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Israel's ambassador to the U.S., Michael Oren, describes Iran's efforts to make weapons grade nuclear material, escalating the enrichment process from 3.5% to 20%. He says Iran now has 225 pounds of 20% uranium and 11,000 pounds of 3.5%, enough for 5 nuclear bombs, and points out that 20% uranium can be enhanced to weapons grade in weeks. During the initial negotiations the P5+1 nations demanded suspension of enrichment acitivites at a time when the enrichment process was at 3.5%, and transfer of stockpiles abroad. As negotiations dragged on Iran escalated to 20% enrichment. current demands of the P5+1 are for cessation of 20% enrichment and removal of the 20% stockpile, and closing the facility at Qom, as a first step. This has been rejected by Iran. In this op-ed Oren says Israel alerted the world about the Iranian nuclear program 20 years ago, and as this has continued to what it is today, Israel's view is that much of that time was wasted and the window for international efforts to cease and dismantle Iran's nuclear program is almost shut. ...

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Veterans of the Iraq conflict see a decade of efforts in Iraq being undone in 2014 with increasing sectarian conflict and the spillover from the war in Syria.

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Hubbard and Erdbrink report on U.S. president Trump's visit to Saudi Arabia to begin a new chapter in relations with the Gulf nations and the Saudis. Under president Obama the U.S. distanced itself from the Saudis and the Gulf nations, preferring to pursue a policy of closer relations with Iran and signing the Iran nuclear deal. This included a policy of staying out of Syria to the point of turning down a decision to deploy U.S. airpower to maintain no-fly zones to protect refugees. Syrian government forces fighting rebels were supported by Iran. The new policy is dictated by the new conditions in the Middle East. The U.S. has sought since the presidency of Reagan to balance the power relations in the region. With the nuclear deal signed and Iran respecting the deal according to independent reports, the U.S. allied with Iran in the battle against Islamic State in Iraq,  a shift was needed to balance the support provided to Iran by Russia which worsened the refugee crisis in Syria. The Republican party and Mr. Trump were critical of the Obama Iran policy during the nuclear deal negotiations. The safety of Israel is also a factor as non-state actors were supported by Iran threatening Israeli security. For these reasons the shift is an effort to rebalance the relations in the region. The arms deal in its size and president Trump's statement that Iran had "fueled the fires of sectarian conflict and terror," can be seen as this rebalancing. A business aspect of the large arms deal is that it will promote job growth in the defense industry in the U.S.. Other countries including Germany have seen growth in their defense industry. This is not the best way forward for the Middle East, yet it is a way the U.S. and nations in the region are adjusting to realities- the collapse of the Arab Spring from within and without the help from outside, the sectarian conflict arising from the Shiite pushback from Iran following the Baathist and Sunni control of Iraq which collapsed with the U.S.invasion, where the majority of people are Shiite yet with a strong Sunni presence. Elections brought Shiites in power, leading to a Sunni response in the form of Islami State caliphate move into Mosul, Iraq's second largest city after Baghdad. A decade of conflict and the efforts by the Bush administration ended in failure and sectarian conflict, resulting in the U.S. policy of rebalancing in favor of Iran to negotiate the nuclear deal. In this sense the arms deal does not solve anything. A similar rebalancing under Reagan by arming one side, followed by arming the other, led to involvement with ground forces under president Bush. It only leaves the region poor after years of sanctions against Iran to the point where a NYT reporter was not sure whether it was safe to fly from Tehran to Mashad with Iran Air because of the lack of spare parts for the airline. War torn, with millions of refugees in Syria and Iraq, the region remains broken in many ways, waiting for a sensible non sectarian view to prevail in the interest of the people in the region. The election of Rouhani in Iran by 57% of the vote is only a sign that young people in the region given a chance would opt for a different course in future. The rest of Asia has moved forward and shows a path that can be followed. ...

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The UN Refugee Agency says 7.6 million Syrians were displaced and refugees in their own country, 3.6 million Syrians are in other countries as refugees. Worldwide it says about 60 million are refugees. About half of the refugees are children. Of this about 14 million people were displaced in 2014, with 11 million of this displaced in their own country. Fighting in Iraq, Syria and Libya, appear to be the main cause of displacement in 2014. Never before in the agency's 50 year history are there so many displaced people in their own countries.

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Karen Elliott House, a widely respected expert on Saudi Arabia, gives her assessment of the Saudi situation as the Obama administration completes a nuclear deal with Iran in July 2015. She says the Saudis have few options in the short term. She also points out that the unfreezing of $100 billion in assets of Iran by the end of 2015, and the lifting of economic sanctions, could exacerbate tensions in the Middle East if Iran uses the money to increase support to proxies in the Middle East. Saudi Arabia has a large population of young people and high youth unemployment, increasing political risks, says Karen House.

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Liu He, the author of the 2013 DRC report on recommended changes to China's banking and financial system, is now the director of the Communist party's top financial policy committee and senior advisor to president Jinping. Changes he is pushing for relate to increasing focus on credit risk for China's banks, promoting competiion between banks, a mechanism for letting banks fail, and a deposit insurance program to protect the public against failing banks. To open up the sector dominated by state owned banks, opening private banks would be encouraged. Local governments would be allowed to issue bonds in an effort to reduce their dependence on land sales and opaque off-market borrowing. The urgency of this agenda comes from the realization in top Chinese policy circles and the Jinping-Keqiang administration of the risks to the banking sysem from the lack of attention to credit risks in bank lending.

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Orlik cites a 2011 survey from China's South Western University of Finance and Economics, which surveyed 8000 households and found that 55% of Chinese households had little or no savings for that year. 10% of households control 86% of wealth and 56% of household income. Surveys in 1995 and 2002 showed 10% of households controlled 31% and 41% of wealth. In the U.S. top 10% of households control 74% of the wealth, according to the Federal Reserve figures. What this means, says Orlik, is that before China can shift to consumption based growth the low incomes of the majority of households have to go up, requiring a major policy shift. Under current policies and even with movement in the direction of the DRC/World Bank policy report for China for a gradual shift away from state owned enterprises, there is little prospect for rebalancing the world economy.

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With only 63 million metric tons of food storage facilities and 75 metric tons of foodgrains stocks after the 2012 harvest season, India faces an acute shortage of storage capacity. About 3-4 million tons of additional capacity are planned by May or June 2012, and 11 million tons in 2013, according to India's Food Ministry, but more capacity will be needed this year. If not corrected this could mean that about 8 million tons of foodgrains could rot out in the open or in makeshift conditions. This is a major problem as about 200 million people in India are considered to be food-insecure, and an estimated 42% of children suffer form malnutrition.

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Wang Xiaofang is a former bureaucrat and writer who documents real life stories of corruption in China's bureaucracy by using fictional characters. A similiar approach by another Chinese writer Mo Yan in literary novels led to him being awarded the 2012 Nobel Prize for Literature. Censorship in China has not affected writings using fictional characters and literary novels of this kind. It may be seen by the government as a way to let the public ventilate some of its frustrations with corrupt bureaucrats and communist party officials in China. It also shows how widespread the problem has become and is a serious matter for the future of the Communist Party. Wang tells the Beijing Bookworm Literary Festival after he entered the official bureaucracy he felt the desire "not to be spiritually crippled." Wang is the author of the Civil Servant's Notebook, which is described as a guide for the 1.4 million people taking the civil service exams in China each year. This suggests that China's new leadership sees this as one of the ways to give right direction to young people joining the civil service, and comes with a new focus on corruption. Wang is also part philosopher in his musings when he says China has lost its traditional culture and cannot adopt western culture, and so it remains confused at a crossroad. This leads to his idea of operators in China's official circles as people who have lost their faith and spiritual home. ...

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Montes and Cordoba of the WSJ provide this exceptional account of corruption at the state level in Mexico. Ironically the very effort to reduce the power of centralized administration with PRI winning repeated elections and having a monopoly in power for many years, led to the decentralization and passing on power and money to the state governments in Mexico after the 1990's. But this was done without putting in the checks and balances required. Instead too much power was now concentrated in the hands of the state governments which appointed even the judges and officials at all levels including election bodies. Federal transfers of tax money to states increased 20 fold to $88 billion in 2016, according to this report.  The result 41 state governors faced corruption charges between 2000 and 2013, according to the Mexican Competitiveness Institute. This includes the state of Veracruz where state coffers are almost empty and there is no money to pay municipal bodies. The PRI governor of Veracruz Mr. Duarte supported president Pena Nieto, and was at 43 years age cited as the new face of the young PRI. This report  says he is nowhere to be found now that $2.5 billion in state funds cannot be verified. Other states are Tamaulipas, Quintana Roo, Coahuila, Sonora, where corruption charges remain. The Veracruz scandal is among the worst and is the focus of attention for the public in Mexico. At this point president Pena Nieto of PRI has about 12% popularity rating, lowest of any modern Mexican president.   ...

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Central Huijin, part of China's sovereign wealth fund, China Investment Corporation, bought shares of China's four major banks in October 2011 to prevent steep price declines. China's bank stocks have lost about a third of their value in 2011. The four major banks- China Construction Bank, Agricultural Bank of China, Bank of China, and the Industrial and Commercial Bank of China- control two-thirds of the banking industry in China. In China's interlocking system of relationships between the state, the banks and the state controlled industrial companies, Central Huijin owns 35.4% of Industrial and Commercial Bank, 67.6% of Bank of China, and similiar stakes in the other 2 banks. It was created in 2003 to bail out China's banks after bad loan losses, and was transferred to China Investment Corporation in 2007. As part of the 2007 move bonds were issued by CIC to compensate the central bank. This means the banks pay dividends to CIC so that it can make payments on the bonds. Today the 4 major banks pay half of their earnings in dividends to CIC. CIC chief Lou Jiwei, says Central Huijin needs 300 million renminbi a day, or $47 million to pay interest on the bonds to the central bank. The 4 major banks are also under pressure from China's regulators to increase their capital reserves, because of large bad loans to local governments after the global financial crisis of 2008....

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To correct misgivings in many quarters about Syrian refugees not finding a haven in Gulf states, this letter from the Cato Institute points out that the population of Syrian refugees living in the Gulf states including Saudi Arabia has gone up by 1.1 million by 2013 from the beginning of the civil war. He cites World Bank data showing 241,000 Syrians living in the Gulf states before the civil war. By 2013 that number is 1.4 million. For Saudi Arabia the figures are up from 111,000 to 1 million.

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WSJ's Trofimov talks to some of the 2.5 million refugees and displaced people in the sectarian conflict in Iraq in 2015. He finds a mood of despair and resignation to a permanent partition of the country following sectarian conflict between Shiites and Sunnis. The situation is being dictated by the facts on the ground as the refugees see little prospect of returning to their homes, and the different regions controlled by Sunni, Shiite and Kurdish forces with borders.

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This exceptional report by Chulov in the Guardian shows the changes in the war in Iraq and Syria in 2015-2016 since the downing of a Russian jet by Turkey in late 2015. It says that the Syrian government's future was uncertain in late 2015 with Turkish support for rebel forces in the north. During this period Russia curtailed trade and tourism relations with Turkey, and improved relations with the Kurds. Russia intervened in northern Syria directly to prevent a collapse of Syrian government forces in the north. Kurdish forces were already controlling large parts of the Syrian territory adjoining Turkey, and Turkey was concerned about the support to Kurds within Turkey from Kurds in Syria and a historical movement for  Kurdish independence. In April 2016 Russia made a move to win Turkish support by saying it would support the territorial integrity of Syria, so that no support would be given to the Kurds. As the U.S. consistently supported the Kurds in the fight against ISIS, Turkey under prime minister Erdogan changed its policy of support for rebel forces in Syria to focus on what it perceived as the threat fom Kudish control of the region at its Syrian borders. Rebel forces were told to focus not on the Syrian government forces but on ISIS, leading to withdrawal of support in Aleppo. What remains now of the war in Syria and Iraq is Iranian influence in Iraq, the Russian influence from support of the Syrian government in Damascus, and for the first time U.S. ground forces in the north with 900 troops supported by artillery on the side of the Kurds. The next stage in the war to take ISIS controlled Raqqa is being negotiated between Russia, Turkey and the U.S., according to this report.  ...

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The high risk of failure as the U.S. withdraws from Afghanistan in 2012-2013. The U.S. is handing over to an Afghan Army that faces a high desertion rate, high turnover, and uncertain loyalties. The turnover is so high that the Afghan Army has to replace a third of the 195,000 army every year. The problems from the corruption in the Karzai government, the flawed elections, and other issues have not been resolved, leaving a fragile government and a fragile army and police force as the U.S. withdraws. A decade of sacrifices in resources, lives and wounded, is at risk. A negotiated settlement in talks with the Taliban has not moved forward to create a post U.S. withdrawal Afghan government that brings in all parties. The untimely death of American diplomat Holbrooke who set up the accord that made peace in the Balkans, and the failure to get results at the talks only leaves the whole U.S. project at risk.

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This article by General James Jones is the second from the highest ranks of the Obama administration, saying the entire Middle East policy of U.S. president Obama was flawed and could lead to dangerous consequences. Gen. Jones, former National Security Advisor to Obama 2009-2010, says the situation today is worse than in 1991 when the U.S. launched Operation Provide Comfort to protect Kurdish refugees in Northern Iraq from Saddam Hussein, with an engagement of about 5 years and 25,000 Allied troops. Jones says the crisis in Iraq and Syria is of an order several times worse than 1991 and at any time since the 2003 invasion, as it involves the setup of a terrorist ISIS state in the heart of the Middle East. What went wrong? Jones says all the warnings from other Middle East nations about Maliki's corrupt policy and sectarianism used to stay in power turned to be true. Even Maliki's own advisors and colleagues say in a separate report by Matt Bradley that Maliki battled not for the Iraqi state but only to preserve his own power. Jones calls the U.S. president's decision not to act in Syria when the "red line" of use of chemical weapons was crossed, the failure to maintain a limited military training presence in Iraq after 2011, and not insisting that Mr. Maliki arm the Kurds, as having gravely aggravated the problem in 2014. Jones calls for arming the Kurds directly with sufficient weaponry for defending their region and providing immediate expanded aid to the Abadi government, appointment of a special envoy to ensure direct and immediate communications with Baghdad and with Kurdish, Sunni and Shiite leaders. He calls also for close air support of Iraqi and Kurdish operations, and an aggressive diplomatic effort to unify the Middle Eastern nations to remove ISIS from the region. Jones says this is the right thing to do in the name of all the Iraqi people yearning for peace, for the U.S. service personnel who made sacrifices in Iraq for 23 years, and for U.S. national security....

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Moody's Investor's Service downgrades China's credit rating to A1 from Aa3. Moody's predicts a slowdown in growth for China. GDP growth for 1st quarter 2017 was 6.9%. Total debt has grown from 149% of gross domestic product in 2008, to 213% in 2013, and is now 253%, according to JP Morgan. The problem is that ever higher levels of credit have supported growth and more of this is coming from the shadow banking sector. Higher levels of debt in future years from the already high levels will weigh heavily on growth, leading to an eventual slowdown in the economy's growth rate.

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Washington Post editorial on the Obama Georgetown speech of April 13, 2009. It questions whether President Obama has the candour and courage to tackle the tough issues of deficit reduction and entitlement reform. New healthcare spending for coverage itself will add to entitlement, and it says some of the savings mentioned by the President are phony or already needed for new spending for the economic recovery and health care. At the same time the paper gives Obama good marks for his clarity and grasp of the crisis and steps for recovery, and the policy agenda in the areas of health care, energy and education. The questions about courage and candor also raise all the questions about facing upto the facts about insolvent banks that Krugman, Rosenfeld, the Economist and others have raised. Is Obama dodging the hard choices, is he dithering? On the toughest issues like foreclosures, insolvent banks, global regulation pushed by the Europeans, will he end up making inadequate or faulty choices, and when he comes around to making the tough choices, will he have lost so much valuable time as to prolong the crisis and stretch it out to many years....