2 ★ FINANCIAL TIMES Wednesday9 October 2019
That is one of the stated purposes of
Turkey’s planned “safe zone” in north-
eastern Syria. Last month, Mr Erdogan
set out a ontroversial $27bn plan toc
build 10 towns and 140 villages n ao
32km stretch of land on the Syrian side
of the border. He has asked forinterna-
tionalsupport but western diplomats
are rofoundly uneasy about the plan.pWhy has Donald Trump ordered
US troops to stand aside?
Mr Trump has long said that he wants to
end the presence of US forces in the Mid-
dle East. He tried to order the with-
drawalfrom Syria in December 2018,
but was forced instead to reduce their
number after fierce opposition from the
Pentagon and from Capitol Hill.
Amid mounting warnings from Mr
Erdogan of an imminent Turkish mili-
tary assault, the two leaders spoke by
telephone on Sunday. Following the call,
Mr Trump announcedAmerican troops
would leave the vicinity of a Turkish
operation, effectively giving Ankara the
green light — although the US president
laterthreatened to “totally destroy”
Turkey’s economyif it did anything that
he considered “off limits”.
Mr Trump could once again be forced
to backtrack amid resistance from those
who arguethe battle against Isis is not
over.Yet as his campaign for re-election
gears up, any progress towards a fuller
drawdown from Syria could take Mr
Trump closer to meeting a key cam-
paign pledge.Why does the prospect of a Turkish
military operation alarm many in
ashington and Europe?W
Security and military officials feara
Turkish assaultwould open the door to
a resurgence of Isis, because the SDF has
warned that it will divert manpower
from ongoing mopping-up operations to
efforts to fend off a Turkish assault.
They also worry about the fate of the
thousands of Isis detainees and their
familiesin SDF-controlled amps.c
Diplomats are also alarmed at Tur-
key’s plan to resettle millions of Syrians,
which they fear could amount to “demo-
graphic engineering” if ethnic Arabs are
encouraged to establish themselves in
Kurdish-majority villages and towns.
Additional reporting by Demetri Sevastop-
ulo and Aime Williamsname of greater autonomy for the coun-
try’s Kurdish minority.Why does Turkey want to launch
a military assault?
Turkey wants to push Kurdish militants
away from the Turkish border and to
prevent themforming what Mr Erdogan
calls a “terror corridor” on the country’s
southern flank. He alsowants to create a
“safe zone” to allow Syrian refugees to
return.
Turkey is home to 3.6m people who
fled the conflict in neighbouring Syria,
and public discontent at the continued
presence of Syrians has been growing. In
response, Turkish authorities have
launched a crackdown on undocu-
mented migrants in Istanbul, and Mr
Erdogan has promised to find ways to
enable refugees to return home.The region is controlled by the Syrian
Democratic Forces (SDF), a group
established in 2015 from a loose alliance
of leftist Kurdish fighters and Arab
forces from more moderate units of the
constellation of armed opposition
groups fighting Bashar al-Assad’s
regime. The US chose the battle-
hardened Kurdish forces to spearhead
the fight against Isis.
From the outset, Turkey was
alarmed by the rise of the SDF —
and US support for the group. A
large segment of the fighting
force is comprised of members of
the People’s Protection Units,
known as the YPG. The YPG has
intimate links to the Kurdistan
Workers’ party (PKK), an armed
group that has pursued a bloody insur-
gency on Turkish soil since 1984 in theL AU R A P I T E L —ANKARA
C H LO E C O R N I S H— BEIRUT
Donald Trump on Sundayordered US
troops o vacate a part of north-eastt
Syria where Turkey has threatened to
launch a military incursion. The move
appeared to pave the way for a Turkish
assault against the US-backed Kurdish
forces that control the region.
Thattriggered alarm in Washington
and in European capitals,amid fears of
the impact on efforts to defeat Isis
jihadis. Humanitarian organisations
warned of the potential harm to civil-
ians in a country now in the ninth year
of a punishing civil war that has already
left an estimated 500,000 people dead.
Why is north-east Syria so important
to the west?
The long north-eastern corner of Syria,
wedged between Turkey to the north
and the unruly western deserts of Iraq to
the east, was where Isis incubated
before bursting across the Iraqi border
in 2015. The jihadist groupsold oil from
Syria’s eastern oilfields in their terri-
tory, helping to fuel their murderous
campaign and rule over cities and an
area the size of Great Britain.
Its self-declared caliphate survived
for more than five years before the
grouplost its final scrap of territory astl
March in a village on the east coast of the
Euphrates river, close to the Iraqi bor-
der. The thousands of Syrian and foreign
men, women and children who spilled
out of Baghouz village have ended up in
crowded prisons and fenced-off camps
in north-east Syria.
Military officials have long warned
that not all Isis fighters were imprisoned
or killed, and the area remains at risk of
being destabilised once more by Isis
sleeper cells.
Who controls the region?
A huge swath of north-east Syriais
under the control of members of the
country’s Kurdish minority.
Kurds, often referred to as the
world’s biggest stateless ethnic
group, are mostly spread across Tur-
key, Syria, Iraq and Iran and have
historically suffered waves of perse-
cution. But in Syria, leftist Kurdish
groups have taken advantage of the
civil war to carve out an utonomousa
enclave, popularly known as Rojava.
I N T E R N AT I O N A L
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[email protected]I N T E R N AT I O N A L
D E M E T R I S E VA STO P U LO A N D
L AU R E N F E D O R— WASHINGTON
The House committees leading the
Ukraine-related impeachment inquiry
into Donald Trump have subpoenaed
Gordon Sondland, US ambassador to
the EU, to appear before Congress after
the state department ordered him not to
testify yesterday.
The heads of the Democratic-control-
led committees — intelligence, over-
sight and foreign affairs — accused the
Trump administration of obstructing
their investigation by preventing Mr
Sondland from appearing for a deposi-
tion and also blocking him from provid-
ing the committees with messages on a
personal device. “We consider this
interference to be obstruction of the
impeachment inquiry,” the committee
heads said. “We will be issuing sub-
poena to ambassador Sondland for both
his testimony and documents.”
Mr Sondland, a former hotelier and
Trump fundraiser, had been scheduled
to appear yesterday before the House
committees leading theimpeachment
inquiry. But his lawyer, Robert Luskin,
said the state department told Mr Sond-
land that he should not appear for a vol-
untary deposition.
Mr Luskin said his client was “pro-
foundly disappointed” he would not be
able to appear, but added that he
“stands ready to answer the committee’s
questions fully and truthfully”.
Mr Trump said on Twitter he “would
love to send” Mr Sondland to testify, but
that “he would be testifying before a
totally compromised kangaroo court”.Adam Schiff, the Democrat who
heads the House intelligence commit-
tee, said the text messages and emails
from Mr Sondland’s “personal device”
that were being withheld by the state
department were “deeply relevant” to
the inquiry.“By preventing us from hearing from
this witness and obtaining these docu-
ments, the president and secretary of
state are taking actions that prevent us
from getting the facts needed to protect
the nation’s security,” Mr Schiff added.
TheHouse committees have pro-
ceeded rapidly with an investigationthat most experts believe will lead to
articles of impeachment being brought
— and passed — against Mr Trump. The
president is banking on Republican sen-
ators defending him during a potential
trial in the Senate.
Most Republicans have so far refused
to criticise Mr Trump over hisJuly
phone call ith his Ukrainian counter-w
part, in which he encouraged President
Volodymyr Zelensky into trying to
investigate Joe Biden — a frontrunner
for the Democratic presidential nomi-
nation — and thelocal business activi-
ties f his son, Hunter.o
Republican lawmakers defended the
state department’s decision, echoing Mr
Trump’s criticisms of Mr Schiff. Jim Jor-
dan, the Republican congressman from
Ohio, said Mr Schiff was running an
“unfair and partisan process”.
The House committees are also look-
ing into why Mr Trump withheld $391min congressionally authorised military
aid to Ukraine and whether he used the
funds as a bargaining chip to urge Mr
Zelensky to find dirt on the Bidens, in a
move critics have said would amount to
foreign interference in the US election.
The House committees on Monday
issued subpoenas to the Pentagon and
White House budget office. A separate
subpoena wasissued o the Whitet
House on Fridayafter the Trump
administration did not meet a deadline
to submit documents.
Democrats had hoped to ask Mr Sond-
land about text messages between him-
self and Kurt Volker, theformer US spe-
cial envoy o Ukraine, and other offi-t
cials, in which Mr Sondland appeared to
confirm that the officials were offering
Mr Zelensky a meeting with Mr Trump
only if he started probing the Bidens.
Additional reporting by Adam Samson in
LondonJA M E S P O L I T I— WASHINGTONKristalina Georgieva, theIMF’s manag-
ing director, has asked staff to look
more closely at the risks of negative
interest rates for the world economy,
urging countries to use monetary pol-
icy “wisely” in the face of a “synchro-
nised slowdown” in global growth.Ms Georgieva, theBulgarian economist
who became IMF chief on October 1,
toldthe Financial Timesthe fund would
“accelerate” its work on the pitfalls of
negative interest rates s one of its firsta
steps under her leadership.
“Obviously, if we were to be going
through a more prolonged period of low
to negative interest rates we ought to
more seriously think about the conse-
quences, as well as what an exit strategy
might look like,” she said.
Ms Georgieva’s commentscame as
she offered a downbeat assessment of
theworld economic outlook, which has
been buffeted by political risk and rising
trade tensions, in a speech in Washing-
ton yesterday. The IMF in July predicted
that world growth would slow to a rate
of 3.2 per cent this year before rebound-
ing to 3.5 per cent in 2020, but Ms Geor-
gieva said there would be “downward
revisions” to the figures for both years
when the fund released a new set of fore-
casts next week.
“In 2019, we expect slower growth in
nearly 90 per cent of the world,” Ms
Georgieva said in her speech. “The glo-
bal economy is now in a synchronised
slowdown.”
Ms Georgieva said trade tensions —
which have increased since Donald
Trump become US president in 2017 —
had put asignificant drag n the globalo
economy.
By 2020, losses from trade uncer-
tainty — including the secondary effects
on confidence stemming from tariffs —
would reach $700bn, equivalent to the
value of Switzerland’s economy, Ms
Georgieva said. “We have spoken in the
past about the dangers of trade disputes.
Now, we see that they are actually tak-
ing a toll.”
In addition to stagnant global trade,
thedecoupling f the main economieso
was also a growing concern.
“The current rifts could lead to
changes that last a generation — broken
supply chains, siloed trade sectors, a
‘digital Berlin Wall’ that forces countries
to choose between technology systems.”
Speaking to the Financial Times, Ms
Georgieva said there was now sufficient
evidence that “nobody wins” from trade
disputes. “Some lose more than others.”
The IMF has called on central banks
to pursue loose, or accommodative,
monetary policy in the face of the slow-
down if they needed a dose of stimulus,
but Ms Georgieva acknowledged they
were grappling with their mandates
under “difficult circumstances”.
ButMs Georgieva said there could be
unintended consequences as central
banks pushed interest rates deeper into
negative territory.
With monetary policy so constrained,
it was important for countries to gear up
for a fiscal response to the slowdown, if
it ends up being sharper than expected.
“Let me be clear. We are not there. But
when it comes to preparing for the pos-
sibility of a co-ordinated response we
should remember the advice of Shake-
speare: ‘Better three hours too soon,
than a minute too late,’ ” she said.Washington
Envoy subpoenaed by impeachment probe
Monetary policy
IMF chief
urges work
on impact of
negative rates
JA M E S S H OT T E R— WARSAWPoland’s ruling Law and Justice govern-
ment is offering a sharply higher mini-
mum wage if it wins re-election on Sun-
day, renewing its vote-winning plat-
form of support for the poor but setting
businesses on edge.The conservative-nationalist party
swept topower four years ago with a
promise to dramatically expand public
welfare spending. This time, it says the
minimum monthly wage would
increase in steps from 2,250 zlotys
($570) today to 4,000 zlotys by the end
of 2023, a 78 per cent jump.
The party’s leaders claim this will pro-
vide a fairer deal for workers and
foment radical change in themodel hatt
has powered Poland’s economy for the
past three decades.
“We want to close the chapter [in
which Poland was] a country of low
wages and cheap labour,” Poland’s
prime minister, Mateusz Morawiecki,
told the state press agency.
“The authors of Poland’s growthmodel during the transition were even
proud that the fruits of Polish growth
largely went abroad or to Poland’s eco-
nomic elite, and not the wallets of the
majority of Polish society... We want
to build a country of prosperity, and in
the medium or long term, make Poland
the best place to live in Europe.”
Business leaders agree that Poland’s
economic model should rely less on
cheap labour. But many question
whether raising the minimum wage will
have the desired impact and fret that
the speed will be too much for small
business. According to Alicja Defratyka,
senior analyst at Spotdata, the lowest
wage will rise to about 60 per cent of the
average wage in 2023, the highest share
in the OECD club of mostly rich nations.
“For sure there will be inflation, some
lay-offs... and also bankruptcies of
some small companies, because they
won’t be able to pay the [higher] wages,”
she said.
The rise will mainly affectretailers,
restaurants and the hotel industry plus
some public sector workers.Law and Justice
Polish ruling party vows to lift
minimum wage if re-elected
C H R I S G I L E S —LONDONConsumer confidence is at historically
high levels across leading economies
even as clouds gather over the lobalg
outlook, newly published data show.Manufacturing output is falling in many
leading economies while services and
trade growth are slowing, but the figures
from the Conference Board, the US busi-
ness group, and Nielsen, the data ana-
lyst, suggest some of the foundations of
global prospects are still holding firm.
“There is an unprecedentedly large
gap between strong consumer confi-
dence and business confidence, which
has been hit by thetrade warand manu-
facturing downturn,” said Bart van Ark,
chief economist at the board. “Consum-
ers do not care so much so long as [trade
tensions] do not affect their jobs.”
The board’s global index stood at 107
in the third quarter of 2019, a high for
the data series, and the same as in the
second quarter, suggesting a positive
outlook for household spending over
the next six months, said Mr van Ark.The figures come ahead of next week’s
annual meetings of the World Bank and
IMF, which is set to downgrade its eco-
nomic outlook significantly. But they
show why the world economy is not
showing deep recessionary signs yet.
The buoyancy of consumers’ views of
their job prospects, personal finances
and willingness to spend suggests that
household consumption will remain
firm in most large economies even as
manufacturing and trade stagnate.
Butconsumer confidenceis beginning
to drop in a growing number of coun-
tries, the data series shows. It fell in 33 of
the 64 economies measured by a
bespoke survey, and rose in 29. There
was particular strength in the US and
much of Asia, with Europe lagging
behind a little.Confidence in Hong Kong
fell 14 points to 86 in the third quarter,
the same in Peru, while Greece enjoyed a
12-point rise.The UK and Germany saw
small rises despite Brexit concerns.
The survey was based on responses
from 32,000 people online in 64 coun-
tries, with 500 surveyed in each.Global data
Consumers confident in spite
of gathering economic gloom
Syria safe zone Turkish plan raises spectre of resurgent Isis
Fighters and
veterans from
the Kurdish YPG
make up a large
part of the
Syrian
Democratic
Forces, fighting
against Isis and
the regime of
Bashar al-Assad
Delil Souleiman/AFP/GettyUS ambassador to EU
ordered to answer queries
over Trump-Ukraine ties
‘We consider this
interference to be
obstruction of theimpeachment inquiry’
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FEBRUARY 4^2
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THE RISE OF ECO-GLAM
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