Mumbai Why Islamists are anti-Semites and why the NYT doubts it

The wonder over Islamist targeting of Jews is peculiar. The founder of modern Islamism, Sayyid Qutb was very explicit about his hatred for Jews. This has nothing to do with Israel or Palestinians, but rather with the same old "World Jewish Plot" and Jewish influence:  

 

....explaining the purpose of man and his historical role in philosophical terms ... is one of the tricks played by world Jewry, whose purpose is to eliminate all limitations, especially the limitations imposed by faith and religion, so that Jews may penetrate into body politics of the whole world and then may be free to perpetuate their evil designs. At the top of the list of these activities is usury, the aim of which is that all the wealth of mankind end up in the hands of Jewish financial institutions which run on interest. [Milestones, p.110-111]

  

 

The Times Doubts Islamic Terrorists are Anti-Semites. Apparently.
Zachary Thacher
by Zachary Thacher, December 3, 2008

 

Last week, while Islamic terrorists attacked Mumbai, the New York Times covered the event with a sense of confusion and surprise – mimicking what it must have felt to be on the ground in a city suddenly under fire.

 

When it became clear Jewish New Yorkers were caught in the attacks, the Times went into overdrive to report the latest twist. Unfortunately the first article they published on the Jewish angle contained language that was so naïve as to be offensive.

 

Fernanda Santos reported the story, Brooklyn Rabbi and Wife Caught in Attacks, where she stated two items that jumped out.

 

First: "the Holtzbergs' Chabad house became an unlikely target of the terrorist gunmen…"

 

I dropped my fork at Thanksgiving dinner as I read this on my BlackBerry. It's "unlikely" that Islamic terrorists attack Jews? Since when?

 

Then, further down, she wrote: "It is not known if the Jewish center was strategically chosen, or if it was an accidental hostage scene."

 

Now I was mad. What, exactly, is an accidental hostage situation?

 

"Oh, hey, I just happened to be an evil Muslim radical carrying this AK-47, and since you look like a helpless civilian, and whoa, you're wearing a yarmulke! Might as well take you hostage."

 

I mean, really? Is that what she meant?

 

Fortunately no other article I could find in the Times or CNN opined about the terrorists plans, accidental or otherwise. As the killers stalked from the train station to a movie theater and to the Taj and Oberoi luxury hotels, no one questioned if these were unlikely or accidental targets. They just reported the facts. Except for the Times when it came to Jews.

 

Why were Ms. Santos and her editors so afraid to make the obvious connection between Islamic terrorists and their unarmed Jewish civilian victims? Is the Times, as a mostly center-left news source, afraid of unfairly demonizing terrorist madmen intent on killing as many civilians as possible? Do they really need protection by the Times? I didn't get it. So I emailed the reporter telling her I was upset and confused.

 

Fernanda Santos' response:

 

"It was not my intention to dilute the significance of the attack at the Chabad house. The doubt expressed in my story was solely related to the fact that, at the time, our reporters on the ground had not been able to confirm if the Chabad house had been targeted because it is a place of congregation for people of the Jewish faith, which is what I and my editors immediately suspected (and which is, in fact, the most obvious conclusion) or because it is in the middle of Mumbai's tourist district… It is a subtle, yet important distinction, and one that, in spite of all the evidence that Jews are frequent targets of Islamic militants, we could not make with a comfortable degree of certainty in the six hours I had to report and write my article. I apologize if I offended you in any way. That was by no means my intention."

 

Ms. Santos is a good person and was kind to reply, but now I'm even more confused about the Times editorial policy. It was clear to her and her editors that the Islamic terrorists, like every other Islamic terrorist in the world, are violent anti-Semites -- by definition I might add. And since she only had six hours to report the article, and couldn't interview terrorists to ask them what their goals are, she retreated into safe language that opined about the likeliness and purposefulness of these Jewish targets. Seems reasonable, right?

 

So why did the Times not feel the need to wonder if the Taj, Oberoi, movie theater or train station (and remember, the attackers came in by boat) were unlikely or accidental targets? Where are the subtle yet important distinctions not brought up for these locations? Why did no other news source have this same problem that Santos and her editors did?

 

Apparently there's a double standard when it comes to Jews in this news cycle.

 

No one should demonize Ms. Santos – by all measure she's a hard working reporter who strives to do the right thing – but she did advocate an Orwellian double-speak for Jewish targets, versus secular Western targets. This isn't only unfair, nor is it really over-cautious, it's just ignorant – and this hurts everyone. It denies the truth to all of us, of every color, religion, nationality and political persuasion, about the nature of Islamic terrorism. If the Times is worried about suggesting that Islamic terrorist target Jews, perhaps they could think of the forty Muslims who were killed that day. (Wikipedia reference.) By now it's clear the most frequent victims of Islamic terrorism are innocent Muslims. They deserve better. We as Jews deserve better. The attackers of both peoples should be named for who they are, and not sheltered in the cautious wording of newsroom editors who either don't know better, or need to be reprimanded by their more senior editors.

 

Perhaps my polite and ultimately positive exchange with Ms. Santos and this blog post will keep the Times on their toes the next time a Jew is attacked by Muslim terrorists. Unfortunately, it's likely this will happen in the near future, and it won't be by accident.

 

Cross posted: Israel News  Middle East Analysis

Pakistani "apology" for Mumbai atack: 'None Of India's Cities Can Remain Safe From Our Missiles'

If the Mumbai terror attacks were intended to stir up trouble between Pakistan and India, they certainly succeeded. It is truly amazing that after a barbarian terrorist attack was launched from its soil, Pakistan is threatening India rather than apologizing. it is totally unacceptable.  

 

Pakistani Nuclear Scientist: 'None Of India's Cities Can Remain Safe From Our Missiles'; 'Our Missile System… Can Be Fired in Only 10 Minutes – They Are On the Launchers'

 

Amid growing tensions between India and Pakistan following the 11/26 Mumbai terror attacks, Pakistani nuclear scientist Dr. Samar Mubarakmand spoke of the readiness of Pakistani missiles and of their capability to target Indian cities. Dr. Mubarakmand, who has steered the Pakistani nuclear program for the past several decades alongside disgraced nuclear scientist Dr Abdul Qadeer Khan, expressed his views during a talk show.

Following are excerpts from the interview, as published in the Urdu-language Pakistani newspaper Roznama Express: [1]

"Pakistan's nuclear assets are in safe hands.

"Every Indian city is on the target of our missiles, and [Pakistan's] atomic technology is better than that of India. [We] can fire the missiles at only 10 minutes' notice...

"I am very satisfied with the defense preparedness. As long as [we] didn't have nuclear weapons, India had a three and a half advantage [over Pakistan]. But this advantage was levelled when we conducted the nuclear testing.

"Following the nuclear testing, we tested missiles like the Shaheen, the Ghaznavi, the Shaheen II, and the Ghauri. After this, India's tone and language [vis-à-vis Pakistan] changed...

"The nuclear tests carried out by India were of eight to 10 tons, whereas our [atomic tests] were of 25 to 30 tons, and the one we conducted in Kharan [Desert, in Baluchistan] were of 10 to 12 tons. This is why our weapons are better [than India's]...

"Our Shaheen missiles hit targets [during testing]; the world recognized their delivery system. None of India's cities can remain safe from our missiles... Pakistan's width is less than India's, which is 1,200 to 1,400 kilometers. Therefore, no corner of India is safe from the Shaheen II...

"We have also developed cruise missiles. And Pakistan is the fourth country in the world to have cruise missiles...

"We should talk to India strongly... Even while giving the message of friendship, we should make [Indians] realize that we are not weak...

"Being a small nation, if we abandon the option... to launch a nuclear attack, then there won't be any use of the second option. This way you end one advantage...

"Our missile system is ready, [and] can be fired in only 10 minutes - they are on the launchers..."

Cross posted: Israel News  Middle East Analysis

Understanding Islamism

Following is a long excerpt from an authoritative article about Islamism. The author, Maajid Nawaz, was an Islamist, so he knows whereof he speaks. He is not an apostate Muslim, just a regular Muslim, explaining what it is all about.

My time in Egypt's notorious Mazra Tora prison gave me the opportunity to finally study Islam myself from its primary Arabic sources. I also had the opportunity to debate with some of Egypt's most well-known convicted terrorists, such as the surviving assassins of late Egyptian President Anwar Sadat and the founders of al-Gama'a al-Islamiyyah – formerly Egypt's largest terrorist group. I also had access to imprisoned liberals such as the runner-up in the Egyptian Presidential election Ayman Noor, and the then imprisoned Sociology Professor Saad el-Din Ibrahim. My adoption by Amnesty International as a 'prisoner of conscience', and in particular the tireless efforts of one Amnesty activist – John Cornwall – served to open my heart to non-Muslims again for the first time in 10 years. My mind, however, would still not follow without rigorous investigation. After four years of daily debate and organised studying with the whole spectrum of reformed political prisoners I gradually came to the realisation, subconsciously at first, that what I had thought was Islam, was in fact a modern political ideology masquerading as the ancient faith of Islam. Islamists had taken modern day political paradigms and superimposed them onto religion. I now refer to this ideology as Islamism, so as to distinguish it from Islam the faith.
 
Upon returning to the UK in March 2006 I continued in my activities with Hizb ut-Tahrir at the leadership level. At this stage I was in psychological  nial, after thirteen years of Islamist activism, that I could have been so wrong. The more my status grew on the Islamist circuit, the more I felt hypocritical for no longer believing that Islam was a divine political ideology. I had become one of the most recognised figures amongst Islamists generally and in Hizb ut-Tahrir ranks specifically, yet I could not face the fact that I no longer believed in the ideology. I eventually learnt that the group was preparing me for leadership of the UK branch, and this news brought me to my final tipping point. In May 2007, thirteen years after joining, I unilaterally announced my resignation from Hizb ut-Tahrir, and in September 2007 I appeared on national television to declare that I now recanted Islamism itself.
 
Understanding the ideology of Islamism

In understanding what the ideology of Islamism is, it would help to begin with the name. The suffix 'ism' has been added to Islam so as to draw attention to the political nature of the subject matter. Islam is a faith; Islamism is an ideology that uses Islam the faith as a justification. Some of you may be reluctant to call this ideology Islamism. There exists an understandable concern of not wanting to alienate Muslims. It is my contention however that only by using Islamism can one popularise the notion that the ideology is indeed distinct from the faith, and that Islam is innocent from the excesses of Islamism. The presence of Islam in the title should be no more troubling for Muslims than the presence of 'social' in Socialism is for sociologists. The presence of the word Islam in Islamism, like social in socialism, indicates the justificatory claim made by the ideologue rather than an admission of the validity of such a claim. I firmly believe that by claiming the word Islamism, and helping shape how it is used, one can direct the debate in the right way with the intention of distinguishing the ideology from the faith. Finally, for all their feign of offence, Islamists use this word in Arabic when differentiating themselves from other Arab political trends, such as Bathism.
 
When dealing with this question one must remain cognisant of the fact that the majority of Muslims are not Islamists. Generally, non-Islamist Muslims are from the conservative camp, such as traditionalist Sufis or Deobandis, or the literalist Wahhabis. [1] This camp holds to socially conservative views and is historically apolitical. Non-Islamist Muslims could also be of the progressive camp, such as many leading theologians and academics today. Many in this grouping, and some from the conservatives, may even be politically active. These form the nascent post-Islamist movement of morally-inspired and politically active Muslims, or Muslim Democrats. However, the majority of progressives are simply secular legal positivists, believing that religion and morals cannot be a basis for strictly defining legal and political decisions. Key to the political activism of the above Muslims is that their politics is not driven by ideology.
 
The natural question then arises: what is the difference between an Islamist and an ordinary Muslim who may be politically active? Here some identifiers will be highlighted, not as hard and fast rules, but as general guidance on the fundamental beliefs that the vast majority of Islamists will hold dear. It is important to note that just as there is no one single definition of Communism, it is likewise for Islamism. This, of course, does not mean that Communism does not exist just as it does not mean that there is no such thing as Islamism. If, as is claimed, Islamism is a modern ideology, it follows that there must be some basic ideational factors that help shape it, ideas that can be clearly traced as being modern. In this endeavour, I aim to identify an Islamist's ideology, law, people and state.
 
The first identifier of Islamism is the Islamist belief that Islam is not a religion, but a divine political ideology surpassing Communism and Capitalism. An implication of this is the Islamist assertion that Islam must have provided a detailed and divinely pre-ordained stance on matters such as political structure or the economy and these must lie, by definition, in contradistinction to structures already available in Capitalism and Communism. If these structures and systems are deemed absent, the Islamists will work to bring them about. Hence the Islamist desires to 'Islamise' all aspects of society and life. This also carries with it the Islamist assertion, subsequently also subscribed to by prominent non-Muslim commentators, that Islam is in perennial conflict with other ideologies, just like Communism in the cold war. In fact, the founder of Hizb ut-Tahrir used to be a Bathist or an Arab Socialist, which is where he found much of his political inspiration. Moreover, Islamists have long suffered due to their lack of theological legitimacy having been founded by political activists rather than theologians. The founder of the Muslim Brotherhood, Hassan al-Banna, was a school-teacher. The founder of the Indian subcontinent offshoot of the Brotherhood, Jamat-e-Islam, was a journalist by the name of Abul 'Ala Mawdudi. Al-Qa'idah's Osama Bin Laden is an engineer and Ayman al-Zawahiri a medical doctor. The man who recruited me to Hizb ut-Tahrir all those years ago, the current head of Hizb ut-Tahrir in the UK, was also a medical doctor. Due to the Islamists' emphasis on modern political thought they tend to attract those who have a modern education, those who can grasp discussions on sovereignty, statehood and the economy yet whose disciplines are not these social science subjects themselves, thereby explaining their willingness to adopt political ideas that lack nuance. A qualified theologian would rarely claim that Islam is a political ideology, unless he has been reared exclusively by an Islamist party to become a theologian so as to reinterpret the theology in light of the ideology, such as the Brotherhood reared Yusuf al-Qaradawi.
 
The second identifier is the Islamist claim that the Muslim religious code, known as the Shari'ah, demands implementation on state level as codified law. In other words, the legal and illegal of state law must be synchronised with halal (permissible) and haram (impermissible) of the religious code. This again is a modern innovation unheard of in traditional Islamic sources. Muslim history is in fact bereft of examples of any type of Shari'ah being wholesale adopted as state law. Despite this, Islamists place so much emphasis on synchronising the Shari'ah with codified state law that they consider it a matter of apostasy if someone claims otherwise. Such a demand gives rise to Islamist claims of un-Islamic, hence illegitimate, laws that subsequently need to be Islamised. On the contrary, ordinary Muslims are perfectly happy for the Shari'ah to remain a personal code of conduct.
 
The third identifier is the Islamist notion of the ummah, or Muslim community, forming a political rather than simply a religious identity. This has parallels with the Communist idea of the international proletariat. The subsequent implication for Islamists is that loyalty and allegiances are owed to this global community above all else. Hence, an Islamist will not consider a non-Muslim as being from 'his people', nor will he accept any national identity. Ordinary Muslims, on the other hand, consider the ummah as a religious community; hence they are free to adopt as their political identity any number of things. In fact, the Prophet himself declared, as a civil leader, that Jewish, Christian and Muslim residents of his city-state were all 'one ummah', as 'citizens.'
 
The final identifier is the Islamist dream of having an ideological entity to represent the above three elements in the form of an expansionist Muslim bloc, the Caliphate. Its ideology will be Islamism, its law an adoption on Shari'ah and its people the global Muslim political bloc. Just as the international proletariat, the global political bloc for Communists, required an expansionist state to proactively 'liberate' workers from the tyranny of Capitalism, likewise the Caliphate must proactively intervene in the affairs of other states so as to 'liberate' Muslim residents from the yoke of kufr, or disbelief. Ordinary Muslims have no such expansionist dreams. Muslim theological authorities in each country have time and time again made the point that the days of religiously-inspired expansionism went out with the Middle Ages.
 
It is not strange that a modern-day supremacist ideology with aspirations of a super-state and a higher people emerged in the Middle East after World War I. The end of the age of empires led to the same phenomenon in Europe. Whereas European Fascist, Communist and Nazi parties emerged from the ashes of defeated European empires, the collapse of the Ottoman Empire led to Islamist parties emerging in the Middle East. The very same characteristics of expansionist super-states, a higher-people, and political party organisation are to be found in each of these supremacist phenomena. Such a development can be explained by the crisis of identity experienced by collective peoples in the aftermath of the old-world order empires collapsing.

From the Roots of Violent Islamist Extremism and Efforts to Counter it 

 

Cross posted: Israel News  Middle East Analysis

Syria: Something to Hide

Something to Hide

November 30th, 2008

Sunday, 30 November 2008 02:09 Nir Boms&David Keyes

A British Ambassador in Teheran once explained the logic of the Middle East as follows: "What I say does not definitely reflect what I think. What I do does not necessary reflect what I say. Therefore, not everything that I do necessary contradicts everything that I think. "This twisted logic may help explain the latest sequence of events in Syria and the apparent gap between the regime's words and deeds.  Despite softening rhetoric and occasional signs of rapprochement with the West, President Bashar al-Assad still has a lot to hide—and fear.

On the one hand, Syria appears to be taking its time. Last September it took the government over a week to admit that its "air defense systems confronted Israeli aircraft."  This announcement followed a flurry of reports about an Israeli strike that destroyed a suspected nuclear site.  The Syrians, naturally, denied these "western" reports but they also refused to allow the International Atomic Energy Agency to conduct a follow up visit, this despite the recently published report confirming the presence of uranium at the site.  It took Syria another whole week to admit the assassination of General Mohammed Suleiman, a top Assad adviser and a key player in the Lebanese arena. The regime stayed mum regarding the abduction of Kurdish leader Meshaal Tammo too.  Lastly, Syria has yet to officially comment on the mysterious assassination of Hamas leader Khaled Mashall's top aid, Hisham el-Badni, who was taken out of his car and shot in the city of Homs earlier this month.

In contrast to this foot-dragging, Syria has been all too quick at repressing dissent.  Twelve more names were recently added to Syria's already long list of political prisoners.  Journalists Jabr al-Shoufiand and Fayez Sarah, Democratic Party member Muhammed Haji Darwish and  former independent member of parliament Riad Seif  were among those sentenced to two and a half years in prison for "spreading false information and belonging to a secret organization promoting sectarian strife." These convictions follow a wave of arrests against figures such as Ghazi Omar Qaddour, member of the Syrian Council of Freedom and Human Rights Committees and Habib Saleh, author and opposition figure.   Many of those targeted by the regime are associated with the 2005 Damacus Decleration, which calls for "democratic and radical change" in Syria.

Even as these arrests occur, Assad has dispatched "unofficial" emissaries to Washington to help convince the Americans that Syria is serious about peace.  Such lobbying is to be expected, but is this a genuine move toward reconciliation or is it part of a more nefarious plot?  Talking peace while banning basic liberties is an old Middle Eastern game with all too familiar consequences.  Indeed, nations cannot be trusted to treat their neighbors with respect when they treat their own citizens with such contempt.  Regional peace without domestic peace is ephemeral at best.  In the words of famed dissident Vaclav Havel, "Without free, self-respecting, and autonomous citizens there can be no free and independent nations. Without internal peace, that is, peace among citizens and between the citizens and the state, there can be no guarantee of external peace."  The Middle East is no exception to this sound principle.

In 2006, Assad said "Worry does not mean fear, but readiness for confrontation."  Assad may or may not be ready for confrontation, but he is worried.  From the assassination of his top military aid to prison riots in Sidnaya that reportedly killed dozens, Syria is beset with internal strife.  The recent crackdown on dissidents is yet another sign of Syrian insecurity.

Syria remains draconian in its repression of dissent and wholehearted in its commitment to authoritarianism. The regime seeks engagement and respect from the West, but economic aid and political rapprochement must be linked to an improvement in human rights.  Just as the Jackson-Vanik amendment applied critical pressure to the decrepit Soviet state, so too must we mobilize today against the repressive Syrian regime.  Brave Middle Eastern dissidents are the free world's greatest ally.  Standing shoulder to shoulder with these champions of liberty is both a moral and security imperative and one that should be taken seriously by the new US president elect.

Nir Boms is the Vice President of the Centre for Middle East Freedom.  David Keyes is the Coordinator for Democracy Programs under Natan Sharansky at the Adelson Institute for Strategic Studies.

Cross posted: Israel News  Middle East Analysis

Bad economy means trouble for Iranian regime

Iran's Mullahs face a dilemma.  The rule of Ahmadinejad is becoming unpopular. There is no real democracy in Iran as the Supreme Council has the final say in all things.  It is easy enough to invalidate all the reformist candidates as "un-Islamic" as they did in the past.

But if they do so they may face a popular uprising. Making women wear the Hijab or hanging a few homosexuals or Bahai is one thing, and to stage Holocaust denial conferences is good clean fun. It is OK --  as long as you are not a woman or a Bahai or a Jew of course..  But making people poorer will not be tolerated. Everyone wants A-bombs and missiles in Iran, needed to kill the Jews and the Americans, but nobody wants to pay for them. Make no mistake. The "reformist" Mullahs like Rafsanjani have the same agenda as the other brand. The nuclear development program began or continued in secret under the reformist regime and it will continue if Ahmadinejad is ousted. But Iran will put some window dressing on its society and its foreign policy. There will be less talk of wiping out Zionism and more talk about the plight of the poor Palestinians. Missile tests will not get so much publicity, and perhaps all the programs will slow down a bit.

 

An alternative is to close the straits of Hormuz and drive the price of oil back up again, or to get Sy Hersh and others to produce more canards about Israel or the US attacking Iran.

 

Iran's reformists say president squandered oil cash 

 

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Reuters - 05 December, 2008

Iran's main reformist party accused President Mahmoud Ahmadinejad on Thursday of squandering windfall oil earnings and driving up inflation, part of its campaign to oust the leader at an election next year.

Most Iranians complain about high inflation, at over 29 percent, and rising unemployment. Analysts say the economy will be the main focus of the June 2009 election when Ahmadinejad is expected to run for another four-year term.

The Islamic Iran Participation Front said the government had not saved enough when oil prices were high to maintain spending now the price has dropped to below $ 50 a barrel. Prices hit $ 150 in July.

"His main campaign slogan was to share oil wealth fairly ... But instead, his economic policies have caused major problems for Iranians, particularly for lower-income people," Mohsen Mirdamadi, the party's secretary-general, told about 400 people at an annual party meeting.

Critics, both reformists and conservatives, including some who backed Ahmadinejad's first presidential bid, say the leader's high spending is to blame for surging inflation that stood at about 11 percent when he took office in 2005.

"Since the (1979 Islamic) revolution, Iran's total oil income has been $ 700 billion. Over 36 percent of it was earned during the tenure of office by Ahmadinejad," Mirdamadi said. "But inflation and unemployment rates are the highest now."

Mirdamadi said substantial political reform was needed.

"Reforms are the only solution to the economic crisis," Mirdamadi told the audience, which included reformist former president, Mohammad Khatami.

Khatami has yet to announce whether he wants to relaunch his reform plans by competing in the election. But his allies say he will announce his candidacy in the coming weeks.

Analysts say securing victory in the presidential vote will also depend on gaining support of Iran's clerical establishment.

Supreme Leader Ayatollah Ali Khamenei, Iran's top authority, has supported Ahmadinejad, and his comments may sway millions of revolutionary loyalists. Ahmadinejad is also popular in small towns and rural areas where he frequently doles out cash.

"Ahmadinejad's economic and foreign policies have failed. But he still can win if the leader supports his candidacy," said an analyst at the meeting, who asked not to be named.

Khatami fell out of favour with many Iranians for failing to take a firmer stand against Islamic hardliners during eight years in government. But allies say he could win another vote.

"Wherever people see a leading reformist, they complain about Ahmadinejad's policies. They want Khatami as their president again," Mirdamadi said.

"Winning the election is the first step. Iran's next president should compensate for the losses under Ahmadinejad."

 

Cross posted: Israel News  Middle East Analysis

 

From Somalia to Mumbai - in one explosive lesson

What's the difference betwee the Somali pirates, Bonnie and Clyde and John Dillinger on the one hand and Al-Qaeda the Lashkar group that carried out the terror attack in India? A very big difference in some respects. Nobody lionized Somali pirates, and nobody marches in the streets with portraits of their leaders. No dialog groups call for understanding the "deap reasons" for piracy, bank robbery and bootlegging, as long as they are not furnished with religious or ideological motives. No Somali pirate supporting NGOs will be invited to the Durban II Racism conference either.

 

There is another big difference. The pirates don't kill people for no reason.

 

Other than that, there is no difference.

 

Read more about it here: Mumbai terror and Somali Pirates 

 

Cross posted: Israel News  Middle East Analysis

 

Panic over low oil prices in greedy gulf states

Arab oil states and others in OPEC, together with speculators, deliberately and artificially inflated the price of oil. The soaring prices helped to sabotage the world economy, already vulnerable because of irresponsible credit policies. The states used the extra revenues to invest in unimaginable and unnecessary projects that helped nobody: Ski resorts in the desert and artificial islands. In Iran, they have been used to fund nuclear weapons development. Now the whole house of cards has come down on the heads of those who created it. Western home owners, gouged for oil, could not pay for their cheap mortgages. Industrialized countries could not afford the oil needed to run their industries. Oil prices headed back toward realistic levels. There is no money to pay for the artifical islands and atomic bombs.

 

But it seems a bit unrealistic to fear or hope for single digit oil prices. OPEC can always close the faucet after all. Without interference and immoral carteling practices, oil would probably fall to about $30 to $45 a barrel. If the price goes below $20 a barrel, it will be less than the cost of extraction and transport for countries like Russia, and therefore the supply would begin to dry up for legitimate reasons. Nobody will sell oil if they are really losing money.

 

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Oil may fall to single digit, warns economist
Mahmood Rafique | Arab News  

MANAMA: The steep fall in oil prices due to the ongoing economic crisis could result in drastically low oil prices ranging between $15-$20 per barrel or even a single-digit per barrel.

The worst-case scenario will remind us of the situation of the 1990s Asian crisis, a senior economist warned yesterday. Simon Williams, chief economist, Gulf markets at HSBC, in a briefing titled "Shelter from the Storm," held yesterday at the Ritz-Carlton, Bahrain, said oil was the bedrock of the regional economies.

"The Gulf is still digesting the oil price shock as the shift to a new oil price equilibrium has fundamentally changed the Gulf as an economic story. Here everything is directly or indirectly linked to the hydrocarbon industry, and if falling oil prices touched its lowest then everything will be at a grinding halt.

"The GCC as a region has immense hydrocarbon resources heavily dependent on oil income which constitutes half of the gross domestic product of these six nations," Williams added. The economist, who was joined by David Bloom, global head of foreign exchange strategy, HSBC, during a joint presentation on Global Markets Outlook '09, said the ongoing economic turmoil had already hit hard GCC markets which lost about 50-60 percent of its total value in the last 10 months.

"The slowdown with low oil prices seems an end to the remarkable boom of six years with the current account surplus rising to $1.2 trillion. This region has never experienced such a quantum shift in the past which we've seen in the past few years as a trillion-dollar GCC economy having trebled in size in six years.

"The per capita income is in excess of the OECD (Organization for Economic Cooperation and Development) and real growth running well ahead of medium trends. Public finances and the external accounts are extraordinarily strong as no central government deficits have been recorded anywhere in the region over the past six year.

"The cumulative current account surplus of $1.2 trillion over 2002-08 and current risk are currently negligible. But there's a very scary picture ahead with the slowdown of the GCC economies guaranteeing the expected 2-4 percent GDP growth forecast for next year where the US and UK face negative growth which seems indigestible to the most of the economies in the region. In a nutshell, falling oil prices will definitely create volatility and uncertainty in the region.

"Some of the markets lost three-fifths of their value in less than three months while Dubai financial market lost about 80 percent during this volatility period. The year 2010, as it shows by all indicators, is likely to be the worst in the history of the Gulf region."

Williams said that oil and liquidity were the main issues in the Gulf. "Oil prices ranging between $50-to-$70 per barrel have created anxiety among GCC governments but this is going to be worse, like that of $30 per barrel which will definitely put a brake on ongoing development across the region. There is no problem with liquidity but banks are hoarding cash due to existing mistrust and anxiety in the market. This situation is manageable but the bad story is that this region has missed a self-fund opportunity," he maintained.

Cross posted: Israel News  Middle East Analysis