Tuesday, August 4, 2020

Yemen's Multilayered War: The Houthi Rebellion

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Anant Jani

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Yemen's Multilayered War: The Houthi Rebellion

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Global Views 360

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August 4, 2020

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Houthi rebels protesting the airstrike in Sana

Houthi rebels protesting the airstrike in Sana | Source: Henry Ridgwell (VOA) via Wikimedia

This is the 3rd part of a short explainer article series on the current crisis in Yemen.

To read the 1st part of the series click on the link.

To read the 2nd part of the series click on the link.

After the overthrow of the monarchy in 1968,  Yemen existed as two countries — North Yemen and South Yemen.  These two countries united in 1990, after several years of conflict with one another.

This unity could not remain for long and the North-South divide resurfaced which led to the first civil war of unified Yemen. This civil war was short-lived and ended in 1994 after the decisive victory of the pro-unification governing faction over the Southern saperatist faction.

On the other hand a major dissatisfaction with the central government was simmering in the region dominated by a local branch of Shia Muslims known as Zaidi. They are the decendent of Prophet Muhamma and believe that Muslims should be ruled only by a descendant of Prophet Muhammad whom they call an Imam. They have ruled Yemen for more than 1,000 years which ended in 1962.

Zaidis are a minority sect in Yemen but have much ideological affinity with the Sunni Shafi'i majority. They lived together harmoniously and prayed in the same mosques for hundreds of years.

A new element was also getting added to the dangerous mix of sub-nationalism, intra religious division, and tribal loyalty in Yemen. The Yemeni veterans of Soviet-Afghan war who fought with the mujahideen were battle hardened and well versed in guerilla warfare. They started a low level insurgency and also tried to impose a hardline interpretation of Islamic religious and social practices in Yemen.

In order to counter the socio-economic and political marginalization by the central government as well as the growing influence of Salafism in their northern heartland, the Houthis formed a movement named Ansar Allah. President Saleh however accused them of attempting to overthrow the government and of seeking to revive the rule of the imamate in Yemen.

The Houthi Rebellion (also known as the Shia Insurgency):

The Houthi Movement in its current militant form began in 2004 by Hussein Badreddin al-Houthi, religious, political and military leader, as well as former member of the Yemeni parliament between 1993 and 1997. Though he was killed in the action of very early in his fight with the government forces, his brother who took over the movement leadership made it politically and militarily a formidable force in Yemen.

Zaidis have had historical grievances against the Wahhabi, the dominant Sunni sect in Saudi Arabia, who assisted North Yemen in the First Yemen Civil War. The Zaidi fear they still have too much say in Yemeni politics. They have also fought against the Salafis, whom they accuse of implementing the hardline interpretation of Islamic religious and social practices in Yemen. In order to counter these forces, Houthis destroyed the schools run by them in Saada, Dar al Hadith in Dammaj and its sister school in Kitaf, claiming them to be “feeder schools”, for al-Qaeda.

It was the 2011 Yemeni Uprising (or Intifada), which catapulted Hauthis to the centre of Yemen politics. They sided with the common citizens of the country in demanding the resignation of President Saleh whom they charged with corruption and for being a lackey of Saudi Arabia and the USA. A Nesweek photo-essay reported that Houthis are fighting "for things that all Yemenis crave: government accountability, the end to corruption, regular utilities, fair fuel prices, job opportunities for ordinary Yemenis and the end of Western influence."

Later in 2011, President Saleh resigned, as per the Houthi terms, letting Abd Rabbuh Mansur al-Hadi step in as the President in exchange for immunity from prosecution. However the Houthis pressed on with their power grab which started resentment among other players.

In an ironic act, ex-President Saleh who was overthrown in an Houthi led public uprising, threw his weight behind Houthis in the power struggle. In 2015 he publicly announced his formal alliance with the Houthis, and hoped for ceasefires with the Arab Coalition.

In 2015, Hadi, the President of Yemen was placed under house arrest by the Houthis and forced to resign. He managed to flee to Aden, and rescinded his resignation. He fled to Saudi Arabia, and returned in September with the Arab Coalition at his support. Ever since, he has used Aden as his governing base.

At the same time, Saudi Arabia imposed severe restrictions on import, including air and sea blockades in Yemen, resulting in the shortages of food and medicine. Given the fact that Yemen is dependent on imports for food supply and medicine, it is no surprise that the blockades have led to a famine situation, compounded by an outbreak of cholera since 2016 caused by and worsened due to the air-strike bombed healthcare infrastructure.

After aligning with Houthis for many years, Saleh once again took an about turn in 2017 by publicly ending this alliance and stated his openness to talk with the Saudi-led coalition. Al Jazeera reported this was because the Saudi Prince had decided that Saleh, rather than Hadi, would help to win the war. However, the same year, Saleh was assassinated.

In September 2019, the Houthis claimed responsibility for drone attacks on Saudi Arabia's eastern oil fields of Abqaiq and Khurais, disrupting nearly half the kingdom's oil production.

In January 2020, the Houthi Special Criminal Court found Hadi guilty and sentenced him to death, for “high treason...and looting the country’s treasury”, over other things,

It is important to note that Saudi Arabia and the USA have also seen this war as a Sunni Saudi pitted against a Shi’ite Iran. This has been shown to be inaccurate - both nations likely intending it as an excuse for using extreme military might and sanctions that Saudi has engaged in with the backing of both, the Obama and Trump administration, to use Yemen for strategic purposes.

It is this war, between Saudi-backed Hadi at Aden and the Iran-led Houthis at Sana’a, that has prolonged for 5 years and displaced millions, prompting the UN to call it the worst man-made humanitarian disaster.


To read the 4th part of the series click on the link.

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April 13, 2021 7:47 AM

Are India's Antitrust laws effective at controlling monopolies?

On 15th of July 2020, Reliance Industries Ltd (RIL) held its annual general meeting of the shareholders. The chairman and managing director Mukesh Ambani, announced that global tech giant Google would be investing $4.5 billion in Jio Platforms. Facebook also has acquired a 9.99% stake in Jio Platforms. This is the first time in the world that both the global tech giants have invested in the same entity. These investments have boosted the confidence for Jio Platforms and also for India’s growth but there have been questions and speculations about the potential anti-competitive makeup of these deals.

The objective of this article is to explore the interpretation and the effectuality of Antitrust laws in India.

Anti-competitive practices are those business practices which firms engage in to emerge as the or one of the few dominant firms, who will then be able to restrict inter firm competition in the industry in a bid to preserve their dominant status. The Collins English dictionary defines antitrust laws as those laws that are intended to stop large firms taking over their competitors by fixing prices with their competitors, or interfering with free competition in any way. These laws focus on protecting consumer interests and promoting a competitive market. The word ‘Antitrust’ is derived from the word ‘trust’. A trust was an agreement by which stakeholders in several companies transferred their shares to a single set of trustees.

In present-day India, talking about market dominance Reliance Industries Ltd (RIL), resembles American company—John D Rockefeller's Standard Oil Company—of the early 20th century. Mukesh Ambani holds the highest ability to influence markets and policy in every sector in which RIL is present—petrochemicals, oil, telecom, and retail. Many industry experts and critics suggest that Ambani has used his political clout to twist the regulatory framework in his favor.

Gautam Adani, founder of Adani Group | Source: Twitter

Furthermore, economic power in aviation infrastructure is clustering into a few hands as well. In 2019, the Adani Group bagged the 50-year concession to operate all the six Airports Authority of India-operated airports—Lucknow, Jaipur, Guwahati, Ahmedabad, Trivandrum, and Mangaluru—which were put up for auction. The company also obtained a controlling stake in ‘The Chhatrapati Shivaji Maharaj International Airport, Mumbai’ from GVK Airports. Moreover, Adani Group is now set to construct the Navi Mumbai International Airport. The group is now eyeing Indian Railways while they have already established an alarming monopoly in green energy and sea ports. While Airports are natural monopolies, one private company controlling more than 8 important airports is not good news to airlines.

India has established antitrust laws to promote competition. For 40 years, India followed the Monopolies and Restrictive Trade Practices Act 1969 (MRTP). This act was based on principles of import substitution and a command-and-control economy. However, over time several amendments had to be made to the act. In 2002, the Indian approved a new comprehensive competition legislation. This is called the Competition Act 2002. The act focused on regulating business practices in order to prevent practices having an appreciable adverse effect on competition (AAEC) in India. The act primarily regulates three types of conduct: anti-competitive agreements (vertical and horizontal agreements), abuse of a dominant position, and combinations such as mergers and acquisitions. The act lists out the cartel agreements that it intends to prevent. This list includes price-fixing agreements, agreements between competitors seeking to limit or control production, market-sharing agreements between competitors and bid-rigging agreements. These agreements are called “cartel” arrangements.

The competition Act is enacted by the Competition Commission of India (CCI), which is exclusively responsible for the administration and enforcement of the Act. It comprises a team of 2 to 6 people appointed by the government of India. The CCI has previously handled high-profile cases. In 2018, CCI imposed a fine of Rs135.86 crore on Google on the grounds that Google misused its dominant position and powers to create a search bias. In another important case, the CCI, ordered a probe into Idea, Vodafone and Airtel when Reliance Jio owner Mukesh Ambani lodged a complaint against the three for forming a cartel and denying Jio the POI required for network connection, causing multiple call failures. The Cellular Operator Association of India was also probed for encouraging the same.

In some cases, the Competition Commission has been successful in tackling activities that are against the free competitive market. However, critics and economists believe that the act is now unable to adapt to the changing business environment in e-commerce, telecom, technology and the government’s role in distorting competition. Demonetization and GST drove the formalization of the economy. One consequence of them was that bigger, better organized players gained at the cost of smaller ones with lesser resources. The Insolvency and Bankruptcy Code (IBC) was designed to solve the problem of non-performing assets (NPAs) of banks. But consequentially, it has also led to a consolidation in many sectors.  

However, CCI has expressed inability to consistently adjudicate punitive measures due to obligation in several cases. This points to the loopholes in the very provisions of the Competition Act 2002. In an Economic and Political Weekly (EPW) article, Aditya Bhattacharjea—an Economist—argues that even though the 2002 Act represents an improvement from the MRTP Act which was extremely restrictive, the present act also remains riddled with loopholes and ambiguities. According to Bhattacharjea, this creates unnecessary legal uncertainty, which acts in advantage of lawyers and law firms. For instance, the act allows the CCI to leave some scope of flexibility for “relative advantage, by way of contribution to the economic development.” Bhattacharjea argues that this may allow large firms to justify their anti-competitive practices in the name of development.

Mark Zuckerberg and Mukesh Ambani having online interaction after Facebook invested in Jio Platforms | Source: NDTV

Data portability plays a significant role in determining market power of certain firms. In 2017, the CCI closed cases against both WhatsApp and Jio involving allegations of predatory pricing and privacy violations. In both these decisions, the regulator did not consider the restrictions around data portability as a competitive advantage. The possible data leveraging advantage for the attempted monopolization could be the ‘portfolio effect’. Portfolio effect refers to increasing the range of brands, by bundling of telecom or messaging service and other service offerings or illegal vertical restraints, even predatory pricing. This in turn may lead to greater ability of further leveraging, deterring innovation and results in degradation of quality. Another possible advantage is explained as the theory of leveraging. The best example of leveraging is when Microsoft entered the media-player market by extending its quasi-monopoly on the operating systems market by taking advantage of the indirect network effects. In case of Facebook acquiring 10% of Jio’s shares, it is a concern that both entities could potentially use WhatsApp’s market dominance in telecom and social networking services and establish dominance in e-commerce market through anticompetitive acts.

There was a consensus among Indian policymakers at the time of the 1991 economic reforms that economic liberalization would eliminate the nexus between the business elites and the policymakers. On the contrary, the relationship between these two groups got further strengthened.

On the other hand, few critics and industrialists argue that extreme restrictions on growing companies hampers the progressive growth of the national economy. While RIL’s Jio looks like a cause for concern, the company has also saved Rs. 60,000 crores for annual savings in India. In addition to that, the entry of Jio to the telecom industry has led to a rise in data consumption and improved accessibility and affordability of the internet across the nation.

However, the concern still lingers as the question of whether this growth is a result of actual innovation or crony capitalism remains unsolved.

However, the fact that telecom, organized retail, ports and airports have two or three players controlling the bulk of the sector needs to be addressed. A healthy competition is quintessential for long-term growth and innovation. Harmful trade practices and cartelization does not only affect small manufacturers but also the general public.

The government, CCI and other lawmakers must closely examine the present laws and provisions and need to see if they are required to amend the act.

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