Donald Trump and the death of the two-state solution

The demise of the two-state has been evident for some time.

The strange double act of Benjamin Netanyahu and his poodle has marked the official burial of the two-state solution, writes Shlaim [Reuters]

by

Avi Shlaim

-24 FEBRUARY 2017

Avi Shlaim is an emeritus professor of international relations at Oxford University.

At his meeting with the US President Donald Trump at the White House on February 15, Israeli Prime Minister Benjamin Netanyahu scored what in his eyes must be a spectacular diplomatic success: he got the new president to reverse the US' long-standing support for a two-state solution to the Israeli-
Palestinian conflict and to give him a free hand to do more or less whatever he likes with the West Bank.

The major stumbling block to a two-state solution is the illegal Zionist colonial project on the West Bank. The Obama administration repeatedly tried and failed to secure an Israeli settlement freeze.

By abstaining in the United Nations Security Council vote on December 23 last year, it made possible the passage of a landmark resolution. UNSC Resolution 2334 condemned the settlements as a flagrant violation of international law and a major impediment to the achievement of a two-state solution. For the first time since 1967, Israel came under concerted international pressure, which included the US, to curb settlement expansion.

US no longer as part of the solution

WATCH - Trump drops US commitment to Israel-Palestine two-state solution (2:23)

The election of Donald Trump let Israel off the hook. He was pro-Israel and pro-settlements and he campaigned on a promise to move the US embassy from Tel Aviv to Jerusalem.

President-elect Trump tweeted his opposition to the Security Council resolution and promised that things will change after January 20. Netanyahu conveyed to the president-elect and his team his opposition to a Palestinian state well in advance of inauguration.

He also assured his hawkish ministers at home that he would make it clear to Trump that all he is willing to concede to the Palestinians is a "state minus", suggesting a level of autonomy well short of statehood.

At the press conference with Netanyahu, Trump denounced what he regarded as unfair and one-sided action against Israel at the UN and indicated that he would not hesitate to use the veto to protect the US' junior ally.

His other comments were practically identical to the Israeli government's talking points: Trump criticised the Palestinians for their alleged incitement of their children to hate Israelis, he urged the Palestinians to recognise Israel as a Jewish state, and he stressed that it is the parties themselves who must work out the peace deal.

This ignored the staggering asymmetry of power between the parties which precludes a voluntary agreement: Israel is too strong and the Palestinians are too weak. Hence the need for a third party to redress the balance.

The question today is no longer one state or two states but the protection of basic Palestinian rights, both individual human rights and the collective right to national self-determination.

When pressed by a journalist on the subject of the two-state solution, Trump said: "I'm looking at two-state and one-state and I like the one that both parties like. I'm very happy with the one that both parties like".

Referring to the Israeli prime minister by his nickname, he added: "I can live with either one. I thought for a while it looked like the two-state, looked like it may be the easier of the two, but honestly if Bibi and the Palestinians, if Israel and the Palestinians are happy, I'm happy with the one they like the best".

Trump might as well have said to the man standing alongside him: "Yes Sir, no Sir, three bags full Sir". 

His body language reinforced the impression of not just deference but subservience and obsequiousness towards his guest.

Nonetheless, the president's poor English and his confused and contradictory message must not conceal the bombshell he dropped: the US would no longer insist on a Palestinian state as part of the solution to the Israeli-Palestinian conflict.

Defiant Netanyahu

Explainer: Israel-Palestine conflict, the two-state solution (1:36)

The same question about the two-state solution was addressed to the prime minister. Netanyahu has a long history of duplicity on the subject: when it suits him he pays lip service to the idea of a Palestinian state while working assiduously to make it impossible.

Just before the 2015 elections he finally removed all ambiguity by stating that there will be no Palestinian state on his watch. His answer to the question at the press conference was vintage Netanyahu: "Rather than deal with labels, I want to deal with substance", he said evasively.

He then went on to stipulate his two "prerequisites" for a peace settlement: the Palestinians must recognise Israel as a Jewish state, and "Israel must retain overriding security control over the entire area west of the Jordan River".

Presumably, this is what Netanyahu meant by a "state minus". What this amounts to is a collection of enclaves with no territorial contiguity, no sovereignty, no capital city in Jerusalem, and no armed forces, in short, Bantustans.

INTERACTIVE: Will the American embassy move to Jerusalem?

Not even the most moderate of Palestinian politicians would accept a peace deal on such humiliating terms and Netanyahu knows it. Trump who accused the UN of one-sidedness could not have been more one-sided himself.

In this respect the strange double act of the prime minister and his poodle may be said to have marked the official burial of the two-state solution.

OPINION: US and Israel join forces to bury Palestinian statehood

In truth, the demise of the two-state has been evident for some time. Netanyahu's far-right coalition government is packed with expansionists and outright annexationists who recognise only Jewish rights in what they call Judea and Samaria or the Land of Israel.

American presidents in the past three decades have talked a great deal about the two-state solution but have done virtually nothing to implement it. As the American expression goes, they have talked the talk but not walked the walk.

Back to basics

Inside Story - What happens to global support for two-state solution? (25:30)

The question today is no longer one state or two states but the protection of basic Palestinian rights, both individual human rights and the collective right to national self-determination.

Sadly, the Palestinians are handicapped by weak leadership and by the internal rivalry between Fatah and Hamas. Israel's occupation of the Palestinian lands is now its 50th year and the pressure on Netanyahu from his right-wing coalition partners to annex the main settlement blocs is growing all the time.

American leverage to halt this creeping annexation of the West Bank has virtually vanished under the new administration. The Security Council made a valiant effort to curb Israel's settler-colonialism but this effort is now imperilled by the American veto on the Security Council.

Western governments as a whole have been either unable or unwilling to hold Israel to account for its persistent violations of international law or for its systematic abuse of Palestinian human rights.

OPINION: Don't blame Trump for tiring of the two-state solution

The abuse takes countless forms: a discriminatory legal system, settlers-only roads, home demolitions, arbitrary arrests, torture, the mistreatment of children for stone-throwing, the blockade over the Gaza Strip and daily humiliation of the non-Jewish inhabitants of the West Bank at over 500 checkpoints.

Justice for the Palestinians can therefore only come from the efforts of civil society. Here the signs for a change are quite encouraging. Boycott, Divestment, Sanctions (BDS), the global grassroots movement in support of Palestinian rights is steadily growing in both size and impact. BDS upholds the simple principle that Palestinians are entitled to the same rights as the rest of humanity.

In a world that is moving away from nation-states and national borders to universal rights, the message of BDS is ever more relevant. Inspired by the South African anti-apartheid movement, it is fighting to end Israeli apartheid. And it represents the best hope the Palestinians have for a better future.

Avi Shlaim is an emeritus professor of international relations at Oxford University and the author of The Iron Wall: Israel and the Arab World. 

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.

Trump to propose 10 percent spike in defense spending, major cuts to other agencies

President Donald Trump on Feb. 27 said he would propose a budget that would ramp up spending on defense, but seek savings elsewhere to pay for it. "We're going to do more with less and make the government lean and accountable," Trump said in a meeting with governors. (Reuters)

By Abby Phillip and Kelsey Snell February 27 at 3:26 PM

President Trump will propose a federal budget that would significantly increase defense-related spending by $54 billion while cutting other federal agencies by the same amount, an administration official said.

The proposal represents a major increase in federal spending related to national security, while other priorities, especially foreign aid, would face massive reductions.

According to the White House, the defense budget would increase by 10 percent. Trump also will request $30 billion in supplementary military spending for fiscal 2017, an administration official said.

But without providing specifics, the administration said that most other discretionary spending programs would be cut to pay for it. Officials singled out foreign aid, one of the smallest parts of the federal budget, saying it would face “large reductions” in spending.

[Budget breakdown: What the Obama White House wants to spend money on]

 Saying they need more information before they can offer specifics, Feb. 27, Senate Minority Leader Chuck Schumer (D-N.Y.) and House Minority Leader Nancy Pelosi (D-Calif.) slammed President Trump's plans to propose a federal budget that cuts funding to almost all federal agencies, aside from the military. (Reuters)

It is the first indication of spending priorities by the new administration, with the president set to arrive on Capitol Hill on Tuesday night for a speech to a joint session of Congress. But the full budget negotiations between Trump and Congress will not be complete for many months.

In a statement at the White House on Monday morning, Trump said that his budget would put “America first” by focusing on defense, law enforcement and veterans using money previously spent abroad.

“We are going to do more with less and make the government lean and accountable to the people,” he said. “We can do so much more with the money we spend.”

[Analysis: The U.S. foreign-aid budget, visualized]

The White House did not specify how Trump’s budget would address mandatory spending or taxes, promising that those details would come later. The vast majority of federal spending comes from programs Trump can’t touch with his budget. Social Security costs totaled about $910 billion last year, and Medicare outpaced defense spending with a total cost of $588 billion. Medicaid, interest payments on debt and miscellaneous costs made up an additional $1.2 trillion.

White House officials declined to answer questions about the president’s priorities on a host of other fiscal issues, including infrastructure improvements and plans to pay for a wall between the United States and Mexico. Mick Mulvaney, director of the Office of Management and Budget (OMB), emphasized that the priorities outlined Monday do not reflect policy on broader fiscal issues, which he said will be addressed later.

“We are taking his words and turning them into policies and dollars,” Mulvaney told reporters. “A full budget will contain the entire spectrum of what the president has proposed.”

Speaking to conservative activists, Feb. 24, President Trump outlined his plans for tax reform, regulatory rollback and strengthening the U.S. military. (Photo: Ricky Carioti/Reuters)

Defense spending accounts for almost the same proportion of the federal budget as all non-discretionary domestic spending, meaning that the Trump administration’s proposal will result in a roughly 10 percent across-the-board cut in all other federal spending programs.

Budgets for most federal agencies would be reduced substantially, said an OMB official, who spoke on the condition of anonymity on a call with reporters to discuss the proposal.

The announcement marks the beginning of a process in which the OMB will coordinate with agencies to flesh out the plan.

Trump said his budget, which will be submitted to Congress next month, will propose “historic” increases in spending to bolster the country’s “depleted military,” and he said it will support law enforcement in an effort to reduce crime.

[Trump team plans for infrastructure ‘task force’ to advance top spending priority]

Trump noted that the country faces an urgent infrastructure problem, which he promised during the campaign that he would address with a $1 trillion infrastructure spending plan. Although the administration has not yet outlined whether infrastructure will be part of Trump’s budget proposal, the president spoke about it at length before a gathering of governors at the White House on Monday.

“We’re going to make it easier for states to invest in infrastructure,” he said. “We spent $6 trillion in the Middle East, and we have potholes all over our highways and our roads.”

He added: “Infrastructure, we’re going to start spending on infrastructure — big.”

Republicans in Congress expect that the details released this week will be the first elements of a broader budget that will be rolled out next month. The Trump administration is expected to release a pared-down “skinny budget” the week of March 13 and a fuller list of requests by the end of March or early April, said multiple Republican congressional aides who spoke on the condition of anonymity to discuss the process.

Democrats have warned that under the current circumstances, Trump would be hard-pressed to make significant cuts to domestic programs without significantly reducing some government services. Senate Minority Leader Charles E. Schumer (D-N.Y.) said Monday that the scant details the Trump administration released probably would lead to cuts to widely used programs.

“A cut this steep almost certainly means cuts to agencies that protect consumers from Wall Street excess and protect clean air and water,” Schumer said.

House Minority Leader Nancy Pelosi (D-Calif.) added that deep reductions could have a major effect on programs that keep the American workforce competitive.

“A $54 billion cut will do far-reaching and long-lasting damage to our ability to meet the needs of the American people and win the jobs of the future,” she said in a statement. “The President is surrendering America’s leadership in innovation, education, science and clean energy.”

Individual agencies were expected to begin the customary process of sending budget requests for the upcoming fiscal year to the White House beginning Monday, the aides said. The OMB will then begin drafting an official request for fiscal 2018 and submit it to Congress in the coming weeks.

Congress typically does not agree with the White House budget in full, even when the president and congressional leaders represent the same party. Republican leaders have not yet said when they will release their budget blueprint for the fiscal year that starts Oct. 1.

House Speaker Paul D. Ryan (Wis.) told members at a GOP retreat in Philadelphia in January that he expects to act by July on a 2018 budget proposal that will lay out major spending cuts and begin the process of rewriting the tax code.

Philip Rucker and Ana Swanson contributed to this report.

Sources: U.S. considers quitting U.N. Human Rights Council

A final decision on membership in the council would likely involve U.S. ambassador to the United Nations, Nikki Haley, Secretary of State Rex Tillerson and President Donald Trump. | AP Photo

The body has been accused of unfairly targeting Israel, and Trump aides are questioning its usefulness.

By NAHAL TOOSI and ELIANA JOHNSON

02/25/17 08:52 PM EST

The Trump administration is considering pulling the United States out of the United Nations Human Rights Council, a body that has been accused of being biased against Israel and criticized for including abusive governments, according to two sources in regular contact with former and current U.S. officials.

No immediate withdrawal is expected ahead of the council’s next session, which starts Monday, but discussion of abandoning the council is likely to alarm international activists already worried that the United States will take a lower profile on global human rights issues under President Donald Trump.

A final decision on membership in the council would likely involve Secretary of State Rex Tillerson, as well as the U.S. ambassador to the United Nations, Nikki Haley, and of course the president himself.

A former State Department official briefed on the discussions said while the council's targeting of Israel is likely part of the debate, there also are questions about its roster of members and doubts about its usefulness overall.

Countries known for human rights abuses, such as China and Saudi Arabia, have managed to snag seats on the 47-member council.

"There’s been a series of requests coming from the secretary of state's office that suggests that he is questioning the value of the U.S. belonging to the Human Rights Council," the former official said.

In a recent meeting with mid-level State Department officials, Tillerson expressed skepticism about the council, which has a number of powers, including the ability to establish panels that probe alleged human rights abuses.

A spokesman for Haley did not immediately respond to a request for comment Saturday. White House press aides also did not immediately offer comment.

State Department spokesman Mark Toner did not address whether U.S. membership on the council was being reconsidered, but said, "Our delegation will be fully involved in the work of the HRC session which starts Monday."

The Human Rights Council was established in 2006. It replaced the U.N. Human Rights Commission, which had faced severe criticism because countries with poor rights records became members and prevented it from carrying out its mission to the fullest.

The Bush administration refused to join the new council, questioning whether it would be much different. But under President Barack Obama, the U.S. felt it was more useful to be part of the council and try to influence it from the inside, including by speaking out in support of Israel.

Still, supporters of Israel have accused the council of being overly focused on the Jewish-majority state, by pushing critical resolutions, for example.

Israel had a difficult relationship with the Obama administration, one that hit a new low late last year after Obama decided not to veto a U.N. Security Council resolution criticizing Israeli settlement construction.

Israeli Prime Minister Benjamin Netanyahu has made it clear he looks forward to working with Trump, while Haley also has been very public about America's plans to shield Israel from critics at the United Nations.

The Human Rights Council’s membership is laced with political symbolism. Last year, Russia lost its seat on the body after a vote by the U.N. General Assembly, apparently due to international fury over Moscow’s role in the Syrian conflict.

Allegations and Investigations and Polls, Oh Mon!

BY EMILY TAMKIN-FEBRUARY 27, 2017

Call it a February surprise.

French presidential elections are still two months away, but revelations and allegations are coming out as though it were Oct. 28 2016 all over again.

First, there are the new allegations against far-right candidate, Marine Le Pen. Le Pen dismissed charges that she had used European Parliament funds to pay for staff for her National Front Party. Nevertheless, following a day of questioning, her chief of staff, Catherine Griset, was put under investigation on Wednesday.

Then, on Monday, former National Front aid Gael Nofri said that, the party tried to use a fake European Parliament contract when he was recruited to work for Le Pen’s campaign team in 2012. This, if true, would have allowed Nofri to work for the National Front without the party declaring his salary as campaign spending — he would have shown up as a European Parliament employee.

Le Pen has said the allegations are politically motivated. She has also has said that, if elected, she will hold a referendum for the French to vote on whether they want to remain in the EU.

But Le Pen is not the only candidate fending off accusations. Center-right candidate François Fillon, accused of using roughly one million euros in French parliamentary funds to pay his wife and children for jobs they did not actually do, was put under official investigation on Friday.

Fillon had previously said he would drop out of the race if he was put under official investigation. Yet Fillon is not dropping out of the race.

Despite all this, French voters who do not want Le Pen, who is currently expected to make it into the second round of voting, are calm. Why? Because center-left, independent candidate Emmanuel Macron would beat Le Pen in the second round of voting according to polls.

If, after everything that happened in 2016, and all the twists and turns the French election has seen so far in 2017, the French still trust in polls — if that is indeed the case, it would perhaps be the most shocking revelation of all.

Photo credit: LIONEL BONAVENTURE/AFP/Getty Images

Indo-Sino Diplomacy: A dialogue without strategy

India should lighten its China baggage

by MK Bhadrakumar- Feb 27, 2017

( February 27, 2017, New Delhi, Sri Lanka Guardian) The India-China Strategic Dialogue held in Beijing last week was not productive. But Foreign Secretary S Jaishankar said in his statement not less than four times that his talks with Chinese officials were “useful”. Nuances are what make diplomacy an absorbing pastime.

The Chinese side assessed positively that the two sides “pledged to enhance cooperation… agreed to cement coordination on international and regional affairs and properly deal with differences and sensitive issues”. Foreign minister Wang Yi said the two sides should “advance strategic contact and reinforce mutual trust to contribute to regional and global prosperity and stability”. Significantly, state councillor Yang Jiechi received the Foreign Secretary.

The Foreign Secretary gave a more detailed media briefing. He sounded cautiously optimistic about a “more stable, substantive, forward-looking India-China relationship which would inject a greater amount of predictability into the international system”. He somewhat played down the differences over the issue of India’s membership of the NSG and the UN sanctions on Masood Azhar. On the other hand, he highlighted a separate session on Afghanistan and forcefully voiced our unhappiness over trade deficit.

The talks in Beijing might help India strategise a new approach to relations with China. The talks served a useful purpose if they provide stimulus to review our China policies. Time will tell. We are in an interregnum where the government’s approach toward China has reached a cul-de-sac. This happened largely because of Azhar and the CPEC. Both issues make demands on China’s crucial relationship with Pakistan and it is unrealistic to expect Beijing to accommodate us. We need to change tack. This needs some explaining.

Indian diplomats would know that the “blacklisting” of Azhar by the UN will bring India no tangible gains. Nonetheless, we made Azhar’s blacklisting a litmus test of China’s credentials in the fight against global terrorism. This approach was incomprehensible.

The Foreign Secretary flagged after the talks that Azhar issue is now “really being pursued by other countries, not India alone” and that those other countries are “pressing this application” to include the fugitive Pakistani criminal on the UN’s blacklist. Indian newspapers reported recently that these “other countries” are three veto-holding permanent members of the UN Security Council — the US, Britain and France.

If this is really so, it makes wonderful news. We have a window of opportunity here to remove Azhar from the litany of irritants in the bilateral India-China discourse. We should now simply lead from the rear the forthcoming charge of the three P-5 powers on Azhar. This sounds funny, but then, this is also the theatre of the absurd. If Azhar has de facto graduated as a figure in the pantheon of global terrorists, being an issue affecting international security, the onus is henceforth on the big powers — in particular, US President Donald Trump, the scourge of terrorists the world over — to circumscribe Azhar’s activities.

The big powers recently removed Gulbuddin Hekmatyar, “Butcher of Kabul”, from the UN’s watch list. The US took the initiative to add Gulbuddin to the UN list 15 years ago, and now in its wisdom sought to set him free so that he returns to mainstream politics in his country and, some say, contests the next Afghan presidential election. Azhar, perhaps, can take Hekmatyar’s slot.

Indeed, India’s war on terrorism has a surreal touch. This war cannot be fought at the UN or by tilting at China. It is to be fought long and hard on the ground. We managed to get Pakistani terrorists embargoed previously too, did it help?

However, the CPEC is an altogether different matter. China will not have second thoughts on it. Around $12 billion has been reportedly disbursed. It is not only the flagship of One-Belt One-Road, an initiative that carries the imprimatur of President Xi, but is also a key template of China’s global strategies. It absorbs China’s surplus industrial capacities, while also strengthening China’s political bonding with Pakistan and provides a gateway to the world market.

China hopes that India would cooperate with the OBOR. While in Beijing, the Foreign Secretary disclosed that China had invited PM Modi to participate in the OBOR summit in May. The invitation is under consideration. But the Foreign Secretary added tauntingly that Beijing must explain how Modi could possibly attend the summit so long as China “violated” India’s sovereignty over POK and Gilgit-Baltistan.

How real is this business of India’s “territorial sovereignty”? A good way of knowing will be by consulting Japanese PM Shinzo Abe. Japan and Russia, World War II “enemies” (like India and Pakistan), have still not concluded a peace treaty, because they cannot find a solution to the dispute over Kuril Islands, which Russia seized in the last phase of the war and is controlling. Abe calculated that Russia’s keenness to attract Japanese investments and technology for the development of backward regions of Siberia and Russian Far East could be the carrot he should dangle in front of Moscow.

If Abe had an Indian mindset, he’d have vented his frustration by teaming up with the Obama administration’s containment strategy against Russia. He would have made Kuril an issue of “territorial sovereignty”. Instead, Abe reasoned out that although political rule is territorial, territoriality does not necessarily entail the practices of total mutual exclusion. Abe is open to considering the issue in the regional setting in the context of the volatility of the world economy and the emergence of political currents outside the framework of territorial states. Meanwhile, Abe also understands that Russia may not ever hand back the Kuriles. Therefore, as a far-sighted statesman, he believes he owes it to his people not to fall into the “territorial trap” but be realistic.

Thus, Abe announced in Tokyo on February 1 that Japan and Russia will carry out joint economic activities at the four Kuril Islands. “Through this activity, we will be able to strengthen mutual understanding and trust, and it will be a great advantage in our path toward signing a peace treaty,” he explained. Chanakya would have commended Abe on his empirical knowledge.

The emerging spatial form over the Kuril makes a timely case study for our Chanakyas in South Block, as it may help cut the Gordian knot of the CPEC so that Modi participates in the OBOR summit and opens a productive chapter in the Sino-Indian partnership.

The writer is a former diplomat

India firms fear lingering economic aftershocks from cash crackdown

FILE PHOTO: A cashier displays the new 2000 Indian rupee banknotes inside a bank in Jammu, November 15, 2016. REUTERS/Mukesh Gupta/File photo

By Rajesh Kumar Singh | GHAZIABAD, INDIA- Mon Feb 27, 2017

Struggling with customers unable to pay on time and plummeting sales, Indian small-business owner Ravi Jain fears the government's crackdown on cash will have a much larger impact than predicted by top policymakers.

Jain's bath taps manufacturing firm Supreme, along with many other Indian businesses, has been shaken by New Delhi's shock decision last November to scrap 86 percent of the cash in circulation. And it wasn't certain when things will get back to normal as much depends on a revival in consumer spending.

"Demonetisation has developed a psychology among customers to spend only on essential items," Jain told Reuters from his factory on the outskirts of the Indian capital.

"We expect the cash situation to become normal in a couple of months, but we don't know when this psychology will change."

Asia's third-largest economy is tipped to slow down to a near three-year low in the October-December period, losing the title of the world's fastest-growing major economy to China.

The median estimate from a Reuters poll showed economists expect economic growth to slip to 6.4 percent in the last quarter, lower than China's 6.8 percent in the same period and slower than a 7.3 percent annual expansion in the September quarter.

The data is due on Tuesday at 1200 GMT.

TEMPORARY PAIN

Prime Minister Narendra Modi's currency ban, aimed at fighting tax evasion, corruption and forgery, had caused huge disruption to daily life, leaving farmers, traders and companies - reliant on cash transactions - in disarray.

Chief Economic Adviser Arvind Subramanian last month said the official GDP figures may not fully reflect the "real and significant hardships" experienced by the informal sector, in which an estimated nine out of 10 Indian workers are employed.

But the pain, policymakers promised, will be short-lived.

The Reserve Bank of India (RBI) has called the slowdown a transitory phenomenon and expects a sharp rebound in economic growth in the next fiscal year as cash conditions improve.

That confidence prompted the central bank to keep interest rates on hold this month and shift its monetary policy stance to "neutral" from "accommodative", signalling the end of the monetary-easing cycle.

To be sure, the cash situation is improving gradually.

Currency in circulation increased to 7.2 percent of GDP in mid-February from 5.9 percent in early January, the central bank data showed. But it was lower than the 12 percent ratio before the cash crackdown began.

With the cash situation still not back to normal and weak consumer confidence, many economists predict the aftershocks of Modi's move will linger for months.

FALTERING CONFIDENCE

Consumer confidence has fallen sharply with households uncertain about their income, employment and spending capability, according to RBI's consumer confidence survey published earlier this month.

In rural India, the situation is no better. Sales of two- wheeler vehicles, a proxy for rural demand, fell for a third straight month in January.

Leading consumer goods firm Dabur India, with exposure to rural India, slashed its revenue growth guidance last month, citing the demonetisation fallout.

Indian companies had hoped for a fiscal stimulus to revive consumer spending, but the federal budget this month belied those hopes.

With factories running nearly 30 percent below capacity, companies were not ready for fresh investments until demand roars back to life.

"We have seen extreme volatility in the market," Jain said about his company Supreme, whose sales have improved slightly since dropping as much as 50 percent after Modi's November announcement.

"Once things stabilize ... we will think in terms of expansion. But it would be reasonable to assume that all this will take at least a year."

(Reporting by Rajesh Kumar Singh; Editing by Randy Fabi)

NGO rescues off Libya encourage traffickers, says EU borders chief

Head of Frontex calls for rescue operations in Med to be re-evaluated and says NGOs work ineffectively with security agencies

 People trying to cross the Mediterranean are rescued by a Maltese NGO and the Italian Red Cross off the Libyan coast. Photograph: Andreas Solaro/AFP/Getty Images

Patrick Wintour Diplomatic editor-Monday 27 February 2017

NGOs who rescue people in the sea off Libya are encouraging traffickers who profit from dangerous Mediterranean crossings, the head of the EU border agency Frontex has said.

Speaking to Germany’s Die Welt newspaper, Fabrice Leggeri called for rescue operations to be re-evaluated and accused NGOs of ineffectively cooperating with security agencies against human traffickers.

The comments provoked a bitter row with charities and leftwing groups, who said there was no evidence of a lack of cooperation and that the alternative to rescue operations was to leave people to their deaths.

Leggeri said 40% of recent rescue operations at sea off the north African country were carried out by non-government organisations, making it impossible to check the origins of the migrants or their smuggling routes if the NGOs did not cooperate.

Luise Amtsberg, spokeswoman on refugees for the Greens in the German parliament, denounced Leggeri’s comments. “The number of dead would be much higher without the tireless commitment of non-governmental organisations so we are indebted to these organisations,” she said.

In his interview, Leggeri said that under maritime law everyone at sea had a duty to rescue vessels and people in distress. “But we must avoid supporting the business of criminal networks and traffickers in Libya through European vessels picking up migrants ever closer to the Libyan coast.

“This leads traffickers to force even more migrants on to unseaworthy boats with insufficient water and fuel than in previous years.”

He also claimed some NGOs cooperated poorly with EU security agencies, which “makes it more difficult ... to gain information on trafficking networks through interviews with migrants and to open police investigations”.

MSF labelled the charges “extremely serious and damaging” and said its humanitarian action was not “the cause but a response” to the crisis.

Aurélie Ponthieu, the humanitarian adviser on displacement at Médecins Sans Frontières, said its only purpose was to save lives.

“It is very disturbing that we are hearing these criticisms from Frontex via the media when they will not meet with us,” she said. “We have asked for a meeting to respond to these criticisms and there is no reply.

“What is the alternative but to let even more people die? We are not encouraging the smugglers, but it is not our job to act as a law enforcement agency … [and] not our job to cooperate with law enforcement agencies about the smugglers.

“We are a humanitarian agency, and we carry out proactive search and rescue operations because the alternative is that hundreds of people will die from drowning, asphyxiation and dehydration. If we just wait 60 miles out to sea for boats that may pass by chance, rather than going to the areas where the smugglers are operating, there will be many more deaths.”

The UN has said nightmarish conditions in Libya were helping drive a surge in the numbers of migrants attempting to reach Italy in the depths of winter.

European efforts to close the route are also thought to be behind a 30-40% increase in the number of mainly African migrants who have landed at Italian ports in the first two months of this year, compared with the same period in 2015 and 2016.

More than 2,700 people have been rescued in recent days, including a newborn delivered on a Norwegian police vessel, lifting the total arrivals for January and February above 12,000.

Also speaking to Die Welt, the new president of the European parliament, Antonio Tajani, proposed the EU should set up reception centres for asylum seekers in Libya, taking over the role currently played by smugglers and the state.

Tajani warned that unless Europe acted now 20 million African people would come to Europe over the next few years.

The proposed Libyan detention centres should not become “concentration camps” but should have adequate equipment to ensure refugees live in dignified conditions with access to sufficient medical care, Tajani added.

Conditions in more than 30 existing detention centres, both those run illegally by smugglers and by militias nominally on behalf of the Libyan ministry of justice, violate human rights, the EU has said.

A leaked report from the EU external action service describes Libyan border management as “in a state of complete disarray and unable to combat smuggling”, adding smuggling is “a low-risk, high-value” source of income for organised crime.

Echoing the report, Leggeri added: “There is no stable state. At present, we have virtually no contact at the operational level in order to promote effective border protection. We are now helping to train 60 officers of a possibly future Libyan coastguard. But this is at most a beginning.”

He said work to train a Libyan coastguard to operate inside Libyan waters had only just begun. Overseas vessels are forbidden from operating in Libyan waters, and cannot send back refugees rescued in international waters.

World's most threatening superbugs ranked in new list

By Michelle Roberts-27 February 2017

The World Health Organization has drawn up a list of the drug-resistant bacteria that pose the biggest threat to human health.

Top of the list are gram-negative bugs, such as E. coli, which can cause lethal bloodstream infections and pneumonia in frail hospital patients.

The list will be discussed ahead of this summer's G20 meeting in Germany.

The aim is to focus the minds of governments on finding new antibiotics to fight hard-to-treat infections.

Experts have repeatedly warned that we are on the cusp of a "post-antibiotic era", where some infections will be untreatable with existing drugs.

Common infections could then spread and kill.

Dr Marie-Paule Kieny from the WHO said antibiotic resistance was reaching "alarming proportions" and yet the drug pipeline was "practically dry".

"We are fast running out of treatment options. If we leave it to market forces alone, the new antibiotics we most urgently need are not going to be developed in time."

The WHO says there is a danger that pharmaceutical companies will develop only treatments that are easier and more profitable to make - the low-hanging fruit.

The focus should be on clinical need instead, says the WHO.

Tuberculosis was not included on the list because the search for new treatments for this infection is already being prioritised.

Experts drew up the list by looking at the current level of drug resistance, global death rates, prevalence of the infections in communities and the burden the diseases cause on health systems.

One of the infections at the top is a bacterium called Klebsiella that has recently developed resistance to a powerful class of antibiotics called carbapenems.

The US recently reported the fatal case of a woman who caught this infection which could not be treated with any of 26 different antibiotics available to her doctors.

The list:

CRITICAL

• Acinetobacter baumannii (carbapenem-resistant) - can cause serious chest and blood infections
• Pseudomonas aeruginosa (carbapenem-resistant) - can cause serious chest and blood infections
• Enterobacteriaceae, including Klebsiella, E. coli, Serratia, and Proteus (carbapenem-resistant, ESBL-producing strains) - can cause serious chest, blood and urine infections

HIGH PRIORITY

• Enterococcus faecium (vancomycin-resistant) - can cause serious wound and blood infections
• Staphylococcus aureus (methicillin-resistant, vancomycin-intermediate and resistant) - can cause serious chest, blood, urine and wound infections
• Helicobacter pylori (clarithromycin-resistant) - infection linked to stomach ulcers
• Campylobacter spp. (fluoroquinolone-resistant) - can cause diarrhoeal disease and bloodstream infections
• Salmonellae (fluoroquinolone-resistant) - can cause diarrhoeal disease and blood poisoning
• Neisseria gonorrhoeae (cephalosporin-resistant, fluoroquinolone-resistant) - a sexually transmitted infection that can cause infertility and, rarely, can spread to the blood and joints

MEDIUM PRIORITY

• Streptococcus pneumoniae (penicillin-non-susceptible) - can cause serious chest infections and meningitis as well as blood poisoning
• Haemophilus influenzae (ampicillin-resistant) - can cause serious chest infections and meningitis as well as blood poisoning and skin and joint infections
• Shigella spp. (fluoroquinolone-resistant) - a diarrhoeal disease that can lead to serious complications, including kidney failure

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