of last May.Last week, Britain, France and Germany launched a system to facilitate non-dollar trade with Iran and avoid US sanctions. However, the EU warned that it could no longer tolerate what it said were Iranian assassination plots on its soil. Iran’s foreign ministry rejected the warning. “Raising such baseless and hollow accusations while known terrorist and criminal groups are free in Europe, is non-constructive at this stage, and is in line with the goals of enemies who seek to undermine Iran’s relations with Europe,” it said. The ministry welcomed the new channel for non-dollar trade, known as the Instrument In Support Of Trade Exchanges (INSTEX), but called it “late and inadequate”.Iran warned that it would revise relations with Europe if it did not benefit economically from INSTEX.

Iran Refuses to Link FATF to EU Trade Mechanism
London - Adil Al-Salmi/Asharq Al-Awsat/Tuesday, 5 February, 2019/Iran rejected Monday a "special mechanism" to circumvent US sanctions by complying with the Financial Action Task Force (FATF) standards, a parliamentary speaker quoted Foreign Minister Mohammad Jawad Zarif as saying. Iran’s top judge said that Tehran would never accept the “humiliating conditions” set by the European Union for non-dollar trade intended to evade US sanctions. Spokesman for the Parliament National Security and Foreign Policy Commission Ali Najafi told reporters that during the Commission's meeting, the FM said that the newly-unveiled EU trade mechanism, in Support of Trade Exchanges (INSTEX), cannot be conditioned on Iran’s accession to anti-money laundering body FATF. The Commission’s session was attended by Zarif, deputies and senior managers of the Economy Ministry and Central Bank of Iran (CBI).
Zarif rejected any links between the INSTEX and FATF, stressing that Europe’s late action in establishing the mechanism cannot be conditioned, according to semi-official news agency ISNA. “At the meeting, the foreign minister briefed the MPs on the financial mechanism between Iran and Europe and stressed that this mechanism was a positive and initial step by the EU to maintain the interests of Iran,” Najafi said. On Monday, the European Council said it is “gravely concerned” by Iran's ballistic missile activity and called upon it to refrain from these activities. It urged it to take all necessary measures to fully respect all relevant UN Security Council resolutions related to the transfer of missiles and relevant material and technology to state and non-state actors in the region. “The Council is ... gravely concerned by Iran’s ballistic missile activity and calls upon Iran to refrain from these activities,” EU said in a rare joint statement on Iran, according to Reuters. Last week, Iran revealed a long-range cruise missile "Hoveizeh". Germany, France, and Britain (E3) have launched a mechanism to allow financial flows to be sent to Iran that would not violate US sanctions in an attempt to keep the 2015 nuclear deal alive.
INSTEX will help European firms with legitimate business interests to use barter techniques to conduct business in Iran. “It is a political act,” French Foreign Minister Jean-Yves Le Drian told reporters after a meeting of his European Union counterparts in Bucharest.
“It is a gesture to protect European companies.”E3 said in the statement that INSTEX will support legitimate European trade with Iran, focusing initially on sectors that are most essential to the Iranian population, such as pharmaceutical, medical devices and agri-food goods.
On the long run, INSTEX aims to be open to economic operators from third countries who wish to trade with Iran. The European mechanism is seen as a means to trade Iranian oil and gas exports in exchange for purchases of European goods. Details of the financial mechanism were leaked which sparked a heated debate in Iran. A team of diplomats, close to Zarif, took it to the media to defend the nuclear deal and rebut fierce condemnation of critics of the agreement and close circles to Iranian Revolutionary Guards Corps (IRGC) and the conservative movement. The activation of the mechanism coincided with the growing disagreements between the Iranian decision-making bodies on the government's draft. Parliament approved the government's draft of the Combating the Financing of Terrorism (CFT) and the Palermo Convention, while the Guardian Council refused to pass the laws, which led to its referral to the Expediency Council. The Expediency Council did not announce its final decision on joining the FATF after more than 10 days of media leaks suggesting that its committees had rejected the government's draft bill. Iran's Judiciary Chief Ayatollah Sadeq Larijani said Iran will never give in to humiliating conditions set by Europe for the enforcement of its new non-dollar mechanism aimed at facilitating trade with Tehran. “European countries, which had promised to remain committed to Iran's nuclear deal after the US withdrawal from it, have now restricted their efforts to INSTEX and have reportedly set two strange conditions for it to become effective." Addressing a meeting of high-ranking judicial officials on Monday, Larijni went on to say that Europe asked Iran to join the FATF and started missile negotiations, before INSTEX enters into force. He noted that today, European countries are moving in the same direction that the US had moved before “and we must continue to stand fast as always.”Larijani explained: “After nine months of dawdling and negotiations, European countries have come up with a limited-capacity mechanism not for exchange of money with Iran, but to supply food and medicine.”

Astana Guarantors Agree on Syria Constitutional Committee
Moscow - Raed Jaber/Asharq Al-Awsat/Tuesday, 5 February, 2019/The Kremlin stressed on Monday that the presidents of the three guarantor states of Syrian peace, Russia, Turkey and Iran, will meet in Sochi in February 14. The three countries appeared to have reached consensus on the composition of the Syrian constitutional committee, which will be proposed to the UN. Kremlin spokesman Dmitry Peskov said Presidents Vladimir Putin, Recep Tayyip Erdogan and Hassan Rouhani will meet in Sochi. He explained that a meeting between Putin and Erdogan will directly precede the summit, in an apparent reference to the intention of the two presidents to finalize Russian-Turkish understandings on Syria, especially in Idlib, before discussing them in the tripartite framework. Peskov did not disclose details of the summit agenda. Russian foreign ministry contacts with a number of regional parties and talks in Moscow and Ankara had focused on the formation of the constitutional committee and mechanisms for dealing with the situation in Idlib. These two issues will likely top the agenda of the Sochi talks. “In parallel with the war against terrorism, there is a current political track in which Russia, Iran, and Turkey adopted an initiative based on the decisions of the Syrian national dialogue congress held a year ago in Sochi to set up a committee to discuss the constitution,” Russian Foreign Minister Sergei Lavrov said during a speech in Kyrgyz capital, Bishkek, on Monday. His remarks were made one day after Turkish Foreign Minister Mevlut Cavusoglu said that the constitutional committee will be set up in the coming days. “In the coming days, the constitutional committee will be set up comprising representatives of the civil society, supporters of [Syrian President] Bashar al-Assad and the opposition,” Cavusoglu said.

Pentagon: ISIS in Syria Could Regroup in 6 Months
Asharq Al-Awsat/Tuesday, 5 February, 2019/The US Department of Defense warned on Monday that the ISIS terrorist group in Syria could regroup if counter-terrorism measures were not put in place in the war-torn country. ISIS militants have lost territory since Trump's surprise announcement in December that he was pulling US forces out, but military officials warn the fighters could regroup within six months to a year after the Americans leave. The ISIS group "remains a potent force of battle-hardened and well-disciplined fighters that 'could likely resurge in Syria' absent continued counter-terrorism pressure," the report from the inspector general said according to The Associated Press. Trump's decision to leave Syria, which he initially said would be rapid but later slowed down, shocked US allies led to the resignations of Defense Secretary Jim Mattis and the top envoy to the anti-ISIS coalition, Brett McGurk.
The withdrawal will fulfill Trump's goal of bringing troops home from Syria, but military leaders have pushed back for months, arguing that ISIS remains a threat and could regroup. US policy has been to keep troops in place until the extremists are eradicated. US officials in recent weeks say ISIS has lost 99.5 percent of its territory and is holding on to fewer than 10 square kilometers of turf in Syria. In late November and December that figure had been estimated at between 400 and 600 square kilometers, according to officials briefed on the matter. But several defense officials said Monday that many fighters fled to ungoverned spaces and other pockets in the north and in the west and are likely hiding out until they can regroup. Trump said in a weekend interview that ISIS is "almost knocked out.""We're at 99 percent right now, we'll be at 100," he said on CBS' "Face the Nation."US officials say that ISIS fighters hold only several villages in the Middle Euphrates River Valley that amount to significantly less than 10 square kilometers. But, they say they do not expect that area to be cleared of militants for another several weeks, at best. Officials say that overall, there are about 2,000 ISIS militants in Syria.
The Defense Department watchdog report warned that even with the ISIS forces on the run, the group "is still able to coordinate offensives and counter-offensives, as well as operate as a decentralized insurgency,” said the AP. The report, which covers October through December 2018, also includes a classified section that was provided to Congress and includes a more detailed Pentagon assessment on the impact of the troops withdrawal and the status of ISIS militants and other foreign fighters in Syria. According to the report, US Central Command believes that ISIS fighters will continue to conduct "opportunistic attacks" on US troops as they withdraw. And it says, "If Sunni socio-economic, political, and sectarian grievances are not adequately addressed by the national and local governments of Iraq and Syria it is very likely that ISIS will have the opportunity to set conditions for future resurgence and territorial control."

Sources: Proposal to Deploy 10,000 Arab, Kurdish Fighters in East Syria
London – Ibrahim Hamidi/Asharq Al-Awsat/Tuesday, 5 February, 2019/Head of Syria's Tomorrow Movement, Ahmad Jarba proposed to American and Turkish officials and Kurdistan Region leader Masoud Barzani the deployment of 10,000 Arab and Kurdish fighters in the safe zone in northeastern Syria, western diplomatic sources told Asharq Al-Awsat on Monday. Washington and Ankara are working on the final touches to a plan to establish a safe zone, 28 to 32 kilometers deep between Jarablus, in northern Aleppo, and Feysh Khabur, near the Iraqi border, following the withdrawal of US troops from east of the Euphrates River. Turkey has demanded that the zone be clear of US military bases and heavy weapons. It has also called for the withdrawal of around 7,000 fighters from the Kurdish People’s Protection Units (YPG), which it considers terrorist. According to the sources, US and Turkish officials and Barzani welcomed Jarba’s proposal to deploy between 8,000 to 12,000 fighters from his “elite forces” and from the Peshmerga, which includes Kurdish and Syrian fighters trained in the Kurdistan Region. “The proposal aims to fill the void and to meet the interests of several local, Arab and international parties,” the diplomatic sources said. The proposal also stipulates providing US air support from the Ain Al-Assad air base in Iraq's Anbar province and from the Tanf base in southeast Syria. However, YPG leaders doubted the possibility that such a proposal could be implemented.They have instead continued their talks with Moscow and Damascus to reach arrangements following the US withdrawal from the area. For its part, Russia suggested activating the 1998 Adana Treaty to ensure the security of Turkey and Syria’s borders and the territorial integrity of their states by achieving a full-scale cooperation in the fight against terrorism. The Adana agreement was signed by Syria and Turkey on October 20, 1998, and aimed to restore bilateral relations, allowing Turkey to perform operations against terrorists on the border.

Israeli Military Object 'Deduction Law'
Tel Aviv- Asharq Al-Awsat/Tuesday, 5 February, 2019/Israel’s Diplomatic-Security Cabinet will convene on Wednesday to discuss major slash in the tax revenues that Israel collects on behalf of the Palestinian Authority (PA), claiming that PA pays to terrorists and their families. The meeting comes amid disagreements over the issue, as far-right ministers demand a large cut up to $140 million a month, while intelligence and military leaders warn that such a move would have repercussions on Israel. The funds are estimated at $350 million a month and Israeli Ministry of Finance and its tax and customs authorities collect them from businessmen and other sources. Israel receives up to 3 percent of the collected money for doing it on behalf of PA.Since far-right took office, the government considers these funds as an Israeli grant, and thus deducts from it as it pleases. Sometimes it deducts to pay Israeli companies’ debts, and others to pay fines to Israeli courts, which do not fairly try Palestinians. Recently, the government has been trying to withhold taxes and tariffs collected for the PA which disperses payment to Palestinians in Israeli prisons, injured citizens, and families of martyrs. On the eve of the Israeli elections, there is a growing demand for cutting funds, especially within right-wing parties. Knesset Foreign Affairs and Defense Committee chairman Avi Dichter expressed satisfaction at the law’s expected implementation, saying that “every shekel the PA transfers to terrorists will be deducted. This is how we create deterrence against terrorism.”In his capacity as defense minister, Prime Minister Benjamin Netanyahu ordered a report containing precise data to determine the amounts paid by the Palestinian Authority to the families of prisoners and martyrs. Sources close to the matter in Tel Aviv said the army and intelligence were not keen about deducting funds. They fear that the money cut will create a second economic blow to the Authority after the United States stopped its financial aid, which could lead to a comprehensive economic crisis in the West Bank, thus reflecting a political and security crisis on Israel. These sources stressed that Netanyahu understands the position of his security services. The PM shares their concerns and worries it will destabilize the PA, as he seeks a way to find balance between the two elements. "Israeli Prime Minister Benjamin Netanyahu has said in closed-door talks that the deduction will go ahead, although he expressed concern that the reduced tax funds would hurt the stability of the PA; he also said he would look for a way to carry out the demands of the law while ensuring that the PA remains stable,” sources reported. Based on recent Israeli media reports, the PA paid out some 502 million shekels to families of martyrs and detainees. However, Palestinian sources estimates that no more than 230 million shekels had been paid.

Russia to Develop New Missile Systems in 2 Years after Treaty Pullout
Agence France Presse/Naharnet/February 05/19/Russia's defense minister Sergei Shoigu on Tuesday said the country must develop new types of missile systems in the next two years after Washington and Moscow ripped up a key arms control treaty. The United States has repeatedly accused Russia of violating the Intermediate-Range Nuclear Forces (INF) agreement and on Friday President Donald Trump said Washington was starting a process to withdraw from the treaty in six months. In a tit-for-tat move on Saturday, Russian President Vladimir Putin said Moscow was also leaving the treaty and beginning work on new types of weapons that would breach the crucial Cold War-era agreement. Many analysts say abandoning the 1987 treaty effectively signalled the start of a new arms race. At a meeting with officials on Tuesday, Shoigu said Russia should develop two new missile systems in the next two years. "During 2019-2020 we have to develop a land-based version of the seaborne Kalibr system equipped with a long-range cruise missile which showed good results in Syria," Shoigu told defense officials. "Over the same period we will also have to create a land-based missile system with a long-range hypersonic missile," he said. The defense minister said the plans had been approved by Putin. The INF agreement forbids ground-launched, short- and intermediate-range missiles, but not those launched from the air or sea --- which Russia already has. Defense experts say converting seaborne and air-launched missile systems for ground use will be advantageous for Russia since producing such missiles will be cheaper and quicker. "The use of seaborne and air-launched missiles will allow us to significantly reduce the time needed to produce the new missiles as well as financing for them," Shoigu said. He also tasked defense officials with extending the maximum range of ground-based missiles that are being developed. Defense experts say because ground-based intermediate-range missiles are cheaper, Russia could theoretically place more of them within range of European targets. Speaking to Shoigu on Saturday, Putin said Russia would not put any such missile "in Europe or other regions of the world" unless the United States did so first.
'Plenty to choose from'
Military experts were hard-pressed to say what hypersonic missile Russia planned to develop in response to Washington's exit from the INF treaty. In December, Putin said if Washington abandoned the treaty, Russia's seaborne Kalibr and air-launched Kh-101 cruise missiles -- as well as cutting-edge hypersonic Kinzhal (Dagger) missiles would be converted for ground launch. "We have plenty to choose from," pro-Kremlin defense analyst Igor Korotchenko told AFP, noting the Dagger missile was just one such system. Korotchenko, who is editor of the National Defense journal, said it would be fairly easy to convert the seaborne Kalibr system for ground use as the defense ministry just needed to develop a land-based mobile launcher.The INF treaty was signed in 1987 by then U.S. president Ronald Reagan and Soviet leader Mikhail Gorbachev and resolved a crisis over Soviet nuclear-tipped ballistic missiles targeting Western capitals. Experts say the United States and Russia abandoning of the INF treaty delivered a huge blow to the global arms control regime and international security. The last nuclear arms control treaty between Washington and Moscow -- the New START treaty -- expires in 2021 and most analysts expect it will not be extended. "We are on the brink of a new arms race," said Konstantin Makiyenko, deputy head of the Center for Analysis of Strategies and Technologies, a defense think tank in Moscow. He said it was a contest Russia would not win. "The losses will outweigh any ephemeral benefits," he told AFP, suggesting Russia may be at a disadvantage as Washington would develop and deploy new ground-based intermediate-range missiles quickly."The United States' industrial, scientific and technical might is stunning."

Lima Group Calls for Venezuela Regime Change without Force
Agence France Presse/Naharnet/February 05/19/The Lima Group of Latin American countries and Canada called Monday for a peaceful change in government in Venezuela, without military intervention. They also urged Venezuela's military to support opposition leader Juan Guaido as interim president and "not to impede the entry and transit of humanitarian assistance to Venezuelans." Eleven of the group's 14 members said in a joint statement after meeting in Ottawa -- which saw protesters briefly disrupt a closing press conference -- that they "reiterate their support for a process of peaceful transition through political and diplomatic means without the use of force."At the same time, the group welcomed into the Lima Group Guaido's "legitimate government of Venezuela" and vowed to "recognize and work with" his representatives in their respective countries. At a closing press conference, host Chrystia Freeland, Canada's foreign minister, said 34 countries have so far recognized Guaido as Venezuela's interim leader until new elections are held. She pressed the entire international community to join them, and to also freeze the assets of President Nicolas Maduro's "dictatorial regime." Those monies should be placed in the hands of the transition government, she said. Pressed about possible military intervention in Venezuela, Freeland was unequivocal -- it is not an option. "This is a process led by the people of Venezuela in their very brave quest to return their country themselves to democracy in accordance with their own constitution," she said. Peru's Foreign Minister Nestor Popolizio echoed those comments, saying: "We would not consider the use of force."Two women using press credentials to access the event briefly interrupted, unfurling a banner and chanting "Hands off Venezuela" before being escorted away by security. Freeland smiled and remarked that protesting was a right guaranteed by the constitution in Canada, one that "I am sad to say political protesters in Venezuela do not (have)."Earlier, Canadian Prime Minister Justin Trudeau pledged Can$53 million ($40 million US) in humanitarian aid for Venezuelans amid the deepening crisis. The bulk of the funds is set to go to "trusted partners" and neighboring countries to help them support three million refugees that have fled Venezuela, he said.
'Very close' to reclaiming freedom
Guaido has accused the military -- controlled by President Nicolas Maduro -- of planning to divert international humanitarian aid headed for the crisis-torn country. "We have received information, from the circle close to the high command, who are no longer evaluating if they let it enter or not, but how they will steal it from us," Guaido told reporters in Caracas. "They are going to hijack it to distribute it through the CLAP," he alleged, referring to the socialist government's program to distribute subsidized food boxes to its supporters. US Secretary of State Mike Pompeo and European Union deputy diplomatic chief Helga Schmid also participated by videoconference in the Lima Group talks. Guaido, who heads the opposition-controlled National Assembly, addressed the gathering in a video message, saying he looked forward to having "free and fair elections as soon as possible in order to restore democracy to Venezuela."Venezuelans are "very close to reclaiming their freedom," he said. The next Lima Group meeting is due to be hosted by Colombia. Emergency talks at the headquarters of the Organization of American States in Washington will also be held on February 14 to help deliver aid to the country's population facing major shortages of food and medicine.

Yemen Foes in New Talks on Troubled Prisoner Swap Deal
Agence France Presse/Naharnet/February 05/19/Yemen's Saudi-backed government began a new round of UN-brokered talks with Shiite Huthi rebels in Jordan on Tuesday on a troubled prisoner swap deal that mediators say hangs in the balance. The huge prisoner exchange agreed in Stockholm in December is seen as a crucial confidence-building measure in the UN-led push to bring the warring sides to negotiations on ending four years of devastating conflict. Both sides have said repeatedly they remain committed to the agreement that could see thousands of prisoners released by each side. During two days of talks in the Jordanian capital last month, they submitted lists of the detainees they each want to see freed, but deep distrust prevented them coming up with a final list of names for the exchange. At the end of January, the rebels released a captured Saudi soldier while Riyadh set free seven Huthi prisoners but they are the only detainees exchanged under the deal so far. UN envoy Martin Griffiths said he hoped the two sides would be more successful this time as he opened three days of talks in Amman. "The aim of this event is to finalise... the lists of prisoners and detainees to be released and exchanged," he said. "Success in this regard is not only of huge importance for those who will be released and return to their families but also to the broader political process in which we are engaged."A senior official of the International Committee of the Red Cross, which will oversee the deal's implementation, said on Monday that it was "hanging in the balance," with trust among the parties "insufficient". Each side has presented a list of up to 8,000 detainees to be freed, but many names cannot be accounted for, said Stillhart, adding that the prisoner swap realistically would involve a significantly lower number. "There is a lot of disappointment on both sides", he said. "What we now see on both sides (is that) they don't have them all because a lot of them, they probably died during the conflict."The prisoner exchange is one of the main achievements of a breakthrough in the peace process which the UN envoy brokered last year. There are fears that its failure would have a knock-on effect on the other key elements -- fragile truce agreements for the lifeline port of Hodeida and battleground third city of Taez. Those deals too are running into trouble -- while the ceasefires have largely held, timetables for the pullback of combatants have fallen far behind schedule. The agreements reached in Sweden are widely seen as the best chance yet of ending a conflict that has killed some 10,000 people since 2015 and pushed 14 million to the brink of famine, according to the United Nations.

Latest LCCC English analysis & editorials from miscellaneous sources published on February 05-06/19
The Best Economic Policy for the Working Class
Karl W. Smith/Bloomberg/February 05/19
US politics is currently dominated by efforts to exact vengeance on behalf of working-class Americans. On the right, the target is rising globalism. On the left, it is wealth itself.
Both approaches have their appeal — and both are doomed. The Trump administration’s plan to isolate America (raise tariffs and close the border) has created chaos in both politics and markets. And higher taxes on the wealthy, favored by an increasing number of well-meaning Democrats, will make the US economy less dynamic.
And yet the question remains of what can be done for the working class. Is there another solution to the stagnating wages and declining hopes of American workers? There is. And it comes in the form of monetary policy. Since 1980, there has been a sustained increase in real median weekly earnings only twice: once in the late 1990s, and now. What these periods have in common is the willingness of the Federal Reserve to tolerate a prolonged period of low unemployment. For almost four decades, the Fed’s No. 1 mission has been to keep inflation low and stable. This means a monetary policy that avoids excessively low unemployment, and the wage increases that go along with it. (The theory is that higher wages lead to higher costs for businesses, higher prices for consumers and, eventually, higher inflation.) So when the Fed is worried that unemployment is so low it could bring about a rise in inflation, its response has been straightforward: Raise interest rates to slow down the economy and let unemployment rise. The Fed’s deviations from this policy are instructive. In the late 1990s, as unemployment began to drift below what the Fed determined to be a safe level, there were concerns that a rise in inflation was imminent. So Fed economists recommended an increase in interest rates. But Alan Greenspan, then Fed chairman, believed that new technologies would provide enough productivity growth to pay for rising wages. As it turned out, he was correct. Throughout the economy, technology enabled new efficiencies — in fields as diverse as retail and (of course) IT. What’s more, the late ’90s showed how a willingness to let unemployment fall to very low levels can be good for productivity. Low unemployment pushes up the cost of labor, but it also pressures businesses to use labor more efficiently.
Think about it: A manager who is constantly worried about rising costs will naturally turn her creative thoughts to keeping them low. By contrast, a manager who is dogged by low sales will be more interested in retaining customers and keeping them satisfied. A world with chronically low demand, therefore, will result in fewer cost-reducing innovations.
Today the economy is benefiting from another deviation in Fed policy, for a different reason. After the Great Recession a decade ago, millions of Americans gave up looking for work. Many economists concluded that they were lost from the workforce forever. At the same time — as early as 2014, when unemployment was at 6 percent — there were fears that the economy would soon begin experiencing a dangerous increase in inflation. Some Fed officials recommended raising rates to stave off this possibility.
Once again, the impulse was resisted. The worry was that slowing the economy too soon could spark a renewed financial crisis that would prove nearly impossible to escape. So rates remained low though 2017, when they began their gradual increase.
Just as the late ’90s showed that low inflation could coexist with low unemployment, so did the early teens. In fact, employment growth has been better than expected. Workers who had been written off are beginning to return to the workforce. This overall increase in economic growth has sustained corporate profits even as wages have begun to increase.
To date, a spiral of rising wages leading to rising prices has failed to set in. Yes, some industries have reported worker shortages — but this has led to pulling workers off the sidelines and an increased interest in innovation. Restaurants have begun experimenting with kiosks and digital menus. The trucking industry is pushing hard for autonomous vehicles. These developments were already happening; a tightening labor market simply identified where they were most needed. That is likely to speed further development and increase productivity growth, just as it did in the late ’90s. The wage gains that workers have experienced are more likely to last. The poor prospects that workers have faced over the last 40 years have been caused by a monetary policy that tolerates more unemployment than is necessary and spurs less innovation than is possible. Putting an end to policies that intentionally slow down the economy when unemployment gets “too low” is essential to any effort to improve those prospects.