Another Gulf Crisis: Dinar Devaluation Looms As Bahrain Begs Neighbors For Bailout

Despite the recent rise in oil prices, all is not well among the allies in the Gulf. The "pegged-to-the-dollar" Bharaini Dinar has tumbled in the last few days as Bloomberg reports the nation has asked Gulf Arab allies for financial assistance as it seeks to replenish its foreign-exchange reserves and avert a currency devaluation - which could spread contagiously through MidEast markets.

Bloomber notes that the slump in oil prices has battered the six-member Gulf Cooperation Council, at times raising questions over whether a dollar peg seen as a bedrock for economic stability for more than three decades was sustainable. And while bets against the region’s currencies have subsided this year, a devaluation of a GCC member would risk shifting the attention to others. Gulf central banks, including Bahrain’s, have repeatedly brushed aside talk of abandoning their exchange-rate regimes.

But Bahrain has seen its central bank"s foreign reserves collapse over 75% from 2014 highs as they have defended the currency peg.

And so, as Bloomberg reports, according to people with knowledge of the talks, Bahrain has asked for a bailout.

The request was made to Saudi Arabia and the United Arab Emirates, two of the people said.

 

A third person said Kuwait was also asked.

 

The countries responded by requesting the island kingdom do more to bring its finances under control in return for the money, the people said on condition of anonymity because the discussions were private.

 

The talks are at an early stage, one person said.

It appears the FX markets are not convinced as the Dinar tumbled...

The IMF estimates that Bahrain needs oil prices at $99 a barrel to balance its budget this year, compared with $73.1 a barrel for Saudi Arabia, which is overhauling its economy.

While Brent crude is trading at the highest level in more than two years, it’s still almost $40 below Bahrain’s breakeven price.

But, Bloomberg points out that economists say that a Saudi-led bailout of Bahrain will be less costly than cleaning up the mess of a devaluation.

“Most people are fully expecting the other Gulf countries to come to Bahrain’s aid,” said Jason Tuvey, a London-based economist at Capital Economics.

 

“If Bahrain was forced to devalue its currency it would probably start to raise questions about other currency pegs.”

Will this be the next ripple to spook markets? Or just another dip to buy?

We Know What Inspired The Manchester Attack, We Just Won't Admit It

Authored by Patrick Cockburn via The Strategic Culture Foundation,

In the wake of the massacre in Manchester, people rightly warn against blaming the entire Muslim community in Britain and the world. Certainly one of the aims of those who carry out such atrocities is to provoke the communal punishment of all Muslims, thereby alienating a portion of them who will then become open to recruitment by Isis and al-Qaeda clones.

This approach of not blaming Muslims in general but targeting “radicalisation” or simply “evil” may appear sensible and moderate, but in practice it makes the motivation of the killers in Manchester or the Bataclan theatre in Paris in 2015 appear vaguer and less identifiable than it really is. Such generalities have the unfortunate effect of preventing people pointing an accusing finger at the variant of Islam which certainly is responsible for preparing the soil for the beliefs and actions likely to have inspired the suicide bomber Salman Abedi.

The ultimate inspiration for such people is Wahhabism, the puritanical, fanatical and regressive type of Islam dominant in Saudi Arabia, whose ideology is close to that of al-Qaeda and Isis. This is an exclusive creed, intolerant of all who disagree with it such as secular liberals, members of other Muslim communities such as the Shia or women resisting their chattel-like status.

What has been termed Salafi jihadism, the core beliefs of Isis and al-Qaeda, developed out of Wahhabism, and has carried out its prejudices to what it sees as a logical and violent conclusion. Shia and Yazidis were not just heretics in the eyes of this movement, which was a sort of Islamic Khmer Rouge, but sub-humans who should be massacred or enslaved. Any woman who transgressed against repressive social mores should be savagely punished. Faith should be demonstrated by a public death of the believer, slaughtering the unbelievers, be they the 86 Shia children being evacuated by bus from their homes in Syria on 15 April or the butchery of young fans at a pop concert in Manchester on Monday night.

The real causes of “radicalisation” have long been known, but the government, the media and others seldom if ever refer to it because they do not want to offend the Saudis or be accused of anti-Islamic bias. It is much easier to say, piously but quite inaccurately, that Isis and al-Qaeda and their murderous foot soldiers “have nothing to do with Islam”. This has been the track record of US and UK governments since 9/11. They will look in any direction except Saudi Arabia when seeking the causes of terrorism. President Trump has been justly denounced and derided in the US for last Sunday accusing Iran and, in effect, the Shia community of responsibility for the wave of terrorism that has engulfed the region when it ultimately emanates from one small but immensely influential Sunni sect. One of the great cultural changes in the world over the last 50 years is the way in which Wahhabism, once an isolated splinter group, has become an increasingly dominant influence over mainstream Sunni Islam, thanks to Saudi financial support.

A further sign of the Salafi-jihadi impact is the choice of targets: the attacks on the Bataclan theatre in Paris in 2015, a gay night club in Florida in 2016 and the Manchester Arena this week have one thing in common. They were all frequented by young people enjoying entertainment and a lifestyle which made them an Isis or al-Qaeda target. But these are also events where the mixing of men and women or the very presence of gay people is denounced by puritan Wahhabis and Salafi jihadis alike. They both live in a cultural environment in which the demonisation of such people and activities is the norm, though their response may differ.

The culpability of Western governments for terrorist attacks on their own citizens is glaring but is seldom even referred to. Leaders want to have a political and commercial alliance with Saudi Arabia and the Gulf oil states. They have never held them to account for supporting a repressive and sectarian ideology which is likely to have inspired Salman Abedi. Details of his motivation may be lacking, but the target of his attack and the method of his death is classic al-Qaeda and Isis in its mode of operating.

The reason these two demonic organisations were able to survive and expand despite the billions – perhaps trillions – of dollars spent on “the war on terror” after 9/11 is that those responsible for stopping them deliberately missed the target and have gone on doing so. After 9/11, President Bush portrayed Iraq not Saudi Arabia as the enemy; in a re-run of history President Trump is ludicrously accusing Iran of being the source of most terrorism in the Middle East. This is the real 9/11 conspiracy, beloved of crackpots worldwide, but there is nothing secret about the deliberate blindness of British and American governments to the source of the beliefs that has inspired the massacres of which Manchester is only the latest – and certainly not the last – horrible example.

Feds Blame "Lapse In Vetting" For Admitting Syrian Refugees With Terrorist Ties

Via Judicial Watch,

Dozens of Syrian refugees already living in the Unites States may have ties to terrorism and the Department of Homeland Security (DHS) is downplaying it, claiming federal agents missed “possible derogatory information” about the immigrants due to “a lapse in vetting.” Among those who slipped through the cracks is a man who failed a polygraph test after applying to work at a U.S. military installation and another who communicated with an Islamic State leader.

Information about this scandalous security lapse comes from federal agents with firsthand knowledge of the situation. They spoke to a mainstream newspaper on condition of anonymity, as many Judicial Watch sources who expose delicate information do, out of fear. This is the type of case the government works hard to keep quiet and consequences could be serious for those who blow the whistle. The news article reveals that federal agents are now “reinvestigating the backgrounds” of the dozens of Syrian refugees because somehow DHS discovered that the lapse in vetting allowed refugees with “potentially negative information in their files to enter the country.” The newspaper attributes the information to “U.S law enforcement officials” who were not authorized to discuss the matter.

Coincidentally, on the day this story broke a national newswire service reported that President Donald Trump drafted an executive order to stop accepting Syrian refugees. The president also plans to suspend issuing visas for citizens of seven predominantly Muslim countries—Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen. Under President Barrack Obama’s lax immigration policies, large numbers of terrorists from some of these nations entered the U.S., including members of ISIS and other radical Islamic groups. They include individuals who have engaged in or attempted to engage in acts of terrorism, conspired or attempted to conspire to provide material support to a terrorist organization or engaged in criminal conduct inspired by terrorist ideology. Some have been convicted and sentenced in American courts.

Additionally, the Obama administration was very generous in granting citizens of Muslim nations special amnesty protections and residency benefits in the U.S. During a five-year period, Obama’s DHS issued around 680,000 green cards to foreigners from Muslim countries, according to the agency’s figures. Somalia, Yemen, Syria and Libya were among the nations. In 2015 Judicial Watch reported on a special “humanitarian” amnesty program offered to illegal aliens from Yemen, an Islamic Middle Eastern country well known as an Al Qaeda breeding ground. Yemen is the headquarters of Al Qaeda in the Arabian Peninsula (AQAP) and the State Department has revealed that AQAP militants carried out hundreds of attacks including suicide bombers, vehicle-borne improvised explosive devices (VBIEDs), ambushes, kidnappings and targeted assassinations.

Circling back to Syrian refugees, as Obama let thousands settle in the U.S. his own intelligence and immigration officials admitted that individuals with ties to terrorist groups used the program to try to infiltrate the country and that there is no way to properly screen them. In 2015 the Office of the Director of National Intelligence (ODNI) confirmed that individuals with ties to terrorist groups in Syria tried to gain entry to the U.S. through the refugee program and that the program is “vulnerable to exploitation from extremist groups seeking to send operatives to the West.” Before that the director of U.S. Citizenship and Immigration Services (USCIS), Matthew Emrich, admitted during a congressional hearing that there’s no way to adequately screen Syrian refugees because the Syrian government doesn’t have an intelligence database to run checks against. Additionally, FBI Assistant Director Michael Steinbach conceded that the U.S. government has no system to properly screen Syrian refugees.

Chinese Warships In Persian Gulf For First Time Since 2010

In a deployment not seen in seven years, three Chinese warships including a guided-missile destroyer warship embarked on a tour of Gulf Arab states for the first time since 2010 in what al Arabiya has called Beijing"s "desire to play a bigger role on the global stage."

The three Chinese vessels arrived in Qatar’s capital Doha on Saturday following a visit to the Saudi port city of Jeddah, according to Chinese state broadcaster CCTV.

While China’s navy regularly tours the world and its ships patrol off the coasts of Yemen and Somalia as part of international anti-piracy operations, such visits to Gulf Arab states, where both the U.S. and Britain have naval bases, are less common. In 2014, China"s navy visited Iran for the first time to take part in joint naval exercises with Saudi Arabia’s regional arch-rival.

Beijing, which relies on the Middle East for oil, has tended to leave Middle Eastern diplomacy to the other four permanent members of the U.N. Security Council - the United States, Britain, France and Russia. As reported yesterday, for the first time in history, Russia surpassed Saudi Arabia as China"s primary source of oil imports.

Perhaps this fallback option explains why China has been trying to get more involved in gulf diplomacy recently, especially in Syria peace efforts, and has taken tentative steps over the Yemen crisis too.

A senior Chinese diplomat said on Monday that Beijing could be forced to assume a role of world leadership if others step back from that position after U.S. President Donald Trump pledged in his first speech to put “America first." Naturally such an expansion in China"s global role would include taking tenative steps to declaring who its friends in the gulf region are and, by implication, its enemies.