May 26, 2007

WHY LTTE ATTACKED DELFT NAVAL BASE?

By B.Raman

Till March 26,2007, the Sri Lankan Air Force (SLAF) enjoyed the command of the skies. There was no opposition to its punitive strikes against the positions held by the Liberation Tigers of Tamil Eelam (LTTW) in the Eastern and Northern Provinces and to its intimidatory strikes against the Sri Lankan Tamil population, inflicting a large number of civilian casualties. The LTTE faced difficulty in countering the punitive and intimidatory air strikes of the SLAF. This was due to a serious depletion of its anti-aircraft capability and the difficulties faced by it in procuring anti-aircraft guns and ammunition and surface-to-air missiles.

2. As a result of this, the Sri Lankan authorities did not consider it necessary to provide strengthened anti-aircraft defences to their army, naval and air force stations in the Tamil areas. They feared only land-based threats to them. They did not anticipate any threat from the air.

3. The position has since changed as a result of the LTTE's Tamil Eelam Air Force (TAF) going into action since March 26,2007, and demonstrating its capability for conventional air operations on ground-based targets and to evade the anti-aircraft defences. The TAF has already carried out three successful air strikes on ground targets of a strategic significance----two in the Colombo area and one in the Jaffna area.

4. The psychological and economic impact of these strikes has unnerved the Sri Lankan authorities. The psychological impact has been in denting the self-confidence of the Sri Lankan security forces and affecting their credibility in the eyes of the public. The economic impact has been on tourism. Flights of nervous international airlines were affected and there was a decline in tourist arrivals.

5. The expected operations of the armed forces to recover territory under the control of the LTTE in the Northern Province have not yet materialised. The SLAF has not been as active as it used to be before the TAF went into action. Fearing more strikes by the TAF, the Government of President Mahinda Rajapakse has given priority to strengthening the anti-aircraft defences in Colombo and Jaffna. Apart from taking conventional measures such as providing anti-aircraft guns and ammunition to all major military posts in the Northern and Eastern Provinces, it has also entered into negotiations with Pakistan and China for the purchase of surface-to-air missiles.

6. Taking advantage of this, the LTTE has embarked on a policy of identifying military posts where anti-aircraft defences have been set up, raiding them and capturing the anti-aircraft weapons supplied to them. It was in pursuance of this tactics that the LTTE raided a strategic naval base at Delft, an islet off the northern Jaffna peninsula, shortly after midnight on May 24,2007, dismantled its anti-aircraft defences and took away two anti-aircraft guns with ammunition, two Israeli machine guns, one rocket-propelled grenade launcher and eight assault rifles. They badly damaged the base infrastructure and withdrew after killing over 20 sailors of the Sri Lankan Navy. The raid lasted about two hours. The officers at the base frantically kept asking for an air strike against the raiding Sea Tigers and their boats, but the SLAF did not come to their help. Later, it claimed that the SLAF went into action and attacked the Sea Tiger boats as they were withdrawing and inflicted casualties and damage. There has been no corroboration of this so far.

7.The Government has not yet been able to remove the nervousness caused in Sri Lankan and foreign business circles----particularly among those in the civil aviation and tourism sectors---in the wake of the TAF's air raids in the Colombo area. Fear of an LTTE retaliation from the air continues to have a negative impact on the Government and the Security Forces.

(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: itschen36@gmail.com )

Pakistan Disappeared : Video

Have Pakistan’s security forces secretly detained hundreds of suspected terrorists? Reports are growing that the government is using the war on terror as an excuse for a general clampdown.

“We want our husbands and sons back”, laments one woman. Human Rights groups claim hundreds of people have been arrested and their detention officially denied. “The government has been using the war on terror as an excuse to suppress political opposition”. Relatives of the missing are now trying to use the courts to find out info about their loved ones

Cilck and Watch

Are the Diamonds Forever?

POLICE RAID DIAMOND DEALERS
Are the Diamonds Forever?

By Carol Matlack

A crackdown in Antwerp threatens the city's historic gem trade.

REUTERS


Dealmaking is part of the scenery in Antwerp's centuries-old diamond district. Passing one another on the narrow streets, traders nod in greeting while talking into cell phones. A black-hatted Hasidic broker, spotting a prospective customer, pulls a clear plastic bag of tiny, sparkling stones from his overcoat and launches into a rapid-fire sales pitch. At a nearby café, two men take turns peering through a jeweler's loupe at a pile of diamonds between their coffee cups.

But lately the buzz of commerce has been tinged with anxiety. Over the past 18 months police have repeatedly swept in, raiding offices and hauling away papers and gems as evidence in investigations of money laundering and tax evasion. One trader died of a heart attack during a police search of his home last December, prompting a protest by fellow traders, who shut down the district for a day.


Although fewer than 20 of Antwerp's nearly 2,000 trading companies have been raided, police have seized tens of millions of dollars' worth of diamonds. The gems are held as evidence while the probe continues. Adding to the tension, DeBeers Group's trading arm, which supplies 50 percent of the world's diamonds, warned Antwerp traders that they could be cut off if they don't follow industry rules against money laundering.

Traders say the pressure is spooking suppliers and customers alike, sending them to rival centers in Dubai, India, and Israel. Imports of rough diamonds, the uncut stones that are Antwerp's main business, fell 20 percent in April, though year-to-date figures remain above 2006. "People are afraid and upset," trader Shashin Choksi says, sitting in his office next to a refrigerator-size safe full of jewels.

Moving Money

No question, the $70 billion-a-year global diamond business has some ugly facets. Easy to transport and hard to trace, the precious stones are a favored vehicle for financing illicit activity, from drug trafficking to terrorism. "The diamond industry is very secretive. Large amounts of money can be moved around, and it's relatively easy to misstate the value," says Alex Vines, a former U.N. diamond-trade investigator who now heads the Africa program at Chatham House, part of London's Royal Institute of International Affairs.

Belgian authorities won't discuss their investigation. But the Diamond High Council, a quasi-governmental agency that oversees the Antwerp trade, says recent raids stemmed from a probe of a diamond shipping company, Monstrey Worldwide Services. Agents searched the company in October, 2005, and arrested its owner in a money-laundering investigation. Monstrey has shut its doors and no one from the company could be reached for comment, but police have seized the inventories of at least 16 traders who were its customers.




Antwerp traders fear the crackdown could end the city's reign as the world's No. 1 diamond center. Antwerp's first exchange opened in the 15th century, and although most cutting and polishing has relocated to cheaper locales such as China, 80% of the world's uncut diamonds still pass through the city. "If rough diamonds disappear from Antwerp, it is finished," says Koen Smets, a Belgian who buys diamonds from local traders and sends them to a factory in China for finishing.

The threat to their livelihood has united Antwerp's multicultural diamond community as never before. Over the past decade a growing population of Indians has gradually displaced Orthodox Jews as the dominant group of traders. But now, says third-generation Jewish trader Ziv Knoll, "we're all in the same boat." Knoll says he knows several traders who are relocating to Dubai and Tel Aviv. If the raids continue, he says, he may do the same. "We can't continue to work with constant harassment."

Matlack is BusinessWeek's Paris bureau chief.

Economic intelligence : France to launch 4 year research programme

Support of CNRS for research a four-year programme in economic intelligence
May 21, 2007

CNRS launched a research programme four years in economic intelligence starting in 2007.

CNRS launched a research programme four years in economic intelligence starting in 2007. This program is placed under the direction of Pr Clement Paoli (University of the Marne the Valley) and will associate the CERIC (university of Montpellier 3 - coordinator: A. Mucchielli), the UMR 6171 (CNRS/University of Aix Marseilles 3 - coordinator J. Kister), the LORIA (University of Nancy - coordinator: A. David) and the IRIT (University of Toulouse - coordinator B. Dousset). An annual financing of 40.000 euros was notified by CNRS for animation and operation in network of this collaboration, which will relate to three research orientations:

the use of the economic intelligence for the projection of the French influence at the international level

the creation of value within the framework of the communication and information sciences

the development of new tools within the framework of the machine analysis of information and the diffusion of these results within the framework of co-operative work.


Within the framework of this program, a French-speaking international conference associating researchers of the universities of Bologna, Turin and Madrid will be organized in Venice of the 24 at June 28, 2007 on the topic “the problems arising from the valorization of the data: theories, methods, tools”.

The flaws in the Chinese economic miracle

THE REALITY BEHIND THE WORLD'S WORKSHOP - The flaws in the Chinese economic miracle

Jean-Louis Rocca
Le Monde diplomatique, May 2007

China, with its unique mix of authoritarian government and rampant capitalism, is often portrayed as a fast-growing and malignant cancer that threatens the rest of the world's economies. But the reality is far more complex. China is struggling with mass migration, skills shortages and millions of unemployed graduates.

China and its teeming armies of workers seem to have become the focus of all our economic anxieties. We worry that the People's Republic will become the chief demon in a futur nightmare for our world: a capitalist-communist global power that combines leftwing authoritarianism with capitalist exploitation. We fear that our own people will become unemployed because of the outsourcing of production to China, the world's workshop.

But we have to think about Chinese labour differently, and not concentrate solely on the workshop aspect of the economy. We need to take account of a disparate, sometimes contradictory mix of economic, political and cultural elements. The labour-intensive industries with their industrial revolution exploitation affect only a fraction of China's enormous population. They cannot function on their own without interconnecting with other types of labour.

Agriculture is the only sector of the Chinese economy that has not been transformed by the new capitalism. Its labour force has not been turned into merchandise; the return to small family holdings of land has not led to new kinds of labour exploitation, nor has membership of the World Trade Organisation. Only collective ownership of land, currently being tested by a growing market in "utilisation rights" (1), still shows the traditional conservatism of the state. Agricultural labour policy remains highly political. There are of course considerations of food security, but the policy also allows the government to control a population that, if deprived of its means of production and social network, could turn migrant and invade the cities.

The government's aim is not to prevent migration but to regulate it; to prevent brutal urbanisation and allow migrants to return to their villages if the economy declines. The reality fits this strategy since most migrants do not see departure as a total break with their native villages. Agriculture remains as a fallback position, while the social network provides a structure for population movements, since most migrants are introduced to their employers by friends or family.

Around 120 to 150 million migrant farmers are subject to capitalist exploitation. More than half these peasant-workers (mingong) work in factories or on building sites. The remainder find jobs in catering and hotel businesses, retailing, security or even in garbage recycling (2). Some 80% of migrants abandon their land without actually leaving the countryside. They work in local industry; 50% never leave their native province. Their working conditions are not necessarily better than those of their peers in the global-supply sweatshops on the east coast, but their experiences do not match the traditional picture of the capitalist hell that is, for example, endured by China's miners.

Leaving for the cities

The authorities have changed the way they view migrations. Their social aspect was almost totally ignored during the 1980s and early 1990s, when liberal ideas about managing the labour force blended with a view that the migrations would not be large-scale or permanent. More recent developments, notably China's membership of the World Trade Organisation, have forced leaders to look more closely at rural employment. The stagnation of agriculture, and the importance to China's growth of the construction industry and sectors that are not capital intensive, have made the migrations strategically valuable. Researchers and civil servants now predict the progressive urbanisation of a large segment of the migrants, and some believe their living conditions should be improved to boost slackening domestic consumption.

The government is even considering an economic policy for migrants which includes housing them in cities hit by property speculation, giving those with no social security access to health care, educating their children (most have no access to schools) and persuading bosses (not just
capitalists but the heads of state construction companies) to actually pay their workers. These are not just grand philosophical principles, nor are they the effect of outside influences on Chinese disorder. These vital issues will set the conditions for continued growth in relative social
stability.

A trend that could be called "social capitalism" has emerged, popular among sociologists, journalists, congress delegates, civil servants and Chinese Communist party (CPP) members, which holds that while capitalism is good, it must go hand-in-hand with social policy. Proponents believe that a mechanism for redistributing wealth is necessary; wage increases for the lowest paid would boost flagging domestic demand.

The same people defend the idea that Chinese society should become more middle class as the only way to prevent a class war between rich and poor; and they believe some migrants should have access to this new middle stratum. This idea clashes, sometimes violently but usually discreetly, with the views of the free marketeers, who disapprove of social policy. The division doesn't reflect the reformist/conservative divide, though.

Some social capitalists have a nationalistic vision of capitalism and dream of Chinese state multinationals ruling the world. Others favour amore mercantilised capitalism. The economic liberals are not united; some are ultra-liberal, others favour a modicum of social policy. A hardline economic liberal may be a virulent anti-democrat and believe that only a strong government can control the market, and be hawkish in
international relations. The labour issue has arisen at a time when a small elite, not just CCP leaders and senior officials but also "elected" representatives, leaders of mass movements and the intelligentsia, is expressing a wide variety of opinions.

Adopting a social policy for migrant workers raises financial problems and might affect the future of the Chinese economic miracle. Many leaders ask if raising the cost of labour and providing social benefits might not be detrimental to China's competitiveness. Some point to the shortage of unskilled labour in certain areas of Guangdong province and ask if it is the result of a refusal to accept the conditions and wages
offered by the world's workshop, or the result of recent massive investment to open up the Chinese west? Or is it a demographic effect of the one-child policy (3)? The answer is probably "all of the above".

Migrants are not going home

It is clear that improved wages and living conditions, especially in Shanghai and in Fujian province where employers complain less of a labour shortage, have tempted many migrants to leave Guangdong province and head north. Perhaps migrants now have better knowledge of the labour market. The recent 23% increase in the minimum wage in Shenzhen shows that the remuneration of the new working class is a major issue. The mass return of migrant workers to the country is now considered hypothetical; surveys show that many farmers believe that their own futures lie in the cities. And the development of western China is only beginning. Perhaps the geographic trend is a result of changes in production along the coastal region. Labour-intensive industries are gradually moving to central China, while the eastern seaboard is turning to higher value-added employment. This redistribution would explain the emergence of a few local social security initiatives; companies on the coast need to ensure that they have access to a better-skilled and stable workforce.

China also has unemployment, which should be remembered by those who see it as the empire of labour. The official unemployment rate may be low; 4.1% of the urban population in 2006, although this does not include unemployed migrants or "off-post" workers who have lost their jobs but still depend on their company (the xiagang zhigong) (4). Nor does it include the unemployed who have reached the end of their entitlements, or the young jobless who have never paid contributions and are not entitled to benefits. Though there has been a significant increase in job applications since 2004, these are mostly for "informal" jobs (feizhenggui) without contract or social security. In urban areas "official" jobs are in the minority. Many former state employees remain out of work or only find jobs in the informal sector as auxiliary traffic police or security guards (5).

The most recent estimates reveal a tense situation. In 2006 the state provided 25m jobs for the urban population, 9m of them to labour market entrants, 3m to migrants (that this category was mentioned at all shows how the official line has changed) and 13m to workers who had lost jobs because of restructuring in the state sector. In reality, only 11.84m work contracts with social security entitlements were created
in 2006 (6). This year 24 million young people are expected to enter a labour market with only 12m new jobs (including places left by retirees) (7). The gap will be filled in part by unofficial jobs.

Effects on the young

The repercussions of the industrial restructuring in the second half of the 1990s that ended the jobs of millions of workers are still being felt. Urban unemployment is no longer confined to the older generation of "iron rice bowl" workers. The pretexts used to get rid of them implied that this
surplus generation was unable to adapt to market change and had to be sacrificed to make way for better-educated and more adaptable youth. But research in 2005 in the cities of Dalian, Tianjin, Changsha and Liuzhou showed that unemployment among 15-29 year-olds was 9% compared with 6.1% for the urban population as a whole.

According to Shen Jie, a sociology researcher at the Chinese Academy of Social Sciences: "Most young people are in jobs with no social security or stability. They work long hours for poor wages." These are unskilled school leavers with the equivalent of a high-school diploma. They are unlikely to be in competition with the migrants for dirty jobs but do not
have the training for jobs in the new sectors.

Cohorts of jobless young people are looked after by residents' committees and street offices, the lowest administrative levels. They are given temporary tasks in the non-trade community sector such as security or maintenance, or hold low-level jobs in the trade-related activities that
are developing, such as hotels, restaurants and stores. Quotas are reserved for them in jobs considered inferior but still better paid and more highly prized than those given to the migrant workers. These young people are gradually forming a welfare-supported proletariat between the middle class and the migrants. The better off may refuse lowly jobs and live off their parents, who, if they can afford it, may send them
abroad to obtain a qualification from a second-rate business or hotel management school. (France is one of the most popular destinations.)

But unemployment also affects young graduates. These have risen from 1.07 million in 2000 to 4.13 million in 2006; by 2010, 23% of the young will be graduates (8). The Chinese economy is having trouble absorbing such numbers. They were almost half the 9 million young people who entered the labour market in 2006 expecting to find work in the "new sector". An estimated 60% of 2006 graduates did not find jobs that year.

There is a paradox; major Chinese and foreign enterprises complain of a shortage of skilled, tech-savvy labour, yet young graduates are unable to find jobs (see `Graduates without prospects', left). Employers claim that their education does not reflect market requirements, and there is
a lack of mobility among job seekers. China's development model is still predominantly based on unskilled labour. Graduate starting salaries are very low. According to a survey in 2005, 20.3% earn less than $129 a month and 65.4% get a maximum $259. These low financial rewards are hardly likely to foster a new Chinese middle class.

Few hard facts

Faced with the seriousness of the situation, the last session of the National People's Congress discussed a law promoting employment and setting some major objectives; to improve coordination between the cities and the countryside, provide free "job shop" services, remove all segregation in employment, bring in new measures for unemployed young people without university or secondary school qualifications,
develop professional training, and provide greater assistance to young graduates in finding their first jobs. But translating these measures into reality depends on what concrete measures national and local authorities will take.

There are few hard facts about Chinese labour. Surveys are infrequent and fragmentary and the categories used in official statistics are rarely reliable. The labour force is used according to political/economic thinking primarily motivated by stability. The existence of a state-aided sector limits competition between urban and migrant workers. The
state is able to keep part of the population in the countryside by maintaining a traditional sector of activity there, while restricting the flow to the cities. Modern jobs being developed in sectors such as telecommunications, finance and advertising provide jobs for some children of former state workers left by the wayside following the restructuring of state enterprises. The government enables these young people, who will fill future, or existing, employment needs, to join the workforce and work their way up to more sophisticated production.

This would not be possible with a fully centralised and all-knowing labour management policy which would result in growing unrest. The police are likely to have a different point of view of social stability in relation to migrant living conditions than would cadres in charge of economic policies or social security management, or ideological chiefs
and the official unions. These potential differences of opinion provide opportunities for action by associations defending the rights of migrants. They can explain that the best strategy is to show local government and bosses that a well-treated workforce is both more efficient and more
stable. This would gain them the support of many trade unionists who hope that the present conflicts between workers and private-sector bosses will make their movement legitimate. As one explained:"Opposing the illegal actions of capitalists does not mean opposing government policy. On the contrary, it means upholding the law."
________________________________________________________

(1) Land remains state-owned but the farmers own the right to
use it and hence to rent it.

(2) Major Chinese cities are mostly cleaned by these
recyclers who wander up and down the main streets in search
of waste that can be sold (at a low price) to salvage
companies.

(3) Chinese economists are having a lively debate on this.
See Philip Bowring, "Labor need haunts China", International
Herald Tribune, 8 April 2006.

(4) These are workers who have been laid off but are still
being paid by their work units. This category will soon
disappear and the xiagang zhigong will gradually join the
unemployed.

(5) See Martine Bulard, "China breaks the iron rice bowl", Le
Monde diplomatique, English edition, January 2007.

(6) 2006 Chinese government report.

(7) 2007 Chinese government report.

(8) See David Langue, "Chinese paradox: A shallow pool of
talent", International Herald Tribune, 25 April 2006.



Translated by Krystyna Horko

Nigeria: '$2.27m Found on Capt. Ojedokun Approved'

This Day (Lagos)

24 May 2007
Posted to the web 24 May 2007

Juliana Taiwo
Abuja

Nigerian Miltary may have approved the $2.27 million found on the Nigerian Defence Attaché to India, Navy Captain G. A. Ojedokun, for which he was arrested by Indian security agencies, a senior officer in the Military who would not want his name in print yesterday clarified that the money was duly approved by the Ministry of Defence for certain projects earmarked for the Nigerian High Commission in India.

He said the money was part of an approval released for the project after the endorsement of the Defence Ministry, pointing out that the project was initially meant to be undertaken by the former Defence Adviser, also a Navy Captain, who is currently attending the National Institute for Policy and Strategic Studies, in Kuru near Jos, Plateau State.


"Following the appointment of the new Defence Adviser, the cost of the project was reviewed downwards. From our discussions with the Ojedokun and investigations, we discovered that the officer was trying to return the money which is the balance of the original sum that was approved to the country."

The senior officer explained that problems arose when he failed to declare that he had such an amount of money on him, which is normal international practice.

Explaining that the arrested Captain has since been released and has resumed duties at the Nigerian mission in India, the senior officer said the incident was blown out of proportion simply because it involved a diplomat.

When contacted for comments on the development, a senior official of the ministry who pleaded anonymity said "the Defence headquarters has set up a board of enquiry to further investigate the incident and unravel the circumstances surrounding it.



It would be recalled that the Indian Airport Authorities on the allegation that he was trying to smuggle out the $2.27million arrested Ojedokun an attache to the Nigerian High Commission in India.

He was said to have been stopped while about to board an Ethiopian airline flight bound for Lagos on Monday night, when the scanner revealed he had stacks of cash in his bag.

Indian authorities were said to be investigating whether there is a connection between Ojedokun and a drug syndicate in Nigeria, because he failed to mention if the money was linked to the Nigerian mission.

Indians largest group to get British citizenship in 2006

Press Trust Of India
London, May 25, 2007
First Published: 21:29 IST(25/5/2007)
Last Updated: 21:45 IST(25/5/2007)


Indians were the single largest group to get British citizenship in 2006, latest official figures indicated.

While 15,125 from India were given British citizenship, Pakistan came second with 9,050 of their nationals changing their citizenship.

Other major groups were from the Philippines (8,840), South Africa (7,670), Nigeria (5.870) and Sri Lanka (5,720).

In the last one decade of Labour rule, one million foreign nationals have been given British citizenship.

In 2006, more than 150,000 people obtained a passport which took the total of foreign nationals given British citizenship to 1,020,000 since Tony Blair assumed the rein.

Andrew Green, chairman of Migrationwatch UK said passing one million new citizens since 1997 was a watershed for government policy.

"It is hard to know whether this increase is incompetence or deliberate deceit. Either way we will pay a high price in terms of social harmony," he said.

Immigration Minister Liam Byrne said, "British citizenship is a privilege and it is right that it should be recognised and celebrated as a crucial stage in a person's integration into British life.

"It's also essential that migrants wishing to live in the UK permanently recognise the responsibilities that go hand in hand. Requiring a good grasp of English ensures that they are able to play a full role in society and properly integrate into our communities," he added.

NIGERIA MONITOR: Compilation of Events

Oil workers kidnapped in Nigeria
May 26, 2007

Nigeria - Seven oil workers were kidnapped in Nigeria, three of them U.S. citizens, the U.S. State Department confirmed but offered few details.

"Our consulate general in Lagos reports that three American citizens were kidnapped in Bayelsa state," State Department spokesman Gonzalo Gallegos said in a written statement.

"We are in the process of notifying their families, and will maintain contact with Nigerian authorities to monitor this incident."

Four other foreigners were kidnapped in the same incident, he said.

Reuters cited oil industry sources as saying nine foreign oil workers and a Nigerian colleague were kidnapped Friday.

In addition to the three Americans, the workers included four Britons, a South African and a Filipino, industry sources told Reuters.

There has been a wave of kidnappings of foreign workers in the oil-rich Niger Delta. Since late 2005, Movement for the Emancipation of the Niger Delta (MEND) militants have carried out numerous attacks on Nigeria's oil sector and abducted dozens of foreign workers, releasing nearly all of them unharmed.

Nigeria is Africa's largest oil producer. In 2005, it was the world's sixth-largest exporter of oil, but the conflict there has cut distribution by an estimated 500,000 barrels per day, according to the U.S. Department of Energy.

© AlaskaReport News



26/05/2007 14:32 LAGOS, May 26 (AFP)
Nigeria's oil unions suspend strike

Nigeria's oil unions said Saturday they have suspended a two-day-old strike after the government met their demands over the proposed sale of two state-owned oil refineries.

"We have suspended the strike," Peter Esele, president of the senior oil workers union PENGASSAN, told AFP.

He said that the government has agreed to retain a 51 percent stake in the Port Harcourt and Kaduna refineries and only sell the remaining 49 percent to private investors. Previously the government wanted to sell 100 percent.

The government also agreed to a 15 percent wage increase.

Nigeria's PENGASSAN and NUPENG oil workers unions had began the strike on Thursday at the refineries, which have a combined production capacity of 210,000 barrels of crude oil per day and employ around 4,000 people.

"The sale of the refineries does not follow due process and was not agreed to by all the stakeholders in the industry," said NUPENG head Peter Akpatason.

"Some of these so-called investors are political in their activities, they may buy the refineries and keep them comatose to promote monopoly", he added.

Critics of Nigeria's outgoing President Olusegun Obasanjo, who steps down on Tuesday, accuse him of organising a fire sale of state assets to his cronies in his final days in power.

Nigeria is world's sixth oil exporter accounting for about 2.6 million barrels per day of crude but production has been cut by a quarter due to unrest in the Niger Delta, where more than 150 foreign workers have been kidnapped this year.



Crude oil prices rise on Nigeria strike, worry over Iran


© ap
2007-05-26 02:17:45 -


LONDON (AP) _ Crude oil prices rose Friday amid worries about supply after Nigeria's powerful oil unions went on strike and gunmen kidnapped oil workers in the nation's south. Concern about more tensions with Iran was also a factor.
Potential conflicts in Nigeria _ Africa's biggest oil producer and a top supplier of crude to

the United States _ and Iran could affect global supplies and are buoying prices after a sharp drop-off Thursday, analysts said.
Light, sweet crude for July delivery rose 82 cents to US$65 a barrel in electronic trading on the New York Mercantile Exchange by afternoon in Europe. Brent crude for July rose 39 cents to US$71.11 a barrel on the ICE Futures exchange in London.
Oil unions began a strike Thursday at Nigeria's state-owned oil company and threatened to target exports in hopes of reversing the sale of government refineries. The state oil company holds the majority stake in joint ventures with international oil companies that account for more than 90 percent of the country's oil exports.
The kidnappings in southern Bayelsa, meanwhile, are the latest in a run of more than 100 seizures of foreign workers this year in the oil-producing Niger Delta. Embassy officials said those kidnapped included three Americans and four Britons.
Iran has expanded its uranium enrichment program, and the U.S. Navy is holding unannounced exercises off Iran's coast.
Traders and analysts fear any conflict between the U.S. and Iran could result in the closure of the Strait of Hormuz, through which tankers ship carry about 17 million barrels of crude oil a day, according to the U.S. Energy Information Administration.
Still, growing crude stocks in the U.S. have been depressing prices, as traders figure that already abundant crude inventories are likely to swell even more if refineries keep paring back operations for maintenance.
«The refinery problems in the U.S. has meant that there has been a buildup of crude even though there has been very strong demand for gasoline,» said Andrew Harrington, an analyst with ANZ Global Natural Resources in Sydney. «So that's putting pressure on crude prices.»
But issues surrounding Nigeria and Iran have taken front seat for now, Harrington said.
New refinery outages were reported at Valero Energy Corp.'s McKee refinery in Sunray, Texas, and ConocoPhillips' Alliance oil refinery in Belle Chasse, Louisiana, after a U.S. government report showed Wednesday that U.S. crude oil supplies rose 2 million barrels last week when analysts had been expecting a drop of 200,000 barrels.
Each new refinery problem makes crude oil less needed and gasoline in tighter supply, said Peter Beutel, president at trading advisory firm Cameron Hanover.
Heating oil futures gained 1.86 cents to US$1.9477 a gallon (3.8 liters) while natural gas prices edged up 0.3 cent to US$7.684 per 1,000 cubic feet. 


Nigeria: Which Drug Barons?


Vanguard (Lagos)

EDITORIAL
25 May 2007
Posted to the web 25 May 2007

Lagos

AT a time many Nigerians thought the murder of Chief James Ajibola Ige, former Attorney General of the Federation and Minister of Justice, had been rested, since his killers were unknown, President Olusegun Obasanjo has stated that drug barons killed him.

Nigerians are unshockable by the utterances of their imperious President. The latest revelation is an additional parting shot to the long list of Obasanjo's legacies. Why did it take the President more than five years to react to the murder of his serving Attorney General? The position of the Attorney is important enough to be listed by title and function in the Constitution.


How did the President know the killers were drug barons? Why was the President comfortable with a tenuous investigation of a very important national issue?

Was the curtailment of illegal drug trade not one of the listed achievements of the President? Was Ige working outside the programme of the government, assuming this was the reason for his death? Why was none of the suspects linked to drug barons? When did the President, who swore in 1999 and again in 2003 to defend the Constitution of the Federal Republic of Nigeria know this? The Constitution provides for sanctity of the human life.

It is obvious Ige's murder did not embarrass the government. There were no convictions, and Justice Atinuke Ige, wife of the former Minister of Justice, died soon after a no case submission was made - and all the accused freed - in 2003. The Inspector General of Police, Sunday Ehindero, last December declared the case closed.

What did the President intend to achieve by bringing up this case?Relevant Links



The Ige family think it is part of a campaign of calumny the President had been waging against their dead father. President Obasanjo had earlier blamed power failure on a minister "who did not know his left from his right". Chief Ige was a Minister of Power for just a year and power supply has regularly dipped below pre-1999 levels since Ige's exit.

President Obasanjo has unfortunately dedicated his remaining days to the same unpresidential altercations he has often been advised were below his office. His strident attacks on Vice President Abubakar Atiku have been sustained. The President does not need to be provoked anymore. Nigerians mostly think his eight years were engaged unproductively in conflicts that diminished the exalted office of the President and charted a path of poor civility for his innumerable lieutenants some who wholesomely adopted the abuse as acceptable manner of engaging the public.

Does the President want to be remembered for his last days in this light? There are even hints that he is quickly losing touch with the reality of May 29 being his final day in office. At the commissioning of the Mint on May 20, the President threatened to sell the place in 12 months' time, if it failed to run according to his expectations

Red Alert: Ukraine -- Sliding Down a Slippery Slope

Source: Stratfor

May 26, 2007 11 18 GMT


The Ukrainian Interior Ministry reported May 26 that some of its forces have begun acting on the order of President Viktor Yushchenko and disregarding the orders from the Interior Ministry. Several thousand Interior Ministry troops loyal to the president are reportedly moving toward the capital, Kiev, in defiance of orders from Interior Minister Vasyl Tsuchko.

The normal rule of law in Ukraine has become more and more blurred over the past few weeks. Prime Minister Viktor Yanukovich has repeatedly taken advantage of the country's weak institutions in order to peel power away from the increasingly unpopular Yushchenko.

That led Yushchenko on April 2 to use his greatest constitution-granted power and dissolve parliament, forcing new elections. But the constitutional order is so degraded that Yanukovich has continued to wield parliamentary power in defiance of the decree. In order to cope with such actions, Yushchenko also has begun doing end-runs around the system.

Ukraine's top judiciary, the Constitutional Court, has fallen victim to this escalating fight since courts only have power if their independence is respected, something that neither side is doing at the moment. With the courts out of the picture and two power centers now largely reduced to ruling by decree, the only true means of influencing events now boils down to troops.

On May 24, Tsuchko sent troops to the prosecutor's office without consulting the president -- a questionable action explicitly designed to head off Yushchenko's unilateral dismissal of the prosecutor (the institution next in line after the court), an equally questionable answer. Immediately thereafter, Yushchenko decreed that all Interior Ministry forces are his to command. Now, according to the Interior Ministry, at least one faction -- the highly trained Alpha Group -- has heeded the president's call and is moving.

At this point, the troop movement is unconfirmed, but if it is true, then the situation has moved the closest to violence in Ukraine's post-Cold War history.

Ultimately, during the Orange Revolution, government forces -- all government forces -- refused any hint of orders to fire on civilians. But then, political authority was unquestionably concentrated in the hands of President Leonid Kuchma. Now that concentration is gone, and the leading politicians, to put it mildly, despise one another. Add in the breakdown of the constitutional order and Ukraine is sliding down the slippery slope of "might makes right." If things do go that far, the only country positioned to intervene in any way is Russia.

Intervening is something that Russian President Vladimir Putin, well into a long-running effort to reassert influence in the old Soviet space, would sorely love to do. But he will not move until violence has broken out. He wants Russia to serve as savior, not conqueror. Should Putin play his cards right, the West is unlikely to lift a finger. Europe has already warned Yushchenko -- via foreign policy freelancer Javier Solona -- that it does not want to see violence of any sort, while the United States does not dare give the Russians reason to be anything but helpful in strengthening its negotiations with Iran over Iraq.

The one bright spot in all this is that Yanukovich and Yushchenko, as recently as a few hours ago, were still civil enough to hold a face-to-face meeting. Although tense and anger-filled, it was a meeting nonetheless. They have not yet reached the point at which they are willing to shoot at each other, but they are certainly getting their firepower ready.

Thailand: The Challenge of Eroding Royal Support

Source: Stratfor

May 25, 2007 18 36 GMT


Summary

Thai King Bhumibol Adulyadej said May 25 the restoration of democracy in Thailand remains on track, effectively withdrawing his unconditional endorsement of the military-backed government. In its eagerness to dismantle the party of ousted Prime Minister Thaksin Shinawatra, the government had started taking the king's support for granted -- consequently dismantling a key base of its legitimacy.

Analysis

In a nationally televised ceremony May 25, Thai King Bhumibol Adulyadej warned the country's top judges against dissolving Thailand's two main opposition political parties in a Constitutional Court verdict due May 31. He described Thailand's political situation as not good at all and implied that dissolving the Thai Rak Thai (TRT) party, founded by ousted Prime Minister Thaksin Shinawatra, and the Democrat Party would damage the nation's image. This is the first time the much-revered king has criticized the military-backed government's performance so publicly since it came to office after Thailand's September 2006 coup.

The king, who is considered a near-divine authority on what is best for Thailand's social well-being (he has devoted much if not all his life to establishing social programs throughout Thailand), typically steps into Thai politics only when stability is threatened. The last time the king spoke out against an incumbent government (under Thaksin), that government fell. By speaking out now, he is effectively withdrawing his unconditional endorsement of the military-backed government. He also is lending credence to rumors that the May 31 ruling probably will order the dissolution of the two opposition parties, something likely to spark mass violence in Bangkok.

The two opposition parties in question face charges of electoral fraud, and will be dissolved if found guilty by the government-appointed panel of nine constitutional court judges May 31. This would bar both parties' executives from politics for five years and therefore from participation in December's election. This blatant obstruction to Thailand's promised democratization process is the first issue capable of generating significant unrest or violence in Bangkok to have arrived in recent months. Opposition groups have long been hoping for just such an issue to help trigger a countercoup.

The Thai king's top concern is maintaining stability in the capital, hence his assurances to the public that promised democratic elections actually will arrive in December. Likewise, the identity of the two parties his words might have saved from dissolution is irrelevant to him, since it was the consequences of their dissolution -- unrest -- that he is trying to prevent.

The struggling regime has no choice but to respond immediately to address the king's concerns given the political weight that royal statements hold in Thailand. The regime's original goal in guiding the judges toward a guilty verdict was to eliminate the TRT from Thailand's political landscape as a warning to all opposition parties straying too far from the government's wishes. Simultaneous dissolution of the Democratic Party would have aimed to uphold the widely accepted Thai concept of balance and unity.

The king's statement means the Constitution Court in all likelihood will dissolve one of the opposition parties, if any. Though this will protect the government from a potential backlash, that and sticking to the promised electoral timetable will no longer be enough to secure its position given how heavily the government's legitimacy rested on the king's unconditional endorsement.

To prevent the king's support for the government from slipping further, and for the government to pick up what pieces are left of its public credibility, the government will have to deliver in other areas -- such as containing continued militant violence in the south. Given its lack of success in this endeavor in the nine months since coming to office, the government's options -- and days -- appear to be limited.

Germany's Tough Security Effort

Source: Stratfor

May 25, 2007 18 15 GMT


German authorities are sending police reinforcements to Hamburg in anticipation of protests planned for the May 28 Asia-Europe Meeting (ASEM) of foreign ministers. That event, however, will be a dry run for security forces ahead of much larger protests planned by anarchists and activists at the G-8 summit set for June 6-8 in eastern Germany's Baltic coast resort of Heiligendamm. With tensions already high and violent outbreaks occurring in several German cities, authorities are hoping to keep a lid on protests in Hamburg so as to avoid a spillover of violence in Heiligendamm.

In the months leading up to the G-8 summit, anarchists and anti-globalization activists have staged protests in several cities, including Berlin, Karlsruhe and Hamburg. Although most have been peaceful, some scuffles have broken out and arrests made. One demonstration in Hamburg turned violent May 9, forcing police to used water cannons to disperse a crowd of about 2,000 protesters, some of whom were throwing bottles and stones at officers. Four people were injured and eight arrested. Additionally, cars belonging to conservative politicians, officials and journalists have been firebombed in Hamburg and other cities in recent months.




The latest firebombing occurred May 22 when the Mercedes of Kai Diekmann, editor-in-chief of the daily newspaper Bild, was torched in front of his home in Hamburg. A note from "Militante Kampagne kampft fur Sie" ("a militant campaign that fights for you") was sent to Deutsche Presse-Agentur claiming responsibility for the attack, citing Bild's support of German police raids on suspected activist offices in the city. No arrests have been made in connection with the attack.

Nine similar attacks occurred in Germany in 2006, but the frequency of such attacks has increased significantly with the approach of the G-8 summit; one source reported that 18 cars have been torched in Berlin alone during May.

Amid these increasing tensions, Hamburg police are bracing for protests at the ASEM gathering, which will be attended by more than 40 foreign ministers from EU and Asian countries. Hamburg officials expect about 5,000 protesters to enter Hamburg prior to the G-8 summit, many arriving in time to demonstrate against the ASEM and to stay on for protests during the G-8 summit. Adding to the Hamburg police's concerns is a soccer match scheduled for the evening of May 25 between Hamburg's St. Pauli team, which is supported by generally left-leaning fans, and eastern Germany's Dynamo Dresden, whose fan base comes from the country's far right.

The combination of so many anarchists, leftists, anti-globalization activists and neo-Nazis in town at the same time makes for a potentially volatile situation in Hamburg, and German officials are bringing in extra police from four states as backup. By doing so, however, officials could be creating further tensions, as a larger police presence could actually incite the protesters.

German security preparations for both events -- including a series of raids on suspected activist offices across the country and the cataloging of suspected activists leaders by smell (perhaps to be used by dogs trained to sniff out troublemakers if necessary) -- has caused leftist groups to make the usual comparisons with Nazi Germany and the notorious East German Stasi secret police. Although such comparisons have been a sensitive issue in postwar Germany, the police are forging ahead with their proactive security measures. Indeed, similar measures were successful in minimizing disruptions during the World Cup matches held in Germany during summer 2006.

German authorities are determined not to let Hamburg erupt in violence, as it could only antagonize and encourage the protesters to cause more trouble at the big G-8 meeting in Heiligendamm.

Iraq: Al-Sadr's Return and Iran's Plan

Source: Stratfor

May 25, 2007 18 28 GMT


Summary

Radical Shiite leader Muqtada al-Sadr reappeared in Iraq for Friday prayers May 25 after spending months hiding in Iran. Al-Sadr's return reflects movement in negotiations between Iran and the United States. With these talks in full swing, al-Sadr will use Tehran's security blanket to prepare his movement for an eventual overhaul of the Iraqi political system. For the U.S.-Iranian deal to work, al-Sadr will have to make good on a commitment to rein in his militia -- and it appears that he already has begun to deliver.

Analysis

After a nearly four-month hiatus, Shiite leader Muqtada al-Sadr made a public appearance May 25 in the holy Shiite town of Kufa, Iraq, for Friday prayers. Rumors that al-Sadr fled Iraq for his personal safety surfaced around the start of a U.S.-Iraqi security crackdown in mid-February. Al-Sadr was most likely hiding out in Iran, taking the time to shore up his religious credentials while delivering instructions to his movement to lay low and avoid major confrontations with U.S. and Iraqi forces.

Al-Sadr's resurfacing could only have been made possible by a deal worked out between the United States and Iran in which Washington assured Tehran that al-Sadr would be on the U.S. military's "no touch" list. Though al-Sadr's movement has traditionally kept its distance from the Iranian clerical regime, priding itself on being an Iraqi nationalist movement rather than another Iranian proxy, the Iranians managed to use the security crackdown in Iraq to bring the radical leader under their umbrella.

An integral part of the framework of negotiations developing between Iran and the United States over Iraq involves a guarantee by the Iranians that they can rein in Iraq's Shiite militia groups to help quell sectarian bloodshed in the country. To make good on this promise, Iran needed to make al-Sadr dependent on Tehran for protection so that Iran could call in the favor when its negotiations with the United States advanced to a point where both sides would need to stop talking and start acting.

The longer al-Sadr remained in Iran, however, the greater the risk that his movement would implode and he would no longer be able to control his various commanders, who already operate independently for the most part. To be able to purge his militia of all the renegade elements, al-Sadr needed to step back into the picture -- and there was no better time than now, when the United States and Iran are forging ahead with direct negotiations to create a settlement on Iraq.

Surrounded by bodyguards and aides, al-Sadr told his followers during Friday prayers in Kufa that he would not back down from his demand for a timetable for the withdrawal of U.S. troops. After being away for so long, al-Sadr has some damage control to do to demonstrate that his demands will be met (and actually can be met now that Iran and the United States are actively working on a U.S. exit strategy for Iraq.) Furthermore, al-Sadr ordered his Mehdi Army militiamen to refrain from fighting Iraqi security forces, reflecting the quiet cooperation between the U.S. military and al-Sadr that Iran has facilitated.

And it appears that al-Sadr is ready for that cooperation. Just after Friday prayers on May 25, Iraqi special forces backed up by British troops killed Mehdi Army militia commander Abu Qader, also known as Wissam al-Waili, and at least one of his aides after they resisted arrest in the oil-rich southern Iraqi city of Basra. Abu Qader, described as the leader of the Mehdi Army in Basra, was charged with weapons trafficking and carrying out attacks against British forces in the Shiite-dominated south. While normally this sort of incident would result in immediate retaliatory attacks, a senior member of al-Sadr's political bloc said its response to the killing would be limited to "political resistance." It could very well be that Abu Qader had become a Mehdi Army renegade and that his elimination was a quiet show of good faith by al-Sadr.

Moreover, major changes were recently made to the leadership structure of the Mehdi Army, according to a May 23 Al-Quds Al-Arabi report. The reorganization involves moving away from regional commands and toward smaller contingents comprising 23-strong brigades. These changes allow al-Sadr to break down the regional setup that led to the creation of multiple renegade units, and thus exert more control over his movement and the oil resources in Iraq's Shiite-dominated areas. Securing control over the oil-rich city of Basra is of prime concern for al-Sadr, which could explain why he agreed to the "removal" of his top leader in Basra, clearing a path for him to insert a stronger loyalist.

As al-Sadr proceeds in efforts to purge his militia and political bloc of dissidents, he will be counting on the assurances he has received from Tehran that a U.S.-Iranian negotiated blueprint for Iraq will involve implementing a new political order in Baghdad that will safeguard the interests of the al-Sadrite movement.

The world's most expensive club



May 24th 2007 | HONG KONG

From The Economist print edition

China's investment in Blackstone shows how government investors are flourishing at the heart of the financial system

Satoshi Kambayashi


WITH $1.2 trillion in foreign-exchange reserves and the pool growing by more than $1 billion every day, China casts a giant's shadow over the global financial markets, even if it has mostly used the money to pile up American Treasury bonds. The announcement on May 21st that it would invest $3 billion of its reserves in Blackstone, a New York-based private-equity firm soon to issue shares, shows that it is prepared to barge into murky private markets as well as liquid public ones. It is not the only inscrutable country to be cosying up to the inscrutable private-equity industry. Around the world, a secretive society is emerging of governments flush with foreign assets, some of them petrodollars, that are increasingly calling the shots in international finance. The Blackstone deal is likely to stir others to invest their money even farther away from prying eyes than they do already.

Like China, whose proposed Blackstone stake is part of $300 billion that the government plans to set aside this year for investment purposes, dozens of countries have set up what are now commonly referred to as sovereign-wealth funds. They manage money drawn from reserves, natural-resource payments and the like. China is chiefly concerned to diversify its foreign reserves, but other sovereign-wealth funds own national, as well as international, assets.

The top 12 each have anything from $20 billion to hundreds of billions of dollars to invest (see table). Recently, Japan, Russia and India have reportedly been considering setting up funds along similar lines. Some estimates put the size of the funds at $2.5 trillion by the end of this year (in contrast, hedge funds are thought to have a mere $1.6 trillion), with another $450 billion in transfers from reserves being added annually. Including capital appreciation, the amount could swell to $12 trillion by 2015.


To the extent governments have traditionally held investment assets, it was to protect domestic currencies and banks from crisis. Since the funds were for emergencies, they were of a type that could be liquidated easily—initially the holdings were in precious metals, lately they have been in dollars. The idea of building up an endowment to replace shrinking natural resources did not exist.

That process may have started inadvertently in 1956 when the British administration of the Gilbert Islands in Micronesia put a levy on the export of phosphates—bird manure—used in fertiliser. The manure has long since been depleted. However, a once-tiny set-aside of money has become the Kiribati Revenue Equalisation Reserve Fund, a $520m investment portfolio that has grown to about nine times the tiny atoll's GDP.

A similar approach is now common among oil-producing countries, which, it is estimated, account for two-thirds of the assets in these sovereign-wealth funds, and are keen to diversify their national revenues, aware that their wealth is being pumped away. They have typically invested along similar lines to central banks, holding bonds, dollars and bank deposits. Temasek, a Singaporean entity created in 1974 to pool state-owned investments, started to change the mindset. It subsequently evolved into an even more complex investment vehicle. The heady combination of state-control, success and secrecy, entranced other governments.

Recently, central bankers have also begun wondering whether they have a fiduciary duty to make higher returns from the public wealth under their supervision, which could mean placing at least some part of foreign-exchange reserves in high-yielding, if less liquid, investments. In Asia this question has become increasingly pertinent in the past two years, as reserves have mushroomed.

The result has been a torrent of money into a finite pool of assets. There is no precedent for such fortunes suddenly to find their way into global financial markets, and they help explain the waterfall of liquidity that has driven up the value of risky (and less risky) assets of all descriptions around the world. The world's entire supply of shares is $55 trillion, and bonds account for a similar amount. Sovereign-wealth funds could soon become the most important buyers of such assets, and many others besides. If so, the world will witness the intriguing spectacle of its largest private companies being owned by governments whose belief in capitalism is often partial.

The last time governments were this involved in sinking money into private assets, the process tended to be called nationalisation. Now the funds are invested both abroad and domestically. A new term will have to be coined: internationalisation, perhaps.
Northern light

Of the biggest sovereign funds, only Norway's provides anything close to transparency. Each year it discloses its investment portfolios and returns. Without such a window on their investments, it is hard to fathom the interests of other funds—how they vote on shareholder motions, for example. There are likely to be questions about strategic objectives, too. What will they care about most? Economic returns, political objectives, securing strategic resources? It will be hard to tell.

Andrew Rozanov, of State Street Bank, argues that the lack of well-defined obligations and the ability to retain funds indefinitely while not having to reveal results is an investment advantage. The funds can harvest the benefits of volatility and illiquidity unavailable to the risk averse. It would not be surprising if some did particularly well. On the other hand, the same factors that could lead to higher returns could also lead to corruption and untoward political intervention.

But the kind of assets the funds invest in—big ones—can generate frictions even when run properly. Temasek has been embroiled in controversy in Thailand after it bought Shin Corp, one of the country's telecoms companies, from Thaksin Shinawatra, the country's deposed prime minister. China is no stranger to such tensions. In an event that still rankles, CNOOC, the state-controlled oil company, was blocked in America, supposedly on national-security grounds from acquiring Unocal, an oil company. It is quite possible that by purchasing a non-voting interest in Blackstone, China will be able to bypass the restrictions that might prevent it doing Unocal-style deals in Europe and America.

By choosing a private-equity firm, China will also be able to invest directly in a partner that, notwithstanding its forthcoming share offering, can keep many of its operations out of the public eye. But this is where the ironies of the deal are most apparent. “Crony capitalism? It is a marriage made in heaven—a partnership that does not want investors to ask questions with a country whose firms do not want investors to ask questions. I worry about the serious conflicts of interest this generates. More generally, government entities shouldn't be in the business of investing in private firms,” opines Raghuram Rajan, of the University of Chicago's Graduate School of Business.

Moreover, it is widely believed that by having China as a partner, Blackstone will receive preferential access to China's market (as well as providing China with experience it clearly covets on how to set up its own domestic private-equity industry). This is an advantage for Blackstone, and for its shareholders, China included, particularly so when other private-equity firms complain that the impediments to operating in China are growing.

However, providing an economic incentive to a lucky few, even if that includes the government itself, impedes China's broader need to create a fair and transparent financial market for all participants. That is what would produce the most efficient market for capital.


China still has vast holdings of state assets, and its embryonic stockmarket is bubbling over—if anything it needs more publicly traded companies. Like other countries with sovereign-wealth funds, it would appear to need more expertise in selling companies that it owns, rather than learning how to buy the ones it does not

Click http://www.economist.com/images/20070526/CFN411.gif

Defences against cyberwarfare are still rudimentary. That's scary

Newly nasty

May 24th 2007
From The Economist print edition

Peter Schrank


IMAGINE that agents of a hostile power, working in conjunction with organised crime, could cause huge traffic jams in your country's biggest cities—big enough to paralyse business, the media, government and public services, and to cut you off from the world. That would be seen as a grave risk to national security, surely?

Yes—unless the attacks came over the internet. For most governments, defending their national security against cyberwarfare means keeping hackers out of important government computers. Much less thought has been given to the risks posed by large-scale disruption of the public internet. Modern life depends on it, yet it is open to all comers. That is why the world's richest countries and their military planners are now studying intensively the attacks on Estonia that started four weeks ago, amid that country's row with Russia about moving a Soviet-era war memorial.


Even at their crudest, the assaults broke new ground. For the first time, a state faced a frontal, anonymous attack that swamped the websites of banks, ministries, newspapers and broadcasters; that hobbled Estonia's efforts to make its case abroad. Previous bouts of cyberwarfare have been far more limited by comparison: probing another country's internet defences, rather as a reconnaissance plane tests air defences.

At full tilt, the onslaught on Estonia was also of a sophistication not seen before, with tactics shifting as weaknesses emerged. “Particular 'ports' of particular mission-critical computers in, for example, the telephone exchanges were targeted. Packet 'bombs' of hundreds of megabytes in size would be sent first to one address, then another,” says Linnar Viik, Estonia's top internet guru. Such efforts exceed the skills of individual activists or even organised crime; they require the co-operation of a state and a large telecoms firm, he says. The effects could have been life-threatening. The emergency number used to call ambulances and the fire service was out of action for more than an hour.

For many countries, the events of the past weeks have been a loud wake-up call. Estonia, one of the most wired nations in Europe, actually survived pretty well. Other countries would have fared worse, NATO specialists reckon.

National security experts used to dealing with high-explosives and body counts find cyberwarfare a baffling new theatre of operations. In Estonia's case, “botnets” (swarms of computers hijacked by surreptitiously placed code, usually spread by spam) swamped sites by deluging them with bogus requests for information. Called a “distributed denial of service” (DDOS) attack, this at its peak involved more than 1m computers, creating traffic equivalent to 5,000 clicks per second on some targets. Some parts were highly co-ordinated—stopping precisely at midnight, for example. Frank Cilluffo, an expert formerly at the White House, says that the attack's signature suggests that more than one group was at work, with small-time hackers following the initial huge sorties.

Most countries have been complacent about guarding information infrastructure. In America, a congressional committee for computer security has given failing grades to many of the federal bodies it scrutinises. The Department of Homeland Security supposedly has a “cybersecurity czar” but the throne has not yet found a steady occupant.

Private firms have had more experience in fighting off internet attacks. Organised crime gangs, often from Eastern Europe, extort money from gambling and pornography sites by using botnets to make them unreachable. Last week a large DDOS attack hit YLE, Finland's public broadcaster. This week Britain's Daily Telegraph was hit. No political or financial motive was apparent. A Romania-based hacker led the Finnish attack.

Firms of varying competence and credibility peddle technical solutions. The typical protection against DDOS attacks is to buy lots of extra computers and bandwidth to handle an unexpected spike in traffic. “Mirroring” content across several servers means the cyber-attackers must hit many more targets simultaneously before disrupting anything. A system's architecture helps too: Estonia's open approach, with its built-in flexibility and resilience, and co-operation between the state, business and academics, worked well. Mr Viik hopes this will deter those trying to build cyberdefences on a military or state monopoly model.

Counterattacks are possible, but tricky. Security firms' staff can pose as hackers to infiltrate cybergangsterdom. This used to be a mere battle of wits. Now there are real fears of violence. “It's changed now that big money is involved. It is not beyond the realm of imagination that someone might be targeted,” says Mikko Hyppönen of F-Secure, an internet security firm.

But technology and sleuthing offer only a partial fix. The real question facing industrialised countries is how to create a legal environment that counts cyberaggression not as a kind of practical joke, but a grave breach of the legal order, akin to terrorism, international organised crime, or aggression against another state.

NATO is rethinking its position. It is designed to protect members against physical attack. When Estonia appealed for help it could only send an observer to Tallinn to monitor the attacks. For now, informal alliances are more useful. Internet companies in friendly countries such as Sweden headed off many of the attacks before they even reached Estonia. Ken Silva, the security chief at VeriSign, which runs big chunks of the internet's domain-name system, advocates defences at the core of the network to tackle malicious data-packets before they reach their target. But finding agreement among the world's privately run internet networks is hard.

The urgent need is for an international legal code that defines cybercrimes more precisely, and offers the basis for some remedies. The Council of Europe, a continent-wide talking-shop that is the guardian of many international legal conventions, has a treaty on cybercrime dating from 2001. Acceptance has been partial. From overseas, America and Japan have signed up; Russia so far hasn't.

The International Telecommunication Union, which unites all 191 countries that use the world telephone system, hopes to take the lead in pushing for a global convention against cybercrime. Alexander Mtoko, its expert on cyberwarfare, says the key issue is anonymity: “We are in an industry where there is no control, no rules, no identities—it's the wild west. But for critical applications you have to know who you are dealing with.” NATO experts agree. At a minimum, any international cybercrime convention is likely to oblige internet service providers to co-operate in blocking DDOS attacks coming from their subscribers' computers.

Yet the underlying problem is the internet itself. Wreaking havoc with anonymous telephone calls is hard. The internet's inherent openness allows hackers to hide. Yet that also helps make it cheap and innovative. Some countries may be more willing than others to trade freedom for security.

Mr Viik thinks a new global cybersecurity treaty may be reached by 2012. But victory will never be complete, thanks to the asymmetry between cat and mouse, notes Bruce Schneier, a security expert. “It is easier to come up with a new attack than with a new defence,” he says. The strongest defence, says Mr Cilluffo, may be resilience: “the ability to reconstitute quickly, recover and absorb.”

My Mother's Baghdad

http://www.bestlifeonline.com/
By: Joseph Braude
Jan 3, 2007 - 1:19:07 AM

She spoke of a peaceful cosmopolitan city where Muslims, Christians and Jews lived side by side—a vision that has guided my life and work

An unmarked FBI van sped past my college residence at Yale and paused a block and a half away, engine purring. The driver had his usual instructions from the New Haven field office to avoid the appearance of waiting for me in front of my dorm.

“Just get in quick.”

We raced to a nearby town and established contact with a dozen or so armed field agents who had been passing time in unmarked sedans, covertly circling a small-time mosque. The driver turned up the volume of what sounded like AM radio, but instead of a Red Sox game, a tense conversation in Arabic, fuzzy with static, came through the speakers. The van’s receiver was tuned in to a wired microphone that a Muslim worshipper inside had agreed to wear up his pants, past his crotch, and underneath his shirt.

“The guy is Iraqi,” my handler piped up from the backseat. “He hasn’t slept in two weeks, ever since the cleric in there supposedly started threatening to break his arms and legs. If you hear the imam breathe so much as a word that sounds like a personal threat to the guy, just say so and we’re going to bust down the friggin’ door.”

It was spring 1996, my senior year in college. At 21, I had no idea exactly what I wanted to do with my life, but the FBI did. They assigned me to help them find out if this Egyptian cleric, long in the agency’s sights, had broken the law. According to the Iraqi, the cleric had threatened him for planning to join an “infidel” organization. Would he make the mistake of repeating his threat? The four of us sat there tense and sweating. The van’s stuffy air seemed to aggravate a palpable urge on the part of the agents to move out and storm the place.

“Come on, Joe, what’s he saying?”

I concentrated on the layers of a nuanced Arabic-language power play between the cleric and his disaffected minion. I detected an Egyptian dialect, paper-light but confident and laced with Quranic phrasing.

“I mean to steer you toward the straight path, my son,” the cleric said. “My advice is only for your benefit.”

“But you have terrified my wife and me,” the congregant replied.

There was a pause, broken by the cleric’s warm chuckle. “Our only reckoning is with God, my son.”

“What’s he saying?” is a dangerous question for a translator barely out of his teens, especially in a high-stakes situation in which the speaker and audience are foreigners and violence is possible. The struggle to answer this question responsibly—to navigate the linguistic, cultural, and historic barriers that wall off East from West—was one of the reasons I began studying Near Eastern languages and history in college. It was the reason I was sitting here in the darkness on a warm spring night.

Maybe this passion to listen, to understand, to explain is the inevitable fate of a man born into a family whose history straddles the fault lines of today’s sectarian conflicts. Perhaps it all leads back to my mother, who became a refugee from Baghdad at age 5, one of more than 120,000 Iraqi Jews who fled their native soil in 1951 after 2,800 years of continuous history in Mesopotamia. But a refugee never entirely leaves the city of her birth. Memories of the place trail her through life, then live on in her children’s dreams. My brother and I grew up hearing her speak of a Baghdad that no longer exists—a peaceful multiethnic city, once a jewel of the Middle East, which has been fading from the war-torn landscape of Iraq for decades.

Behind high vine-shrouded stone walls, my mother listened to her nanny tell animal fables under a palm tree’s restful shade. Roses, gardenias, lemons, strawberries, and okra grew in a garden flanked by water fountains. My mother tells me there were family outings in a colorful bustling town, of pastoral scenes at home that changed with the seasons. When winter’s cold crept into her house, the Persian carpets were spread across the chilly tiles on the ground floor, only to be rolled up and transplanted to the rooftop for the summertime, “when the family went up and slept in the open air to keep cool.” The Tigris River, too, brought a welcome breeze during the hot season: “We would take a boat to a little island in the Tigris, and your grandfather and your uncles would catch fish and spit grill them for our picnic.”
Why, then, did she, her parents, five siblings, and tens of thousands of Iraqi Jews leave this wonderful place—nearly all at once? By the time we’d grown old enough to learn the answer, the sunnier parts of my mother’s youthful Baghdad had seeped into us.

Even as a 5-year-old, my nose knew the smell of an Iraqi kitchen: Tbeet, a centuries-old Babylonian dish that cooks overnight on the Sabbath, features stuffed chicken quarters and whole eggs in their shells sitting in a reddish-brown cloud of rice, cardamom, diced tomatoes, cinnamon, and onions. This dish, she quipped, sometimes had to serve as a Baghdad mother’s tool of last resort to dissuade her son from leaving Judaism for Islam—not an unheard-of occurrence. “You can abandon our community, but are you ready to give up the eggs in this tbeet?” was supposedly the question that stopped many a prospective convert in his tracks.
In my hometown of Providence, Rhode Island, Rita Braude looked out of time and place. Her willowy frame, dark complexion, and piercing olive-shaped eyes turned bearded heads at the Orthodox Jewish day school where she taught Hebrew to kids. Her students and peers looked and sounded a continent apart from her, their light skin and Yiddish-infused banter a product of their Eastern European ancestry. To fit in, she peppered her conversation with quotes from the Torah and Talmud, showing her acquaintance with the Babylonian roots of Hebrew lore.

At home, however, her Arabic flowed as naturally as her Hebrew, and she never missed a chance to mix the two. One day, for example, my brother and I brought her a verse from the Book of Ecclesiastes, the sad truism “That which is crooked cannot be made straight.” We wanted to know what it meant.

“In Arabic,” she responded, switching seamlessly from Hebrew into Judeo-Iraqi dialect, “we say, ‘The tail of the dog cannot be made straight.’ That’s because there was a legendary experiment in Baghdad, in which they tied the crooked tail of a dog to a branch in order to stretch it out, and then left it that way for 40 days.”

My little brother eyed her quizzically as she grabbed hold of an invisible tail between her clenched fists. “When after 40 days they untied the tail from the branch, it snapped back”—she mimed a sudden momentary loss of balance as she released her fists from their air grip—“into its original crooked position. So we say that even after 40 days— arb’in yom—you still cannot straighten the dog’s tail.”

She was teaching us to feel at home with the Arabic and Islamic sensibilities she had known growing up, and the American and Jewish ones that surrounded us in Providence. Just how rare her attitude was didn’t dawn on me until years later. I came to appreciate that the Baghdad of my mother’s girlhood had left her with something extraordinary to share, a vision the world still needed.

She was born into the waning years of an Iraqi constitutional monarchy in which Muslims, Christians, and Jews thrived under a benign Muslim king. Synagogues dotted the capital’s cityscape, sometimes right next door to mosques. Mom’s turbaned great-grandfather had been one of the last chief rabbis of a Jewish community that numbered as high as 40 percent of Baghdad’s population. Unlike the cities of Europe, Baghdad had no Jewish ghetto. Our family’s neighbors and friends were from all of the city’s creeds.

Even after the city’s interfaith honeymoon ended, the nobler values of Iraqi culture still flickered, albeit amid a rising wave of sectarian bloodshed. In 1941, Iraqi nationalists from the military and security services, along with German-backed fascist groups and criminals from Baghdad’s slums, killed several hundred men, women, and children. Though most of the victims were Jews, more than 100 Muslims died too, many of whom were fighting to protect their Jewish neighbors.
The mass lynching was an early manifestation of a brutal variety of Arab nationalism that shows little tolerance for minority groups. Sixty-six years later, it still functions as a crutch for dictators across the region. My mother’s enduring love for her birthplace is permanently scarred by the trauma of that black day. But to her sons, she stressed the flip side of the story: The fact that so many Iraqi Muslims willingly died to defend their cosmopolitan values, she said, was “like a sapling of hope, never to be forgotten.”


“Learn to recognize it,” she would add. “Learn to nurture it, every chance you have.”

Come on Joe, where’s the conversation going?”

I strained to make out the voices coming from inside the mosque, but they mixed with my mother’s voice deep in my memory. I felt empathy for the aggrieved Iraqi and suspicion toward the operation’s Egyptian target. I could also feel the agents’ pent-up energy, which kept swelling. I knew I had to deflate it.

“Can’t say I’m hearing the cleric make an overt threat right now, guys,” I said. “Either he’s a decent man and your source was mistaken, or the cleric is holding his tongue because he can smell us sweating out here.”

The squad dispersed without a prisoner to show for the outing, and my handler dropped me off on campus at Sterling Memorial Library. As Mom used to say in Judeo-Arabic, citing an Iraqi adage she’d grown up with, “You returned exactly as you had left.” Which was a better outcome, I think, for everyone concerned than to drive away with an innocent and handcuffed holy man in the backseat.

For five years, I moonlighted with the FBI while continuing Arabic and Islamic studies in college and grad school. In the end, it was enough to breed lifelong doubts in me about the capacity of covert government action to stem the rising tide of Islamist militancy. Not long before September 11, I quit and resolved to travel east. Call it that all-American passion to learn more about the old country—only a much older and unrulier country than, say, Ireland. I aimed to find my own answers by communing with a distant past.

No guidebook was available to help an American Jewish boy find his Babylonian roots in Saddam Hussein’s Iraq. Denied a visa, I circled Iraq’s periphery instead—following the lilt of people’s accents, the aroma of their cooking, and the timbre of their music—looking for traces of the Baghdad I had never seen but had learned somehow to long for.

“From your accent, I can tell you’re Iraqi,” a uniformed customs inspector said to me at the airport in the Saudi capital, Riyadh. Locals there speak in long, deep vowel sounds and clipped gutturals, much like the dialects of southern and central Iraq. “But tell me this,” he went on, “are you Muslim or Christian?”

I thought for a long moment about which answer to give. The U.S. Department of State advises Jews traveling in Arab countries to obscure their background in situations like this, which seemed ironic to me when my ethnicity was precisely what was propelling me there. The ensuing feeling of unease never fades, even during the friendliest exchanges. The same combination of intimacy and distance I had felt while listening in on a wire in an FBI van seemed to travel along with me across the Middle East.

I spent the better part of a decade exploring the oil-rich sheikdoms of the Arabian Gulf to Baghdad’s south, Levantine countries to its west, and Iran to its east. Wherever I went, I sought out the Iraqis: I found them squatting in a refugee camp and pontificating behind a mahogany desk. I talked less and listened more. Those who were old enough to remember the Baghdad of my mother’s childhood shared their longing for the bygone days, their vague hopes for the future.

This winding journey had a finish line: I assembled a decade’s gleanings and distilled them into a book called The New Iraq, my dreamy manifesto for how Iraqis could rebuild their country, with the world’s support, on the strength of their own history and collective memory. It hit bookstores the week the United States invaded Iraq in spring 2003.

By the time I finally crossed the Kuwaiti border into Iraq in May 2003, only 36 Jews were left in Baghdad. Two Iraqi bodyguards, graciously provided by the Iraqi Sunni family that hosted me, dropped me off near the Baghdad home of the youngest Jew in the city and left me there one afternoon. The two guards didn’t know who lived inside. My hosts had warned me that neither one of them would guard me particularly well if they knew much about who I was or whom I was visiting.

Thirty-eight-year-old Emad Levy and his father sat in their starkly furnished living room wearing yarmulkes. Crookedly hanging baby pictures flanked an empty clock socket on the wall over a dusty curtain, which shrouded the only window. The home was nothing like the lavish digs Mom remembered from her childhood. Nothing felt familiar—until Levy opened his mouth.

“What’s it like out there, Ayni?” asked Levy, punctuating his question with the Iraqi term of endearment that literally means “my eyes.” He wasn’t accustomed to having visitors.

In his rare, distinctively Judeo-Iraqi accent, I heard the sound of my childhood back in Providence. It’s an ancient lilt more ironic and self-deprecatory than anything you’d hear on Al-Jazeera. I answered his question with stories about a world neither he nor his parents had ever seen. Our eyes moistened. The stories we exchanged seemed to highlight our mutual estrangement, yet the language we shared brought us deeply, though obscurely, together.

“Has everything really changed here?” I asked. “Is everything about to change?”
“You know,” he replied, “in Baghdad a long time ago, they did a legendary experiment involving a dog’s crooked tail.…”

That which is crooked cannot be made straight. I finished the animal fable for him, and he flashed an approving smile.

“Do you eat tbeet on Saturdays?” I asked.

Levy gesticulated a little wearily in the air. “Who in this town is going to make me tbeet?” he asked.

The sound of rifle fire outside clipped the day’s calm as the sun began to set on Baghdad. Though the city of my mother’s memories felt farther away than ever before, I felt, for just a moment, completely free to be myself for the first time ever in the Arab world.

May 25, 2007

Indian Evangelist K.A. Paul arrested

CRIME: Evangelist K.A. Paul arrested

Click

May 24, 2007

A social dimension of Balochistan problem

By Robina Ali Zaidi
Thu, 24 May 2007, 13:49:00

The current conflict in Balochistan is as much social as it is political. The traditional sardars, in order to keep their tribesmen under their control, are generally not interested in their educational, social and political uplift. Likewise, the past governments did not pay the required attention to socio-economic development of the province. Except for the settled areas described as 'A' areas, such as Quetta, Zhob, etc., Sardari System has persisted in Balochistan ever since country's independence. The tribal chief holds the power of life and death over the whole of the tribe. There is no appeal against his decisions. He decides all the disputes of the tribe himself; inter-tribal disputes he settles with the help of other tribal chiefs. He is supposed to provide his flock with collective security and pursues their grievances with the government or with other tribes. When the aggrieved party approaches him, he is mandated to provide them with accommodation, food and shelter. His justice is supposed to be speedy and there is no beating about the bush. His decisions have supposedly only one orientation; to provide satisfaction to the aggrieved party.

The punishment of the guilty is only secondary. More so, the Sardar has the power to levy taxes, up to any amount. He can send his tribe hurtling into war or retire it in peace, back to their hearths, homes and families. He shares the tribe's sorrows and happiness alike and remains a part of it and at no stage alien. And every year he sends out his men to collect his share of goods and services, cash or kind; livestock, sheep, goats, camels; his share in the crop. In addition, he is entitled to get percentage in the fines imposed in cases, civil or criminal.

Balochis are a proud people and have good traditions and traits such as honesty, brotherhood and belief in the purity of their system, inherited from their forefathers. They have 'big egos' and would not accept new systems easily. Any attempt to change it, will be resisted. At the same time, the emerging educated class, the return of expatriates, the influence of electronic and print media and increased trade activity and development in the province is bound to change the feudal culture. Already, there have cropped up political parties representing the emerging middle class.

As the matter of the fact, Sardari system, entrenched since centuries and strengthened by the colonial powers could not be terminated overnight but it could not be allowed to perpetuate indefinitely. It is however, not in the interest of the masses. Unfortunately, the system is persisting owing to illiteracy, economic backwardness and feudal dominated governance. Various governments in Pakistan thought it convenient to maintain the status quo. Prime Minister Zulfiqar Ali Bhutto announced its abolition but could not implement it. Whenever there is a change in the status quo, there is an opposition from those vested interests, who are likely to be adversely affected. Interested external forces normally tend to exploit the internal dissensions. The government seems to have correctly adopted a two-pronged approach to deal with the present situation in the province, i.e., to seriously address the political, economic and social concerns of the people, and to use security forces in areas where there are armed insurgent elements. The Constitution of Pakistan does not allow the prevalent sardari system, maintenance of private armies or militias. These need to be disarmed and abolished. Similarly, the acts of sabotage or damage to public or private life and property cannot be permitted. No person can be allowed to take law into his own hands. The disturbed areas should be given 'A' status on priority. The unlawful activities should be effectively dealt with primarily by the civil armed forces, which need to be strengthened. However, if, in an emergency, the local or provincial authorities are unable to control violent disturbances with the help of civil armed forces, and request for help from the federal government, the armed forces can act in aid of civil power, as stipulated under article 245 of the Constitution of Pakistan.

In any case, peace and security is vital for the development of the province and welfare of the people. The representatives of the people, law-abiding sardars, elder statesmen and the intelligentsia need to be taken on board and a wide range of common people should be involved. The educated Marris, Mengals and Bugtis can match the influence of their traditional tribal chiefs. Any foreign help to militants can be denied through a meaningful engagement with the neighbouring countries. Sustained and solid economic development on a very large scale should be expedited.

If Pakistan has to progress in the competitive world of twenty-first century and follow the internationally accepted norms, the human development index has to be raised and the masses are to be given basic necessities of life, i.e. education, healthcare, jobs, etc. Balochistan cannot be kept away from the national and international influences in a world that has become a global village; expatriates are returning from abroad with an international outlook; and there is explosion of knowledge through media. It seems that the social and economic development in the province will create and strengthen a middle class, which will be the rivals of feudal leaders. There should, therefore, be a conscious effort to eliminate feudalism and sardari system through sustained efforts and solid economic development and reforms. In course of time, the archaic feudal order will be replaced by a modern egalitarian society. If the citizens have basic necessities of life and are provided with equal opportunities for education, health care and employment, the status quo will be changed. The sooner it is done, the better for the people of Balochistan. Although Balochistan has not been given the attention that it deserved in the past, there seems no doubt that under the new thrust and orientation of national policies, Balochistan is set for a change for the better.



© Copyright 2003 by The New Nation

Book Review - Pakistan: Sovereignty Lost

Buried in debt
National debt is a serious subject which must be discussed in a sober rather than sensational manner, writes Dr Muhammad Reza Kazimi
Dawn: Books and Authors, May 20, 2007

Book Review: Pakistan: Sovereignty Lost
By Shahid ur Rehman

Shahid ur Rehman, a veteran journalist known for his economic and diplomatic reports, is correspondent for Kyodo News Agency of Japan. His other books include Who Owns Pakistan? and Long Road to Chagai


Pakistan is burdened with debt. This constricts its diplomatic and security options. There have been attempts by previous governments to liquidate the debt. Resumption of aid following Pakistan’s joining the ‘War Against Terror’ gave the impression that the debt burden had been greatly relieved. Shahid ur Rehman assures us that it has not. The Introduction of his book highlights his main contentions and it is here that he shifts the burden of guilt from economic to political decisions. It is an indictment of our country’s early leadership. Some of these observations are factual and correct but even here, the documentation is not adequate, which prevents his observations from acquiring context.

Shahid ur Rehman says that Pakistan first lost its sovereignty immediately after its independence, when the Quaid-i-Azam sought a $2 billion economic assistance from the United States (P.15). The background to this is that the US was the only country to send a delegation to attend the Independence celebrations of Pakistan, while the USSR was the only country not to congratulate Pakistan on its creation. The Indian government had withheld Pakistan’s share of its financial assets. The 17 per cent which was paid after Gandhi’s protests was barely sufficient to meet our initial expenditure.

In an investigative treatise, it is necessary to mention the primary cause of the events described. According to the author, Liaquat Ali Khan and Khwaja Nazim uddin renewed the request only two days after Liaquat’s assassination. It needed to be ascertained whether Liaquat’s signature was genuine, since this is an assertion which is at odds with other US documents. Liaquat’s meeting with the US envoy Avra Warren only four days before his assassination; had been contentious. Warren had asked for Pakistan to contribute towards Middle East defence. Liaquat made the contribution contingent on a Kashmir solution and not on $2 billion. In fact, Liaquat was broaching a joint defence with Iran and Egypt, against the western bloc.

Shahid ur Rehman tells us that in 1952, wheat imported from the US was transported on camel carts with “Thank you America” written on the signs hanging from the animals’ necks. This, by itself is correct, but here one is tempted to register a counter complaint:

“Not long ago, while one of the authors was in Pakistan, our economic mission delivered a shipment of American tractors. Within a few days, it was commonly accepted throughout the countryside that the tractors had been given by Russia” (A Factual Epilogue: The Ugly American, P.282)

Shahid ur Rehman in his Introduction blames Ayub Khan for the grant of the Badaber Base. Further on, he himself refers to the acrimonious correspondence between Ayub and Lyndon B. Johnson over its closure: “I give not a fig for Pakistan except as its interests are ours” (P.17). Earlier McConaughy wrote: “The fight to the finish would destroy Pakistan’s military capability, which is not in American interests” (British Papers, P.381). Every envoy is meant to consider the interest of his or her own country and not the country of accreditation. Clearly, McConaughy was answering the charge that he was being sympathetic to the country to which he was assigned.

Under the heading ‘Mystery of Liaquat’s visit to the US’ (P.30), Shahid ur Rehman persists in the face of overwhelming documentary evidence to the contrary, that Liaquat used USSR’s invitation to cadge an invitation from the US. But it is another fact that the USSR, after having extended the invitation, never set the dates. Before embarking for USA; on American soil and on his return, Liaquat reiterated that he had accepted Stalin’s invitation but he could only go when the dates were set.

But before rendering judgments, one must keep in sight, that even now, the India-US Nuclear Treaty and Russia’s supply of five nuclear reactors to India are proceeding simultaneously. It is naïve to think that the same conditions that apply to India would also apply to Pakistan, which brings us back to the advantages accruing to India, and the disadvantages accruing to Pakistan at the time of its creation. To blame the founding fathers instead of recognising the predicament in which the new country found itself, is quite a distortion.

National debt is a serious subject which must be discussed in a sober rather than sensational manner. It was found necessary because, when the author comes to his subject, he is on firm ground. In a situation when the people of Pakistan are kept from knowing the extent of their debt, when the loan is staggering despite the respite granted to Pakistan for its cooperation in the ‘War Against Terror’, these facts need to be made public.

Shahid ur Rehman reveals that 1989-90 was the first financial year during which debt repayment came first in the federal budget, getting ahead of defence and development (P.74). During the same year, three packages were negotiated with the IMF — all negotiated by unelected governments but implemented by elected governments. Since 1990, Pakistan is paying $39 million every year to encash one National Highway Authority bond worth $22 million and “nobody knows when, how and why these bonds were issued” (P.84). It would take $780 million for bonds having a face value of $440 million by 2010, which is not too far away. Now the debt incurred for building highways is not the same as the debt incurred for keeping the economy afloat in the initial stages. We must differentiate between the loans contracted before and after the Korean War, when the element of compulsion had receded.

Apart from the amounts of the loans contracted, the other aspect is that since information is not shared, there is no accountability. For example, Dr A.R. Kemal suspects that the government was reporting commercial debts repayment, but not the commercial debt contracted. A table provided by the author reveals that Pakistan to date has contracted $79 billion and repaid $70 million. They are shocking figures.

In conclusion, we are constrained to remark that such an important book should not have been produced in such a slipshod manner. We learn that what Ziaul Haq had staged was not a coup but a “coupe”. Similarly the back cover says that the premier had promised to come to the premier of the book.

--------------------------------------------------------------------------------

Extract

Pakistan joined the World Bank on July 11, 1950, and the Auditor-General Yaqub Shah was appointed the first Pakistani representative to The World Bank.

A team of World Bank officials visited Pakistan in 1951 and offered $60 million for irrigation purposes, the rehabilitation of railways, extension of telecommunication and hydro projects.

Pakistan contracted the first loan in its history — $27 million from the World Bank for Pakistan Railways on February 22, 1952. But it was the first loan from the United States signed in December 1952 that changed the economic, security and political landscape for all times to come.

In 1951, India, hit by a famine sought two million tons of wheat from the United States leading to the Indian Emergency Flood Act signed by President Truman on June 19, 1951. It envisaged that a nearly $5 million interest would be used to bring Indian students, professors and technicians to the United States and for free ocean transportation of relief supplies to India given by individuals and private organisations.

In 1952, Pakistan was also hit by a food shortage earning the ‘gourmet’ Prime Minister Khwaja Nazim uddin the nickname of Quaid-i-Qilat (leader of shortages).

The government approached the United States for assistance, and negotiations which led to an agreement for the import of one million tons of wheat under a $15 million commercial loan provided by USEXIM. The agreement was signed at a ceremony in the White House on September 7, 1952, witnessed by President Truman. Ambassador Muhammad Ali Bogra signed on behalf of Pakistan.

Subsequent developments revealed that the shortage was artificial and as soon as imported wheat started reaching Pakistan, the hoarded wheat resurfaced. When 600,000 tons of wheat had arrived, the government asked the US to stop further shipments.

Using the food shortage as a pretext, Ghulam Mohammad sacked Prime Minister Nazim uddin on April 17, 1953. According to various accounts, Nazim uddin was held incommunicado, his telephone lines severed to prevent him from appealing to the Queen in whose name the governor-general was ruling Pakistan.

Nazim uddin is reported to have remarked in helplessness that when he was governor-general, the power lied with the prime minister, now that he was the prime minister, the governor-general was wielding the real power.

Mohammad Ali Bogra was imported from Washington to become the prime minister. He was the first rolling stone of Pakistani politics to rise meteorically by switching over parties and loyalties. When Pakistan was born, he supported Hussein Shaheed Suharwardy in the election of the leader of the house in the East Pakistan Legislative Assembly against Khwaja Nazim uddin.

Nazim uddin won. Bogra changed his allegiance to Nazim uddin and managed to secure the ambassadorship to the United States. Mehmood Ali, a veteran of the Pakistan Movement, said the following about Mohammad Ali Bogra.

“In the power struggle in Pakistan after the assassination of Prime Minister Liaquat Ali Khan and the illegal and unconstitutional dismissal of Khwaja Nazim uddin, Mohammad Ali Bogra changed over to the Ghulam Mohammad-Iskandar Mirza-Ayub Khan axis backed by a foreign power and succeeded in stealing the office of the prime minister of Pakistan.”

As ambassador to the United States, Bogra had signed the cherished deal for one million tons of wheat and was inducted as prime minister before it started arriving in Pakistan. The US wheat was transported from the port on camel carts with “Thank you America” hanging from the camels necks and its arrival was celebrated at a glittering ceremony in Karachi on July 3, 1953. It was the biggest ceremony ever in the history of the metropolis chaired by Prime Minister Bogra.