Friday, September 02, 2005

Mehlis to Come to Damascus - Rice Gets Tough

Mehlis has been invited to Syria. It is not known who he will ask to talk to here. He stated last Thursday that there were no Syrian suspects, but that will probably only be a matter of time. He also said that he believed more people were involved in the bombing. U.N. investigators on Saturday searched the Beirut offices of the Baath Party, the Lebanese branch of Syria's ruling party. Its investigators questioned Lebanese Baath Party leader Assem Qanso on Friday as a witness in the case.

Mehlis says he will need an extension of his three-month mandate, which expires on September 15, to wrap up the probe and report back to the U.N. Security Council that ordered it. He can ask for up to three extra months to conclude the inquiry.

In Washington, Secretary of State Rice is preparing to isolate Asad during his September visit to the UN by getting the other Arab states to meet with her to discuss Syria without Asad being there. It is covered by Reuters:

Rice Will Try to Rally Allies Vs. Syria

Saturday September 3, 2005 12:01 AM

WASHINGTON (AP) - The Bush administration intends to step up pressure on Syria to steer clear of Lebanon in its drive for political independence and to crack down on Palestinian militants with headquarters in Damascus.

Secretary of State Condoleezza Rice will try to rally support when she hosts a meeting of European and Middle Eastern leaders at the special session of the U.N. General Assembly in New York in two weeks, two senior U.S. officials said Friday.

Syrian President Bashar Assad will not be invited even though he is expected to attend the assembly session along with more than 100 government leaders, said the officials, who spoke on condition of anonymity because they were not authorized to announce Rice's plans.

It is a worldwide strategy being promoted in other capitals as well as by American diplomats, one of the officials said. And, he said, it ranges beyond defending Lebanon's rights.

Building on support for U.S. policy on Lebanon, the United States wants to move further and pressure Syria to clamp down on groups the State Department brands as terrorists and also to end Syrian help for insurgents in Iraq.

Working with France and the United Nations, the Bush administration has succeeded in forcing Syria to withdraw its troops from Lebanon. But intelligence units are believed to still be operating the country Syria effectively controlled for some 16 years.

The assassination in February of Rafiq Hariri, a former Lebanese prime minister who sought to separate his country from Syrian domination, helped trigger the diplomatic drive against Syria.

Declaring the Lebanese people are owed an answer, the Bush administration has called on all parties to cooperate with a U.N. investigation into the slaying.

The U.N. Undersecretary-General for Political Affairs, Ibrahim Gambari, said Thursday ``a form of cooperation is taking place, but not sufficient cooperation.''

In Beirut, Lebanese prosecutors filed preliminary criminal charges Thursday against four pro-Syrian generals in the assassination.

The charges were based on a United Nations investigation into the murder of Hariri.

The chief U.N. investigator, Detlev Mehlis, said he had not identified any Syrian suspects but said there had been problems with Syrian cooperation.
Syrian security forces have killed five militants belonging to Jund al-Sham in a clash in central Syria with an Islamist group plotting "terrorist" attacks, SANA claimed. "The anti-terror squad raided on Friday evening a hideout of a terrorist group in the Hama governorate," it said, quoting an Interior Ministry source. "A clash took place and resulted in the killing of all five members of the group," while two Syrian security officers were wounded."

"The Investigation is over…Mehlis knows the truth," by Raghda Dergham
“Detlev Mehlis is a name that will be [written] in the history of the Middle East. His report regarding the investigation of Prime Minister Rafik Hariri will cause an earthquake in the whole Arab region,” Dergham wrote in Al Hayat, a pan-Arab newspaper, on September 2. According to Dergham, the report will reshape the whole political map in the Middle East because it will destroy political leaderships in the region. “Mehlis practically finished the investigation that the Security Council commissioned him with in UN resolution 1595,” Dergham wrote. She added that Mehlis has already collected all the information needed and reached certain conclusions. According to Dergham, Mehlis by now knows how the assassination took place, who ordered the plan, and who executed it.

“But Mehlis also knows that his life is in danger,” Dergham wrote. According to Dergham, the Security Council, which appointed Mehlis to be the International Investigator in this case, is the one responsible for the prosecutor’s security. Therefore, “if anything happens to him, the Lebanese-Syrian reality will be shaken” because the UN will interfere. Dergham also said that the trial, which will be held for those who are accused of killing Hariri, will represent a “drastic change in the political history of the region.” Dergham said: “This trial will represent a precedent. This would be the first time that the heads of security apparatus are arrested and presented to trial in the Arab world.” As a result, the writer concluded: “The message that can be understood from the investigation of the independent International Committee led by Detlev Mehlis is: The time of political assassinations is over in the Arab region.” - Al Hayat, United Kingdom
“Syrian opposition criticizes Baath Party recommendations”
Elaph, a pan Arab electronic newspaper, reported from Damascus on September 1 that Syrian opposition spokesman Hassan Abdul Azim criticized the Syrian ruling [Baath] party for not executing what was promised in its last conference. Elaph quoted Abdul Azim as saying that Article 8 of the constitution - which stipulates that the sole leader of the country be from the Baath Party - would “block the way ... of any peaceful periodical transfer of power in the country.” Abdul Azim was quoted as saying: “There is no way for a healthy political life that consists of ruling parties and opposition parties to work if Article 8 is not [withdrawn] from the constitution.”

According to Elaph, the opposition in Syria currently consists of five major political parties that are gathered under what is called “the National Democratic Gathering.” All five parties are officially banned by the regime. Elaph quoted Abdul Azim as saying that “the results and the recommendations of the last Baath Party conference did not satisfy the basic needs of the people, and were disappointing.” According to Elaph, the Baath conference had suggested amending several laws, including the emergency law, a move that was criticized by Abdul Azim. He was quoted as saying: “What we need is to cancel such laws, not amend them.” - Elaph, United Kingdom
The Oxford Business Group writes that analysts predict that the Lebanese economy will weather the Mehlis storm. There report continues:

Assem Safieddine, head of the Financial Department at the American University of Beirut, told the Daily Star after the detentions, There may be some implications in the shorter term on the economy as investors wait until the situation settles in. However, the government is quite capable of weathering any pressure on the pound.

He also said that Prime Minister Fouad Siniora and Finance Minister Jihad Azour were capable of handling the task and could guarantee that the monetary system would not be affected, as shown by the government's decision to build up foreign currency reserves, which currently stand at some $11.5bn, in order to counteract any negative outcome from the UN report on the Hariri assassination.

However, due to the sporadic violence and political uncertainty in the aftermath of Hariri's assassination, capital inflows and investments have dropped, and the tourism industry has suffered a 30% decline year-on-year. The deficit ratio stands at 27.2% for the first half of 2005, up from 25.5% for the same period last year. Private deposits have fallen by 3.1% and private-sector borrowing went up by 0.9% in the first half. The Beirut bourse also experienced a small decline in anticipation of the UN report, and according to many analysts, GDP will likely contract between 1 and 5% by the end of 2005.

Still, as the economy has not simply fallen into a downward spiral and continues to function, many remain optimistic.

The decline is a result of political instability - not fundamentals, Youma Assaf, manager of the financial advisory department at Bemo Bank, told the Daily Star. The outlook is positive, but not within the coming two months.

Regional stock markets are experiencing a surge and as Gulf Arab investors continue to gain capital from increasing oil revenues due to the rise in prices, they continue to invest in Lebanon's stock market and real estate sector.

As long as these investigations do not trigger some kind of confessional war... then the country can cope with any political development, Safieddine said.

According to security sources, the investigation could go higher, with some suggesting possibly to President Lahoud. Some analysts feel that if even powerful figures who seemed untouchable are punished, then the public and investors will take comfort in the knowledge that everyone is accountable. Figures in the Lebanese intelligence arm, the Internal Security Forces (ISF), are also likely to be questioned.

Economist Marwan Iskander saw the detainment of the men as a major step forward, saying that investments will start pouring into Lebanon by the beginning of 2006 at the latest. The Lebanese stock market has also made a strong recovery since February 14.

Even economist Elie Yashoui, who does not see much reason for optimism at present, told the Daily Star that as long as the government immediately makes much-needed economic reforms, the Lebanese can still live with the public debt, as it crept up over $35.6bn this year, equal to 180% of GDP.

Debt servicing increased in the second quarter but actually decreased in the first half of 2005 by 22.6%. A few reforms, such as a streamlining of the customs process for exports leaving Lebanon, have already been implemented. Other long-awaited and more vital reforms are expected to be made in the coming months as Prime Minister Siniora enjoys the backing of a majority in parliament, whereas previous attempts at reform were blocked during the period of Syrian political domination. The Siniora government has already approved $275m for land expropriation.

Aid to the beleaguered economy also continues to pour in, as the government seeks to reign in soaring energy costs and offset economic damage. The US, France and the World Bank are presently preparing a new economic package for Lebanon. The government Council for Development and Reconstruction (CDR) has secured 14 loans and grants totalling $425m for projects throughout Lebanon, mainly provided by Arab and international organisations.

The Lebanese economy is trudging on in the face of political uncertainty and the potential for greater conflict. Caution and patience, not panic, remain the rule of the day.

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