Financial Times Europe - 04.03.2020

(John Hannent) #1

4 ★ FINANCIAL TIMES Wednesday4 March 2020


A


mounting war of attrition n north-west Syriai
betweenTurkeyandtheRussia-backedforces
of Syrian president Bashar al-Assad in the
pastweeklurchedtowardsall-outwar.
Air and drone strikes have killed scores of
troops on both sides. Officials, diplomats and medical
sourcessaytheFebruary27airstrikesonTurkishtroopsin
Idlib — probably carried out by Russianas well as Syrian
warplanes causedsubstantiallymorethanthe34deaths—
towhichAnkaraadmitted.
Morethan1mSyrianrefugeeshavebeentrappedagainst
the Turkish border with Idlib. Now, Turkish president
Recep Tayyip Erdogan as said they (and the 3.6m Syrianh
refugees already inside Turkish borders) are free to move
north into Europe, expandingIdlib’s humanitarian crisis
tothebordersofGreece.
How did this new disaster creep up while the world tried
to cast Syria from its mind? Idlib is the last redoubt of the
rebellion that erupted in 2011 against the Assad regime.
One of the first cities to rise up, it has been the pivot of a
warthathassavedtheworstforlast.
Turkey and Russia, though on opposite sides in Syria’s
war, entered an alliance of convenience after the 2016
attempted coup against Mr Erdogan, which he partly
blames on the west. Although they designated Idlib a “de-
escalationzone”in2018,theprovincehasbecomeabottle-
neck for rebels and their families fleeing from other areas
recaptured by Damascus. The Assad regime and its spon-
sorsarenowpoisedtomakeitthefinalkillingfield.
Backed by Russia’s air force, a depleted Syrian army —
reinforced from Decem-
ber by Iran-supplied
forces — made headway
in southern Idlib. The
strategic logic was to
retake two arterial high-
ways: one from Damas-
cus north to Aleppo, the
other west to the coast.
Moscow complained that
Ankara had failed to fulfil a pledge to rein in Hayat Tahrir
al-Sham, an al-Qaeda offshoot with some 20,000 fighters
in Idlib province. WhenTurkey’s 12 “observation posts” in
Idlib were attacked last month, Ankara sent in at least
three armoured brigades. On February 26 they recaptured
Saraqeb, the junction of the two strategic highways, fight-
ing alongside HTS jihadis. Assad forces struck back
lethally the next day. Turkey replied with greater force,
killing Syrian and Iranian troops and fighters of Hizbollah,
the Tehran-backed Lebanese paramilitaries. This is a spi-
ral.TheskiesaboveIdlibarecrowdedwithrivalwarplanes
anddrones.Atleast3mciviliansareatrisk.
The EU, which struck a deal with Turkey in 2016 to stem
the flow of refugees, hascalled an emergency meeting fo
foreign ministers. Mr Erdogan is to meet Vladimir Putin,
his Russian counterpart, in Moscowtomorrow. Mr
Erdogan is looking exposed. His insistence that Damascus
should withdraw to the “de-escalation” lines Ankara
agreed with Moscow in 2018, and his apparent refusal to
acceptanewTurkishenclavenorthofSaraqebanditsvital
junction,risksconfrontationwithRussia.
Thatrisks Turkey’s two north-west enclaves in Afrin
and around Jarabulus — taken in 2016 and 2018 with Mr
Putin’s imprimatur — and even the Turkish buffer zone
emerging along Syria’s north-eastern border afterthe US
pulled back and Ankara invaded last autumn. Nato, of
which Turkey was once a stalwart, will probably not come
to its aid after Ankara’s purchase ofRussia’s S-400 air
defencesystem.
Mr Erdogan, who sees Turkey as a standalone regional
hegemon and prefers transactional relations to normative
alliances, is vulnerable. His interests in the region are to
stop Syrian Kurdish fighters allied with insurgents inside
Turkey from establishing an autonomous entity on his
borderandtokeepoutanymoreSyrianrefugees.Heneeds
Mr Putin’shelp on both counts. As one leading Turkish
analyst put it: “What interest does Turkey have in slowing
downthefallofIdlib?”

[email protected]

GLOBAL INSIGHT


SYRIA


David


Gardner


Erdogan risks conflict


with Moscow while


needing Putin’s help


The Assad regime


and its sponsors are
now poised to make

Idlib province the
final killing field

I N T E R N AT I O N A L


M I C H A E L P E E L— N I C O S I A
K E R I N H O P E— AT H E N S


The EU faces a looming refugee “disas-
ter”,thepresidentofCyprushaswarned
after a threat from Turkey to allow
migrants to cross into Europe prompted
violent clashes on the Greek-Turkish
border.
Nicos Anastasiades told the Financial
Times that Europe was paying the price
for being absent from Middle Eastern
conflicts, as he urged the EU to stand up
to the “blackmail” vow by Turkish pres-
ident Recep Tayyip Erdogan to “open
the gates” torefugees fleeing the fight-
ing i nnorthernSyria.
“It is going to be a disaster,” the Cyp-


riot leader warned, when asked what
would happen if the EU did not push
back against Mr Erdogan and protect its
2016 deal with him to stop migration to
Europe via Turkey. “On the one hand is
the humanitarian aspect: you should
take care of all these people. But who is
creatingtheproblemisthequestion.”
Mr Anastasiades’ remarks highlight
the rising tensions between the EU and
Turkey as thefour-year-old accord ee-t
ters on the brink. The EU agreed to pay
€6bn to support Turkish efforts under
the deal truck following the 2015-16s
increase in arrivals in the bloc. But the
Cypriot president accused Mr Erdogan
of attempting to “use the refugees to
raise money” from the EU and “taking
theadvantagetoblackmaileverytime”.
“Will Erdogan continue to play the
roleheisplaying,Imeanasadominator
of the area [and] a spoiler of the peace,
withoutanyreaction?”MrAnastasiades

asked. “We are absent from the scenes
where the events are taking place. Why
[are we] not playing a role in Syria, why
[are we] not playing a role in Libya?
Whyareweacceptingallwearewitness-
ingasregardstoErdogan’spolicy?”
Ursula von der Leyen, European
Commission president,yesterday out-
lined €700m of financial assistance to
Greece, saying the border issue was for
Europe as a whole to address. “We will
manage it in an orderly way, with unity,
solidarity and determination,” Msvon
der Leyen said at a press conference
with other EU leaders including Kyria-
kos Mitsotakis, Greek prime minister.
“Those who test Europe’s unity will be
disappointed,”shesaid.
Turkey, home to 3.6m Syrian refu-
gees, accuses EU countries of failing to
take their fair shareand ailingf to help
its militaryfend off an assault by the
Russia-backed Syrian regime in the

rebel-held enclave of Idlib. The regime
offensive has created what aid groups
say is the worst humanitarian crisis of
Syria’s nine-year civil war, with almost
1mpeopleforcedtofleetowardsTurkey
inlessthanthreemonths.
While the Turkey-Syria border
remains closed, Mr Erdogan has sought
to raise the pressure on the EU by
encouraging refugees already in Turkey
to head to the country’s frontiers with
Greece, telling Europe: “You are now
takingyourshare.”
Mr Anastasiades said 100 African
nationalsyesterday became the latest
people to seek asylum in Cyprus after
arriving in the Turkish-occupied north-
ernpartoftheMediterraneanisland.
Cyprus has the highest number of ref-
ugees per capita of any EU country, with
about15,000registeredasylumseekers.
Additional reporting by Laura Pitel in
Ankara and Mehreen Khan in Brussels

Border violence


Cyprus attacks Ankara’s refugee stance


President accuses Turkey


of ‘blackmail’ by urging


migrants to head west


‘Will
Erdogan

continue to
play the

roleas a
dominator

of the area
[and] a

spoiler of
the peace?’

Nicos
Anastasiades

H E N RY F OY— M O S C O W
L AU R A P I T E L— I S TA N B U L
C H LO E C O R N I S H— B E I R U T


Turkish attacks on Russia-backed
forces in Syria’s Idlib province are test-
ing Moscow’s relationship with Ankara
as all sides raise the stakes in the latest
phaseofSyria’snine-yearcivilwar.
Seekingtoavengethekillinglastweek
of 34 Turkish soldiers, President Recep
Tayyip Erdogan has bombarded Syrian
regime targets in the province in the
past three days, warning that the
destruction of fighter jets and killing of
more than 100 pro-regime combatants
is“onlythebeginning”.
The heightened conflict has laid bare
the risks inherent in the Kremlin’s
gamble of allowing President Bashar al-
Assad of Syria to fight Mr Erdogan for
control of Idlib, Syria’s last rebel-held
province, and left Russia president
Vladimir Putin caught between the two
leaders who have helped him gain
greaterinfluenceintheMiddleEast.
The Turkish president’s threatened
escalation of hostilities risks all-out war
as he prepares to meet Mr Putin in Mos-
cow tomorrow.The two leaders will
seek a resolution to an almost year-long
battle that is edging the countries closer
toadirectmilitaryconfrontation.
“Moscow is worried about the possi-
bility of Syrian-Turkish clashes degen-
erating into a real war. Casualties on
both sides bring that war closer,” said
Dmitri Trenin, head of the Moscow
CarnegieCenter.
“Russia will try to get some sort of a
ceasefire to prevent being eventually
draggedintowar,butitwillputpressure
on Erdogan to yield on the ground.”
A 2018 deal between Mr Putin and Mr
Erdogan to prevent a Syrian assault on
Idlib,whichborders Turkey, fell to
pieces last year as both sides ccuseda
eachotherofbreachingtheterms.
In recent weeks,fighting has intensi-
fied , with more than 50 Turkish mili-
tarypersonnelkilledinairstrikesbythe
Russia-backedregime.


Moscowsays Syria isfighting terror-
ists supported by Ankara.Turkey has
consistently sought to avoid blaming
Moscow directly and instead turned its
ireonDamascus.
“We said that we would avenge the
death of our martyrs,” said Mr Erdogan
on Monday, even as he said he would
like a ceasefire in Idlib. “By destroying
the regime’s war planes and tanks, we
aremakingitpayaveryheavyprice.”
Al Watan, a pro-government Syrian
newspaper, wrote that with the start of
the new offensive, Turkey had
“declaredwaronSyria”.
Operation Spring Shield,Turkey’s lat-
est campaign, s Ankara’s fourth mili-i
tary offensive in Syria in as many years.
But it is the first to directly target the
Assad regime, unleashing the power of
the second-largest military in Nato on
thedepletedSyrianarmedforces.
“It is quite logical that Russia would
not be able to dodge negative conse-
quences from [Mr] Erdogan for ever. In
fact, it is a great surprise that it lasted so
long,” said Ruslan Pukhov, director of
the Centre for Analysis of Strategies and

Technologies, a Moscow-based defence
think-tank.
The Kremlin declined on Monday to
commentonthefreshTurkishoffensive
but reiterated its support for the Syrian
operations and endorsed a statement
from the Russian defence ministry that
Moscow “cannot guarantee the safety of
TurkishaviationintheSyriansky”.
“Our stance is absolutely consistent
and unwavering,” Kremlin spokesman
DmitryPeskovsaid.“WesupportSyria’s
territorial integrity and back up Syria’s
intention to continue fighting terrorists
andterroristgroups.”
The defence ministry statement was
an “indirect” threat to Ankara, Mr
Trenin said. “It’s not clear whether Rus-
sia would actually shoot down Turkish
planes over Syria but testing that would
be reckless. It doesn’t mean it won’t
happen.”
In a sign that this threat may have
worked, analysts said that the pace of
Turkish drone attacks had slowed on
Mondayaftera72-hourblitz,suggesting
that the Kremlin still retains the ability
tode-escalatethesituation.

Sinan Ulgen, chairman of the Istan-
bul-based think-tank Edam, said that
Moscow appeared to have chosen to
allow Mr Erdogan to attack regime tar-
gets for a few days in order to “appease”
public anger while also showing the
Turkishpresidentthat“hisambitionsin
Idlib are still conditional on Russian
acquiescence”.
Mr Ulgen argued that, given the con-
tinued vulnerability of Turkish soldiers
in Idlib, Mr Erdogan would go to Mos-
cow with a “weak hand” and was likely
to be asked by Mr Putin to concede the
regime’s recent gains and accept a nar-
rower zone of influence. “If he doesn’t
accept that, what’s the alternative?” Mr
Ulgensaid.“Togobacktoamilitarysce-
nario,whichisveryrisky.”
Murat Yesiltas, director of security
studies at the Ankara think-tank Seta,
whichhascloselinkstotheTurkishgov-
ernment, said that Turkeycould walk
awayifthetwosidescouldnotagree.
“Pandora’s box has already been
opened in terms of the potential for mil-
itary conflict between Turkey and the
regime,”hesaid.

Syria. ivil warC


Idlib clashes strain Russia ties with Turkey


Putin caught between two


leaders who have boosted his


influence in the Middle East


Convoy:
displaced Syrian
children talk to
Turkish soldiers
on the highway
linking Idlib
to theborder
crossing with
Turkey on
Monday
AarefWatad/AFP/Getty

J O S E P H C OT T E R I L L— J O H A N N E S B U R G


South Africa has entered its second
recession in two years after rolling
powerblackoutsstalledPresidentCyril
Ramaphosa’seffortstorevivegrowth.


The economy contracted 1.4 per cent in
the fourth quarter of 2019, according to
official statistics releasedyesterday,
far outpacing analyst forecasts of a
0.2percentdecline.
The contraction came after a 0.8 per
centdropineconomicoutputinthepre-
vious quarter, leading to a second reces-
sion — defined as two quarters
of negative growth — since 2018. The
slowdown was felt across the economy
with most sectors recording falls in out-
put,saidthestatestatisticsagency.
The rapid return to recession will pile
pressure on Mr Ramaphosa, whose
pledge of a “new dawn” for an economy
beset by corruption has flagged since he
becamepresidenttwoyearsago.
The presidenthas faced fierce resist-
ance in the ruling African National Con-
gress to his plans to overhaul state-
owned companies, not leastEskom, the
brokenstatepowermonopoly.
Eskomhadtheworstgenerationcrisis


in its history in December when ageing
power plants failed, and blackouts left
mines, factories and shopping centres
withoutpowerforhoursatatime.
Overall he economy grew onlyt
0.2 per cent in 2019, the lowest rate in a
decade and far below the annual rate of
population increase.Growth per capita
hasfallenforthepastfiveyears.
“On a full year basis, it signals the
weakesteconomicgrowthseensincethe
global financial crisis, and this is even
before the hit to growth from the coro-
navirus slowdown globally,” said Razia
Khan, chief economist for Africa and

the Middle East at Standard Chartered.
The South African Reserve Bank has
warned that growth will remain as low
as 1 per cent a year as long as Eskom’s
problems persist. The central bank has
forecast0.4percentgrowththisyear.
Mr Ramaphosa was unsparing in his
comments about the power problems.
“Effortsoverthepasttwoyearstorevive
the economy and rebuild institutions
have been undermined by the electric-
ity crisis, further constraining growth
and placing an additional burden on
publicfinances,”hesaidthisweek.
Thestagnanteconomyandaresulting
drop in revenue collection have left
state coffers in their weakest position
sincethestartofANCrulein1994.
Tito Mboweni, finance minister, said
last week that Pretoriawould cut civil
service pay increases to keep debt levels
under control, setting Mr Ramaphosa’s
government on a collision course with
thepowerfultradeunions.
Mr Ramaphosa has said the attempt
to curb wage bill growth but avoid
steeper spending cuts was a “deliberate
decision not to pursue a path of auster-
ity”, which, he said, would have done
furtherdamagetotheeconomy.

Economy


South Africa tumbles back into recession


Power failure: Eskom has been beset
by generator breakdowns

D O N W E I N L A N D— B E I J I N G

The US justice department has charged
two Chinese nationals with laundering
more than $100m worth of virtual cur-
rency connected to a North Korean
hackingoperation.

The indictment is the first of its kind in
the US government’s fight to stop Kim
Jong Unfrom raising billions of dollars
through cyber attacks sed to fundu
NorthKorea’sweaponsprogrammes.
Justice department documents
released late on Monday said North
Korean co-conspirators stole about
$250m in 2018 by hacking a cryptocur-
rency exchange. Those funds were then
laundered via hundreds of transactions
meant to disguise the origins of the vir-
tualcurrencies.
Between the end of 2017 and April
2019,ChinesenationalsTianYinyinand
LiJiadongtookpartinthescheme,laun-
dering more than $100m using 113 vir-
tual currency accounts and addresses,
accordingtothejusticedepartment.
“Today, we are publicly exposing a
criminal network’s valuable support to
North Korea’s cyber heist programme
and seizing the fruits of its crimes,” said

John C Demers, assistant attorney-gen-
eralatthejusticedepartment’sNational
SecurityDivision.
The US Treasury department also
sanctioned the Chinese nationals for
assistingLazarusGroup,aNorthKorean
state-sponsored cyber group that has
alreadybeensanctionedbytheUS.
The individuals are not in US custody.

Lazarus Group was linked to the hack-
ing of India’s Kudankulam nuclear
powerplantinOctoberlastyear.
In recent years, Mr Kim’s regime has
been accused of deployingthousands of
hackers that bring in hundreds of mil-
lions of dollars annually through illicit
cyber ctivities. The revenues deriveda
by these operations are believed to pro-
vide core funding for developing weap-
onsintheisolatedStaliniststate.
The UN said last year that North
Korean agents had stolen about $2bn

from banks and cryptocurrency
exchanges, some of which is believed to
fundanuclearweaponsprogramme.
Hackingcryptocurrency exchanges
has presented a new degree of difficulty
for authoritiesworldwide because the
exchanges are lightly regulated in some
jurisdictions and transactions in digital
assetsareoftenanonymous.
Brian A Benczkowski, assistant attor-
ney-general, noted in a statement that
the actions highlighted the justice
department’s ability to “pierce the veil
of anonymity provided by cryptocur-
renciestoholdcriminalsaccountable”.
The documents from the justice
department reveal a high degree of
sophistication in the efforts to launder
stolen funds. Prepaid Apple iTunes gift
cards andChinese bank accounts were
usedbytheChinesenationalstolaunder
thefunds,thedocumentsclaimed.
Mr Tian transferred about $1.4m
worth of bitcoin into prepaid Apple gift
cards, according to the treasury depart-
ment;$34m was transferred to Chinese
banks.Several Chinese financial institu-
tions have beentargeted by US authori-
ties orf alleged connections to North
Koreanbusinessactivities.

Cryptocurrency laundering


Chinese nationals charged over N Korea hack


The revenues derivedare


believed to provide core
funding for developing

weapons in the North


MARCH 4 2020 Section:World Time: 3/20203/ - 17:47 User:david.owen Page Name:WORLD3 USA, Part,Page,Edition:USA, 4, 1

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