The Overflow for July 29th

International News

"Not Directed Against Third Parties"

China and Russia will hold "routine" naval exercises in the South China Sea in September, China's Defence Ministry said on Thursday, adding that the drills were aimed at strengthening their cooperation and were not aimed at any other country. The exercises come at a time of heightened tension after an arbitration court in The Hague ruled this month that China did not have historic rights to the South China Sea and criticised its environmental destruction there. China rejected the ruling and refused to participate in the case.

"This is a routine exercise between the two armed forces, aimed at strengthening the developing China-Russia strategic cooperative partnership," China's defence ministry spokesman Yang Yujun told a news conference. "The exercise is not directed against third parties."

China and Russia are veto-wielding members of the U.N. Security Council, and have held similar views on many major issues such as the crisis in Syria, putting them at odds with the United States and Western Europe.

Last year, they held joint military drills in the Sea of Japan and the Mediterranean.

China has recently taken part in US-led multinational naval drills in the Pacific and a US defence official said he did not expect the China-Russia exercises to affect US military activity or behaviour in the South China Sea. “We're not concerned about the safety of US vessels in the region as long as interactions with the Chinese remain safe and professional, which has been the case in most cases,” the official said.

China has laid claim to most of the South China Sea, through which more than $5 trillion of trade moves annually. Brunei, Malaysia, the Philippines, Taiwan and Vietnam have rival claims.


Germany of High Alert

German police have searched a mosque and eight apartments in Hildesheim that are believed to be a hotbed of a radical Salafist community, the interior minister of Lower Saxony said on Thursday. Germany is on high alert after a spate of attacks since July 18th which has left 15 people dead - including four attackers - and dozens injured. Two assailants, a Syrian asylum seeker and a refugee from either Pakistan or Afghanistan, had links to Islamist militancy.

Interior Minister Boris Pistorius said in a statement that up to 400 police - including mobile squads and a special forces police commando - were involved in the raids on Wednesday in the Hildesheim area, which is just south of Hanover.

"The German-speaking Islamic circle in Hildesheim is a nationwide hot-spot of the radical Salafist scene that Lower Saxony security authorities have been monitoring for a long time," the state official said. Pistorius said the search followed months of planning and was an important step toward banning the association, which security authorities say has radicalised Muslims and encouraged them to take part in jihad in combat zones.

Germany has seen sharp increases in the number of ultra-conservative Islamists known as Salafists in recent years, with the total number of sympathisers now seen at 8,900, up from 7,000 at the end of 2014, German officials have said.


Islamic State Oil Fields

Islamic State, pushed off more than half the Iraqi territory it seized in 2014, has suffered a near collapse in revenue from oil smuggling, forcing it to cut fighters' pay, levy new taxes and raise fines for breaking its religious code. The group has lost control of a series of oil fields, and is having to sell what production that remains at steep discounts to persuade truck drivers to collect it and run the gauntlet of US-led air strikes.

Alongside taxes, ransoms and antiquities trading, oil has been a major fundraiser for Islamic State operations. At one point it made millions of dollars a month in sales to neighbouring Syria and Iran, or to makeshift local refineries.

However, advances by Iraqi government and Kurdish forces plus Shi'ite Muslim militias have left the militants with partial access to just two of the five Iraqi oilfields they once controlled. This has cut smuggling by at least 90%, according to security and municipal officials.

Islamic State used to sell at least 50 tanker truckloads a day from Qayara and Najma oilfields, south of the group's Mosul stronghold. This crude was mostly shipped to Syria to barter for automobile fuel, said Mosul provincial councilman Abdul Rahman al-Wagga, who moved to the Kurdish capital Erbil after the fall of Mosul. "Now with Iraqi forces getting closer and stepping up air strikes, Daesh can hardly sell five small tankers," he said.

Precise figures on how much Islamic State raises from oil are hard to come by. Luay Al-Khatteeb, executive director of the Iraq Energy Institute who has done extensive research into Islamic State's oil smuggling, said revenues fluctuated even during their peak in the second half of 2014 when "on its best days" the group made nearly $700,000 a day from Iraqi fields. In May, the United States estimated its revenue had been roughly halved to $250 million a year from the territory it controls in Iraq and Syria. While the militants have suffered further losses since then in Iraq, they still control several oil fields in eastern Syria, where U.S.-backed rebels have had less success in ejecting them.

Islamic State took the Iraqi oilfields, with a total capacity of nearly 60,000 barrels per day, when they swept through the north and west two years ago. This prompted the air strikes from the US-led coalition which have targeted financial infrastructure as well as fighters and leaders.

Khatteeb's estimates are at the conservative end of the range. Security officials and an oil ministry adviser say Islamic State's revenue fell by $1 million a day in April 2015 alone when it lost the Ajil and Himreen oilfields near the city of Tikrit, which lies about 100 miles north of Baghdad.

Now Iraqi forces pushing towards Mosul for a planned year-end offensive are close enough to Qayara and Najma fields, about 40 miles south of the city, to reduce their operations substantially, said security and local officials.

The danger smugglers face from coalition air strikes to collect the oil has forced Islamic State to slash prices. "Daesh is luring local traders in Mosul to buy its crude from Qayara and Najma by cutting the price from $6,000 per tanker to just $2,000," said Wagga.

UK News

Labour Leadership, In Two Parts

Part One: Owen Smith

Owen Smith, who is seeking to take become leader of Britain's Labour Party has proposed a wealth tax on the country's highest earners as part of what he cast as a "socialist revolution" to woo Labour supporters. Smith is seeking to replace socialist Jeremy Corbyn as Labour leader, promising a public spending spree funded by £200 billion of extra borrowing and taxes on business that would net £13.5 billion a year.

Labour has been locked in a bitter power struggle since the vote to leave the European Union, with critics of Corbyn saying he did not work hard enough to persuade the party's voters to back remaining in the bloc.

Smith, who has said Britons should vote again on leaving the EU once a Brexit deal is decided, is running against Corbyn in a leadership contest triggered by Labour lawmakers who said they had lost confidence in Corbyn's ability to lead the party and win an election.

Smith's proposals include reversing cuts to corporation tax and capital gains tax and bringing back the top rate of income tax of 50 pence on the pound. The money would be spent on ending a freeze on public sector pay and on a £12 billion boost to spending on the state-funded National Health Service. Smith also proposed a 15% tax on the investment earnings of anyone with a salary of more than £150,000 a year. Such a tax would be applied to share dividends and buy-to-let property.


Part Two: Jeremy Corbyn

British opposition Labour Party leader Jeremy Corbyn does not need to be nominated by his lawmakers to run in a leadership contest triggered by a challenge from one of his colleagues, a judge ruled on Thursday. Labour is locked in a bitter internal fight over its future and Corbyn, whose party has overwhelmingly backed a vote of no confidence in him, is campaigning to keep the job he was elected to last year with strong grassroots support.

A decision by the party's National Executive Committee (NEC) this month that Corbyn could automatically be on the ballot paper for the contest without having to seek nominations from lawmakers had been challenged in court by Labour donor Michael Foster. If he had been forced to seek nominations from Labour members of parliament, Corbyn would likely not have won enough support to get on the ballot paper.

"The Judge accepted that the decision of the NEC was correct and that Mr Corbyn was entitled to be a candidate in the forthcoming election without the need for nominations," the judgment said.

Long Read

With the Rio de Janeiro games a week away, it's fascinating to look back on Olympics of years past to examine the effects on the host cities. In 1976, Montreal was rushing to finish their Olympic Park construction as the countries' teams approached the stadium for the opening ceremony. This Guardian piece discusses how Montreal was plagued with staggering debt from the games that, compounded by political instability in the 70s and 80s, the city only barely managed to survive.

I have been a sentient being, a thinking animal, on this beautiful planet, and that in itself has been an enormous privilege and adventure.
— Oliver Sacks