The Red Wedding

A botched drone strike in Yemen shows how America's anti-al Qaeda strategy has gone off the rails.

SANAA, Yemen — On Dec. 12, near sunset, a convoy of vehicles carrying armed tribesmen that was part of a wedding procession was destroyed in an apparent U.S. drone strike. The attack, which occurred in Yemen's central al-Baydah province, was far from the first American strike in the area -- the United States is estimated to have carried out at least a dozen strikes against suspected al Qaeda targets in the province since the start of 2012. It was, however, the first time one of the strikes had made the grievous mistake of hitting a wedding.

The initial reports left me incredulous. As I started to make calls to sources in the area, it became clear the strike hit four cars in a convoy of about a dozen vehicles, killing at least a dozen people and wounding many more. The casualties were identified as members of local tribes. The information I received, as usual after such an event, was sometimes contradictory: While some sources stressed that those killed were all civilians, others seemed just as confident that some were indeed militants.

Whatever happened on Dec. 12, it was not a "targeted killing" -- the language President Barack Obama's administration often uses to describe drone strikes -- nor was it consistent with the White House's claim that the strikes are only carried out when civilians will not be caught in the crossfire. It's not just a matter of the morality of the drone program: The confirmed deaths of noncombatants in this strike will set back anti-al Qaeda efforts everywhere in Yemen, and its effects will only be exacerbated by the restive area where it occurred.

The strike was followed, as always, by silence from WashingtonThe drone strike was followed, as always, by silence from Washington., which has acknowledged carrying out drone strikes in Yemen but never publicly comments on individual attacks. The Yemeni government, however, released a statement the following day that said the strike targeted al Qaeda militants, but neglected to mention either the country that carried out the attack or the apparent civilian casualties. The actions taking place behind the scenes, though, painted a vastly different picture: Al-Baydah's governor was dispatched to mediate between the government and the families of the dead, while Yemeni officials that were previously supportive of the drone strikes cast the attack as a tragic error.

"Drones have saved lives, but they've also taken innocent lives," one official told me, speaking on the condition of anonymity due to the sensitivity of the issue. "And this strike personally shook me."

The exact nature of the error is still a matter of speculation. It was hard not to wonder if the wedding convoy was mistaken for something more sinister -- that someone in the bowels of the U.S. intelligence community concluded that vehicles carrying heavily armed wedding guests were actually an al Qaeda convoy. Some tribal contacts said that there were high-ranking militants near the site of the strike, and a Yemeni official briefed on security matters told me a vehicle hit in the attack had been linked to a prominent local al Qaeda leader. Either way, any "suspected militants" present were surrounded by civilian bystanders.

In many ways, the northwest corner of al-Baydah province is an unlikely place for al Qaeda militants to carve out a base. Tensions with the central government are far from new, but the locals' ideology has historically taken a far different form: The area was a hotbed for leftist insurgents in the late 1970s and its residents are still over-represented in the ranks of Yemen's Socialist Party.

Looking back, the chain of events that transformed the area into a notorious "al Qaeda hotbed" seems almost like a perfect storm. In January 2011, militants affiliated with al Qaeda in the Arabian Peninsula led by Sheikh Tareq al-Dahab, a local tribal leader, took advantage of the government's weakness and seized control of the town of Rada', near where last week's drone strike occurred. While the fighters pulled out little more than a week later and their sheikh was killed in a longstanding family feud the following month, al Qaeda's presence in the area remained. The fighters have maintained their presence in and around Sheikh Tareq's hometown of al-Manaseh, expanding to other parts of the province and capitalizing on the central government's virtual absence.

Most importantly, perhaps, the group has had far more success in infiltrating local tribes in the area than they've had in other parts of the country. Al Qaeda has capitalized on their ties with a faction of the Dahab family -- which locals tend to see as sheikhs first and militant leaders second -- appearing to take great pains to avoid tensions with other tribesmen while exploiting widespread unemployment and anti-government sentiment to gain recruits.

The group's supporters still appear to constitute a fraction of those in the area. But even if locals lament the current status quo, few want to see a devastating conflict similar to the 2012 offensive that pushed al Qaeda-affiliated fighters out of their former strongholds in Yemen's southern Abyan province. And even those who deeply resent the terror network's presence appear to lack the will to directly confront the group.

"The government tells us to turn in al Qaeda fighters," one tribesman hailing from near the site of Thursday's strike mused. "But how can we do that when there's no government present to turn them into? And why would we do it when there's no government present to protect us from retaliation?"

It's going to take more than drone strikes to eliminate al Qaeda from its strongholds in this Yemeni province. The militants killed, locals say, are largely replaceable, while the tens of civilians killed over the past two years has only heightened distrust of the central government among noncombatants, pushing some young men into al Qaeda's arms. However, the long-term solution to combatting the militants' presence -- ameliorating pervasive poverty and underdevelopment -- is far easier said than done.

Either way, in the aftermath of Thursday's strike, the possibility of defeating al Qaeda in al-Baydah feels further away than ever.



The Celtic Cougar

Why Ireland's economy only looks good from afar.

The Eurozone is back in the news this week with what at the surface level is a good story -- Ireland is leaving the European Union/International Monetary Fund bailout mechanism and regaining its economic sovereignty. Five years after it became the first European country to enter a post-financial crisis recession, Ireland is being heralded as a model for how austerity can put a nation back on its feet. There is no question that the country's temporary sacrifice of economic freedom halted what was one of the steepest declines in relative wealth in modern history. However, the reality is that Ireland has yet to hit rock bottom, and when it does, it will likely remain there for a very long time. Irish Prime Minister Enda Kenny may have been right when he said that leaving the bailout sends a "powerful signal internationally, that Ireland is fighting back, that the spirit of our people is as strong as ever." But the government has not prepared the public -- or potential outside investors -- for dangers that continue to lurk in the Irish economy or the stark choices that lie ahead.

The roots of Ireland's economic crisis are relatively straight forward: The country's roughly 4.5 million people needed a $117 billion bailout in 2010 because key banks had no money, the nation had gone on a spending and credit binge, and the government could not finance its borrowing to fund its public sector without an outside infusion of capital. Necessary as it was, the bailout struck deep in the Irish psyche because it meant the country had lost its economic freedoms The bailout struck deep in the Irish psyche -- it meant the country had lost its economic decision-makers in Brussels after being praised for so long as the "Celtic Tiger." To sustain its bailout commitments as a member of the Eurozone, Ireland embarked on a deep economic austerity program -- widely praised in financial capitals -- that cost each Irish citizen roughly $13,700, on average, though the final cost will be far higher.

Ireland subsequently witnessed skyrocketing unemployment, deep economic recession, and painful budget cuts combined with rising taxes and fees. But the economy has since started to stabilize. Unemployment today is down to a still staggering 12.8 percent (although it would be much higher if Ireland didn't export so much of its talented labor force to help build other nations' economies.) The country's borrowing rates on 10-year bonds have also dropped considerably -- to 3.47 percent -- down from a Eurozone high of 14.2 percent in 2011. There have also been improvements in the housing market, at least around Dublin. Yet through the third quarter of this year, an unsustainably high 18.5 percent of Irish homeowners had missed a payment on their mortgage, and three quarters of those in arrears more than 90 days had yet to be restructured. Against this precarious backdrop, insisting on a return to economic sovereignty could very well put Ireland's modest gains at risk.

Ireland's government recently rejected the option of sustaining an EU credit line as a backstop, should internal or external surprises make self-financing of borrowing to sustain the economy impossible. In effect, it gambled that a strong statement of confidence will be popular at home and attract investment from abroad. But the opposite is just as likely to happen -- that questions about the sustainability of Ireland's economic stability will deter the same international investment. Either way, external investment in Ireland has done little to advance its economy since 2001 -- when an unregulated property binge began to fuel high levels of growth -- and is not the solution to the country's continued economic crisis. Foreign direct investment has helped sustain existing employment levels in that sector, but because of Ireland's low corporate tax rates it has had only a marginal effect on the country's deeper economic problems. Ireland wins bragging rights for hosting the headquarters of major European business operations for Google and Facebook. But these companies don't employ large numbers of Irish people and they put little money back into the Irish economy. 

In fact, Ireland's tax policies, long criticized in Europe, have raised questions among some of the country's closest allies in the United States. Earlier this year, Sen. John McCain (R-AZ) and Sen. Carl Levin (D-MI) referred to Ireland as a "tax haven" and alleged that it was inappropriately shielding American companies like Apple, which they said was holding $44 billion in off-shore accounts, in part taking advantage of Irish tax rules, from tax liabilities at home. Ireland has since indicated it will close loopholes in its tax laws which allowed companies like Apple to pay an actual tax rate of 2 percent. Still, the U.S. senators remain skeptical, saying in October: "Hopefully, the answers will demonstrate that Ireland is ready to close the door on these egregious corporate tax abuses enabling multinational tax avoidance."

Ireland's central challenge is a sustained lack of indigenous economic growth, due in large part to the unwillingness of banks to support risk taking and lend money to small and medium-sized businesses. Meanwhile, rents and operating costs are high, making it difficult for many businesses to survive, let alone grow. Ireland's public sector wages remain among the highest in Europe. A failure to address this problem means that even deeper budget cuts are likely, as are heftier taxes on an already heavily burdened public. Meanwhile, Ireland has the third highest deficit in Europe and its debt to gross domestic product (GDP) ratio is 117.4 percent; both are unsustainably high.

Ireland's 2014 budget cuts about $3.4 billion more from domestic government spending. But if Ireland is to sustain self-financing on the open markets, these cuts may actually be woefully insufficient. Deeper cuts, however, might rattle the existing governing coalition, which includes a sizeable Labour Party minority that draws its political backing from constituencies most harshly impacted by budget cuts. Whatever the final number for continued austerity, the country faces a serious dilemma because the same cuts that are necessary to make self-financing possible will also further deflate the domestic economy, inhibit domestic spending and constrain economic growth.

At its current rate of economic growth -- about 0.2 percent for 2013 and an optimistic projection of 1.8 percent for 2014 -- Ireland is not even on track to meet assumptions on interest terms for the bailout it just departed. The government has raised capital in reserve -- roughly $34 billion -- which it says will keep Ireland solvent through 2014. Having thrown away its credit lifeline to Europe, however, Dublin will likely find it much harder to secure a new bailout should it need one in six months or a year.

The tragic reality often lost in Ireland is that the bailout it just exited was not designed to help the country's economy recover; it was designed to contain the Irish crisis so it would not spread further in Europe, while also protecting against foreign exposure from Ireland's dodgy banks. The tragic reality is that the bailout Ireland just exited was not designed to help the country's economy recover.Today, Ireland's banks are capitalized -- although the banking sector remains weak and under considerable international scrutiny -- while public sector spending, private debt, and underwater mortgages all remain high. If the government does need another bailout, the terms aren't likely to be favorable to the Irish people and could put its low corporate tax rate at risk -- something that might have been avoided by accepting the European Union's precautionary credit reserve line. No question, Ireland's decision is a welcome one in Europe, as the country's restored economic sovereignty takes the European Union off the hook for sustaining the Irish economy.

As it exits the bailout, the government and media in Dublin understandably want to promote a new image of Ireland -- one that is back on its feet and has learned hard lessons. However, the harsh realities and serious risks to the Irish economy that remain cannot be swept under the rug. Widespread inability to meet personal debt obligations, high unemployment, heightened food insecurity, and soaring murder and suicide rates are just a few examples of the depth of searing pain that has left a tragic imprint on the Irish landscape. 

Meanwhile, Ireland has only a limited capacity to promote investment in areas that could grow the domestic economy. Ireland could, for example, position itself as a global higher education hub while also investing heavily in wind and wave energy production -- leading the way for a new kind of globalization and progressive economic development. But in a climate of further austerity -- required to restore and sustain Ireland's economic sovereignty -- the country's capacity to invest in future economic development is much diminished.

In 2009, Irish economist Morgan Kelly, one of a handful of economists who was consistently right in warning of Ireland's economic collapse, wrote: "By 2015 we will have seen what happens when jobs disappear forever.... Ireland is at the start of an enormous, unplanned social experiment on how rising unemployment affects crime, domestic violence, drug abuse, suicide and a litany of other social pathologies." Little has changed since then to suggest this timeline of assumptions should be changed. The only difference is that now Ireland's leaders are flying without a net -- understandably hoping for the best but so far failing to plan for the worst.  

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