Saturday, May 02, 2015

Iraqi forces overpowered at Baiji refinery - Iraq Oil Report

BAGHDAD - Fighters from the so-called Islamic State (IS) group have made their largest incursion yet into the Baiji refinery, seizing most of the compound from pro-government security forces who have been hampered by inconsistent supply lines and incoherent strategic planning.
Several security officials based in Salahaddin province – including one soldier from the 5th Brigade of the federal police who was reached by phone inside the refinery – said hundreds of fighters from the IS group (which is often referred to as "Daesh" in Arabic) have intensified their attacks over the past two days, using several car and truck bombs, suicide attackers, rockets, and heavy artillery.
"We have very little food and ammunition, and we can't withstand the suicide bombers, snipers and rockets," said the federal police officer, who was trapped inside the refinery along with about 50 other police as of Thursday evening. "All of us now are thinking of committing suicide."...

He said that, as of Wednesday, 80 percent of the refinery was held by the IS group. A second senior Energy Police official said that pro-government forces had lost control of the whole interior of the compound and were only able to contest positions along the perimeter.....

A senior Mosul-based member of the IS group told Iraq Oil Report that trucks of gasoline, loaded last week from storage tanks in the refinery, had recently arrived in Mosul and sold for 1,750 Iraqi dinars per liter. That is roughly double the price of gasoline in government-controlled areas of Iraq, indicating that fuel in IS-held territory has become very scarce – a likely impetus behind the group's intensified effort to take the Baiji refinery.
The IS member said the militants plan either to use the refinery by reconnecting pipelines leading from the refinery to storage tanks south of Mosul, or to destroy the refinery entirely.
"There are several suicide attackers wearing explosive belts waiting to launch further attacks," the IS member said....

-bth: this is an excellent article worth reading in full.  It also refers to hijacked gasoline trucks taken to Mosul and a 2x price differential in gasoline between IS territories and Iraqi government controlled areas.

Finnish military preparing 900,000 reservists for 'crisis situation' - Newsweek

The Finnish Defence Forces are to send letters to all 900,000 of the country's reservists at the beginning of this month, informing them what their role would be in a "crisis situation", causing a row over whether such a move is necessary.
Finland, with its population of 5.2 million, has a small professional army of 16,000. Yet in the event of mobilisation, Finland could call on its former conscripts to fight. Finland's wartime military strength is 230,000....

-bth: Putin's tactics might win him eastern Ukraine and Crimea but it is costing him the hearts and minds of his remaining neighbors.

Friday, May 01, 2015

Thursday, April 30, 2015

Disrupted Land Trade Routes Caused by Syrian Civil War and Iraq's IS Damaging Turkey, Syria, Lebanon and Jordan

Here is a brief compilation of current news on land trade route disruptions.  Of particular concern has been the closing of the Syrian-Jordanian border crossings, but other disruptions are occurring.

Here are a few notes clipped from recent articles.

Jordan's overland trade paralyzed by Iraq, Syria border woes

JABER CROSSING, Jordan (AP) — Jordan's overland trade has largely been paralyzed by recent border attacks from insurgents in neighboring Syria and Iraq — a spillover of regional turmoil threatening a close Western ally that has thus far succeeded in fending off Islamic militants. The violence has forced the closure of the only Syria-Jordan trade crossing and further disrupted already sharply diminished cargo shipments between Jordan and Iraq. Thousands of trucks sit idle, traders are scrambling for new transport routes and the government says Jordan's economy is losing tens of millions of dollars a month.

“Iraq is closed, Syria is closed, only the (route to the) Gulf is left,” said truck driver Firas Zoabi, who has lost most of his business in recent weeks because of blocked or treacherous crossings.
The border disruptions are the latest setback for Jordan since the Arab Spring uprisings of 2011 — and particularly since Islamic State militants seized large areas of Syria and Iraq last year. Unemployment and the cost of living are up, driven in part by the influx of hundreds of thousands of refugees from Syria’s civil war, while tourism, direct foreign investment and trade have dropped.
Jordan’s exports decreased nearly 17 percent in the first two months of this year, compared to the same period in 2014 — and that was before the most recent troubles.
A month ago, Jordan closed its only working border crossing with Syria after rebels fighting President Bashar Assad captured the Syrian side of the border point from pro-Assad forces. Last weekend, Islamic State militants set off three suicide car bombs on the Iraqi side of the only truck crossing with Jordan, killing four Iraqi troops and causing major disruptions.
The loss of trade routes is hurting Jordan’s farmers and manufacturers. “Both Syria and Iraq are major export markets for Jordan, so definitely the closure of the borders would have an impact on our industry,” Trade Minister Maha Ali said in an interview.
The economic fallout was apparent this week at the Syrian-Jordanian crossing, known to Syrians as Nasib and to Jordanians as Jaber. A free trade zone next to the crossing has been closed amid reports of widespread looting by Syrian rebels.

Impact on Jordan's Economy

"... Romman said the "Jaber crossing is a vital artery between us and Europe. Seventy percent of what we eat, of everything we import and export, passed through Syria."
Goods were brought in and exported by sea from Lebanon, or even travelled overland through Turkey farther north.
Mohammed Daud, president of the Jordanian truckers' union, estimates that the long-term damage from lost trade with not only Syria, but also Iraq, could reach $500 million.
He said around 2,500 trucks crossed the Syrian border daily before a pro-democracy uprising broke out four years ago and degenerated into civil war. That number was down to "a couple hundred when the border was closed. Now it is zero."
Prime Minister Abdullah Nsur said earlier this week that Jordan was in a "state of siege".
Not only is it effectively cut off from Syria to the north, it has also seen commerce with Iraq severely curtailed because of the conflict between the government and the Islamic State group there.
- 'Serious consequences' -
Jordan is a relatively poor desert kingdom and has virtually no oil reserves. Its major exports are phosphates, potash and limestone, as well as textiles and vegetable produce.
Economist Mazen al-Rashid said "the longer the borders are closed, the more serious the consequences will be for the Jordanian economy".
"The decline in exports could exacerbate the trade deficit, which would force Jordan to borrow more to cover the difference," a particularly unenviable situation considering that debt reached a record $30 billion last year.
Economist Yussef Mansur said the only solution now is to consider trade by sea.

Impact on Syrian Trade for Foreign Exchange is Negative

"... Syria, home to an ancient mercantile culture, was once a crossroads for trade between Europe and the Arabian peninsula, carrying billions of dollars of goods arriving from Turkey and heading for the Gulf. Its own producers were also major suppliers to the region.

This trade has dived during four years of crisis, which began with a peaceful uprising against President Bashar al-Assad and descended into civil war. Now Damascus is trying to rebuild Syrian industry and exports to withstand sanctions imposed by the West and defeat the insurgency.

At least 40 percent of industrial capacity was left idle, but firms have moved some production away from areas worst hit by the fighting. The government is pushing them hard to raise exports needed to earn scarce foreign currency and boost imports of essential raw materials.

"Syria's priority is to get foreign exchange and not to import goods that are produced locally. I want to preserve my foreign currency to buy essential goods," Thaer Fayad, head of foreign trade in the Economy Ministry, told state television.

Syrian exports climbed back to $1.8 billion last year, the highest level since the crisis began in 2011, according to Ihab Smandar, the president of the state-run Exports Promotion Authority. However, this fell far short of the import bill, which he estimated at $4.3 billion, and remained a small fraction of exports in 2010 which totalled $12 billion....

-bth: one really wonders who is bankrolling the Syrian government?  Russia needs hard cash for arms.  Iran has been paying the bills but their own financial situation is hurt by sanctions and lower oil prices.

Negative Impact on Lebanese Farmers Who Need to Export to the Gulf

"... Lebanon, with almost 70 percent of its fresh produce to the Gulf going through the crossing, is also suffering. Lebanese officials estimate industrial and agro-exports worth $1 billion would now have to move to costlier sea routes.

Syrian exporters are also scrambling to find alternatives, and face having to pay the equivalent of at least $2,000 per truck in extra shipping costs....

Turkey to Gulf Few Options

"... Until 2002, the main transportation route to the Gulf countries was via Iraq. - After the Iraqi war, Syria became the new route. - After a civil war erupted in Syria in 2011, the transportation route via Egypt was created. - With a deal in 2012, the transportation became possible for Turkish trucks via Egypt. - If Egypt does not renew the deal, the only route in the region for Turkish transporters will be Iran by April 22. - In line with the deals with Iran, the test drives begin this week.

"... The current transportation agreement, which was signed between Turkey and Egypt in 2012, will expire on April 22. The agreement allowed the use of Egyptian seaports for the transport of Turkish foodstuffs, electrical appliances and textile products to markets in the Gulf. The Egyptian government has, however, reportedly decided not to renew the agreement, although there has not been an official notification, according to sector representatives. Turkish exporters have been looking for alternatives for a while. “Iran is a good alternative for us to transport goods to the Gulf… Actually we have wanted to keep our Egyptian route online, but we needed to focus on the Iran route as we didn’t see any positive step from the Egyptian authorities to renew the deal. The transportation via Iran will start soon,” Nuhoğlu said. ...

-bth: so basically Turkey is getting squeezed on all land transportation routes.  The Austrians and Bulgarians are slowing up trade due to customs disputes.  The Iranians are moving very slow to clear trucking using the Iran route.  The Egyptians have got the Turks by the nuts and are squeezing the transport route via Egypt to the Gulf states. ISIS territories are off limits due to hijackings.

Turkey via Iran Complications

"... There are problems at all of Turkey's exit points,” Şener said. “We are going to great lengths to find a way through. Moreover, Iran and Austria in particular are obstructing us. They are not processing us through customs efficiently. While economic growth is tied to exports, exports are tied to logistics.”

He said Turkish trucks trying to cross the border into Iran from the Gürbulak border gate are required to wait four days as Iran is prioritizing the crossing of its own trucks. As such, shipments are arriving late and costs are increasing. Iran is a crucial entry point for Turkish trucks exporting goods to Central Asian countries.

He added that going through the Kapıkule border gate to Bulgaria -- the most important entry point for Turkish trucks en route to Europe -- is being hampered by extremely long lines and that truckers are lucky if they can get through it within three days.

Regarding Austria, Şener said that the country has imposed a limit on the number of Turkish trucks that can enter within a year, claiming that this is because Turkey is not an EU member state.

A crisis broke out last year over Iran and Turkey due to the high fees levied by Iran on Turkish trucks crossing into the country. At one point this resulted in hundreds of trucks from both Iran and Turkey stranded on either side of the border.

-bth: the source article goes on to report difficulties moving goods from Turkey to Europe.  In general one could conclude that land route trade disruptions are having a devastating impact on the regions economies.  Turkey is hemmed in by logistics and poor foreign policies.  Syria is financially bankrupt and unable to move goods to their traditional markets.  Lebanon will certainly have its farm exports to the Gulf States severely impacted.  One wonders how long it will be before drug smuggling by Hezbollah and IS steps up.  Jordan's economy has always been fragile, but now it is essentially blocked to the north, west and east from normal commerce. Egypt may be one of the only winners as Turkey has few options and neither do the Lebanese or Syrians if they want to move goods to the Gulf.


Was there a mass desertion in Saudi Arabia? No confirming evidence

The Global Research quoted European diplomatic sources as saying on Sunday that, almost 4,000 Saudi forces fled their border bases in anticipation of Riyadh’s order for launching a ground assault on Yemen.
“The intel gathered by the western intelligence agencies showed that the Saudi military forces have fled their bases, military centers and bordering checkpoints near Yemen in groups,” diplomatic sources were quoted as saying by Iraq’s Arabic-language Nahrain Net news website.

Other reports also said that over 10,000 soldiers from different Saudi military units have fled the army battalions and the National Guard, accordiing to the Global Research....
-bth: this story is troubling if true.  But I have not been able to track down the original sources of the article.  I would think if it were true there would be indications in the Saudi stock market or extreme capital flight, executions and arrests.  I don't see these confirming indicators.  It is true that the invasion of Yemen didn't happen but the blockade seems to be having its affect. Anyway, put me in the skeptical camp at this time.

Tuesday, April 28, 2015

Russian Economy - Various Current Observations from Media

"... If low oil prices and sanctions persist, Russia is in for a protracted period of declining economic growth coupled with vicious inflation. ..."

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Low Oil Prices and Economic Sanctions are Hurting the Russian Economy.

Low oil prices have hit Russia hard. Energy accounts for 25% of Russia’s GDP, 70% of its exports and 50% of federal revenues. Sharply lower oil prices, combined with economic sanctions following Russia’s incursion into Ukraine, have led to a severe recession that forecasters predict will last at least two years.

“The future of Russia is quite bleak, and we have revised our projections downward substantially,” Olivier Blanchard, director of the IMF’s research department, said in January.

Just how bleak remains to be seen. Standard & Poor’s and Moody’s have both downgraded Russia’s debt to junk status. The IMF forecasts that the Russian economy will contract by 3.8% in 2015, another 1.1% in 2016, then continue to limp, growing just 1.5% in 2020. Moody’s outlook is even worse: It expects GDP to fall by 5.5% in 2015, then drop another 3% in 2016, with real growth through 2018 at virtually zero.

Russian Inflation

... When oil prices fall, the ruble drops as well. This has meant brutal inflation in a country that depends on imports for food, clothing, electronics and machinery. Russia had 6.5% inflation in 2013, according to Moody’s. The IMF predicts inflation this year will reach nearly 18%, then roughly 10% in 2016.

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Private Capital Flight

Private-sector net capital outflows averaged $57 billion annually during 2009-2013; then increased sharply to $152 billion in 2014, according to Standard & Poor’s. Capital flight will likely accelerate if the country’s reserves deteriorate, which would spur the market to anticipate capital controls and further currency depreciation.

Debt in Foreign Currency Very High
Russian companies added $170 billion in new foreign currency debt in the last two years – then moved most of that money offshore. Only a small portion was invested in the Russian economy, Yevgeny Gavrilenkov, the chief economist at Sberbank CIB, the largest state bank, told The Economist.

Ironically, companies loaded up on debt partly to make themselves less attractive targets of a state takeover, according to Kirill Rogov of the Gaidar Institute for Economic Policy. Now, they may find themselves begging the government for a bailout.

S&P estimates Russia's gross external financing requirement for 2015 at close to 85% of current account receipts, plus usable reserves. It expects that some of this will be met by dollar sales by the CBR, which will put more downward pressure on CBR reserves.

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Russia 3rd in Defense spending but 8th in GDP size

Russia's share in world military spending reached 4.8 percent in 2014, placing it third in the world after the U.S. and China, whose shares were 34 and 12 percent, respectively.
This conclusion was the result of a report published by the Stockholm International Peace Research Institute (SIPRI), the Russian news agency TASS reported. According to the document, Russian military spending in 2014 increased compared to the previous year by 8.1 percent to $84.5 billion, or 4.5 percent of GDP.

According to Vasily Zatsepin, a senior researcher with the Laboratory of Industrial Market and Infrastructure Studies at the Russian Presidential Academy of National Economy and Public Administration, Russia's third place by its share in world military expenditures does not correspond to its place in the global economy (it was eighth in nominal GDP with a share of 3.4 percent in 2013; data for 2014 is not yet available).

Zatsepin said this is evidence of the increased and totally excessive militarization of the Russian economy. "In the economic situation Russia is in at the moment, nothing can justify such high military spending," he added...

Russian Space Program budget cut 35%

MOSCOW, April 22 (Reuters) - Russia is cutting spending on its space programme by more than a third over the next 10 years because of the country's economic crisis, forcing it to scrap plans to develop a super-heavy launch rocket.

Space exploration is a subject of national pride in Russia, rooted in the Cold War "space race" with the United States that saw Soviet cosmonaut Yuri Gagarin become the first man in orbit. The collapse of the Soviet Union starved the programme of funds, but President Vladimir Putin has nurtured plans for a revival.

Russia is planning to develop its own space station by 2023 but economic constraints are growing.
A spokesman for the Roscosmos federal space agency said planned spending would be reduced by 35 percent to 2 trillion roubles ($37.76 billion), a cut of 850 billion roubles....

-bth: One can only conclude that sanctions and low oil prices are having a devastating impact on what has become an increasingly closed economic state.  I doubt the leaders will suffer but average Russians are going to bear a disproportionate hardship.  It is hard to see what they get from the invasion and annexation of Crimea and encouraged rebellion in the Ukraine. Putin may be a tremendous tactician but what is he really accomplishing for Russia?  Arms spending in NATO and adjoining countries in Scandinavia and Eastern Europe are up and the neighborhood is alarmed.

Honey, I printed a thyroid gland - Russia Beyond the Headlines

Back in March 2015 Moscow-based 3D Bioprinting Solutions lab (founded in 2013) became the first such facility to successfully bioprint a thyroid gland – or, to quote the scientists themselves, a "construct" of the organ. Now the researchers are preparing the transplant of several of these glands into living mice. The results of the experiment will be made public in July 2015 at the Second International Congress on Bioprinting in Singapore. The head researcher Vladimir Mironov told RBTH that he is expecting positive results.

Scientists claim they are ready to start the 3D printing of human thyroid glands. All they need for the first batch are follicular cells, which are responsible for the production and secretion of thyroid hormones....

-bth: excellent use of technology.

3D bioprinter

Monday, April 27, 2015

Hizbullah airstrip revealed for UAVs - Janes

Satellite imagery of the Hizbullah airstrip in northeast Lebanon taken on 19 June 2014. (Google / CNES / Astrium / IHS)

Lebanon's militant Shia group, Hizbullah, has constructed an airstrip in the northern Bekaa Valley for its unmanned aerial vehicles (UAVs), an analysis of satellite images suggests.

Located in a remote and sparsely populated area 10 km south of the town of Hermel and 18 km west of the Syrian border, the airstrip was built sometime between 27 February 2013 and 19 June 2014, according to imagery that recently became publicly available on Google Earth.

It consists of a single unpaved strip with a length of 670 m and width of 20 m. Material has been excavated from a nearby quarry to build up the northern end of the strip so that it is level. It is built over a shorter strip that had been in existence since at least 2010...

An alternative explanation is that the runway was built for Iranian-made UAVs, including the Ababil-3, which has been employed over Syria by forces allied to the Syrian regime, and possibly the newer and larger Shahed-129.

Hizbullah sources have confirmed to IHS Jane's that the organisation is using UAVs to support operations against rebel forces in Syria, particularly over the mountainous Qalamoun region on Lebanon's eastern border....

-bth: article is worth reading in full.  Of significance is that non-state entities are building entire airfields for drones and using them as a poor man's air force.  Similarly drones are being used by drug cartels in North America though I have not heard of an actual airfield.  It would seem logical though that a small ranch type air strip would be a good cover.  Note in this case that they are using what looks like a cell tower as a radio uplink location. If confirmed it would be consistent with other Hizbullah approaches at concealment from the air like using commercial trucks with canvass covers over their cargo areas to disguise military payloads as civilian vehicles.

Why Iran is standing by its weakened, and expensive, ally Syria -CSM

... “There is not a critical mass available [for Assad] to achieve victory,” says a former Syrian official who requested anonymity. “To prevail, 200,000 to 300,000 mothers need to be convinced to send their sons to fight. But why would a Sunni mother and father send their son to die for Bashar al-Assad?”

The critical manpower shortage is compounded by the recent coordination on Syria policy between the region’s Sunni powerhouses – Saudi Arabia and Turkey – in cooperation with Jordan and Qatar.

In early March, Saudi Arabia’s new monarch, King Salman, and Turkish President Recep Tayyip Erdogan, agreed on the “necessity of enhancing support to the Syrian opposition in a way that aims at yielding results.”...

Diplomatic sources in Beirut estimate that Iran spends between $1 billion and $2 billion a month in Syria in cash handouts and military support. Staffan de Mistura, the United Nations envoy to Syria, recently told a private gathering in Washington that Iran has been channeling as much as $35 billion a year into Syria, according to one of the participants at the meeting....

But Iran’s strategic interests in Syria do not require Assad’s control over the entire country, only the vital corridor connecting Damascus to Tartous on the Mediterranean coast, which runs adjacent to the border with Lebanon. That corridor would enable Iran to continue providing weapons to Hezbollah.

“Iran is not committed to the person of Bashar al-Assad.… They’re committed to preserving their interests in Syria,” says Karim Sadjadpour, senior associate in the Middle East Program of the Carnegie Endowment for International Peace....

-bth: worth reading in full.

Assad’s hold on power looks shakier than ever as rebels advance in Syria -WaPo
There are signs that the regime itself is fraying under the strain of the four-year-old war. On Friday, pro-government news outlets reported the death of political security director Rustom Ghazaleh, a longtime Assad stalwart, after months of rumors that he had fallen out with the regime, had been badly beaten up by a rival and was languishing in a hospital.
The reports followed the firing last month of the military intelligence chief, Rafiq Shehadeh, another inner-circle loyalist. Western diplomats monitoring events in Syria from Beirut say the two men appear to have clashed with the Assad family over the growing battlefield role played by Iran.

The tensions are reaching into the heart of the Assad family, whose four-decade-old rule had seemed unshakeable until the revolt erupted in 2011.
Hafez Makhlouf, Assad’s cousin, was fired late last year as head of security in the province of Damascus and has since fled the country, the diplomats say. Another cousin, Munzer al-Assad, was detained this month amid rumors that he had been plotting a coup.

“It looks like there are major rifts going on inside the Assad regime,” one of the diplomats said. “A military collapse on the regime side is not impossible.”

Much will depend on Iran, which has stepped up in the past to dispatch men, money and arms whenever Assad seemed to be faltering. But Iran is stretched, too, by the economic effects of continued international sanctions and by the competing demands of the war next door in Iraq, which has diverted some of the Iraqi Shiite militias that had been fighting for the regime in Syria.
In a commentary for the Middle East Institute in the past week, Robert S. Ford, a former U.S. envoy to Syria, said a regime collapse cannot be ruled out. The regime’s schisms, its battlefield setbacks and its manpower shortages “are all signs of weakness,” he wrote. “We may be seeing signs of the beginning of their end.”

-bth: article in WaPo is worth reading in full. I guess my questions is what will tip this over?  Will it be a lack of funding from Iran?  Will it be an internal coup from family?  I find it hard to believe that IS will be able to generate enough force to win straight out on the battlefield.

Sunday, April 26, 2015

Kurdish fighters retake territory from ISIL in Hasanka

Abide With Me, Hayley Westenra, Rugby

Abide with me;

fast falls the eventide;

The darkness deepens;

Lord with me abide.

When other helpers fail and comforts flee,

Help of the helpless, O abide with me.

Syrian wheat shortages, imports and Hasaka city storage and siege

ABU DHABI/LONDON, March 30 (Reuters) - Weeks after Syria said it had no need for wheat imports, the government plans to import 150,000 tonnes and has introduced ways to conserve grain stocks in signs of the growing strain on food supplies from conflict in the country.
Despite millions of Syrians fleeing the fighting to neighbouring countries with 220,000 people estimated to have been killed, Syrian President Bashar al-Assad's government is grappling with ensuring there is enough grain for all.
Trade sources say Damascus faced challenges importing sufficient stocks as payment problems and fighting have deterred many international firms from trading.
Before the war, Syria kept annual strategic stocks of around 3 million tonnes of wheat. The state-run General Establishment for Cereal Processing and Trade (Hoboob) has declined to give a figure for how much is left.

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Hoboob said in October Syria had enough wheat to satisfy consumption until mid-2015 from previous imports and its local harvest, but that imports of 1 million tonnes were necessary to boost its strategic reserve.
Syria's wheat harvest stood at around 1.8 million tonnes in 2014, the worst in 25 years due to security and drought.
Of that total, Hoboob only managed to procure over half a million tonnes of wheat from Syrian farmers. Over 300,000 tonnes of that is in wheat silos in Hasaka, on the border with Islamic State held areas in Iraq.
Initial estimates from agronomists and other experts put the 2015 crop on course for 2.5 million to 2.8 million tonnes.

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Bth- I wonder if we will see IS attacks at Hasaka where the wheat stores are kept? Answer yes.

...But Islamic State remains a danger, said Redur Xelil, YPG spokesman. Its targets include the provincial capital, Hasaka city, and the town of Tel Tamr, to the northwest. Islamic State is still believed to be holding some 200 Assyrian Christians abducted in February from villages near Tel Tamr.
"South of Hasaka there are areas that Daesh controls entirely. There is a big Daesh mobilization outside the city, and there are big fears of an attack on Hasaka city," Xelil said in an interview from the city of Qamishli via Skype....

Bth - do is the abduction of 200 Assyrian Christians in February linked to harvests?