April 18, 2008

Why Iran`s Oil Bourse can`t break the Buck

F. William Engdahl, 10 March 2006

A number of writings have recently appeared with the thesis that the announced plans of the Iranian government to institute a Tehran oil bourse, perhaps as early as this month, is the real hidden reason behind the evident march to war on Iran by the Anglo-American powers. The thesis is simply wrong for many reasons, not least that war on Iran has been in planning since the 1990s as an integral part of the United States' Greater Middle East strategy.

More significant, the oil-bourse argument is a red herring that diverts attention from the real geopolitical grounds behind the march toward war that have been detailed on this website, including in my piece, A high-risk game of nuclear chicken, which appeared in Asia Times Online on January 31.

In 1996, Richard Perle and Douglas Feith, two neo -conservatives later to play an important role in formulation of Bush administration's Pentagon policy in the Middle East, authored a paper for then newly elected Israeli prime minister Benjamin Netanyahu. That advisory paper, "A Clean Break: A New Strategy for Securing the Realm", called on Netanyahu to make a "clean break from the peace process". Perle and Feith also called on Netanyahu to strengthen Israel's defenses against Syria and Iraq, and to go after Iran as the prop of Syria.

More than a year before President George W Bush declared his "shock and awe" operation against Iraq, he made his now-infamous January 2002 State of the Union address to Congress in which he labeled Iran, along with Iraq and North Korea, as a member of the "axis of evil" trio. This was well before anyone in Tehran was even considering establishing an oil bourse to trade oil in various currencies.

The argument by those who believe the Tehran oil bourse would be the casus belli, the trigger pushing Washington down the road to potential thermonuclear annihilation of Iran, seems to rest on the claim that by openly trading oil to other nations or buyers in euros, Tehran would set into motion a chain of events in which nation after nation, buyer after buyer, would line up to buy oil no longer in US dollars but in euros. That, in turn, goes the argument, would lead to a panic selling of dollars on world foreign-exchange markets and a collapse of the role of the dollar as reserve currency, one of the "pillars of Empire". Basta! There goes the American Century down the tubes with the onset of the Tehran oil bourse.

Some background considerations

That argument fails to convince for a number of reasons. First , in the case of at least one of the oil-bourse theorists, the argument is based on a misunderstanding of the process I described in my book, A Century of War, regarding the creation in 1974 of "petrodollar recycling", a process with which then-US secretary of state Henry Kissinger was deeply involved, in the wake of the 400% oil-price hike orchestrated by the Organization of Petroleum Exporting Countries (OPEC).

The US dollar then did not become a "petrodollar", although Kissinger spoke about the process of "recycling petrodollars". What he was referring to was the initiation of a new phase of US global hegemony in which the petrodollar export earnings of OPEC oil lands would be recycled into the hands of the major New York and London banks and re-lent in the form of US dollar loans to oil-deficit countries such as Brazil and Argentina, creating what soon came to be known as the Latin American debt crisis.

The dollar at that time had been a fiat currency since August 1971 when president Richard Nixon first abrogated the Bretton Woods Treaty and refused to redeem US dollars held by foreign central banks for gold bullion. The dollar floated against other major currencies, falling more or less until it was revived by the 1973-74 oil-price shock.

What the oil shock achieved for the sagging dollar was a sudden injection of global demand from nations confronted with 400% higher oil-import bills. At that time, by postwar convention and convenience, as the dollar was the only reserve currency held around the world other than gold, oil was priced by all OPEC members in dollars as a practical exigency.

With the 400% price rise, nations such as France, Germany and Japan suddenly found reason to try to buy their oil directly in their own currencies - French francs, Deutschmarks or Japanese yen - to lessen the pressure on their rapidly declining reserves of trade dollars. The US Treasury and the Pentagon made certain that did not happen, partly with some secret diplomacy by Kissinger, bullying threats, and a whopping-big US military agreement with the key OPEC producer, Saudi Arabia. At that time it helped that the shah of Iran was seen in Washington to be a vassal of Kissinger.

The point was not that the US dollar became a "petro" currency. The point was that the reserve status of the dollar, now a paper currency, was bolstered by the 400% increase in world demand for dollars to buy oil. But that was only a part of the dollar story. In 1979, after the accession to power of the ayatollah Ruhollah Khomeini in Iran, oil prices shot through the roof for the second time in six years. Yet, paradoxically, later that year the dollar began a precipitous free-fall, not a rise. It was no "petrodollar".

Foreign dollar-holders began dumping their dollars as a protest against the foreign policies of the administration of US president Jimmy Carter. It was to deal with that dollar crisis that Carter was forced to bring in Paul Volcker to head the Federal Reserve in 1979. In October 1979 Volcker gave the dollar another turbocharge by allowing interest rates in the US to rise some 300% in weeks, to well over 20%. That in turn forced global interest rates through the roof, triggered a global recession, mass unemployment and misery. It also "saved" the dollar as sole reserve currency. The dollar was not a "petrodollar". It was the currency of issue of the greatest superpower, a superpower determined to do what it needed to keep it that way.

The F-16 dollar backing

Since 1979 the US power establishment, from Wall Street to Washington, has maintained the status of the dollar as unchallenged global reserve currency. That role, however, is not a purely economic one. Reserve-currency status is an adjunct of global power, of the US determination to dominate other nations and the global economic process. The United States didn't get reserve-currency status by a democratic vote of world central banks, nor did the British Empire in the 19th century. They fought wars for it.

For that reason, the status of the dollar as reserve currency depends on the status of the United States as the world's unchallenged military superpower. In a sense, since August 1971 the dollar is no longer backed by gold. Instead, it is backed by F-16s and Abrams battle tanks, operating in some 130 US bases around the world, defending liberty and the dollar.

A euro challenge?

For the euro to begin to challenge the reserve role of the US dollar, a virtual revolution in policy would have to take place in Euroland. First the European Central Bank (ECB), the institutionalized, undemocratic institution created by the Maastricht Treaty to maintain the power of creditor banks in collecting their debts, would have to surrender power to elected legislators. It would then have to turn on the printing presses and print euros like there was no tomorrow. That is because the size of the publicly traded Euroland government -bond market is still tiny in comparison with the huge US Treasury market.

As Michael Hudson explains in his brilliant and too-little -studied work Super Imperialism, the perverse genius of the US global dollar hegemony was the realization, in the months after August 1971, that US power under a fiat dollar system was directly tied to the creation of dollar debt. The US debt and the trade deficit were not the "problem", they realized. They were the "solution".

The US could print endless quantities of dollars to pay for foreign imports of Toyotas, Hondas, BMWs or other goods in a system in which the trading partners of the United States, holding paper dollars for their exports, feared a dollar collapse enough to continue to support the dollar by buying US Treasury bonds and bills. In fact in the 30 years since abandoning gold exchange for paper dollars, the US dollars in reserve have risen by a whopping 2,500%, and the amount grows at double-digit rates today.

This system continued into the 1980s and 1990s unchallenged . US policy was one of crisis management coupled with skillful and coordinated projection of US military power. Japan in the 1980s, fearful of antagonizing its US nuclear-umbrella provider, bought endless volumes of US Treasury debt even though it lost a king's ransom in the process. It was a political, not an investment, decision.

The only potential challenge to the reserve role of the dollar came in the late 1990s with the European Union decision to create a single currency, the euro, to be administered by single central bank, the ECB. Europe appeared to be emerging as a unified, independent policy voice of what French President Jacques Chirac then called a multipolar world. Those multipolar illusions vanished with the unpublicized decision of the ECB and national central banks not to pool their gold reserves as backing for the new euro. That decision not to use gold as backing came amid a heated controversy over Nazi gold and alleged wartime abuses by Germany, Switzerland, France and other European countries.

Since the shocks of September 11, 2001, and the ensuing declaration of a US "global war on terror", including a unilateral decision to ignore the United Nations and the community of nations and go to war against a defenseless Iraq, few countries have even dared to challenge dollar hegemony. The combined defense spending of all nations of the EU today pales by comparison with the total of current US budgeted and unbudgeted military spending. US defense outlays will reach an official, staggering level of US$663 billion in the 2007 fiscal year. The combined annual EU spending amounts to a mere $75 billion, and is tending to decline, in part because of ECB Maastricht deficit pressures on its governments.

So today, at least for the present, there are no signs of Japanese, EU or other dollar holders engaging in dollar-asset liquidation. Even China, unhappy as it is with Washington's bully politics, seems reluctant to rouse the American dragon to fury.

The origins of the oil bourse

The idea of creating a new trading platform in Iran to trade oil and to create a new crude-oil benchmark apparently originated with the former director of the London International Petroleum Exchange, Chris Cook. In a January 21 article in Asia Times Online (What the Iran 'nuclear issue' is really about), Cook explained the background. Describing a letter he had written in 2001 to the governor of the Iranian Central Bank, Dr Mohsen Nourbakhsh, Cook explained what he advised then:

In this letter I pointed out that the structure of global oil markets massively favors intermediary traders and particularly investment banks, and that both consumers and producers such as Iran are adversely affected by this. I recommended that Iran consider as a matter of urgency the creation of a Middle Eastern energy exchange, and particularly a new Persian Gulf benchmark oil price.

It is therefore with wry amusement that I have seen a myth being widely propagated on the Internet that the genesis of this "Iran bourse" project is a wish to subvert the US dollar by denominating oil pricing in euros.

As anyone familiar with the Organization of Petroleum Exporting Countries will know, the denomination of oil sales in currencies other than the dollar is not a new subject, and as anyone familiar with economics will tell you, the denomination of oil sales is merely a transactional issue: what matters is in what assets (or, in the case of the United States, liabilities ) these proceeds are then invested.

A full challenge to the domination of the US dollar as the world central-bank reserve currency entails a de facto declaration of war on the "full-spectrum dominance" of the United States today. The mighty members of the European Central Bank Council well know this. The heads of state of every EU country know this. The Chinese leadership as well as the Japanese and Indians know this. So does Russian President Vladimir Putin.

Until some combination of those Eurasian powers congeal in a cohesive challenge to the unbridled domination of the United States as sole superpower, there will be no euro or yen or even Chinese yuan challenging the role of the dollar. The issue is of enormous importance, as it is vital to understand the true dynamics bringing the world to the brink of possible nuclear catastrophe today.

As a small ending note, a good friend in Oslo recently forwarded me an article from the Norwegian press. At the end of December, Sven Arild Andersen, director of the Oslo bourse, announced he was fed up with depending on the London oil bourse trading oil in dollars. Norway, a major oil producer, selling most of its oil into euro countries in the EU, he said, should set up its own oil bourse and trade its oil in euros. Will Norway - a member of the North Atlantic Treaty Organization - become the next target for the wrath of the Pentagon?

India and Its External Security

Vikram Sood

There was always more than one India living together for most of its history. Today at least two Indias are growing together. A traffic jam at the 32-lane highway toll tax plaza as motorists leave for work with the occasional Bentley and its sole occupant gliding by the gates is not unusual. Nor is it unusual to see a camel drawn transportation system not too far on the side road close by or a three wheeler scooter rickshaw carrying sixteen passengers to work. This is the new India on the move – young, confident, buoyant, corporate and also a demanding 350 million consumer class. It signifies an awakening after years of colonisation that stifled and socialism that did not deliver.

According to some Pakistani calculations, two of the country’s biggest industrialists, the Ambani brothers have enough resources to buy off the Karachi Stock Exchange with money to spare and four Indian industrialists can buy of the entire produce of Pakistan, the region’s second largest economy, also with money to spare. Progress at this rate needs resources and markets and political and economic stability in the neighbourhood. India’s neighbours thus have a choice – either they can ignore the rise of India or become part of this new journey that will take them to new vistas.. Whatever happens, they remain subjects of concern for India because India lives in a difficult neighbourhood.

A Difficult Neighbourhood
The Failed State Index for 2006 prepared by the Washington-based Fund for Peace, lists Pakistan (9), Afghanistan (10), Myanmar (18), Bangladesh (19), Nepal (20) and Sri Lanka (25) as the most dysfunctional states in the world.. Six of India’s neighbours are thus listed in the top 25 dysfunctional states. India’s three other neighbours -- the gigantic and powerful China and the diminutive Himalayan state of Bhutan and the atoll republic of the Maldives in the Indian Ocean -- are the exceptions to this categorisation.

This is not to suggest that collapse of these states is imminent or that this will occur in the order listed. Equally, it is unlikely that the Fund for Peace will change this unflattering and worrying depiction of India’s neighbourhood for 2007. This is because all these states have continued to exhibit classic symptoms of failed states in varying degrees. They have failed to provide basic security and good governance to their people and have lost control over the use of force within their own boundaries.

Multiple Challenges
In considering India’s external security the country’s policy makers have to bear in mind the economic backwardness and political instabilities of its smaller neighbours, the continued inimical relations that Pakistan has maintained with India. It has used terrorism as an instrument of foreign policy and as a force equaliser. India has to contend with the intentions of a powerful China that would seek to be the paramount power in Asia. External security would demand assessment of conventional military threats but in addition, terrorism, energy security, environmental degradation, demographic changes and access to natural resources including water and markets are the new factors. The nature of threats that emanate from the weakness of the smaller countries and those from the intentions of the bigger countries, China and Pakistan, are different and need different responses.

The Smaller Neighbours
A billion Indians, with enough problems of their own, thus live in a troubled part of a troubled planet. They live in an era of exploding expectations with limited resources and in economies of shortages across the entire South Asian region. The region continues to remain economically backward and politically unstable. Pakistan and Bangladesh, two of India’s most populous neighbours, are rapidly slipping into religious obscurantism. India will continue to face demanding challenges from its neighbours.
These are Nepal’s continuing domestic turmoil as it struggles to introduce democracy in the midst of a violent campaign led by the radical left wing ‘Maoists”; Bangladesh’s recession into a thinly veiled military regime after its troubled experience with democracy and slide into Talibanisation; and, Sri Lanka’s unending fratricidal war arising from the inability of the Sinhala majority to reconcile to the demands of an increasingly violent Tamil minority. Myanmar, with whom India has a long land frontier, has largely been an aloof and distant neighbour although there are signs of a thaw in the midst of fears that China may have become the relevant power in that country. A little further away but strategically relevant to India in the context of Pakistan and access to Central Asia, is Afghanistan which continues to slide into unending chaos.

The largest Muslim concentration in the world, about 450 to 460 million live in India, Pakistan and Bangladesh. Of these, about one third is in India. This makes them the largest number of Muslims living in a democratic set up for the longest time, any where in the world today. The rest have been under an increasing influence of dictatorships and Islamic radicalism at a time when state policies have weakened liberal societies while an anti-American sentiment has grown sharply. The challenge here for India is to keep its own Muslims immune from external influences where attempts are undoubtedly being made not only to suborn them but also simultaneously, to provoke a Hindu backlash.

India cannot help its size or strength and has to live with the title of a regional hegemon or even a bully at times accused of arrogance and intrusiveness when trying to help or being haughty and indifferent when trying to stay away. India baiting thus is common in Bangladesh, Pakistan and Nepal. It is perhaps natural that some of them seek comfort wit the distant power against the local power. Some of the neighbours do not wish to share in the prospects of mutual prosperity that India might offer but are willing to share poverty. These countries seek their own security by isolating themselves from India defying the logic of geography.

Consequently, nations of the sub-continent are unable to maximise economic complementarities and opportunities to the extent that they hardly trade with each other. Transit routes are denied, common rail and road links are virtually non-existent. It is this lack of common economic and security perceptions among the neighbours which have hamstrung multi-lateral organisations like SAARC, unlike the EU or the ASEAN, which function as a common platform for diverse interests they represent. The other problem is that India is being globally recognised as a rising economic power but the region is slow to recognise and take advantage of this evolving new situation.

For India, the nightmare is a failed state in its neighbourhood and the influx of refugees with their socio-economic impact as India, despite its economic size, does not have the capacity to bolster the sagging systems in all these countries for all times. The choice is whether or not to become a totally dysfunctional state is the individual choice of the state yet how this is handled will be a major challenge for India in the future. Bangladesh, for instance, surrounded on three sides by India and crucial to India’s economic development, has the choice to become the birthplace for the next Islamic revolution or a reasonably modern economic state. Closer economic and trade tie-ups with India would generate employment and reasonable prosperity within the country. India could become an important stake holder in Bangladesh’s prosperity but is hampered by that country’s domestic political compulsions which seek sustenance in anti-India rhetoric. The same principles apply to Nepal where its political future still seems uncertain as the mainstream traditional political parties battle it out for space with the radical Maoists who seek a complete overhaul of the system. Sri Lanka seeks better political and economic ties with India but is constantly being pulled down by its own ethnic problems and the occasional urge to balance India with China. Bhutan has successfully amalgamated its economic system with India and has benefited from this. Myanmar has been difficult to prise it open for Indian interests but objects to any suggestion that it allows China a freer hand than other countries.

Pakistan—Slipping into a Jehadi mindset
The assassination of two-time Prime Minister Benazir Bhutto on December 27, 2007 typified not only an extremely violent year for Pakistan but also signified the kind of dangerous political impasse into which that the country has slipped. In 2007 there were 1442 terrorist attacks and incidents of political and sectarian violence inside Pakistan. More than 3000 persons were killed up against 657 similar incidents in 2006 in which 907 persons were killed. 232 army men, 163 para-military troops and 71 policemen were killed in terrorist attacks and of the 60 suicide attacks 41 were directed against security forces. This indicates not only the anger against them but the absence of fear. Of the 1636 persons shown as arrested for terrorist activity the largest component, 740 was from the restive province of Balochistan where, mostly unknown to the rest of the world, a fierce battle for independence is being fought by Baloch nationalists. All this is blowback – the unintended consequences of unacknowledged actions in another country. One of the most dangerous blowbacks for Pakistan has been that there is an incumbency fatigue against the Army and it has lost much of its sheen in recent years.

This has been the cumulative result of decades of incorrect policy both by Pakistan and its benefactors. Pakistan’s leaders, both civilian and military, have not been able to reconcile to the reality that theirs is a smaller country and has fewer resources than India. They have constantly sought to justify the creation of a Muslim homeland on the sub-continent. Insecure against a ‘Hindu’ neighbour, Pakistan’s leaders from very early days, sought security outside the region and the Pakistan Army, which has ruled the country, directly and indirectly for most of the period, refuses to give up historical grudges and ambitions -- to avenge the creation of Bangladesh that undermined the two-nation theory, and to create more Caliphates in India.

There is a very real fear in Pakistani ruling circles that a secular democratic India which is also economically successful on its borders would undermine the ideology of an Islamic Pakistan. Jehad against the Soviets in Afghanistan and terrorism in India were the result of these warped policies. While the Soviets may have left, India was not going to go away. The result has been that today Pakistan faces the danger of being consumed by its own creations – jehad abroad and the Taliban at home.

Many Pakistanis see Musharraf as America’s stooge and anti-American sentiments are high in the country. Any attempt to roll back the Taliban/Islamic Emirate in the North West Frontier Province bordering Afghanistan is being fiercely resisted with an element of the security forces unwilling to engage in battle against fellow Muslims and tribesmen. Sharia courts have been established and an Islamic taxation system has been introduced. The movement has spread further inland into other parts of the country. Violence and extremism in the name of religious ideology is now directly linked with the US-led was in Afghanistan and the Pakistan army crackdown against these forces generates further hatred. The increased targeting of the armed forces by suicide bombers is an indication of this. Yet the hard truth is that the Pakistani establishment, especially the Army, has been so deeply involved with the various terrorist organisations in their country and for so long that it is now difficult for them to disengage.

Their jehad is now targeted not only against the “infidels” occupying Afghanistan but also against the “infidels” that rule Pakistan or propagate secularism. The political situation is complicated because in the absence of any stable institutions there are no constitutional shock absorbers to cushion the tremors in a country caught up in internal ethnic and religious turmoil.

The other effect has been the outward movement of jehad from centres in Pakistan. Jehad had gone international during the Afghan jehad days and its immediate fall out was in India in the Nineties. The time to arrest the growth has now gone and events in September 11, 2001 or the Madrid train bombings, the London bombings later and again the arrests of suspected terrorists in Barcelona, all have a Pakistani connection.

China – Harmonious rise or impending challenge
India is blessed with two neighbours both of whom are nuclear weapons states and of which one, Pakistan has remained an implacable foe while the other, China has had frosty relations for long spells with a thaw setting in recent years. Today, the world’s two largest countries, in terms of populations, with the two of the largest armed forces, nuclear weapons and with the highest growth rates are separated by unmarked 4057 km long border. There are prospects of peace and prosperity and should the two get together they would become the largest and the richest economic powerhouses and military powers. This would be a situation unthinkable among Western strategists. However, so long as the border question remains unresolved, genuine progress on major strategic issues is unlikely. There could be co operation but more likely there will be competition and even confrontation although conflict seems unlikely. Beijing, however, does not perceive India as a competitor only as a pretender to greatness.

While there is a vast economic stake in keeping the border tranquil the reality is that despite 27 years of negotiations, the border issue remains unresolved. India-China trade has grown phenomenally from a mere $ 2.5 billion a few years ago to $25 billion last year and growing. Growing economic and trade relations do not necessarily lead to political warmth as in the case of Japan and China. The slow progress in resolving this issue and China’s assertiveness regionally and on the border issue in recent times indicates a new approach by the Chinese. This is partly due to the perceived closeness between India and the United States but strategically and for decades, China has sought out balancers in the region. Consistent support to Pakistan militarily to the extent of supplying nuclear weapon and missile technology as well as equipment has been part of China’s low cost hedge against India. China too cannot afford to see the Indian model succeed and become a rival for influence in Asia which is seen by Chinese leaders as the sole preserve of China to exclusion of all, including the US.

Many Indian analysts feel that there is enough space for India and China to grow together. China has larger ambitions and its search for a greater role for itself sharpened after it became a net importer of oil in 1994 to meet its rapidly growing need for energy to sustain its economy. The US led Global war on Terror and the US presence on its neighbourhood in Central Asia indicated greater urgency for Chinese planners. China had to seek greater strategic depth for itself to ensure acquire land routes for its oil and gas requirements rather than the sea routes that were liable to interruptions. It has since then sought exclusive arrangements with various strategic energy suppliers globally, including India’s neighbourhood. It has used its closeness with the present Myanmar regime to exclude India from a gas supply arrangement. Elsewhere, China has opposed India’s attempts to seek membership of the P-5 or the post of the UNSG. It stance on the India-US civilian nuclear power deal remains ambivalent.

Unable to protect sea-lanes because of an inadequate navy, the Chinese needed alternative routes for energy supplies. Chinese began the construction of Gwadar, close to the vital Straits of Hormuz through which 40 per cent of the world’s oil passes and located on Pakistan’s Balochistan coast, at a feverish pace in 2002 and was completed in 2007. The port will have an exclusive SEZ for China and will eventually be linked through the Chinese built Karakoram Highway to Khunjerab Pass to Kashgar with a network of roads, rail links and gas pipelines. The Karakoram Highway has served as a route through occupied Kashmiri territories for covert Chinese nuclear and missile transfers and other military aid to Pakistan. Kashgar is linked to Xigatse, which will soon have a rail link with Lhasa. The road continues to run parallel to the Sino-Indian border and then south to Kunming from where a network of river, rail and road links lead to the Bay of Bengal.
Beijing thus has two strategic corridors on either side of India in a north-south axis — the Trans-Karakoram Corridor from western China stretching all the way down to Gwadar and the Irrawaddy Corridor from Yunnan to the Bay of Bengal that has brought Chinese security personnel to Burmese sites close both to India’s eastern strategic assets and to the Strait of Malacca. A third Chinese strategic corridor is in the east-west axis in Tibet across India’s northern frontiers. In addition the $6.2-billion railway from Gormu to Lhasa in Tibet significantly boosts China’s offensive military capability against India. A railway branch southward from Lhasa to Xigatse is nearing completion. China now has the logistic capability to intensify military pressure at short notice by rapidly mobilizing up to 12 divisions.
In the 20th century Xinjiang was the New Territory and Tibet was the New Treasure. In the 21st century, Pakistan is the New Territory and Myanmar is the New Treasure. In addition, China has offered assistance for development of Hambantota harbour in southern Sri Lanka. None of this is India specific by design but India’s encirclement will be complete and India’s influence restricted to its national boundaries.

In recent years, Chinese leaders have made several statements in their internal deliberations that indicate their worries. Commenting on China’s periphery after September 11, 2001, Hu Jintao said that the US had strengthened its military positions in the Asia-Pacific region, strengthened its alliance with Japan and strategic co-operation with India, improved relations with Vietnam and established a pro-American regime in Afghanistan. He also referred to the extended outposts – possibly referring to the 737 military bases around the globe – and that America had placed pressure points on China’s east, west and south. Premier Wen Jiabao also predicted that US military focus would shift from Europe to Asia-Pacific.

China will not however challenge the US directly in the foreseeable future but will seek to undermine its influence. It sees the US stuck in a strategic stalemate in Iraq which, for a superpower is really a strategic defeat, and sees this as an opportunity to move in to a perceived vacuum in the Eurasian region. The present closeness of Iran and China is part of a mutually beneficial arrangement at a time when the US is on the defensive in the Middle East. Apart from the various energy tie-ups that Beijing has worked out with Kazakhstan, Russia and other Central Asian states, it will now build twelve new highways connecting Xinjiang to major Central Asian cities to reach Europe eventually. China would like to position itself, not as a successor but possibly as an eventual competitor just as it has endeavoured to ease out the US from various arrangements in South East Asia.

The Future
India thus has to deal with a turbulent Pakistan where at times it looks as if no –one is in control as the country seems to slip into an extremist abyss. On the other border China is more assertive as it perceives India as part of a southern flanking move by the US.

The high–voltage stability of the bipolar world has now been replaced by the uncertainty of evolving multi-linear multi-polarities with the US still the primary power and non-state actors threatening existing stabilities. Interstate relations are now going to be more carefully calibrated and sophisticated with no clearly demarcated power blocs operating in a globalised world. Various triangulations are being configured, many of which exclude the US. Russia, India and China have been talking to each other trilaterally There could even be an Iran, Russia and China arrangement that effectively bottles up the energy rich Eurasian region or there could be a Russia, Iran and India arrangement. At the same time, at present and for the foreseeable future, no country, including India, China and Russia would want to jeopardise its relationship with the US for the sake of its new partners.

Handling new challenges for an India that is growing rapidly at a time when China is growing faster will throw up new challenges for India’s policy makers while old threats and problems remain. The most urgent is the eastward movement of the Taliban mindset from Afghanistan to Pakistan as Pakistan is consumed by its own creations - Taliban and jehad.

Source : La Vanguardia, Spain, April-June 2008

Risky Geopolitical Game: Washington Plays ‘Tibet Roulette’ with China

by F. William Engdahl

Global Research, April 10, 2008

Washington has obviously decided on an ultra-high risk geopolitical game with Beijing’s by fanning the flames of violence in Tibet just at this sensitive time in their relations and on the run-up to the Beijing Olympics. It’s part of an escalating strategy of destabilization of China which has been initiated by the Bush Administration over the past months. It also includes the attempt to ignite an anti-China Saffron Revolution in the neighboring Myanmar region, bringing US-led NATO troops into Darfur where China’s oil companies are developing potentially huge oil reserves. It includes counter moves across mineral-rich Africa. And it includes strenuous efforts to turn India into a major new US forward base on the Asian sub-continent to be deployed against China, though evidence to date suggests the Indian government is being very cautious not to upset Chinese relations.

The current Tibet operation apparently got the green light in October last year when George Bush agreed to meet the Dalai Lama for the first time publicly in Washington. The President of the United States is not unaware of the high stakes of such an insult to Beijing. Bush deepened the affront to America’s largest trading partner, China, by agreeing to attend as the US Congress awarded the Dalai Lama the Congressional Gold Medal.

The immediate expressions of support for the crimson monks of Tibet from George Bush, Condi Rice, France’s Nicolas Sarkozy and Germany’s Angela Merkel most recently took on dimensions of the absurd. Ms Merkel announced she would boycott attending the August Beijing Summer Olympics as her protest at the Beijing treatment of the Tibetan monks. What her press secretary omitted is that she had not even planned to go in the first place.

She was followed by an announcement that Poland’s Prime Minister, the pro-Washington Donald Tusk, would also stay away, along with pro-US Czech President Vaclav Klaus. It is unclear whether they also hadn’t planned to go in the first place but it made for dramatic press headlines.

The recent wave of violent protests and documented attacks by Tibetan monks against Han Chinese residents began on March 10 when several hundred monks marched on Lhasa to demand release of other monks allegedly detained for celebrating the award of the US Congress’ Gold Medal last October. The monks were joined by other monks marching to protest Beijing rule on the 49th anniversary of the Tibetan uprising against Chinese rule.

The geopolitical game

As the Chinese government itself was clear to point out, the sudden eruption of anti-Chinese violence in Tibet, a new phase in the movement led by the exiled Dalai Lama, was suspiciously timed to try to put the spotlight on Beijing’s human rights record on the eve of the coming Olympics. The Beijing Olympics are an event seen in China as a major acknowledgement of the arrival of a new prosperous China on the world stage.

The background actors in the Tibet “Crimson revolution” actions confirm that Washington has been working overtime in recent months to prepare another of its infamous Color Revolutions, these fanning public protests designed to inflict maximum embarrassment on Beijing. The actors on the ground in and outside Tibet are the usual suspects, tied to the US State Department, including the National Endowment for Democracy (NED), the CIA’s Freedom House through its chairman, Bette Bao Lord and her role in the International Committee for Tibet, as well as the Trace Foundation financed by the wealth of George Soros through his daughter, Andrea Soros Colombel.

Chinese Prime Minister Wen Jiabao has accused the Dalai Lama of orchestrating the latest unrest to sabotage the Olympic Games “in order to achieve their unspeakable goal”, Tibetan independence.

Bush telephoned his Chinese counterpart, President Hu Jintao, to pressure for talks between Beijing and the exiled Dalai Lama. The White House said that Bush, “raised his concerns about the situation in Tibet and encouraged the Chinese government to engage in substantive dialogue with the Dalai Lama’s representatives and to allow access for journalists and diplomats.”

President Hu reportedly told Bush the Dalai Lama must “stop his sabotage” of the Olympics before Beijing takes a decision on talks with the exiled Tibetan spiritual leader, foreign ministry spokesman Qin Gang said.

Dalai Lama’s odd friends

In the West the image of the Dalai Lama has been so much promoted that in many circles he is deemed almost a God. While the spiritual life of the Dalai Lama is not our focus, it is relevant to note briefly the circles he has chosen to travel in most of his life.

The Dalai Lama travels in what can only be called rather conservative political circles. What is generally forgotten today is that during the 1930’s the Nazis including Gestapo chief Heinrich Himmler and other top Nazi Party leaders regarded Tibet as the holy site of the survivors of the lost Atlantis, and the origin of the “Nordic pure race.”

When he was 11 and already designated Dalai Lama, he was befriended by Heinrich Harrer, a Nazi Party member and officer of Heinrich Himmler’s feared SS. Far from the innocent image of him in the popular Hollywood film with Brad Pitt, Harrer was an elite SS member at the time he met the 11 year old Dalai Lama and became his tutor in “the world outside Tibet.” While only the Dalai Lama knows the contents of Harrer’s private lessons, the two remained friends until Harrer died a ripe 93 in 2006.1

That sole friendship, of course, does not define a person’s character, but it is interesting in the context of later friends. In April 1999, along with Margaret Thatcher, and former Beijing Ambassador, CIA Director and President, George H.W. Bush, the Dalai Lama demanded the British government release Augusto Pinochet, the former fascist dictator of Chile and a longtime CIA client who was visiting England. The Dalai Lama urged that Pinochet not be forced to go to Spain where he was wanted to stand trial for crimes against humanity. The Dalai Lama had close ties to Miguel Serrano2, head of Chile’s National Socialist Party, a proponent of something called esoteric Hitlerism. 3

Leaving aside at this point the claim of the Dalai Lama to divinity, what is indisputable is that he has been surrounded and financed in significant part, since his flight into Indian exile in 1959, by various US and Western intelligence services and their gaggle of NGOs. It is the agenda of the Washington friends of the Dalai Lama that is relevant here.

The NED at work again…

As author Michael Parenti notes in his work, Friendly Feudalism: The Tibet Myth, “during the 1950s and 60s, the CIA actively backed the Tibetan cause with arms, military training, money, air support and all sorts of other help.” The US-based American Society for a Free Asia, a CIA front, publicized the cause of Tibetan resistance, with the Dalai Lama’s eldest brother, Thubtan Norbu, playing an active role in the group. The Dalai Lama’s second-eldest brother, Gyalo Thondup, established an intelligence operation with the CIA in 1951. It was later upgraded into a CIA-trained guerrilla unit whose recruits parachuted back into Tibet, according to Parenti.4

According to declassified US intelligence documents released in the late 1990s, “for much of the 1960s, the CIA provided the Tibetan exile movement with $1.7 million a year for operations against China, including an annual subsidy of $180,000 for the Dalai Lama.” 5

With help of the CIA, the Dalai Lama fled to Dharamsala, India where he lives to the present. He continues to receive millions of dollars in backing today, not from the CIA but from a more innocuous-sounding CIA front organization, funded by the US Congress, the National Endowment for Democracy (NED). The NED has been instrumental in every US-backed Color Revolution destabilization from Serbia to Georgia to Ukraine to Myanmar. Its funds go to back opposition media and global public relations campaigns to popularize their pet opposition candidates.

As in the other recent Color Revolutions, the US Government is fanning the flames of destabilization against China by funding opposition protest organizations inside and outside Tibet through its arm, the National Endowment for Democracy (NED).

The NED was founded by the Reagan Administration in the early 1980’s, on the recommendation of Bill Casey, Reagan’s Director of the Central Intelligence Agency (CIA), following a series of high-publicity exposures of CIA assassinations and destabilizations of unfriendly regimes. The NED was designed to pose as an independent NGO, one step removed from the CIA and Government agencies so as to be less conspicuous, presumably. The first acting President of the NED, Allen Weinstein, commented to the Washington Post that, “A lot of what we [the NED] do today was done covertly 25 years ago by the CIA.” 6

American intelligence historian, William Blum states, “The NED played an important role in the Iran-Contra affair of the 1980s, funding key components of Oliver North's shadowy "Project Democracy." This network privatized US foreign policy, waged war, ran arms and drugs, and engaged in other equally charming activities. In 1987, a White House spokesman stated that those at NED "run Project Democracy." 7

The most prominent pro-Dalai Lama Tibet independence organization today is the International Campaign for Tibet, founded in Washington in 1988. Since at least 1994 the ICT has been receiving funds from the NED. The ICT awarded their annual Light of Truth award in 2005 to Carl Gershman, founder of the NED. Other ICT award winners have included the German Friedrich Naumann Foundation and Czech leader, Vaclav Havel. The ICT Board of Directors is peopled with former US State Department officials including Gare Smith and Julia Taft. 8

Another especially active anti-Beijing organization is the US-based Students for a Free Tibet, founded in 1994 in New York City as a project of US Tibet Committee and the NED-financed International Campaign for Tibet (ICT). The SFT is most known for unfurling a 450 foot banner atop the Great Wall in China; calling for a free Tibet, and accusing Beijing of wholly unsubstantiated claims of genocide against Tibet. Apparently it makes good drama to rally naïve students.

The SFT was among five organizations which this past January that proclaimed start of a "Tibetan people's uprising" on Jan 4 this year and co-founded a temporary office in charge of coordination and financing.

Harry Wu is another prominent Dalai Lama supporter against Beijing. He became notorious for claiming falsely in a 1996 Playboy interview that he had “videotaped a prisoner whose kidneys were surgically removed while he was alive, and then the prisoner was taken out and shot. The tape was broadcast by BBC." The BBC film showed nothing of the sort, but the damage was done. How many people check old BBC archives? Wu, a retired Berkeley professor who left China after imprisonment as a dissident, is head of the Laogai Research Foundation, a tax-exempt organization whose main funding is from the NED.9

Among related projects, the US Government-financed NED also supports the Tibet Times newspaper, run out of the Dalai Lama’s exile base at Dharamsala, India. The NED also funds the Tibet Multimedia Center for “information dissemination that addresses the struggle for human rights and democracy in Tibet,” also based in Dharamsala. And NED finances the Tibetan Center for Human Rights and Democracy.

In short, US State Department and US intelligence community finger prints are all over the upsurge around the Free Tibet movement and the anti-Han Chinese attacks of March. The question to be asked is why, and especially why now?

Tibet’s raw minerals treasure

Tibet is of strategic import to China not only for its geographical location astride the border with India, Washington’s newest anti-China ally in Asia. Tibet is also a treasure of minerals and also oil. Tibet contains some of the world's largest uranium and borax deposits, one half of the world's lithium, the largest copper deposits in Asia, enormous iron deposits, and over 80,000 gold mines. Tibet's forests are the largest timber reserve at China's disposal; as of 1980, an estimated $54 billion worth of trees had been felled and taken by China. Tibet also contains some of the largest oil reserves in the region.10

On the Tibet Autonomous Region’s border along the Xinjiang Uygur Autonomous Region is also a vast oil and mineral region in the Qaidam Basin, known as a "treasure basin." The Basin has 57 different types of mineral resources with proven reserves including petroleum, natural gas, coal, crude salt, potassium, magnesium, lead, zinc and gold. These mineral resources have a potential economic value of 15 trillion yuan or US$1.8 trillion. Proven reserves of potassium, lithium and crude salt in the basin are the biggest in China.

And situated as it is, on the “roof of the world,” Tibet is perhaps the world’s most valuable water source. Tibet is the source of seven of Asia's greatest rivers which provide water for 2 billion people.” He who controls Tibet’s water has a mighty powerful geopolitical lever over all Asia.

But the prime interest of Tibet for Washington today is its potential to act as a lever to destabilize and blackmail the Beijing Government.

Washington’s ‘nonviolence as a form of warfare’

The events in Tibet since March 10 have been played in Western media with little regard to accuracy or independent cross-checking. Most of the pictures blown up in European and US newspapers and TV have not even been of Chinese military oppression of Tibetan lamas or monks. They have been shown to be in most cases either Reuters or AFP pictures of Han Chinese being beaten by Tibetan monks in paramilitary organizations. In some instances German TV stations ran video pictures of beatings that were not even from Tibet but rather by Nepalese police in Kathmandu. 11

The western media complicity simply further underlies that the actions around Tibet are part of a well-orchestrated destabilization effort on the part of Washington. What few people realize is that the National Endowment for Democracy (NED) was also instrumental, along with Gene Sharp’s misnamed Albert Einstein Institution through Colonel Robert Helvey, in encouraging the student protests at Tiananmen Square in June 1989. The Albert Einstein Institution, as it describes itself, specializes in "nonviolence as a form of warfare." 12

Colonel Helvey was formerly with the Defense Intelligence Agency stationed in Myanmar. Helvey trained in Hong Kong the student leaders from Beijing in mass demonstration techniques which they were to use in the Tiananmen Square incident of June 1989. He is now believed acting as an adviser to the Falun Gong in similar civil disobedience techniques. Helvey nominally retired from the army in 1991, but had been working with the Albert Einstein Institution and George Soros’ Open Society Foundation long before then. In its annual report for 2004 Helvey’s Albert Einstein Institution admitted to advising people in Tibet. 13

With the emergence of the Internet and mobile telephone use, the US Pentagon has refined an entirely new form of regime change and political destabilization. As one researcher of the phenomenon behind the wave of color revolutions, Jonathan Mowat, describes it,

“…What we are seeing is civilian application of Secretary Donald Rumsfeld's "Revolution in Military Affairs" doctrine, which depends on highly mobile small group deployments "enabled" by "real time" intelligence and communications. Squads of soldiers taking over city blocks with the aid of "intelligence helmet" video screens that give them an instantaneous overview of their environment, constitute the military side. Bands of youth converging on targeted intersections in constant dialogue on cell phones constitute the doctrine's civilian application.

“This parallel should not be surprising since the US military and National Security Agency subsidized the development of the Internet, cellular phones, and software platforms. From their inception, these technologies were studied and experimented with in order to find the optimal use in a new kind of warfare. The "revolution" in warfare that such new instruments permit has been pushed to the extreme by several specialists in psychological warfare. Although these military utopians have been working in high places, (for example the RAND Corporation), for a very long time, to a large extent they only took over some of the most important command structures of the US military apparatus with the victory of the neoconservatives in the Pentagon of Donald Rumsfeld.14

Goal to control China

Washington policy has used and refined these techniques of “revolutionary nonviolence,” and NED operations embodied a series of ‘democratic’ or soft coup projects as part of a larger strategy which would seek to cut China off from access to its vital external oil and gas reserves.

The 1970’s quote attributed to then-Secretary of State Henry Kissinger, a proponent of British geopolitics in an American context comes to mind: “If you control the oil you control entire nations…”

The destabilization attempt by Washington using Tibet, no doubt with quiet “help” from its friends in British and other US-friendly intelligence services, is part of a clear pattern.

It includes Washington’s “Saffron revolution” attempts to destabilize Myanmar. It includes the ongoing effort to get NATO troops into Darfur to block China’s access to strategically vital oil resources there and elsewhere in Africa. It includes attempts to foment problems in Uzbekistan, Kyrgystan and to disrupt China’s vital new energy pipeline projects to Kazakhstan. The earlier Asian Great Silk Road trade routes went through Tashkent in Uzbekistan and Almaty in Kazakhstan for geographically obvious reasons, in a region surrounded by major mountain ranges. Geopolitical control of Uzbekistan, Kyrgystan, Kazakhstan would enable control of any potential pipeline routes between China and Central Asia just as the encirclement of Russia controls pipeline and other ties between it and western Europe, China, India and the Middle East, where China depends on uninterrupted oil flows from Iran, Saudi Arabia and other OPEC countries.

Behind the strategy to encircle China

In this context, a revealing New York Council on Foreign Relations analysis in their Foreign Affairs magazine from Zbigniew Brzezinski from September/October 1997 is worth quoting. Brzezinski, a protégé of David Rockefeller and a follower of the founder of British geopolitics, Sir Halford Mackinder, is today the foreign policy adviser to Presidential candidate, Barack Obama. In 1997 he revealingly wrote:

‘Eurasia is home to most of the world's politically assertive and dynamic states. All the historical pretenders to global power originated in Eurasia. The world's most populous aspirants to regional hegemony, China and India, are in Eurasia, as are all the potential political or economic challengers to American primacy. After the United States, the next six largest economies and military spenders are there, as are all but one of the world's overt nuclear powers, and all but one of the covert ones. Eurasia accounts for 75 percent of the world's population; 60 percent of its GNP, and 75 percent of its energy resources. Collectively, Eurasia's potential power overshadows even America's.

‘Eurasia is the world's axial super-continent. A power that dominated Eurasia would exercise decisive influence over two of the world's three most economically productive regions, Western Europe and East Asia. A glance at the map also suggests that a country dominant in Eurasia would almost automatically control the Middle East and Africa. With Eurasia now serving as the decisive geopolitical chessboard, it no longer suffices to fashion one policy for Europe and another for Asia. What happens with the distribution of power on the Eurasian landmass will be of decisive importance to America's global primacy….’15 (emphasis mine-w.e.).

This statement, written well before the US-led bombing of former Yugoslavia and the US military occupations in Afghanistan and Iraq, or its support of the Baku-Tbilisi-Ceyhan Pipeline, puts Washington pronouncements about ‘ridding the world of tyranny’ and about spreading democracy, into a somewhat different context from the one usually mentioned by George W. Bush of others.

It’s about global hegemony, not democracy. It should be no surprise when powers such as China are not convinced that giving Washington such overwhelming power is in China’s national interest, any more than Russia thinks that it would be a step towards peace to let NATO gobble up Ukraine and Georgia and put US missiles on Russia’s doorstep “to defend against threat of Iranian nuclear attack on the United States.”

The US-led destabilization in Tibet is part of a strategic shift of great significance. It comes at a time when the US economy and the US dollar, still the world’s reserve currency, are in the worst crisis since the 1930’s. It is significant that the US Administration sends Wall Street banker, former Goldman Sachs chairman, Henry Paulson to Beijing in the midst of its efforts to embarrass Beijing in Tibet. Washington is literally playing with fire. China long ago surpassed Japan as the world’s largest holder of foreign currency reserves, now in the range of $1.5 trillions, most of which are invested in US Treasury debt instruments. Paulson knows well that were Beijing to decide it could bring the dollar to its knees by selling only a small portion of its US debt on the market.


1 Ex-Nazi, Dalai's tutor Harrer dies at 93, The Times of India, 9 Jan 2006, in

2 Goodrick-Clarke, Nicholas, Black Sun: Aryan Cults, Esoteric Nazism and the Politics of Identity, New York University Press, 2001, p. 177.

3 Goldner, Colin, Mönchischer Terror auf dem Dach der Welt Teil 1: Die Begeisterung für den Dalai Lama und den tibetischen Buddhismus, March 26, 2008, excerpted from the book Dalai Lama: Fall eines Gottkönigs, Alibri Verlag,, new edition to appear April 2008, reproduced in

4 Parenti, Michael, Friendly Feudalism: The Tibet Myth, June 2007, in www.michaelparenti.org/Tibet.html.

5 Mann, Jim, CIA funded covert Tibet exile campaign in 1960s, The Age (Australia), Sept. 16, 1998.

6 Ignatius, D., Innocence Abroad: The New World of Spyless Coups, The Washington Post, 22 September 1991.

7 Blum, William, The NED and ‘Project Democracy,’ January 2000, in www.friendsoftibet.org/databank/usdefence/usd5.html

8 Barker, Michael, ’Democratic Imperialism’: Tibet, China and the National Endowment for Democracy, Global Research, August 13, 2007, www.globalresearch.ca.

9 McGehee, Ralph, Ralph McGehee’ s Archive on JFK Place, CIA Operations in China Part III, May 2, 1996, in www.acorn.net/jfkplace/03/RM/RM.china-for.

10 US Tibet Committee, Fifteen things you should know about Tibet and China, in

11 Goldner, Colin, Mönchischer Terror auf dem Dach der Welt Teil 2: Krawalle im Vorfeld der Olympischen Spiele, op cit.

12 Mowat, Jonathan, The new Gladio in action?, Online Journal, Mar 19, 2005, in

13 Ibid.

14 Ibid.

15 Brzezinski, Zbigniew, A Geostrategy for Eurasia, Foreign Affairs, 76:5, September/October 1997.

Global Research Articles by F. William Engdahl

Why must India kow-tow to China?

Source: REDIFF
Francois Gautier

April 18, 2008

For 60 years, China has humiliated India at every step. It betrayed Jawaharlal Nehru's naive trust in a Hindi-Chini bhai-bhai friendship. It treacherously attacked India from Tibet [Images] which Nehru had implicitly left to the Chinese, humiliating the Indian army which would take decades to recover.
It directly or indirectly encouraged separatist movements in the Northeast; it used Nepal as a front State against India; it armed, and worst of all, gave the nuclear bomb to Pakistan, a crime against humanity.

Today it is still sitting on a million square metres in Aksai Chin (supposedly given to Pakistan), which rightfully belongs to India; it claims Arunachal Pradesh, and sometimes Sikkim, does regular incursions into Indian territory and is still busy encircling India in Burma.

The Chinese despise Indians, witness how they summoned the Indian ambassador at 2 am in the morning as if she was some lower hireling.

Indian leaders are also perfectly aware that the Chinese, in a span of fifty years, have killed 1.2 million Tibetans, razed to the ground 6,254 monasteries, destroyed 60 per cent of religious, historical and cultural archives and that one Tibetan out of ten is still in jail.

As we have entered the Third Millennium, a quarter million Chinese troops are occupying Tibet and there are 7.5 million Chinese settlers for six million Tibetans -- in fact, in many places such as the capital, Lhasa, Tibetans are outnumbered two to one...

India has also to wake up to the plain fact that China needs space and has hegemonic aspirations: It got Tibet, it got Hong Kong, it got part of Ladakh; now it wants Taiwan, Arunachal Pradesh, the Spratly islands and what not!

Fifty years ago, during the Korean war, Sri Aurobindo, had seen clearly in the Chinese game: 'the first move in the Chinese Communist plan of campaign is to dominate and take possession first of these northern parts and then of South East Asia as a preliminary to their manoeuvres with regard to the rest of the continent in passing Tibet as a gate opening to India.'

And magically, for once, India had a chance to get back at China without appearing to do so. It would have been easy to have a little less security for the Olympic torch and let the Tibetans express their anger and resentment in a way that would have once more been flashed all over the world.

Yet, India did exactly the opposite: It went overboard to please the Chinese, giving more security to this sham that was the Olympic relay in New Delhi than it does for Republic Day.

Did anybody see the utter farcical absurdity of this flame, which slept in a five star hotel, had to be guarded by 17,000 security men and ran without spectators, creating unheard off problems for the poor citizen caught in traffic jams?

Is there any peace, is there any sporting and Olympic spirit in such a flame which has become the symbol of Chinese repression, arrogance and thirst for domination in Asia?

Tibet is so important for India: It has always acted as a peaceful, non-violent buffer zone between the two giants of Asia: China and India. And the Dalai Lama [Images] wants it even more peaceful: A demilitarised, denuclearised harmony region.

But it's exactly the opposite which has happened: According to the CIA, China has transferred one third of its nuclear arsenal to Nagchuka, 250 kms away from Lhasa, a region full of huge caves, which the Chinese have linked together by an intricate underground network and installed nearly 100 intercontinental ballistic missiles, many of them pointed at Indian cities.

The reason for this is that the Chinese, who are probably among the most intelligent people in the world, have always understood that India is their number one potential enemy in Asia -- in military, nuclear and economic terms.

Today India is encircled by hostile neighbours, from Pakistan to Bangladesh, from Chinese-occupied Tibet, to a Maoist Nepal.

Never has India faced a darker hour whatever gurus say. Never has she faced so many enemies at the same time -- and truly China is one of the most dangerous ones. Yet India always bends backwards to please the Chinese.

Why is that so? Because the Indian intelligentsia, the secular politicians, the journalists, top bureaucrats, are the descendants of these Brown Sahibs, created by Macaulay more than 250 years ago.

The man who thought that all the historical information which can be collected from all the books which have been written in the Sanskrit language, is less valuable than what may be found in the most paltry abridgement used at preparatory schools in England [Images], wished to make of Indians a darker version of the British. He has been immensely successful and has created a nation with a colonised mind.

Many of India's politicians, bureaucrats and journalists are always aping the West, or are always worrying about what the West thinks of them. They never think Indian, they have no idea about India's great culture, philosophy and spirituality. Very few have read the Bhagavad Gita, or understood that it encourages yoga in action and that sometimes it is important to defend one's country, culture and borders, by force if necessary.

They are no match for the Chinese, who are proud of themselves and their nation and will use any means, open and covert, legal and foul, to foster their dream of a Greater China. The Olympics [Images] are just such a tool for them.

April 17, 2008

Globalization Is Genocide

This article appears in the April 18, 2008 issue of Executive Intelligence Review.
by John Hoefle

[PDF version of this article]

Globalization is genocide. What else would you call a policy whereby trillions of dollars are spent to bail out the banking system, trillions of dollars are spent on war, and people are deliberately starved by a combination of financial policy and food cartel machinations? It is a decidedly anti-human policy, intended to restore what the London-centered international financial oligarchy sees as the natural order of things: itself on top, and everyone else expendable.

Globalization is a policy explicitly designed to destroy the nation-state. The globalizers claim that the nation-state is archaic, that it has failed, and must be replaced with a more "modern" form of world management—but that is a lie. The nation-state, and specifically the form of republic established by the Declaration of Independence and U.S. Constitution, is the highest form of political organization ever designed by man, one specifically designed to promote the General Welfare of all citizens.

The great irony is that what the "modernizers" are pushing is actually a far older, repressive system designed to protect the elite and keep the peasants in line. Were we to do what these modernizers propose, we would set the world back more than 250 years, to the days when the British Empire ruled, and the United States was a gleam in Ben Franklin's eye.

The Nation-State
How do you build a nation-state? You build cities with all the necessary infrastructure: power, water, sewage facilities, housing, transportation systems, schools, hospitals, libraries, cultural facilities—all the things you need to make the population productive. You create industry to produce goods and employ the people. You have agriculture in the surrounding areas to feed the cities. You build up its transportation systems so people can get around, and goods be moved efficiently. You build the transportation and communications grids necessary to move people and goods between cities. And above all, you have an educational system in which students can re-experience the great scientific and philosophical breakthroughs from the past, so that they may make the new breakthroughs required for the future.

The greatest asset any society has is the power of reason of individual human minds, for it is from those minds that the scientific and technological discoveries are made which increase the productive power of human labor. Societies which nurture this process succeed, and societies which do not, fail. A nation-state organized around these concepts is the most powerful, and most modern, form of political structure possible.

Look at globalization from this standpoint. One of the primary tenets of globalization is to move production to the areas where labor is cheapest. This is presented as a benefit, when in fact it is a highly destructive race to the bottom. Paying people fair prices for their labor is an essential component of a stable society. Families must have sufficient income to cover their basic expenses (with extra to put away as savings), and the time and money to pursue intellectual and cultural interests. People should not have to work all the time just to make ends meet—it's bad economics as well as bad social policy.

Additionally, moving production from areas of higher technological levels to areas of lower technological levels actually reduces the economic benefit of that production. Far from making the world more productive, globalization has made it weaker.

So who benefits? The corporations obviously benefit because it increases their profits, and the bankers benefit because they can extract more money from these corporations; but these benefits are an illusion, a short-term boost in profit at the expense of the long-term degradation of the planet. It is a form of economic cannibalism.

This cannibalism is deliberate, a policy designed to reduce the carrying-capacity of the world in order to reduce population levels. Contrary to Malthusian propaganda, the reason for this is to prevent the nations of Asia, Africa, and Ibero-America from developing their potential and taking their rightful place in the world.

For centuries, the European-centered oligarchy, located at various times around the Roman, Venetian, Spanish, British, and other empires, has viewed the world as its playground, and they want to keep it that way. They view the world's natural resources as theirs, no matter where they are located, and they will not tolerate nations interfering with their "rights."

The history of the world is replete with examples of governments being overthrown, and national borders redrawn, to protect these imperial looting prerogatives. Were these nations to develop themselves along the lines of the United States, these oligarchs know, it would change the balance of power globally, knocking these pompous jackasses off their lily-white thrones. No longer would the City of London and its satellites be able to dictate global policy.

Not only that, but with higher standards of living, including better nutrition and proper education, these so-called Second and Third World countries would produce populations more capable of scientific and technological breakthroughs of their own, including in the field of nuclear power. The technologies of the nuclear era would help smash the oligarchy's control over crucial raw materials such as petroleum and strategic minerals.

Faced with these prospects, the oligarchy launched a full-scale assault on the United States and other nation-states, under the euphemism "globalization."

The aim of globalization is to ensure the domination over the planet of the Anglo-Dutch Liberal system. That is to be accomplished by the bankers and the Four Horsemen of the Apocalypse, using methods of which the evil Lord Bertrand Russell said, they might be unpleasant, but what of it. Or, as Dick Cheney might put it: So what?

Their goal is a dramatic reduction in global population, through a combination of famine, disease, war, and financial warfare. This effectively destroys a nation's ability to develop into a sovereign nation capable of resisting imperial designs.

Examples abound. Wars are very efficient ways of killing large numbers of people, as we have seen in several African countries, Cambodia under the Khmer Rouge, the former Yugoslavia, and in western Asia, to name just a few.

The British are masters at organizing such wars, provoking both sides to get the war going, selling arms to both sides, and blocking attempts to stop the fighting. Disease is another big killer, as the devastation of Africa by AIDS, malaria, and other killer diseases attests.

Famine is a similar weapon, as we discuss in detail elsewhere in this issue. In areas like Africa, long a European colonial subject, the combination of wars, famine, and disease has virtually destroyed the continent, especially in Black Africa.

Financial warfare serves a similar purpose. The manipulation of raw materials prices by the banker-run "free markets" allows the commodity cartels to pay low prices to the producing nations, while charging high prices to the consumers, gouging both in one operation.

Even more insidious are the repeated assaults on national currencies launched by the Western financiers, of which the late-1990s "Asian crisis" and the long-running Ibero-American debt crises are indicative. Hook a nation on debt (payable in dollars), force it to devalue its currency through financial warfare, then bankrupt it by forcing it to devote an ever-increasing share of its GDP to repaying that debt, thereby making it increasingly impossible to fund the sorts of large-scale infrastructure projects needed to build a nation.

The cumulative effect of these policies over decades destroys the fabric of these nations. Local oligarchies develop which are loyal not to the nations, but to their colonial overseers. These local oligarchies actively sabotage attempts by the citizens to put their nations back on track, much in the same way that the Anglophiles in the U.S. Establishment fight the efforts of the LaRouche movement to return the United States to the principles of the Founding Fathers and Presidents Lincoln and FDR.

Look at what has been done to the United States. Once the greatest industrial power in the world, the United States has been reduced to importing most of our manufactured products. This was not imposed upon us by China or Japan; we did this to ourselves, as nominally American corporations moved their production overseas, either by outsourcing or building new plants where labor was cheap.

Thanks to our failure to move to a nuclear economy, we are more dependent upon the London-centered oil distribution cartel than ever before, and we routinely import food from countries whose own populations do not have enough to eat. Far from benefitting from globalization, we are its greatest victim, a shell of our former selves, increasingly dependent upon a London-centered cartel system for the necessities of life, while our own economy collapses.

This is deliberate genocide, and it must be stopped if the world is to avoid collapsing into a new Dark Age. We must reject the archaic repression of the British Empire and its co-genocidalists, and use the power of the modern nation-state to rebuild the world.

Is affordable credit still available?


Given that a major cause of the current credit crunch was sub-prime mortgage lending, it is perhaps inevitable that the very same sub-prime borrowers are the most badly hurt by its effects. In addition to fledgling US sub-prime homeowners who have faced foreclosure, vulnerable families continue to rely on credit to supplement generally low incomes.

While relatively high interest credit cards continue to target such borrowers, credit card approvals have fallen across the board. Numerous lenders have reduced credit limits, and in some cases -- such as UK internet bank Egg, which is owned by Citigroup -- cancelled the cards of customers they judge to be at greatest risk of default.

Credit alternatives
Increasingly tight credit conditions have created a marketplace for higher cost sub-prime alternatives:

Payday loans. Payday loans of small amounts for short period have mushroomed in many countries in recent years. However, the credit crunch has fuelled this business in recent months. Payday loans usually require borrowers to write a post-dated cheque for the amount of the loan, along with interest that often works out at over 500% in the United States and in excess of 1,000% in the United Kingdom. If the borrower remains unable to repay the loan the following month they are typically allowed to roll it over, increasing interest costs even further. Payday loan companies are able to get around legislation aimed at capping interest rates by lobbying for exemptions or claiming that they charge 'fees' rather than interest. They often argue that their services represent value for money if 'fees' are compared to, for example, bank charges for bouncing cheques or making late payments on credit cards.

Doorstep lending. Growth of the payday loan sector in the United States has led some to argue for legislation banning loan sharks to be liberalised. Loan sharks actually charge lower interest rates and their conditions are often flexible and negotiable, meaning that -- provided they do not use violence against defaulters, which, contrary to widespread belief, is actually relatively rare -- they may actually offer better value to sub-prime borrowers than payday loan providers. The United Kingdom arguably has taken such a step, and many doorstep lending companies operate there --loaning small amounts to borrowers with poor credit histories at rates of around 150-300%, with repayments collected by agents, and loans sometimes secured against good such as cars.

Third way?
While doorstep lending generally is cheaper than payday loans, interest rates are much higher than those available to 'prime' borrowers. This raises the question of whether less expensive alternatives could be offered to sub-prime borrowers, which could make available affordable credit. One option in some communities is credit unions, which allow those with a 'bond of association' such as residence in a particular area, or members of a particular profession, to save small amounts, and borrow at rates much closer to mainstream retail banking -- typically around 12%.

Credit unions require membership, and many insist that members must save a certain amount before they can borrow -- with loans sometimes proportional to savings. This helps avert default risk by using peer pressure to encourage borrowers to repay, while encouraging a degree of financial prudence.

Limited option...
While credit unions are relatively common in some places -- such as Ireland -- in Great Britain they tend to be extremely small, and often run by volunteers, which means they are only an option for those lucky enough to live in areas in which they exist. Where credit unions become larger -- for example in parts of the United States -- they can face hostility from mainstream banks, which perceive them as competition, particularly when credit unions offer services such as credit cards, which are more commonly associated with the mainstream retail banking sector.

This means that for most sub-prime victims, payday loans, doorstep lenders, and -- in the most extreme cases -– old-fashioned loan sharks are likely to be the only options. Ironically, this means that there will be some financial service beneficiaries of the sub-prime credit crunch.

Myanmar (Burma) – Referendum on 10th May - A Deception?

Guest Column by Dr. Tint Swe

(The views expressed are those of the author)

The Referendum Law for the approval of the draft constitution of the Republic of the Union of Myanmar 2008 is full of tricks letting the regime to do as it wishes.
The Law carries a three-year prison term and with or without a fine of 100,000 Kyat ($90) for anyone who is charged for acting against referendum.[1]
The Law does not set the timing when to release the vote results[2] (Notice the election in Zimbabwe.)

The interpretation of the Law for postponement and cancellation of voting is in the hands of the junta.[3]

Decree 5/96 of 7-6-1996 can punish criticism of the regime’s roadmap with minimum 5 years and maximum up to 20 years in prison and the organization can be disqualified and properties can be seized.

The USDA[4] is assigned to oversee the referendum process as the commission and poll officials are from USDA which enjoys all extra-judicial privileges.
Before it was officially published, there have been (1) draft constitution and (2) basic principles on pro-SPDC website http://www.myanmarforum.net/ with ostensible typographic error in an amendment chapter in the draft. The copies sent to political parties carry the typographic errors. Correction was added only when the NLD[5] pointed it out.

The draft constitution was made public only one month ahead of the referendum so that the people have less time to study and the political parties will not have enough time to educate the voters.

Only Burmese version of draft constitution was published while most of the ethnic people do not read or speak Burmese.

Government-run TV, radio, newspapers, blog-sites carry “Yes” vote propaganda while NLD is being intimidated, members arrested, beaten by unknown peoples, and printed materials are seized.

Artists, film stars, singers and celebrities are exploited for the “Yes vote campaign”

Government employees are instructed to vote for “Yes” and they are threatened they would be fired if they voted for “No” to referendum.

Highest ranking SPDC authorities, ministers, commanders, USDA officials pay visits around the country and urge the people to vote for “Yes”.

The unknown huge amount of State fund is misused to lure the people with economic incentives, mobile phone, loans etc.

The village heads are ordered by military officials for “yes vote” campaign.[6]
Neither domestic nor international observers will be allowed to monitor the referendum and UN’s offer for technical assistance was turned down.
Chief Justice U Aung Toe is the man of all colors because he was Chairman of the National Convention Convening Work Committee as well as the Chairman of the State Constitution Drafting Commission and he is also Chairman of the National Referendum Commission.

The Referendum Commission has been given enough powers to ensure an ‘Yes’ vote.
In 1973 Referendum Law, the voters’ list was announced 10 days ahead. But in 2008 it will be announced only 7 days ahead.

In 1973 referendum, all 18 years old citizens were eligible to vote. But 2008 Law 11 (a) says every citizen, associate citizen, naturalized citizen and temporary certificate holder who has completed the age of eighteen years on the day of referendum shall have the right to vote at the referendum.

SPDC has issued temporary certificates to ceasefire groups and unknown persons e.g. half-Indians who are happy with that and they will give yes votes. No one knows how many temporary certificates have been issued. Nobody knows how many hold more than one certificate.

In 1973, the ballot papers placed outside the ballot boxes were regarded as cancelled votes. In 2008 Law, the ballot papers put outside the ballot boxes will not be regarded as cancelled votes.

In 2008 Law, the ballot papers with additional marks will not be counted as cancelled votes.

· In 1990 election, the voters have to press a seal beside the candidate’s name or party logo. In this referendum it has to tick ü for Yes vote and û for No vote. In Burmese culture û means negative or pessimistic.

· The referendum will be successful if 50% + 1 voters cast the voting.

· The result of referendum will be decided by simple majority i.e. (50% + 1) votes.

· Conundrum (1)

Votes-in-favor = 26
Votes-against = 25
Absentees = 49
Total turn-out = 51
Referendum is successful but all the 49 absentees are believed to be against the constitution and referendum and only 26% Votes-in-favor can win.
· Conundrum (2)

Votes-in-favor = 26
Votes-against = 26
Absentees = 48
Total turn-out = 52
In this deadlock, by canceling one No vote and Votes-in-favor can win.
· Conundrum (3)

Votes-in-favor = 20
Votes-against = 31
In this scenario, 12 Votes-against can be deliberately cancelled i.e. (31 – 12) = 19 Votes-against so that only 20% Votes-in-favor can win.
· Conundrum (4)

Votes-in-favor = 20
Votes-against = 60
The referendum sub-commission can dissolve voting and the result will not be counted at all.
· Vote-banks for the military regime:

The illiterate people and naive voters, the rural dwellers and the non-Burmese language speakers and government employees
Temporary identity card holders who are not legal citizens:
Half-Indians and half-Chinese
Migrants from China and Bangladesh and unidentified peoples
Families of Army (Tatmaday) and Police Force
Members of USDA, Fire-brigade, Red cross and Swan-Ahr-Shin[7]
So-called Non-Governmental Organizations[8]
Over 1000 National convention delegates
28 Ceasefire ethnic armed groups[9]
14 Members of Parliament who were delegates of the national convention[10]
7 Pro-SPDC political parties including NUP, the runner-up in 1990 election[11]
(Dr. Tin Swe is an elected member of Parliament from Burma from the NLD now living in F-15, Vikas Puri, New Delhi and can be reached at his mobile- 981-000-3286, e-mail ncginida@vsnl.com).


[1] Law 25: Whoever violates any prohibition contained in section 24, attempts to violates as such, commit any criminal act by conspiring to violate or abet in violation, shall, on conviction, be punished with imprisonment not exceeding 3 years or with a fine not exceeding one hundred thousand kyats or, with both.

[2] Law 23: The Commission shall, after holding the referendum, combine the lists of advance ballot papers submitted by the State or Divisional Sub-commissions under sub-section (d) of section 22 and lists of advance ballot papers counted by the Commission under sub-section (e) of section 22, declare the number of eligible voters, number of voters in favor and a comparison of them in percentage.

[3] Law 21 (a): If situation arises to dissolve voting for referendum due to any reasons contained in section 20, the Ward or Village-tract Sub-commission may dissolve some polling booths or all polling booths within its referendum area. If such situation arises, the Ward or Village-tract Sub-commission shall submit its performance immediately to the relevant Township Sub-commission.

[4] USDA = The Union Solidarity and Development Association; On 20th April 1996 Daw Aung San Suu Kyi said, “The USDA has become a very dangerous organization as it is now being used in the way Nazi leader Hitler used his brown shirts.”

[5] NLD = National League for Democracy, the party of Daw Aung San Suu Kyi

[6] Khonumthung News 15-4-08: Military officials from the battalion based in Chin State will accompany the village heads who will start campaigning among the locals soon to cast the "Yes" vote during the referendum. The village heads were told to prevent any campaigning for casting the 'No' vote in the referendum by any organization in their respective areas. In case, there is any anti-referendum campaign in the area, the village heads will have to inform the concerned authorities immediately.

[7] The Swan-ahr-shin was formed by SPDC and was systematically trained by the army to terrorize and crackdown on opposition. E.g. it was assigned to crackdown on the tours of Daw Aung San Suu Kyi prior to her last house arrest in May 2003.

[8] Myanmar Agriculture, Forestry, Livestock and Fisheries Technicians Organization, Myanmar Academics of Medical Science, Myanma Historical Commission, Myanmar Language Commission, Myanmar Academy of Technology, Myanmar Academy of Arts and Science, Myanmar War Veterans Organization, Myanmar Red Cross Society, Myanmar Medical Association, Myanmar Veterinarians Association, Myanmar Dental Association, Myanmar Nursing Association, Myanmar Women's Affairs Federation, Myanmar Maternal and Child Welfare Association, Child Care Association, Myanmar Health Assistants Association, Union of Myanmar Federation of Chambers of Commerce and Industry, Myanmar Rice Dealers Association, Myanmar Banks Association, Myanmar Women Entrepreneurs Association, Myanmar Construction Entrepreneurs Association, Myanmar Engineering Society, Myanmar Archaeologists Association, Myanmar Computer Federation, Myanmar Computer Scientists Association, Myanmar Computer Industrialists Association, Myanmar Computer Enthusiasts Association, Myanmar Writers and Journalists Association, Myanmar Thabin Asiayon, Myanmar Music Asiayon, Myanmar Motion Pictures Asiayon, Myanmar Floriculturalists Association

Myanmar Florists Association, Myanmar National Work Committee for Women's Affairs, Myanmar Anti-Drug Association, Myanmar Garment Entrepreneurs Association, Myanmar-Thai Cultural and Economic Cooperation Association, ASEAN Chamber of Commerce and Industry [ASEAN-CCI], Myanmar Edible Oil Dealers Association, Myanmar Goldsmiths Association, Myanmar Tourism Entrepreneurs Association, Mynamar Hoteliers Association, Myanmar Timber Entrepreneurs Association, Myanmar Fisheries Federation, Myanmar Bird lovers Association, Myanmar Economic graduates Association, Myanmar Traditional Medicine Association, Myanmar Sea-farers Association, Myanmar Calendar Advisors Association, Myanmar Geological Association, Myanmar Friends of Forest, Shalon Foundation, Myanmar Border area development Association, Myanmar Literary Assistance Association, Myanmar foreign journalists Association, Myanmar anti-narcotic Association, Myanmar Rice mill owners Association and others

[9] Shan State (North) Special Region-1, Shan State (North) Special Region-2, Shan State (North) Special Region-3, Shan State (East) Special Region-4, Shan State (North) Special Region-5 (KDA), Shan State (South) Special Region-6, Shan State (North) Special Region-7, Kayah State Special Region-1, Kayah State Special Region-2, Kayah State Special Region-3, Kayinni National Progressive Party (KNPP) Dragon Group, Kayinni National Progressive Party (KNPP) (Splinter, Hoya), Kayinni National Unity and Solidarity and Organization (Ka Ma Sa Nya), Shan State Nationalities People's Liberation Organization (Ya La La Pha), New Mon State Party, Democratic Kayin Buddhist Association (DKBA), Haungthayaw Special Region Group, Phayagon Special Region Group, Shan State National Army, Burma Communist Party (Rakhine Group), Arakanese Army (AA), Homein Region Welfare and Development Group, Shwepyiaye (MTA) Group, Manpan Regional Militia Group, Mon Armed Peace Group (Chaungchi Region), Mon Splinter Nai Saik Chan Group, Kachin State Special Region-1, and Kachin State Special Region-2

[10] Dr. Hmu Thang, U Hla Soe, U Than Htun, U Thein Kyi, U Aung Thein, U Kyi Win, U Tin Tun Maung, U Tin Win, U Mya Hlaing, U Tun Kyaw, U Maung Ohn, U Thet Way, U Than Htun, U San Thar Aung

[11] (1) Kokan Democracy and Unity Party (KDUP), (2) Lahu National Development Party (LNDP), (3) Mro or Khami National Solidarity Organization (MKNSO), (4) National Unity Party (NUP), (5) Union Karen Nationalities League (UKNL), (6) Union Pao National Organization (UPNO) and (7) Wa National Development Party (WNDP)


By Dr. Subhash Kapila

Background Readings: The following SAAG papers by this Author provide the necessary contextual background for this paper:

“United States Fateful Choice: Save Afghanistan or Save Pakistan” Paper No. 2585 dated 13.02.2008 (http://www.southasiaanalysis.org/papers26/paper2585.html).
“Afghanistan: United States and NATO Need to Set Strategic Priorities Right” Paper No. 2124 dated 06.02.2007 (http://www.southasiaanalysis.org/papers22/paper2124.html).
“Afghanistan: The United States Wakes Upto Taliban Resurgence” Paper No. 1874 dated 12.7.2006 (http://www.southasiaanalysis.org/papers19/paper1874.html).
Introductory Observations

Afghanistan has once again rightfully shot back into focus especially in the United States where in a presidential election year national security issues and challenges receive detailed scrutiny. Afghanistan has also shot back into strategic focus as it is has finally dawned on the United States that a strategic success in Afghanistan cannot be achieved by a solo effort of the Untied States only.

Afghanistan’s security and stability is a national security concern not only of the United States only but also impacts NATO countries, Russia and India. On the flip side of the coin is a strategic reality that China and Pakistan are opposed to any long term embedment of United States and NATO Forces in Afghanistan to assist its emergence as a stable progressive and western oriented nation state. Their chief weapon is the Taliban, Al Qaeda and other such armed militia groups.

Afghanistan therefore to be turned around would need intensified United States and NATO efforts and also a re-formulation and review of their existing strategic, military, political and economic policies. The fact that the United States and NATO countries have sat down together twice in recent weeks to plan for the challenges ahead is a heartening indicator.

The United States with possibly some NATO prodding has brought back Russia into the strategic calculus of Afghanistan. Russia’s declared willingness to provide US and NATO logistic supplies access through its territories for the war effort in Afghanistan is commendable and timely. Such access would obviate US reliance on Pakistan supply routes to Afghanistan.

Afghanistan’s military situation today is not all that pessimistic as made out in American media coverage and strategic debates. It can fairly be stated that compared relatively to the Taliban regime days, Afghanistan is more peaceful. The military turbulence in Afghanistan is more pronounced in the South and South East Afghan provinces bordering Pakistan which provide an easy marauding ground for the Taliban militia operating from Pakistani territories around Quetta and South Waziristan. They maraud in these areas and swiftly fade back into Pakistani territory.

The nett assessment of the Afghanistan situation today is that the United States and NATO efforts albeit on a limited scale in the last five years (as reflected in my papers quoted above) has provided Afghanistan with a stable foundation on which with more devoted effort the country can emerge as a moderate, democratic and Islamic nation.

But it needs to be reiterated that this devoted effort by the United States particularly needs to scrupulously avoid the policy mistakes and flawed policy approaches of the last five years or so.

In terms of United States policy mistakes of the past these stand highlighted in detail in the Author’s papers quoted above. The common thread running through these papers in terms of major policy mistakes can be recounted in brief as follows: (1) American strategic aims in Afghanistan were distorted and American national security interests subverted by American pandering to Pakistan’s sensitivities and obsession for continuance of General Musharraf in power (2) General Musharraf “double-timed” the United States militarily and impeded the success of American military operations in Afghanistan (3) United States over reliance on Pak ISI supplied military intelligence which at times was misleading (4) All of the foregoing generated Afghan resentment against the United States for relying on Pakistan which was the strategic patron of Taliban which is the most hated entity in Afghanistan.

United States and NATO’s success in stabilizing Afghanistan for global and regional security imperatives necessarily has to commence with a focus on the strategic and military dimensions. But concurrently, the political and economic dimensions also need equal focus so that a comprehensive state of military, political and economic stability is achieved. With this in view, this paper will carry out a review of the United States strategic challenges in the following dimensions.

The Strategic Dimension: Re-Definition of Afghanistan Strategic Policy Premises
The Military Dimension: Re-Define the Afghanistan Military Operations Blueprint and Priorities
The Political Dimension: President Karzai Should not be Marginalized
The Economic Dimension: Priority to Economic Development and Job Generation in Afghanistan
Since this is a Paper and not a dissertation, each of the above dimensions would be examined in terms of relevant issues at the macro-level. The Author’s Papers listed as background reading provide a fairly detailed analysis and hence those points are not being repeated in this Paper.

The Strategic Dimension: Re-Definition of Afghanistan Strategic Policy Premises

The United States strategic distraction with its military pre-occupation in Iraq severely inhibited and distorted its strategic and military priorities in Afghanistan’s stabilization. The United States has to resign itself to the fact that in Iraq it will have to be embedded for a number of decades and there are no easy exits from there.

Similarly, the United States has to strategically accustom itself to the reality that there are no easy exist from Afghanistan. In fact Afghanistan is more strategically retrievable for the United States than Iraq and hence deserves priority focus to enable the United States to claim gains at least here.

More importantly, the United States policy establishments and strategic community should stop viewing Iraq and Afghanistan military interventions as policy failures. In terms of United States strategic future in Greater South West Asia, Iraq and Afghanistan should be viewed as the future “Twin Pillars” of US security and it should positively work for the achievement of the same.

Having made this audacious assertion, this Author recommends that the strategic and military operational control of Iraq be retained by the United States and Afghanistan’s strategic and military operational control be delegated to NATO, of which the United States in any case is a member. This would facilitate greater strategic focus and streamlining of military operations.

The following other re-definition of United States strategic policy premises need to be emphasized

Taliban’s liquidation should be the prime strategic aim and be relentlessly pursued.
Pakistan needs to be totally de-linked from US strategic formulations on Afghanistan.
China’s meddling in Afghanistan jointly with Pakistan needs to be neutralized.
Russia’s cooperative incorporation in stabilizing Afghanistan is a strategic imperative.
India cannot be marginalized in Afghanistan’s strategic calculus.
The United States, NATO and the international commonly need to understand that the Taliban is the major threat to Afghanistan. Its liquidation or neutralization has to be the prime strategic war aim for USA and NATO. Spasmodically, some Western analysts keep recommending that a dialogue with the Taliban or incorporation of “moderate Taliban” in the political process is the only way to bring peace to Afghanistan.

The United States went into Afghanistan with the war-aim of eliminating the Taliban regime. The Afghan people helped the United States to capture Kabul because they hated the Taliban regime. How can America even think of a dialogue with the enemies of the Afghan people? Further, “moderate Taliban” is an oxymoron contrivation.

The advent of a civilian government in Pakistan and a new Pakistan Army Chief will not bring about any change in Pakistani perceptions on Afghanistan. It should not be forgotten that the Taliban was a creation of late PM Benazir Bhutto and her PPP in the 1990s. The PPP is now in power in Pakistan and its Taliban linkages are still relevant.

The new Pakistan Army Chief cannot be expected to throw in the dustbin Pakistan Army’s doctrine of “strategic depth” in Afghanistan, Re-vitalizing the Taliban and working for its regime establishment in Kabul is the only way for the Pakistan Army now to redeem itself in Pakistani public eyes.

Therefore, it would be suicidal once again for the United States to continue to nurture Pakistani linkages and sensitivities in determination of its Afghanistan strategic policies and priorities.

Britain’s BBC has lately carried enough reports of recovery of Chinese arms and military equipment from captured/dead Taliban in Afghanistan. It is also quoted that China has also supplied heavy weaponry including shoulder-fired Surface-to-Air missiles to the Taliban. This disturbing trend is likely to intensify.

China does not welcome US and NATO military presence in Afghanistan in the close proximity of its turbulent Muslim majority region of Xinjiang. China also has a past record of active collaboration with the Taliban regime when it was in power in Kabul. China therefore, is likely to impede US military success in Afghanistan.

China singly and China-Pakistan jointly need a close watch by USA and NATO in terms of their strategic outlook on Afghanistan.

The interest of Pakistan to strategically involve China in Afghanistan was betrayed in General Musharraf’s remarks during his ongoing China visit that China should use the Shanghai Cooperation Organization to defuse the situation in Afghanistan. Besides the inherent Pakistan strategic mischief underlining this assertion what this remark inherently conveys is that China along with Pakistan have a controlling influence over the Taliban insurgency in Afghanistan.

Russia’s willingness to open access to Afghanistan through its territories for logistic supplies and non lethal equipment for US and NATO Forces will impart a significant operational flexibility for military operations in Afghanistan. The trust so gained needs to be widened by even inviting Russia to station troops in Northern Afghanistan as part of the UN-mandated ISAF. This if agreed to would release additional NATO troops for military operations in the Taliban threatened Southern Afghanistan.

In deference to Pakistan, the United States initially even went to the extent of presenting diplomatic ‘demarches’ to India on the opening of Indian Consulates in Afghanistan forgetting that India and the Afghan people have a historical friendship dating centuries. In the last five years India has provided Afghanistan with millions of dollars in economic aid and reconstruction projects. In the process many Indians stand killed by the Taliban to deter India’s involvement in Afghanistan.

India is the regional power in South Asia which includes Afghanistan. As compared to Pakistan’s disruptive role in Afghanistan, India’s role and contributions to Afghanistan’s stabilization has been positive and constructive. The United States would be well advised not to attempt any marginalization of India in Afghanistan to please Pakistan.

It is strange and strategically naive for a US think tank study report authored by a former US Ambassador in South Asia that India should downplay (or wards to that effect) its role and involvement in Afghanistan so that Pakistan is not disturbed. Has the United States not paid enough in American lives for pandering to the so-called Pakistani sensitivities?

Further the United States should not forget that it has a strategic partnership with India and whose basic foundation stone should be the US respect for India’s strategic sensitivities in South Asia especially.

The Military Dimension: Re-Define the Afghanistan Military Operations Blueprint and Priorities

This aspect was covered in the Author’s Paper of February 13, 2007. In addition to the recommendations made then and a year down the line some additional points that need re-emphasis are as follows:

Forces of major NATO countries like Germany, France and Italy should be redeployed in the Kandahar and Helmand provinces to eliminate the pronounced Taliban threat in these areas.
North and West Afghanistan can be entrusted to the newer member of NATO.
Additional brigade of US troops be deployed opposite South Waziristan.
All US and NATO troops be diverted form reconstruction tasks to operational combat roles. Reconstruction can be left to the Afghanistan National Army.
The elusiveness of Taliban who now are reluctant to offer pitched battles to US/NATO forces and rely on insurgent tactics, need to be outsmarted by greater tactical mobility and firepower in terms of air-mobility operations at the sub-unit level.
Platoon sized outposts and foot-patrols need to be dispensed with. Company bases with adequate firepower and integral heli-borne operational capabilities should provide the military deployment template.
Recently the new Australian Defense Minister of the Labor Government made a telling point in an Australian newspaper interview to the effect (referring to the Taliban) as that while NATO Forces had been successfully “stomping on lots of ants, we have not been dealing with the ants nests.”

The United States and NATO has to recognize that the Taliban’s “ants-nest” are in the Quetta and South Waziristan regions of Pakistan and if the Pakistan Army and the ISI are reluctant to strike at them then NATO direct strikes may be the only option left.

The Political Dimension: President Karzai Should not be Marginalized.

It has become fashionable these days to lay all the ills of Afghanistan at President Karzai’s door from poor administration, law and order, corruption and what not. Two things should not be forgotten in this regard. Firstly, Karzai was elected as President of Afghanistan as the preferred choice of the United States. Secondly, all of the zeal and enthusiasm of President Karzai to reform Afghanistan’s political stability and Taliban-wrecked administrative structure was neutralized by US Administration over-playing Pakistan’s sensitivities in the running of Afghanistan.

President Karzai was in fact battling on three fronts, namely (1) The Pakistan supported Taliban (2) General Musharraf’s efforts to de-stabilize and discredit the Karzai Administration and (3) Convince the US Administration that he was being targeted by General Musharraf as a cover for Pakistani reluctance in dealing with the Taliban and to impede the restoration of stability in Afghanistan.

It also needs to be highlighted that in the years preceding the Karzai Administration, the medieval brutality of the Pakistan-imposed Taliban regime in Kabul had completely destroyed all state institutions and administrative structure in Afghanistan.

The next presidential elections are due in 2009 and in the run-up to them the United States should not allow the marginalization of President Karzai by vested external interests. Let the ballot box be the judge.

It should not be forgotten that when President Karzai is being marginalized by vested interests, it is the United States that is the intended target for discrediting its role in Afghanistan.

The Economic Dimension: Priority to Economic Development and Job Generation

In brief the Author would like to examine this dimension briefly in point-form to get the message across:

In the last five years, enough priority has not been given to economic development and job generation in an integrated manner.
Reconstruction work done provincially by US/NATO Forces is not economic development. They are small projects like reconstruction of schools/bridges/ dispensaries executed to win ‘hearts and minds’ of people locally. These are not planned on a nationally integrated basis nor catering for noticeable job generation.
A lot of Western aid has flown-in in millions of dollar but as per some estimates 40% of such money gets ploughed back to the donors in consultancy fees.
Afghanistan as a state ravaged by war in the decades of the 1980s, 1990s, and 2000s is sorely in need of economic resuscitation in an integrated manner.
It may be advisable for the United States to entrust the economic reconstruction of Afghanistan to the United Nations control and execution with a wider international participation.
Afghanistan’s economy does not need “band-aid” treatment but an intensive and critical economic “life-support” system which the international community as a whole should provide.
Needless to say that economic development can take place only when there is a general sense of security. But then today in Afghanistan there are areas where that is available and visible economic development projects need to be initiated in these regions to begin with and help shed the propaganda that the United States is only interested in military occupation of Afghanistan.

Concluding Observations

The Afghanistan story in terms of lack of American success to stabilize the nation in the last five years can be attributed to the United States over-reliance and misguided reliance on Pakistan to further America’s cause and consequently allotting inadequate military, financial and economic resources. Attendant to all these drawbacks was a lack of comprehensive long term strategy generated by United States distractions in Iraq.

Further, both Iraq and Afghanistan as it happened during the Vietnam War were getting sucked-into American domestic politics resulting in interference in drawing up long range effective strategies.

As this Author has advocated in this Paper it is time for the United States to give a positive note to its military interventions in Iraq and Afghanistan. They should be projected as strategic investments as “Twin-Pillars” of US security in the region and US effort should be focused to achievement of that aim.

(The author is an International Relations and Strategic Affairs analyst. He is the Consultant, Strategic Affairs with South Asia Analysis Group. Email:drsubhashkapila@yahoo.com)