LCCC ENGLISH DAILY NEWS BULLETIN
July 13/2018
Compiled & Prepared by: Elias Bejjani

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Religion, Politics and Investing
Barry Ritholtz/Bloomberg/July 12/18
I have no problem with people wanting to feel good about their investments, but I also want them to realize what their choices potentially do to their returns. Today, I want to see how well the Inspire Global Hope Large Cap ETF, with the ticker symbol BLES, has done in terms of returns and otherwise.
First, the benchmark: Finding a suitable one isn’t easy, as the fund’s holding are made up of 50 percent US-based securities, 40 percent in developed-nation foreign securities and 10 percent in emerging markets. It invests in companies with market capitalizations of $5 billion or more. The closest comparable indexes are either the BlackRock Inc.’s iShares MSCI World ETF or perhaps State Street Corp.’s SPDR S&P 500 ETF Trust.
The fund lags both indexes in terms of returns at three months, six months, one year and since inception on Feb. 28, 2017.
The cost of the Inspire fund is another factor, at 0.61 percent, which is more than twice as much as the BlackRock product, which is 0.24 percent, and it is more than half a percentage point higher than the State Street product, at 9.5 basis points. That’s a pretty substantial drag on returns over a longer period of time.
My investment philosophy is that most of your portfolio should be in low-cost indexes. You should feel free to have some of your portfolio in non-indexes, but only if you can come up with a sound reason why you are moving a few percent away from what looks like a sure thing into something that might or might not be a better substitute. My preferences have been toward the Fama-French factor model focused on value, size and quality. If you want to deviate from that, well you should have a defendable reason.
Feel free to use 5 percent of your portfolio for your mad money, i.e., speculative or themed investments. But the bar for moving away from beta, or market-matching returns, in your pursuit of either above-market alpha or other factors is very high. Things get complicated when the portfolio shift is based on issues other than performance — ethics, politics, sustainable investing, corporate governance and social motivations. These all come with compromises.
One such non-financially motivated portfolio I noticed recently is named the Point Bridge GOP Stock Tracker ETF. Its clever stock symbol is what caught my eye: MAGA. GOP Stock Tracker’s slogan is “invest politically,” a strategy many will tell you is counterproductive. As Bloomberg News reported, this ETF only invests in companies that are loyal to President Donald Trump and the Republican Party:
Not necessarily the most profitable companies, or the fastest-growing, or the ones with the most attractive price-earnings ratios—or any of a number of metrics a typical investor would use. Instead, it selects companies based on public information about donations to Republican candidates by their employees and political action committees.
To me, this is a very strange basis for making an investment — it might satisfy an emotional need, but not a financial one. In fact, as we showed earlier this year, the companies that Trump trashed did much better than the ones he liked.
The knee-jerk response will be, What about environmental, social and governance investment products. The short answer is that the first and third parts of ESG, environmental and governance, have a correlation with better performance. The underlying basis of environmental investing is that companies with less exposure to environmental volatility and associated costs tend do better; on governance, diverse leadership is associated with less groupthink and better decision-making. No such correlation has been shown for social investing; similarly, an inverse correlation seems to exist for political investing.
If you want to invest from a political angle, the closest thing I have found to a rational basis is the Life + Liberty Emerging Markets Index, which says it incorporates “human and economic freedom metrics as primary factors in our investment selection process.” The idea behind the Life + Liberty index, which will introduce an ETF in 2019, is that “freer” markets experience more sustainable growth, and attract, retain and allocate capital more efficiently than countries with unfree.
Politics and religion are both unavoidably emotional. That is why they tend to be bad for your investment returns. If you are worried about your mortal soul, try to be a nicer person, and pick up karma points where ever you can — preferably not when making investment decisions.

Germany Blames the Locusts Again
Chris Bryant/Bloomberg/July 12/18
Within hours of Heinrich Hiesinger stepping down as ThyssenKrupp AG chief executive last week amid pressure from activist investors, the talk turned to “locusts,” Germany’s catch-all term for the evils of Anglo-Saxon capitalism.
A “locust-style” breakup must be resisted, ThyssenKrupp’s chief labor representative warned, no doubt in reference to Cevian Capital and Elliott Management Corp, who’ve been pushing for change. Blaming hedge funds for the unraveling of a once-mighty industrial conglomerate feels misplaced though.
If a business cannot consistently generate a return in excess of its cost of capital, it might as well pack up and go home. ThyssenKrupp has been failing to do that for years. Similarly, it’s reasonable to ask whether a company that spans submarines, industrial plants and auto parts has become too complex to manage. The recent poor performance of ThyssenKrupp’s industrial solutions division and the relatively weak margins of its elevators business — compared to rival Kone Oyj — suggest this is indeed the case.
Of course, the German giant’s problems run far deeper than its spread of assets. It’s important to remember where Hiesinger started out from when he took the reins. ThyssenKrupp’s former management team spent about 12 billion euros ($14.1 billion) on a pair of steel plants in the U.S. and Brazil, whose business model and construction was fundamentally flawed. Massive writedowns followed, leading led to roughly 7 billion euros of losses between 2011 and 2013 and almost forcing the company into bankruptcy.
It fell to Hiesinger too to revamp a culture benighted by price-fixing allegations and reports of directors living the high life. ThyssenKrupp used to have several hunting grounds. It’s a little rich to accuse activist funds of being locusts when this is the recent company history.
To his credit, Hiesinger also initiated a wrenching shift away from the company’s cyclical steel activities, culminating in the combination last week of its European flat steel business with that of Tata Steel Ltd.
Yet he resisted a full-scale breakup, arguing that there was an industrial logic to keeping the various businesses together. Unfortunately, that logic isn’t apparent in the company’s operating profit margins, which have averaged less than 3 percent in the past four years.
Indeed, even modest changes might unlock a lot of value. With its own stock-market listing, the elevator unit might be worth as much as the parent’s entire market capitalization. A breakup certainly looks more likely now Hiesinger is gone.
None of this is to decry his staunch defense of the German model of capitalism— which balances the interests of investors and employees. The strength of the country’s economy owes much to huge manufacturers such as Siemens AG, Daimler AG and Volkswagen AG, where workers have a powerful voice.
More than one-third of ThyssenKrupp’s employees are based in Germany, where most earn good wages and have decent pensions. There’s something to be said for that. Airbus SE’s threat to quit Britain in the event of a hard Brexit is a stark reminder of the dangers to a country of not fostering large industrial champions. The gig economy of Uber drivers and food delivery is hardly an adequate replacement.
But activist funds can be useful stakeholders too. The more patient investment approach of Sweden’s Cevian is hardly in the locust category, and all companies that want to be around for the long run need to earn their keep and take their shareholders seriously. Siemens, for example, has stayed a step ahead of the activists by separately listing its wind power and healthcare units — though admittedly with mixed results so far.
Germany should recognize that not all activists are out to wreck its industrial base. Hiesinger’s predecessors made a pretty good stab of that already.

This Is What Democracy Looks Like
Jonathan Bernstein/Bloomberg/July 12/18
The Boston Globe’s Jeff Jacoby reminds us that we’re approaching the 70th anniversary of a landmark event in U.S. history: Hubert Humphrey’s speech on civil rights at the 1948 Democratic National Convention and the subsequent vote on a civil rights platform.
Humphrey’s 1948 triumph wasn’t the first important step the Democrats took in the shift from their Jim Crow past and toward their civil rights future — that would probably be the end of the two-thirds rule in 1936, which ended the Southern veto over Democratic presidential nominations. And it was hardly sufficient: The Democratic presidential candidate in 1952 and 1956, Adlai Stevenson, ran as a moderate at best on the issue. Yet it was certainly important. Some Dixiecrats who walked out on the party in 1948 never returned, and as they and their successors moved to the Republican Party, the bigotry faction of the Democrats became smaller and smaller.
It’s an important story in the history of the civil rights movement, but it’s also an excellent example of how U.S. democracy can work.
For one thing, it demonstrates that internal party decisions are crucially important. Not all such decisions come to a vote within formal party organizations, the way this one did. Sometimes the decisions that matter involve a consensus reached within the informal party network. Sometimes, instead of a platform battle, it turns out that the crucial decisions are made between different candidates, backed by different coalitions, for a presidential nomination — such as Barry Goldwater’s nomination by Republicans in 1964, marking the initial triumph of the conservative coalition in that party. Or it may involve pressuring candidates to accept the party’s priorities — think of how Barack Obama, Hillary Clinton and John Edwards all supported (with minor variations) the basic framework that became the Affordable Care Act, or the way Republican candidates for office take a pledge against raising taxes.
However they are made, those decisions are how new policy options appear and become plausible governing options. And the ability of party actors to propose new directions and have a meaningful chance to get them adopted is absolutely essential to U.S. democracy. That doesn’t mean that intraparty democracy must follow a plebiscite model in which voters have to decide the party’s direction through primary elections or other such mechanisms. It does mean, however, that some form of intraparty democracy is necessary if the nation as a whole is to be democratic.
The march toward civil rights also demonstrates why the vote is absolutely essential. The Democrats’ choice to move toward civil rights wasn’t just about Northern politicians gaining a conscience as they looked at white supremacy in the South. What mattered overall was black citizens moving north and starting to vote in their new cities.
What that shows is that the vote is what really matters — more, in some ways, than whether any particular vote is enough to swing an election (although it certainly helped that the black vote was often seen as a swing vote). Politicians try to represent their districts. But without the vote, constituents are largely invisible to their elected officials. Of course, it also mattered that some of those voters began electing black politicians, who then fought within the Democratic Party for what their constituents wanted — for themselves, and for other black citizens.
Democratic processes don’t always work in the U.S. But without the vote — and without robust political parties — they don’t have a chance.

The Daraa battle that has no horizon
Khairallah Khairallah/Al Arabiya/July 12/18
Syria’s Daraa battle proved that there is a deep agreement between Russia, Israel and the US regarding South Syria. This agreement has allowed troops affiliated with Iran to participate in the battle that aims to reach the Jordanian borders and reopen the Nasib border crossing. They managed to participate by dressing Iranian Revolutionary Guard members and other members of Lebanese and Iraqi militias the military uniform of the Syrian army, which now lacks human resources. This agreement, which Jordan that is concerned over not hosting more Syrian refugees does not seem far from, is based on new arrangements that divide South Syria into two areas. One of them is called southwest Syria, and this is where Iranian militias are allowed to operate to support the remaining Assad forces under Russia’s aerial cover, which has destroyed towns and neighborhoods on the heads of women, children and civilians. This has left the opposition there with one option, which is reaching settlements that apparently serve the interest of the Syrian regime. Russia combines between the beneficial and the enjoyable while managing this game. The beneficial is represented in providing personnel to the regime via the sectarian militias affiliated with Iran while the enjoyable is in going far in cooperating with Israel and working on achieving a deal with the Trump administration
The Israeli stance in Syria
In brief, there is a game being played in South Syria. One of the game rules is not to come near Israel which believes that the issue of the Syrian Golan that’s been occupied since 1967 is a finalized issue; hence the separation between one area and another in South Syria. They have also prohibited anyone from coming near the southwestern area and the Golan front. This front has always been the reason behind the presence of the current Syrian regime ever since Hafez al-Assad was minister of defense during the 1967 war. The Trump-Putin summit will be held on July 16 right after the World Cup, which Russia is hosting and which it used to enhance its global status. As we wait for this summit, it seems the only truth that has actually surfaced is Israel’s frank announcement that it is sticking by the Syrian regime. This does not mean ending the strikes that target Iranian posts in Syria.
On the contrary, there were still strikes in the past few weeks while Iranian-linked militias were sacrificing victims to serve the Syrian regime that believes it emerged victorious from the Daraa battle. Meanwhile, Russia proved that it’s the only party capable of managing a game that’s extremely complicated. This game is based on an agreement with Israel and the Trump administration before anything else, and on using Iranian militias to secure the shortage of personnel in the Syrian army. Russia combines between the beneficial and the enjoyable while managing this game. The beneficial is represented in providing personnel to the regime via the sectarian militias affiliated with Iran while the enjoyable is in going far in cooperating with Israel and working on achieving a deal with the Trump administration which, as it’s well-known, does not reject any of the Hebrew State’s requests.
Can one say the Syrian regime has a future? Before engaging in the issue of the future of the Syrian regime, which has been carrying out what is required from it, i.e. divide Syria and displace the largest number of citizens, we must note that Iran which sought to be the party with the first and final word in Damascus has been the victim of the idea that it can use others to achieve its aims. Yes, Iran can use Lebanese sectarian militias as a tool. It can use Iraqi militias to serve its ambitions. However, this is one thing and using Russia to save Bashar al-Assad is something else. Vladimir Putin saved Assad when he sent his fighter jets to Khmeimim in late September 2015. He did not make this move before getting a green light from Iran. It’s no secret that before Russian bombers were sent to the Khmeimim base that’s located on the Syrian coast near Latakia, General Qassem Soleimani, the commander of the Quds Brigade of the Iranian Revolutionary Guards, visited Moscow.
The importance of Daraa
Everything has a price in the Syrian war. There is a price which Iran must pay in exchange for Russian intervention. This price includes acknowledging Israel’s interest on one hand and the deep relation between it and Russia on another. Israel passes through Russia before Iran.
What’s more important than all this is the future of Russian-American relations. The Russians know, before anyone else, that if it the US hadn’t directly informed the opposition that it must surrender in Daraa and it must not rely on any help from Washington, the battle in the southwest would not been a simple walk in the park. What Russia, Iran and the Syrian regime ignore is that Daraa and its surroundings will not be a bite that’s easy to swallow on the long run. Daraa is where the Syrian revolution erupted. Daraa is where the regime which Hafez al-Assad established was first shook and from where he began relying on Sunnis in the countryside. Hafez al-Assad really hated the Sunnis in larger cities. At the same time, he was concerned in covering his regime’s Alawism with the Sunnis in the countryside and with the minorities, like Christians and Ishmaelites.
It will be difficult to imagine the regime’s future in an area like Daraa where familial ties still dominate over everything else. There is a tribal society in Daraa and its surrounding, and this society has extensions towards Jordan as well. Most families in this area have branches in Jordan. These families are not only known for the ties between them, but also for the revenge customs.
The regime will flash the signs of victory in Daraa. This victory against the Syrians was achieved thanks to the Iranian militias, the Russian aerial shelling and American and Israeli collusion. A victory has been achieved against citizens in Daraa. There is no horizon for this victory, which only resembles victories that were achieved during the Cold War via Soviet tanks against eastern European countries. What is left of the Soviet occupation of countries like Hungary, Poland, East Germany, Romania, Bulgaria and Czechoslovakia which has now become two states?
Who remembers that the tanks which were sent from Moscow crushed the Budapest uprising in 1956 and the Prague Spring in 1968 and that they suppressed the revolution of the Polish people in the 1980s? These are only few examples that show there are limits to what a tank or a jet can do. There is simply a regime that has ended in Syria. The regime will not rise again regardless of all the Russian planes and Iranian militias and despite the American and Israeli support provided to Bashar al-Assad during the Daraa battle.
Something broke in Syria, and it is the regime whose main problem is that it can destroy the Syria we’ve known but it cannot eliminate the entire Syrian people even if Israel combines all contradictions for it and provides it with all it needs in terms of American coverage.

Beyond borders: Rise of the global citizen
Marco Gantenbein/Al Arabiya/July 12/18
When the first modern citizenship-by-investment programs were developed in the mid-1980s and early 1990s, the investment migration industry was largely unformed, unknown, and unregulated.
Today, by contrast, the market is an established and evolving feature of the economic landscape, and is growing faster in the Middle East than in any other part of the world.
Thousands of people now apply for citizenship and residence each year, and by the end of 2017, there were over 30 active and successful programs in existence. But what benefit do nations get from administering citizenship-by-investment programs, and why are individuals so eager to get their hands on a second passport?The boom in the global citizenship market over the past decade has seen the industry gain widespread credibility and acceptance. The European island of Cyprus legalized citizenship-by-investment in 2011. Two years later, both Antigua and Barbuda and Grenada in the Caribbean launched citizenship programs. In 2014, EU member state Malta introduced its Individual Investor Program, which is the only one of its kind recognized by the European Commission.
The primary benefit for states that administer citizenship-by-investment programs is significant financial investment in their domestic economies. The cost and design of each program vary, but most involve an up-front investment into the country. These inflows of funds are considerable, and the macroeconomic implications for most sectors can be extensive.
rect investment brings capital both into a country’s public sector — in the form of donations to the government, tax payments, or treasury bond investments — and the private sector, in the form of investments in businesses, start-ups, or real estate.
Countries are able to use citizenship-by-investment funds to finance infrastructure development and improve their people’s standard of living, and those that save their inflows may be able to improve their fiscal performance, minimize any dependence on international aid, and reduce national debt.
While citizenship-by-investment offers rewards to investors and the host nation, there are also mutual benefits to be obtained simply by removing the barriers to visa-free travel
Intangible benefits
Apart from these economic gains, successful applicants also bring intangible benefits to receiving countries, such as scarce skills and rich global networks. They add diversity and uplift host nations through their demands for improved and novel services, which in turn creates new employment and entrepreneurial opportunities. As the number of successful applicants increases each year, host countries often gain international prominence on account of their increased competitiveness. This results in other benefits to the country, including growing publicity and media attention and a boost in tourism, which may encourage more potential citizenship-by-investment applications. For applicants, a second or third passport does not just mean increased travel freedom. Having an alternative passport also grants its holder the right to do business and settle in an expanded set of countries and regions, as well as allowing access to all the benefits enjoyed by other citizens. It also eliminates a great deal of the inconvenience surrounding visa applications and passport renewal or replacement processes.
Most importantly, though, an additional passport can literally save a person’s life in times of political unrest or under heightened terrorism risk, or in other delicate political situations. At such times, a second citizenship can be an escape route, allowing people to secure a safe future and an improved quality of life for their families. While citizenship-by-investment offers rewards to investors and the host nation, there are also mutual benefits to be obtained simply by removing the barriers to visa-free travel. While the advantages are not as significant as those received through citizenship-by-investment programs, many governments have adopted this approach. Earlier this year, for example, the UAE allowed Chinese passport holders to enter the country without a visa, which led the Emirati hospitality and tourist industries to report a 70 percent growth compared to 2017, as Chinese travelers took advantage of their newfound access to the Middle East’s main hub.
Another benefit for the UAE is that like many such visa arrangements, the agreement with China was reciprocal, and in fact UAE passport holders can now visit 158 destinations visa-free. This year alone, they have gained access to Ireland, Burkina Faso, Uruguay, Guinea, Tonga, Honduras, Canada, Brazil, Guyana, and Barbados. Thus, eliminating visa requirements is a helpful step along the path to borderless travel, even if it cannot provide the same advantages to countries or individuals as citizenship-by-investment programs.
For the privilege of fully comprehensive global mobility and flexibility, alternative citizenship is by far the best solution, and for this reason it is consistently sought after by high-net-worth individuals who are willing to spend significant sums in order to secure it in the hope of better opportunities.
Somewhat unsurprisingly, it is becoming increasingly popular in the Middle East, where instability in countries such as Yemen, Syria, Iraq, and Lebanon means that many people in the region find their movement and opportunities constrained by their passports.
The Future
In recent years, the global citizenship-by-investment industry has experienced unprecedented growth, with thousands of people applying for alternative citizenship and residence each year. Nonetheless, there are still many countries where it makes sense to start new programs, and the industry looks set to continue to thrive as global demand for alternative citizenship solutions increases. However, as the industry grows in visibility and breadth, so too does the cloud of public dissent and opposition regarding the perceived ‘marketization’ of citizenship, as does concern from multilateral organizations about tax and money-transfer practices. Accordingly, a strong culture of self-regulation and due diligence is essential to the industry’s continued success and sustainability. The challenge for the industry, then, is to build longevity and future-readiness while carving out its place in the global community as a beacon of innovation, collaboration, professionalism, and responsible investing. The global citizenship-by-investment industry matters and, by all accounts, it is here to stay.

Challenging times for the Iranian regime
Michael Flanagan/Al Arabiya/July 12/18
Last month, I attended a convention of the Coalition of Iranian Opposition Groups (CIOG) at George Washington University. This was an assemblage of the top exiled groups from Iran.
Some have been working here as long as their escape and exile after the revolution in Iran in 1979. While, it was a collection of septuagenarians calling for change and reliving their past triumphs, it was also a truly representative gathering for regime change in Iran.
They had participants and members from all ethnic, religious and racial minorities in Iran. For the first time in my experience these disparate groups spoke with one voice. This convocation is distinguished from the annual meeting in Paris last month of the National Council of Resistance of Iran (NCRI). Rudy Giuliani, Newt Gingrich and others from the United States appeared and spoke of their personal support and of the support of the Trump Administration’s call for an end to the regime. The NCRI has been the international focal point for Iranian resistance. However, it is an imperfect messenger. The Paris meeting lacked representation from the ethnic minorities in Iran and the NCRI has its origins in a checkered past.
The new is better than the old but both have the same goal and should find a way to work together. Both meetings stressed that it appears that the Trump Administration has made the decision that this is the time to support the dissidents abroad and the protesters inside Iran.
Regime change is the obvious goal and more and more public meetings of dissidents should be expected working toward the end of the theocracy in Tehran. A bombing plot against the Paris NCRI meeting was thwarted in Europe and was apparently planed with some assistance from government functionaries in Iran. Such a desperate act may point to a greater weakness in the hold that the regime has on power than we otherwise understand. It is possible that the regime is more brittle that we understand and that talk among dissidents is actually dangerous to their otherwise precarious position.
Regime change is the obvious goal and more and more public meetings of dissidents should be expected working toward the end of the theocracy in Tehran
Pompeo’s attack
Over the past few months, Secretary Pompeo has attacked the “criminal regime” for its external activities in directing the Revolutionary Guards’, Hamas’ and Hezbollah’s activities abroad. At the same time, protests against the regime have markedly shot up recently in both number and intensity.
Notably, the Arab minority in Southwestern Iran arose because of a lack of water for consumption and for irrigation and has had continuous protest demanding radical change in the provincial leadership and a proper response to their need from Tehran.
Their response in Tehran is weak (and a little insane). An Iranian General was sent forth to accuse Israel of controlling the clouds and stealing the rain.
Sad attempts like this to divert the attention of the protesters from their thirst will fail and will erode credibility for the regime. In short, it will embolden the protestors and lead to more and bigger protests.
Unrelated but constant protests have spread throughout Iran – not just in the Arab Southwest. The protests are no longer merely sporadic events usually occurring in opposition centers like Iran’s large cities.
Troubling for the regime, the renewed protests are in rural areas and have real demands. These rural areas are the stronghold of the Ayatollahs, which provide the base of their most ardent supporters. In almost every province of the Islamic Republic, people are protesting the regime.
The regime in Tehran is facing new and challenging times internally as well as externally. They would do well to put their own houses in order first before trying to export the revolution. I doubt that they can – or even want to.

Europe and immigration
Hazem Saghieh/Al Arabiya/July 12/18
The EU summit that was recently held in Brussels, which mainly discussed immigration and asylum, is considered to be one of Europe’s most complex and difficult summits. It was not only difficult to organize as it’s equally difficult to implement its decisions, which observers described as extremely vague.
Views expressed at the summit widely differed from each other, with some calling to give financial support for countries receiving immigrants, like Italy and Greece. Other views focused on possible locations for establishing secure migrant centers. France insisted on establishing these centers in countries where migrants first arrive in the EU, which was of course rejected by Italy. This is in addition to differences between Spain and Greece over dealing with granting asylum, Italy’s extreme and harsh approach and some Central European countries’ abstention from participating in European commitments and obligations.
The problem of migration and asylum amid poor economic circumstances has the components that play a role in the strategy of attacking Europe given the ability to incite less developed and less prosperous segments of the population against ‘strangers’
Exploiting immigration issues
There is a more important and disconcerting fact behind this scenario. According to official European figures, the number of illegal refugees in the EU has dropped from over 1 million recorded in 2015 to 56,000 in 2017.This means that the differences are worsening even as the problem itself is dissipating! This shows that the asylum and migration issue, which is very significant indeed, is being exploited as national and populist pretexts to weaken intra-European ties and perhaps to later dissociate the EU by basing this on the Schengen agreement over free travelling between its countries. The anti-EU governments that now run countries like Italy and Austria in the west and Poland and Hungary in the east strengthen such a possibility. If we take a wider look, we would notice that the rise in populist and nationalist sentiment in Europe sweeps across nation states from Russia under Vladimir Putin to the US under Donald Trump. If the Washington Post’s story that the US President encouraged his French counterpart Emmanuel Macron to quit the EU, promising him with dual agreements between the two countries in return is true then expecting bad intentions is valid.
Trump has talked about European allies as selfish little parties that benefit from military protection provided by America and from trade with it. As for Moscow, it has also done its best to support anti-European powers, in every election event in the continent.
Targeting European unity
Targeting the project of European unity has several aims as, for the first time in history, it seeks to democratically violate the ideal of the nation-state. This clashes with the extreme nationalist tendencies in each country while liberalism and human rights would run contrary to populist sentiments sweeping through the world these days. Thus, German Chancellor Angela Merkel has become the favorite target of criticism from various quarters. The problem of migration and asylum amid poor economic circumstances has the components that play a role in the strategy of attacking Europe given the ability to incite less developed and less prosperous segments of the population against ‘strangers.’ Some may take things further as this immigrant ‘stranger,’ who is exploiting Europe’s naiveté as nationalists and populists claim, can be blamed as the reason for European tragedies and hardships.
This could also provide a chance for opportunistic politicians to exploit and rake up arguments and bring them down to the meanest levels, by establishing secure migrant centers, according to what the Brussels summit called for and which human rights organizations viewed as inhumane prisons.

Iran’s ‘moderates’ have been forced to show their true colors
الدكتور مجيد رفيع زاده: المعتدلون في إيران عليهم أن يعلنوا عن مواقفهم
Dr. Majid Rafizadeh/Arab News/July 12/18
http://eliasbejjaninews.com/archives/65990/dr-majid-rafizadeh-irans-moderates-have-been-forced-to-show-their-true-colors-%D8%A7%D9%84%D9%85%D8%B9%D8%AA%D8%AF%D9%84%D9%88%D9%86-%D9%81%D9%8A-%D8%A5%D9%8A%D8%B1%D8%A7/
The so-called moderate political party of Iran, the Moderation and Development Party, which is led by President Hassan Rouhani, came to power by promoting a clear distinction between themselves and the Principlists (Osolgarayan), as well as the hard-line factions of Iran’s politics, including the Islamic Revolutionary Guard Corps, the Ministry of Intelligence, and the judiciary.
The moderates advocated for employing diplomacy, using a softer tone on the international stage, and refraining from using harsh, incendiary rhetoric and threats. Many Western politicians and mainstream media outlets bought into the regime’s fabricated binary narrative of Iran’s moderates versus the hard-liners.
But the reality on the ground is that Rouhani and his political party never were moderates, but rather insiders. Nevertheless, for almost four years, Rouhani and his technocrat team, including the Foreign Minister Mohammed Javad Zarif, succeeded in hiding their actual intentions, policies and positions. This has recently changed, as the moderates appear to be showing their true colors.
For example, Rouhani has recently been making serious threats, which, if implemented, could have catastrophic results and grave geopolitical and strategic implications for the region and the international community. He pointed out: “The Americans have claimed they want to completely stop Iran’s oil exports. They don’t understand the meaning of this statement because it has no meaning for Iranian oil not to be exported while the region’s oil is exported.” Rouhani is threatening to block the Strait of Hormuz.
Rouhani further escalated his threat by stating: “If you can do such a thing, do it and see the result.” In addition, Zarif also recently threatened that Iran is prepared to “vigorously” resume its nuclear enrichment program. He said: “We have put a number of options for ourselves and those options are ready, including options that would involve resuming at a much greater speed our nuclear activities.”
Serious threats such as these are increasing. Where are the so-called moderates and the “diplomat sheikh” of Iran, who appeared to be respecting international laws and norms and promoting peace and stability in the region?
Although the moderate political party projects itself to be different from the hard-liners, such as former president Mahmoud Ahmadinejad, recent policies and incendiary and provocative statements issued by the ruling politicians are strikingly similar to those of the hard-liners.
In fact, Iran’s hard-line politicians, including the commander of the Quds Force, Qassem Soleimani, as well as the state-controlled conservative media outlets, have praised Rouhani for his recent posturing and statements. In other words, the so-called moderates are joining the hard-liners and reiterating the same core agenda of the regime.
Another major question to address is why are the moderates now coming out of the closet and adopting these positions?
The moderates advocated for employing diplomacy, using a softer tone on the international stage, and refraining from using harsh, incendiary rhetoric and threats.
Although this might appear to be a tactical shift, the moderates have been forced to reveal their true faces. It is important to note that the true mandate of Iran’s ruling moderates is to pave the way and to facilitate the revolutionary agenda of Supreme Leader Ali Khamenei and the IRGC, both in the region and on the international stage. This agenda is anchored in increasing the IRGC’s influence in the region, exporting the extremist revolutionary ideals of the mullahs abroad, and pursuing the regime’s hegemonic ambitions through military adventurism and aggressive and expansionist policies.
For almost the first four years after assuming power, the “moderate” politicians were more effectively capable of advancing the supreme leader’s agenda through a softer tone on the international stage, smiles, and a misleading facade. They sealed a flimsy and one-sided deal in their favor, labeled as the Joint Comprehensive Plan of Action but commonly known as the Iran nuclear deal. They received unjustified economic and geopolitical concessions, and gained billions of dollars in extra revenues, which helped the IRGC and its elite branch, the Quds Force, increase their influence in Iraq, Yemen, Syria and Lebanon. They created more Shiite militias in the region. They escalated their ballistic missile activities, launching more than 20 missiles in a few years. In other words, the moderates successfully duped the international community, specifically Western powers.
But, with the election of Donald Trump as president, the political dynamics in the United States and the balance of power has changed. The Iranian regime lost its leverage over the global superpower, which previously offered it significant appeasements during Barack Obama’s presidency. Now that the Iranian regime’s moderates observe that the Trump administration cannot be deceived by the shrewd “diplomat sheikh,” the moderates versus hard-liners narrative, and tactical phony smiles and softer tones, they have no option other than to reveal their true hard-line stances.
In sum, by threatening to further destabilize the region and by reiterating the hard-liners’ messages, Rouhani and Iran’s moderates are finally showing their actual hard-line face. There are no genuine moderates in Iran’s politics: The so-called moderates, hard-liners and Principlists all serve Khamenei’s rule.
*Dr. Majid Rafizadeh is a Harvard-educated Iranian-American political scientist. He is a leading expert on Iran and US foreign policy, a businessman and president of the International American Council. Twitter: @Dr_Rafizadeh

Erdogan's growing influence ominous for Turkey's future
Diana Moukalled/Arab News/July 12/18
Turkish President Recep Tayyip Erdogan achieved a long-awaited dream when he became president with sweeping new powers in a country he has dominated for 15 years and for which he has introduced a new identity. In the past few days, the first signs of the election results emerged as Erdogan stepped into his new presidential term. He has issued presidential decrees that sacked more than 18,000 civil servants and soldiers, in addition to shutting down three newspapers and a television channel.  Erdogan’s reign will continue for five years and see him have sweeping powers under a presidential system repeatedly denounced by critics and described as an authoritarian regime. Such accusations have been especially forceful since the unsuccessful coup attempt of 2016, which was followed by massive purges of the military and the police and the arrests of tens of thousands of others for allegedly playing a part in the conspiracy. These charges were mocked by many people inside and outside Turkey because a coup is known to be planned by a limited number of people, yet tens of thousands of people have been punished for their alleged part in a conspiracy. This latest crackdown conveys the message that Erdogan’s authoritarian and exclusionary approach will continue — and with even more dominance this time.
Erdogan now enjoys institutional and legal support to control almost every area of power, with the post of prime minister being abolished following last month’s elections. The victories of the likes of Erdogan, which are many, leave us all concerned as to what the future might hold.
What is happening in Turkey is the most dramatic change to the ruling system since the modern republic was founded on the ruins of the Ottoman Empire almost a century ago. Between 1960 and 2002 — before the Islamic Justice and Development Party came to power — Turkey witnessed the following ruling pattern: A life of parliamentary democracy interrupted approximately every decade by military coups that shook political life and maintained a role for the army. After these coups and after the army announced the elimination of “extremists,” Turks went back to their normal lives. These “extremists” were sometimes leftist and sometimes Islamist, Kurdish or Alawite.
However, the Islamists and Erdogan have exacerbated these contradictions and announced the rule of religion and nationalism in the face of Europe — the continent they wished to join but which they failed to embrace. Erdogan has held on to the military behavior from which he suffered before he defeated it. He is now adopting the same approach in his foreign policy and with the media and his opponents. He has cleansed the political arena of his opponents, whether Kurds, dissident theologians (Islamists) or liberals. After the elections, the new presidential system entered into force to completely contradict the parliamentary system, which dates back to the establishment of the Republic of Turkey. The new system can be called “the second republic.”The victories of the likes of Erdogan, which are many, leave us all concerned as to what the future might hold. This kind of victory is considered a loss for everyone dreaming of a better future, and this has been proved by the outcomes we have already begun to witness.
*Diana Moukalled is a veteran journalist with extensive experience in both traditional and new media. Twitter: @dianamoukalled