The Real Reason behind Qatar’s Gulf State Freeze Out

Officially, the narrative on the split among Gulf Arab nations, between Saudi Arabia and the tiny nation of Qatar, has centered around support for terrorism. The reality of the situation is far more nuanced, but that hasn’t stopped President Trump from immediately embracing the Saudi position, attacking the Qatari government for supporting “extremism” in the region.

.. the actual rift stems heavily from the Arab Spring, and the Qatari government’s support, both official and unofficial, for groups advocating democratic reform in the Middle East. While the Saudis and the other nations involved in directly in this split are more than comfortable to be overtly hostile to democracy in the Middle East, it is wildly dangerous for the United States to position itself in such a manner.

.. The hostility toward Qatar has its roots in the hostility of other Gulf Arab states, particularly Saudi Arabia, toward al-Jazeera, a highly influential media outlet in the Middle East which is funded heavily by the Qatari royal family, and whose positions often conflict with those of Saudi Arabia, and the rest of the GCC governments.

.. Al-Jazeera has its origin in dissent toward the Saudis. Founded in 1996, the network’s staff were heavily from the Arabic-language BBC news service, which had just been shut down because of mounting censorship demands by the Saudi government. The new network was given broad editorial discretion, though It has remained funded by, and subsequently loyal to, the Qatari government.

From the beginning, al-Jazeera was controversial, willingly broadcasting dissenting opinions on important issues at a level unheard of in the region. Israeli officials were interviewed, something which just didn’t happen on other networks there, and opposition figures who were silenced domestically in various nations often found a voice on al-Jazeera, enhancing the network’s credibility, and given it a broad reach indeed.

.. The Arab Spring saw the conflux of two major bogeymen of a lot of the region’s despots, calls for democratic reform and the Muslim Brotherhood

.. Qatar’s relationship to the Muslim Brotherhood is unusually positive for the region. The group has existed for nearly a century, initially a reaction to British colonialism, advocating a religiously conservative, but democratic, system of government that has given it great influence in the clergy, which in the Middle East has been where revolutions traditionally start, and a natural position in the Arab Spring as a big organizer.

.. Few region-wide revolutions come and go successfully without some attempts at a counterrevolution, and this was true in the Arab Spring as well.

.. The fall of the Brotherhood in Egypt was a real turning point, as the new junta there under current president Abdel Fattah el-Sisi quickly presented the Brotherhood and its Islamist supporters as “terrorists,”

.. Since then, Qatar’s connections with the Muslim Brotherhood, and al-Jazeera’s unwillingness to vilify the only really successfully democratic revolutions in decades, has been a source of tensions between Qatar and its neighbors. This has at times led to diplomatic rows, but really boiled over this month in the wake of President Trump’s visit to Saudi Arabia.

.. Trump’s often vague understanding of Middle Eastern affairs fit perfectly into the anti-Qatar narrative, with Trump having been keen to move against the Muslim Brotherhood himself after taking office, and likely would have done so but for advice to the contrary within the administration.

.. President Trump’s move to back the Saudis and the Egyptians against Qatar is incredibly dangerous in the long-term for US interests, because it positions America as backing an overtly anti-democracy movements in the region under the guise of the war on terror.

The Calculated Rise of France’s Emmanuel Macron

French presidential candidate skipped electoral politics, instead connecting with the elite and acquiring market experience; at stake, the future of Europe

Mr. Macron made friends in high places who propelled him to ever-higher echelons of French society. Along the way he acquired a repertoire of skills, from piano and philosophy to acting and finance, that helped impress future mentors.

.. Rather than run for office in his hometown, gradually building a constituency, he proceeded straight to Paris, where he became an expert on banking and European technocracy. He acquired a mastery of arcane regulations, from the 3,334-page French national labor code to the plumbing of the European Union’s single market
.. A Macron win would put Europe’s second-largest economy under an outspoken EU supporter who wants to establish a command center for the Continent’s defense, create a border police force, loosen France’s rigid labor rules, cut payroll taxes and reduce French public-sector employment by 120,000.
.. Mr. Macron met his future wife, Brigitte Trogneux, while he was in high school and she was his drama coach. She was more than 20 years his senior, a member of a prominent business family of chocolatiers, and married.
.. Mr. Hollande hired Mr. Macron as an aide, dispatching him to reassure investors and business leaders nervous about the candidate’s plan for a 75% tax on incomes above €1 million.After winning the presidency in 2012, Mr. Hollande brought Mr. Macron to the Élysée Palace as deputy chief of staff. As business leaders threatened to leave France, citing the tax policy, Mr. Macron warned his boss in an email that he risked turning France into “Cuba without the sun.”

.. Mr. Macron invited Sigmar Gabriel, then Germany’s economy minister and vice chancellor, to a private dinner in Paris. They agreed to commission a report from economists that could serve as a blueprint for a grand bargain Mr. Macron envisioned to revive the EU’s fortunes: Germany would provide stimulus by spending more, and France would become a European model of economic rectitude by paring back its generous labor protections.

.. In his view, France’s job market was hemmed in by a rigid educational system that set young people on a narrow career trajectory and by labor rules that discouraged companies from hiring them.

.. “When a president names someone minister,” he said, it’s “not to make him a servant.”


Xi Jinping’s Failed Promises Dim Hopes for Economic Change in 2nd Term

“I’m highly skeptical, since I don’t think it’s a lack of authority or the opposition of special interests that have kept him from moving in that direction so far,” said Scott Kennedy, the director of the Project on Chinese Business and Political Economy at the Center for Strategic and International Studies in Washington. “Rather, he’s operated according to his instincts in the face of economic challenges. And I don’t expect his instincts or those challenges to change much.”

.. “The boat sails best when the winds and waves are steady,” Liu Shiyu, the chairman of the China Securities Regulatory Commission, said at a news conference last Sunday. “Without stable market conditions, no reform can make progress, and there may even be reversal of the strides that we’ve made.”

.. And while many economists, including some of Mr. Xi’s top advisers, continue to lobby openly for more market-oriented policies, the government has also become less tolerant of those who directly and publicly criticize it for not doing enough, including by censoring them on social media.

.. It is Mr. Xi’s own policies, though, that raise the biggest questions about his commitment to change. As more and more capital has left China, the government has restored restrictions on moving money abroad.

While taxes have been increased on service industries, promises to introduce a property tax and other fiscal changes have made little headway. That logjam has left the finances of local governments in many manufacturing-dependent cities dangerously dependent on land sales for revenue.

.. Some of the initial hopes that Mr. Xi would turn out to be a market liberalizer were probably never realistic. The Chinese government’s idea of reform has never been the free-market bonanza that some economists advocate.

Even Deng Xiaoping, who first injected elements of capitalism into the Chinese economy in the 1980s, stressed that the government must retain control.

.. Most experts expect Mr. Xi will stay much the same leader he has been for five years, unless slowing growth and rising debt produce a shock. Yet the cost of inaction could be an increasingly debt-ridden, inefficient economy.

“If the government keeps meddling in the markets to ensure growth, then this road will become impassable,” said Mr. Li, the professor in Shanghai. “The problems won’t be solved and will only get worse.”

Italy Just Handed the Global Economy Another Giant Variable

Even that possibility threatens Europe with trouble. If investors worry that Italy may leave the euro, they will demand greater rewards for continued lending. Those with the greatest debt burdens — Greece, Spain and Portugal — could see their borrowing costs rise beyond their ability to pay.

.. For now, such grim scenarios appear remote. The referendum maintains the power of the Italian legislature’s upper chamber, a potent check on the Five Star Movement, or any government pursuing radical change.

.. The consensus is that Italy can patch immediate holes in the banking system. But the referendum has destroyed what momentum existed to address the condition that is both cause and effect of the banking problem — a dire lack of economic growth.

Italy’s banks are stuffed with uncollectable debts in part because the country’s economy is smaller than it was a decade ago. Bad loans on bank balance sheets reflect that millions of people have lost jobs, eliminating spending power, while companies have seen sales evaporate.

.. Voters clearly did not trust Mr. Renzi to wield greater power. Now, they will be represented by someone with less power where it matters a great deal: Brussels and Berlin.

.. Brussels and Berlin argue, such countries must deliver so-called structural reforms, stripping away labor protections and trimming pension benefits.

.. German Finance Minister Wolfgang Schäuble effectively threatened to banish Greece from the euro if Athens did not deliver on reforms it promised as a condition of successive European bailouts.

.. Mr. Renzi was a rare leader who carried credibility in such quarters. He gained modest relief from European spending strictures in part by pointing at his reforms.

Renzi is the only leader in recent history who has advanced a structural reform agenda,” said Mujtaba Rahman, managing director for Europe at the Eurasia Group, a risk consultancy.