Saturday, April 01, 2006

International banks join boycott of Syria

A European friend writes to say that most international banks are joining the Swiss and US to cut off dealings with the Commercial Bank of Syria. This raises pressure on Syria considerably. We look forward to his follow up; he writes:

I just heard from a prominent crude trader in London that most international banks (incl. institutions in the Gulf) have decided last Thursday to deny lines of credit to Syria central bank for its purchase of gas oil. Swiss (and of course US) banks had taken this decision a while ago, but Syria has had many fall back plans. Now they have many, many less... Though I trust Assad’s regime “inventiveness” to get out of this trap, this could be a major social issue ahead. I will follow this up…

A solution for Syrian will be to barter Syrian crude vs foreign gas oil, but I am told that Syrian crude export office and gas oil import office could never work together in the past. They may have to change their habits going forward.
The US has miscalculated badly with its democracy campaign and its vigorous policy of using force in the region according to Perry and Crooke in the article copied below. Rather than cow Islamists and rejectionists in the region, it has emboldened them and given them greater legitimacy through polls. All the same, the US seems prepared to drive forward the confrontation, using the UN security council, international consensus, and economic strangulation as a substitute for military force. Starving Hamas, getting Iran referred to the Security Council and corralling international banks to boycott Syria shows that the US still has arrows in its quiver, despite the "thousands of tactical errors" committed in Iraq.

Talking with the 'terrorists'
By Mark Perry and Alastair Crooke, Asia Times, March 31, 2006

Seventy-two hours before the Iraqi people voted on a new parliament, on December 12, 2005, we were told by a senior US administration official that "detailed data received by the White House" pointed to a "decisive win" for Ayad Allawi's Iraqi National List. "Allawi's victory turns the tables on the insurgents," this official said gleefully. "Sectarianism will be the big loser."

Allawi's prospective triumph was trumpeted repeatedly over the next two days by US news networks quoting administration officials. Weeks later, after the results of the election became known, it was clear that the White House had overestimated Allawi's popularity: his party received just over 5% of the vote.

On the eve of the Palestinian parliamentary elections in late January, US-funded Palestinian polls suggested that while the mainstream Fatah movement had lost much of its popular support, Hamas was expected to win no more than "a third of the legislature's 132 seats". On January 27, when the results of the polling were complete, it was clear not only that Fatah had been defeated, but that Hamas had swept into office in a landslide. A prominent front-page article in the Washington Post stated that US Secretary of State Condoleezza Rice was "stunned" by the results, as the Hamas victory contradicted everything the administration of President George W Bush believed about Palestinian society.

Just two weeks after the Hamas victory, on February 6, Lebanese Maronite leader Michel Aoun and Sheikh Hassan Nasrallah appeared together in Beirut to sign a memorandum of understanding between the Free Patriotic Movement and Hezbollah. The Aoun-Nasrallah agreement shook the State Department, which had worked for years to isolate Hezbollah.

The US had underscored its anti-Hezbollah strategy as recently as November 23, when Aoun met with State Department officials in Washington. The State Department blithely discounted the importance of the talks that Aoun's movement had been having with Hezbollah and reassured the press that Aoun would remain a staunch supporter of the United States' Lebanon policy. Certainly, it was believed, the leader of Lebanon's Maronite Christians would never tie the future of his own movement to that of a group allied with Damascus and Tehran.

In the aftermath of the Aoun-Nasrallah agreement, however, all of that changed: not only was Aoun's support for the US-led program against Syria in question, his agreement with Hezbollah meant that he was justifying Hezbollah's alleged kidnapping of Americans in Lebanon during the 1980s. Overnight, it seemed, Aoun had gone from being a friend of the US to a man allied with terrorists.

Allawi's failure, Hamas' success, the Aoun-Nasrallah agreement - and the inability of the West to predict, shape or even understand these seminal events - have been variously interpreted: as a signal that the US intelligence community needs increased resources, that the West has not been doing enough to sell its "program" in the region, that the US and its allies have not been harsh enough in their condemnation of "radicalism", that the West has underestimated the amount of support its secular allies need, and (in the case of the Palestinian elections) that Hamas didn't really win at all - "Fatah lost."

We have reached a much more fundamental and alarming conclusion: Western governments are frighteningly out of touch with the principal political currents in the Middle East. The US and its allies overestimated Ayad Allawi's strength, were "stunned" by Hamas' win, and were surprised by the Aoun-Nasrallah agreement because they don't have a clue about what's really going on in the region. [complete article]

U.S. bans meetings with Hamas
By Sharmila Devi, Financial Times, March 29, 2006

The US administration banned its officials on Wednesday night from meeting the Islamist group Hamas, as the new Palestinian government was sworn in and while Israel’s centrist Kadima party opened talks to form a coalition after winning the largest number of seats in Knesset elections.

US officials in the region were instructed by e-mail on Wednesday to have no contacts with Palestinian ministries from 6pm last night. [complete article]


At 4/01/2006 03:13:00 PM, Blogger Vox Populi - Agent Provocateur said...

I come from a family where we use line of credits extensively in our business . Line of credits are vital if you want to import goods.

It would certainly be a huge problem for Syria if this measure was generalized to other banks in other countries. If it happens, Syrian importers will have to pay their imports cash at the source, before these imports. I won't get into the details here, but this will put de facto HUGE constraints on Syrian commerce with these countries (on both imports and exports).

At 4/01/2006 03:24:00 PM, Blogger Vox Populi - Agent Provocateur said...

For those who are interested, this is a good article in wikipedia explaining how the letter of credits are used and why it is the backbone of internation commerce:

At 4/01/2006 09:33:00 PM, Blogger norman said...

The Arab countries critesized the US economic sanctions against Syria ,the US will boycot any company that boycot Israel ,do we realy think that the Arab countries will boycot American and Euoropian banks and companies that boy cot Syria ,I doubt they have no backbone ,does anybody have any doubt about the reason that Syria trusts Iran more than these corrupt traiters calling theselves arabs.?.

At 4/01/2006 10:27:00 PM, Blogger Nur-al-Cubicle said...

Doesn't Malaysia have banks? Are they on board?

At 4/02/2006 10:21:00 PM, Blogger zobahhan said...

I think the issue is more related to euro and dollars...not really country specific nur. Wikipedia isnt a great source vox..i know understand your "Backbone."



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