April 05, 2008

RIL,ONGC buy oil assets in Latin America

6 Apr, 2008, 0231 hrs IST, TNN

MUMBAI: India’s biggest oil explorer ONGC and biggest company by market cap, Reliance Industries (RIL) have acquired equity stakes in three Latin American oil blocks.

ONGC’s overseas arm OVL has picked up 40% participating interest in San Cristabel block in Venezuela for $450 million, while its private sector peer RIL has picked up stakes in another two block.

OVL will sign an agreement with state-run Petroleos de Venezuela (PDVSA), the biggest crude oil exporter to US next week with the operatorship remaining with the Venezuelan firm.

“The Venezuelan oil block has reserves of around 250-million tonne. A team of government and company officials is scheduled to leave for Venezuela on Sunday to sign the agreement,” petroleum minister Murli Deora said.

RIL will have majority stakes in atleast one of the oil blocks in Latin America, Atul Chandra, president of company’s international business said. He refused to divulge any further information citing absence of regulatory approvals.

RIL has signed agreement for these two blocks with its counterpart on late Friday night.

OVL is present in 29 oil and gas projects spread over 15 countries. During the last one year, OVL ventured into two new countries- Turkmenistan and Congo Brazzaville, and secured equity participation in 11 oil and gas projects in 6 countries.

RIL is present in three exploration blocks in Yemen, two each in Oman and Columbia and one each in East Timor and Australia covering an area of about 38,000 sq km.

Besides, RIL has also signed a technical evaluation agreement with ANH (Columbia’s hydrocarbon regulator) and has entered into a cooperation agreement with Ecopetrol (National Oil Company of Columbia) for exploring opportunities in that country.

India, Asia’s third-biggest oil consumer, is competing with China for securing oil equities abroad. India, world’s fastest-growing major economy after China, depends on imports for 70% of its oil needs.

India will spend $300 billion over the next five to seven years on oil exploration and production.

The domestic exploration and production business will become a $5.2 trillion industry in the next five to seven years, said petroleum secretary MS Srinivasan while delivering his key note address at an CII oil and gas event on Saturday

India, Turkmenistan ink energy pact

India and Turkmenistan Saturday inked a landmark memorandum of understanding on cooperation in the oil and gas sector that is expected to go a long way in addressing India’s long term energy security needs.

Minister of State for External Affair E. Ahamed and Turkmen Deputy Prime Minister for Oil and Gas Tachbardy Tagier signed the agreement in the presence of Vice President Mohammad Hamid Ansari and Turkmen President Gurbanguly Berbimohammedov.

Speaking earlier at the delegation level talks between the two countries, Ansari pointed to Turkmenistan’s geo-strategic location and said it had an important role to play in meeting India’s energy needs.

“Turkmenistan is geo-strategically located and with its vast hydrocarbon resources, it has an important role to play in the world’s energy security. India, with its vast requirement of energy is Turkmenistan’s natural partner,” the vice president noted.

Both Ansari and Berbimohammedov pointed to the close and historical ties between the two countries and said they would provide the impetus to move ahead in diverse fields.

Appreciating the fact that India was one of the first countries to recognize Turkmenistan when it emerged as an independent nation in 2001, Berbimohammedov said: “India’s progress in IT is commendable. We seek your expertise in this field.”

Referring to the growing ties, the president noted that some 15 Indian companies currently had a presence in Turkmenistan, trade had grown 10 times in the last decade, and that 10 flights operated a week between the two countries. “We must find new ways to enhance these ties,” Berbimohammedov added.

(Source: thaindian.com)

ONGC Videsh to invest $450 million in Venezuelan joint venture news

05 April 2008

Mumbai: ONGC Videsh Ltd (OVL), the overseas arm of Oil and Natural Gas Corporation of India (ONGC), will invest around $450 million over the next three years in oil and gas exploration in Venezuela, petroleum minister Murli Deora said.

OVL is planning a joint venture with Venezuela's national oil company Petroleos de Venezuela SA (PDVSA) to operate the San Cristobal oil block, Deora said.

OVL has acquired a 40 per cent stake in the San Cristabel oil block, located in the Orinoco belt, in Venezuela, with estimated reserves of around 250-million tonnes, he said.

OVL and a subsidiary of PDVSA will form a joint venture to operate the San Cristobal area and production is expected to start in about three years' time.

Deora is leaving for Venezuela tomorrow to sign an agreement to this effect.Deora also said Indian officials would meet their counterparts from Pakistan and Iran later this month to resolve certain issues raised by Pakistan on the proposed $7 billion India-Pakistan-Iran gas pipeline.

The government is planning to spend $300 billion over the next 5-7 years on exploration and production of oil, petroleum secretary MS Srinivasan said.

India and Turkmenistan, meanwhile, signed a memorandum of understanding on cooperation in the field of oil and natural gas.NNThe MoU was signed by minister of state for external affairs E Ahamed and Turkmenistan's deputy premier and minister for oil and gas, T Tagiev.

April 04, 2008

Unrest in Xinjiang: China Seeks Musharraf's Good Offices

by B. Raman

The unrest against the Chinese Government has spread from Tibet to the Muslim majority Xinjiang province of China. Since the beginning of this year, there were already indications of the revival of the Uighur independence movement as seen from the discovery of an Uighur sleeper cell in Urumqi, the capital of the province, by local officials of the Chinese Ministry of Public Security, which is the Chinese internal intelligence and security agency. This was followed on March 7, 2008, by an aborted attempt by three Uighurs---one of them a woman--- to blow up a civil aviation plane going from Urumqi to Beijing with the help of gasoline concealed inside a soft drink can, which had been smuggled into the plane. The attempt was thwarted by alert security guards on board the plane.

2. There was a fairly big demonstration against the Chinese authorities at Khotan in the Xinjiang province on March 23, 2008. About 1,000 Uighurs, including many women, participated in the demonstration. The protest was triggered off by two events. Firstly, the alleged death in the custody of the Ministry of Public Security of Mutallip Hajim, a wealthy jade trader and popular philanthropist, who had been arrested on a charge of belonging to the sleeper cell discovered in January, 2008. Secondly, the anger of the local women over a long-standing order banning women from wearing scarves over their heads. Many of the Uighur women, who participated in the demonstration, defiantly covered their heads with scarves. The news of the demonstration was first broken by the US-run Radio Free Asia, which covered it on the basis of reports received from its sources in Xinjiang and Uighur political exiles in Turkey. The local authorities of Xinjiang initially denied and ridiculed the reports of the Radio, but they admitted on April 2, 2008, that a demonstration did take place. According to a statement from the Khotan government in the Xinjiang region, "extremist forces" tried to incite an uprising in a local market place on March 23. "A small number of elements... tried to incite splittism, create disturbances in the market place and even trick the masses into an uprising," an official statement issued by the authorities said. It added: "Our police immediately intervened to prevent this and are dealing with it in accordance with the law."

3. The belated official confirmation of the incident has strengthened the credibility of the broadcasts of Radi Free Asia, which has now reported that the local authorities have undertaken house-to-house searches in the area looking for extremist suspects. Other independent reports from Tibetan sources also speak of a crack-down in Urumqi and other places, during the course of which over 100 Uighur Muslims have been detained for interrogation.

4. The continuing unrest in the Xinjiang province, which is attributed to pro-Western Uighur groups operating from Turkey and the Central Asian Republics as well as the pro-bin Laden groups operating from Pakistan, has unnerved the Chinese authorities, who are worried that the pro-Western Uighurs and the Tibetan youth might join hands to disrupt the Olympics. The pro-Western Uighur groups and the Tibetans have links with each other and with the intelligence agencies of the Baltic States through the Holland-based Unrepresented Nations' and Peoples' Organisation, allegedly funded by the US Central Intelligence Agency. Elements belonging to the organisation, which had played an active role in the anti-Moscow movement in the Baltic States, have now joined hands with the US-funded National Endowment For Democracy for supporting the anti-Beijing revolts in Tibet and Xinjiang and for encouraging a similar revolt in Hong Kong, with the help of Falun Gong elements. The Chinese are also worried about likely threats to the Olympic Torch from pro-Al Qaeda Uighur elements and from the students of the Lal Masjid of Islamabad, when it transits Islamabad on April 16 before being taken to New Delhi.

5. According to reliable Pakistani sources, in response to a request from the Chinese Foreign Ministry, Pakistan President Pervez Musharraf has agreed to visit Urumqi during a long-pending six-day state visit to China from April 10, to attend a meeting of the Boao Forum for Asia and appeal to the local Muslims to co-operate with the local authorities and not to let themselves be misled by the followers of the Dalai Lama. He is expected to visit a local mosque in Urumqi and address the local Muslim personalities there. Musharraf, who is keen to project himself as still enjoying the confidence of China, has welcomed the request of the Chinese Foreign Ministry and agreed to try to help the Chinese out.

6. Reports of continued peaceful demonstrations by Tibetan monks and students have been received from Tibet, Sichuan, Gansu and Qinghai, but there have been no fresh incidents of violence. Radio Free Asia has been disseminating detailed instructions to its listeners in Tibet and Xinjiang as to how to overcome the jamming of its broadcasts by the Chinese.

7. Pakistan and Nepal have been playing a double game in the recent events. Pakistan has been pretending to co-operate with the Chinese against the Uighur extremists. At the same time, it has allowed Radio Free Asia to produce many of its Uighur language programmes in Pakistani territory. Similarly, the Government of Nepal has been co-operating with the Chinese authorities for monitoring the activities of the Tibetan Youth Congress from Nepalese territory. At the same time. it has allowed Radio Free Asia to produce and transmit many of its Tibetan language programmes from the Nepalese soil.

(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute for Topical Studies, Chennai. He is also associated with the Chennai Centre For China Studies. E-mail: seventyone2@gmail.com)

Partnership Action Plan on Defence Institution Building


Building democratically responsible defence institutions - this is one of the long standing priorities within the Partnership for Peace. Since the Istanbul Summit 2004, the manifold activities in this common endeavour have a jointly agreed conceptual framework: the Partnership Action Plan on Defence Institution Building. The PAP-DIB Programme gives clear guidance on way to develop and consolidate democratically accountable and managerially effective defence institutions.

An Educational Product – Made in Switzerland

Switzerland, as a member of the Partnership for Peace, has supported PAP-DIB from the beginning. This e-learning course is a Swiss contribution to the further implementation of the Defence Institution Building programme.

This course:
contains factual, conceptual and procedural information on how democratically responsible defence insitutions are set up and run;

targets early/mid-career officers and civil servants from defence insitutions and courses at EAPC/PfP defence academies and educational insitutions;

offers effective learning for all 10 objectives of PAP-DIB. The learning path comprises self-contained modules, which can be taken individually or as a “whole”;

is free of charge and can be easily used by anyone and adapted by an insitution.

How to obtain this course

The simple-to-use course can be run in Learning Management System, from a CD-ROM, in an internet browser or be offered in print format. Any institution is invited to request its own free copy and use the course for its own educational purposes.

Download a free copy of the course to be run in an LMS
Use the course on ready-to-use infrastructure

Middle East atomic moves

The UAE and Egypt make significant moves to develop a nuclear capacity, as Israel drops reactor plans, Dominic Moran reports for ISN Security Watch.

By Dominic Moran in Tel Aviv for ISN Security Watch (04/04/08)

A period of hiatus following a wave of Arab nuclear announcements appears to have ended with the signing of a Franco-UAE atomic pact, as Egypt prepares to launch a tender for the country's first nuclear energy plant.

There are strong indications that the UAE deal could constitute the first step in a developing trend of atomic development and competition promoted both by pressing energy needs and regional instability.

Dr Emily Landau from Tel Aviv University's Institute for National Security Studies told ISN Security Watch that Arab nuclear plans were motivated, in part, by Iranian atomic development. "Otherwise it would be difficult to explain this surge of interest that came out at a certain point of time when the Iranian nuclear program seemed to be getting very serious," she said.

Referring to the Gulf, London-based Chatham House's Dr Valerie Marcel told ISN Security Watch, "They have all these plans to develop domestic [electricity supply] because populations are expanding and also industrial usage is expanding and they have fewer and fewer options for importing gas. So turning to nuclear is a way to diversify their energy mix."

Raising the stakes
In the first indication that repeated government assertions regarding plans for an Egyptian nuclear energy program could be about to bear fruit, a tender is expected to be held later this year for the construction of the country's first energy reactor.

Egypt penned a nuclear cooperation deal with Russia last week raising the stakes in the tendering process. The reactor is likely to be situated at al-Dabaa, west of Alexandria on the Mediterranean coast.

"I think the movement in Egypt and also other countries is to explore areas of cooperation, not just with Russia but also with China, Europe and the United States," Dr Mohamed Kadri Said from the Al Ahram Center for Political and Strategic Studies in Cairo told ISN Security Watch.

Referring to last week's deal, Landau said: "I think they just signed some sort of understanding in this regard; they haven't signed a concrete deal. Mubarak made some statements afterwards where he tried to downplay it a little bit and not make it seem that they are going full steam ahead with Russia for their program."

Egypt has the most significant nuclear research development track record of any Arab state, operating two research reactors, and signed several energy reactor deals in the past, all of which came to naught.

In late 2006, the Egyptian Electricity and Energy Ministry announced plans for a three-to-four reactor program to be completed by 2027, with the first plant scheduled to be in operation within 10 years, ending a freeze on atomic energy plans in place since the 1986 Chernobyl disaster.

Egypt clarified in December that it was unwilling to commit to a Nuclear Non-Proliferation Treaty (NPT) Additional Protocol mandating invasive probes by the UN's International Atomic Energy Agency (IAEA) - which may have an impact on US and European states' readiness to supply the mooted reactor program with nuclear fuel and sensitive technologies.

"Of course they are talking about nuclear energy programs […] but everyone knows that the way to nuclear weapons in the world of the NPT is through nuclear energy programs," Landau said.

The decision to renew the Egyptian reactor program, while presented as a response to pressing electricity generation needs, appeared motivated primarily by developments in the Iranian nuclear program.

Mubarak has specifically related nuclear development to wider regional strategic issues, warning recently that the Gaza crisis had brought Iran onto the Egyptian border. Egypt's atomic plans appear designed both as a warning and as a pragmatic initial step in developing a significant nuclear capacity ahead of the potential emergence of an Iranian atomic weapons capacity.

According to Said, "Egyptian-Iranian relations are not healthy. But at the same time the Egyptian government received some officials from Iran, just to listen to them. But I didn't see any positive translation of that on the ground."

Significant obstacles remain. The new reactor - which officials estimate will cost US$1.5-US$2 billion - will need significant underwriting from the government of the state whose nuclear industry wins the primary fabrication contract.

Informed Egyptian officials tell ISN Security Watch that the US and other western countries will have the inside running for any reactor deal.

During his highly publicized visit to Egypt in December, French President Nicholas Sarkozy indicated that France was willing to "collaborate with Egypt in nuclear energy for civilian use if Egypt wishes." The US has made a similar initial pledge of assistance and, rather muted, support for Egyptian right to atomic development. However, neither country has indicated a willingness to find the cash for the Egyptian reactor program.

Said believes that "Egypt is more than 20 years behind" countries such as India, Pakistan, Iran and Israel with regard to nuclear development, and faces a number of challenges. One is to form "a community of technicians and scientists" in a global environment that is not as welcoming as in the past, while a second is dealing with the environmental impact of reactors, he said, citing fears of potential accidents.

Shelved plan
Israel is keeping a wary eye on the Egyptian program, eschewing an official response as nuclear officials make vague noises concerning the potential for future regional atomic development cooperation.

ISN Security Watch has learned from official sources that Israel will not be pushing ahead with floated plans for a 1,000MW energy reactor in the short term.

Plans for a nuclear plant at Shivta in southern Israel had been floated repeatedly by interested parties in recurrent governments and the Israel Electrical Company (IEC), but appeared to gain traction in February 2007 with revelations of Israel Atomic Energy Commission (IAEC) support.

Israel has a significant history of nuclear research and development, conducted with the active support of France and the US, and is believed to have an atomic weapons capacity built, in part, on development work at the secretive Dimona reactor.

The IAEC signaled recently that a decision had been made to shut down the program's second reactor open at Nahal Soreq. The 5MW reactor, which was subject to IAEA safeguards, will be replaced by an advanced particle accelerator.

Security blanket
The Israeli media has paid little attention to domestic nuclear development, with existing, sharply delimited discourses subsumed under the mantle of national security. Previous moves to lift the lid on Dimona have come from the leftist Hadash party and two NGOs, but efforts to bring the nuclear issue onto the national agenda are still in their infancy.

Israeli Greenpeace disarmament campaigner Sharon Dolev told ISN Security Watch, "There is no discussion of nuclear issues: health impacts, international debates, disarmament issues. Nothing is in the Israeli discourse."

"We don't talk about how to close the reactor in Nahal Soreq and we are not talking about accidents that we know happened in both reactors, or the discharging of radioactive waste and the way it is handled, and this is irresponsible," she said.

Israeli opponents of nuclear development have been chary to back international calls for Israel to sign on to the NPT for fear that an open acknowledgement of the country's nuclear weapons capacity could promote a wave of regional nuclear development, greatly raising the chances of an atomic arms race.

On 8 March, Arab League foreign ministers released a statement sharply at odds with the established Arab position on Israeli nuclear development, warning that Arab states would immediately withdraw from the NPT if Israel ended its long-term policy of ambiguity through admitting it had atomic weapons.

While unsure of the statement's provenance, Landau said it appeared to be made "in the context of the whole dynamic with regard to Iran."

"To say that if Israel admits it has nuclear weapons they would withdraw from the NPT is saying to Israel, 'Don't say anything on your nuclear policy. Keep that whole issue quiet and then Arab states will not be forced to react.'

"With the Arab League states we can see that it is not even in our interests to talk about ambiguity. But that shouldn't stop us from debating whether Israel should or shouldn't have nuclear weapons," Dolev said.

Reactor deal
With tensions rising in the Gulf, the state with the closest business and cultural ties to Iran, the UAE, now appears willing to pre-empt a final decision on a proposed joint atomic energy program with other Gulf Cooperation Council (GCC) states.

On 15 January, the emir of Abu Dhabi, UAE President Shaikh Khalifa bin Zayed Al Nahyan and Sarkozy signed two deals governing military and nuclear cooperation. Under the auspices of the atomic pact, the UAE and France will create a high-level joint committee charged with establishing the basis for civilian UAE nuclear development.

The signing came after Abu Dhabi secured a US$8.8 billion deal with a French consortium, incorporating energy conglomerates Total, Areva and Suez, for the construction of two reactors which will be utilized in desalination and electricity generation.

With other Gulf states, the UAE is seeking to diversify its economy as it looks ahead to the end of oil production. In January, Abu Dhabi also announced ambitious plans for the world's first carbon-neutral city - plans that appear designed with the mooted reactor program in mind.

"It seems to be a serious MOU [memorandum of understanding]. Initially I had treated it a little lightly, before they signed the deal," Marcel said. "I didn't really expect that they would go ahead with such an expensive and long-term [proposition] […] "It seems like the political will is quite strong in the UAE now for this. So I would expect it to go ahead."

Unlike Egypt, the UAE has the economic wherewithal to fund turn-key nuclear projects, but questions have been raised questions concerning the security of transferred technologies.

Landau noted that there was a concern that Dubai port was being used as a conduit for the onward transfer of goods to Iran. "US products it seems are reaching Iran through Dubai […] that is not the kind of thing that you want in a state that is developing nuclear technology."

Marcel differs: "I think that the UAE has given very clear commitments about transparency and managing concerns of the international community about the development of civil nuclear energy."

The path to a future UAE or GCC reactor program remains fraught with obstacles. In particular, the capacity of the long-moribund nuclear industry to cope with standing contracts is in serious doubt. The French nuclear industry is struggling to cope with the domestic and global decline of related training and educational programs that, with the sullied image of atomic development, has contributed to a drastic shortage of qualified workers.

"They [France] are pretty serious about this deal with the UAE but we are probably not talking about something that will materialize in the short term," Landau said.

Referring to the proposed UAE reactor program, Marcel said, "I think it is likely to legitimize Iran's claim that it is pursuing nuclear development for domestic energy use […] though it does give the UAE a bargaining chip in its efforts to import gas from Iran," she said.

"The Emirates are looking for a civil application and I think that the Iranians will say to them, 'We can help you.' Until now, I didn't measure any reaction from the Iranians because I think maybe they will be happier if all countries in the region will go in this direction," Said said.

"But I don't know what will happen in the future because if these activities go beyond civilian applications I think the problems will really start," he said.

Dr Dominic Moran, based in Tel Aviv, is ISN Security Watch's senior correspondent in the Middle East and the Director of Operations of ISA Consulting.

No killer instinct: Why cops run low on morale

Prabhakar Kumar / CNN-IBN

Published on Fri, Apr 04, 2008 at 10:53, Updated at Fri, Apr 04, 2008 in Nation section

Tags: On The Beat, Police , Patna
E-mail this report | Print this report

Patna/Raipur: Allauddin Khan was a fierce police officer in Bihar police. Five years ago, he shot dead four suspected Naxals in Bihar, even as a bullet ripped through his spine. Since that day, he's been on a wheelchair.

"I have an eight-year-old son, who asks me, ‘papa, why did you go to kill the criminal? Why did you not run away when all other policemen ran away?," he says.

Khan got Rs 2 lakh from the government and a bravery medal. Today, his family is left with medical expenses, debts, and regrets.

Says his son, "I want to fulfill my father's dreams. But I'll never become a policeman."

In the Naxal-dominated areas of Bihar and Madhya Pradesh, Naxal-police confrontations always lead to heavy casualties and it's the lowest rung officers who pay with their lives.

April 03, 2008


Dedicated to all victims of terrorism--- whether civilians or members of the security forces and agencies, whether Indians or foreigners.


Terrorism is a continuously evolving threat. From a uni-dimensional threat involving attacks with hand-held weapons, it has evolved into a multi-dimensional threat involving the use of hand-held weapons, improvised explosive devices, suicide bombers, landmines, mobile phones as triggers, aircraft hijackings, cyber attacks through the Internet etc. Terrorism of today is different from terrorism of yesterday. Terrorism of tomorrow is likely to be different from terrorism of today.

Terrorists no longer come from under-privileged and economically and socially handicapped families. Many of them have come from affluent and socially well-placed families. They are no longer ill-educated who are manipulated by their leaders. Many of them are highly-educated----doctors, engineers, IT experts etc. They are irrational in their objective of mass casualty attacks, but very precise in planning and executing those attacks. They are technology savvy, but not technology slavish. Their modus operandi keeps changing.

One of the important lessons of 9/11 was the need to anticipate and prepare oneself to prevent other similar unconventional scenarios of a catastrophic potential and, if prevention fails, to have in place a capability for coping with the resulting situation. Amongst such likely scenarios of catastrophic potential increasingly receiving attention since 9/11 are those relating to maritime terrorism, terrorist threats to energy security, terrorism involving the use of Weapons of Mass Destruction (WMD) material and terrorist threats to critical information infrastructure.

Since the attempt to blow up the New York World Trade Centre in February,1993, one has been talking of old and new terrorism. The old terrorists----who had taken to terrorism for ethnic or ideological reasons or even on religious grounds--- had a Laxman Rekha, a dividing line, which they tried not to cross. They were concerned over the impact of their actions on public opinion.

Since 1993, the world is confronted with a new brand of terrorists----also called the jihadi terrorists--- for whom there is no Laxman Rekha. They believe in mass casualty or catastrophic terrorism. They want not only to kill human beings, but also destroy economic, technological and other capabilities. They talk of their religious right and obligation to acquire weapons of mass destruction and use them, if necessary, to protect their religion and safeguard its interests.

It is important to be aware of their mind-set, thinking, planning and capabilities to have their plans executed. To be aware is to be prepared. How to create an awareness of them and drive home to the people and the policy-makers the importance of dealing with them in an effective manner, without unwittingly contributing to a demonisation of the community from which they have arisen? That is the question facing all of us today.

The purpose of this book is to create such an awareness by focusing on some of the important dimensions of the evolving threat. For this exercise, I have drawn upon some of my past writings on the subject and presentations made before international conferences and appropriately edited and updated them. Some new material has also been included.

I have tried to make each Chapter self-contained so that the readers do not have to keep moving backward and forward in order to refresh their memories. For this purpose, the repetition of some of the points in different Chapters has become necessary.

I am grateful to Capt.Bharat Verma of the Lancer Publishers for coming forward to publish this book too. This is my fourth book being published by them---- the earlier three being “Intelligence---Past,Present & Future”, “A Terrorist State As A Frontline Ally” and “The Kaoboys of R&AW--- Down Memory Lane”. The first two were published in 2001 and the third in 2007. I always feel happy to have my books published by them because of their thorough professionalism, seriousness of purpose and their abiding interest in matters concerning national security. For them, publishing is not just a profession. It is a duty to the nation and its people.

I also think of Shakti Bhatt, a budding publisher, who died after a brief illness on April 1,2007, at the age of 26. She was the daughter of Sheela Bhatt, the Executive Editor of Rediff.com, New Delhi, and Kanti Bhatt, the Gujarati writer. She was the wife of Jeet Thayil, the poet. It was Shakti, a fascinating girl full of ideas, who persuaded me to revive my interest in writing books on national security matters, instead of keeping my writing confined to periodic articles.


For enquiries regarding likely date of publication, price etc, please contact bharat.verma@lancerpublishers.com

NATO is Ukraine’s Catastrophe

Vladimir BATYUK
Strategic Culture Foundation

The visit to Ukraine of US president G.Bush is over. A number of bilateral documents were signed, in particular, “the road map” of US–Ukrainian cooperation that defined priorities of their short-time interaction. But different issues keep the attention of the world and Ukrainian public glued on, including other run-of-the-mill documents defining the USA and Ukraine mutual relations. What they focus on is the fact of the visit of head of US White House to Ukraine as such.

The visit of US president to Kiev right before the NATO summit in Bucharest was one of the empty body language acts the official Washington uses to indicate its influence on the Ukrainian political elute. The US is merely incapable of offering to Kiev what it expects. These expectations include: 1) large-scale assistance in the post-Communist Ukraine’s transformation; 2) real support of Ukraine’s entry into the EU.

As for US assistance, in 2005 it totalled $174 million, with $53,3 million earmarked for the implementation of social and economic reforms, a ridiculous amount when serous reforms are on the agenda, and, given the continuing aggravation of the financial situation in the United States there’s hardly anything Ukraine can currently count on.

As for Ukraine’s NATO membership that was the main topic of negotiations Bush held with his Ukrainian counterparts, Kiev is to consider this membership as a step towards another goal for Ukraine’s entry into the EU.

However in their Ukrainian policies, EU leaders stick to a firm line. They think that Ukraine’s membership in the EU is totally out of the question, so its NATO membership would change nothing. True, what Kiev is offered to create together with the EU a free-trade zone (after Ukraine becomes a WTO member). In other words, Ukraine’s status will make it equal to EU Mediterranean partners with many of whom it has free-trade agreements with. More than that, with many of them it has association agreements. But a free-trade agreement would not make Ukraine a millimetre closer to a EU membership, and Brussels would close its ears on Washington’s calls to open its doors to the “democratic Ukraine.”

Meanwhile, the option of becoming a NATO member without any prospect of getting an EU membership cannot satisfy Ukrainian elite on the whole (to say nothing of Viktor Yuschhenko). Kiev politicians realise that a NATO membership first and foremost means that Ukraine’s military and industrial complex would be technologically and financially strangled due to the severing cooperation ties with Russia and the forced refusal of deliveries of armaments to the countries that in the West are considered hostile, and secondly; the full-fledged frontier regime on the Ukrainian-Russian and Ukrainian-Belorussian frontiers with the inevitable consequences for the residents of Ukraine’s east. But Ukrainian authorities would decide to step on this “slippery” path only if they get as “compensation” real prospects of an EU membership, otherwise the course towards a NATO membership would become their political suicide.

That is why Ukrainian political heayweights, Yulia Timoshenko and Viktor Yanukovich are more and more demonstrating their reticence where issues of the North Atlantic organisations, whereas Viktor Yushchenko is the only enthusiast of Ukraine’s NATO membership, but his electoral base is melting and who would need more and more support of the United States in his striving to keep his president’s chair.

The question is how long would Ukrainian elite be satisfied with meaningless and absolutely unfeasible promises of its Western partners. Sooner or later that Ukrainian leadership will have to admit that the prospects of Ukrainian EU membership is a “carrot” that the donkey cannot get, whereas huge political costs of nothing but an attempt to ensure Ukraine’s NATO membership would have to be paid for immediately and in full.

Arc of Turbulence, Axis of Equals

M.J.AKBAR (India)

Source: Strategic Culture Foundation

When I argued, in my book, The Shade of Swords [Routledge, 2003] that the American invasion and occupation of Iraq would inevitably end the isolation of Iran, change the geo-politics of the Middle East by creating what might be called "Shia space" between Afghanistan and Syria-Lebanon-Jordan-Israel, and revive Iran as a regional power, Western reactions ranged from an imperious snort to amused skepticism. The Pentagon had conducted a near-faultless military campaign, the Baathists had been eliminated from the power structure and the hunt for Saddam Hussein was intense. Support for George Bush's war was so fervent that even the shifting goalposts of cause and effect never seemed to perturb either leaders, cheerleaders or a populace excited by televisual heroism. The search for weapons of mass destruction changed imperceptibly to a search for democracy without much consideration of what the consequences of the new logic might be.

Five years later, it is clear that nothing suits Iran better than the installation of a popular government in Baghdad. The weapons of mass destruction thesis has been stood on its head, its credibility so damaged in Iraq that it could not be reactivated in Iran. Saddam did not have a matchstick and was hanged; Iran has an effective nuclear program and received a virtual free pass from America's National Intelligence Estimate in 2007. More crucially, America has all but admitted that it could not bring any form of political or military stability to Iraq without the cooperation of Iran, and Iran has made it clear that this cooperation would come at a price. In the meantime, on the eastern front of the "war on terror", NATO and its allied forces, including the Pakistan Army, are under siege in the Afghanistan-Pakistan region.

The Pentagon made a critical strategic error in 2003: while it had the correct measure of Saddam's formal forces, it underestimated the response of shadow armies, a principal theme of this book. This was surprising because the Pentagon had made effective use of such armies in the Jihad against the Soviet occupation of Afghanistan.

These armies may have little in common except a desire to defeat the outsider through mobilization of a jihad. Battle lines overlap, or decay into internecine warfare, when they intersect with parallel objectives, sectarian or political. But that does not detract from the larger objective of defeating the foreign occupation.

Iran's response to America's Iraq intervention was clever and nuanced: it wanted to retain what had been wrought, the destruction of its greatest enemy, Saddam, while seeking to displace the American troops that had done Iran such a favour. A permanent, powerful American base in Iraq will be a serious security threat to Iran. Iran therefore had substantive reasons for providing support to the Iraqi insurgency, for Iraq is its first line of defence. If every prediction of the Bush circle had come true in Iraq, the neocons would have certainly ensured a march towards Tehran.

The growing perception in the Muslim world is that Iran has not only turned the tide in its confrontation with the Bush administration, but may even be in control of the stream of future events. Of course Iran has substantial domestic problems, not the least of them being a government that has not delivered on basics like bread and development to an increasingly agitated youth. One estimate [in 2008] puts the figure of unemployed at over two million out of a working population of 21 million. But little unites Iranians more easily than the idea of Iran as the natural leader of the region, capable of defending the interests and honor of a Middle East rife with regimes that have sold out to the West in return for dynastic security. Moreover, while President Mahmoud Ahmadinijad may not understand economics, his political skills and his ability to empathise with the street should not be underestimated.

In the region, Iran will seek the role of a major player not just to its west, where Iraq is already an ally, and south, where the Gulf is nervous, but also to its east and perhaps into Central Asia. Iran is now the most influential player in Iraq, active when it so desires, discreet when necessary, ambivalent when opportune. To its east it has a common interest in the defeat of the Taliban, but is content to let Nato bleed in slow drips. The Gulf and Arabia are beginning to appreciate that an American defence screen might be nothing more than a deceptive mesh; while the Sunni states will never abandon it, they need no reminders about what happened to the Maginot Line.

Anxiety over Iran's ambitions is topped by unease over incapability: can any of the neighbouring nations, including Saudi Arabia and Egypt, do anything about it? By repeatedly hinting at, or even threatening, war Bush raised the ante so high that he has stumbled on the way back to ground level. The case for war was lost on the battlefields of Iraq, and other options are being construed as victory for Iran because they are softer. Soft is easily synonymous with timid in the region. Even the possibility of tougher economic sanctions was sabotaged by the American national intelligence estimate report giving Iran a pass on its "central guilt", building a nuclear arsenal: Russia and China vetoed such a move in the United Nations in March 2008. Ahmadinijad called the NIE assessment a "declaration of surrender". Even if we disregard the habitual blare of his trumpet, it is obvious that the Bush administration, which repeatedly claimed that all options were on the table, has removed the option of war.

America's new Iran strategy, to confront as well as engage, contrasts sharply with previous belligerence. The Sunni states around Iran have chosen to hunt with the American hound in public, but they are running with the Iranian hare in private. Washington might seek a steel ring around Iran but at best it might manage a plastic circle. Neighbours who have been traditionally suspicious of Iran have begun to make conciliatory gestures towards Tehran. In 2007, the Gulf States invited Ahmadinijad to speak at their annual meeting in Manama; Bahrain, homeport of the American fleet in the Gulf, has suggested an expansion of relations with Tehran. In 2008, Saudi Foreign Minister Saud al-Faisal told an Iran-Saudi parliamentary friendship meeting in Riyadh that all efforts should be made to solidify Saudi-Iranian relations, and both should "stand vigilantly against all conspiracies". The vibes had been polished in the last month of the previous year, when King Abdullah of Saudi Arabia invited Ahmadinijad to join the 2007 hajj as the King's personal guest. He accepted the invitation – after a studied delay. During the Bush visit to Saudi Arabia, columnist Maureen Dowd, traveling with the President, quoted an unnamed "insider at the Saudi royal court" [International Herald Tribune, 17 January 2008] as saying, "We don't need America to dictate our enemies to us, especially when it's our neighbour". This Saudi high official may have preferred anonymity, but we can be certain that the quote was not given accidentally, or without clearance.

The Muslim world is preparing for a new equation in which Iran has shifted from the Axis of Evil to the Axis of Equals.

Obviously it is not the equal of America across the globe. But within the conflict zones of the Middle East and Afghanistan, slowly coalescing into an inter-related contiguous battlefield, Iran has become an effective counterpoint to the world's sole superpower.

This may not be a strategic reality in the making; but policy planning is often a child of perception. The American occupation of Iraq has set in motion consequences that have tilted the regional balance in favor of Iran. The ironies of Iraq are not over. The child of American intervention may yet become a theocracy rather than a democracy. It has been noted in a new book [Napoleon's Egypt by Juan Cole, Palgrave Macmillan] that there have only four instances in the Middle East, if you include Afghanistan in the term, when Muslim clerics came to power: "…under the republican French in Egypt, under Khomeini and his successors in Iran, under the Taliban in Afghanistan and, it could be argued, with the victory of the United Iraqi Alliance in the Iraq elections of 30 January, 2005 [the U.I.A. was led by the Shiite cleric Abdul Aziz al-Hakim]". Iran and Iraq, who fought a bitter eight year war when Saddam Hussein was in Baghdad and Imam Khomeini in Tehran, are now not only fraternal allies but could have governments dominated by men of similar ideological persuasion. Some parts of Iraq already have an administration of a different hue from Baghdad's polyglot set-up. The Basra region, for instance, where Shia insurgents have largely achieved their objective [the virtual elimination of the British presence in their areas], is arguably closer in spirit to Tehran than Baghdad. This is not to suggest that Iran and Iraq will be anomalous to a single state, or that they will not have varying interests – but the political and economic isolation of Iraq is no longer feasible.

The first head of government to visit Baghdad from the Middle East was Mahmoud Ahmadinejad, when he made a state visit on 2 and 3 march 2008. He drove in calmly from the airport, and entered the Green Zone [the fortress inside which American officials and the government have cocooned themselves] only briefly, to meet the Prime Minister. His point was made of panache: a friend had no security problems in Baghdad. He was greeted warmly by his counterparts. Jalal Talabani, the Kurdish President of the country who speaks Farsi, asked Ahmadinejad to call him "Uncle". Prime Minister Nuri Kamal al-Maliki described the talks as "friendly, positive and full of trust". Ahmadinejad equated Saddam and America, saying "dictators and foreigners have tried to tarnish and undermine the emotional relations between two states [Iran and Iraq]". The Associated Press quoted him as saying, on the second day of his visit, that the foreign presence in Iraq "was an insult to the regional nations and a humiliation…We believe that the major powers who have come to the region from thousands of kilometers away should respect the will of nations and leave this region".

He took on the issue of terrorists at a news conference on 2 March. He said, "Six years ago, there were no terrorists in our region. As soon as others landed in this country and this region, we witnessed their arrival and their presence." He made this statement after an extremely cordial meeting with Abdul Aziz al-Hakim, leader of the largest Shia bloc in Parliament.

CNN reported on 3 March that Ahmadinejad went about quite freely in Baghdad, and assessed that the only winner of the game that started with the invasion and occupation of Iraq seemed to be Iran. It quoted senior Iraqi officials, speaking on condition of anonymity, that they consistently heard two points in talks with Tehran: Iran was a neighbour and a rising power; America was thousands of miles away. Second, Iran was going to be a nuclear power some day. Ahmadinejad offered Iraq a billion dollar loan before he returned home.

Iran is responding to shifts in American policy. Ayatollah Ali Khamanei has declared that he is not permanently opposed to ties with the United States. There is sufficient circumstantial evidence to suggest that the American turnaround can be traced to the change of guard at the Pentagon, the starting point of a graded implementation of the Baker-Hamilton recommendations on Iran, which was essentially to talk to Tehran without changing the objective of eliminating its weapons capability. Ground realities, particularly the fact that America cannot declare victory without Iranian cooperation, have dulled the confrontation and sharpened the engagement. It is not a matter merely of talks at diplomatic and other levels, or the capture and release of British navy personnel in an "incident" as a 'friendly gesture'. The region believes, even if it will not say so, that America and Iran have come to a working arrangement on Iraq. There is speculation that Saudi Arabia has helped facilitate the new equation.

It would be extremely foolish on the part of Iran's radicals to disturb this understanding by senseless provocation, and it is unlikely that Khamanei will permit it. He has placed a confidant, Muhammad Zolghadr, as deputy head of Basij, the volunteer militia; Zolghadr resigned as deputy interior minister for security affairs in December 2007. Tehran has also offered a hand to Cairo. Iran broke off ties with Egypt when it signed a peace agreement with Israel in 1979. Ali Larjani, who was eased out from the critical position of chief nuclear negotiator, visited Egypt for talks as a representative of Khamanei.

London's Sunday Times reported [January 13, 2008] that the head of the Iranian Revolutionary Guard Corps "slipped into the green zone of Baghdad last month [December 2007] to press Tehran's hardline position over the terms of the current talks with American officials, it was claimed last week. Iraqi government sources say that Major General Mohammed Ali Jafari, 50, traveled secretly from Tehran. Jafari appeared to have passed through checkpoints on his way into the fortified enclave that contains the American embassy and Iraqi ministries, even though he is on Washington's 'most wanted' list. Last year Washington declared the Revolutionary Guard Corps a 'foreign terrorist organization' and imposed sanctions on it." It was accused of supplying rockets, mortars and roadside bombs known as explosively formed projectiles [EFPs] to Shia militias in Iraq through the Quds Force, one of its units. Jafari's mission was to broaden the scope of talks between Ryan Crocker, the American ambassador to Iraq, and Hassan Kazemi Qomi, his Iranian counterpart, to include the release of Iranian diplomats being held in Baghdad by the Americans.

By 2007 the American military was in tacit partnership with the most famous of the pro-Iranian Shia clerics, Moqtada al-Sadr, a man who pole-vaulted from most-wanted in 2005 to most-helpful in 2007. A significant, if studiously unmentioned, prelude to General Petraeus' 2007 "Surge" was the withdrawal of the Shia leader Moqtada Sadr from the battlefield. Sadr announced a "ceasefire" a little before "Surge" became fully operational. In the middle of January 2008 Sadr warned that the ceasefire could be coming to an end. We do not know his compulsions; perhaps it was meant to stall any gratuitous declaration of American victory. What is beyond doubt is Iran's ability to shift gears on the Iraqi battlefield. While the "Surge" reduced the intensity of fighting in 2007, Iraq was far from pacified, and the graph began to shift in the upward direction again in early 2008.

By then, British forces had moved out of the Iran zone of influence, Americans were concentrating their combination of money power and firepower on the Sunni insurgency, and Shia insurgents in the south had been co-opted into the establishment. In other words, American forces were doing the work that Shias would have had to do in a post-withdrawal scenario. Nothing could suit Iran or Iraq's Shias better.

Moqtada Sadr used his "ceasefire" to go back to school. [The Shia religious hierarchy begins from talebeh, student, from whence the word taliban, to alim, teacher, masalegu, one who can explain problems, vaez, preacher, mojtahed, interpreter of the law, and then to Ayatollah, a rank equivalent to marja-e-taqlid, one worthy of emulation.] No prizes for guessing where Sadr went to study: to the famous seminary at Qom, in Iran, an alma mater of Imam Khomeini. In its issue of 16 February 2008, the Economist reported that General David Petraeus had praised Sadr as "responsible". A year earlier Sadr and his Mahdi Army were considered the greatest threat to Iraq's future. It is possible that America now accepts Sadr as part of Iraq's future.

Sadr probably sees himself as the future Khamanei of Iraq. Iraq cannot be another Iran, if only because the population is not homogenous, but Shias will be in effective control of Baghdad. That, in essence, has been Bush's gift to the Shia community. There will be political accommodation of Sunnis and Kurds, but neither will be allowed the luxury of independence by either Baghdad or the neighbourhood. Whether they say so publicly or not, Iraq and Iran are likely to be the closest of allies. Time reports [9 January 2008] that when a major American oil company showed interest in some Iraqi oil fields, it was told by the oil ministry in Baghdad that it might be worthwhile to get Tehran's approval for the deal.

The governments of the Middle East are assessing the consequences of an American withdrawal over the next five years. What they do know already is that the logistics of withdrawal cannot function without the cooperation of Iran, and Iran will not this provide this cooperation as a humanitarian gesture. It will demand greater regional influence in return.

The more cynical analysts in regional capitals see the American intelligence certificate to Iran in 2007 as part of the trade-off. Those with a sense of humor are wondering at the conundrum: Saddam is dead because American intelligence was convinced that he had weapons of mass destruction. Iran, which has the capability of producing them, is getting a free ride.

There is also a growing suspicion that the international NPT regime is withering. An immediate fallout – the word is appropriate – is the revival of defunct departments of nuclear energy. President Nicolas Sarkozy, who took office in May 2007, has signed deals worth billions of dollars for nuclear power plants or technical advice with Morocco, Libya, Algeria, Qatar and the United Arab Emirates. [The estimated cost of a new nuclear unit in 2008 was between five to seven billion dollars; not the best money-for-value investment in an area overflowing with oil if peaceful energy is what they only want.] Sarkozy, unlike his predecessor, is believed to work in coordination with the White House. Naturally, the official veil is used: this energy is needed for "peaceful" purposes. The excuse is thin. With Pakistan's A.Q. Khan, the world's most famous proliferator, neutralized, China also joined the marketplace, opening a nuclear counter, if not a shop, during its Africa summit in 2007. Egypt was among those interested.

A weakened America cannot continue to enforce its dual-logic argument on nuclear weapons, where America can continue to make its own weapons more miniature and sophisticated; and the Middle Three [Israel, India and Pakistan] are permitted a toehold around the Big Five while the rest of the world is denied entry into the club. Two of the Middle Three are America's strategic allies and India is on its way to becoming one.

Paradoxically, the new conventional wisdom among the non-nuclear states is that the only guarantee against American intervention, or defense against occupation, is a nuclear armory. They know that the cost of war against a nuclear state is simply too high. A minor nuclear power may not be able to stave off international pressure, but that pressure will stop short of war, as in the case of North Korea. That is an unintended byproduct of America's search for weapons of mass destruction in Iraq.

In the last five years, Iran has built up serious credibility on the Arab and Muslim street. Its ability to stand up to Bush has won it respect. Its surrogate, Hezbollah, turned back an Israeli invasion in Lebanon and won unprecedented admiration. This was the only war in which an Arab force emerged with its self-respect intact, its pride enhanced. The closest claim to an Arab victory was in 1973, but by the end of that conflict, Israel had seized the initiative; its troops were on the Egyptian mainland when a ceasefire was negotiated. Hezbollah, on the other hand, achieved the near-impossible without the resources of a state, lending legitimacy to another perception: that real power in the Muslim world has shifted to shadow armies led by committed believers, rather than standing armies under corrupt or compromised autocrats.

America needs Iran's cooperation in Afghanistan as well. Fortuitously, Iran's principal objectives in Afghanistan are largely concurrent with those of the United States, for Iran does not want the return of the Taliban. [The only nations that had diplomatic relations with the Taliban regime were Pakistan, UAE and Saudi Arabia; and only Pakistan had an effective mission in Kabul. Iran, incidentally, lobbied very hard to save the Bamiyan Buddhas. It offered Mullah Omar's regime hard cash, and was prepared to physically carve out the statues from the mountain and take them to Iran for safe-keeping.] Iran's interest in Afghanistan is a comfort zone on the bordering Herat region and guardianship of the Shia population. America can live with that.

Iran is wedged between the two zones of conflict: Iraq-Palestine-Israel to the west and Afghanistan-Pakistan to the east. The indication of 2007 is that the second could emerge as the more dangerous place over the next five years. The Taliban has reasserted itself against Nato, and instability in Pakistan is threatening not only the country but the region and beyond.

Iran-US Confrontation

The world has watched most of the last year and the one preceding, the Iran-US confrontation, at times with baited breath as the two seemed to be on hair trigger alert from time to time. The battle of nerves has ebbed and flowed over the last two years and mostly away from the US. Thanks to the badly configured and unfinished war in Afghanistan, the foolish misadventure in Iraq, and the inability to control Pakistan in the so-called Global War on Terror, the mighty US has today been reduced to trying to fend off a regional power, Iran, from acquiring precisely the same kind of stature that Bush’s National Security Doctrine seeks to prevent - that a regional power becomes strong enough to challenge US interests. As a result of the ill advised and ill planned interventionism that has been the singular feature of Bush’s foreign policy, other players like Russia and China today have a role in the region.
Both the Iraq and Afghanistan projects of deconstructing first and then reconstructing, have floundered badly. A secular Iraq has now been replaced by Shia militants, Sunni Salafist fundamentalists and Kurdish separatists. Yet some can argue that in Iraq this may have been partly mitigated if one considers that US oil interests for the future may have been safeguarded somewhat regardless of the cost (US $ 500 billion) to the US exchequer. There is no such perceived counterveiling benefit from the Afghan imbroglio. In fact the spectacular growth of the heroin trade is an alarming consequence.

For an American President battling desperately for at least one foreign policy success in the winter of his political career, the Iranian refusal to blink even in the midst of all threats that were held out to them, including nuclear attacks, must have been most exasperating. The neo-con belief that extraordinary military prowess could deliver results, did not take into account that after the dismal display of limitations of military power in neighbouring Iraq, no country was going to take these threats seriously. Even the combined pressure of the British, the French and the Germans has not helped. The Arab street was not going to buy the new line, there was something of a regional pride in this defiant anti-Americanism and for Iran it was also civilisational. It was a case of national pride with strong Islamic overtones, a quest for regional security if not dominance in an area traditionally known to be hostile to them. A defiant Iran finally decided to go ahead with its oil bourse in Euros and not deal in the dollars that Ahmadinijad had described as a scrap of paper. Besides China and Russia, the other members of the P-5 and emerging players in West Asia, were on Iran’s side. The Iranian defiance, has led to the most important development of the 21st century, that the US has reduced itself to losing a war of nerves with Iran, which until recently was an extremely weak power in the region, surrounded not only by hostile or suspicious Arabs, but also American armoury in all its might, and a hostile Israel.

The battle Washington has waged is not just about a regime change in a rogue state, but ultimately to ensure energy security for itself and its European allies, regional security for Israel, and maintaining global dominance in a world, where there are new and aggressive players challenging America’s writ. The new players on the scene are the resurgent Russians under Putin, challenging American interpretation of the scene in West Asia, and the emerging Chinese seeking a role for themselves as they search for energy security to sustain their double-digit growth. Putin became the first Russian President, ever, to have visited Iran last September and he followed this up with a visit to Saudi Arabia. He was obviously making in-roads into traditional American territory. Besides, members of the Gulf Co-operation Council have made overtures to Iran. President Ahmedinijad visited Saudi Arabia on an invitation from the Saudi King Abdullah for Haj and the two held cordial discussions.

The drum beats were louder for some time in September and October last year and were accompanied by loud rhetoric, but the march was mostly out of step by then. Condoleezza Rice had threatened to cut off Iran’s “malignant activities” in Iraq, informing the House of Representatives Foreign Affairs Committee in October that Iran would not be allowed to use “the international financial system to move its ill-gotten gains from proliferation or terrorism around the world.” The Secretary of State dutifully described Iran’s policies as constituting “perhaps the single greatest challenge to American security interests in the Middle East around the world,” and adding that El Baradei was wrong on Iran - and this is despite 2700 person hours of inspections including numerous snap and intrusive visits by the IAEA inspectors. It is true that Iran is not entirely innocent in all its dealings, especially the A Q Khan connection, but neither is it as guilty as the West makes it to be. It was when the French-British-German reneged under US pressure after first agreeing with Iran in 2005 that forced Iran to resume enrichment the next year.
In autumn last year, however, Seymour Hersh wrote in the New Yorker that the war in Iraq was being redefined as a strategic war between Iran and the US. The summer hysteria about Iran possessing a nuclear bomb, had changed to Iran wanting to possess one, and finally to the allegation that the Iranians had the knowledge to make a bomb. Iran was now threatening to destabilise Iraq by aiding the Shias there, and Revolutionary Guards of Iran were declared as a terrorist organisation. Iran was at that time threatened by surgical strikes instead of the earlier bombing blitzkriegs that were openly talked about. There were unsubstantiated allegations that Iran was helping build a Hezbollah type of insurgent organisation in Iraq. An element of the plan was to provoke Iran into some action that would require an immediate US response. The Iranians did not bite.
Nevertheless, towards the end of October neo-con gurus like Norman Podhoretz were urging shock and awe from the outside, while Vice President Dick Cheney echoed this re-commendation from within. Recipient of America’s highest honour, the Presidential Medal of Freedom in 2004, and the author of the book World War III: the Long Struggle Against Islamofascism, Podhoretz had met Bush in New York last October where he outlined his case for air strikes against Iran. Republican Presidential hopeful Rudy Giuliani also joined this chorus where the refrain was ‘bomb Iran using cruise missiles and bunker busters’.

Bush himself had said that “I’ve told people that if you’re interested in avoiding World War III, it seems you ought to be interested in preventing them (the Iranians) from having the knowledge necessary to make a nuclear weapon.” It seems that there is cause enough for shock and awe if the Iranians have the knowledge to make a bomb, later redefined to even thinking about making one. This has led to a change of strategy. Iran remained the rogue because it was now abetting terrorism and smuggling IEDs into Iraq for use against US forces. This claim was designed to get approval from a sympathetic Congress for intervention in Iran. Apparently they were also pre-empting the uncomfortable findings in the yet to be released NIE report.
It was fairly clear by late summer 2007 that the strategy to deal with Iran would have to change as the nuclear story was no longer selling. At the same time it was not easy to give up the rhetoric - only the stress had to change. Condi Rice’s statements need to be viewed in this changed context, for she was no longer talking about mushroom clouds but about impediments to US policies in West Asia. US Congressional sources have said that the 16-agency National Intelligence Report of 2007, made public on December 3, 2007, was actually delayed thrice, and as Seymour Hersh says, Vice President Cheney was instrumental in this delay. The report essentially made the following observations couched in elliptical verbiage at times. It said that Iran had suspended its nuclear arms programme in 2003, that if it does resume this it will be based on uranium enriched after its had resumed its operation of enrichment in 2006, that Iran would have major technical problems in operating these reactors, most of which are in Natanz, that the earliest possible date by when Iran could have a bomb is 2009-but more realistically it would be 2015, and, finally, that the Iranians do not have the capability to take the plutonium route.
The reactions in Israel and the US were predictable; the former was livid with rage, and the latter mostly confused, except for the extreme right wing who denounced the report and the spin doctors in Washington became active. Some Iranians on the other side of the globe sounded smug after the report was published, feeling vindicated, while a section was not impressed by the NIE findings suspecting that there was a hidden agenda in this and that the report could still be used by the US to create an international consensus on the need to impose unilateral sanctions on Iran.
Various lobbies got active, and there was consternation in the US that the NIE would be the reason to dampen efforts to isolate Iran, and the earlier attempts to say that Iran was on its way to make a bomb suddenly seemed to be going awry. True, the French tried to help by saying that war between Iran and Israel could break out. Speaking to Le Nouvel Observateur, President Sarkozy feared that “The problem for us is not so much the risk that the Americans launch a military intervention, but that the Israelis consider their security to be truly threatened… The only debate is about whether they will develop a military capacity in one or five years.”
Israeli strategists and most analysts have refused to accept the NIE as the final word on the subject. “Words do not stop missiles,” was what Defence Minister Ehud Barak said. While they would not go so far as to say that this was a political report meant to get the US off the hook, they do assert that the report is inaccurate. Mossad aims to prove that despite having discontinued their nuclear arms programme in 2003, the Iranians are still developing a third secret programme that has been kept hidden so far. They still adhere to their intelligence assessment that Iran could have the bomb by 2009 or 2010.While even the Iranians assert that there is still a threat of an attack, other analysts have pointed out that since the Israeli invasion of Sinai in 1956, without US approval, when President Eisenhower rapped Israel hard on the knuckles, it is doubtful if Israel would today launch a military offensive in the region without unequivocal backing from the US. It seems that so far not much heed has been paid to the suggestion made by Efraim Halevy, the former Mossad chief that Israel should enter in a dialogue with Iran.
Despite the NIE report, President Bush has said “Iran was dangerous, Iran is dangerous and Iran will be dangerous if they have the knowledge necessary to make a nuclear weapon.” His National Security Adviser Stephen Hadley claimed that the US decision to pursue the sanctions route had made the Iranians change their policy in 2003 and it was necessary to pursue the same strategy to ensure that Iran remained on course. Hardliners like former US Ambassador to UN, John Bolton led the charge against the NIE saying that the report could be misread, the report was internally contradictory and insufficiently supported by facts and that Iran could use the report for disinformation.

However, whichever way these statements may be interpreted, the Bush administration has certainly been made to look awkward and clumsy in all this with its credibility taking another knock. The NIE report has become a major obstacle to those advocating the military option. Sensing this and the direction the Annapolis conference had taken in its attempts to isolate Iran, Arabs in the region have begun to make overtures to Iran. Qatar invited Ahmedinijad to speak at the GCC, while the Egyptians sent a high-level delegation to Iran, for the first time since they broke off relations in 1979. Ahmedinijad was in Saudi Arabia at the invitation of the Saudi king to perform Haj. It is possible that all three being strong US allies probably had prior approval for these overtures but these regimes are worried that should the military option gain approval in Washington, the consequences for them could be grave and avoidable. The GCC states would want to stay on Iran’s right side following a decline of US policy in the region.
With crude selling at US $ 100 a barrel, energy dependent Italy and Austria have signed deals with Iran for the supply of gas. Iranian gas would transmit to Italy through Turkey and Greece. The Khomein Petrochemical Complex and the Italian company Basell also signed a 20 million euro contract for transfer of technology. The Iranians and the Austrian Oil and Gas Group were discussing a project for the transfer of oil and gas to Austria. The French giant Total was ready to invest 12 billion dollars in an LNG project, Royal Dutch Shell and the Spanish Repsol also have interests in Iran’s two main LNG projects; the Italian company Eni has no intention of pulling out of Iran. The Spanish energy company Fenosa, along with its subsidiary Socoin was awarded a 32.5 million euro engineering contract for the Iranian LNG project, while the Austrians OMV were still negotiating a similar contract, while a US $ 30 billion contract was separately signed for the import of liquid gas from Iran. The last round of discussions between Pakistan and Iran ended on December 21 and according to the Iranians, Indian companies have shown interest in exploring 17 oil blocks. But India is a small and doubtful player. Apart from voting at the IAEA twice, the gas pipeline is in the doldrums. The State Bank of India has disallowed LCs on Iranian banks and Essar steel pulled out of a steel project in favour of installing one in America. These decisions may be justified in strict economic terms, but coming as they do in the present circumstances, it does not look good.
Iran is not as isolated as the US would have it. The biggest buyer of energy is China. SINOPEC, the largest refiner in China, will increase its purchases of crude from 60,000 bpd in 2007 to 160,000 bpd in 2008 - a nearly three fold increase. Another Chinese state owned company, Zhuhai Zhenrong Corp will buy 400,000 bpd in 2008 and this will account for six per cent of China’s total crude demand. Apart from this, after three years of negotiations, China also signed a $ 2 billion deal to develop the Yadavaran oil field. The world’s second largest consumer of oil is obviously in a close strategic relationship with Iran. Obviously China is not going to allow the US to have a free run of the place; nor will Russia.
Even though the Russians are gas rich, they have been moving aggressively into the region under Putin, who has countered American moves on Russia’s periphery and in Europe by carrying the battle to West and Central Asia. Having been beguiled into winding down the Warsaw Pact in the Nineties, to be replaced by an eastward expansion of the NATO, The Russians under Putin have aggressively moved closer to China, reacted by abrogating missile treaties with US and strengthening the Shanghai Co-operation Organisation, as well as the Collective Security Treaty Organisation. The Iran theatre is in some ways an extension of the US-Russia rivalry in Europe and Russian suspicions about the now well known American moves into Poland and the Czech Republic setting up radar and missile defences. Putin withdrew from the Conventional Forces in Europe treaty in retaliation to American insistence to go ahead with their plans in Poland and the Czech Republic. In the decade ahead, both China and Russia, in competition with each other, or jointly in asymmetric opposition to the US, will seek geo-strategic space in Central Asia, West Asia and the Caspian. US attempts to wean away the energy rich Central Asian states by having pipelines from these countries bypass Russia en route Europe. The Americans are worried that the Russians could translate their energy monopoly into untenable foreign and security influence that could hurt US-Europe relations. An example of this was when the Russians struck a deal with Austria when the two countries entered into a partnership which would allow Gazprom to have a base for further expansion into Europe.
Given the EU dependence on Russian energy sources, the West would need to tap into Iran’s vast hydro-carbon reserves - the world’s second largest gas reserves after Russia and the second largest oil reserves after Saudi Arabia. Add to this, is Iran’s geo-strategic location atop the Persian Gulf and the Caspian Sea. Having successfully checkmated US approaches into Turkmenistan and Kazakhstan, Putin has begun to move into traditional American territory in West Asia. The Russian naval flotilla led by the aircraft carrier Admiral Kuznetsov was recently in the Mediterranean off the Syrian port of Tartous. In terms of size the Russian fleet was extremely small compared to what the Americans have put together in the Persian Gulf and the Mediterranean. But it is a beginning. The Russian support for Iran against unilateral sanctions, and the decision to supply fuel to Bushehr nuclear power plant indicates a coming together of the two countries. Russian experts had arrived in Iran in December to install TOR-M1 air defence batteries at Iran’s nuclear facilities. Putin has visited Saudi Arabia (another first for a Russian President), Jordan and Qatar in February 2007 and later Iran in October that year. He would rather have the Chinese access West Asian, including Iranian, gas and oil rather that Central Asia which would increase its influence far too close to Russia. Both Iran and Russia are opposed to US led trans-Caspian pipeline schemes. Iran needs Russia for the development of the massive South Pars gas fields and the Russians would want Gazprom to move into Iran.
Putin was not going to let the Americans have a free run of the place, and assessing that there has been a decline in US prestige following a string of foreign policy disasters, it was necessary to control or influence the producers of energy in the years ahead. The timing had to be right. Vladimir Putin’s moves in election year in the US, as he moves into the space being vacated, will also be interesting to watch. The Russians will continue to oppose the invasion of Iran, which the Arabs also do not want, but it will be careful not to alarm the Arabs by being too supportive of Iran. India’s geo-strategic, economic and political interests, especially its energy requirements in the next few decades, demand that India remains friendly with both Russia and Iran while managing its relations with the US.

The struggle in Iran is not about its nuclear weapons programme. The struggle is for its oil and gas, and for dominance. Unless the Americans agree to dialogue with the Iranians fairly soon, the game could well slip away from them.

Source : Indian Defence Review , Jan-Mar 2008 , Vol 23(1)

Pakistan: Thirty nine persons recorded disappeared during the first quarter of 2008


Ch. Narendra 3/4/2008 9:08:21 PM(IST)

Thirty nine (39) persons, mostly young people, remain missing after arrest during the first quarter of 2008; their whereabouts are unknown to their families. The state intelligence agencies are still operative in arbitrarily arresting people, keeping them in custody for several months and torturing them to confess their involvement in crimes against the state.

After the general elections of February 2008, about 27 persons disappeared after arrests by the Elite Force, a state intelligence agency working under the Pakistan Army.

According to the reports collected by the Defence of Human Rights, an organization working on the recovery of disappeared persons, and Baloch Rights Council, an umbrella organization of several Baloch nationalist organizations, more than 65 persons have been disappeared after the imposition of the state of emergency by President Musharraf, (who was then General Musharraf) on November 3, 2007.

The latest disappearance is that of Asad Ali Shah, a 24 year old teacher of Saint Paul, Rawalpindi, who was arrested on March 22, 2008, just two days before the new elected assembly took oaths.

Shah'''s mother and father who were interviewed by the BBC said he was arrested by the Elite Force. He was taken from his home in the early hours of the morning by personnel from the Elite Force who told his parents that they would return him within 15 minutes as they wanted him to support a statement. However, until now there is no news about him.

His family is afraid that wherever he is, he is being severely tortured. The Baloch Rights Council claims that 23 persons are missing from districts of Dera Bugti and Sui, Balochistan province after their arrest by plain clothes men driving in police vans since the start of March 2008, just weeks after the general elections of February 18.

Since 2001, when the war on terror began, it is reported by the several nationalists and religious groups that about 5000 persons remain disappeared after arrests. In the southern province of Balochistan, nationalist groups and political parties are claiming that about 4000 persons are missing since the military operation began in the province in year 2001 and that the Pakistan Army has killed several hundred persons in aerial bombardments.

In the North Western Frontier Province, where the Pakistani military and foreign forces are carrying out operations against militants, the media and political parties are claiming that more than 1000 persons are missing and that their whereabouts remain unknown.

The nationalist forces of Sindh province claim that about 100 persons have been disappeared but that some of them were released after the intervention of the Supreme Court and Sindh High Court. In Punjab province most of those arrested were from some religious groups working in southern and north western areas of the Punjab province. The figure goes to more than 100 persons.

The newly formed civilian government of Pakistan particularly, the Prime Minister Syed Yousaf Raza Gillani have still not mentioned about the fate of disappeared persons after their arrests by the state intelligence agencies.

The issue of the disappearances was one of the main issues which caused the dismissal of the deposed Chief Justice and whole higher judiciary by the military rulers. The state agencies are still operating freely to arrest any one with out any legal authority and keeping persons incommunicado for several months during which time they are tortured.

The new government must realise that their indifferent attitude towards the issue of disappearances will only strengthened the resolve of the intelligence agencies of the army to run a parallel rule of law contrary to constitution and civilian laws.

This is the time for the newly formed coalition government to take the issue of disappeared person as one of the priority issue for their government's 100 days task, which was announced by the prime minister after formation of his government.

The government of Prime Minister Syed Yousaf Raza Gillani should announce policy statement about the fate of disappeared persons and their release and make a committee of parliamentarians to record statement from all those persons who were released from the captivity of intelligence agencies. The government should also seriously take the notice of the testimonies of the released persons about the military torture camps in all big cities of the country and immediately start a probe of them.

Strengthen Iran-Pak Ties

Envoy Calls for Increased People Contact to Strengthen Iran-Pak Ties

TEHRAN (FNA)- People-to-people contacts are necessary to strengthen Iran-Pakistan relations, Tehran's Cultural Counselor to Islamabad said, adding that exchanges of delegations can also play pivotal role in enhancing and boosting economic, cultural, social and educational contacts between the two Muslim countries.

Seyed Morteza Saheb Fosoul made the remarks while briefing the media on Wednesday.

He said that Iran-Pakistan Cultural Karwan is one of such efforts.

"Iran has always tried to facilitate exchange of such delegations," he added.

Regarding Iran-Pakistan Cultural Karwan, he said that the delegation is hosted and facilitated by Islamic Culture and Relations Organization as well as Iran's Cultural Heritage, Handicraft and Tourism Organization.

The Pakistani delegation is scheduled to attend a meeting with Supreme Leader of the Islamic Revolution Ayatollah Seyed Ali Khamenei, President Mahmoud Ahmadinejad, Vice chancellors of various universities and other high-ranking officials.

Head of the Pakistani delegation vice-president of the federation of Pakistan Chamber of Commerce and Industry Azhar Saeed Butt, for his part, said that Pakistan and Iran have had coherent relations for the centuries.

Iran, Pakistan Discuss Technological Cooperation

TEHRAN (FNA)- Iranian and Pakistani science ministers exchanged views on boosting cooperation in various scientific and technological fields.

Iran's Minister of Science, Research and Technology Mohammad Mahdi Zahedi and his Pakistani counterpart Tahmineh Doulataneh met on the sidelines of the 13th meeting of the OIC Standing Committee for Scientific and Technological Cooperation (COMSTECH) in Islamabad on Wednesday, press tv reported.

During the meeting Zahedi congratulated Doulataneh on her appointment as Pakistan's new minister of science and technology, reiterating Iran's keenness to develop cooperation with Islamabad in various educational, scientific and technological sectors.

Referring to the significance of COMSTECH in the development of science and technology in the Muslim world, Zahedi noted, "We are witness to the fact that a number of developed states have been imposing a specific apartheid on Muslim nations over the past years.

"They make efforts to deprive the Islamic states of accessing necessary scientific capabilities for application of advanced technologies including a peaceful nuclear energy under false excuses," he underlined.

"Iran is capable enough to have a fruitful cooperation with the OIC member states in policy making, planning and developing science and technology," said Zahedi, referring to Tehran's scientific status among Islamic countries.

The official said Iran has the potential to transfer technical know-how to Muslim states in many advanced fields including bio-technology, energy, health and medical equipment as well as information technology.

Doulataneh, for her part, praised Iran's latest scientific and technological achievements, declaring Islamabad's readiness to benefit from Tehran's scientific expertise.

Both sides also agreed on activating the joint working group to pursue the implementation of signed agreements.

Iranian Foreign Minister Manouchehr Mottaki expressed hope that the new Pakistani government would restore stability in the country.

In a Tuesday telephone conversation with Pakistan's new Foreign Minister Shah Mehmood Qureshi, Mottaki congratulated his counterpart on his appointment, a press tv report said.

"We hope that the new government will work toward promoting stability, security and the progress of the Pakistani nation," the Iranian minister said.

Mottaki added that Iran expects the new government to cooperate with Tehran to defeat "terrorism and extremism in the region".

Qureshi, for his part, said Islamabad is committed to expanding its relations with Iran in all areas.

Kosovo’s Fate Can Be Clarified on May 11. Russia Has its Final Chance

Strategic Culture Foundation

The decision of U.S president George Bush to start deliveries of arms to Kosovo (for reasons of “bolstering” U.S. security) and the belated sincerity of Carla del Ponte, Prosecutor General of the International Criminal Tribunal for Yugoslavia, who spoke about the anti-Serb atrocities of the current Albanian leaders in that province, became the final elements of the brilliant western scenario. Indeed, the scenario was brilliantly orchestrated and orderly implemented.

The forced seizure of the cradle of Serbia’s statehood and Orthodoxy, and the creation of the world’s first “NATO state” was the work of all the present-day international institutes, including UN, the European Union, the North Atlantic Alliance, OSCE and the Hague Tribunal. Some organisations and individual countries presented the order others implemented, still others acted as the “cover” group. The objective was achieved in less than a decade starting from 1998 when an OSCE mission was opened in Kosovo headed by William Walker, an active participant in blatant CIA operations in Central America in the 1980s. It was him who made public details of the alleged massacre by Serbian security forces of the residents of the village of Rachak in Kosovo in January 1999 that came as a shock to western public. And even though independent observers soon announced that in reality the dead were Albanian militants killed in battle whose uniforms were replaced by civilian clothes. But the required pretext for the anti-Serbian campaign was there.

The time then came for the United Nations, EU and the Contact group. Talks in Rambouille and Paris in 1999 were organised with an eye to making Belgrade give up Kosovo under the threat or actual use of force. The demand of NATO’s unimpeded access to Kosovo was ghastly reminiscent of the 1914 Austrian-Hungarian ultimatum to Serbia (true, then it was all about the unlimited authority for Austrian courts to investigate independently the circumstance of the murder of Archduke Franz Ferdinand in Kingdom of Serbia).

In 1914 Serbia rejected the ultimatum, and Russia sided with Serbia with all its military might. In 1999 the Yugoslav negotiators acted in much the same way, but all that Moscow offered in support, boiled down to Boris Yeltsin’s rambling TV address “Stop Clinton!” and the dashing U-turn of Evgeni Primakov’s aeroplane over the Atlantic. NATO made its coup de grace against the background of lively debates by then Russian elite on the issue whether it was worthwhile for Moscow to quarrel with the West over “some Yugoslavia”. Their answer was “No”, and to appease Washington and Brussels the more, they despatched Viktor Chernomyrdin to beat the consent to capitulate out of Slobodan Milosevic.

In the summer of 1999 NATO’s the Yugoslav army and Serbian police in Kosovo was substituted for by KFOR. Russia made a show of its formal part in the peacekeeping operation, but failed to even get its own zone of responsibility determined. Russian troops then had to report to NATO commanders, immeasurably pleasing their recent “cold war” opponents, and a little later Russian troops quietly left Kosovo for good, betraying both authorities in Belgrade and ordinary Kosovo Serbs.

It took no magic to predict further developments. The UN mission in Kosovo was closing its eyes on the crimes of Albanian extremists, and the Hague tribunal drew carbon copies of accusations of the Serbian and Yugoslav leaders. NATO began to set up bases to train Albanian military units, while the chieftains of the terrorist “Kosovo Liberation Army” continued to seize power in the province. Organising elections and the follow-up self-proclaiming of Kosovo’s “independence” February 17, 2008 under the circumstances proved - elementary.

The latest revelations of Ms. Del Ponte about the unprecedented trade in human bodily organs extirpated from hundreds of kidnapped and murdered Kosovo Serbs along with the Interpol and Europol reports on Kosovo turning into Europe’s biggest drug trafficking terminal give one a clue as to what the sources of Kosovo’s “independence” are.

It is not hard to foresee that there will be more new shocking revelations coming from western politicians and dignitaries, confident that Kosovo’s independence process is irreversible so they can now repent their sins, shedding crocodile tears - provided no harm is done to their shared cause.

But both Serbia and Russia still have their last chance to grab before, as it were, the train is out of reach, finding the way into the engineer’s cabin and making the train run on a different line. The most important thing is to be able to take advantage of the current situation. For Serbs that is May 11 early parliamentary elections that are to mark the beginning of the revival of Serbian national spirit and the cleansing of the bodies of power of traitors, yes-men and the “fifth column.” The follow-up developments can include (provided the only democratic force, the Serbian Radical party coming to power), Serbian leaders could officially make a call on Russia to become the defender of Kosovo Serbs. It is quite possible given the UN Security Council Resolution 1244 of June 1999, which even the West still honours it as legal. The document confirms Belgrade’s right to despatch to Kosovo a limited consignment of troops to protect Serbs in Kosovo and their historical and cultural monuments, something not yet demanded by either by Serbia or Russia. The arrival of Russian troops to Kosovo’s northern parts could become the first step on the path of installing genuine order in Serbia.

Global Rice Prices Hit Record Highs on Supply Fears

10:09 04/03 (CEP News) London – The price of rice soared in intraday trading on Thursday as fears of demand outstripping supply gripped investors after several Asian governments imposed curbs on exports of the staple food.

At 8:26 a.m. EDT on Thursday, the Rough Rice Contract for May delivery rose by nearly 2.4% to hit a record of $20.26 per 100 lb on the Chicago Board of Trade, according to a spokesperson. The price rise was fanned as restrictions were placed on exporters based in China, Vietnam and Egypt by their respective governments earlier in the week.

India followed suit on Wednesday night and banned the export of “non-basmati,” a lower non-aromatic quality of rice, to help control soaring domestic food costs. Subsequently, the price for exports of aromatic “basmati” rice was also raised on Thursday to $1,200 per tonne to discourage exports, according to news channel NDTV.

Both the World Bank and the Rome-based United Nations Food and Agriculture Organization (FAO) have expressed disappointment at the spiking price of rice, thought to be the staple food of half of the world's population. FAO believes rice prices have risen by 20% over the first quarter of 2008 alone and other soft commodities have recorded similar price spikes.

The UN agency expects rice production to rise by 1.8% or 12 million tonnes, but it may not be enough in the face of soaring demand. The figure is based on the assumption of "normal" weather conditions in Bangladesh, China, India, Indonesia, Myanmar, Philippines and Thailand, where supply and demand are currently quite stretched.

Concepcion Calpe, senior economist at FAO, said, "The international rice market is currently facing a particularly difficult situation with demand outstripping supply and substantial price increases."

She added that higher rice production in 2008 could reduce the pressure, but short-term volatility will probably continue, given the very limited supplies available from stocks. "This implies that the market may react very strongly to any good or bad news about crops or policies," Calpe added.

FAO also hopes that production may rise in Africa, Latin America and the European Union, while it may contract in Japan, one of the few countries where producer prices fell last year. Meanwhile, the forecast for Australia is "dismal," in light of extremely low water availability. A decrease is also expected in the U.S., owing to competition from more profitable crops.

Looking ahead, FAO believes prices are not likely to rise further in the coming months, with the arrival of new rice harvests in Brazil or Uruguay, as well as in Bangladesh, India, Indonesia, Thailand and Vietnam. "So far, prospects regarding these crops are positive," Calpe said.

Darren Cooper, senior economist at the International Grains Council (IGC) in London, agrees with the FAO's assessment of the situation. In the IGC World Grains Summary Report for March, he said that despite escalating prices, world rice trade is still expected to increase in 2008 but trade restrictions were unhelpful in respect of cooling the prices.

"In contrast to other markets, Asian rice prices registered steep increases (over the first quarter) on concerns about tightening supplies and new export measures, including a ban on fresh sales (until May) by Vietnam and the recent doubling of India’s minimum export price for 'non-basmati' rice," Cooper wrote.

Meanwhile, the World Bank believes that energy price rises, coupled with the rapid rise in prices of soft commodities, especially wheat, rice and corn, was a worrying prospect.

Robert Zoellick, president of World Bank said, "nearly 33 countries around the world face potential social unrest because of the acute hike in food and energy prices. For these countries there is no margin for survival."

In a statement, he urged world leaders to reach an agreement on the WTO Doha Round of negotiations which have been in the balance since November 2001.

"The poor need lower food prices now. But the world's agricultural trading system is stuck in the past. If ever there was a time to cut distorting agricultural subsidies and open markets for food imports it must be now," Zoellick said.

By Gaurav Sharma, gsharma@economicnews.ca, edited by Cristina Markham, cmarkham@economicnews.ca

(END) ©CEP Newswires - ©CEP News Ltd. 2008. All Rights Reserved. www.economicnews.ca