It was not too long ago that Gazprom, the state-controlled energy conglomerate, was one of theKremlin’s most potent geopolitical weapons. But those days now seem like a distant memory:Gazprom is a financial shadow of its former self.

   The speed of Gazprom’s decline is breathtaking. At its peak in May 2008, the company’s market capitalization reached $367.27 billion, making it one of world’s most valuable companies, according to a survey compiled by the Financial Times. Gazprom’s deputy chair, Alexander Medvedev, repeatedly predicted at the time that within a decade the Russian energy giant could be worth $1 trillion.
 
   That prediction now seem foolhardy. Since 2008, Gazprom’s value has plummeted. As of August 3, it had a market capitalization of $51.12 billion. A little over four years ago, in April 2011, the figure stood at $194.5 billion. No company among the planet’s Top 5,000 has suffered a bigger collapse in market capitalization, according to Bloomberg Business News.
 
   Indicators suggest Gazprom is nowhere near hitting bottom, and lingering uncertainty raises questions about its survivability. During the first two quarters of 2015, Gazprom’s natural gas production fell by 12.9 percent. In addition, Russia’s Ministry of Economic Developmentpredicts that annual production will fall to 414 billion cubic meters (bcm), the lowest level in Gazprom’s history, and well below the company’s 2015 target of 485 bcm. Last year, production declined by 9 percent to 444 bcm, which, at the time, was the lowest on record. Industry experts forecast that production will remain low over the next few years.
 
   Not only production is sagging, export revenues are also taking a big hit. During the first five months of 2015, export revenue shrank by 35.8 percent to $18.768 billion, according to Russia’s Federal Customs Service. Last year, the company’s net income plummeted by over seven times in ruble terms to 159 billion rubles from 1.139 trillion rubles in 2013, and by whopping 12.5 times in dollar terms to $2.8 billion from $34.8 billion in 2013.
 
   So what happened? Why is the company with the largest proved oil and gas reserves among publicly traded energy giants, and operating in a country bordering on two of the world’s top energy consumers – the European Union and China – performing so badly?
 
The Kremlin, which holds a controlling stake in Gazprom, tends to blame the sharp drop in oil prices and “warm winters.” However, energy giants ExxonMobil and Petro China, Gazprom’s financial contemporaries back in mid-2008, have remained top performers. As for falling demand in “warm winters,” while Russian supplies to Western Europe shrank, Norway boosted its market share and, for the first time, significantly beat Russia – by more than 50 percent – in terms of supplies to this critical region in the last quarter of 2014 and first quarter of 2015, according to the latest data available.
 
   Experts say that Gazprom’s main problem is that it continues to serve as the Kremlin’s favored geopolitical weapon, rather than be allowed to act as a purely commercial enterprise. President Vladimir Putin’s administration keeps forcing the company to serve its political interests. Examples include Gazprom’s purchase of major Russian media outlets that were then turned into Kremlin mouthpieces, bullying or buying the loyalty of neighboring states for Moscow’s geopolitical benefit, and sponsoring the egregiously expensive Olympic Games in Sochi.
 
   Gazprom’s “plunge has become emblematic of the malaise that has overtaken President Vladimir Putin’s economy,” noted a commentary published by Bloomberg Business in 2014. Russia will finish 2015 as the second biggest loser in global economic growth, according to forecasts of economists surveyed by Bloomberg.
 
   Most ominously for the company, the Putin administration still keeps pushing Gazprom to implement new projects that are “geopolitically important,” but risky from a financial viewpoint. Two prominent examples of such projects concern Ukraine and China. 
 
   The Kremlin’s sponsorship of separatists in eastern Ukraine has cost Gazprom dearly. Gazprom’s exports to Ukraine fell from 36.4 bcm in 2010 to 3.7 bcm during the first six months of 2015, before stopping altogether on July 1. Moscow’s efforts to effectively mount an energy blockade against Ukraine in 2014-2015 did not work, but ended up costing Gazprom close to $6 billion in lost revenue and fines, while pushing European customers to diversity their energy imports.
 
   Moscow still wants to stop transit supplies of gas via Ukraine to Europe (or at least cut them from 60-62 bcm in 2014 to 10-30 bcm) by 2019. The alternative for Russia is to channel gas via Turkey and two new lines via the North Stream network. Analysts are not thrilled with these plans, seeing them as more about politics than economics.
 
   The estimated construction costs for two new lines of North Stream stand at €9.9 billion ($10.9 billion), while the first of the total of four Turkish Stream lines could cost €3.3 billion ($3,6 billion). Thus, the total costs of the projects, without taking into account the likelihood of cost overruns, will reach about €23.1 billion ($25.4 billion).
 
   Beyond the construction expenses, transit costs for North Stream appear to be significantly more expensive than shipping energy via Ukraine. Experts estimate that in 2014 Gazprom’s transit costs per tcm via North Stream amounted to $43 compared to $33 via a Ukrainian route.
 
   When it comes to Gazprom’s commitments to Chinese exports, the news for the company may not be much better. Initially, when the $400-billion, 30-year deal was announced in May 2014, it was widely seen as a major geopolitical victory for Putin and Russia. But details of the agreement remain a secret, suggesting that there is little good news for Gazprom in it. The limited information that has emerged supports this assumption.
 
   The project is expensive, with cost estimates ranging from $55 billion, as mentioned by the Kremlin, to $100 billion or more cited by Gazprom’s specialists. In addition, Gazprom is reportedly obligated to cover the costs of building infrastructure to extract, process, store and deliver gas to China on its own. China was initially supposed to help out with a $25-billion payment, but it never happened. Meanwhile, Gazprom moved ahead with the project on borrowed money, increasing the price tag and risk. Adding to the risk is the fact that the project poses significant technological challenges, including difficult terrain along the planned route.
 
   While it was initially announced that the deal could be worth upwards of $400 billion for Gazprom, Russian officials now estimate the deal could reap significantly less due to low oil prices. A benchmark barrel of oil cost roughly $100 at the time the deal was announced; these days the oil price is hovering in the $50-per-barrel range.
 
   Analysts at Merrill Lynch estimate that Gazprom needs to sell gas to China at a price of $340-380 tcm to turn a small profit. Currently, however, Gazprom is receiving about $200 per bcm for its gas exports. For the third quarter, for example, Gazprom is charging Moldova a price of  $210 per bcm. With revenue potentially falling to about $200 billion, and construction costs of $100 billion or more, the China deal could potentially turn toxic for Gazprom.
 
   Overall, the price tag of the new geopolitically driven pipelines could exceed $125 billion, or about 2.5 times Gazprom’s current market capitalization. Given the company’s financial situation, Gazprom executives have a lot to worry about in the immediate future.

Originally published by EurasiaNet.org

 

   Three district co-mayors in the southeastern province of Diyarbakır, two co-mayors inHakkari province and one provincial official from the pro-Kurdish People's Democratic Party (HDP) in Hakkari were arrested on Sunday (23/8) after they declared autonomy from the Turkish state last week. 

(Today's Zaman)

Full story here

 


    In a recent report, the main opposition Republican People's Party (CHP) has claimed that ambulances are routinely used in the southeastern province of Adıyaman to carry injured Islamic State in Iraq and the Levant (ISIL) militants from Syria toTurkey and to transport new ISIL recruits across the border into Syria.

   See the full story here.

 


 

Update

"One report by Iran's English Press TV in which it claimed that Sümeyye Erdoğan, the Turkish president's daughter, visited wounded Islamic State in Iraq and the Levant (ISIL) militants near the Syrian border in southern Turkey, sparked anger in Ankara and played a key role in Erdoğan's decision not to meet with the Iranian foreign minister."

 

Update II

"Twitter whistleblower Fuat Avni has claimed that the Justice and Development Party (AK Party) government and President Recep Tayyip Erdoğan have revised a planned crackdown on critical media outlets to include some major business groups critical of the government. "

See full story here

-- ed

 

   Federica Mogherini, the Foreign Representative of the European Union, visited Tehran for the purpose of strengthening relations and coordinating the fight against terrorism. A weird assignment given the fact that Iran is a major sponsor of the terrorist Assad government in Syria, as well as of Hizbollah, the illegal Shi'ite militia in Lebanon.

   But what is also disconcerting is the fact that she donned a headscarf during the encounters with the Ayatollahs and during the joint press conference with Foreign Minister Mohammad Javad Zarif.

   The headscarf was pink, o.k. But that does not make it less of a headscarf. Why would a non-Muslim European diplomat wear such a piece of headgear?  Is it because Ayatollahs such as President Hassan Rouhani could be embarrassed to see a woman's hair?

   Whatever happened to half a century of feminist pride, of gender mainstreaming, if this is the result?  How can we expect Iran ever to rejoin the world community if  the representative of Europe bows to the whims of a caste of priests turned politicians who are notorious for their awful human rights record?

Ihsan al-Tawil

 

   Es gibt ein zweites Notstandsgebiet in der Eurozone, doppelt so gross wie Griechenland: Italiens Süden mit 21 Millionen Einwohnern.  Roberto Saviano, der unter Polizeischutz lebende Autor, der der Mafia von Neapel die Maske vom Gesicht riss, hat leidenschaftlich an Regierungschef Matteo Renzi appelliert, endlich etwas Entscheidendes für den Süden zu tun, der vor die Hunde geht.

   Renzi, der alle Hände voll hat, seine Reformen gegen die Widerstände durchzuboxen, ist nicht begeistert, dass sich da eine neue Baustelle öffnet. Norditaliener aus Florenz, ist Renzi das leise Dauerjammern des Südens leid und sagt das auch in seiner Antwort an Saviano.

   Das war freilich der falsche Tonfall, und Saviano legt nun weiter nach. So trostlos ist die Lage im Mezzogiorno, dass selbst die Mafia aufhört, ihre Geschäfte dort auszubauen und lieber anderswo investiert, gerne in Norditalien, das inzwischen fest in Händen der kriminellen Vereinigungen ist, und noch lieber im Ausland.

   Nicht nur die Mafia wandert ab, auch die illegalen Einwanderer verlassen den Süden, sobald sie können, sagt Saviano. Die hoffnungslose Wirtschaftslage lässt ihnen keine Wahl. Die Arbeitslosigkeit hat den höchsten Stand seit 1977, dem Beginn der Arbeitsstatistik, erreicht. Viele Arbeitslose sind nicht mehr gemeldet, weil sie es aufgegeben haben, Arbeit zu suchen.

   Bürokratie und Korruption lähmen die Unternehmer, sagt Saviano.  Die Zahl der Geburten im Süden ist auf den Stand von 1860 gesunken. Das Wirtschaftswachstum ist nahezu auf null geschrumpft: in den letzten fünfzehn Jahren war es nur halb so stark wie das von Griechenland.  Saviano beklagt den brain drain: die brillantesten Köpfe, die von den  Universitäten des Südens herangebildet wurden, wandern nach Norden oder ins Ausland ab.

  "Die Unfähigkeit und die Widersprüchlichkeiten der Behörden erwecken die niedrigen Instinkte, die unserer Gesellschaft geschichtsbedingt innewohnen", klagt Saviano."Die Deindustrialisierung hat die Wirtschaft des Mezzogiorno und seine Arbeitskultur in eine Wüste verwandelt".

   "Die Institutionen Italiens müssen  Millionen Menschen (des Südens) um Verzeihung bitten, die als eine Bleikugel am Fuss (des Nordens) betrachtet wurden, aber gleichzeitig als Energiereservoir (des Nordens) geleert wurden," fordert Saviano.  Seit 2008 ist die Zahl der Arbeitslosen im Süden um 700.000 gestiegen.  Wie soll eine Wirtschaft funktionieren, frägt der Autor, "wenn die Hauptarterie -- die Autobahn Salerno-Reggio Calabria -- durch unzählige Baustellen und Umleitungen unterbrochen ist, weil untreue Beamte den Geldfluss steuern?"

   Man solle die Wüstenbildung durch das Verschwinden der auf Subventionen gegründeten Schwerindustrien des Südens auch als Chance verstehen, eigene, angepasste Wirtschaftskonzepte zu verwirklichen, ohne staatliche Hilfen, ohne die berüchtigte Cassa per il Mezzogiorno1)

   Saviano ruft auf, die Unternehmer zu befreien von der Bürokratie, der übermässigen Besteuerung und der Korruption. Die schlimmste Korruption sei nicht die, die stiehlt. Die schlimmste ist vielmehr jene Korruption, die den Unternehmer daran hindert, das zu erlangen was ihm zusteht, ohne bestechen zu müssen. "Im Süden kaufen sich die Rechte, immer schon!", erinnert Saviano den Premier Renzi.

   Jahrzehnte lang war die Organisierte Kriminalität des Südens der grösste Arbeitgeber Italiens. Nicht mehr, sagt Saviano. "Im Süden zirkuliert nicht einmal mehr das Blutgeld, das die Mafias bis zum Ende der Neunziger Jahre umlaufen liessen."

Der SVIMEZ- Bericht

   "Der Süden läuft inzwischen das starke Risiko der industriellen Wüstenbildung mit der Konsequenz, dass der Mangel an menschlichen, unternehmerischen und finanziellen Ressourcen den Süden daran hindert, sich an eine mögliche Erholung anzuhängen mit der Gefahr, dass sich die zyklische Krise in eine dauerhafte Unterentwicklung verwandelt," sagt der Jahresbericht 2014 der angesehenen Vereinigung für die industrielle Entwicklung im Mezzogiorno (SVIMEZ).

   Das Pro-Kopf-Einkommen des Südens ist auf den niedrigsten Stand seit 2000, nämlich auf 64 Prozent des italienischen Durchschnitts, gesunken. In den Rezessionsjahren verlor der Süden 50 Milliarden Euro seines Sozialprodukts. Der Grad der Frauenbeschäftigung liegt nur bei etwa 60 Prozent des europäischen Mittels.

   Eine von drei Personen im Süden ist dem Armutsrisiko ausgesetzt, in Mittel- und Norditalien ist es eine von zehn Personen. Von 2008 bis 2014 ist die industrielle Produktion im Süden um 35 Prozent gesunken, die industriellen Investitionen gingen sogar um 60 Prozent zurück.

   " Der Süden war einmal die Magnagrecia -- Grossgriechenland. Heute ist er metà della Grecia -- ein halbes Griechenland",  kommentiert der Gewerkschaftsboss Carmelo Barbagallo.  

La pentola bucata-- das Fass ohne Boden

   Es ist nicht einfach, zu ermitteln, inwieweit der unterentwickelte Süden die Wirtschaft Italiens belastet. Naturgemäss gehen die Ansichten weit auseinander. Im Norden spricht man vom Fass ohne Boden, im Süden sieht man sich ausgebeutet und zum Absatzmarkt für die Industrien des Nordens degradiert.

   Paolo Savona, ein Student der Wirtschaftswissenschaften an der Universität La Sapienza in Rom hat 2011 gewagt, sich der Frage rechnerisch zu nähern. Er errechnete ein gesamtes Handelsdefizit des Südens mit dem Norden und dem Ausland von 72 Milliarden Euro/Jahr, das zum grössten Teil durch staatliche Transfers (45 Mrd.) gedeckt wird. Das Übrige erklärt sich durch Tourismus, Kapitaltransfers und den Bankensaldo. Bleibt ein ungeklärter Rest von 5 Milliarden, vermutlich den Mafias zuzurechnen.

   Interessant wird es, wenn man das Defizit des Mezzogiorno mit der italienischen Staatsverschuldung vergleicht, die derzeit 2.149,5 Milliarden Euro beträgt. Folgt man Savonas Kalkül, dass das Defizit des Südens jährlich 72 Milliarden beträgt und kumuliert man dieses Defizit über 30 Jahre zu 2011 Preisen, so gelangt man zu einem Gesamtdefizit des Südens von 2160 Milliarden, also exakt der Gesamtverschuldung Italiens.

   Das ist natürlich eine Bierfilzrechnung. Man kann daraus nicht ableiten, dass Italien ohne den Mezzogiorno schuldenfrei wäre. Aber es gibt doch Anlass, über die Bedeutung des Mezzogiorno für die Stabilität des Euro nachzudenken. Vielleicht ist der Mezzogiorno für die gemeinsame Währung doppelt so wichtig wie Griechenland. 

Was ist zu tun?

   Den endemischen Problemen des italienischen Südens ist ohne Bekämpfung der organisierten Kriminalität nicht beizukommen.  Wenn man heute irgendwo im Süden eine Investition vornimmt, und sei es auch nur wenn ein Privatmann ein Haus kauft, so steht am nächsten Tag die Mafia vor der Tür und fordert. Wer sich dem nicht aussetzen will, investiert nicht. So einfach ist das. Niemand investiert im Süden, solange zwei konkurrierende oder kollaborierende Strukturen bestehen: der Staat und die lokale Mafia.

   Der italienische Staat ist durchsetzt durch die Mafias, die bis in die Staatsspitze hinaufreichen und in Brüssel eigene Vertretungen unterhalten. Solange die italienische Politik sich nicht aufrafft, den Süden der Kriminalität zu entreissen, ist an einen wirklichen Aufschwung des Südens nicht zu denken.

   Während der langen Berlusconi-Jahre und den unsicheren Zeiten danach gelang es den Mafias, sich auszubreiten. Wo immer sich Verbrecherbanden bilden oder ausbreiten, sinkt das Wirtschaftswachstum gegen null. In der Lombardei, in Ligurien geht nach übereinstimmenden Aussagen mehrerer Beobachter nichts mehr ohne die 'Ndrangheta oder die Cosa Nostra. Mit jedem Jahr, das vergeht, werden die Kriminellen geschickter, reicher, mächtiger. Die Regierungen in Rom kämpfen sich an ihren Alltagsproblemen ab und haben weder die Kraft, noch die Geduld, eine umfassende Anstrengung zur Rettung des Südens zu unternehmen. Nur Brüssel könnte sie dazu zwingen. Vielleicht.

Benedikt Brenner 

 

1)Die Cassa und die Agenzia per il Mezzogiorno haben von 1951 bis zu ihrem Ende 1998 insgesamt 21.6 Milliarden Euro (Wert von 2008) in ausserordentliche Entwicklungsvorhaben im Mezzogiorno investiert.   (Amedeo Lepori: Macchine o Maccheroni. La Cassa per il Mezzogiorno e lo Sviluppo Economico Italiano, tavole 2, 3)

 

 

      

   If an IS militant dies in battle and is awarded his 72 "houris" (the heavenly maidens whom, according to IS ideology, militants are given if they are killed in battle), will he forget all about his wife?

   It sounds like the opening lines of a joke. But this is a serious question for the Islamic State (IS) group, and especially for the women who join it and marry militants.

   Like other violent "jihadi" groups, IS entices men to join its ranks by promising them they will be granted 72 eternally young and beautiful virgins when they die in battle and go to heaven.

   This is a powerful piece of recruitment propaganda for male militants.

   But it is hardly attractive for IS brides, who are told that after death they will be reunited with their dead husbands in paradise -- after he has settled down with his houris.

'I Am Jealous Of The Houris'

   A support group for IS wives and widows on the Russian social network VKontakte openly addresses the problematic issue of houris through a poem. 

   The poem's author, named as Karima Umm Saad, addresses her husband and admits her jealousy of the heavenly houris who, she believes, will make him forget about his earthly life as soon as he dies. 

"I am jealous of the houris who call out to you

Every time you go into battle.

I am jealous of them because they

Might meet you sooner.

They will meet you -- you will forget everything,

Blood still flowing from your chest."

Poem by Karima Umm SaadPoem by Karima Umm Saad

   Umm Saad goes on to tell her husband she is "also dreaming about a rendezvous" with him in paradise, though she doesn't say how she will deal with his houris.

   Other IS brides have dealt with the houri problem in other ways.

   In a post on July 20 that has been shared among other female IS militants, a woman called Ubeida Shishan attempts to assuage women's fears that their dead husbands will prefer their ever-beautiful houris to them by relating a hadith, a saying of the Prophet Muhammad. 

   IS brides need not worry, Ubeida says, because they are actually more attractive and interesting than the houris. "The houris have never passed through the difficulties and trials that accrue to sisters in this world. They never even fought on the path of Allah," she writes.

   "They were never slandered because they wore a hijab! They have never encountered the difficulties being obedient to their husbands!"

Romance & The Ideal Wife

   As well as the specific issues of houris, the IS wives' support group and other pro-IS groups on VKontakte also deal with the wider problem of how "jihadi brides" are supposed to cope emotionally when their militant husbands leave them to go off to battle and die.

   To do this, the groups constantly create and recreate a romantic narrative in which militants who die fighting alongside IS are depicted as brave warriors carrying out God's wishes. They are supported by devoted militant wives whose divinely ordained role is to help their men achieve what the extremist group portrays as the lofty goal of death in battle.

   Wholly modest and unfailingly loyal to their husbands, these ideal IS wives are told that they are carrying out God's commands and that they will meet their husbands again in paradise.

   A July 10 post by the group Longing For Paradise illustrates this with a photograph of a bearded militant planting a chaste kiss on the entirely covered head of his wife, presumably as he heads off to battle.

   "We will meet, inshallah [God willing], only there where all pain and anguish have ended, where there is eternity and the pleasure of Allah. This is the end and the limit of each of our dreams," the caption reads. 

   IS tries via its propaganda efforts to dress up the realities of life under its rule -- marriage to a violent militant, early widowhood, and remarriage -- as a romantic fairy tale. But there are signs that not all IS militants believe the propaganda.

   A post criticizing would-be "jihadi brides" for romanticizing life as a militant's wife in IS-occupied territory in Syria and Iraq recently spread across Russian IS accounts. The post argued that women do not realize the reality of the hardships they will face in Syria or Iraq.

   IS has also refused to allow women whose husbands have died in Syria to return home unless they leave their children behind. A Tajik woman, 25-year-old Gulru Olimova, was told in May that her three small children were the "property of Islamic State" and she would have to leave them behind.

Joanna Paraszczuk -- Radio Free Europe - Radio Liberty