Saudi Arabia is playing chicken with its oil

In August 1973, Egyptian President Anwar Sadat paid a secret visit to the Saudi capital, Riyadh, to meet with King Faisal. Sadat was preparing for war with Israel, and he needed Saudi Arabia to use its most powerful weapon: oil.

Until then, King Faisal had been reluctant for the Arab members of OPEC to use the “oil weapon.” But as the October 1973 Arab-Israeli war unfolded, the Arab oil producers raised prices, cut production and imposed an embargo on oil exports to punish the United States for its support of Israel. Without Saudi Arabia, the oil embargo would not have gotten very far.

Today, Saudi Arabia is once again using its “oil weapon,” but instead of driving up prices and cutting supply, it’s doing the reverse. In the face of a global slide in oil prices since June, the kingdom has refused to cut its production, which would help to drive prices back up. Instead, the Saudis led the charge to prevent OPEC from cutting production at the cartel’s last meeting on Nov 27.

The consequences of Saudi policy are impossible to ignore. After two years of stable prices at around $105 to $110 a barrel, Brent blend, the international benchmark, fell from $112 a barrel in June to around $65 on Friday. “What is the reason for the United States and some U.S. allies wanting to drive down the price of oil?” Venezuelan President Nicolas Maduro asked rhetorically in October. His answer? “To harm Russia.”

That is partially true, but Saudi Arabia’s gambit is more complex.

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The state and Islam: Converting the preachers

SAUDI ARABIA has long used a simple method to regulate mosques. The oil kingdom lavishes clerics with money and perks that can suddenly vanish if their preaching goes astray. If that does not work they are fired or parked in jail. Now Saudi preachers face a new constraint: starting next year authorities will install centrally monitored cameras in every mosque to record what goes on inside. The move is ostensibly meant to prevent theft and regulate energy use, but few doubt the real intention is to tighten the state’s grip on Islam, part of a trend across the Middle East.

Critics have long reviled Saudi Arabia for its sponsorship of a rigidly puritanical brand of religion. The ruling Al Saud family, whose legitimacy rests in part on a 270-year-old pact with the Wahhabi school of Sunni Islam, has tended to shrug off the complaints. But in recent months it has worried about a backlash from conservatives angered by the government’s enthusiastic support for the crackdown against the Muslim Brotherhood in Egypt, as well as its participation in the American-led military coalition against Islamic State (IS) in Syria and Iraq. Apparently fired up by IS propaganda, radicals in the kingdom have lately targeted “infidel” Westerners and “deviant” Shias in a string of small but deadly terror attacks.

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via The Economist

Making sense of the growth puzzle

The performance of the Indian economy has been quite enigmatic in the past two-three years. Two successive years of low growth cast a shadow on our growth potential and we went around looking for reasons. Policy paralysis dramatized the issue and remained embedded in our minds. The cabinet committee on investment under the United Progressive Alliance government cleared as much as over Rs.6 trillion worth of investment by February. Yet, growth remained anaemic. We then said that we need reforms and there was some movement on land reforms and foreign direct investment in retail. Then the central government changed. Clearances have continued and the administration has been made to take decisions. Yet, the economic situation is at best stable, although sentiment is sanguine. Are we missing something?

An analysis of the growth path since 2011-12 shows slowdown has been due to a series of issues in which the government plays only a secondary role. The main issue has been with demand, where the level of spending has come down. The three major components: consumption, investment and government have shown limited traction.

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via Livemint

Drug resistance deadlier than cancer by 2050: Study

Infections resistant to medicines will kill more people per year than cancer by 2050, and cost the world $100 trillion annually, according to a U.K. government-backed report led by Jim O’Neill, the well-known former Goldman Sachs economist.

The wide-ranging study, called the Review on Antimicrobial Resistance, was commissioned by the U.K. government earlier this year amid growing concerns about drug-resistant “superbugs”, including new strains of E. coli, malaria and tuberculosis.

Its forecasts, based on research by RAND Europe and KPMG, suggest that drug resistance, which is estimated to have caused around 700,000 deaths globally this year, will cause 10 million by 2050 if further action is not taken.

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Six charts that show how India should approach emission cuts

In the face of the much-touted US-China climate deal, India’s strategy of piggybacking on China to avoid taking compulsory carbon emission cuts has backfired.

The international pressure is now firmly on India—the third largest polluter in the world—to act decisively against climate change. However, a closer look at climate data shows that while population and steep economic growth are the two reasons why India has become a major carbon emitter, it is much less responsible for climate change than many other comparable nations.

Here are six charts that show how India should juggle the trinity of international pressure, its own development concerns and the need for a clean environment for its own sake.

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via Livemint.

Everything you need to know: Land swap with Bangladesh

A Standing Committee has urged Parliament to bring a Bill to ratify the Land Boundary Agreement between India and Bangladesh.

India and Bangladesh have a common land boundary of approximately 4,096.7 km. The India-East Pakistan land boundary was determined as per the Radcliffe Award of 1947. Disputes arose out of some provisions in the award.

The Land Boundary Agreement (LBA) of 1974, was signed on May 16, 1974, soon after the independence of Bangladesh, to find a solution to the complex nature of border demarcation. While Bangladesh ratified the agreement, India didn’t as it involved seceding territory and indicating these precise areas on the ground. The 1974 agreement provided that India would retain half of Berubari Union No. 12 and in exchange Bangladesh would retain the Dahagram and Angarpota enclaves. The Agreement further provided that India would lease in perpetuity to Bangladesh a small area near Dahagram and Angarpota (the “Tin Bigha” corridor) for the purpose of connecting Dahagram and Angarpota with Bangladesh.

Finally the agreement was implemented in entirety, though India did not ratify, with the exception of three issues pertaining to un-demarcated land boundary of approximately 6.1 km in three sectors — Daikhata-56 (West Bengal), Muhuri River-Belonia (Tripura) and Lathitila-Dumabari (Assam); exchange of enclaves; and adverse possessions.

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via Indian Express

AIDS campaigners say pandemic has finally reached tipping point

The world has finally reached “the beginning of the end” of the AIDS pandemic that has infected and killed millions in the past 30 years, according to a leading campaign group fighting HIV.

The number of people newly infected with HIV over the last year was lower than the number of HIV-positive people who joined those getting access to the medicines they need to take for life to keep AIDS at bay.

But in a report to mark World AIDS Day on 1 December, the ONE campaign, an advocacy group working to end poverty and preventable disease in Africa, warned that reaching this milestone did not mean the end of AIDS was around the corner.

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via Reuters.