Thursday, September 8, 2011

Fitch warns of downgrades for China, Japan...


Fitch warns of downgrades for China, Japan...

Fitch Ratings warned on Thursday that it might downgrade China's credit rating within two years as the country's banks struggle with debt loads following a lending surge to help lift the economy during the 2008 financial crisis.

It also said that Japan, weighed down by a public debt load twice the size of the $5 trillion economy, faced a greater-than-even chance of a downgrade in part due to a political impasse that is stalling plans to clean up its finances.

Asia's two biggest economies are in the ratings firing line alongside Europe and the United States as they deal with massive debts built up during the global financial crisis.

Andrew Colquhoun, head of Asia-Pacific sovereign ratings at Fitch, told Reuters in an interview that China's local currency debt rating could be downgraded over the next 12 to 24 months.

"We expect a material deterioration in bank asset quality," he said. "If the problems in the banking system pan out as we expect or are even worse over the next 12 to 24 months, then that would incline us to take the rating downwards."

Fitch downgraded the outlook on China's long-term local currency debt to negative from stable in April because of concerns about the country's financial stability following a lending surge encouraged by Beijing to help maintain economic growth during the global downturn.

Fitch's China long-term local currency rating is AA minus, its fourth highest level, on a par with Italy and a notch below Spain, Reuters data shows.

Fitch has sounded the loudest warnings of the three main ratings agencies about the surge in lending in China and is the only one with a negative outlook on the long-term local currency debt rating.

China reported local government debt of 10.7 trillion yuan ($1.67 trillion) as of the end of 2010. More than 347 billion yuan in urban construction investment bonds were issued in the five years to 2010.

Last month, China's top banking regulator Liu Mingkang said work to clean up local government debt was progressing smoothly, the latest comment from officials to try to reassure skeptical capital markets that risks were manageable.

Colquhoun said non-performing loans at Chinese banks were about 2 percent of the total, but if lending to local government financing vehicles was appropriately classified, the figure would be more like 6-7 percent.

"That by itself is sufficient to exhaust the banks' internal absorption capacity," he said. "So any further deterioration in asset quality beyond that... would lead to a requirement for sovereign support, which then affects the sovereign credit profile."

While in general terms it was known how much stimulus during the financial crisis cost European countries and the U.S., Colquhoun said, because in China it was done through the banking system, "in a nutshell we don't know how much it cost."

"We haven't seen the full cost come through yet."

FURTHER DETERIORATION?

There was a risk that asset quality could deteriorate further because bank lending was still running at a fast pace, Jonathan Lee, Fitch's senior director of financial institutions, said at a later media briefing.

Lee said Fitch estimated bank loans would increase this year alone by 18 trillion yuan.

"This is the equivalent to 55 percent of China's GDP, which is an extremely high number and a potential problem for banks' asset quality," he said.

Japan's credit rating has already been cut this year by Fitch's rivals, Standard & Poor's and Moody's. Like Fitch, they cite the inability if Japan's leadership to come up with a plan to reduce the debt load over time.

"We think the ratings on current trends are more likely than not to go down," Colquhoun said. "To shore ratings up at their current level we need to see a credible fiscal consolidation plan."

The three major agencies rank Japan's credit ratings at their fourth highest levels. However, both Fitch and S&P have a negative outlook, suggesting further rating downgrades unless Japan is able to come up with a credible plan to sort out the debt.

"Our confidence that we will see it is not high because of the track record of the politics," Colquhoun said.

Japan's government spokesman declined to comment.

Hopes now rest on Yoshihiko Noda, appointed last week as Japan's sixth prime minister in five years, to forge a political consensus in the divided parliament, or Diet. The costs of reconstruction following the March 11 earthquake and tsunami and the recession it triggered is adding to Japan's debt burden.

"We'll see if Mr Noda has the formula to break the logjam in the Diet. But if we don't, then the ratings will be coming down."



China's Evolving Technology Sector; moves from market to maker....


China's Evolving Technology Sector; moves from market to maker will shake up the global technology balance.

--

AT THE END of July, embarrassed local authorities in the Chinese city of Kunming, the capital of Yunnan province, ordered the closure of several Apple Store locations. The closure was not in response to some slight by the consumer electronic giant against China’s government. The problem was that these weren’t actual Apple Stores at all. Instead, they were meticulously created facsimiles, in effect knock-offs of one of the West’s most iconic retailers, “China-fied” with alterations to the facade and some internal details but filled with bona fide, sought after Apple products.

But for most consumers shopping in these stores, and even for the employees, most of whom believed they were working for the actual company, the glass-fronted stores appeared to be the real deal, staffed by what looked like Apple employees in their iconic t-shirts and neck tags. Five shops were found in total, none real, according to Reuters. Only four genuine Apple Stores exist at the moment in China, and none of these are even in Yunnan province. If not for the eye of an American blogger living in the city who reported it on her site, the charade might have gone on for some time.

The story has been the source of not a little humour, but is only one of numerous tales of so-called shanzai tech stores that purport to be the real thing, with a wink and a nod, no doubt. It may be the most bald-faced counterfeiting at such a scale uncovered yet. More than anything, it appears to be the frontstage of KIRF (Keepin’ it Real Fake, a term coined by popular tech blog Engadget to refer to counterfeit tech products), for which the backstage contains hundreds of workshops and factories, and thousands of artisans and con artists, engineers and hackers who toil to create China’s technology mirror world. At one end are the hundreds of thousands of units of “iPone” and “Nokla” clones that litter global markets. At the other are the kind of high-tech weapons that I wrote about in this column last month.

The issue of product fakery would remain largely an intellectual property and piracy discussion if it wasn’t happening alongside a parallel evolution of China’s technological capabilities, from design through to engineering and research. The rising tide of China’s economic growth has lifted a wide array of boats—from domestic desire for status-object electronics such as iPhones and iPads (and their innumerable knock-offs), to the latest entertainment gear and even energy efficient cars. In these areas and others, the demand of an increasingly wealth population is meeting an unregulated supply of new products and services. It does it in a structure that sits partly inside and partly outside the frameworks of innovation and development the West has taken for granted for a century or more. In short, China is paving its own multi-lane highway. One lane is a combination of grassroots entrepreneurship, grey- and black-market ingenuity. Another lane is marked by aggressive learning curves among its growing cadre of technology producers companies. Yet another runs through it, showing a heavy dose of top-down investment in more traditional, if highly independent, state-driven and academic R&D.

This center lane of domestic manufacturers provides many of the gadgets we now center our lives around in the rest of the developed world. Such electronic must-haves begin their lives in China on the assembly lines of what are called in the industry "OEMs", or original equipment manufacturers. These are where the Apples, HPs and Dells of the world outsource final production and polish of new products. OEMs are no secret: there is now not just one but a half-dozen or more ways to track your new Macbook Pro or iPad from its birthplace in Shanghai through port of entry, usually in Alaska these days, to your front door.

A number of these OEMs have risen from no-name contract manufacturers a decade or less ago to rising stars in the technology firmament, including Lenovo, Huawei, Haier and ZTE, now global brands. Like Taiwan’s HTC, not long ago a white label producer of mobile phones and now among the top ten mobile brands in the world, China’s OEMs-turned-retail brands have learned engineering, design and marketing lessons by working for, and watching, their current competition. They're not just mimickinganymore, but instead shaping market strategy. Along the way, they're also paving the way for the Chinese equivalent of the Silicon Valley garage entrepreneur—the persistent but resource-constrained hacker who produces his wares out of a shed or unlabeled workshop today, but who might end up either with a lucrative business selling in market stalls across the region, or as a rising startup in a few years’ time.

While these big brands are reshaping day-to-day markets, it's the third lane, so to speak -- state-sponsored technology development -- where China’s efforts have the potential to gradually shift the global balance of power over the next few decades. One important element of this has been the development of the so-called Dragon chip, or Loongson processor. Driven by a desire to satisfy future domestic demand for computing power and an unease with running military applications on Western chips, Loongson has been under development for a decade, and is expected to debut this year in low-end electronics, as well as in supercomputer configurations. While the head of the project to develop Loongson says his team’s efforts are probably 20 years behind market leaders Intel, the potential to free itself of Western processors can put China on an even more technologically independent path down the road, again evolving from customer into competitor.

The geopolitical implications of this diverging highway are important at cultural, economic and political levels. As CEOs in businesses that have grown fat on a largely monopolar world can already tell you, the advent of a strengthening second center of power eats into already cloudy future market opportunities. It also has the capability to reshape demand based on different sets of values—those of Shanghai and Beijing casting a shadow on or displacing Madison Avenue and Sandhill Road. On a political level, China’s multi-lane technology future will fuel growing insularity and further stoke a return to regionalism. Just as the Chinese are uneasy about long-term use of Western components for military applications, there are rumblings in Washington about insecurity in technology supply chains flowing to the West from China. This is likely to be inflamed even more as field reports from an escalating East-on-West cyberwar become more alarming.

Not everyone is worried. The global south that China is targeting as it own future overseas markets isn't bothered where its circuit board are printed. Loongson’s creators see opportunities in African markets now being courted by Chinese government and brands. Like Western pharmaceuticals, its microprocessors and operating systems come with hefty licensing fees, making low-cost technology from other sources attractive.

While feeding open source chips into emerging markets isn’t going to break Intel, Microsoft et al anytime soon, their technological genes won’t be the only ones replicating on an uncontested frontier. As emerging markets grow and their embrace of China’s technology deepens, its technological DNA will spread. As has been the case with Western technology's DNA for a half-century or more, how it is constructed, what it defines and runs, and who funded and wrote it, will matter.

--

Scott Smith is the author of Discontinuities.

Cristina de Kirchner's victory points to macroeconomic uncertainty in Argentina

By Daniel Kerner

Cristina de Kirchner's victory points to macroeconomic uncertainty in Argentina come November...

President Cristina Fernandez de Kirchner scored a clear victory in Argentina's first ever open primary election on August 14, setting the stage for her to sweep the October 23 presidential election. Fernandez de Kirchner's win in the primary came on the back of Argentina's strong economic growth. That growth, however, is based on unorthodox economic policies that are unlikely to change if Fernandez de Kirchner wins reelection, and that implies macroeconomic concerns in the future.

Fernandez de Kirchner is in a very strong political position. Popular support for her is at the highest levels since she came to office in December 2007. Moreover, several indicators suggest voters are content with the status quo and that there is little demand for change. Fernandez de Kirchner's 50.06 percent of the primary votes compares favorably to the 45.6 percent she won in the 2007 presidential elections. The increase is mostly because of robust economic growth and the opposition's weakness.

Fernandez de Kirchner's overwhelming victory bodes very well for her chances in the October elections. Participation was high at more than 77 percent, which means that these results should be taken as indication of how voters are likely to behave in October. In fact, support for her could even grow as her front-runner status attracts additional voters.

In contrast, the opposition is in disarray. There is a substantial distance between Fernandez de Kirchner and other candidates and no other candidate is likely to emerge as serious competitor. Ricardo Alfonsin obtained only 12.7 percent of the votes, a former president, Eduardo Duhalde, got 12.6 percent, and the socialist candidate Hermes Binner received 10.27 percent.

There is some speculation that opposition parties could coalesce behind a single candidate in October. That is unlikely. All three opposition candidates were close and there is little incentive for any of them to step aside. Additionally, any decision to leave the race would mean abandoning that party's candidates for legislative and local elections, and that would be resisted. Barring a major economic or social deterioration in the run up to the October elections, Fernandez de Kirchner is favored to win. In fact, the primary is likely to generate the perception that Fernandez de Kirchner is unbeatable.

With Fernandez de Kirchner on track to win reelection, attention now turns to what might happen during her next term. There is unlikely to be any major change or improvement in economic policy after the election, in fact, quite the opposite. Strong growth and popular support mean that the government perceives little need to adjust policy. Fernandez de Kirchner's likely victory in October (and probably with a comfortable margin) will only reinforce this feeling. In addition, the profile of some of the individuals that seem to be gaining strength within government suggests that Argentina's unorthodox economic policies are likely to continue, which bodes poorly for the country's macroeconomic outlook.

Daniel Kerner is an analyst in Eurasia Group’s Latin America practice.


Wednesday, September 7, 2011

Ukraine moves to trim gas lines, and Roh sheds light on Russian switch....


Ukraine moves to trim gas lines, and Roh sheds light on Russian switch....

By Robert M Cutler

MONTREAL - In a move that could affect the future of Eurasian geo-economics and alter its energy politics, Ukraine is to dismantle its state-owned corporation Naftogaz and review the company's existing contracts, including agreements for gas purchase and delivery with Russia's Gazprom. The stated purpose is to decrease gas imports from Russia by two-thirds by the middle of the decade.

Prime Minister Mykola Azarov made an announcement to this effect at the end of last week, just before the meeting of Commonwealth of Independent States (CIS) heads of state in Dushanbe, Tajikistan, where Ukraine's President Viktor Yanukovych met his Russian counterpart Dmitry Medvedev.

It followed the publication of Yanukovych's book Opportunity Ukraine in German in Vienna on August 24, the 20th anniversary of Ukraine's independence, and Yanukovych's guest column the next day in the Wall Street Journal titled, "Ukraine's Future Is with the European Union". These events have attracted wide attention, since Yanukovych's political career has given him a well-established profile of deep sympathy towards the interests of the Russian state.

The move announced by Azarov is a stratagem for preventing the still-greater insertion of Gazprom's grasp into Ukraine's energy portfolio. Russian energy trusts such as Gazprom have over the past 15 years followed a pattern of allowing state customers in the CIS to run up debt that they are unable to pay, and then to offer to erase that debt in return for control or even outright ownership of the physical plant and infrastructure of energy companies in the debtor states.

Ukraine consumes about 60 billion cubic meters per year (bcm/y) of gas; under the present contract, it must buy 52 bcm/y of gas but already produces about 20 bcm/y of natural gas. Under contract terms, if both sides agree, then the amount imported could be lowered to 41.6 bcm/y. Russia maintains that into the future, Ukraine cannot escape being required to pay for at least 33 bcm/y whether it uses the gas or not.

Ukraine's energy minister, Yuri Boiko, has already announced that he wishes to cut imports from Russia to 27 bcm in 2012. Moreover, under the terms of the contract, the import prices have risen from US$264 per thousand cubic meters (tcm) in the first quarter of the year to $355/tcm at present, and will rise further to $400/tcm in the last quarter. Gazprom is able to avoid customs duties for gas deliveries to Ukraine while receiving basically European prices for it.

Russia is insisting the current gas contract remain in force. Former prime minister Yuliya Tymoshenko is on trial for abuse of office over the very 2009 natural gas imports contract that Yanukovych, who defeated her in the presidential elections in early 2010, wishes to abrogate. The election was widely criticized by observers for administrative improprieties and lack of transparency. The United States, the European Union, and other international organizations have criticized her arrest as "selective prosecution".

If the gas contract does not remain in force, then the only other possibilities, according to Moscow, are that Kiev join the Customs Union of the Russia-led Eurasian Economic Community (other members are Belarus and Kazakhstan; see
Russia tries a menage a trois, Asia Times Online, July 8, 2010) or that Naftogaz merge with Gazprom.

Such a merger would result in Ukraine's gas transportation system becoming the property of a Russian energy trust. It would also render impossible Yanukovych's stated policy goal of establishing a free-trade zone with the EU.

It is therefore significant, although it has not been widely observed, that the Ukrainian announcement is also a response to a requirement expressed last September 24 by the European Commission (EC), when Ukraine signed a protocol to accede to the European Energy Community. The communite was created in 2005 to establish a common energy-market regulatory framework by extending the EU's acquis communautaire (that is, the accumulated body of EU law) in the sector to non-EU third countries, mainly in Southeast Europe.

The EC stipulated that Kiev "unbundle" Naftogaz, in particular separating its gas transit pipelines from other businesses. This requirement is in keeping with the rules established by the EU under its third energy liberalization package, which is designed to increase competitiveness throughout Europe's internal energy market. Revision of the contract would help Ukraine balance its budget, and so help it persuade the International Monetary Fund to release the last tranche of a $15.6 billion loan program.

In 2009, the Ukrainian network carried over three-quarters of Russia's natural gas exports to Europe. That is due to change, however, as the Nord Stream project for a gas pipeline under the Baltic Sea from Russia to Germany is now complete. The first gas was reported to be pumped into the pipeline from Russia on Wednesday, to arrive in German in three or four weeks. Nord Stream's maximum design capacity is 55 bcm/y.

Observers do not foresee a "gas war" between Ukraine and Russia, such as occurred twice during the last decade when Gazprom halted exports at the beginning of the calendar year, causing citizens in the EU to freeze in mid-winter and also some deaths from cold in Central and Eastern Europe, which have been highly dependent on Russian gas transited through Ukraine.

The Ukrainian distribution system does need to be modernized. It includes more than 60,000 kilometers of pipe plus 71 compressed air plants and 13 underground gas storage facilities. Russia stated last year that it would be willing to cooperate with the EU in an undefined modernization plan. (See
Ukraine seeks pipeline threesome, Asia Times Online, April 9, 2010.)

Depending upon financial advantages that could be accorded in such a deal to Gazprom, for which the Ukrainian transit deal is highly profitable, there may be a basis for arriving at a compromise solution. The question then would be who in the EU would pay for it, and in whose best interests German energy companies, which could likely be involved, would act, other than their own.
Roh sheds light on Russian switch....
By Sunny Lee

BEIJING - The plan to build a trans-Siberia gas pipeline through North Korea to South Korea, highlighted by Kim Jong-il's recent visit to Russia, appears to be on a fast track as Russia's largest extractor of natural gas Gazprom's officials head for Seoul to discuss the matter. It's fair to describe it as an inter-governmental project because the Russian government holds a controlling stake of the company.

Seoul is enthusiastic. On Monday, a key Foreign Ministry official told Yonhap News Agency that the gas pipeline project was not a violation of United Nations sanctions against Pyongyang that restrict economic engagement with the North, saying "The focus of the UN sanctions against North Korea is on weapons of mass destruction [WMD]. The gas pipeline project has no direct relations with WMD."

Lately, Russia has been highlighted in South Korean media, which is curious to know what role the former empire can play with regard to North Korea. The Kremlin and Seoul, the two Cold War adversaries, established diplomatic relations in 1990, under the initiative by then South Korean president Roh Tae-woo. Roh reached out to the communist bloc as a strategy to press North Korea.

"To resolve the South-North Korean tension, I decided to adopt the old Chinese Emperor Qin's strategy of unifying the entire China: Befriend the far and attack the near ... we should have a comprehensive plan to elicit opening up of North Korea," Roh said in his two-volume memoir released on August 9.

The memoir, released at a time when the role of Russia on the Korean Peninsula has come to the fore, is a first-hand account of the many hidden diplomatic backstories between Seoul and the Kremlin, leading up to the knotting of diplomatic ties, and Seoul's intentions in applying "the Russian card" to its rivalry with Pyongyang.

One of North Korea's signature diplomacy strategies, then and now, is to "skip" South Korea to clinch direct deals with world powers, including the United States. It's partly a product of inter-Korean rivalry and assertion of state legitimacy. For example, South Korea's constitution does not recognize North Korea as a state, although both are members of the United Nations.

Roh, who held office as president of South Korea for four years from February 1988, launched an ambitious "Northern Diplomacy" to reach out to the communist bloc on being sworn in. He signed diplomatic relations, including with China and Russia - former Cold War enemies - to counter the North's strategy. The aim was to change Pyongyang's habit of detouring Seoul in international affairs and press it to deal directly with Seoul. "It's a strategy to corner North Korea from its rear and to goad it to dialogue [with South Korea]," Roh explained in the preface of the memoir.

The same philosophy has since been adopted by subsequent South Korean governments. Seoul, for example, has been lobbying hard to bring Beijing onside and persuade it to see the North Korean issue from Seoul's viewpoint, by closely linking China's economic interests to those of South Korea.

The successful completion of the Seoul Summer Olympic Games in 1988 was a golden opportunity for Seoul to impress the Kremlin with its industrial development and make the Soviet leadership think twice about South Korea, which during the 1950-1953 Korean War had been one of the world's poorest countries.

One month after the Seoul Olympics, the Soviet politburo, attended by Mikhail Gorbachev, unanimously adopted a policy shift to normalize relations with South Korea, describing South Korea as "the most promising economic partner in the Far East".

As the Soviet Union was leaning closer to South Korea, Roh calculated that it would also help in thawing the Cold War relationship with Beijing. "The Chinese leadership has a closer relationship with North Korea's Kim Il-sung [the founder of the country and current leader Kim Jong-il's father] than the Soviet Union ... But China is prudent. If we first establish diplomatic relations with the Soviet Union, China will follow suit," predicted Roh (p. 193).

His preference for the Kremlin had also to do with his belief that the Kremlin's interest was mainly economically driven, while China had political ambition on the Korean Peninsula. This fear by South Korea toward China comes from historical experience and runs deep even today.

The Kremlin actually did have a political calculation in mind as it leant closer to South Korea: to check Japan. Around a century ago, the rival imperial ambitions of Russia and Japan led to a war (1904) over their dominance over the Korean Peninsula. Japan defeated Russia at that time, greatly hurting the Russian empire's pride. The two also have had a territorial dispute over the Kuril Islands since the 1950s. The economic giant Japan was perceived by the Kremlin as arrogant and hesitant to broaden economic ties with Russia.

Roh's aides at the presidential Blue House began to meet secretly with a KGB agent in Tokyo, who had a cover as a magazine reporter, to fine-tune the process of establishing diplomatic relations. Later, Roh and Gorbachev met in San Francisco in June 1990. At that time, Gorbachev told Roh, "It would be a big mistake for Japan to think that we need Japan more than Japan needs us." (p. 205) Later in Moscow, Gorbachev also told Roh, "South Korean leaders are different from Japanese leaders. Japan expects us to kneel down. Nothing could be further from the truth!" (p. 212).

Three months later in September 1990, Seoul and Moscow signed diplomatic relations. This was originally supposed to take place in January 1991. But it was Pyongyang that sped up the process by insulting a senior Russian interlocutor. Russian foreign minister Eduard Shevardnadze visited Pyongyang and notified its intention to establish diplomatic ties with Seoul.

He "received blatantly insolent treatment from the North Korean leadership, which was close to a threat. That made the top Russian envoy deeply indignant." (p. 209). When Shevardnadze met with the South Korean foreign minister, Choi Ho-joong, at a UN session and when Choi expressed a desire to speed up the diplomatic process. Shevardnadze readily agreed. A few days later on September 30, the two met again. Shevardnadze personally changed the printed date of the official diplomatic document on the spot from "January 1, 1991" to "September 30, 1990."

"It was a gift from angry Shevardnadze," Roh recalled (p. 207).

In the negotiations leading to the establishment of diplomatic relations, Seoul's major demand on Russia was on North Korea. Seoul wanted Moscow to stop military assistance to the North. Moscow honored the request. Expectedly, that put Pyongyang in great difficulty. According to Roh, "not a single fighter jet, a single tank, a single missile went to North Korea after." (p. 217).

Perhaps a greater irony was that Russia soon changed its weapons export destination: from North Korea to South Korea. Despite North Korea's protest, Russia in 1995 proposed to Seoul that loans could be paid by providing Russian tanks, helicopters and missile parts. Russia's attitude toward North Korea was also becoming "business-like". It scrapped trade favors that had been granted to North Korea and demanded Pyongyang pay its debts in hard currency. The series of gestures by Russia put the Moscow-Pyongyang relationship to test. Experts point out that the duo's relationship has not been fully repaired since.




Swiss central bank sets limit on franc's strength...


Swiss central bank sets limit on franc's strength...


In what experts called a last-ditch "nuclear option," the Swiss National Bank set a ceiling Tuesday on the value of its currency, which has skyrocketed this year as traders worldwide frantically searched for a safe haven in volatile times.

http://jessescrossroadscafe.blogspot.com/2011/09/us-dollar-very-long-term-chart.html

Aiming to protect Swiss exports and the country's vital tourism industry, the bank said it would spend whatever it takes to keep the Swiss franc from strengthening beyond 1.20 francs per euro. It also indicated it might take more measures to weaken it further.

Philipp Hildebrand, chair of the central bank's governing board, said that the move to counter "a massive overvaluation of our national currency" was taken to avert a recession.

"Switzerland is a small and very open economy. Every second franc is earned abroad. A massive overvaluation carries the risk of a recession as well as deflationary developments," he said in a statement, adding that the goal is "a substantial and sustained weakening of the Swiss franc."

The reaction in markets was immediate. The euro, which had been trading around 1.10 francs before the announcement, shot up to 1.2024 afterward. The dollar jumped from 0.7850 francs to 0.850 francs....

The Swiss stock market cheered the move, with the main index jumping 4.7 percent.

But the central bank acknowledged the move could cost it large sums of money because it would be burning cash by buying foreign currency.

"With today's decision, the SNB sets foot on a challenging journey," Hildebrand said. "We have to accept the fact that the costs associated with it might be very high. At the same time, doing nothing would almost certainly inflict tremendous long-term damage on our economy."

With the United States flirting with recession, many European nations mired in debt, and stock markets showing extreme volatility, international traders have poured money into the safety of Swiss money accounts, causing the franc to jump in value. The Swiss economy also has fared better than most other nations in debt-saddled Europe, where the financial sector and governments are being forced to cut spending and pay for expensive bailouts.

Its status as a global safe haven for traders has seen the Swiss franc rally this year by as much as 40 percent against the dollar and 30 percent against the euro.

Tuesday's move was the first time since 1978 that the Swiss authorities have limited the franc's value in this way against another currency.

Hildebrand said the central bank would "no longer tolerate" an exchange rate below the minimum of 1.20 francs per euro and would "enforce this minimum rate with the utmost determination. It is prepared to purchase foreign (currency) in unlimited quantities."

But he said even the rate of 1.20 francs per euro was too strong for the franc and the bank believed it "should continue to weaken over time." He said if the economic outlook and deflationary risks demand it, the central bank was prepared to take further measures to make that happen.

The Swiss business federation welcomed the SNB's decision but indicated its members would like the franc to drop even further against the euro.

"We believe a fair rate to be between 1.30 and 1.40 francs, but this is a good compromise between what's needed and what can be done," board member Rudolf Minsch said.

Jennifer McKeown, a European economist at London-based Capital Economics, called the decision "a bold move" even though 1.20 francs per euro is still relatively strong for the Swiss currency.

"With exports clearly at risk of slumping, the bank must have felt that it had no other choice," she said in a note to investors.

Switzerland's export-driven economy has long thrived on sales of foods like chocolate and cheese, as well as pharmaceuticals, watches, special machinery and tools. Its main trading partners are Germany, the United States, Italy and France.

The Swiss government says because of the soaring franc, it expects a slowdown in growth from 2.4 percent last year to 2.1 percent for 2011 and to 1.5 percent in 2012.

Overall exports rose 0.9 percent in the second quarter, helped by sales of chemicals and watches. But the government said exports of other items such as jewelry, precious metals, machinery and electronics were on the decline.

The last time the Swiss franc's value was limited was 1978, when its exchange rate against the German mark was lowered. That was achieved at a huge cost, however, said Simon Derrick, a senior analyst at The Bank of New York Mellon.

Derrick said the SNB must now feel added pressure managing its cash reserves, after announcing in July a loss of 9.9 billion francs on its foreign exchange holdings for the first half of the year.

"By its promise to buy 'unlimited quantities' of foreign currencies it has effectively agreed to provide an artificially cheap exchange rate for anyone who wishes to seek a safe haven from the uncertainties of the eurozone," he wrote.

The SNB is also alone in its pursuit -- the European Central Bank issued a terse statement indicating they had no role in the Swiss currency move.

But the move did indirectly have a positive impact far from Switzerland, in Eastern Europe.

In Hungary, many households have mortgages denominated in Swiss francs -- and have seen their monthly payments double over the past year as the Hungarian forint weakened against the franc.

Hungary's prime minister, Viktor Orban, said his government will continue to seek ways to help homeowners with rising mortgages, even though the franc fell from above 250 forints to around 230 forints on Tuesday's news. The strong franc is also problematic for Hungarian municipalities, many of which took on franc loans to take advantage of lower interest rates....

Unlocked by melting ice-caps, the great polar oil rush has begun...


Unlocked by melting ice-caps, the great polar oil rush has begun...

Trillions are at stake, and the ecological risks are equally huge....

Michael McCarthy

Tuesday, 6 September 2011

It's the melting of the Arctic ice, as the climate warms, that makes it possible — and you can understand why they're all piling in. In July 2008, the US Geological Survey released the first ever publicly available estimate of the oil locked in the earth north of the Arctic Circle.

Scramble for hydrocarbons above the Arctic Circle: click here to download graphic (900k)

It was 90 billion barrels, representing an estimated 13 per cent of the world's undiscovered oil resources. If you're an oil company, or an oil-hungry economy, that's more than enough to make your mouth water.

But wait. Less than a year later, the geologists involved in the programme, known as Cara, the Circum-Arctic Resource Appraisal, had radically revised their estimate – upwards. Now – in June 2009 – they said the Arctic might in fact hold as much as 160 billion barrels, which would amount to more than 35 years of US oil imports, or five years of total global oil consumption, and be worth, at current prices, more than 18 trillion dollars. Forget mouthwatering. Think drooling.

In the historic opening-up to exploitation of the frozen north, hydrocarbons are the greatest prize (there is likely to be even more natural gas than there is oil.)

No matter that the polar regions are the most inhospitable parts of the whole globe. And no matter, either, that the Arctic constitutes the world's most untouched ecosystem. The oil industry's motto has always been "Can Do", and in the Arctic, it's already doing.

Cairn Energy, an Edinburgh oil exploration company founded by the former Scotland rugby player Sir Bill Gammell, was the first in: it is now in the process of drilling four test wells in Baffin Bay, off the west coast of Greenland (it began last year with three wells, none of which struck oil).

Next year Cairn will be followed into the high north by Shell: the Anglo-Dutch giant has already spent more than $2bn (£1.24bn) on seabed leases and hopes to start a massive programme of oil exploration in July 2012, with up to ten wells in the Beaufort and Chukchi seas off the north coast of Alaska, a region that, according to US Geological Survey estimates, holds 25bn barrels of oil. Shell will be followed in turn by the biggest of all the oil "supermajors", and the world's largest company – ExxonMobil.

Last week it was announced that Exxon had formed an Arctic exploration partnership worth $3.2bn with Rosneft, the Russian state oil group, to look for oil on the other side of the Arctic, in the Kara Sea off the coast of Siberia. In doing so, Exxon was taking the place of BP, which had done essentially the same deal with Rosneft in January, only to see it fall apart in May when it was blocked by BP's existing Russian partners. BP will be back, though; it was "actively looking for opportunities" in the Arctic, a spokesman said last week.

Yet this great surge of development is producing a great surge of concern, as environmentalists contemplate the possibility of a repeat of BP's catastrophic Deepwater Horizon spill in the Gulf of Mexico last year – in the even more unforgiving conditions of the frozen north.

What especially angers green groups is the very fact that the melting of the Arctic ice through global warming is what is paving the way for the region to be exploited.

In mid-September 2007, Arctic Ocean ice cover dropped to a record low, at half its average extent over the years 1979-2000, and it is approaching a similar low this month.

Ben Ayliffe, an Arctic campaigner for Greenpeace, one of a number of environmental bodies strongly opposed to Arctic oil, said: "We've seen how our actions are changing the world, and the idea that we're going to go and use the retreating sea ice as a business opportunity is frankly madness. The risks of drilling and producing oil in this fragile and pristine natural ecosystem, one of the last great wilderness areas of the planet, are terrible."

Greenpeace has taken the lead in opposing the new oil rush with its traditional non-violent direct action: this summer it sent two ships, the Esperanza and the Arctic Sunrise, to disrupt Cairn Energy's drilling operations in Baffin Bay, and its activists did so briefly, until they were arrested and Cairn secured an injunction against the group.

In addition, Greenpeace has persuaded Greenland's government to publish Cairn's 200-page oil spill response plan, which the group subjected to a fierce critique last week, based on an analysis by Professor Rick Steiner, a marine biologist at the University of Alaska.

In a list of criticisms, the analysis pointed out that the plan itself admitted that oil clean-up operations after a spill would not be possible during an Arctic winter, and alleged that a "worst case" spill from a Cairn well would be very much worse than the company was allowing.

A spokeswoman for Cairn said at the weekend: "This plan has been reviewed and approved by third parties including Oil Spill Response Ltd, the Danish National Environmental Research Institute and the Greenland government. All are satisfied that the plan is robust and appropriately designed to deal with an incident in this area."


Tuesday, September 6, 2011

UBS "The Euro Should Not Exist" In A Monster Report On The Odds Of An EU Breakup...


UBS "The Euro Should Not Exist" In A Monster Report On The Odds Of An EU Breakup...


http://online.wsj.com/article/SB10001424053111904199404576538462312243874.html


UBS' Stephane Deo, Paul Donovan, and Larry Hatheway have released a monster report (posted over at ZeroHedge) examining the consequences of a Euro breakup, a once unlikely-seeming outcome that now grows more likely by the day.

The first line basically nails it:

The Euro should not exist (like this)
Under the current structure and with the current membership, the Euro does not work. Either the current structure will have to change, or the current membership will have to change.

The report argues that basically the whole system, right from the start, was basically a lie:

Why consider break-up at all? Break-up occurs because the Euro does not work. Member states would be economically better off if they had never joined. European monetary union was generally mis-sold to the population of the Europe. In the 1990s the Euro was often characterised as an instance of foreign exchange rate integration – the Exchange Rate Mechanism without the crises. The advantages of no foreign exchange rate uncertainties or costs for trade and tourists were emphasised. Of course the exchange rate integration was probably the least of the consequences of the Euro. The most important consequence was the integration of monetary policy. The hint was in the name “European Monetary Union”. However, politicians sought to ignore that hint. A Euro that had been promoted on the idea of monetary union rather than exchange rate integration would have been far more difficult to sell to the electorate.

A monetary union is, economically speaking, a “good” idea if the membership constitutes an optimal currency area. This occurs under one of two conditions. Either the area is so homogenous that the component economies all move in the same direction at roughly the same speed, at the same time. Alternatively, the economies are sufficiently flexible that any differences in economic performance can be relatively swiftly corrected.

Ultimately, even at this dire moment, UBS still has a hard time seeing a breakup, calling some kind of fiscal union more likely. The major reason: It would just be too economically costly for anyone to depart.

The economic cost (part 1)
The cost of a weak country leaving the Euro is significant. Consequences include sovereign default, corporate default, collapse of the banking system and collapse of international trade. There is little prospect of devaluation offering much assistance. We estimate that a weak Euro country leaving the Euro would incur a cost of around EUR9,500 to EUR11,500 per person in the exiting country during the first year. That cost would then probably amount to EUR3,000 to EUR4,000 per person
per year over subsequent years. That equates to a range of 40% to 50% of GDP in
the first year.

The economic cost (part 2)
Were a stronger country such as Germany to leave the Euro, the consequences would include corporate default, recapitalisation of the banking system and collapse of international trade. If Germany were to leave, we believe the cost to be around EUR6,000 to EUR8,000 for every German adult and child in the first year, and a range of EUR3,500 to EUR4,500 per person per year thereafter. That is the equivalent of 20% to 25% of GDP in the first year. In comparison, the cost of bailing out Greece, Ireland and Portugal entirely in the wake of the default of those countries would be a little over EUR1,000 per person, in a single hit.

Read more, including a discussion of breakup mechanics, at ZeroHedge >

Le Liban a désormais un nouveau conflit frontalier avec Israël....


Le Liban a désormais un nouveau conflit frontalier avec Israhëll....


http://www.lecommercedulevant.com/economie-liban/les-dessous-du-nouveau-litige-frontalier-entre-le-liban-et-isra%C3%ABl/19336


Le Liban a désormais un nouveau conflit frontalier avec Israël qu’il accuse d’empiéter sur 860 km2 dans sa zone économique exclusive maritime de 25 500 km2 au total. Comment est né ce différend ? Quelles sont les règles internationales en matière
de définition des frontières maritimes ? Le Liban s’y est-il conformé ? Et Israël ?
Le Liban a-t-il commis une erreur en signant un accord mal ficelé avec Chypre dont les failles ont été exploitées par Israël ? Etc. Le Commerce du Levant répond à toutes ces questions et fait le point sur cette affaire complexe qui mêle diplomatie, droit international, politique, géostratégie, technique cartographique et enjeux économiques.

Qu’est-ce qu’une zone économique exclusive ?

La zone économique exclusive (ZEE) est l’espace maritime sur lequel l’État côtier dispose du droit souverain d’explorer et d’exploiter à la fois les fonds marins, leur sous-sol et les eaux surjacentes. Elle s’étend sur une largeur maximale de 200 milles marins (370 km) définie en suivant la ligne de base (une ligne qui suit selon des règles assez précises la ligne côtière). La ZEE n’a cependant pas d’existence légale a priori. Il appartient à chaque pays de la définir à travers une loi. Cela suppose la délimitation des frontières de cet espace. Dans le cas d’une île isolée en pleine mer, cet exercice ne pose aucune difficulté. Les choses se corsent lorsque la zone des 200 milles d’un État chevauche celle d’un, voire celle de plusieurs autres États. La règle applicable alors est celle de l’équidistance.

Comment sont déterminées les frontières de la ZEE ?

En matière de frontière, il y a deux notions différentes : la détermination du tracé et la délimitation de la frontière. La détermination du tracé est une opération technique, mathématique, qui consiste à définir une série de coordonnées géodésiques en suivant les règles complexes mais claires du droit coutumier, du droit international et du droit de la mer consacré par la convention de Montego Bay de 1982. Mais, et c’est là la subtilité, déterminer une frontière ne vaut pas délimitation. Cette deuxième notion est un acte politique. Pour des raisons qui leur sont propres, deux États peuvent en effet d’un commun accord choisir une frontière dont le tracé diffère de celui que des juristes et des géographes ont établi en suivant les règles à la lettre, en respectant par exemple le principe de “l’équité”. Un tribunal peut aussi faire prévaloir une ligne de frontière légèrement différente de la frontière technique. A contrario, et c’est la source la plus commune des nombreux litiges frontaliers, deux États peuvent revendiquer deux tracés différents, soit parce que la configuration complexe de leur littoral (côtes profondément découpées ou bordées d’îlots, deltas, baies suffisamment profondes, etc.) les pousse à effectuer des calculs compliqués pour tracer leur ligne de base, soit pour des raisons purement politiques.
C’est le sens d’un communiqué de l’ambassade des États-Unis à Beyrouth qui ne s’étonne pas du fait que le Liban et Israël ont notifié des tracés différends, car il est « tout à fait normal dans le processus de délimitation des frontières internationales que ces revendications diffèrent ».

Comment résoudre un litige frontalier ?

Les cas de différends frontaliers de ce type sont très nombreux dans le monde. Lorsque la possibilité d’une solution pacifique existe, elle passe généralement par trois voies : le recours à la Cour internationale de justice de La Haye, le recours au Tribunal de la mer de Hambourg, institué par la convention de Montego Bay, ou le recours à une procédure arbitrale. Ces trois voies de recours ne sont pas applicables dans le cas présent, les deux États concernés n’ayant pas de relations diplomatiques, et le Liban ne reconnaissant pas Israël. La situation est compliquée par le fait que le Liban est signataire depuis 1995 de la convention sur le droit de la mer, ce qui suppose qu’il en applique les règles pour le tracé des frontières maritimes, alors qu’Israël ne l’est pas (pas davantage que la Syrie d’ailleurs, à sa frontière nord).

En quoi consiste le différend entre Israël et le Liban ?

Les diplomates et les connaisseurs du dossier savaient depuis plusieurs mois déjà qu’on risquait d’en arriver là. Mais le différend n’est officiellement constitué que depuis le 10 juillet 2011, date à laquelle Israël a officiellement adopté le tracé de sa zone économique exclusive. Sa frontière avec le Liban est nettement plus au nord que celle notifiée à l’ONU en juillet et octobre 2010 par Beyrouth. La frontière libanaise relie le point B1 à Ras Naqoura jusqu’à un point 23, qu’elle considère comme la pointe sud-ouest de sa zone économique exclusive ; tandis que le tracé israélien relie Ras Naqoura (en un point sensiblement différent de celui du Liban) à un point 1 situé 17 kilomètres plus au nord que le point 23 (voir la carte).

Quels sont les enjeux de ce nouveau différend ?

Alors que le contentieux du Liban avec Israël sur leur frontière terrestre est déjà assez lourd, aucun des deux pays n’avait pris la peine jusque-là de démarquer leur frontière maritime. Dans la pratique, le respect de cette frontière a bien sûr posé des problèmes : les pêcheurs du sud du Liban le savent bien qui se font arraisonner par la marine israélienne alors qu’ils affirment voguer dans les eaux libanaises. Mais ce n’est que la découverte du potentiel gazier du bassin levantin de la Méditerranée – US Geological Survey parle de plus de 3 000 milliards de mètres cubes de gaz, soit des dizaines de milliards de dollars – qui a finalement poussé les deux parties à se pencher sur la question.
L’apparition de ce nouveau différend frontalier est donc importante à deux niveaux : d’une part, il alimente d’une façon ou d’une autre la tension entre Israël et le Liban qui est susceptible de dégénérer en guerre à tout moment ; de l’autre, il a une implication directe sur les programmes offshore d’exploitation des gisements d’hydrocarbures dans lesquels les deux pays sont respectivement engagés (voir Le Commerce du Levant de février 2011).

Sur quoi se fonde le tracé du Liban ?

Mathématiquement, le tracé de la frontière suppose deux choses : définir le point de frontière sur le littoral et définir la ligne de base à partir de laquelle seront faits les calculs pour définir les coordonnées des différents points qui vont constituer la frontière. Pour simplifier, supposons que la ligne de base est toute droite, la frontière sera une perpendiculaire à cette ligne qui débute au point de frontière côtier. Comme la ligne de base n’est jamais droite, la frontière est la ligne médiane reliant une série de points équidistants du point le plus proche sur la ligne de base libanaise d’un côté et du point le plus proche sur la ligne de base israélienne de l’autre.
Le Liban a adopté comme point de départ de sa frontière maritime, le point B1 à Ras Naqoura, consacré par l’accord d'armistice de 1949 avec Israël comme le point de frontière terrestre le plus à l'ouest entre les deux pays. Ces coordonnées reprennent l’accord Paulet-Newcombe du 3 février 1922 entré en vigueur le 10 mars 1923 délimitant la frontière sud du Liban.
Pour dessiner sa ligne de base et calculer la série de coordonnées aboutissant au point 23, la pointe sud-ouest de sa ZEE, le Liban s’est fondé sur trois cartes : les cartes maritimes internationales n° 2634 et n° 183 de l’Amirauté britannique ; la carte de la direction des Affaires géographiques de l’armée libanaise pour la région de Naqoura. Ces cartes méritent d’être affinées par un système GPS du côté israélien, estiment les auteurs des calculs, mais elles sont largement suffisantes pour établir l’exactitude du tracé libanais de sa frontière sud, selon le général Abdel Rahman Shehaitly qui a supervisé le travail des cartographes de l’armée libanaise, ainsi qu’un professeur européen de droit international qui a étudié le dossier, interrogés par Le Commerce du Levant.
Le travail de l’armée libanaise a été qualifié « d’excellent sur le plan technique » par un expert étranger qui en a pris connaissance, mais a souhaité préserver son anonymat.
« Si on réunissait une assemblée de juristes et de cartographes d'horizons différents, ils parviendraient au même tracé, à quelque epsilon près, ajoute-t-il. Je suis certain que l'armée israélienne a elle-même établi ces mêmes coordonnées, totalement conformes aux normes internationales. »

Quand a été établi le tracé libanais ?

En matière de frontière, il ne suffit pas d’effectuer un tracé, aussi bon soit-il, mais il s’agit de le faire prévaloir politiquement. En la matière, le calendrier libanais s’est révélé très cahoteux.
Beyrouth a d’abord négocié avec Chypre le tracé de leur frontière commune. Un accord avec Nicosie a été signé en 2007 par le ministre des Travaux publics et des Transports de l’époque, Mohammad Safadi, qui avait été mandaté par le Conseil des ministres, en tant que responsable de la gestion des eaux du littoral. Cet accord n’a cependant jamais été adopté en Conseil des ministres, ni, a fortiori, ratifié par le Parlement. Les pressions de la Turquie qui s'oppose par principe à tout accord conclu par Nicosie sans l'aval de la partie turque de l'île sont souvent invoquées pour expliquer ces atermoiements.
Dans un second temps, le 29 avril 2009, une commission interministérielle de 10 membres présidée par le directeur général du ministère des Travaux publics et des Transports, Abdel Hafiz Kaissi, établit toutes les coordonnées géodésiques des frontières de la ZEE du Liban. Le tracé complète les points 1 à 6 définis dans l’accord avec Chypre. Au nord, il ajoute les points 7 à 17, ce dernier représentant le point de frontière terrestre entre le Liban et la Syrie. Au sud, il ajoute une série de points de 18 à 25, le premier coïncidant avec le point B1 de Ras Naqoura. Dans cette série, c’est le point 23 qui marque selon le Liban la pointe sud-ouest de sa ZEE et le point 7 sa pointe nord-ouest. Il s’agit là de points tripartites dont l’adoption officielle dépend de l’accord des trois États frontaliers. La carte de la ZEE libanaise est approuvée en Conseil des ministres quelques jours plus tard, le 13 mai 2009, mais elle n’a toujours pas été adoptée par le Parlement.
Dans un troisième temps, le Liban a notifié à l’ONU le tracé de sa frontière maritime avec Chypre et avec Israël, respectivement en juillet et octobre 2010, s’appuyant sur les points établis pour la détermination de sa ZEE.

Sur quoi se fonde le tracé israélien ?

Dans le tableau de l’ONU actualisé au 15 juillet 2011, il apparaît que la revendication par Israël des frontières de sa ZEE repose sur la législation israélienne en la matière. De fait, le 10 juillet, le gouvernement israélien a annoncé avoir adopté le tracé de sa zone économique exclusive. Israël n’étant pas signataire de la Convention sur le droit de la mer, elle n’a pas l’obligation de déposer à l’ONU les coordonnées géodésiques des frontières de sa ZEE. En revanche, en vertu du droit international, elle a l’obligation de la déclarer à travers une loi.
La frontière israélienne avec Chypre est délimitée en vertu de l’accord conclu entre les deux pays en décembre 2010 et entré en vigueur en février 2011.
En ce qui concerne sa frontière avec le Liban, Le Commerce du Levant n’a pas réussi à comprendre la localisation exacte de son point côtier de départ. Il est probable qu’il ne s’agit pas du même point B1 à Ras Naqoura adopté par le Liban, mais il ne s’en éloignerait pas de façon à créer une distorsion démesurée par rapport au tracé libanais. Israël refuse en effet de reconnaître que le point B1 constitue sa limite côtière la plus à l’ouest avec le Liban. La Finul négocie l'installation de bornes visuelles le long du tracé de la ligne bleue établie en 2000 pour constater le retrait israélien du Liban après 22 ans d'occupation. Elle y parvient pour les portions de la ligne qui correspondent à la frontière reconnue par les deux pays, mais est en bute à leurs contestations sur plusieurs autres portions du tracé. Fin 2011, 80 % des bornes auront été installées, selon son commandant Alberto Asarta (interview au quotidien al-Akhbar). Le point B1 de Ras Naqoura fait partie des points contestés par Israël.
En revanche, pour le point de terminaison de sa frontière maritime avec le Liban, Israël a clairement annoncé qu’elle le situait au point 1 de l’accord entre le Liban et Chypre, situé 17 km au nord du point 23 que le Liban considère comme sa frontière tripartite.
La déclaration du Premier ministre Benjamin Netanyahu à l’occasion de la proclamation de la ZEE israélienne établit sans ambiguïté le lien entre le tracé israélien et l’accord libano-chypriote : « Le tracé soumis par le Liban à l’ONU est plus au sud que celui qu’Israël propose. Il diverge du tracé sur lequel nous nous sommes entendus avec Chypre, et, ce qui est plus important encore à mes yeux, il diverge du tracé sur lequel le Liban lui-même s’est entendu avec Chypre en 2007. » En clair, Israël considère que le Liban a lui-même fixé sa frontière tripartite au point 1 de son accord avec Chypre.

Sur quelle base le Liban conteste-t-il le tracé israélien ?

Le principal argument du Liban est technique : il accuse Israël d’avoir tracé une frontière “arbitraire” sans tenir compte des règles du droit international maritime en la matière.
« Israël a toujours eu une notion élastique de la notion de frontière et n’est en tout cas pas signataire de la convention sur le droit de la mer », commente Sarkis Hlaiss, directeur des installations pétrolières au ministère de l’Énergie.
Pour lui, il ne fait aucun doute que le tracé israélien officiel est un acte purement politique, sachant que jusqu’à présent l’État hébreu a toujours paru s’en tenir à un autre tracé coïncidant grosso modo avec celui que le Liban a adopté.
Un diplomate occidental interrogé par Le Commerce du Levant sous le couvert de l’anonymat confirme cette lecture : « Le tracé libanais correspond à quelques exceptions près à la ligne de bouées installée en mer de longue date par Israël à sa frontière maritime nord. De même, les blocs de concessions pétrolières définies par l’État hébreu n’ont jamais dépassé cette limite. »
C’est en exploitant de façon opportuniste l’accord frontalier entre le Liban et Chypre qu’Israël a par la suite décidé de revendiquer un tracé situé plus au nord, estime ce diplomate pour qui Beyrouth a commis une “erreur” en laissant à son voisin du sud une telle marge de manÅ“uvre.

L’accord libano-chypriote prête-t-il à confusion concernant le point 1 ?

Les avis divergent sur ce point. D’après plusieurs responsables libanais interrogés par Le Commerce du Levant, il a toujours été très clair lors des discussions avec Chypre que les points 1 et 6 n’étaient pas les points tripartites et qu’il fallait laisser une marge au sud comme au nord pour la définition ultérieure des points de frontière tripartite, respectivement avec Israël et la Syrie.
« Cette façon de faire est tout à fait conforme aux habitudes internationales en la matière, car deux pays ne peuvent pas s'engager sur un point de frontière tripartite qui, par définition, implique l’accord d’un troisième État », explique un expert, qui a souhaité l’anonymat.
Cependant « la façon dont le texte de l’accord a été rédigé n’a pas fermé totalement la porte à une telle interprétation, ce dont s’est empressé de profiter Israël ». L'article 3 de l'accord libano-chypriote prévoit que « si l'une des parties entame des négociations pour délimiter sa zone économique exclusive avec un État tiers, au cas où cette délimitation concerne les coordonnées de ces deux points (NDLR : 1 et 6), il incombe à cette partie d'informer l'autre et de la consulter avant de parvenir à un accord définitif avec cet État tiers ».
Le caractère non définitif des points 1 et 6 y est établi clairement, mais la confusion est possible quant à savoir s’il s’agit ou non de points tripartites.
Plusieurs voix se sont élevées au Liban pour déplorer “l’erreur” commise, d’autant que le pays sortait alors à peine de la guerre de 2006 et qu’il aurait fallu redoubler de vigilance au moment de la rédaction de l’accord avec Chypre afin d’écarter toute velléité expansionniste potentielle d’Israël.
Pour d’autres, à l’instar du ministre de l’Énergie et des Ressources hydrauliques, Gebran Bassil, l’erreur n’est pas libanaise, mais chypriote. Selon Sarkis Hlaiss, directeur général des installations pétrolières au ministère de l’Énergie, qui est en contacts réguliers avec l’administration chypriote depuis des années, il ne fait pas de doute que Nicosie était parfaitement au courant que le Liban n’a jamais considéré le point 1 comme sa frontière tripartite, d’autant que le tracé de la ZEE libanaise en avril 2009 est nettement antérieur à l’accord israélo-chypriote intervenu en décembre 2010. « Je ne m’explique pas l’attitude chypriote », dit-il.

Quel rôle Chypre a-t-elle joué ?

« L’accord libano-chypriote prévoit clairement que Nicosie devait se concerter avec Beyrouth avant de négocier avec un tiers les coordonnées d’un point de frontière tripartite », fait valoir Sarkis Hlaiss, selon qui cela n’a pas été fait.
Un expert indépendant interrogé par Le Commerce du Levant estime que juridiquement Chypre n’était pas tenu de respecter cet engagement, puisque l’accord libano-chypriote n’est jamais entré en vigueur, même s’il est possible selon lui d’invoquer une responsabilité “morale”. Le professeur européen de droit international interrogé par Le Commerce du Levant va plus loin en affirmant que d’une part « Chypre, comme quiconque se penche techniquement sur la question, sait parfaitement que le point 1 n’est pas le point de frontière tripartite du Liban ; et que, d’autre part, un accord, même s’il n’a pas été ratifié, oblige d’une certaine façon son signataire ».
Mais vu du côté chypriote, on peut aussi considérer que Nicosie a cherché avant tout à faire prévaloir ses intérêts nationaux : Chypre est parvenue à définir sa frontière orientale avec Israël et le Liban, même si cette dernière n’a pas encore été ratifiée. Que ses deux voisins se disputent le positionnement de leur frontière commune ne la concerne pas. L’île a par ailleurs de gros intérêts économiques avec Israël pouvant peut-être expliquer qu’elle ait fermé les yeux sur les velléités expansionnistes d’Israël : le groupe israélien Delek, partenaire de l’américain Noble Energy pour l’exploitation de plusieurs gisements gaziers au large d’Israël, dont le champ du Leviathan, a proposé de construire à Chypre une centrale de liquéfaction de gaz (GNL) destinée à approvisionner le marché européen. Delek et Noble Energy ont aussi une concession sur un bloc chypriote frontalier des eaux israéliennes.
Contacté par Le Commerce du Levant, l’ambassadeur de Chypre à Beyrouth n’a pas répondu à notre demande d’interview.

Comment le Liban a-t-il réagi ?

Le 19 mai 2011, le chef de la diplomatie libanaise Ali Chami a envoyé à Chypre une lettre de protestation contre l’accord conclu avec Israël. Elle est suivie par une autre lettre, en juin 2011, de son successeur Adnan Mansour adressée au secrétaire général de l’ONU, rappelant que la pointe sud-ouest de la ZEE libanaise se situe au point 23 et non pas au point 1, suivant le tracé déposé par Beyrouth à l’ONU en juillet et en octobre 2010.
Bien que juridiquement importantes, les protestations libanaises ne changent rien au fait que le Liban est désormais sur la défensive, obligé de prouver qu’une partie de sa zone économique exclusive est bien à lui, alors que de leur côté Chypre et Israël n’ont aucune contestation sur leur espace maritime.
La chronologie des faits montre que dans cette affaire Israël a agi de façon déterminée et rapide, tandis que le Liban, bien qu’apparemment dans son bon droit, n'a pas su mener une action diplomatique cohérente sur un dossier majeur.
Pour arrêter une stratégie officielle future, la création d’une commission de pilotage sous la direction du Premier ministre a été évoquée, mais pas confirmée.

Que doit faire le Liban pour préserver ses intérêts ?

Sur le plan légal, Beyrouth doit lever toute confusion juridique possible en établissant légalement sa zone économique exclusive, car, contrairement au plateau continental, la ZEE n’a pas d’existence juridique automatique. Or le plateau continental juridique qui, dans le cas du Liban, est de 200 milles quelle que soit la largeur du plateau continental physique (très étroit dans le cas du Liban) donne uniquement des droits souverains sur les fonds marins, alors que la ZEE donne des droits aussi sur les eaux surjacentes. « Rien n'empêche un État d'adopter une loi pour affirmer ses droits souverains sur sa ZEE sans pour autant la délimiter avec exactitude », explique un expert en réponse à la problématique de la délimitation de la frontière nord de la zone, en l’absence d’accord bilatéral avec la Syrie.
Sur le plan diplomatique, le Liban s’est contenté pour l’instant de demander l’aide des Nations unies. Jusqu’à présent aucune voie de solution n’a été proposée, sachant que l’ONU n'a pas la compétence pour imposer à deux États un tracé de frontière, celui-ci devant être le fruit d’une négociation bilatérale (voire trilatérale). La Finul a déclaré que son mandat se limite à la ligne bleue terrestre, mais n’a pas exclu son élargissement éventuel à une ligne bleue maritime (interview du commandant Alberto Asarta au Akhbar). Elle pourrait alors parrainer des négociations indirectes entre les deux parties sur le modèle des coordinations sécuritaires déjà en vigueur dans le sud du Liban.
D’autres intermédiaires sont aussi possibles en cas d’acceptation des deux parties du principe de la négociation indirecte devant aboutir à deux déclarations unilatérales concordantes. Washington a déclaré être prêt à fournir de l’aide aux deux parties pour résoudre ce différend, démentant avoir pris parti pour l’un ou l’autre des deux voisins, comme l’en accusait la presse israélienne.
Chypre pourrait aussi servir d’intermédiaire. Dans une lettre envoyée à son homologue libanais à la suite des protestations du Liban, le chef de la diplomatie chypriote Marco Kyprianou assure que les points tripartites ne peuvent être définis qu’en accord entre les trois États concernés et suggère la formation d’une commission libano-chypriote pour trouver une solution (selon le texte de la lettre publié par as-Safir).
La stratégie libanaise est cependant tributaire de l’attitude israélienne : l’État hébreu peut décider de lier ce nouveau litige à la résolution de tout le contentieux avec le Liban, le remettant concrètement aux calendes grecques.
Dans ce cas, Beyrouth réfléchit à la possibilité de dénoncer devant le Conseil de sécurité les agissements israéliens comme une menace contre la paix et la sécurité internationales afin d’obtenir une résolution contraignante, sous le chapitre 7 de la Charte de l’ONU, empêchant tout forage dans la zone faisant l’objet du litige. « Même si Israël ne respecte pas la résolution, les compagnies internationales ne s’aventureront pas dans une zone qualifiée de disputée par l’ONU », a déclaré Mohammad Kabbani le 19 juillet à l’issue d’une réunion sur le sujet de la commission parlementaire qu’il préside.

Où en est le programme pétrolier du Liban ?

Le différend avec Israël ne remet pas en cause le calendrier du programme pétrolier du Liban, a affirmé au Commerce du Levant le ministre de l’Énergie, Gebran Bassil. Les décrets d’applications de la loi-cadre sur l’exploration et le forage au offshore approuvée en août 2010 par le Parlement sont prévus pour la fin 2011 et les premiers appels d’offres pour début 2012. Les résultats d’une étude sismique en trois dimensions de la société PGS sur une troisième zone potentiellement riche en gaz ainsi que ceux d’une deuxième étude en 2D sont attendus en octobre. Les précédents résultats s’étaient révélés « très prometteurs », selon le ministre de l’Énergie : « Une vingtaine de compagnies internationales, dont certaines des plus grandes mondiales, ont déjà acheté les données. »

Chronologie

2000 et 2002. La société Spectrum réalise à la demande du Liban des études sismiques en deux dimensions qui établissent la présence potentielle de gaz dans les fonds sous-marins du Liban.
2004. Lancement de la première plate-forme gazière Mari-B, dans le sud des eaux israéliennes, dont le potentiel de production n’est pas exceptionnel. La compagnie Noble Energy y a une part de 47 %.
2006. Première étude sismique en 3D effectuée par la société PGS dans la partie centrale du bassin levantin, dans les eaux libanaises, sur 1 550 km2.
17 janvier 2007. Conclusion d’un accord frontalier entre le Liban et Chypre. Transmis en Conseil des ministres, il n’a jamais été adopté.
2007. Deuxième étude sismique en 3D effectuée par la société PGS à cheval sur les eaux chypriotes et libanaises : avec 660 km2 couverts côté libanais.
2008. Étude sismique en 2D sur 5 000 km2 effectuée par PGS dans la ZEE libanaise.
29 avril 2009. Une commission libanaise définit les coordonnées de la zone économique exclusive du Liban.
13 mai 2009. La carte de la ZEE libanaise est approuvée en Conseil des ministres.
2009. Israël vend au consortium américano-israélien Noble Energy – Delek Drilling les licences pour l’exploitation des blocs de concessions Alon A, Alon B et Alon C situés dans le nord de sa zone maritime, mais pas ceux qui sont frontaliers du Liban, à savoir Alon D, E et F. La bordure nord des blocs Alon est située à un angle de 291 degrés par rapport à la côte libanaise, ce qui correspond à l’angle de la frontière tracée par le Liban et pas à celle qu’a établie Israël en juillet 2010.
2009. Les forages réalisés par Noble Energy dans deux autres gisements au large d’Israël, Tamar 1 et 2, se révèlent très prometteurs. La capacité est estimée à 180 milliards de mètres cubes, soit au moins trois fois de plus que la demande de gaz en Israël. C’est le plus gros gisement de gaz naturel découvert cette année-là.
Avril 2010. US Geological Survey dit que le bassin levantin de la Méditerranée recèle potentiellement 3 500 milliards de mètres cubes de gaz, soit la moitié environ des réserves prouvées aux États-Unis.
2010. Noble Energy annonce que le champ Leviathan contient au moins 450 milliards de m3 de gaz.
17 août 2010. Le Parlement libanais approuve une loi-cadre sur l’exploration et le forage au large du Liban. Les décrets d’applications sont prévus pour la fin 2011 et les premiers appels d’offres pour début 2012.
Juillet et octobre 2010. Le Liban notifie au secrétariat général de l'ONU les coordonnées géodésiques du tracé ouest et sud de sa zone économique exclusive.
Décembre 2010. Accord entre Chypre et Israël qui est ratifié par les deux parties et entre en vigueur en février 2011.
Janvier 2011. La société israélienne Delek, partenaire de Noble Energy, propose à Chypre l’installation sur l’île d’infrastructures destinées à fournir au marché européen le gaz extrait du champ Leviathan.
2011. Deuxième étude sismique de PGS en 2D sur 3 814 km2 dans les eaux libanaises.
2011. Troisième étude sismique en 3D de PGS sur une zone de 1 395 km2 dans la partie sud des eaux libanaises, dont les résultats sont attendus en octobre.
19 mai 2011. Lettre de protestation du chef de la diplomatie libanaise Ali Chami adressée à Nicosie à l’issue de la signature de l’accord frontalier israélo-chypriote.
20 juin 2011. Le ministre des Affaires étrangères Adnan Mansour envoie une lettre de protestation au secrétaire général de l’ONU lui rappelant que le Liban considère que sa frontière avec Israël va du point 1B au point 23 et non pas au point 1 de son accord avec Chypre.
28 juin 2011. Lettre du chef de la diplomatie chypriote Marco Kyprianou à son homologue libanais dans laquelle il assure que l’accord israélo-chypriote ne porte pas atteinte aux droits du Liban car, à l’instar de l’accord libano-chypriote, il prévoit les mécanismes de révision des points définis dans l’accord à la lumière des accords conclus avec des parties tierces. Le ministre rappelle que les points tripartites ne peuvent être définis qu’en accord entre les trois États concernés et suggère la formation d’une commission libano-chypriote pour trouver une solution.
10 juillet 2011. Le gouvernement israélien adopte le tracé de sa zone économique exclusive qui considère le point 1 de l’accord avec Chypre comme son point frontalier avec le Liban.


Nord Stream Gas Ready To Flow To Germany, Nord Stream – an end to transit countries’ dictates...


Nord Stream Gas Ready To Flow To Germany, Nord Stream – an end to transit countries’ dictates...


http://oilandglory.foreignpolicy.com/posts/2011/09/07/is_ukraine_alone_against_russia_in_the_renewed_pipeline_wars

The Nord Stream pipeline is going to be filled with gas on September 6th . Having delivered a statement to that effect the day before, Russian Prime Minister Vladimir Putin stressed that the $7.5 billion project was nearly accomplished to become Russia’s energy “window to Europe”.

September 6th will witness process gas being pumped through the pipes of Nord Stream’s first thread that originates in the city of Vyborg. This will become sort of a robustness test for the entire construction, with first direct supplies of the Russian fuel to European consumers scheduled for late October. Thus, the launch of the pipeline will put an end to the dictate of transit countries, Vladimir Putin said.

Until now, Russia has been transporting its natural gas to Europe only via the territories of Ukraine and Belarus. The new 1,220 km long pipeline laid across the Baltic seabed from Russia’s Vyborg to Greifswald in Germany is capable of satisfying a fourth of Europe’s gas demand, the project’s managing director Matthias Warning estimated. Nord Stream’s first leg has a capacity of 27.5 billion cubic meters per year, while the second line planned to be finished by 2012 will increase annual gas supplies to Europe to 55 billion cubic meters.

Moscow’s interest in a speedy launch of the pipeline is understandable – after all, Russia is one of the world’s leading energy exporters. As for European countries, they place major emphasis on the involvement of such Western energy giants as Germany’s E.ON Ruhrgas and BASF/Wintershall, as well as France’s Gaz de France Suez alongside the Russian Gasprom company. The project’s significance is growing in view of Europe’s decision to close its nuclear power plants and a subsequent increase in gas demand. In these circumstances, the Nord Stream will ensure stable supplies that will be never again disrupted by transit countries like it had happened earlier, expert at the National Energy Security Foundation Alexander Pasechnik said in an interview with the Voice of Russia.

“The Nord stream will allow Russia to do away with risks accompanying gas supplies to the European Union and bypass such countries as Ukraine and partially Belarus. Thanks to the new pipeline, we will halve our transit dependence on the Ukrainian gate system,” says Alexander Pasechnik.

The solemn ceremony to launch the newly built pipeline at the Portovaya compressor station near Vyborg will be, among others, attended by Prime Minister Vladimir Putin. Europe is already anticipating the beginning of Russian blue-sky fuel supplies. Gasprom signed long-term contracts with Germany, Denmark, the Netherlands, France and Great Britain.


Energy cooperation: Iran willing to build Pakistan section of gas pipeline....



Energy cooperation: Iran willing to build Pakistan section of gas pipeline....

Industrialists pin hopes on gas imports from Iran to shore up loadshedding.

ISLAMABAD: Energy cooperation between Pakistan and Iran is expected to receive a boost this week, as Iranian Foreign Minister Ali Akbar Salehi will offer Tehran’s help to build Pakistan’s portion of the multi-billion-dollar gas pipeline, an Iranian diplomat said on Monday.

The offer is likely to come as part of a wider dialogue between the two neighbours on a range of economic issues. Sources said on Monday that Pakistan and Iran are expected to sign four agreements, covering energy, financial services, media and technical cooperation.

Salehi is scheduled to arrive on Tuesday (today), leading a 40-member delegation for the Pakistan-Iran Joint Economic Commission’s meeting, which will be held in Islamabad on September 7. The Pakistani side of the talks is expected to be led by Finance Minister Abdul Hafeez Shaikh.

The Iran-Pakistan pipeline is expected to be a key part of the agenda of the JEC talks. The pipeline was originally meant to have India as its terminal location but New Delhi has not been able to make a firm commitment on the project to date.

Iran has already built its portion of the gas pipeline up to the Pakistani border. The Pakistani portion of the pipeline is expected to cost $1.65 billion, little more than a fifth of the total $7.5 billion price tag of the whole project. The total cost may rise after the completion of a feasibility study. It is expected to begin supplying gas to Pakistan by the middle of 2014.

(Read: Iranian gas pipeline – Pakistan seeks financial adviser for project)

At its peak, the pipeline is slated to supply up to 55 billion cubic feet ofgas from Iran’s South Pars field to Pakistan. That amount is expected to cover about 20% of Pakistan’s current demand, and would not be enough for the rising need for gas in the Pakistani economy.

Government officials say all of the supply from the Iranian pipeline will be dedicated for power production and would be expected to generate up to 5,000 megawatts.

Production costs for gas-fired power plants are about 35% less than those for oil-fired power plants.

Tehran is also expected to offer assistance in building three power plants in Pakistan, with a total capacity of 250 megawatts, including a 150-megawatt coal-fired power plant and about 100 megawatts of wind power generation capacity.

Among the more controversial aspects of the visit will be Iran’s request to set up branches of the state-owned Bank Melli in Pakistan. The bank has been placed on several international sanctions lists, including those of the United States. Islamabad is expected to reverse its earlier stance on the request and move forward with Iran’s proposal.

Not having banking operations in other countries has made it difficult for Iranian businesses to conduct trade. The State Bank of Pakistan is expected to begin guaranteeing letters of credit – a necessary tool for global traders to exchange payments – for trade with Iran, which is expected to help increase the volume of commerce between the two nations. An Iranian diplomat said that Tehran is targeting increasing bilateral trade from the current $1.2 billion to $4 billion by 2014.

The two nations are also expected to discuss expanding air travel, including commencing direct flights between Islamabad and Tehran. Currently, there are direct flights from Karachi and Lahore to Tehran and Mashhad.

Iran is also expected to request meat and livestock exports from Pakistan as it tries to switch over from more expensive supplies from Europe. Tehran has already invested in a meat processing plant in Lahore geared to exporting beef and mutton to Iran.

(Read: The rise of Pakistan in the global meat trade)

As a direct corollary of the meat and livestock trade, Pakistan and Iran are also expected to agree to closer collaboration on quality control. A cooperation agreement is expected to be signed between the Pakistan Standard Quality Control Authority and Iranian Research and Industrial Institute.

A separate agreement is also expected to cover media cooperation between the two countries....