Monthly Archives: December 2013

Government, Russia, Society

The attack in Volograd raises concerns for a peaceful Winter Olympics in Sochi…

Intro: The real threat to the Sochi Games is not a Western boycott but an Islamist terror attack

The run-up to the Winter Olympics in Sochi, which start in February, has been mired in controversy for months. Increasing the minds of politicians and athletes has been on whether they should boycott the Games in protest over Russia’s increasingly harsh treatment against homosexuals and lesbians.

The devastating suicide bombing over the weekend in Volograd, in southern Russia, is an instant reminder that the real threat to the Sochi Games is not a Western boycott but an Islamist terror attack. The blast at a railway station, which has killed at least 18 people, was not the first in Volgograd. In October, Russia identified a woman bomber from Dagestan as being responsible for a bus bombing in which five people were killed. Dagestan is one of a patchwork of small, mainly Islamic, autonomous republics in the Caucasus.

Russia has reason to be concerned for Dagestan is almost as unstable now as neighbouring Chechnya was in the 1990s. Although Russia battled a separatist insurgency there, Chechnya has never been entirely pacified. To add to the charge that Sochi is more of a threat from radical Islamists, rather than matters to do with sexuality, the leader of the Chechen rebel Islamists vowed in July to stop the Games from proceeding over the bones of its ancestors, or over the bones of many dead Muslims. The language used by the Chechen rebels is disturbing for athletes simply wishing to compete in the Games for medals.

So far, though, nothing has happened in Sochi, and the militants seem to have selected Volgograd as an alternative – maybe, because it is the nearest largest urban location north of the Caucasus.

For Vladimir Putin, he will deal with the terrorist threat by tightening a formidable range of security measures already in place around the Olympic village and event locations. Mr Putin will want to honour his previous pledge when he proclaimed in advance that the Sochi Games would be ‘the safest Olympics ever’.

Politically, whether Moscow can ever restore a lasting peace in the North Caucasus is highly doubtful. Russia simply does not have the manpower to keep all the republics in lockdown at the same time. Nor is the policy of periodically replacing stubborn local leaders with more adaptable ones necessarily an effective one.

Was Tolstoy right when he wrote that Russia is paying a delayed price for those colonial 19th-century wars which have saddled Russia with lands that it can neither absorb nor relinquish? Violence now seems par the course for radical Islamists in the Caucuses, if not in Sochi, then elsewhere.

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Foreign Affairs, Government, Lebanon, Middle East, Politics, Syria

The assassination of Mohamad Chatah: Lebanon’s moderate voice has been silenced…

QUAGMIRE OF SYRIA

Mohamad Chatah, the former Finance Minister in the Lebanese government of Saad Hariri, was assassinated yesterday in a huge car bomb blast in Beirut. Lebanon has lost a courageous intellectual and a fervent interlocutor for moderation who has regularly spelled out the extreme peril his nation faces as the civil war in Syria continues to polarise the Lebanese people.

Mr Chatah was a prominent blogger and user of social networking sites. Just hours before his death, he used Twitter to express his grave premonition that Lebanon was heading back towards the abyss. He tweeted: ‘Hezbollah is pressing hard to be granted similar powers in security and foreign policy matters that Syria exercised in Lebanon for 15 years.’

As a leading Sunni, Mr Chatah had followed the hard anti-Assad line being pursued by Saudi Arabia and Qatar. It should not have been difficult, even if not agreeing with everything he positioned himself on, to recognise that he saw clearly the dire peril his nation was facing. Mr Chatah’s analysis was that the war in Syria, which has already claimed 120,000 lives, has gone on too long for the regime of Bashar al-Assad to be restored to its previous dominant position. Because of this, the preferred outcome for both Iran and Hezbollah, he said, was for the war to continue indefinitely.

Mr Chatah’s vision was of clarity and pragmatism. He also saw for Lebanon the implications of how great a disaster such a stalemate would be for his country, suggesting it could not hope to avoid being dragged in. As a consequence, he believed, along with other patriots, was that Lebanon would suffer another bout of destructive civil war, similar to the one that lasted from 1975 to 1990. His violent assassination is undoubtedly another fatal step in that direction.

Following months of frustration and numerous setbacks, a peace conference on Syria is set to open in the Swiss town of Montreux next month. Hopes for success at the talks may be slim as the intensification of the war continues. Whilst both sides are seeking to maximise their positions in advance of the summit, the outside world must owe it to Mr Chatah and his beleaguered people to do far more in bringing Syria’s civil war to an end.

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Britain, Business, Economic, Finance, Government, Society

The Revenue must call multinationals to account…

TAX AVOIDANCE

The relationship between the Government’ Revenue Service and how big corporations are being advised on how best to avoid paying tax is often uncomfortably close. Suspicions are such, that no sooner have civil servants finished writing a new addition to the corporate tax laws, is then quickly followed by a recruitment drive by top accountancy firms to provide ideas on how to get round it. Tax avoidance measures are costing the Exchequer billions in unpaid taxes.

The belief that HM Revenue and Customs (HMRC) has too cosy a relationship with the big multinationals has gained new credence when, just last week, a Commons select committee suggested in its report that the tax authority seems to ‘lose its nerve’ when it comes to pursuing the biggest names in business.

The chairman of the House of Commons public accounts committee, Margaret Hodge MP, said:

…In pursuing unpaid tax, HMRC has not clearly demonstrated that it is on the side of the majority of taxpayers who pay their taxes in full.

Noticeably, one of the key findings of the committee’s report was that last year the department collected less tax in real terms than it managed to collect in 2011-12, despite its stated aim of cracking down on tax avoidance. For the average man and woman in the street, who are desperately struggling through the age of austerity, this is an extraordinary state of affairs. With public services being cut at a faster rate than ever before, most people will surely find it astonishing that the corporate world is getting an easier ride than before.

There is, however, an indifferent logic behind the tendency of HMRC to strike deals that seem advantageous to the big firms. Multinational corporations hire very expensive lawyers, who invariably find a way round most of the complex tax rules. At some point, the HMRC calculation seems to be that it would rather cut its losses and do a deal than prolong the agony for an uncertain gain at some indeterminate point in the future.

That is the logic, but it is morally indefensible – especially when the tax authorities show no such leniency when it comes to wringing every last penny from the minnows of British business. Little compunction from HMRC often forces small firms to the wall, even if they are struggling to pay their VAT on time.  These small and medium sized firms (SMEs) put up less of a fight, which is why they are pursued so ruthlessly.

Taxation has to be seen to be fair. For that to be the case, the UK system needs to meet two standards. First, it is imperative we introduce new laws that massively reduce the scope for avoidance. There is a strong argument that the tax code is now too complex, and that this complexity has produced a multiplicity of loopholes that are being exploited. And secondly, HMRC needs to have the resources (and the will) to pursue multinationals as relentlessly as it pursues the country’s smaller firms.

Fairness demands that multinationals know their obligations and are obliged in meeting them.

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