http://business.timesonline.co.uk/tol/business/economics/article4925940.ece
‘Vulgar ambition’ among the country’s sheltered elite was at the root of its financial collapseTony Allen-Mills, Reykjavik
A FEW days before the terrorist attacks of September 11, 2001, the then-prime minister of Iceland was in lyrical mood as he addressed a meeting of his country’s diplomatic corps.
David Oddsson was renowned for his literary interests. He wrote two plays in the 1970s, translated an Estonian history textbook and now he was quoting WH Auden, the British poet, who had written of Iceland half a century earlier: “Fortunate island/ Where all men are equal/ But not vulgar — not yet.”
Oddsson said his government’s aim was to “manage things so well” that future poets would return to Iceland to pay similarly handsome compliments. Instead, the 60-year-old former prime minister finds himself at the eye of the financial storm that last week swept away his country’s banks and provoked a decidedly vulgar outbreak of international rancour.
Oddsson stepped down as premier in 2004 and was rewarded a year later with a new job as chairman of the country’s central bank.
The appointment went largely unremarked at the time, but last week’s collapse of the Icelandic banking system — and the eruption of a nasty diplomatic spat with Britain — has caused many Icelanders to question the wisdom of handing effective control of a supposedly independent financial institution to a powerful, right-wing politician who enthusiastically espoused the free-market policies of Margaret Thatcher and Ronald Reagan.
Oddsson’s distaste for the euro and his rigid support of a high interest-rate policy aimed at taming inflation thrilled British savers and lured billions in inward investments.
Yet several analysts last week concluded that serious misjudgments by the Icelandic central bank had opened the door to meltdown and destroyed the national currency, the krona.
“Oddsson has very strong political views,” said Professor Snjolfur Olafsson of the University of Iceland. “A lot of people think he has been the main problem.”
As both politician and banker, Oddsson played a crucial role in Iceland’s emergence as a Nordic powerhouse with a punch that far exceeded its size. His career in many ways symbolises both the energy and vision that propelled a country with the population of Coventry (around 320,000) to world-beating fiscal eminence.
Yet it also reflects the pressures of a sheltered Icelandic elite that would have seriously disappointed Auden. The Nordic restraint the poet so admired gave way to vulgar ambition.
ABOVE the door to the Bar 11 nightclub in downtown Reykjavik hangs a sign that reads: “Lead us into temptation”. For much of the past five years, Iceland’s ruling class obliged, with dramatic effects on the ancient alleys of this once-dormant cod-fishing capital.
Down the street from Bar 11, the windows of another nightclub are covered with portraits of scantily clad Viking maidens. Around the corner there’s an “Erotik Cafe”.
Souped-up Range Rovers and Maseratis are a common sight on Laugavegur, a street packed with boutiques, bars and gourmet restaurants serving delicacies such as puffin terrine and guillemot smoked in tea leaves.
Yet as each day brought a fresh announcement of disaster last week, the only happy faces belonged to British tourists who were suddenly flush with devalued kronur.
The roots of Iceland’s volcanic transitions — from grim insular subsistence to electric Euro-cool to instant global shame — are surprisingly easily traced. It all started in the 1990s with a newly liberated horde of thirsty Russians and an angry young Icelander named Thor. The son of a Reykjavik shipping owner, Bjorgolfur Thor Bjorgolfsson set off for St Petersburg in 1993 to explore business opportunities in the wake of the collapse of communism.
With his father, Bjorgolfur Gudmundsson, Thor helped form a bottling plant that was later sold to Pepsi. The proceeds were reinvested in a local brewery that quickly flourished.
Named Bravo International, Thor’s operation had 17% of the St Petersburg market by 2002, and healthy sales in Moscow. When Heineken expressed an interest, Thor sold the business to the Dutch giant for a reported $400m (£235m), and promptly spent much of the proceeds on a 45% share in Landsbanki, newly privatised by Oddsson. Thor named his father as chairman, both men were on their way to becoming billionaires and a new age of Viking raiders was born.
With a trio of private banks behind them, the Bjorgolfurs and a group of like-minded entrepreneurs leveraged their strong currency and buckets of then-easy credit into an acquisition spree. Thor’s father snapped up West Ham United. Icelandic investments mushroomed in British high streets, from Somerfield supermarkets to Slug and Lettuce pubs.
“Few Icelanders were rich and it was suddenly very easy to borrow cheap money,” said Olafsson. “Several people at the time expressed doubts about the country getting in so much debt. But basically we were proud that Icelanders could get rich, too.”
The first shock occurred in 2006, when analysts at Merrill Lynch, the US investment bank, and the Danske Bank of Copenhagen warned that Icelandic banks had taken on too much debt in relation to the country’s GDP and were vulnerable to a credit squeeze.
Oddsson responded with characteristic aggression. Talk of a banking crisis was “preposterous”, he said. “I don’t think this is a crisis, not even an indication of a crisis.” A Landsbanki economist dismissed the doubts as “fantasy”.
After a brief wobble, the krona and the stock market recovered, but a fateful lesson had been learnt. Icelandic banks needed to even up their balance sheets. The central bank’s commitment to raising interest rates to combat inflation offered a promising solution — high-interest deposit accounts.
Thus was born Icesave, Kaupthing Edge and Heritable, a trio of ventures that proved magnets for bargain-minded British savers. No other western bank could match Iceland’s interest rates.
The only surprise was that in the rush to profit from their savings so many British investors failed to heed the warnings that multiplied this year. In January, Moody’s, the credit-rating agency, described Iceland’s banks as “fragile”. A study by Morgan Stanley concluded that Iceland’s banks were 7.5 times more likely to default than their European counterparts.
In July the International Monetary Fund published a gloomy report on Iceland warning about impenetrable ownership structures and murky lending practices. Several analysts concurred that the Icelandic central bank was simply too small to support the debts incurred by the private sector.
Oddsson’s response was to accuse unnamed foreign hedge funds of conspiring to undermine the Icelandic economy. He blamed “speculative attacks . . . that give off an unpleasant odour of unscrupulous dealers”.
WHEN the end came last week, there was a ruthless irony about Iceland’s collapse. For all of their free-lending ways, Landsbanki, Glitnir and Kaupthing had largely steered clear of the sub-prime mortgage fiasco that started the crisis.
Until the final moments before Landsbanki and Glitnir were put into receivership and Kaupthing was in effect renationalised, Icelandic officials were complaining that none of the banks deserved to go under, that their core businesses were sound, and that they hadn’t behaved irresponsibly.
Prime minister Geir Haarde, a former political ally of Oddsson, declared with grim understatement: “What we have learnt from this whole exercise over the past few years is that it is not wise for a small country to take a lead in international banking.”
Others have reached an additional conclusion — that it is not wise for politicians to run central banks, especially in very small countries.
Iceland might have achieved a softer landing had the central bank reduced its interest rates and put a brake on lending. Instead the central bank clung to an outmoded inflation target of 2.5% — even when that rate climbed rapidly to a 20-year record high of 12.3% last May.
Inflation is around 14%; on Friday the central bank announced that one of Oddsson’s two fellow governors, Ingimundur Fridriksson, was taking a “short medical leave of absence” on the advice of his doctors. Earlier last week Iceland’s president, Olafur Ragnar Grimsson, was treated in hospital for heart problems.
At her office at the University of Iceland, the country’s best-known political personality was also in sorrowful mood. In 1980, Vigdis Finnbogadottir became the world’s first elected woman president.
She is now a sprightly 78, still works for Unesco and other international causes, and runs an institute named after her. Last week she recalled that after a volcanic eruption in 1973 Icelandic workers succeeded at what experts had declared impossible: they diverted a stream of boiling lava away from a fishing harbour by pumping seawater onto the flow.
Yet the volcanic effects of a global economic meltdown proved impossible to divert. “It has been a very strange crisis,” she mused. “We have talented men, but unfortunately they flew too high. We recognise that perhaps people invested too much. But that’s the weakness of mankind.”
As British and Icelandic officials prepared to sit down yesterday to hammer out questions of compensation, more critical voices were beginning to be heard. “What will happen when the dust settles ?” asked the Rev Karl Sigurbjornsson, the bishop of Iceland. “A lot of people will be very angry”.
At Hresso’s café a few steps from the government building, one of Iceland’s most popular authors reflected on what he described as “the crash of the Icelandic dream”.
Andri Snaer Magnason said that when he published Dreamland two years ago, some Icelanders laughed at its subtitle, “A self-help manual for a frightened nation”. He added: “People were laughing about fear last year. They don’t think it’s funny now”.
Vigdis was confident that Iceland would recover, though probably much chastened. She turned to a popular Icelandic metaphor to sum up her view of the future: “All hailstorms stop sooner or later.”
What they said
Geir Haarde, Iceland’s prime minister What we have learnt from this whole exercise over the last few years is that it is not wise for a small country to try to take a leading role in international banking.
Sigurdur Einarsson, chairman of Kaupthing bank We are not Barclays, HBOS or Lloyds TSB, but I believe we are the twelfth largest bank in the UK and we were not allowed to participate in the rescue plan. We asked and the answer we got was a firm ‘no’.
Gordon Brown, prime minister What happened in Iceland is completely unacceptable . . . They have failed not only the people of Iceland, they have failed people in Britain.
Island’s hot and cold fronts
THINGS weren’t always so gloomy at Iceland’s big banks — far from it. Only last June the second-biggest lender, Landsbanki, chartered
two 737s to fly all 600 of its London staff, from the postboy to directors, to Iceland for a weekend of entertainment.
By day they were driven around the sights, including the Strokkur geyser, and went whale-watching. By night it was dinner and dancing.
It was not the first time the bank had displayed such largesse. It staged a similar event two years earlier, over three weekends to fit in all its staff across Europe.
Landsbanki had indulged in an aggressive spending spree, snapping up City stockbrokers Teather & Greenwood and Bridgewell plus Dublin-based Merrion and Kepler in Europe.
Despite efforts to ingratiate itself with workers, including an office refurbishment, the bank apparently took a laissez-faire approach to knitting its newly acquired operations together. A staffer was told: “You’ll work it out for yourselves,” when he asked a Landsbanki executive what the integration plan was for his department.
The Icelandic invasion of the UK was not restricted to Landsbanki, and there are few corners of British life that remain untouched by the influence of this tiny island nation of only 300,000 people. A number of local councils have deposits at Icelandic banks, as does Transport for London; slices of our high streets are in the hands of its investors, notably Baugur, the retail conglomerate; high-profile entrepreneurs such as chef Gordon Ramsay and property investor Robert Tchenguiz were financed by Kaupthing, the country’s biggest lender.
Iceland is portrayed as a close-knit, insular society, and those who did business with its bankers and investors noted an air of inscrutability.
Tony Shearer ran Singer & Friedlander before its takeover by Kaupthing. At meetings with the Icelanders before the bid, discussions rarely focused on business, something he found curious. “They’re nice people but there was no engagement on a business level at all,” he said. Like Landsbanki, Kaupthing was a good host, taking executives salmon fishing after the takeover.
Simon Burke ran Hamleys, the toy retailer, when Baugur bid for it in 2003. He had no direct dealings with them in the takeover battle but noted their determination to win. “There was no charm offensive. Their offensive was all based on cash,” he said. It had even taken the unusual step of raising its offer on rumours of a higher counterbid from a rival.
Paul Manduca, chairman of Bridgewell when it had a bid from Landsbanki, said: “They weren’t in the business of asking for advice. They had the money and they knew what they wanted to buy.”
Over a few years the Icelanders snapped up a range of UK assets, but what will happen to many of those businesses is unclear.
Teathers, for example, which continues to trade, is looking for a new owner after Straumur, another Icelandic bank, pulled out of a deal to buy it. Baugur insists that its British retail operations will be safe from the turmoil affecting banks. Gunnar Sigurdsson, its chief executive, said: “Our portfolio companies have committed loan facilities with Icelandic and other international banks, commitments which may not be revoked or altered by those banks unless done so in accordance with the agreed terms of those loan facilities.
“The businesses are performing well and the portfolio is generating strong cash flows, which is key in markets like this.”
The Candy brothers have secured a deal to buy out Kaupthing’s interest in two property deals it is working on — one for the former Middlesex Hospital in London, and the other in Beverly Hills, California.
And Ernst & Young (E&Y) was appointed last week as administrator to Kaupthing Singer & Friedlander Ltd, the UK arm of the bank. Among its assets are the fashion retailer Phase Eight, ADP, a chain of dentistry surgeries, and a stake in Bay Restaurant Group, owner of chains such as La Tasca and Slug & Lettuce.
E&Y said it was too early to say what might happen to these investments.
October 11, 2008
US strategic review of Afghanistan may consider Indian involvement
http://www.domain-b.com/defence/general/20081011_indian_involvement.html
11 October 2008
Increased violence along the Afghan-Pakistan border, and a rapidly changing security environment in Afghanistan, warrants a full review of American strategy, a top US military officer said yesterday. Navy Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, said the review would look at broadening the scope of the Afghanistan strategy and apart from improving interagency coordination in this war-torn country would also look at including Pakistan and India in the overall effort to combat the Taliban and the al-Qaeda.
Adm. Mullen noted that both countries have long historic links to Afghanistan and have an important role to play there.
Diplomatic sources in Washington stressed that the idea of allowing India a larger role in the Afghan strategy, or even including them in any joint force to control the Pak-Afghan border has not been discussed formally between US and Pakistani authorities. They also said that it was very unlikely that Pakistan would welcome any such move.
Pakistan, for long, has considered Afghanistan as part of its 'strategic depth' and has tried hard to limit Indian influence in this war-torn country. India has a minimal security presence in Afghanistan, mainly para-military commandos that guard contingents of Indian workers involved with various infrastructure projects.
In an interview with the Pentagon Channel Adm. Mullen, noted the increased sophistication of al-Qaida and Taliban operatives in the border region and expressed concerns about the border region becoming a safe haven for insurgents.
"Things have changed enough in Afghanistan and Pakistan to warrant a review of our overall strategy there, and in fact, part of the effort is to try to ensure better coordination on both sides of that border, which is a safe haven [for insurgents]," the admiral said.
According to Mullen, the United States, NATO and other countries had failed so far to forge the kind of strategic unity necessary to stem the rise in violence.
"One of the big struggles we have is developing a comprehensive approach to all of this," the admiral said. "We're just not there."
"I don't think it's going to turn around overnight. So I would anticipate next year being a tougher year," he added.
"It's been very, very tough fighting this year and it will be tougher next year unless we (develop) a way to get at all aspects of the challenge," he said.
"It's the full spectrum - the political piece, the diplomatic piece, the economic piece, in addition to the security piece - that's got to improve dramatically."
Worsening situation
The United States has 33,000 troops in the country, 13,000 of them under NATO command. All told, Mullen said there are now about 64,000 Western soldiers in Afghanistan. Another 6,000 American troops will be inducted into the country by February of the coming year.
The United States has for some time now stepped up pressure on NATO allies and others to increase the numbers of their troops. US Army Gen David McKiernan, NATO's top commander in Afghanistan, has asked for an additional deployment of 15,000 more US troops over and above those already earmarked by the Pentagon.
Last month, amid rising insurgent violence and tensions with Pakistan, president George W Bush ordered a review of US strategy in Afghanistan. The review is being led by Lieutenant General Douglas Lute, a deputy national security adviser, with the participation of senior representatives from the Pentagon and other departments. Officials said the review would be a "...larger, more cross-governmental approach."
With time running out for the administration, with only months to go, the White House wants to move quickly, officials said. The order for a review comes amid growing concern that insurgent groups operating from safe havens in Pakistan have gained strength over the past two years.
Officials said there was broad support for an approach that "doesn't look at Afghanistan as an island, but looks at it in connection with Pakistan."
"The problems we are seeing in (eastern Afghanistan) are directly attributable to what is going on the other side of the border," they said.
If India is indeed taken onboard in an integrated Afghanistan policy it would be yet another indicator of the rapidly developing relationships between the United States and India and fast-shifting geo-political dynamics of the Indian sub-continent
11 October 2008
Increased violence along the Afghan-Pakistan border, and a rapidly changing security environment in Afghanistan, warrants a full review of American strategy, a top US military officer said yesterday. Navy Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, said the review would look at broadening the scope of the Afghanistan strategy and apart from improving interagency coordination in this war-torn country would also look at including Pakistan and India in the overall effort to combat the Taliban and the al-Qaeda.
Adm. Mullen noted that both countries have long historic links to Afghanistan and have an important role to play there.
Diplomatic sources in Washington stressed that the idea of allowing India a larger role in the Afghan strategy, or even including them in any joint force to control the Pak-Afghan border has not been discussed formally between US and Pakistani authorities. They also said that it was very unlikely that Pakistan would welcome any such move.
Pakistan, for long, has considered Afghanistan as part of its 'strategic depth' and has tried hard to limit Indian influence in this war-torn country. India has a minimal security presence in Afghanistan, mainly para-military commandos that guard contingents of Indian workers involved with various infrastructure projects.
In an interview with the Pentagon Channel Adm. Mullen, noted the increased sophistication of al-Qaida and Taliban operatives in the border region and expressed concerns about the border region becoming a safe haven for insurgents.
"Things have changed enough in Afghanistan and Pakistan to warrant a review of our overall strategy there, and in fact, part of the effort is to try to ensure better coordination on both sides of that border, which is a safe haven [for insurgents]," the admiral said.
According to Mullen, the United States, NATO and other countries had failed so far to forge the kind of strategic unity necessary to stem the rise in violence.
"One of the big struggles we have is developing a comprehensive approach to all of this," the admiral said. "We're just not there."
"I don't think it's going to turn around overnight. So I would anticipate next year being a tougher year," he added.
"It's been very, very tough fighting this year and it will be tougher next year unless we (develop) a way to get at all aspects of the challenge," he said.
"It's the full spectrum - the political piece, the diplomatic piece, the economic piece, in addition to the security piece - that's got to improve dramatically."
Worsening situation
The United States has 33,000 troops in the country, 13,000 of them under NATO command. All told, Mullen said there are now about 64,000 Western soldiers in Afghanistan. Another 6,000 American troops will be inducted into the country by February of the coming year.
The United States has for some time now stepped up pressure on NATO allies and others to increase the numbers of their troops. US Army Gen David McKiernan, NATO's top commander in Afghanistan, has asked for an additional deployment of 15,000 more US troops over and above those already earmarked by the Pentagon.
Last month, amid rising insurgent violence and tensions with Pakistan, president George W Bush ordered a review of US strategy in Afghanistan. The review is being led by Lieutenant General Douglas Lute, a deputy national security adviser, with the participation of senior representatives from the Pentagon and other departments. Officials said the review would be a "...larger, more cross-governmental approach."
With time running out for the administration, with only months to go, the White House wants to move quickly, officials said. The order for a review comes amid growing concern that insurgent groups operating from safe havens in Pakistan have gained strength over the past two years.
Officials said there was broad support for an approach that "doesn't look at Afghanistan as an island, but looks at it in connection with Pakistan."
"The problems we are seeing in (eastern Afghanistan) are directly attributable to what is going on the other side of the border," they said.
If India is indeed taken onboard in an integrated Afghanistan policy it would be yet another indicator of the rapidly developing relationships between the United States and India and fast-shifting geo-political dynamics of the Indian sub-continent
SEVEN YEARS OF OP ENDURING FREEDOM: NO LIGHT YET
B.RAMAN
A bleeding stalemate on the ground in Afghanistan, a bleeding Pakistan tottering towards a possible collapse of the State and a total policy confusion in the corridors of power in Washington DC and other NATO capitals.
2. That has been the outcome of seven years of Operation Enduring Freedom, which was launched by the US on October 7,2001, in the wake of the 9/11 terrorist strikes by Al Qaeda in the US.
3.In Afghanistan, the US and the other NATO forces and the Afghan National Army (ANA) control Kabul, the Capital, and other major towns and the Neo Taliban, resurrected from the pre-10/7 Taliban , controls the rural areas. Neither is in a position to dislodge the other from the areas controlled by it, but each is able to inflict bloody casualties on the other--- the US and other NATO forces through the use of heavy artillery and air strikes and the Taliban through weapons of Pakistani origin and through the inexhaustible flow of suicide terrorists.
4.In Pakistan, a Pakistan-version of the Taliban called the Tehrik-e-Taliban Pakistan (TTP) has arisen post-2002 and has been operating in tandem with the remnants of Al Qaeda, including Osama bin Laden and his No.2 Ayman al-Zawahiri, who are now reported to be based in the North Waziristan area of the Federally Administered Tribal Areas (FATA). It is a coalition of jihadis, which has been operating in the FATA and in the Swat Valley of the North-West Frontier Province (NWFP)---- Afghan Pashtuns, Pakistani Pashtuns and Punjabis, Uzbeks of the Islamic Movement of Uzbekistan (IMU) and the Islamic Jihad Union (IJU), Chechens of the 1980s vintage who had deserted from the Soviet Army, Uighurs of the East Turkestan Islamic Movement in the Xinjiang province of China and Muslims of different ethnicities from the Muslim immigrant diaspora in the West----jihadis of Pakistani origin from the UK, Spain and Denmark, Turks and Uighurs from Germany and some others.
5. The post-2002 Pakistani version of the Taliban has proved to be even more deadly than its Afghan counterpart. The Pakistani Taliban carried out 56 attacks of suicide terrorism in the tribal and non tribal areas in 2007 and it has already carried out 40 so far this year. The number is just one-third of what the Afghan Taliban has carried out, but strategically more significant and deadly----- attacking carefully chosen military and intelligence targets in heavily-protected cities and cantonments----even in Islamabad and Rawalpindi, where the General Headquarters of the Pakistan Army are located.
6. In the "News" of October 10, 2008, Dr Muzaffar Iqbal, a Pakistani analyst, wrote: "With an average of three suicide attacks per week in which at least thirty persons die, there will be 1,560 dead Pakistanis within a year. Add to this approximately 15 "extremists" being killed daily in the northern region, and we have a total of 7,035 dead. Further: for every hamlet, village, and hideout bombed, and with every "extremist" killed, we have an average of ten families displaced. So within a year, northern Pakistan will be a huge graveyard and there will be several thousand internally displaced persons living in makeshift camps in the rest of the country. In addition, there will be thousands of emotionally and mentally unstable persons available to anyone who can convince them that life is not worth living anymore, so come on and die for this or that cause. The net result will be an escalation of violence in all parts of the country and the spiral of violence and death reaching all corners of the country. How did we get here? "
7. A more difficult question engaging the attention of military commanders and policy-makers of the NATO countries is---- is a mid-course correction necessary and how to carry it out? Senior military officers of the NATO have started telling their policy-makers that the war against the Taliban in Afghanistan is unwinnable. Better make a deal with the Taliban to bring the war to an honourable end where there will be neither winners nor losers. However, they are not yet saying that the war against the Taliban in Pakistan is unwinnable. They think that if the Pakistan Army steadily maintains its present offensive in the tribal belt with discreet air support from US Drones (pilotless planes), the TTP can still be defeated.
8. It is a policy nightmare. What one has been seeing in the Pashtun tribal belt on both sides of the Pakistan-Afghan border is three wars in one---- against the Afghan Neo Taliban, against the Pakistani Taliban and against Al Qaeda. The war against the Afghan Taliban is not vital for the security of the West and for preventing new terrorist strikes in the West. No Afghan Pashtun has ever travelled outside his country to indulge in an act of terrorism in foreign territory. The Afghan Pashtuns, who never indulged in suicide terrorism in the past, look upon their present fight against the US and other NATO forces and their wave of suicide terrorism as part of their resistance struggle against the occupation of their country by foreign forces. They are just not interested in another 9/11 in the US homeland or another Madrid or London or Bali or Mumbai.
9. The war against Al Qaeda and the Pakistani Taliban is vital for the security of the rest of the world, including the US, other NATO countries, India, China, Russia and the Central Asian Republics. The tribals, whom the Pakistani Army used in Jammu & Kashmir in 1947-48, 1965, 1971 and 1999, were brought from the FATA. Many of the jihadis, who had indulged in acts of terrorism in different parts of the world after 2001, were trained in the training camps of Al Qaeda and its allies in the FATA. If the Pakistani Taliban and Al Qaeda are not defeated, the world will have to live constantly under the fear of another 9/11 or another Madrid or London or Bali or Mumbai.
10. Is it possible to reach a separate peace with the Afghan Taliban, while continuing the war against Al Qaeda and the Pakistani Taliban? The US is in the forefront of the war against the Afghan Taliban. It can take a decision, whether to continue fighting or whether to reach a peace and, if so, under what terms.The outcome of the war against Al Qaeda and the Pakistani Taliban depends more on the sincerity and willingness of the Pakistani security forces to fight the war to the finish, with US assistance. It is the Pakistan Army, which has to be in the forefront of this war. It has been fighting sporadically and with varying spells of intensity, but the determination to win the war is not there.
11. Just as US officers have come to the conclusion that the war against the Afghan Taliban is unwinnable and hence calls for a mix of the military and political approaches, the Pakistani officers too are coming to the conclusion that the war against the TTP is unwinnable on the ground and hence a different approach is called for in order to protect their population and security forces from the wave of suicide terrorism.
12. Is it possible to make peace with the Taliban on both sides of the Pakistan-Afghan border without weakening the war against the FATA-based Al Qaeda? With whome to negotiate? On the Afghan side, there are two vintages of the Taliban---the pre 10/7 vintage, which consists essentially of the political advisers of Mulla Mohammad Omar, the Amir, before 10/7 and the post-2002 vintage which consists of the remnants of the pre-10/7 commanders such as Jalalludin Haqqani and his son Serjuddin and the new commanders who have come to the fore in the recent fighting. The recent interactions between the representatives of the Government of Hamid Karzai and the Taliban under the auspices of the King of Saudi Arabia in Saudi Arabia during September were essentially with the Taliban of the pre-10/7 vintage.
13. Among those who reportedly attended the dinner were Mullah Muhammad Ghaus, a former Foreign Minister under the Taliban Government, Abdel Hakim Mujahed, former unofficial Taliban representative in the United Nations, Abdul Salaam Hashimi, former director of finance of the Hizb-e-Islami of Gulbuddin Heckmatyar, Maulvi Arsala Rahmani, a former Deputy Minister, Wakil Ahmad Mutawakil, another former Foreign Minister, and Mullah Abdul Salaam Zaif, former Taliban Ambassador to Pakistan. The influence of these leaders on Mulla Omar was limited even before 10/7. Before 10/7, the Saudi Intelligence had repeatedly tried through them to persuade Mulla Omar to hand over bin Laden to Saudi Arabia in order to avoid an American military strike. They could not succeed. Some of them were either captured by the Americans or surrendered to them after the war began and were in US custody for some months before they were released. They are, therefore, viewed with suspicion by the Taliban commanders.
14. Moreover, the US and other NATO forces may want a political face-saving because they are not doing well in the fighting, but why should the Taliban Commanders want one when they think they are winning? The same is the situation on the Pakistan side of the border. The TTP thinks it is doing well against the Pakistani security forces. Why should it agree to a compromise without achieving its objective?
15.Gen . David Petraeus, who was till recently the Commander of the US forces in Iraq, is shortly taking over as the Commander of the US Central Command. In that capacity, he will be responsible for the strategy in the Afghanistan-Pakistan region. In Iraq, he successfully drove a wedge between the secular Iraqi resistance fighters and the Wahabised Arab terrorists of Al Qaeda. There is a talk that he might try a similar approach in the Afghanistan-Pakistan region by driving a wedge between the Taliban on both sides of the border and the Al Qaeda remnants. He succeeded in Iraq because the former Baathists of Saddam Hussein's Army, who constituted the resistance fighters, were secular and did not like the Wahabised Al Qaeda. But, in the Afghanistan-Pakistan region, Wahabism provides the binding ties which strongly unite the Talibans with Al Qaeda. They all feel that the future of Islam is going to be decided in the fight against the US-led NATO forces. They have two common objectives--- the defeat and withdrawal of the NATO forces and the proclamation of an Islamic sharia-based rule in the entire region. So long as these objectives unite them, the Talibans are unlikely to agree to separate peace with the NATO forces. Media reports of a split between the Afghan Taliban and Al Qaeda have not been substantiated.
16. Unless and until the US is able to hunt down and kill at least bin Laden, Zawahiri and Mulla Omar, there is unlikely to be a change in the ground situation. Instead of nursing illusions of engineering a split between Al Qaeda and the Taliban and negotiating a separate peace with the Taliban, the US should focus on eliminating the Al Qaeda leadership. That was the main objective of Op Enduring Freedom and that should continue to be its main objective. (11-10-08)
( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: seventyone2@gmail.com )
A bleeding stalemate on the ground in Afghanistan, a bleeding Pakistan tottering towards a possible collapse of the State and a total policy confusion in the corridors of power in Washington DC and other NATO capitals.
2. That has been the outcome of seven years of Operation Enduring Freedom, which was launched by the US on October 7,2001, in the wake of the 9/11 terrorist strikes by Al Qaeda in the US.
3.In Afghanistan, the US and the other NATO forces and the Afghan National Army (ANA) control Kabul, the Capital, and other major towns and the Neo Taliban, resurrected from the pre-10/7 Taliban , controls the rural areas. Neither is in a position to dislodge the other from the areas controlled by it, but each is able to inflict bloody casualties on the other--- the US and other NATO forces through the use of heavy artillery and air strikes and the Taliban through weapons of Pakistani origin and through the inexhaustible flow of suicide terrorists.
4.In Pakistan, a Pakistan-version of the Taliban called the Tehrik-e-Taliban Pakistan (TTP) has arisen post-2002 and has been operating in tandem with the remnants of Al Qaeda, including Osama bin Laden and his No.2 Ayman al-Zawahiri, who are now reported to be based in the North Waziristan area of the Federally Administered Tribal Areas (FATA). It is a coalition of jihadis, which has been operating in the FATA and in the Swat Valley of the North-West Frontier Province (NWFP)---- Afghan Pashtuns, Pakistani Pashtuns and Punjabis, Uzbeks of the Islamic Movement of Uzbekistan (IMU) and the Islamic Jihad Union (IJU), Chechens of the 1980s vintage who had deserted from the Soviet Army, Uighurs of the East Turkestan Islamic Movement in the Xinjiang province of China and Muslims of different ethnicities from the Muslim immigrant diaspora in the West----jihadis of Pakistani origin from the UK, Spain and Denmark, Turks and Uighurs from Germany and some others.
5. The post-2002 Pakistani version of the Taliban has proved to be even more deadly than its Afghan counterpart. The Pakistani Taliban carried out 56 attacks of suicide terrorism in the tribal and non tribal areas in 2007 and it has already carried out 40 so far this year. The number is just one-third of what the Afghan Taliban has carried out, but strategically more significant and deadly----- attacking carefully chosen military and intelligence targets in heavily-protected cities and cantonments----even in Islamabad and Rawalpindi, where the General Headquarters of the Pakistan Army are located.
6. In the "News" of October 10, 2008, Dr Muzaffar Iqbal, a Pakistani analyst, wrote: "With an average of three suicide attacks per week in which at least thirty persons die, there will be 1,560 dead Pakistanis within a year. Add to this approximately 15 "extremists" being killed daily in the northern region, and we have a total of 7,035 dead. Further: for every hamlet, village, and hideout bombed, and with every "extremist" killed, we have an average of ten families displaced. So within a year, northern Pakistan will be a huge graveyard and there will be several thousand internally displaced persons living in makeshift camps in the rest of the country. In addition, there will be thousands of emotionally and mentally unstable persons available to anyone who can convince them that life is not worth living anymore, so come on and die for this or that cause. The net result will be an escalation of violence in all parts of the country and the spiral of violence and death reaching all corners of the country. How did we get here? "
7. A more difficult question engaging the attention of military commanders and policy-makers of the NATO countries is---- is a mid-course correction necessary and how to carry it out? Senior military officers of the NATO have started telling their policy-makers that the war against the Taliban in Afghanistan is unwinnable. Better make a deal with the Taliban to bring the war to an honourable end where there will be neither winners nor losers. However, they are not yet saying that the war against the Taliban in Pakistan is unwinnable. They think that if the Pakistan Army steadily maintains its present offensive in the tribal belt with discreet air support from US Drones (pilotless planes), the TTP can still be defeated.
8. It is a policy nightmare. What one has been seeing in the Pashtun tribal belt on both sides of the Pakistan-Afghan border is three wars in one---- against the Afghan Neo Taliban, against the Pakistani Taliban and against Al Qaeda. The war against the Afghan Taliban is not vital for the security of the West and for preventing new terrorist strikes in the West. No Afghan Pashtun has ever travelled outside his country to indulge in an act of terrorism in foreign territory. The Afghan Pashtuns, who never indulged in suicide terrorism in the past, look upon their present fight against the US and other NATO forces and their wave of suicide terrorism as part of their resistance struggle against the occupation of their country by foreign forces. They are just not interested in another 9/11 in the US homeland or another Madrid or London or Bali or Mumbai.
9. The war against Al Qaeda and the Pakistani Taliban is vital for the security of the rest of the world, including the US, other NATO countries, India, China, Russia and the Central Asian Republics. The tribals, whom the Pakistani Army used in Jammu & Kashmir in 1947-48, 1965, 1971 and 1999, were brought from the FATA. Many of the jihadis, who had indulged in acts of terrorism in different parts of the world after 2001, were trained in the training camps of Al Qaeda and its allies in the FATA. If the Pakistani Taliban and Al Qaeda are not defeated, the world will have to live constantly under the fear of another 9/11 or another Madrid or London or Bali or Mumbai.
10. Is it possible to reach a separate peace with the Afghan Taliban, while continuing the war against Al Qaeda and the Pakistani Taliban? The US is in the forefront of the war against the Afghan Taliban. It can take a decision, whether to continue fighting or whether to reach a peace and, if so, under what terms.The outcome of the war against Al Qaeda and the Pakistani Taliban depends more on the sincerity and willingness of the Pakistani security forces to fight the war to the finish, with US assistance. It is the Pakistan Army, which has to be in the forefront of this war. It has been fighting sporadically and with varying spells of intensity, but the determination to win the war is not there.
11. Just as US officers have come to the conclusion that the war against the Afghan Taliban is unwinnable and hence calls for a mix of the military and political approaches, the Pakistani officers too are coming to the conclusion that the war against the TTP is unwinnable on the ground and hence a different approach is called for in order to protect their population and security forces from the wave of suicide terrorism.
12. Is it possible to make peace with the Taliban on both sides of the Pakistan-Afghan border without weakening the war against the FATA-based Al Qaeda? With whome to negotiate? On the Afghan side, there are two vintages of the Taliban---the pre 10/7 vintage, which consists essentially of the political advisers of Mulla Mohammad Omar, the Amir, before 10/7 and the post-2002 vintage which consists of the remnants of the pre-10/7 commanders such as Jalalludin Haqqani and his son Serjuddin and the new commanders who have come to the fore in the recent fighting. The recent interactions between the representatives of the Government of Hamid Karzai and the Taliban under the auspices of the King of Saudi Arabia in Saudi Arabia during September were essentially with the Taliban of the pre-10/7 vintage.
13. Among those who reportedly attended the dinner were Mullah Muhammad Ghaus, a former Foreign Minister under the Taliban Government, Abdel Hakim Mujahed, former unofficial Taliban representative in the United Nations, Abdul Salaam Hashimi, former director of finance of the Hizb-e-Islami of Gulbuddin Heckmatyar, Maulvi Arsala Rahmani, a former Deputy Minister, Wakil Ahmad Mutawakil, another former Foreign Minister, and Mullah Abdul Salaam Zaif, former Taliban Ambassador to Pakistan. The influence of these leaders on Mulla Omar was limited even before 10/7. Before 10/7, the Saudi Intelligence had repeatedly tried through them to persuade Mulla Omar to hand over bin Laden to Saudi Arabia in order to avoid an American military strike. They could not succeed. Some of them were either captured by the Americans or surrendered to them after the war began and were in US custody for some months before they were released. They are, therefore, viewed with suspicion by the Taliban commanders.
14. Moreover, the US and other NATO forces may want a political face-saving because they are not doing well in the fighting, but why should the Taliban Commanders want one when they think they are winning? The same is the situation on the Pakistan side of the border. The TTP thinks it is doing well against the Pakistani security forces. Why should it agree to a compromise without achieving its objective?
15.Gen . David Petraeus, who was till recently the Commander of the US forces in Iraq, is shortly taking over as the Commander of the US Central Command. In that capacity, he will be responsible for the strategy in the Afghanistan-Pakistan region. In Iraq, he successfully drove a wedge between the secular Iraqi resistance fighters and the Wahabised Arab terrorists of Al Qaeda. There is a talk that he might try a similar approach in the Afghanistan-Pakistan region by driving a wedge between the Taliban on both sides of the border and the Al Qaeda remnants. He succeeded in Iraq because the former Baathists of Saddam Hussein's Army, who constituted the resistance fighters, were secular and did not like the Wahabised Al Qaeda. But, in the Afghanistan-Pakistan region, Wahabism provides the binding ties which strongly unite the Talibans with Al Qaeda. They all feel that the future of Islam is going to be decided in the fight against the US-led NATO forces. They have two common objectives--- the defeat and withdrawal of the NATO forces and the proclamation of an Islamic sharia-based rule in the entire region. So long as these objectives unite them, the Talibans are unlikely to agree to separate peace with the NATO forces. Media reports of a split between the Afghan Taliban and Al Qaeda have not been substantiated.
16. Unless and until the US is able to hunt down and kill at least bin Laden, Zawahiri and Mulla Omar, there is unlikely to be a change in the ground situation. Instead of nursing illusions of engineering a split between Al Qaeda and the Taliban and negotiating a separate peace with the Taliban, the US should focus on eliminating the Al Qaeda leadership. That was the main objective of Op Enduring Freedom and that should continue to be its main objective. (11-10-08)
( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: seventyone2@gmail.com )
National Seminar on Terrorism : LK Advani's Speech
BHARATIYA JANATA PARTY
Speech by
Shri L.K. Advani
Leader of the Opposition (Lok Sabha)
Inauguration of National Seminar on Terrorism
Organised by Rambhau Mhalgi Prabodhini
New Delhi – 4 October 2008
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Our commitment: To make India terror-free
è POTA will be re-enacted; Strong action will be taken to bust terrorist cells that have mushroomed in different parts of India.
è The contrast is between NDA and UPA is that one alliance cares for India and the other cares only for its vote-bank.
è Stigmatising any faith or community in the fight against terror is wrong.
è Maligning of security forces is a dangerous new trend.
è Obnoxious propaganda by the likes of Arundhati Roy must be
firmly countered.
è Our vision is not limited by the considerations of where will our Party be after the next elections. Rather, it extends to caring about whether India will be united and strong after a hundred years, after a thousand years.
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It gives me great pleasure to be with all of you this morning. My hearty congratulations to Shri Gopinath Munde, Prof. Bal Apte, Shri Vinay Sahasrabuddhe and others at the Rambhau Mhalgi Prabodhini firstly for organizing this seminar and, secondly, for organizing it in New Delhi. The Prabodhini regularly holds seminars and training workshops on important topics for social and political activists at its beautiful campus near Mumbai. This is perhaps for the first that it is holding a major event in the national capital. I look forward to the day when the Prabodhini can have a full-fledged centre operating in Delhi.
India is the worst victim of terrorism in the world
The subject of this seminar is highly topical. Over-familiarity with a problem sometimes lulls one's awareness about its seriousness. Therefore, it may surprise many to know that the problem of terrorism has persisted for nearly half the period of the life of independent India. Since the closing yeas of the 1970s, India has been in the vortex of foreign-sponsored terrorism, which has claimed nearly 80,000 lives, both civilian and of security forces — in Punjab, Jammu & Kashmir, North-Eastern states and in the rest of India. There is no country in the world which has been a victim of terrorist onslaught for so long, and which has suffered such enormous loss.
If a menace has continued for so long, it means that its perpetrators have a definite purpose, a definite goal. We in the BJP had correctly assessed right in the beginning that the goal of terrorists and their patrons abroad was not only to threaten the common man and the civil society, not just to create ordinary law and order disturbances , but to endanger the very unity and security of the nation. What is happening in India today has vindicated our assessment.
History will not pardon us if we fail
In the history of nations, it is important to know what challenges they face. But it is far more important to know how they respond to these challenges. Nations oblivious to the threats that eat into their vitals run an imminent danger of losing their ability to protect themselves. The warning bells are loud and clear that, even though the nation's internal security today stands seriously threatened, our response lacks political will. India does not have a seamlessly integrated counter-terrorism strategy backed by resolute operational capabilities.
There is one more thing to be said about internal security challenges. These do not manifest suddenly, nor do they mature overnight. The ominous signals they send over a prolonged period of time can be noticed unmistakably. However, if we choose not to notice them, or are incapable of taking self-protective action, history will not absolve us. It is our charge against the Congress party that it is keeping its eyes wide shut, choosing not to see, nor to strike, all for the fear of losing its vote-bank.
As far as the BJP is concerned, let me make it absolutely clear that we shall never conduct ourselves in such a short-sighted way that history would hold us guilty of not doing our duty at the right time and in the right manner. We are prepared to make any sacrifices for defending the unity and ensuring the security of our Motherland. Our vision is not limited by the considerations of where will our Party be after the next elections. Rather, it extends to caring about whether India will be united and strong after a hundred years, after a thousand years.
In the last millennium, India suffered many a blow. In the last century, India suffered blood-soaked Partition on account of a pernicious ideology. Therefore, all political parties and all sections of our society should so conduct themselves that no evil power, external or internal, can set its eyes on destabilizing, debilitating and dividing India.
Terrorism: Invisible enemy's low-cost, asymmetrical war
For such strong protective force to emerge, it is necessary to know that in today's world, failure to protect internal security has emerged as the most potent threat to the unity and integrity of nations, to the stability of their polity and to the protection their Constitutional values. In post-World War period, failure to deal with internal security challenges, as opposed to foreign aggressions, has been responsible for the degradation of a large number of nation-states. Most states when confronted with serious internal threats thought it to be a passing phase and allowed the drift to reach a point where retrieval was no longer possible.
Quite often, the adversarial forces won not because of their own strength but because of the weaknesses and mistakes of the regimes that were hit. Thus, history has a big lesson for us and it would be tragic if we failed to learn from past mistakes, both of our own and of others.
An important lesson that we in India should learn — this lesson is indeed globally relevant — is that conventional wars are becoming increasingly cost-ineffective. As instruments of achieving political and strategic objectives, their outcome is unpredictable — and often, counter-productive. Hence, foreign aggressions today come disguised as proxy wars in the form of terrorism and other forms of violence. The enemy targets internal fault-lines for furthering his strategic and political objectives. Even less powerful nations are able to exercise this low-cost sustainable option, giving rise to the new doctrine of asymmetric warfare.
We can see this clearly from what both Pakistan and Bangladesh have been doing to us. Neither can match India's military strength. Yet, both have been threatening India with cross-border terrorism.
This warfare is waged by an invisible enemy, for whom the civil society is both a source of sustenance and the target. The enemy exploits the liberties, freedom, technological facilities and infrastructure to his advantage, making even the more powerful, better equipped security agencies feel helpless.
Maligning of security forces: A dangerous new trend
Maligning the security forces is often a deliberate ploy employed by the civil society supporters of terrorist outfits. Unfortunately, it sometimes influences the thinking of even well-meaning human rights activists. However, it should not be forgotten that our security forces work under extremely difficult circumstances. The rest of society can sleep peacefully only because of the diligent service rendered by our police, paramilitary and Armed Forces. I fully agree that innocent persons should not be harassed and penalised. But let us spare a thought for this question: What will happen to our society, to our Nation, if the morale of our security forces is allowed to be weakened?
Sadly, this is precisely what has happened in recent times. What is sadder is that leaders of the Congress party and the UPA Government have allowed this denigration of our security forces to take place in the mistaken belief that those who are targeting our uniformed forces are defenders of "secularism". Their thinking about secularism has become so warped that anybody who targets the BJP becomes their friend.
For example, there is this book 'Khaki and the Ethnic Violence in India' by Omar Khalidi, an Indian scholar based in America, which provided the inspiration for the Sachar Committee to seek a communal census in the Armed Forces.
Another example is a book by Arundhati Roy, a well-known author, on the terrorist attack on the Indian Parliament on 13 December 2001. The book argues, quite obnoxiously, that the attack was not carried out by terrorists but orchestrated by the security forces themselves with prior knowledge of the leadership of the NDA Government. Her recent statement that "India needs Azadi from Kashmir as much as Kashmir needs azadi from India" is seditious. The intellectual and literary community should strongly condemn such anti-national pronouncements, which are being given legitimacy by pseudo-secularists.
Minorityism has gripped the Congress mindset
Here is yet another example of how the UPA Government has chosen to be influenced by the sinister and sustained campaign launched by such people. In spite of a Supreme Court verdict, it has not carried out the death sentence on Afzal Guru, who has been convicted for his role in the terrorist attack on Parliament. His was no ordinary crime. It was an offence of hitting at the country's legislature, the highest seat of India's Constitutional authority, which symbolizes its sovereignty and democratic polity. Not even the national outrage on this issue has dented the UPA Government's apathy. Not even the extraordinary decision of the families of the martyred security personnel to return the gallantry awards has made it act. Such indeed is the grip of minorityism on the Congress mindset today.
The same mindset has dictated the Congress party's anti-national response to the issue of unchecked infiltration of Bangladeshis into Assam and other parts of the country. I was in Guwahati last week, where, among others, I met Shri Jaideep Saikia, an eminent Assamese scholar who has written a widely acclaimed book 'Terror Sans Frontiers: Islamist Militancy in North East India'. The book is indeed an eye-opener, a strong warning against a problem which the Supreme Court itself, while striking down the IMDT Act as unconstitutional, has described as "external aggression". The UPA Government's response to this external aggression is simply to turn a blind eye.
Once again, the same mindset has dictated the UPA Government's decision not to give approval to the anti-terror laws passed by the Assemblies of Gujarat, Madhya Pradesh and Rajasthan, on the lines of an identical Act that exists in Maharashtra.
I can understand a government not succeeding despite making its best efforts. But I cannot but strongly indict that government which does not take even a single positive step at the legislative, political, administrative or operational levels to a counter threat which is so profusely bleeding the nation.
Stigmatising any faith in the fight against terror is wrong
Friends, no campaign of terrorism that has continued for so long can be without an ideological motive. Recognising the anti-India ideological driving force behind terrorism, and evolving a proper nationalist ideological response to it, is critical to achieving long-term success. Here I would like to state two things emphatically. Firstly, no religion and no religious community can and should be blamed for the criminal acts of some individuals belonging to that community. Stigmatising any community in the fight against terrorism is wrong, counter-productive, and must be condemned.
At the same time, it is equally important to recognize that religious extremism of a certain kind provides the ideological fervour and outward justification for terrorism and separatism. After all, religion was indeed misinterpreted and misused to construct the Two-Nation theory, which had disastrous consequences for India, for both Hindus and Muslims. The ideology behind the ongoing war of terrorism against India is a continuation of the separatist ideology that created Pakistan. Which is why, the anti-India forces in Pakistan have sponsored cross-border terrorism as a deliberate policy to achieve Kashmir's secession from India, and also to weaken India in many different ways.
In recent years, an important new experiment has been introduced into this policy of cross-border terrorism. A section of Indian youth, misguided and exploited by their mentors abroad and radicalized by an interpretation of Islam that is propagated by Al Qaeda, have been inveigled into the vortex of terrorism. SIMI and Indian Mujahideen have emerged as the face of indigenized terror. Their literature speaks volumes about their aversion for the very Idea of a secular, plural and democratic India, and also about their resolve to destroy India as we know it.
Contrast between NDA and UPA Governments
How did the NDA Government deal with SIMI? And how has the UPA Government dealt with it? I shall not go into all the well-known details, except to say that the contrast is stark. The contrast is between one alliance that cares for India and the other that cares only for its vote-bank. So much so that two Cabinet ministers in the UPA Government had the audacity to publicly defend SIMI, which is banned as a terrorist organization, and the Prime Minister did not even upbraid them!
This contrast is also evident in the manner in which the two alliances have dealt with the issue of a strong anti-terrorism law. In a country that has suffered so much due to terrorism with international operational and financial linkages, the need for an effective anti-terrorism law ought to be so self-evident as to preclude any divisive debate over it. After all, the BJP supported the TADA Bill when Rajiv Gandhi's Government introduced it in Parliament. Without TADA, some of the culprits in Rajiv Gandhi's murder case could not have been chargesheeted. When the NDA Government assumed office, TADA had already ceased to exist. Therefore, we legislated POTA.
One of the first acts of the UPA Government in 2004 was to repeal POTA. As a matter of fact, the war against terror figured very low in UPA's Common Minimum Programme. The CMP did not mention a single step to check trans-border infiltration, choking terror's sources of funding, and smuggling of weapons and explosives, etc. The Government's weak-kneed approach, as was inevitable, proved fatal in course of time. It not only emboldened the extremists groups, but also brought down the efficacy of country's security apparatus. The momentum generated by the series of initiatives taken by the NDA government to strengthen national security, particularly the internal security, was lost within a year.
During the first year in office, the UPA Government enjoyed the fruits of the efforts of the previous Government and, as a result, not a single incident of terrorism occurred outside J&K. But in the last three years the country has been brought to a pass where the terrorists are bleeding it with the frequency, place and time of their choice. There is mushrooming of sleeper cells and subversive modules of terrorists, both indigenous and foreign, in different parts of the country. As a result, every citizen of the country from Kashmir to Kanyakumari today feels insecure about his safety.
POTA remained in existence from September 2001 till December 2004. During this period, only eight incidents of terrorist violence, including the attack on Parliament and on Akshardham Temple in Gandhingar, took place in India's hinterland, leading to 119 deaths. Contrast it with what happened after POTA was repealed: The footprint of terrorism has grown alarmingly larger in the past four years. Jammu, Ayodhya, Varanasi, Samjhauta Express in Haryana, Mumbai, Hyderabad, Malegaon, Jaipur, Bangalore, Ahmedabad, Delhi …and, in the latest attack, serial blasts rocked Agartala in Tripura just two days ago. During this period, 625 persons have been killed and 2,011 injured, depicting a five fold increase in those killed and injured. It is the same country, same people, same police and same intelligence agencies; what then explains this unprecedented increase? The answer is very simple: Weak laws have emboldened the terrorists and appeasement has failed to change their intentions.
Congress cacophony about anti-terror law
Since the serial bomb blasts in New Delhi on 13 September 2008, people's pressure on the Government to enact a strong anti-terror law has greatly intensified. But the manner in which senior leaders of the UPA Government and the Congress party have responded to this demand is pathetic.
On 17th September, Prime Minister Dr. Manmohan Singh, while addressing the Governor's Conference, said: "We are actively considering legislation to further strengthen the substantive anti-terrorism law in line with the global consensus on the fight against terrorism."
· Earlier, The Hindu reported on 13th September: "In what is seen as the UPA government speaking with different voices over the need for States enacting tough anti-terror laws, the Union Home Ministry has not taken kindly to the suggestion of the National Security Adviser M.K. Narayanan favouring the Gujarat government's proposal to have its own law to deal with terrorist activities and organised crime. The NSA's suggestion was contained in a letter which he recently wrote to the Home Ministry. He reportedly saw no reason to turn down the request of the Gujarat government to have an anti-terror law. He also reportedly cited demands by a number of senior police officers both at the Central and State levels for enacting a comprehensive, tough anti-terror law. Mr. Narayanan did not see anything wrong in supporting such a demand."
· The Administrative Reforms Commission, appointed by the Government under the chairmanship of senior Congress leader Shri Veerappa Moily, strongly supported the need for stringent anti-terrorist law. Speaking to the media on 17th September, he said that "a strong anti-terror law with equally strong safeguards to prevent its misuse is needed."
On 24th September, Congress general secretary Shri Rahul Gandhi said, "There should be a strong law to deal with terror. A powerful law, not a failed law. POTA is a failed law."
In spite of these pronouncements, what is the net result? "No, no, we do not need a new law. Existing laws, if strengthened, are enough to fight terror."
How can India be safe under a Government that has no mind of its own, that speaks in so many voices, and that is led by a Prime Minister who has an office but no authority? It is difficult to find out who runs this Government and who takes the decisions.
Our commitment: To make India terror-free
Friends, there is no point any longer in demanding anything from this spineless and visionless Government. As they say in Hindi, the ulti ginati of this Government (reverse counting of its days in office) has begun. The people of India will dethrone the UPA rulers whenever the next Parliamentary elections are held.
However, this seminar is certainly a proper occasion for me to present some of our concrete promises, commitments and ideas to make India safe from terror.
1. If voted to power, the NDA will re-enact POTA. The critics of POTA have so far been unable to show a single shortcoming in it. Therefore, the least we expect from our friends in the Congress party is that, now that many of its senior functionaries have spoken in favour of a strong anti-terror law, they should support re-enactment of POTA in the 15th Lok Sabha.
I am saying this because the time has come to treat the fight against terrorism as a national issue requiring broad national consensus. It is in this spirit that I recently I wrote to former President Dr. A.P.J. Abdul Kalam, wholeheartedly supporting his suggestion for a bipartisan approach to combat terrorism.
2. The BJP favours setting up a federal anti-terror agency, which has become absolutely necessary for evolving effective coordination between the Centre and the States — and also among States themselves — in intelligence gathering, intelligence exchange, action, investigation, prosecution and planning and execution of preventive operations.
The Vajpayee government, for the first time since Independence, had formulated an integrated policy for national security. A Group of Ministers, supported by experts' task forces (I had the privilege of heading this GoM), had made nearly 300 comprehensive recommendations for completely overhauling India's security apparatus and management in the areas of Defence, Intelligence, Internal Security and Border Management. The UPA Government has shown callous neglect towards implementation of these recommendations. The next NDA Government will take up this task with the highest priority.
Implementation of the recommendations of the Malimath Committee on overhauling the Criminal Justice System will be done in a timebound manner.
The chain of India's anti-terrorism apparatus can be only as strong as its weakest link. Today one of its weakest links is the local police station and its intelligence gathering capabilities. Therefore, modernization of the police force with adequate Central assistance, which had been started by the NDA Government, will be rapidly intensified.
Finally, I wish to make a fervent appeal to all sections of our society and polity: Let us not communalise the fight against terrorism. Terrorists have no religion. They are enemies of the nation and of humanity as a whole. Let us not imperil the security of India — and, going further, the very unity of India — by going soft in the war against these enemies. This is not a war that any a single party or any single community can win. It is a battle for the survival of India, in which all communities and all political parties are equal stake holders. We wanted to extend our whole-hearted support to the incumbent government for any positive action that it is prepared to take to combat terrorism. Unfortunately, it has not taken even a single initiative in this direction to which we could extend our support.
While enemies of the nation are uniting and coordinating their actions, it is sad that narrow electoral considerations are standing in the way of political parties and governments giving a concerted fight to the menace of terrorism. I do hope that the public opinion in this country will create required pressure for political parties and their leaders to think beyond electoral considerations and fight terrorism with single-minded determination.
One last point. The Navaratri festival has begun. It will conclude on Vijaya Dashami, which symbolizes the victory of Good over Evil. I suggest that, in addition to Ravan Dahan (burning of the effigy of Ravan), let Navaratri pandals all over the country also do Atankvaad Dahan (burning the effigy of the Demon of Terrorism). Let it symbolize our collective resolve to make India terror-free.
With these words, I declare the seminar open and wish it all success.
Thank you.
Even confidence is in crisis
00:27 | 11/ 10/ 2008
MOSCOW (RIA Novosti economic commentator Oleg Mityaev) - On October 7 the Russian Government adopted a new anti-crisis package. Apart from the trillions of rubles allocated for short-term and mid-term financing of the banking system, Russia's largest banks will receive another 950 billion rubles for five years and beyond.
According to the Government and Central Bank's plan, these funds are to filter down to smaller banks and businesses, which are in acute need of refinancing. However, the crisis of confidence, which has spread over the Russian credit market, may frustrate these plans.
Starting in the U.S. mortgage market over a year ago, the financial crisis has crept all over the world causing a chain reaction of distrust in the banking sector. To increase financial security, even those American banks that were not affected by the mortgage crisis have tightened credit for home loans, not so mention the European loans. At the same time, the European banks that have stayed afloat are afraid to refinance Russian banks and companies.
The crisis of credit confidence is aggravating the on-going collapse of the world stock markets to even a greater extent. Many debtors that went bankrupt took loans against securities, which are now in the possession of banks, having depreciated manifold.
Under such circumstances, the billions (and in Russia - trillions) poured into the leading European countries' banking systems haven't had the desired effect yet. The crisis of confidence is so strong that the leading financial institutions hesitate to credit smaller banks, which, in turn, cannot re-credit business, or do not want to risk it. Private customers suffer as well: even Russia's largest banks have raised interest rates or simply put a limit on issuing credits, especially mortgages.
Unless the global banking system (including Russia), which is the monetary circulatory system for the non-financial sector of economy, resumes crediting business, the economic slowdown, and then the recession of economies stricken by the crisis of confidence, will become a reality.
In Russia, it is retailer chains that have suffered the most from the crisis of confidence. Anticipating an ever-growing consumer demand, they purchased large batches of goods on credit. With the credit stream running dry and consumers shying away, retailers found themselves on the verge of bankruptcy.
The most notorious example is the situation with Russia's largest cell phone dealers. Euroset, the market leader, was rescued thanks to billionaire Alexander Mamut, who bought it for $1.25 billion. Three fourths of that sum will be spent on buying down the debt of Euroset's former owners, instead of being transferred to their accounts. Two other large retailers - Svyaznoy and Tsifrograd - have applied a similar scheme: exchanging a former owner for a large investor. As can be seen, there are still people and companies in Russia that have funds to invest.
To raise extra capital, cell phone retailers had to start charging a commission for processing payments. On the other hand, new investors will help them survive the current crisis, and then they are likely to resell the businesses to mobile operators. As a result, Russia may convert to the European format where mobile operators sell phones themselves, with prices often discounted.
Nevertheless, it is obvious that the crisis of confidence won't be resolved that smoothly in other economic sectors. It is not only retail chains that have found themselves in debt - Russia's largest companies have been plagued by the same trouble. For example, Oleg Deripaska, the richest Russian according to Forbes, lost Canadian auto parts manufacturer Magna, which he had purchased for $1.5 billion on credit. Mr Deripaska failed to pay off his debt, and Magna went to French creditor BNP Paribas.
Because of problems with financing, the GAZ group, part of Mr Deripaska's empire, reported a one-week halt in GAZelles light commercial truck production. The assembly line stopped because of a drop in GAZ sales, which, in turn, was caused by the deteriorating auto loan market. Moreover, local GAZ dealers stopped making advance payment which is why the car manufacturer now lacks working capital to buy auto parts. So, it all came around to where it started.
For similar reasons, the Kamaz heavy-duty truck production plant announced a shortening of the workweek from six to four days through December 6.
A cut in car production against the background of the financial crisis is a global trend. Europe's Opel, BMW and Skoda, as well as U.S. General Motors and Chrysler have all announced a reduction in output.
The magnitude of the crisis is evident from the fact that Russia's largest oil and gas companies - Gazprom, LUKoil, Rosneft and TNK-BP - applied to the Government for credit to pay off their debts to western banks and maintain production. One might think their coffers had swelled with petrodollars. However, as soon as "black gold" sank below $90 per barrel, Russian oil tycoons desperately turned to the state for help.
The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.
MOSCOW (RIA Novosti economic commentator Oleg Mityaev) - On October 7 the Russian Government adopted a new anti-crisis package. Apart from the trillions of rubles allocated for short-term and mid-term financing of the banking system, Russia's largest banks will receive another 950 billion rubles for five years and beyond.
According to the Government and Central Bank's plan, these funds are to filter down to smaller banks and businesses, which are in acute need of refinancing. However, the crisis of confidence, which has spread over the Russian credit market, may frustrate these plans.
Starting in the U.S. mortgage market over a year ago, the financial crisis has crept all over the world causing a chain reaction of distrust in the banking sector. To increase financial security, even those American banks that were not affected by the mortgage crisis have tightened credit for home loans, not so mention the European loans. At the same time, the European banks that have stayed afloat are afraid to refinance Russian banks and companies.
The crisis of credit confidence is aggravating the on-going collapse of the world stock markets to even a greater extent. Many debtors that went bankrupt took loans against securities, which are now in the possession of banks, having depreciated manifold.
Under such circumstances, the billions (and in Russia - trillions) poured into the leading European countries' banking systems haven't had the desired effect yet. The crisis of confidence is so strong that the leading financial institutions hesitate to credit smaller banks, which, in turn, cannot re-credit business, or do not want to risk it. Private customers suffer as well: even Russia's largest banks have raised interest rates or simply put a limit on issuing credits, especially mortgages.
Unless the global banking system (including Russia), which is the monetary circulatory system for the non-financial sector of economy, resumes crediting business, the economic slowdown, and then the recession of economies stricken by the crisis of confidence, will become a reality.
In Russia, it is retailer chains that have suffered the most from the crisis of confidence. Anticipating an ever-growing consumer demand, they purchased large batches of goods on credit. With the credit stream running dry and consumers shying away, retailers found themselves on the verge of bankruptcy.
The most notorious example is the situation with Russia's largest cell phone dealers. Euroset, the market leader, was rescued thanks to billionaire Alexander Mamut, who bought it for $1.25 billion. Three fourths of that sum will be spent on buying down the debt of Euroset's former owners, instead of being transferred to their accounts. Two other large retailers - Svyaznoy and Tsifrograd - have applied a similar scheme: exchanging a former owner for a large investor. As can be seen, there are still people and companies in Russia that have funds to invest.
To raise extra capital, cell phone retailers had to start charging a commission for processing payments. On the other hand, new investors will help them survive the current crisis, and then they are likely to resell the businesses to mobile operators. As a result, Russia may convert to the European format where mobile operators sell phones themselves, with prices often discounted.
Nevertheless, it is obvious that the crisis of confidence won't be resolved that smoothly in other economic sectors. It is not only retail chains that have found themselves in debt - Russia's largest companies have been plagued by the same trouble. For example, Oleg Deripaska, the richest Russian according to Forbes, lost Canadian auto parts manufacturer Magna, which he had purchased for $1.5 billion on credit. Mr Deripaska failed to pay off his debt, and Magna went to French creditor BNP Paribas.
Because of problems with financing, the GAZ group, part of Mr Deripaska's empire, reported a one-week halt in GAZelles light commercial truck production. The assembly line stopped because of a drop in GAZ sales, which, in turn, was caused by the deteriorating auto loan market. Moreover, local GAZ dealers stopped making advance payment which is why the car manufacturer now lacks working capital to buy auto parts. So, it all came around to where it started.
For similar reasons, the Kamaz heavy-duty truck production plant announced a shortening of the workweek from six to four days through December 6.
A cut in car production against the background of the financial crisis is a global trend. Europe's Opel, BMW and Skoda, as well as U.S. General Motors and Chrysler have all announced a reduction in output.
The magnitude of the crisis is evident from the fact that Russia's largest oil and gas companies - Gazprom, LUKoil, Rosneft and TNK-BP - applied to the Government for credit to pay off their debts to western banks and maintain production. One might think their coffers had swelled with petrodollars. However, as soon as "black gold" sank below $90 per barrel, Russian oil tycoons desperately turned to the state for help.
The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.
October 10, 2008
US Foreign Policy under Bush: Balance Sheet and Outlook
This analysis addresses the power of the US to shape international relations under President Bush. The author explains that efforts to establish a new order in the Middle East have failed. He argues that in Asia and the post-Soviet space, too, Washington’s influence has been weakened. The analysis concludes that the partial renunciation of the neoconservative project during Bush’s second term in office was not enough to amend the country’s loss of reputation.
© 2008 Center for Security Studies (CSS), ETH Zurich
Download:
English (PDF · 3 pages · 1.0 MB)
Author: Andreas Wenger
Series: CSS Analyses in Security Policy
Volume: 41
Issue: 3
Publisher: Center for Security Studies (CSS), Zurich, Switzerland
© 2008 Center for Security Studies (CSS), ETH Zurich
Download:
English (PDF · 3 pages · 1.0 MB)
Author: Andreas Wenger
Series: CSS Analyses in Security Policy
Volume: 41
Issue: 3
Publisher: Center for Security Studies (CSS), Zurich, Switzerland
Up close with Tiger-turned-MP
10 Oct 2008
The elusive Colonel Karuna Amman at a temporary hideout at a resort some 20 kilometers outside of Colombo. The photographer was blindfolded during the trip and Karuna vacated the area immediately afterwards.
Blindfolded and taken to an undisclosed location, ISN Security Watch's Anuj Chopra talks to elusive Colonel Karuna, a former LTTE commander recently nominated to the Sri Lankan parliament and now topping the Tiger hit list.
By Anuj Chopra in Sri Lanka for ISN Security Watch
Once a battle-hardened, underground guerrilla, Vinayagamoorthi Muralitharan, more popularly known by his nom de guerre Colonel Karuna Amman, eastern commander of the Liberation Tigers of Tamil Eelam (LTTE), now rubs shoulders with MPs as a part of Sri Lanka's political mainstream.
The erstwhile Eastern LTTE commander was appointed as a member of parliament, supported by the ruling United People's Freedom Alliance led by President Mahinda Rajapakse.
At one point, he was LTTE's commander for the Eastern Province, a favorite of LTTE chief Velupillai Prabhakaran, and effectively number two in the Tamil Tiger military organization. But in 2004, he broke ranks with the LTTE, citing differences with Prabhakaran, and formed a mainstream political party called the Tamil Makkal Viduthalai Pulikkal (TMVP).
After defecting, he began fighting alongside government forces against the Tigers. His fighters joined the Sri Lankan government in its offensive against the rebels and helped the security forces to recapture parts of the eastern region from them.
In an exclusive three-hour interview at an undisclosed location with ISN Security Watch, Colonel Karuna spoke about everything from his reasons for breaking ranks with the LTTE ("I want to liberate our people - the Tamils - from the hands of the liberators") to his political ambitions ("I am in the race to convert a bullet to a ballet") to why he still maintains his private army ("I'm on the top of LTTE's hit list.")
The interview with the reclusive renegade Tiger was arranged through a set of intermediaries. The ISN correspondent was blindfolded by Karuna's personal body guard and driven to a plush resort in a village abutting Colombo.
From renegade to lawmaker
"Tamil people can now have the faith of solving their own problems through parliamentary democracy. We should forget the bitter past experiences and work to win the trust of the Tamils," Colonel Karuna told the Sri Lankan Parliament as he was nominated as an MP this week.
Talks of democracy might be an anachronism for a fierce guerrilla fighter who once inspired fear in the hearts of Sri Lankan army soldiers, but Colonel Karuna says his path is akin to the Maoists of Nepal.
"No one believed they would lay down arms. No one believed I would either. But I did," he says, lounging on a chair in a crisp stripped shirt, looking every bit the lawmaker as opposed to the guerrilla commander. "Here I am."
Karuna was appointed to the 225-member parliament to fill the vacancy of a lawmaker who quit recently to contest local polls.
But his appointment as MP has already triggered controversy.
The Sinhala nationalist Janata Vimukthi Peramuna party (JVP) has challenged his appointment in the Supreme Court, arguing the vacancy he took up belongs to an MP of their political outfit.
Moreover, human rights group Amnesty International has strongly criticized Colonel Karuna's appointment, accusing him crimes against humanity, including torture and the use of child soldiers.
Colonel Karuna, however, seems undeterred by such allegations.
Betrayal weakens Tigers?
Colonel Karuna alleges that the LTTE lost 70 percent of its fighting capacity after his group parted ways with the Tigers.
"I broke away with 6,000 cadres; 4,000 of them were battle-hardened guerrilla fighters," he told ISN Security Watch. "The LTTE recruited most of their suicide cadres from the east. Moreover, my group had the potential to launch offensive attacks."
Colonel Karuna refused to share the specifics of his current military collaborations with the Sri Lankan army. However, the Sri Lankan government has made some unprecedented gains against the Tigers in recent months, in large part because of his support. His fighters joined the Sri Lankan government in its offensive against the rebels and helped the security forces to recapture the eastern region from the Tigers last year. In the Wanni battle zone, he is believed to have shared intelligence with the Sri Lankan army about Tiger hideouts.
A military commander posted in Jaffna told ISN Security Watch that he eliminated several hundred LTTE infiltrators in government-controlled Jaffna region after he was tipped off by Karuna.
"In the current fighting in the Wanni, you notice the LTTE are only launching defensive attacks. They don't have the potential to launch offensive attacks," Karuna added. "That's why they are losing."
"Liberated from the liberators"
Karuna says he joined the ranks of the LTTE in 1983 because he believed the "war against Sinhala hegemony" was a just one.
Over the last two decades, he says the LTTE has been able to sustain itself as the world's longest running insurgency because Prabhakaran directed his efforts primarily toward building up the military.
"He built a military office of the Tigers in Tamil Nadu in 1983. He bought books on military hardware and armaments, and appointed translators to translate them into Tamil. He dedicated his efforts to building ground cadres, a naval wing, and later, the aerial wing. Cadres were sent to the middle east and south east Asia for training with other rebel groups," Karuna said.
"The LTTE's military capacity was not built up over night. It took many years of sustained effort."
Over the years, Karuna said, he was dismayed to see Prabhakaran was ignoring the interests of the eastern Tamil people, and that angered him tremendously. It was the main reason for his break with the Tigers.
He vehemently denies the LTTE allegation that his real reason for betraying the Tigers was because its intelligence wing was closing in on him for corruption and violation of the LTTE code of conduct.
At the moment, the Tigers are at their weakest and on the cusp of defeat, if Karuna is to be believed.
"The Sri Lankan government cannot afford to call a ceasefire," he says. "He [Prabhakaran] has to be crushed. You cannot trust that man."
Karuna alleges that Prabhakaran intentionally dragged out peace talks so that the rebels could use the cessation in hostilities to re-arm for further combat. "This is a battle to liberate the Tamil people from the liberators," Karuna said.
In the recent fighting in South Ossetia, Karuna says, the international community insisted the civilian population be given safe passage; until then the warring factions should not exchange fire.
"Why is the international community quiet about Sri Lanka?" he asked. "200,000 Tamils are trapped close to Kilinochchi, trapped by Prabhakaran and used as human shields. If he were a true liberator of Tamils, he would let them go. He must be pressured to give the civilians safe passage."
Several military analysts say that even if Kilinochchi falls, the Tigers will recede to the jungles, and a low-level insurgency will continue to simmer in Sri Lanka.
Karuna doesn't agree.
"War depends on territory," he says. "From the jungle, they can only manage hit-and-run attacks, but that will hardly leave a dent. The LTTE will be crushed once you push them out of their strongholds."
External forces speculation
When Colonel Karuna turned renegade in 2004, it seemed unlikely that he could have challenged Prabhakaran to this extent without some assurances from powerful patrons. Few Tiger dissidents have survived Prabhakaran's wrath in the past. There was even speculation that external forces - RAW (Research and Analysis Wing, India's most powerful intelligence agency) or the CIA - might be behind Karuna's rebellion.
When asked about this, Karuna smiled knowingly. "Wouldn't I be sitting in America or India if they had helped me? I live in virtual hiding because I am on top of the LTTE's hit list."
Human rights violations
Colonel Karuna was the LTTE head of the eastern province in 1990, when 600 unarmed police officers who surrendered to his group were subsequently massacred.
To this allegation, he shrugs, "I wasn't present in Batticaloa, but in Jaffna at that time." He says he isn't aware who was behind that massacre.
When Colonel Karuna was part of the LTTE, he was also implicated in the massacre of Muslims, including the Kattankudy and Erovar massacres in the eastern province. According to Sri Lankan military intelligence sources, "Karuna was not in the eastern province but in the Wanni during the time of the attacks on Kattankudy and Eravur Muslims. He was, however, intercepted giving orders to his cadres in the east in relation to various activities."
Even now, after laying down arms, he is accused of forming death squads to muzzle journalists and silence those who oppose his point of view and of being involved in the disappearances of civilians. UNICEF and Human Rights Watch also accuse him of recruiting child soldiers.
"Return to War: Human Rights Under Siege," a report on the human rights abuses of the current Sri Lankan government, accuses Colonel Karuna of human rights violations with the aide of the Sri Lankan government.
"The Sri Lankan government has failed to take action against the abusive Karuna group, a Tamil armed group under the leadership of V. Muralitharan that split from the LTTE in 2004 and now cooperates with Sri Lankan security forces in their common fight against the LTTE. With the LTTE's loss of territories in the east, the Karuna group has exerted de facto authority in the districts of Ampara, Trincomalee, and Batticaloa. The group also expanded its operations in the northern Vavuniya district, engaging in extortion and abductions," the report says.
Karuna has categorically denied these allegations, claiming that the LTTE is trying to discredit him.
"I have given arms to only a few cadres - 200 or 300 - for our own protection," he said. "LTTE infiltrators in the eastern province are waging a campaign to wipe out TMVP cadres. We need to protect ourselves."
While with the LTTE, he says he was involved in recruiting child soldiers, but denies his continued involvement.
"We just disbanded an army of 6,000 cadres. Why would we now engage in recruiting children? That's an absurd allegation," he said.
But he doesn't deny that some of his cadres, used to an ominous gun culture for two decades, could be involved in some violations.
"Fighting is all they have seen for two decades. It will take some time for their thinking to change," he said. "A lot of them still don't have jobs. We are trying to integrate them into the Sri Lankan defense forces. But morally, Tamils of the east hate war. We've suffered enough."
Karuna was arrested in November 2007 in the United Kingdom and served half of a nine-month term for entering on a forged diplomatic passport. He was released on 3 July 2008.
There were speculations that his passport and visa were arranged for him by the Sri Lankan defense secretary.
Karuna would not comment on who arranged the documents for him to ISN Security Watch. He said he entered the UK on forged documents because of "security reasons" to be with his wife and children.
Anuj Chopra is a freelance journalist whose stories have appeared in The Christian Science Monitor and The San Francisco Chronicle, among other publications. Chopra lives just outside Mumbai in India and is the 2005 recipient of the CNN Young Journalist Award in the print category.
The elusive Colonel Karuna Amman at a temporary hideout at a resort some 20 kilometers outside of Colombo. The photographer was blindfolded during the trip and Karuna vacated the area immediately afterwards.
Blindfolded and taken to an undisclosed location, ISN Security Watch's Anuj Chopra talks to elusive Colonel Karuna, a former LTTE commander recently nominated to the Sri Lankan parliament and now topping the Tiger hit list.
By Anuj Chopra in Sri Lanka for ISN Security Watch
Once a battle-hardened, underground guerrilla, Vinayagamoorthi Muralitharan, more popularly known by his nom de guerre Colonel Karuna Amman, eastern commander of the Liberation Tigers of Tamil Eelam (LTTE), now rubs shoulders with MPs as a part of Sri Lanka's political mainstream.
The erstwhile Eastern LTTE commander was appointed as a member of parliament, supported by the ruling United People's Freedom Alliance led by President Mahinda Rajapakse.
At one point, he was LTTE's commander for the Eastern Province, a favorite of LTTE chief Velupillai Prabhakaran, and effectively number two in the Tamil Tiger military organization. But in 2004, he broke ranks with the LTTE, citing differences with Prabhakaran, and formed a mainstream political party called the Tamil Makkal Viduthalai Pulikkal (TMVP).
After defecting, he began fighting alongside government forces against the Tigers. His fighters joined the Sri Lankan government in its offensive against the rebels and helped the security forces to recapture parts of the eastern region from them.
In an exclusive three-hour interview at an undisclosed location with ISN Security Watch, Colonel Karuna spoke about everything from his reasons for breaking ranks with the LTTE ("I want to liberate our people - the Tamils - from the hands of the liberators") to his political ambitions ("I am in the race to convert a bullet to a ballet") to why he still maintains his private army ("I'm on the top of LTTE's hit list.")
The interview with the reclusive renegade Tiger was arranged through a set of intermediaries. The ISN correspondent was blindfolded by Karuna's personal body guard and driven to a plush resort in a village abutting Colombo.
From renegade to lawmaker
"Tamil people can now have the faith of solving their own problems through parliamentary democracy. We should forget the bitter past experiences and work to win the trust of the Tamils," Colonel Karuna told the Sri Lankan Parliament as he was nominated as an MP this week.
Talks of democracy might be an anachronism for a fierce guerrilla fighter who once inspired fear in the hearts of Sri Lankan army soldiers, but Colonel Karuna says his path is akin to the Maoists of Nepal.
"No one believed they would lay down arms. No one believed I would either. But I did," he says, lounging on a chair in a crisp stripped shirt, looking every bit the lawmaker as opposed to the guerrilla commander. "Here I am."
Karuna was appointed to the 225-member parliament to fill the vacancy of a lawmaker who quit recently to contest local polls.
But his appointment as MP has already triggered controversy.
The Sinhala nationalist Janata Vimukthi Peramuna party (JVP) has challenged his appointment in the Supreme Court, arguing the vacancy he took up belongs to an MP of their political outfit.
Moreover, human rights group Amnesty International has strongly criticized Colonel Karuna's appointment, accusing him crimes against humanity, including torture and the use of child soldiers.
Colonel Karuna, however, seems undeterred by such allegations.
Betrayal weakens Tigers?
Colonel Karuna alleges that the LTTE lost 70 percent of its fighting capacity after his group parted ways with the Tigers.
"I broke away with 6,000 cadres; 4,000 of them were battle-hardened guerrilla fighters," he told ISN Security Watch. "The LTTE recruited most of their suicide cadres from the east. Moreover, my group had the potential to launch offensive attacks."
Colonel Karuna refused to share the specifics of his current military collaborations with the Sri Lankan army. However, the Sri Lankan government has made some unprecedented gains against the Tigers in recent months, in large part because of his support. His fighters joined the Sri Lankan government in its offensive against the rebels and helped the security forces to recapture the eastern region from the Tigers last year. In the Wanni battle zone, he is believed to have shared intelligence with the Sri Lankan army about Tiger hideouts.
A military commander posted in Jaffna told ISN Security Watch that he eliminated several hundred LTTE infiltrators in government-controlled Jaffna region after he was tipped off by Karuna.
"In the current fighting in the Wanni, you notice the LTTE are only launching defensive attacks. They don't have the potential to launch offensive attacks," Karuna added. "That's why they are losing."
"Liberated from the liberators"
Karuna says he joined the ranks of the LTTE in 1983 because he believed the "war against Sinhala hegemony" was a just one.
Over the last two decades, he says the LTTE has been able to sustain itself as the world's longest running insurgency because Prabhakaran directed his efforts primarily toward building up the military.
"He built a military office of the Tigers in Tamil Nadu in 1983. He bought books on military hardware and armaments, and appointed translators to translate them into Tamil. He dedicated his efforts to building ground cadres, a naval wing, and later, the aerial wing. Cadres were sent to the middle east and south east Asia for training with other rebel groups," Karuna said.
"The LTTE's military capacity was not built up over night. It took many years of sustained effort."
Over the years, Karuna said, he was dismayed to see Prabhakaran was ignoring the interests of the eastern Tamil people, and that angered him tremendously. It was the main reason for his break with the Tigers.
He vehemently denies the LTTE allegation that his real reason for betraying the Tigers was because its intelligence wing was closing in on him for corruption and violation of the LTTE code of conduct.
At the moment, the Tigers are at their weakest and on the cusp of defeat, if Karuna is to be believed.
"The Sri Lankan government cannot afford to call a ceasefire," he says. "He [Prabhakaran] has to be crushed. You cannot trust that man."
Karuna alleges that Prabhakaran intentionally dragged out peace talks so that the rebels could use the cessation in hostilities to re-arm for further combat. "This is a battle to liberate the Tamil people from the liberators," Karuna said.
In the recent fighting in South Ossetia, Karuna says, the international community insisted the civilian population be given safe passage; until then the warring factions should not exchange fire.
"Why is the international community quiet about Sri Lanka?" he asked. "200,000 Tamils are trapped close to Kilinochchi, trapped by Prabhakaran and used as human shields. If he were a true liberator of Tamils, he would let them go. He must be pressured to give the civilians safe passage."
Several military analysts say that even if Kilinochchi falls, the Tigers will recede to the jungles, and a low-level insurgency will continue to simmer in Sri Lanka.
Karuna doesn't agree.
"War depends on territory," he says. "From the jungle, they can only manage hit-and-run attacks, but that will hardly leave a dent. The LTTE will be crushed once you push them out of their strongholds."
External forces speculation
When Colonel Karuna turned renegade in 2004, it seemed unlikely that he could have challenged Prabhakaran to this extent without some assurances from powerful patrons. Few Tiger dissidents have survived Prabhakaran's wrath in the past. There was even speculation that external forces - RAW (Research and Analysis Wing, India's most powerful intelligence agency) or the CIA - might be behind Karuna's rebellion.
When asked about this, Karuna smiled knowingly. "Wouldn't I be sitting in America or India if they had helped me? I live in virtual hiding because I am on top of the LTTE's hit list."
Human rights violations
Colonel Karuna was the LTTE head of the eastern province in 1990, when 600 unarmed police officers who surrendered to his group were subsequently massacred.
To this allegation, he shrugs, "I wasn't present in Batticaloa, but in Jaffna at that time." He says he isn't aware who was behind that massacre.
When Colonel Karuna was part of the LTTE, he was also implicated in the massacre of Muslims, including the Kattankudy and Erovar massacres in the eastern province. According to Sri Lankan military intelligence sources, "Karuna was not in the eastern province but in the Wanni during the time of the attacks on Kattankudy and Eravur Muslims. He was, however, intercepted giving orders to his cadres in the east in relation to various activities."
Even now, after laying down arms, he is accused of forming death squads to muzzle journalists and silence those who oppose his point of view and of being involved in the disappearances of civilians. UNICEF and Human Rights Watch also accuse him of recruiting child soldiers.
"Return to War: Human Rights Under Siege," a report on the human rights abuses of the current Sri Lankan government, accuses Colonel Karuna of human rights violations with the aide of the Sri Lankan government.
"The Sri Lankan government has failed to take action against the abusive Karuna group, a Tamil armed group under the leadership of V. Muralitharan that split from the LTTE in 2004 and now cooperates with Sri Lankan security forces in their common fight against the LTTE. With the LTTE's loss of territories in the east, the Karuna group has exerted de facto authority in the districts of Ampara, Trincomalee, and Batticaloa. The group also expanded its operations in the northern Vavuniya district, engaging in extortion and abductions," the report says.
Karuna has categorically denied these allegations, claiming that the LTTE is trying to discredit him.
"I have given arms to only a few cadres - 200 or 300 - for our own protection," he said. "LTTE infiltrators in the eastern province are waging a campaign to wipe out TMVP cadres. We need to protect ourselves."
While with the LTTE, he says he was involved in recruiting child soldiers, but denies his continued involvement.
"We just disbanded an army of 6,000 cadres. Why would we now engage in recruiting children? That's an absurd allegation," he said.
But he doesn't deny that some of his cadres, used to an ominous gun culture for two decades, could be involved in some violations.
"Fighting is all they have seen for two decades. It will take some time for their thinking to change," he said. "A lot of them still don't have jobs. We are trying to integrate them into the Sri Lankan defense forces. But morally, Tamils of the east hate war. We've suffered enough."
Karuna was arrested in November 2007 in the United Kingdom and served half of a nine-month term for entering on a forged diplomatic passport. He was released on 3 July 2008.
There were speculations that his passport and visa were arranged for him by the Sri Lankan defense secretary.
Karuna would not comment on who arranged the documents for him to ISN Security Watch. He said he entered the UK on forged documents because of "security reasons" to be with his wife and children.
Anuj Chopra is a freelance journalist whose stories have appeared in The Christian Science Monitor and The San Francisco Chronicle, among other publications. Chopra lives just outside Mumbai in India and is the 2005 recipient of the CNN Young Journalist Award in the print category.
Iron Law of Economic Ignorance
"The worse and more widespread the ignorance of the causal connections between human actions, the higher the level of political intervention in society. The more one understands the causal connections between human actions and grasps the effects of political interventions, the more one opposes the more "obvious" and "easy" policies"
http://mises.org/story/3135
Political Power and Economic Ignorance
http://mises.org/story/3135
Daily Article by Jeremie T.A. Rostan | Posted on 10/9/2008
Georges Bush's recent speech in defense of his bailout plan was quite a tour de force. Indeed, it managed to explain the pending recession of the US economy by a previous situation of "easy credit" without mentioning the monstrously inflationist policy of the Federal Reserve — which reached its climax in 2003 and 2004, when it lent dollars at a negative short-term interest rate, and resulted in the creation of more dollars in a seven-year period (2000–2007) than had been created cumulatively in the two centuries since the founding of the United States.
According to the 43rd President, the fault rests entirely on "foreign investors" willing to profit from the competitiveness of the US economy. Logically, the lengthening of the structure of production brought by net investment should have resulted in aggregate profits and economic growth — but not this time. For some reason (which the president deems useless to explain) low interest rates were a curse that somehow led all financial entrepreneurs to dissipate their capital in hopeless ventures and loans.
Because of fractional-reserves policies and the de facto international dollar standard, even the billions of units of the US currency spent abroad are duplicated and sent back to America, where they encourage credit. But George Bush did not mention that.
Finally, he concluded that
the Federal Reserve should have its powers extended far beyond their current scope, notably over all financial enterprises, not just banks, and
a massive bailout of taxed funds was necessary — as an exceptional intervention and some sort of public investment which would help the economy recover and be paid afterwards.
Not all "experts" agreed. One commentator on CNN even acknowledged that the impending recession was a consequence of Alan Greenspan's "lax money policy."
Nevertheless, if some grasped the connection between these present effects and that past cause, few of them seem to have grasped that resorting to the same policies at present will necessarily have the same consequences in the future: to delay the recession, and worsen it.
Is there anything we can learn from such demonstrations of ignorance?
Economic knowledge and political ignorance
As Carl Menger explained, men's knowledge of the causal connections between natural phenomena determines the extent to which they control their own lives.[1] The outcome of their actions is only partly the product of individuals. It also depends on other factors that they do not know how to (or do not have the power to) employ as means towards their ends. Indeed, their knowledge only determines the extent to which men control their own lives theoretically. Practically, their actual control depends on the capital they have accumulated.
The causal connection between the increasing employment of higher-order goods and the increasing quantity (or quality) of 1st-order goods produced lies in the fact that the first increases the number of factors of a given causal process of production that have goods-character — i.e., extends to less proximate ones our power to direct its various factors to the satisfaction of our needs.[2]
Conversely, men's ignorance of the causal connections between natural phenomena — as well as their preference, ceteris paribus, for present satisfactions, which limits their saving — determines the extent to which they do not control their own lives, but rather depend for the satisfaction of their needs on side causes present in their environment.
We can extend this Mengerian analysis and say that men's ignorance of the causal connections between human actions determines the extent to which their control over their own lives and striving towards its improvement is limited by the present side effects of past political interventions.
Indeed, the less they grasp their future consequences, the more they tend to favor policies that seem to permit the immediate attainment of their ends — through coercion.
There is a TV commercial that says, "Imagine if firefighters ruled the world." We see Congress, packed with firefighters, one proposing policies, the others supporting them unanimously. It seems so obvious!
"Do you want more schools?"
"Yeah!"
"Do you want health care for everyone?"
"Yeah!"
It only takes thirty seconds. Then the chief concludes joyfully, "That's the easiest job I have ever had…"
Is it not that obvious and that easy? Do we want jobs for everyone? Then let's make it illegal to fire employees. Do we want everyone to be rich? Then let's distribute wealth…
Yes, we may in fact all share the same goals, in the sense that Ludwig von Mises pointed out: interventionists and partisans of laissez-faire seek the same general and "obvious" ends. But as the author of Human Action noted, the laissez-fairists do not advocate the same means, because the policies promoted by the interventionists overlook two things:
the causes of the evils they pretend to fight
their own future consequences
The causes of the present evils are the effects of similar interventionist policies of the past. The future consequences of present interventionist policies are similar to (but worse than) the present evils they fight.
Still, so complete a lack of understanding is all too common — not only on the part of "the man in the street," but also among those who pretend to teach economics.
You will not believe what I found in an "Advanced Placement" economics test, only a few days ago.
The following is number 7 of a series of "macroeconomics" multiple choice questions:[3]
To counteract a recession, the Federal Reserve should
raise the reserve requirement and the discount rate
sell securities on the open market and raise the discount rate
sell securities on the open market and lower the discount rate
buy securities on the open market and raise the discount rate
buy securities on the open market and lower the discount rate
And the answer is supposedly E.
Notice that the question is not, "Should the Federal Reserve do anything, and if so, what?"
No, the question assumes that the Federal Reserve should do something.
What this question really asks is, what intervention of the Fed will have the immediate effect of stopping a recession? It does not ask, what are the causes of recessions? It does not ask, what will be the long-term effects of the Fed's actions?
From such a perspective, it does seem obvious that aggregate losses today mean diminishing economic activity, compared to the previous period, and a policy of inflation that pumps into the economy the equivalent of the aggregate loss will permit us to maintain as high a level of economic activity as before. And such a policy is "easy": the Federal Reserve only has to turn out more green bills.
But this will only "counteract the recession" and maintain the economic activity, immediately — i.e., it will not maintain it at all. On the contrary, it will result in a new recession — more distant in time, but worse than the present one — which a similar policy originated in the past.
Conclusion: The Iron Law of Economic Ignorance
The worse and more widespread the ignorance of the causal connections between human actions, the higher the level of political intervention in society. The more one understands the causal connections between human actions and grasps the effects of political interventions, the more one opposes the more "obvious" and "easy" policies.
$24 $20
George Bush was certainly the spokesman of a more common attitude when he argued that, even if he opposed interventionism "as a general rule," he favored (as an exception) a massive taxation and inflation plan, because of exceptional circumstances. This only proves a lack of understanding of the fact that a causal connection is a necessity — even in "abnormal" conditions. Once we understand that causes of the same type have always and everywhere the same type of effects, we have to extend to all cases the praxeological principle according to which more of the same type of intervention only delays and worsens the evils it supposedly counteracts.
There is a sad irony to economic ignorance — on top of its disastrous effects. Let's call it the Iron Law of Economic Ignorance: the value of economic knowledge increases with its scarcity. That is, economic knowledge gets more valuable as the economy worsens; but the economy worsens according to the level of political intervention — which is a function of economic ignorance.
Jérémie T.A. Rostan is "agrege de philosophie." He teaches philosophy in San Francisco, California. He wrote a study guide to Carl Menger's Principles of Economics, prepared in 2008 for distribution through Mises.org. Comment on the blog.
Daily Article by Jeremie T.A. Rostan | Posted on 10/9/2008
Georges Bush's recent speech in defense of his bailout plan was quite a tour de force. Indeed, it managed to explain the pending recession of the US economy by a previous situation of "easy credit" without mentioning the monstrously inflationist policy of the Federal Reserve — which reached its climax in 2003 and 2004, when it lent dollars at a negative short-term interest rate, and resulted in the creation of more dollars in a seven-year period (2000–2007) than had been created cumulatively in the two centuries since the founding of the United States.
According to the 43rd President, the fault rests entirely on "foreign investors" willing to profit from the competitiveness of the US economy. Logically, the lengthening of the structure of production brought by net investment should have resulted in aggregate profits and economic growth — but not this time. For some reason (which the president deems useless to explain) low interest rates were a curse that somehow led all financial entrepreneurs to dissipate their capital in hopeless ventures and loans.
Because of fractional-reserves policies and the de facto international dollar standard, even the billions of units of the US currency spent abroad are duplicated and sent back to America, where they encourage credit. But George Bush did not mention that.
Finally, he concluded that
the Federal Reserve should have its powers extended far beyond their current scope, notably over all financial enterprises, not just banks, and
a massive bailout of taxed funds was necessary — as an exceptional intervention and some sort of public investment which would help the economy recover and be paid afterwards.
Not all "experts" agreed. One commentator on CNN even acknowledged that the impending recession was a consequence of Alan Greenspan's "lax money policy."
Nevertheless, if some grasped the connection between these present effects and that past cause, few of them seem to have grasped that resorting to the same policies at present will necessarily have the same consequences in the future: to delay the recession, and worsen it.
Is there anything we can learn from such demonstrations of ignorance?
Economic knowledge and political ignorance
As Carl Menger explained, men's knowledge of the causal connections between natural phenomena determines the extent to which they control their own lives.[1] The outcome of their actions is only partly the product of individuals. It also depends on other factors that they do not know how to (or do not have the power to) employ as means towards their ends. Indeed, their knowledge only determines the extent to which men control their own lives theoretically. Practically, their actual control depends on the capital they have accumulated.
The causal connection between the increasing employment of higher-order goods and the increasing quantity (or quality) of 1st-order goods produced lies in the fact that the first increases the number of factors of a given causal process of production that have goods-character — i.e., extends to less proximate ones our power to direct its various factors to the satisfaction of our needs.[2]
Conversely, men's ignorance of the causal connections between natural phenomena — as well as their preference, ceteris paribus, for present satisfactions, which limits their saving — determines the extent to which they do not control their own lives, but rather depend for the satisfaction of their needs on side causes present in their environment.
We can extend this Mengerian analysis and say that men's ignorance of the causal connections between human actions determines the extent to which their control over their own lives and striving towards its improvement is limited by the present side effects of past political interventions.
Indeed, the less they grasp their future consequences, the more they tend to favor policies that seem to permit the immediate attainment of their ends — through coercion.
There is a TV commercial that says, "Imagine if firefighters ruled the world." We see Congress, packed with firefighters, one proposing policies, the others supporting them unanimously. It seems so obvious!
"Do you want more schools?"
"Yeah!"
"Do you want health care for everyone?"
"Yeah!"
It only takes thirty seconds. Then the chief concludes joyfully, "That's the easiest job I have ever had…"
Is it not that obvious and that easy? Do we want jobs for everyone? Then let's make it illegal to fire employees. Do we want everyone to be rich? Then let's distribute wealth…
Yes, we may in fact all share the same goals, in the sense that Ludwig von Mises pointed out: interventionists and partisans of laissez-faire seek the same general and "obvious" ends. But as the author of Human Action noted, the laissez-fairists do not advocate the same means, because the policies promoted by the interventionists overlook two things:
the causes of the evils they pretend to fight
their own future consequences
The causes of the present evils are the effects of similar interventionist policies of the past. The future consequences of present interventionist policies are similar to (but worse than) the present evils they fight.
Still, so complete a lack of understanding is all too common — not only on the part of "the man in the street," but also among those who pretend to teach economics.
You will not believe what I found in an "Advanced Placement" economics test, only a few days ago.
The following is number 7 of a series of "macroeconomics" multiple choice questions:[3]
To counteract a recession, the Federal Reserve should
raise the reserve requirement and the discount rate
sell securities on the open market and raise the discount rate
sell securities on the open market and lower the discount rate
buy securities on the open market and raise the discount rate
buy securities on the open market and lower the discount rate
And the answer is supposedly E.
Notice that the question is not, "Should the Federal Reserve do anything, and if so, what?"
No, the question assumes that the Federal Reserve should do something.
What this question really asks is, what intervention of the Fed will have the immediate effect of stopping a recession? It does not ask, what are the causes of recessions? It does not ask, what will be the long-term effects of the Fed's actions?
From such a perspective, it does seem obvious that aggregate losses today mean diminishing economic activity, compared to the previous period, and a policy of inflation that pumps into the economy the equivalent of the aggregate loss will permit us to maintain as high a level of economic activity as before. And such a policy is "easy": the Federal Reserve only has to turn out more green bills.
But this will only "counteract the recession" and maintain the economic activity, immediately — i.e., it will not maintain it at all. On the contrary, it will result in a new recession — more distant in time, but worse than the present one — which a similar policy originated in the past.
Conclusion: The Iron Law of Economic Ignorance
The worse and more widespread the ignorance of the causal connections between human actions, the higher the level of political intervention in society. The more one understands the causal connections between human actions and grasps the effects of political interventions, the more one opposes the more "obvious" and "easy" policies.
$24 $20
George Bush was certainly the spokesman of a more common attitude when he argued that, even if he opposed interventionism "as a general rule," he favored (as an exception) a massive taxation and inflation plan, because of exceptional circumstances. This only proves a lack of understanding of the fact that a causal connection is a necessity — even in "abnormal" conditions. Once we understand that causes of the same type have always and everywhere the same type of effects, we have to extend to all cases the praxeological principle according to which more of the same type of intervention only delays and worsens the evils it supposedly counteracts.
There is a sad irony to economic ignorance — on top of its disastrous effects. Let's call it the Iron Law of Economic Ignorance: the value of economic knowledge increases with its scarcity. That is, economic knowledge gets more valuable as the economy worsens; but the economy worsens according to the level of political intervention — which is a function of economic ignorance.
Jérémie T.A. Rostan is "agrege de philosophie." He teaches philosophy in San Francisco, California. He wrote a study guide to Carl Menger's Principles of Economics, prepared in 2008 for distribution through Mises.org. Comment on the blog.
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RENEWED SUPPORT FOR SRI LANKAN TAMIL CAUSE IN TAMIL NADU
B.RAMAN
There have been signs of renewed support for the cause of the Sri Lankan Tamils across the political spectrum in Tamil Nadu, except from the Congress (I), which continues to adopt an ambivalent attitude. This support has come not only from the traditional supporters of the Liberation Tigers of Tamil Eelam (LTTE), but also from other parties such as the ruling Dravida Munnetra Kazhagam (DMK) of M.Karunanidhi and J.Jayalalitha of the Anna DMK, the main opposition party. Even the Tamil Nadu branch of the Communist Party of India (CPI) has come out in support of the Sri Lankan Tamils.
2.Karunanidhi, who is generally not given to using strong or emotional language, has given emotional expression to his anguish over what he perceives as the continuing policy of the Government of Mahinda Rajapaksa of suppressing the Tamils. He has conveyed his concerns to Prime Minister Manmohan Singh and stressed upon him the need to take up the matter strongly with Rajapaksa in order to stress upon him the importance of finding a political solution to the problems of the Tamils. He has convened an all-party meeting in Chennai on October 14,2008, to work out a common political approach to the Government of India.Jayalalitha has expressed her support to the right of self-determination of the Sri Lankan Tamils, but made it clear at the same time that her support to the Tamil cause should not be misconstrued to mean any change in her policy of strong opposition to the LTTE as a terrorist organisation.
3. It would be incorrect to view this renewed support as dictated by electoral considerations in view of the elections to the Lok Sabha which are expected in the next few months. Despite the increasing concern in Tamil Nadu over what is perceived as the anti-Tamil policies of the Rajapaksa Government, the Sri Lankan Tamil issue is unlikely to play any role in influencing the voters. Economic and internal security issues are likely to play a predominant role in the elections .
4. It would be equally incorrect for the LTTE leadership to view this as indicating a softening of the hostility to the LTTE after its role in the assassination of Rajiv Gandhi in May,1991. The attitude towards an LTTE led by Prabhakaran continues to be as negative as it has always been since 1991. Any wishful-thinking by Prabhakaran that he and others who were responsible for the assassination of Rajiv Gandhi are likely to be rehabilitated in the eyes of vast sections of the people of Tamil Nadu, who are now hostile to them, will be belied. All political leaders except some die-hard supporters of the LTTE, who have taken up the cause of the Sri Lankan Tamils with the Government of India, have made it clear that their support is for the cause of the Sri Lankan Tamils and not for the LTTE headed by Prabhakaran.
5. The LTTE has been gratified by this renewed support for the Tamil cause and has been playing it up. However, there is no evidence to show that either the LTTE or its supporters in Tamil Nadu, who are in a small minority, had any role in this renewed support. This support has been triggered off spontaneously by heightened concerns over the policies of the Rajapaksa Government and by the statements of some officials serving under him such as Lt.Gen.Sarath Fonseka, the Chief of the Sri Lankan Army, Gothbaya Rajapakse, his brother, who is also the Defence Secretary, and Rohitha Bogollagama, the Foreign Minister, as well as by sorrow over what is perceived in Tamil Nadu as the double-faced policy of the Government of India on the plight of the Sri Lankan Tamils and over the lack of interest shown by Manmohan Singh in taking up the issue more vigorously with the Rajapaksa Government.
6. The continuing use of indiscriminate air strikes by the Rajapaksa Government against the Tamil civilian population in order to intimidate it into stop supporting the LTTE has come in for strong criticism. The closing of the doors by it for a political solution reached through talks with the LTTE has added to the anger in Tamil Nadu against the Rajapaksa Government. As the Sri Lankan Army presses its offensive to re-capture the territory still under the control of the LTTE in the Northern Province, increasingly disturbing statements have been coming from officials such as Fonseka highlighting the rights of the Sinhalese majority and playing down the legitimate rights of the Tamil minority. All these developments have caused concern in Tamil Nadu that under the pretext of crushing the LTTE as a terrorist organisation, the Rajapaksa Government, whose policies are seen as largely influenced by Sinhalese hawks, is seeking to crush the Tamils as a community by exploiting the favourable ground situation and the lack of interest in the international community in the developments in Sri Lanka. Very few in Tamil Nadu take seriously the assurances of Rajapaksa that after neutralising the LTTE as a terrorist organisation, his Government will initiate political measures for meeting the legitimate aspirations of the Tamil people.
7. At the same time, there has been a perceptible disenchantment in Tamil Nadu over what is seen as the lack of interest shown by Manmohan Singh in the problems of the Sri Lankan Tamils. He is being compared unfavourably with Indira Gandhi and Rajiv Gandhi, who took a keen interest in the problems of the Tamils and did not hesitate to take up the matter strongly with the Governments then in power in Colombo. This disenchantment has turned into shock following reports of two Indian radar technicians being injured when two planes of the LTTE's air wing bombed on September 9, 2008, a Sri Lankan military base in Vavuniya, which has been co-ordinating the military operations against the LTTE.
8. The Government of India had repeatedly assured the Government of Tamil Nadu that it would give only non-lethal military equipment to the Sri Lankan Armed Forces, which could not be used in offensive operations against the LTTE. It had justified its supply of radars to the Sri Lankan Air Force on the ground that these radars were meant for use to protect strategic targets in Colombo against LTTE air strikes. There was initial opposition in Tamil Nadu's political circles to the supply of even the radars, but ultimately they were reconciled to it.
9. The information that the radars supplied by the Government of India were actually being used in the frontline areas and that two Indian technicians were helping the SLAF in their maintenance added to the concerns in Tamil Nadu and created a suspicion that New Delhi was not telling the truth to the Government of Tamil Nadu about the extent of the Indian assistance to the Sri Lankan Armed Forces in their operations against the LTTE.
10. The fact that despite the entreaties of Karunanidhi, who has been a loyal supporter of the Manmohan Singh Government, the Prime Minister did not directly take up the concerns of the people and the political leaders of Tamil Nadu with the Rajapaksa Government and that he left it to M.K.Narayanan, his National Security Adviser, to handle the matter has further damaged the image of Manmohan Singh in the eyes of sections of the political class of Tamil Nadu.
11. The revival of support for the cause of the Sri Lankan Tamils is still largely confined to the political class. This has not yet found vigorous articulation among large sections of the public. It would be unwise to interpret this as indicating that public support for the Sri Lankan Tamil cause remains limited and can be managed.
12. Any fresh humanitarian disaster consequent upon the military offensive in the Northern Province could create in Tamil Nadu a situation similar to what had prevailed in the 1980s when Tamil Nadu became a rear base for supporting the struggle of the Sri Lankan Tamils against the Sinhalese. If this happens, any success of the Sri Lankan Army in its current operations to crush the LTTE might see only the end of one phase of the Tamil struggle and the beginning of another.
13. It is important for the Government of India to show a more visible and vigorous interest in working for ending at least the ruthless air strikes against the Tamils and for ensuring that the Tamil cause is not lost sight of. The Sri Lankan Government has every right to press ahead with its counter-insurgency operations in order to restore the Government writ in the areas now under the control of the LTTE, but its use of air strikes and its perceived indifference to the legitimate concerns of India and other members of the international community should not be accepted. (10-10-08)
(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: seventyone2@gmail.com )
There have been signs of renewed support for the cause of the Sri Lankan Tamils across the political spectrum in Tamil Nadu, except from the Congress (I), which continues to adopt an ambivalent attitude. This support has come not only from the traditional supporters of the Liberation Tigers of Tamil Eelam (LTTE), but also from other parties such as the ruling Dravida Munnetra Kazhagam (DMK) of M.Karunanidhi and J.Jayalalitha of the Anna DMK, the main opposition party. Even the Tamil Nadu branch of the Communist Party of India (CPI) has come out in support of the Sri Lankan Tamils.
2.Karunanidhi, who is generally not given to using strong or emotional language, has given emotional expression to his anguish over what he perceives as the continuing policy of the Government of Mahinda Rajapaksa of suppressing the Tamils. He has conveyed his concerns to Prime Minister Manmohan Singh and stressed upon him the need to take up the matter strongly with Rajapaksa in order to stress upon him the importance of finding a political solution to the problems of the Tamils. He has convened an all-party meeting in Chennai on October 14,2008, to work out a common political approach to the Government of India.Jayalalitha has expressed her support to the right of self-determination of the Sri Lankan Tamils, but made it clear at the same time that her support to the Tamil cause should not be misconstrued to mean any change in her policy of strong opposition to the LTTE as a terrorist organisation.
3. It would be incorrect to view this renewed support as dictated by electoral considerations in view of the elections to the Lok Sabha which are expected in the next few months. Despite the increasing concern in Tamil Nadu over what is perceived as the anti-Tamil policies of the Rajapaksa Government, the Sri Lankan Tamil issue is unlikely to play any role in influencing the voters. Economic and internal security issues are likely to play a predominant role in the elections .
4. It would be equally incorrect for the LTTE leadership to view this as indicating a softening of the hostility to the LTTE after its role in the assassination of Rajiv Gandhi in May,1991. The attitude towards an LTTE led by Prabhakaran continues to be as negative as it has always been since 1991. Any wishful-thinking by Prabhakaran that he and others who were responsible for the assassination of Rajiv Gandhi are likely to be rehabilitated in the eyes of vast sections of the people of Tamil Nadu, who are now hostile to them, will be belied. All political leaders except some die-hard supporters of the LTTE, who have taken up the cause of the Sri Lankan Tamils with the Government of India, have made it clear that their support is for the cause of the Sri Lankan Tamils and not for the LTTE headed by Prabhakaran.
5. The LTTE has been gratified by this renewed support for the Tamil cause and has been playing it up. However, there is no evidence to show that either the LTTE or its supporters in Tamil Nadu, who are in a small minority, had any role in this renewed support. This support has been triggered off spontaneously by heightened concerns over the policies of the Rajapaksa Government and by the statements of some officials serving under him such as Lt.Gen.Sarath Fonseka, the Chief of the Sri Lankan Army, Gothbaya Rajapakse, his brother, who is also the Defence Secretary, and Rohitha Bogollagama, the Foreign Minister, as well as by sorrow over what is perceived in Tamil Nadu as the double-faced policy of the Government of India on the plight of the Sri Lankan Tamils and over the lack of interest shown by Manmohan Singh in taking up the issue more vigorously with the Rajapaksa Government.
6. The continuing use of indiscriminate air strikes by the Rajapaksa Government against the Tamil civilian population in order to intimidate it into stop supporting the LTTE has come in for strong criticism. The closing of the doors by it for a political solution reached through talks with the LTTE has added to the anger in Tamil Nadu against the Rajapaksa Government. As the Sri Lankan Army presses its offensive to re-capture the territory still under the control of the LTTE in the Northern Province, increasingly disturbing statements have been coming from officials such as Fonseka highlighting the rights of the Sinhalese majority and playing down the legitimate rights of the Tamil minority. All these developments have caused concern in Tamil Nadu that under the pretext of crushing the LTTE as a terrorist organisation, the Rajapaksa Government, whose policies are seen as largely influenced by Sinhalese hawks, is seeking to crush the Tamils as a community by exploiting the favourable ground situation and the lack of interest in the international community in the developments in Sri Lanka. Very few in Tamil Nadu take seriously the assurances of Rajapaksa that after neutralising the LTTE as a terrorist organisation, his Government will initiate political measures for meeting the legitimate aspirations of the Tamil people.
7. At the same time, there has been a perceptible disenchantment in Tamil Nadu over what is seen as the lack of interest shown by Manmohan Singh in the problems of the Sri Lankan Tamils. He is being compared unfavourably with Indira Gandhi and Rajiv Gandhi, who took a keen interest in the problems of the Tamils and did not hesitate to take up the matter strongly with the Governments then in power in Colombo. This disenchantment has turned into shock following reports of two Indian radar technicians being injured when two planes of the LTTE's air wing bombed on September 9, 2008, a Sri Lankan military base in Vavuniya, which has been co-ordinating the military operations against the LTTE.
8. The Government of India had repeatedly assured the Government of Tamil Nadu that it would give only non-lethal military equipment to the Sri Lankan Armed Forces, which could not be used in offensive operations against the LTTE. It had justified its supply of radars to the Sri Lankan Air Force on the ground that these radars were meant for use to protect strategic targets in Colombo against LTTE air strikes. There was initial opposition in Tamil Nadu's political circles to the supply of even the radars, but ultimately they were reconciled to it.
9. The information that the radars supplied by the Government of India were actually being used in the frontline areas and that two Indian technicians were helping the SLAF in their maintenance added to the concerns in Tamil Nadu and created a suspicion that New Delhi was not telling the truth to the Government of Tamil Nadu about the extent of the Indian assistance to the Sri Lankan Armed Forces in their operations against the LTTE.
10. The fact that despite the entreaties of Karunanidhi, who has been a loyal supporter of the Manmohan Singh Government, the Prime Minister did not directly take up the concerns of the people and the political leaders of Tamil Nadu with the Rajapaksa Government and that he left it to M.K.Narayanan, his National Security Adviser, to handle the matter has further damaged the image of Manmohan Singh in the eyes of sections of the political class of Tamil Nadu.
11. The revival of support for the cause of the Sri Lankan Tamils is still largely confined to the political class. This has not yet found vigorous articulation among large sections of the public. It would be unwise to interpret this as indicating that public support for the Sri Lankan Tamil cause remains limited and can be managed.
12. Any fresh humanitarian disaster consequent upon the military offensive in the Northern Province could create in Tamil Nadu a situation similar to what had prevailed in the 1980s when Tamil Nadu became a rear base for supporting the struggle of the Sri Lankan Tamils against the Sinhalese. If this happens, any success of the Sri Lankan Army in its current operations to crush the LTTE might see only the end of one phase of the Tamil struggle and the beginning of another.
13. It is important for the Government of India to show a more visible and vigorous interest in working for ending at least the ruthless air strikes against the Tamils and for ensuring that the Tamil cause is not lost sight of. The Sri Lankan Government has every right to press ahead with its counter-insurgency operations in order to restore the Government writ in the areas now under the control of the LTTE, but its use of air strikes and its perceived indifference to the legitimate concerns of India and other members of the international community should not be accepted. (10-10-08)
(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: seventyone2@gmail.com )
Pak now the world's top suicide bomb death capital: CSM
Fri, Oct 10 01:05 PM
New York, Oct.10 (ANI): Pakistan has overtaken Iraq and Afghanistan in suicide-bomb deaths this year, its intelligence agency reports.
Suicide bomb attacks have spiked in Pakistan, from two in 2002 to a record 56 in 2007, according to the Institute for Conflict Management, based in New Delhi. As of August of this year, the country had seen 25 suicide-bomb attacks, ICM reports.
In a grim indicator of the rise in attacks, according to Pakistan's intelligence agency, this year Pakistan has overtaken Iraq in suicide-bomb deaths.
It counted 28 suicide bombings in Pakistan that killed more than 471 people in the first eight months of this year. By comparison Iraq saw 42 such attacks and 463 deaths; Afghanistan, 36 incidents and 436 casualties.
According to the Christian Science Monitor (CSM), Thursday's suicide bomb attack at the headquarters of the Anti-terrorism Squad of the Islamabad police force, has added to the rise in bomb attacks in Pakistan.
The CSM quotes Hassan Askari Rizvi, former professor of Pakistan Studies at Columbia University, as saying: "The message [from Thursday's attack] couldn't have been clearer. The militants want to show that they have the capacity to hit Pakistani institutions - even those ones trusted with the responsibility of protecting the rest."
According to the CSM, Pakistan needs more than political will to deal with these attacks.
"Pakistan will need to improve its counterterrorism abilities. Most of the time there is no claim of responsibility, and investigations don't uncover much. Unless we have concrete information on where this is coming from and why, it will be a hard fight to fight," it quotes Khalid Rahman of the Institute of Policy Studies in Islamabad, as saying. (ANI)
New York, Oct.10 (ANI): Pakistan has overtaken Iraq and Afghanistan in suicide-bomb deaths this year, its intelligence agency reports.
Suicide bomb attacks have spiked in Pakistan, from two in 2002 to a record 56 in 2007, according to the Institute for Conflict Management, based in New Delhi. As of August of this year, the country had seen 25 suicide-bomb attacks, ICM reports.
In a grim indicator of the rise in attacks, according to Pakistan's intelligence agency, this year Pakistan has overtaken Iraq in suicide-bomb deaths.
It counted 28 suicide bombings in Pakistan that killed more than 471 people in the first eight months of this year. By comparison Iraq saw 42 such attacks and 463 deaths; Afghanistan, 36 incidents and 436 casualties.
According to the Christian Science Monitor (CSM), Thursday's suicide bomb attack at the headquarters of the Anti-terrorism Squad of the Islamabad police force, has added to the rise in bomb attacks in Pakistan.
The CSM quotes Hassan Askari Rizvi, former professor of Pakistan Studies at Columbia University, as saying: "The message [from Thursday's attack] couldn't have been clearer. The militants want to show that they have the capacity to hit Pakistani institutions - even those ones trusted with the responsibility of protecting the rest."
According to the CSM, Pakistan needs more than political will to deal with these attacks.
"Pakistan will need to improve its counterterrorism abilities. Most of the time there is no claim of responsibility, and investigations don't uncover much. Unless we have concrete information on where this is coming from and why, it will be a hard fight to fight," it quotes Khalid Rahman of the Institute of Policy Studies in Islamabad, as saying. (ANI)
India to be Iran's Top Oil Customer
TEHRAN (FNA)- India will be the top Asian customer of oil from Iran in 2009 followed by China and Japan, according to a high-ranking NIOC official.
"We are negotiating with a few Indian companies for sales of crude oil in 2009," said Ali-Asghar Arshi, Managing Director of International Affairs for the National Iranian Oil Company (NIOC).
"Currently the leading customers of Iran's crude oil in Asia are Japan, China and India but in the upcoming year the top ranking will change to India, China and Japan," he added.
The oil official said the reason for India's jump to top ranking customer is an increase in demand for Iranian crude by the country, adding that the Indian government's energy strategy is to increase the capacity of India's refineries to enhance its energy security.
India has been trying for some years to enhance refinery capacity, and both public and private sectors in the country have increased investment in refineries.
Arshi noted that India employs a complicated refining system that is able to obtain the maximum output of gas and diesel fuel from crude oil, press tv reported.
Iran's top European customers for crude are Italy, France, Belgium, Greece and Spain.
Referring to Latin America, Arshi said Iran does not sell crude to the countries in the region but has recently participated in bids to sell crude oil to Chile and Uruguay.
Iran is also constructing oil reserve tanks that will enable the country to raise its storage capacity, as part of the country's long-term energy policy.
"We are negotiating with a few Indian companies for sales of crude oil in 2009," said Ali-Asghar Arshi, Managing Director of International Affairs for the National Iranian Oil Company (NIOC).
"Currently the leading customers of Iran's crude oil in Asia are Japan, China and India but in the upcoming year the top ranking will change to India, China and Japan," he added.
The oil official said the reason for India's jump to top ranking customer is an increase in demand for Iranian crude by the country, adding that the Indian government's energy strategy is to increase the capacity of India's refineries to enhance its energy security.
India has been trying for some years to enhance refinery capacity, and both public and private sectors in the country have increased investment in refineries.
Arshi noted that India employs a complicated refining system that is able to obtain the maximum output of gas and diesel fuel from crude oil, press tv reported.
Iran's top European customers for crude are Italy, France, Belgium, Greece and Spain.
Referring to Latin America, Arshi said Iran does not sell crude to the countries in the region but has recently participated in bids to sell crude oil to Chile and Uruguay.
Iran is also constructing oil reserve tanks that will enable the country to raise its storage capacity, as part of the country's long-term energy policy.
Is Pakistan’s war against militants India’s too?
Post a commentPosted by: Sanjeev Miglani
http://blogs.reuters.com/pakistan/2008/10/10/is-pakistans-war-against-militants-indias-too/
Time was when every time militants set off a bomb in Pakistan, India’s strategic establishment would turn around and say “we told you so”. This is what happens when you play with fire … jihad is a double-edged sword, they would say, pointing to Pakistan’s support for militants operating in Kashmir and elsewhere.
Not any more. When India’s opposition Hindu nationalist Bharatiya Janata Party – which has consistently advocated a tougher policy toward Pakistan – tells the government to be watchful of the fallout of the security and economic situation in Pakistan, then you know the ground is starting to shift.
“Pakistan is on the verge of an economic and political collapse,” party leader and former foreign minister Jaswant Singh said in remarks that seem to have escaped much public attention. “It is time we understood the influence and be prepared to face it.”
Former Indian High Commissioner to Britain Kuldip Nayar, who is from the opposite end of the political spectrum, made a similar point shortly after the bombing of Islamabad’s Marriott hotel.
“If ever Pakistan goes under, India’s first line of defence would collapse. The Taliban would have secured the launching pad to attack India’s values of democracy and liberalism which do not fit into their scheme of things,” he wrote in the Gulf News.
“Terrorism is the means, Talibalistan is the end. New Delhi and Islamabad should jointly fight against the menace,” Nayar, who has long campaigned for peace with Pakistan, said.
On Thursday, a suicide attacker struck again in a high-security part of Islamabad, this time on the police headquarters itself, underscoring the militants’ ability to strike at will anywhere across the nation.
“The grim truth is that Pakistan is becoming something alarmingly close to a failed state,” wrote Sumit Ganguly, director of research at the Center on American and Global Security at Indiana University, in a piece for the Washington Post. Pakistan, he said, faces an “existential crisis on its streets and in its courts, barracks and parliament”.
The world, led by the United States, must work to put the country back together again, he said. “If not, we will face a terrifying prospect: Pakistan’s collapse (slow or otherwise) into a full-blown failed state, armed with nuclear weapons, riven by ethnic tensions, infused with resentment and zealotry, with roving bands of Taliban sympathizers and bin Ladenists in its midst. ”
So is New Delhi ready to play ball? Given that India looms large over the Pakistani mind and its security/foreign policy has been predicated to meet the threat from its larger neighbour, one obvious way for Pakistan to be more at ease with itself would be to reduce tensions with New Delhi.
The Pakistan Policy Group, comprising independent, bipartisan American experts on U.S.-Pakistan relations, said in a report that while America couldn’t really impose normalcy between India and Pakistan, “it can continually point out both countries’ interests would be served - now more than ever - by building better relations because both face existential terrorist threats.”
This weekend Indian Prime Minister Manmohan Singh launches a rail link in Kashmir, which fueled much of the hostility between the two nations all these years and remains the main stumbling block to better ties.
Is this an opportunity for Singh to announce concessions? Pakistan’s Dawn, citing unspecified news reports, said that Singh was expected to announce important peace measures with Pakistan during the trip to Kashmir.
http://blogs.reuters.com/pakistan/2008/10/10/is-pakistans-war-against-militants-indias-too/
Time was when every time militants set off a bomb in Pakistan, India’s strategic establishment would turn around and say “we told you so”. This is what happens when you play with fire … jihad is a double-edged sword, they would say, pointing to Pakistan’s support for militants operating in Kashmir and elsewhere.
Not any more. When India’s opposition Hindu nationalist Bharatiya Janata Party – which has consistently advocated a tougher policy toward Pakistan – tells the government to be watchful of the fallout of the security and economic situation in Pakistan, then you know the ground is starting to shift.
“Pakistan is on the verge of an economic and political collapse,” party leader and former foreign minister Jaswant Singh said in remarks that seem to have escaped much public attention. “It is time we understood the influence and be prepared to face it.”
Former Indian High Commissioner to Britain Kuldip Nayar, who is from the opposite end of the political spectrum, made a similar point shortly after the bombing of Islamabad’s Marriott hotel.
“If ever Pakistan goes under, India’s first line of defence would collapse. The Taliban would have secured the launching pad to attack India’s values of democracy and liberalism which do not fit into their scheme of things,” he wrote in the Gulf News.
“Terrorism is the means, Talibalistan is the end. New Delhi and Islamabad should jointly fight against the menace,” Nayar, who has long campaigned for peace with Pakistan, said.
On Thursday, a suicide attacker struck again in a high-security part of Islamabad, this time on the police headquarters itself, underscoring the militants’ ability to strike at will anywhere across the nation.
“The grim truth is that Pakistan is becoming something alarmingly close to a failed state,” wrote Sumit Ganguly, director of research at the Center on American and Global Security at Indiana University, in a piece for the Washington Post. Pakistan, he said, faces an “existential crisis on its streets and in its courts, barracks and parliament”.
The world, led by the United States, must work to put the country back together again, he said. “If not, we will face a terrifying prospect: Pakistan’s collapse (slow or otherwise) into a full-blown failed state, armed with nuclear weapons, riven by ethnic tensions, infused with resentment and zealotry, with roving bands of Taliban sympathizers and bin Ladenists in its midst. ”
So is New Delhi ready to play ball? Given that India looms large over the Pakistani mind and its security/foreign policy has been predicated to meet the threat from its larger neighbour, one obvious way for Pakistan to be more at ease with itself would be to reduce tensions with New Delhi.
The Pakistan Policy Group, comprising independent, bipartisan American experts on U.S.-Pakistan relations, said in a report that while America couldn’t really impose normalcy between India and Pakistan, “it can continually point out both countries’ interests would be served - now more than ever - by building better relations because both face existential terrorist threats.”
This weekend Indian Prime Minister Manmohan Singh launches a rail link in Kashmir, which fueled much of the hostility between the two nations all these years and remains the main stumbling block to better ties.
Is this an opportunity for Singh to announce concessions? Pakistan’s Dawn, citing unspecified news reports, said that Singh was expected to announce important peace measures with Pakistan during the trip to Kashmir.
October 09, 2008
Frence : Strategic Axis from Atlantic to Indian Ocean
Source : French White Paper on defence and national security.
France's future early warning systems: "Knowledge and anticipation"
French White Paper on defence and national security. says
"Knowledge and anticipation represent a new strategic function and have become a priority. In a world characterised by uncertainty and instability,knowledge represents our first line of defence. Knowledge guarantees our autonomy in decision-making and enables France to preserve its strategic initiative. It is knowledge which must be provided as early on as possible to decision-makers, military commanders and those in charge of internal and civil security in order to go from forecasts to informed action. Intelligence of all kinds,including from space and prospective studies, takes on major importance."
"Knowledge and anticipation represent a new strategic function and have become a priority. In a world characterised by uncertainty and instability,knowledge represents our first line of defence. Knowledge guarantees our autonomy in decision-making and enables France to preserve its strategic initiative. It is knowledge which must be provided as early on as possible to decision-makers, military commanders and those in charge of internal and civil security in order to go from forecasts to informed action. Intelligence of all kinds,including from space and prospective studies, takes on major importance."
IRAN: The World-Wide Push in favor of People’s Mujahedin
Source: IntelligenceOnline.com
Already able to count on active backing in the U.S. Congress, the opposition Iranian movement People’s Mujahedin has its friends in the European Parliament, too.
The vice president of the European Parliament, Spain’s Alejo Vidal-Quadras, became head of a new organization last month that will work to remove the People’s Mujahedin (Mujahedin-e Kalq: MEK) from Europe’s list of terrorist organizations. Dubbed In Search for Justice -European Committee for De-Listing People’s Mujahedin of Iran (ISJ-ECDP), the organization was launched on Sept. 16 a few months after MEK was withdrawn from Britain's list of terrorist organizations (see Page 5).
In the United States, where MEK figures on the State Department's list of Foreign Terrorist Organizations (FTO) since 1997, the Mujahedin already has a number of powerful friends. Legislators and security-minded members of the Iran Policy Committee (IPC, see graph) are stepping up efforts to get the movement removed from the FTO list, which is coming up for review later this month.
In addition, MEK’s American and European lobbyist are doing their utmost to see to the security of around 3,500 of the organization’s fighters who are currently disarmed and languishing in the Ashraf camp in Iraq under the control and protection of the U.S. Current talks about the U.S. abandoning the camp and leaving the fighters under the authority of the Iraqi government are at the center of current negotiations between Tehran and Washington.
Already able to count on active backing in the U.S. Congress, the opposition Iranian movement People’s Mujahedin has its friends in the European Parliament, too.
The vice president of the European Parliament, Spain’s Alejo Vidal-Quadras, became head of a new organization last month that will work to remove the People’s Mujahedin (Mujahedin-e Kalq: MEK) from Europe’s list of terrorist organizations. Dubbed In Search for Justice -European Committee for De-Listing People’s Mujahedin of Iran (ISJ-ECDP), the organization was launched on Sept. 16 a few months after MEK was withdrawn from Britain's list of terrorist organizations (see Page 5).
In the United States, where MEK figures on the State Department's list of Foreign Terrorist Organizations (FTO) since 1997, the Mujahedin already has a number of powerful friends. Legislators and security-minded members of the Iran Policy Committee (IPC, see graph) are stepping up efforts to get the movement removed from the FTO list, which is coming up for review later this month.
In addition, MEK’s American and European lobbyist are doing their utmost to see to the security of around 3,500 of the organization’s fighters who are currently disarmed and languishing in the Ashraf camp in Iraq under the control and protection of the U.S. Current talks about the U.S. abandoning the camp and leaving the fighters under the authority of the Iraqi government are at the center of current negotiations between Tehran and Washington.
U.S. Army gets tough on ISR networking issues
http://www.c4isrjournal.com/story.php?F=3762491
October 08, 2008
The U.S. Army’s push to get its networking house in order includes a threat to commanders whose networks are not officially approved for security.
“We’re going to turn you off,” said Lt. Gen. Jeffrey Sorenson, the Army’s chief information officer, speaking at the annual meeting of the Association of the U.S. Army in Washington.
Commanders whose forces are using unapproved networks have 30 days to apply for and receive security authorizations, said Sorenson and Brig. Gen. Susan Lawrence, commander of the Army’s Network Enterprise Technology Comman/9th Signal Command in Arizona.
Lawrence said the strong enforcement steps were approved by Gen. George Casey, the Army chief of staff, as the best way to solve the problem. “I’m not going to get it done until I get the commander pointing his finger into the violator’s chest, saying, ‘You will fix,’” she said.
“We’re going to have to become extremely draconian and disciplined about this network or we will end up with the hodgepodge we’ve been living with,” she added. Sorenson, who assembled the panel of experts to discuss networking issues, said he would replace the word disciplined with “dictatorial.”
The enforcement measures are part of the effort by Sorenson, Lawrence and others to knit the service’s fractious networks into a single “enterprise” in which communications frequencies, bandwidth availability and e-mail domains would be coordinated for maximum efficiency. Better management of ISR information is at the center of the effort, they said.
Lawrence said that when she was in Iraq, there were times when counter-improvised explosive sensors sat on the tarmac because their frequencies would have conflicted with other communications. She challenged the industry to take real-world conditions into account. “Test realistically to [the battlefield environment], so that when we get [a sensor] over there we can get it up and operating sooner, instead of parking it on the airfield because there was no more spectrum to be had,” she said.
Lawrence said full-motion video from UAVs devours bandwidth and there is no room in the network for duplication.
“How many eyes do you have to have on the intersection looking for [Abu Musab al-] Zarqawi?” she said, referring to the al-Qaida in Iraq leader who was killed in a 2006 air strike. Too often, she said, an array of U.S. organizations from combat brigades to the White House demand their own ISR eyes on critical targets. She called for “one-to-many delivery” of ISR information.
“We’ve got to get ourselves over this trust and control culture that we’re in as we move forward in this enterprise network,” Lawrence said.
Reducing redundant collection is only part of the answer, she said. The Army needs to apply bandwidth rationally, instead of allowing networks to evolve. “Are we using bandwidth correctly today? No, because we’ve allowed every organization, every service, every agency to build their own networks into [Iraq] and [Afghanistan],” she said. “Instead of sharing bandwidth, we don’t even know where our choke points are. We don’t even know where our excess bandwidth is.”
October 08, 2008
The U.S. Army’s push to get its networking house in order includes a threat to commanders whose networks are not officially approved for security.
“We’re going to turn you off,” said Lt. Gen. Jeffrey Sorenson, the Army’s chief information officer, speaking at the annual meeting of the Association of the U.S. Army in Washington.
Commanders whose forces are using unapproved networks have 30 days to apply for and receive security authorizations, said Sorenson and Brig. Gen. Susan Lawrence, commander of the Army’s Network Enterprise Technology Comman/9th Signal Command in Arizona.
Lawrence said the strong enforcement steps were approved by Gen. George Casey, the Army chief of staff, as the best way to solve the problem. “I’m not going to get it done until I get the commander pointing his finger into the violator’s chest, saying, ‘You will fix,’” she said.
“We’re going to have to become extremely draconian and disciplined about this network or we will end up with the hodgepodge we’ve been living with,” she added. Sorenson, who assembled the panel of experts to discuss networking issues, said he would replace the word disciplined with “dictatorial.”
The enforcement measures are part of the effort by Sorenson, Lawrence and others to knit the service’s fractious networks into a single “enterprise” in which communications frequencies, bandwidth availability and e-mail domains would be coordinated for maximum efficiency. Better management of ISR information is at the center of the effort, they said.
Lawrence said that when she was in Iraq, there were times when counter-improvised explosive sensors sat on the tarmac because their frequencies would have conflicted with other communications. She challenged the industry to take real-world conditions into account. “Test realistically to [the battlefield environment], so that when we get [a sensor] over there we can get it up and operating sooner, instead of parking it on the airfield because there was no more spectrum to be had,” she said.
Lawrence said full-motion video from UAVs devours bandwidth and there is no room in the network for duplication.
“How many eyes do you have to have on the intersection looking for [Abu Musab al-] Zarqawi?” she said, referring to the al-Qaida in Iraq leader who was killed in a 2006 air strike. Too often, she said, an array of U.S. organizations from combat brigades to the White House demand their own ISR eyes on critical targets. She called for “one-to-many delivery” of ISR information.
“We’ve got to get ourselves over this trust and control culture that we’re in as we move forward in this enterprise network,” Lawrence said.
Reducing redundant collection is only part of the answer, she said. The Army needs to apply bandwidth rationally, instead of allowing networks to evolve. “Are we using bandwidth correctly today? No, because we’ve allowed every organization, every service, every agency to build their own networks into [Iraq] and [Afghanistan],” she said. “Instead of sharing bandwidth, we don’t even know where our choke points are. We don’t even know where our excess bandwidth is.”
MALDIVES: Maldivians Vote For a Change
:
By Dr. S.Chandrasekharan
Unofficial election results:
With 95 percent of the counting completed, it looks that there will be a run off to the presidential election with no candidate getting a simple majority.
Unofficial results as given by the Maldivian media are as follows. The final results are unlikely to change the overall standings of the individual candidates:
Abdul Gayoom of DRP and President— 67720- 40.68 percent
Anni of MDP 41843 -25.14 percent
Hassan Saeed, Independent 27528- 16.54 percent
Gasim Ibrahim of Republican Party 25629 -15.4 percent
Umar Naseer of IDP 2397- 1.44 percent
Ibra of SLP 1316- 0.81 percent
Election was peaceful:
In keeping with the call made by the election commission to make it free and peaceful, voting was generally peaceful and despite heavy rains , people in Male turned out in large numbers.
There were 20 international monitors coming from European union, United Nations and the Common wealth. There were also 1400 domestic observers and an additional 400 monitors to oversee the elections. Already over 500 elections related violations have been filed but there were no allegations of rigging, booth capturing etc. a remarkable feat indeed.
Despite acrimonious debates and wild allegations from among the candidates, there were no serious election related violence and the authorities are to be congratulated for running a first ever multiparty elections in a very peaceful manner. Luckily the Supreme Court threw out both the cases against Gayoom and Anni that questioned their eligibility to stand for elections.
The case against Gayoom filed by the SLP argued that Gayoom having served six terms already is ineligible to run for the elections under the new constitution as it will run counter to the whole purpose of the painstaking democratic reform the country had pursued. But it is good and in fact Anni of MDP had also suggested that it is better for the people of Maldives to decide whether Gayoom is acceptable or not,
In view of a peculiar rule that voters will have to register themselves before voting, many of the people who came for voting were initially not allowed to vote as their names did not figure in the voters lists. The Election Commission had an emergency meeting with all the six candidates on 8th afternoon and all but one candidate agreed that the election should go on.
Good sense prevailed, and the Commission allowed all those citizens who had valid identity cards to vote.
What Next?
There are two ways of looking at the results. The DRP would have us believe that it is an endorsement of President Gayoom to continue the reform agenda that he had initiated and mandated by the people to complete the agenda.
The truth is that 60 percent of the voters have rejected President Gayoom to continue in office beyond 10th November when his present term will be over. This was the point made by Mariya Didi, the Chairperson of the MDP also.
Dr. Hassan Saeed the independent candidate, who came third in the elections with over 16 percent had already indicated his unconditional preference for the MDP candidate. He also told the reporters last evening " We are not asking for a stake." He said that he is not for any government post. Similar sentiments were expressed by two of his able colleagues, Dr. Ahmed Shaheed the ex foreign minister and Dr. Ahmed Jameel, the ex. Justice minister.
Thus, Gayoom and Anni can depend upon 40 percent of the votes each in the run off to the elections between the two that will take place within ten days.
The support of Jhumhoory (Republican party) of Gasim Ibrahim with over 15 percent of the votes will be crucial. Gasim Ibrahim was until very recently the Vice President of DRP of Gayoom and the finance minister. As head of the Special Majlis, he did a good job in expediting the reform agenda in the Majlis. Gasim’s position on the run off is still not known
Thus, President Gayoom can still pull off a surprise by getting the support of Gasim Ibrahim. But this will be morally indefensible as the people have definitely voted for a "change." It is still not too late for President Gayoom to withdraw his candidature and allow the two youngsters, Anni and Hassan Saeed to contest the elections in the run off as provided under Article 111 (b) of the constitution
By Dr. S.Chandrasekharan
Unofficial election results:
With 95 percent of the counting completed, it looks that there will be a run off to the presidential election with no candidate getting a simple majority.
Unofficial results as given by the Maldivian media are as follows. The final results are unlikely to change the overall standings of the individual candidates:
Abdul Gayoom of DRP and President— 67720- 40.68 percent
Anni of MDP 41843 -25.14 percent
Hassan Saeed, Independent 27528- 16.54 percent
Gasim Ibrahim of Republican Party 25629 -15.4 percent
Umar Naseer of IDP 2397- 1.44 percent
Ibra of SLP 1316- 0.81 percent
Election was peaceful:
In keeping with the call made by the election commission to make it free and peaceful, voting was generally peaceful and despite heavy rains , people in Male turned out in large numbers.
There were 20 international monitors coming from European union, United Nations and the Common wealth. There were also 1400 domestic observers and an additional 400 monitors to oversee the elections. Already over 500 elections related violations have been filed but there were no allegations of rigging, booth capturing etc. a remarkable feat indeed.
Despite acrimonious debates and wild allegations from among the candidates, there were no serious election related violence and the authorities are to be congratulated for running a first ever multiparty elections in a very peaceful manner. Luckily the Supreme Court threw out both the cases against Gayoom and Anni that questioned their eligibility to stand for elections.
The case against Gayoom filed by the SLP argued that Gayoom having served six terms already is ineligible to run for the elections under the new constitution as it will run counter to the whole purpose of the painstaking democratic reform the country had pursued. But it is good and in fact Anni of MDP had also suggested that it is better for the people of Maldives to decide whether Gayoom is acceptable or not,
In view of a peculiar rule that voters will have to register themselves before voting, many of the people who came for voting were initially not allowed to vote as their names did not figure in the voters lists. The Election Commission had an emergency meeting with all the six candidates on 8th afternoon and all but one candidate agreed that the election should go on.
Good sense prevailed, and the Commission allowed all those citizens who had valid identity cards to vote.
What Next?
There are two ways of looking at the results. The DRP would have us believe that it is an endorsement of President Gayoom to continue the reform agenda that he had initiated and mandated by the people to complete the agenda.
The truth is that 60 percent of the voters have rejected President Gayoom to continue in office beyond 10th November when his present term will be over. This was the point made by Mariya Didi, the Chairperson of the MDP also.
Dr. Hassan Saeed the independent candidate, who came third in the elections with over 16 percent had already indicated his unconditional preference for the MDP candidate. He also told the reporters last evening " We are not asking for a stake." He said that he is not for any government post. Similar sentiments were expressed by two of his able colleagues, Dr. Ahmed Shaheed the ex foreign minister and Dr. Ahmed Jameel, the ex. Justice minister.
Thus, Gayoom and Anni can depend upon 40 percent of the votes each in the run off to the elections between the two that will take place within ten days.
The support of Jhumhoory (Republican party) of Gasim Ibrahim with over 15 percent of the votes will be crucial. Gasim Ibrahim was until very recently the Vice President of DRP of Gayoom and the finance minister. As head of the Special Majlis, he did a good job in expediting the reform agenda in the Majlis. Gasim’s position on the run off is still not known
Thus, President Gayoom can still pull off a surprise by getting the support of Gasim Ibrahim. But this will be morally indefensible as the people have definitely voted for a "change." It is still not too late for President Gayoom to withdraw his candidature and allow the two youngsters, Anni and Hassan Saeed to contest the elections in the run off as provided under Article 111 (b) of the constitution
PRESIDENT ZARDARI---FORWARD & BACKWARD
B.RAMAN
An ability for fresh thinking on Pakistan's relations with India and an inability to initiate a change of policy in line with the new thinking have been the defining characteristics of Asif Ali Zardari ever since he took over the leadership of the Pakistan People's Party (PPP) after the assassination of Benazir Bhutto on December 27,2007.
2. The first sign of his ability for fresh thinking came in an interview given by him to Karan Thapar, the TV journalist, (reported on March 1,2008), in which he spoke of the need to break with Pakistan's past policy of linking the issue of bilateral trade with India with the Kashmir issue so that the continuing deadlock over the Kashmir issue did not come in the way of the normalisation of the trade relations between the two countries. The business class in Pakistan has long been in favour of delinking the trade issue from the Kashmir issue. During the second tenure of Benazir as the Prime Minister (1993-96), this had also been recommended by a committee of officials of Pakistan's Ministry of Commerce, but it recommendations remained a non-starter due to strong opposition not only from the Pakistan Muslim League (PML) of Nawaz Sharif, but also from the Pakistan Foreign Office.
3. Zardari's interview was followed by the usual criticism from the political class. An attempt was made to create an impression as if he was planning to dilute the traditional Pakistani stand on the Kashmir issue. As a result, his remarks on the subject were portrayed by his own party as misinterpreted and any intention to break with the past policy was vehemently denied.
4. The second sign of his ability for fresh thinking came with regard to any role for India on the Afghanistan issue. The policy till now has been to question the legitimacy of any Indian interests in Afghanistan, to project the growing Indian economic and other non-military assistance to Afghanistan as directed against Pakistan, to oppose India's request for rights of transit trade with Afghanistan through Pakistan and to rule out any role for India in any multilateral talks on Afghanistan.
5. In comments made by him before his election as the President, he spoke of the desirability of a regional conference on Afghanistan to restore peace in that country and, in that context, mentioned India as one of the possible participants in such a conference if it materialises. His references to Afghanistan came in the context of what he projects as the need for a multi-pronged policy in the fight against jihadi terrorism of the Taliban-Al Qaeda kind emanating from this region.
6. A careful study of his statements and remarks on Afghanistan and the fight against terrorism would indicate the following nuances:
He agrees on the need for close counter-terrorism co-operation with the US, but wants this co-operation to be recrafted and re-projected in such a manner as not to aggravate the growing wave of jihadi terrorism in Pakistani territory---whether by Pakistani or foreign groups.
He understands the need for effective action against jihadi terrorism in Pakistani territory, but wants such action to be seen by his people as the outcome of Pakistani initiatives through Pakistani forces and capabilities and not as at the behest of the US with the help of US assistance and with US operational co-operation. He does not want Pakistani action against its own terrorists to be perceived by its people as influenced by the US and as part of any regional initiative. In his perception, the jihadi terrorism in Pakistani territory is a Pakistani problem and not a regional or international problem.
At the same time, he views the continuing terrorism of the Taliban and Al Qaeda against the US and other NATO forces in Afghan territory as not just an Afghan problem, but as also a regional and even an international problem. It is also his view that without the restoration of peace in Afghanistan, Pakistan's own counter-terrorism efforts in its territory will not succeed. It is in that context that he talks of a regional conference on Afghanistan to discuss various options and is prepared to consider the participation of India in such a conference.
7. Surprisingly, his remarks on possible Indian participation in a regional conference on Afghanistan did not create in Pakistan the kind of criticism that his remarks on Kashmir did. At the same time, they were not welcomed either. His ideas have remained without a follow-up---either positive or negative.
8. The latest sign of his ability for fresh thinking was seen in a report carried by the "Wall Street Journal" (October 5,2008) on a discussion which he had with one of its journalists. He made a number of positive observations on relations with India during the discussion. To quote from the report carried by the paper:
"'India has never been a threat to Pakistan. I, for one, and our democratic government is not scared of Indian influence abroad."
"He spoke of the militant groups operating in Kashmir as 'terrorists'."
"Replying to a question, Zardari said he had no objection to the India-US nuclear cooperation pact so long as Pakistan is treated 'at par'.'Why would we begrudge the largest democracy in the world getting friendly with one of the oldest democracies,' he asked."
"While seeking better ties with New Delhi he noted, 'There is no other economic survival for nations like us. We have to trade with our neighbours first.'He imagines Pakistani cement factories being constructed to provide for India's huge infrastructure needs, Pakistani textile mills meeting Indian demand for blue jeans, Pakistani ports being used to relieve the congestion at Indian ones."
9.In response to criticism from the PML and some sections of the ruling coalition, the Ministry of Information, apparently with his approval, stepped in the next day and ruled out any change in Pakistan's policy towards India on the Kashmir issue. A statement issued by Sherry Rehman, the Minister For Information, said: "Pakistan is committed to the Kashmiri people's right for self-determination. The President had made it very clear that the just cause of Kashmir and its struggle for self-determination has been a consistent central position of the (ruling) Pakistan People's Party for the last 40 years. There has been no change in this policy.The President has never called the legitimate struggle of Kashmiris an expression of terrorism, nor has he downplayed the sufferings of the Kashmiris. All his statements on India should be viewed in the context of Pakistan's current bilateral relations with that country. The Government is firmly committed to extending moral and diplomatic support to the just cause of Kashmiris for their right of self-determination".
10. What to make of this flip-flop? It would be incorrect to interpret it as indicative of his insincerity. What it does indicate is that while his instincts in relation to India seem to be refreshingly different from those of his predecessors----even from those of Benazir who instigated terrorism in Kashmir when she was the Prime Minister---- his grasp of the ground realities in Pakistan is weak. The ground realities are determined by four entrenched mindsets, which have always been opposing any fresh thinking on the relations with India. These entrenched mindsets are those of the Army, the intelligence community, the Foreign Office and sections of the political class with a close nexus to the Army and the intelligence community.
11. Unless these entrenched mindsets are made to change, new thinking alone, however welcome, will remain just loud-thinking without any follow-up action. To be able to translate any new thinking into action, Zardari has tro stabilise his position as the President, acquire a popular image and acquire the ability to enforce his will on these entrenched mindsets. No previous political leader of Pakistan was able to acquire such an ability and had to ultimately bow to pressure from the Army, the intelligence community and the Foreign Office.
12. In India too, we have had such entrenched mindsets in the Army, the intelligence community and the Foreign Office. It goes to the credit of Prime Minister Manmohan Singh that he has gradually been able to bring about a change in these mindsets whether in relation to India's ties with Pakistan or the US----though not yet in relation to China.
13. Zardari has been the President hardly for a month and it is too early to say whether he would be able to bring about such a change in the mindsets. India has to keep patience with him without expecting quick policy changes. At the same time, it should not lower its guard till the ultimate reality emerges---- is it refreshingly new or more of the same as seen in the past?
14. The current position in Pakistan is complicated by the emergence of a fourth important power ---- Al Qaeda. The future of Pakistan is going to be determined by a configuration of four As---Allah, the Army, America and Al Qaeda. The outcome of the fight between the Army and America on the one side and Al Qaeda on the other will determine whether Zardari's tenure will see a change for the better or the worse in Pakistan.(9-10-08)
(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: seventyone2@gmail.com )
An ability for fresh thinking on Pakistan's relations with India and an inability to initiate a change of policy in line with the new thinking have been the defining characteristics of Asif Ali Zardari ever since he took over the leadership of the Pakistan People's Party (PPP) after the assassination of Benazir Bhutto on December 27,2007.
2. The first sign of his ability for fresh thinking came in an interview given by him to Karan Thapar, the TV journalist, (reported on March 1,2008), in which he spoke of the need to break with Pakistan's past policy of linking the issue of bilateral trade with India with the Kashmir issue so that the continuing deadlock over the Kashmir issue did not come in the way of the normalisation of the trade relations between the two countries. The business class in Pakistan has long been in favour of delinking the trade issue from the Kashmir issue. During the second tenure of Benazir as the Prime Minister (1993-96), this had also been recommended by a committee of officials of Pakistan's Ministry of Commerce, but it recommendations remained a non-starter due to strong opposition not only from the Pakistan Muslim League (PML) of Nawaz Sharif, but also from the Pakistan Foreign Office.
3. Zardari's interview was followed by the usual criticism from the political class. An attempt was made to create an impression as if he was planning to dilute the traditional Pakistani stand on the Kashmir issue. As a result, his remarks on the subject were portrayed by his own party as misinterpreted and any intention to break with the past policy was vehemently denied.
4. The second sign of his ability for fresh thinking came with regard to any role for India on the Afghanistan issue. The policy till now has been to question the legitimacy of any Indian interests in Afghanistan, to project the growing Indian economic and other non-military assistance to Afghanistan as directed against Pakistan, to oppose India's request for rights of transit trade with Afghanistan through Pakistan and to rule out any role for India in any multilateral talks on Afghanistan.
5. In comments made by him before his election as the President, he spoke of the desirability of a regional conference on Afghanistan to restore peace in that country and, in that context, mentioned India as one of the possible participants in such a conference if it materialises. His references to Afghanistan came in the context of what he projects as the need for a multi-pronged policy in the fight against jihadi terrorism of the Taliban-Al Qaeda kind emanating from this region.
6. A careful study of his statements and remarks on Afghanistan and the fight against terrorism would indicate the following nuances:
He agrees on the need for close counter-terrorism co-operation with the US, but wants this co-operation to be recrafted and re-projected in such a manner as not to aggravate the growing wave of jihadi terrorism in Pakistani territory---whether by Pakistani or foreign groups.
He understands the need for effective action against jihadi terrorism in Pakistani territory, but wants such action to be seen by his people as the outcome of Pakistani initiatives through Pakistani forces and capabilities and not as at the behest of the US with the help of US assistance and with US operational co-operation. He does not want Pakistani action against its own terrorists to be perceived by its people as influenced by the US and as part of any regional initiative. In his perception, the jihadi terrorism in Pakistani territory is a Pakistani problem and not a regional or international problem.
At the same time, he views the continuing terrorism of the Taliban and Al Qaeda against the US and other NATO forces in Afghan territory as not just an Afghan problem, but as also a regional and even an international problem. It is also his view that without the restoration of peace in Afghanistan, Pakistan's own counter-terrorism efforts in its territory will not succeed. It is in that context that he talks of a regional conference on Afghanistan to discuss various options and is prepared to consider the participation of India in such a conference.
7. Surprisingly, his remarks on possible Indian participation in a regional conference on Afghanistan did not create in Pakistan the kind of criticism that his remarks on Kashmir did. At the same time, they were not welcomed either. His ideas have remained without a follow-up---either positive or negative.
8. The latest sign of his ability for fresh thinking was seen in a report carried by the "Wall Street Journal" (October 5,2008) on a discussion which he had with one of its journalists. He made a number of positive observations on relations with India during the discussion. To quote from the report carried by the paper:
"'India has never been a threat to Pakistan. I, for one, and our democratic government is not scared of Indian influence abroad."
"He spoke of the militant groups operating in Kashmir as 'terrorists'."
"Replying to a question, Zardari said he had no objection to the India-US nuclear cooperation pact so long as Pakistan is treated 'at par'.'Why would we begrudge the largest democracy in the world getting friendly with one of the oldest democracies,' he asked."
"While seeking better ties with New Delhi he noted, 'There is no other economic survival for nations like us. We have to trade with our neighbours first.'He imagines Pakistani cement factories being constructed to provide for India's huge infrastructure needs, Pakistani textile mills meeting Indian demand for blue jeans, Pakistani ports being used to relieve the congestion at Indian ones."
9.In response to criticism from the PML and some sections of the ruling coalition, the Ministry of Information, apparently with his approval, stepped in the next day and ruled out any change in Pakistan's policy towards India on the Kashmir issue. A statement issued by Sherry Rehman, the Minister For Information, said: "Pakistan is committed to the Kashmiri people's right for self-determination. The President had made it very clear that the just cause of Kashmir and its struggle for self-determination has been a consistent central position of the (ruling) Pakistan People's Party for the last 40 years. There has been no change in this policy.The President has never called the legitimate struggle of Kashmiris an expression of terrorism, nor has he downplayed the sufferings of the Kashmiris. All his statements on India should be viewed in the context of Pakistan's current bilateral relations with that country. The Government is firmly committed to extending moral and diplomatic support to the just cause of Kashmiris for their right of self-determination".
10. What to make of this flip-flop? It would be incorrect to interpret it as indicative of his insincerity. What it does indicate is that while his instincts in relation to India seem to be refreshingly different from those of his predecessors----even from those of Benazir who instigated terrorism in Kashmir when she was the Prime Minister---- his grasp of the ground realities in Pakistan is weak. The ground realities are determined by four entrenched mindsets, which have always been opposing any fresh thinking on the relations with India. These entrenched mindsets are those of the Army, the intelligence community, the Foreign Office and sections of the political class with a close nexus to the Army and the intelligence community.
11. Unless these entrenched mindsets are made to change, new thinking alone, however welcome, will remain just loud-thinking without any follow-up action. To be able to translate any new thinking into action, Zardari has tro stabilise his position as the President, acquire a popular image and acquire the ability to enforce his will on these entrenched mindsets. No previous political leader of Pakistan was able to acquire such an ability and had to ultimately bow to pressure from the Army, the intelligence community and the Foreign Office.
12. In India too, we have had such entrenched mindsets in the Army, the intelligence community and the Foreign Office. It goes to the credit of Prime Minister Manmohan Singh that he has gradually been able to bring about a change in these mindsets whether in relation to India's ties with Pakistan or the US----though not yet in relation to China.
13. Zardari has been the President hardly for a month and it is too early to say whether he would be able to bring about such a change in the mindsets. India has to keep patience with him without expecting quick policy changes. At the same time, it should not lower its guard till the ultimate reality emerges---- is it refreshingly new or more of the same as seen in the past?
14. The current position in Pakistan is complicated by the emergence of a fourth important power ---- Al Qaeda. The future of Pakistan is going to be determined by a configuration of four As---Allah, the Army, America and Al Qaeda. The outcome of the fight between the Army and America on the one side and Al Qaeda on the other will determine whether Zardari's tenure will see a change for the better or the worse in Pakistan.(9-10-08)
(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: seventyone2@gmail.com )
Iconoclast: A Neuroscientist Reveals How to Think Differently
SOURCE :http://sloanreview.mit.edu/smr/issue/2008/fall/07/
Why Picasso Outearned van Gogh
A brief synopsis of Iconoclast: A Neuroscientist Reveals How to Think Differently (Harvard Business Press, 2008) by Gregory Berns
Vincent van Gogh and Pablo Picasso had a lot in common. They each had a distinctive style of painting that has become immediately identifiable. Think of “The Starry Night” or “Three Musicians.” In fact, both artists have become sui generis, and their paintings have sold for tens of millions of dollars. But there’s one huge difference between the two painters: van Gogh died a pauper while Picasso left an estate estimated at $750 million. And the reason, according to Gregory Berns, a professor of psychiatry and behavioral sciences at Emory University School of Medicine, is that van Gogh was a loner and the charismatic Picasso was an active member of multiple social circles. To use the current vernacular of social networking science, van Gogh was a solitary “node” who had few connections, whereas Picasso was a “hub” who had embedded himself in a vast network that stretched across various social lines.
Berns discusses the vast differences between the two artists in his new book Iconoclast: A Neuroscientist Reveals How to Think Differently (Harvard Business Press, 2008). According to Berns, “van Gogh’s primary connection to the art world was through his brother, and this connection did not feed directly into the money that could have turned him into a living success.” In contrast, Picasso’s myriad connections provided him with that access to commercial riches. “[Picasso’s] wide-ranging social network, which included artists, writers and politicians, meant that he was never more than a few people away from anyone of importance in the world.”
To be sure, there were many reasons why van Gogh died penniless. His mental illness was certainly a factor (which, incidentally, might have contributed to his being a loner). But the larger point for corporations is this: How do you connect talented loners to networks so that the creativity of those individuals can be tapped? In other words, how do you ensure that your innovative geniuses are less like van Gogh and more like Picasso? In Iconoclast, Berns also presents the cautionary tale of Edwin Howard Armstrong, another creative genius. Armstrong invented FM radio but, according to Berns, he lacked the social networking skills to sell the idea during his lifetime. Years after Armstrong’s death — he committed suicide in 1954 after patent disputes with AT&T Corp. and RCA Corp. as well as a U.S. Federal Communications Commission ruling that went against him — FM radio finally achieved commercial success as the technologically superior alternative to AM for the broadcasting of hi-fi music.
The issue of social networking is all the more important in today’s world of “open innovation,” in which companies are increasingly finding ideas and technologies from external sources that they will then bring to market, as well as selling internal innovations that they do not have any plans to commercialize. Indeed, various Fortune 500 corporations, including IBM, Procter & Gamble and Motorola, have increasingly been participating in an open market for the commercial exchange of intellectual property. In his article “Sharing the Corporate Crown Jewels” in the Spring 2003 issue of MIT Sloan Management Review, David Kline, a specialist in intellectual property strategy, argued that patent licensing has become a high-growth industry, with annual revenues topping $100 billion. IBM alone pocketed a staggering $1.7 billion just from its technology licensing activities in 2000. “These revenues came with a 98% profit margin and accounted for roughly 20% of the company’s net income in that year,” noted Kline.
Moreover, the benefits of technology licensing can extend far beyond the immediate financial gains. For one thing, strategic licensing (and effective networking with the right companies) can help transform a nascent proprietary technology into a mainstream industry standard — something that the inventor Armstrong, for all the superior benefits of his FM technology, failed to do in his lifetime.
Evidently, companies like IBM have effective systems in place to uncover and market their technological innovations to the outside world. But that’s not always the case at other organizations. Kline asserts that many companies are sitting on unused patents that could be worth millions of dollars. In fact, Kline coauthored an entire book on the subject, with the catchy title Rembrandts in the Attic: Unlocking the Hidden Value of Patents (Harvard Business School Press, 1999). The book provides solid, practical advice for any organization that wants to participate aggressively in this new era of open innovation. In retrospect, though, perhaps a more appropriate title for the book would have been Van Goghs in the Attic.
— Alden M. Hayashi
October 08, 2008
INDIA AS POSSIBLE WEB OF CYBER TERRORISM
B.RAMAN
Many terrorism experts have been concerned since 9/11 that if there is an act of terrorism involving nuclear material, it will most probably originate from Pakistan.Hence, their worries about the security of Pakistan's nuclear arsenal and about the possibility of radicalised Pakistani scientists helping Al Qaeda or pro-Al Qaeda organisations.
2. Is there a similar danger of an act of cyber terrorism, seeking to damage or destroy critical infrastructure, emanating from India because of the availability of qualified information technology experts in the Indian Muslim communuity? This question is likely to occupy the attention of the terrorism experts following the announcement by the Mumbai Police on October 6,2008, of the arrest of 20 suspected members of the so-called Indian Mujahideen (IM), who had played a role in the serial blasts in Ahmedabad on July 26,2008, in the abortive attempt to organise similar blasts in Surat the next day and in the serial blasts in New Delhi on September 13,2008.
3. Among those arrested are four IT-savvy members of the IM, who had played a role in sending the E-mail messages in the name of the IM before and after the Ahmedabad blasts and before the New Delhi blasts by hacking into Wi-fi networks in Mumbai and Navin Mumbai. These are :
Mohammed Mansoor Asgar Peerbhoy aka Munawar aka Mannu. A 31-year-old resident of Pune, who was reportedly working for Yahoo, India, on an annual salary of Rs. 19 lakhs (US $ 45,000).
Mubin Kadar Shaikh, a 24-year-old graduate of computer science from Pune.
Asif Bashir Shaikh, a 22-year-old mechanical engineer from Pune. In addition to helping in sending the E-mail messages, he also reportedly played a role in planting 18 Improvised Explosive Devices (IEDs) in Surat, all of which failed to explode.
Mohammed Ismail Chaudhary, a 28-year-old computer mechanic, who is also suspected to have helped in planting the IEDs in Surat.
4. Peerbhoy is reported to have joined the IM while he was studying Arabic in Pune's Quran Foundation, which seems to have served as a favourite recruiting ground for jihadi terrorism. The US intelligence agencies would be interested to know that he had allegedly visited the US twice in recent months. Did he go on his own or in connection with Yahoo's work? This is not clear.
5. Pune as an important recruiting centre for jihadi terrorism has come out of the investigation made so far by the Mumbai Police. One would recall with interest that Abu Zubaidah, the Palestinian, who was supposedly No.3 in Al Qaeda, was also reported to have studied computer science in Pune before crossing over into Pakistan and joining Al Qaeda. He was arrested in the house of a cadre of the Lashkar-e-Toiba (LET) in Faislabad in Pakistani Punjab in March,2002, and taken to the Guantanamo Bay detention centre in Cuba by the US intelligence. He was considered an IT expert of Al Qaeda.
6. Peerbhoy has been projected as self-radicalised during a visit to Saudi Arabia for Haj. Despite this, certain questions need to be gone into thoroughly---- were he and others self-radicalised or radicalised by Al Qaeda, which would welcome more IT experts? Were they recruits or volunteers as a result of their self-radicalisation? Were they working only for the IM or were they also helping Al Qaeda and other pro-Al Qaeda organisations?
7. Their capabilities as demonstrated till now are rather primitive relating to sending E-mail messages through hacked networks. Many young students can do this. Did they have any other capability of an ominous nature?
8. If the reports that Peerbhoy had visited the US twice in recent months are correct, it shows that he had a valid visa for the US, which he had probably got on the recommendation of Yahoo. It also shows that the Federal Bureau of Investigation (FBI) had no adverse information on him. Otherwise, the US would not have issued a visa to him. If he had managed to get himself transferred to one of the Yahoo offices in the US or in West Europe, Al Qaeda would have had a wonderful cyber sleeping cell in the West. Why did he weaken the possibility of his getting posted to the West one day by helping the IM in doing a simple job of communications, which did not require much expertise?
9. These and other questions of a similar nature require to be gone into in great detail, if necessary, by enlisting the help of the cyber experts of the US intelligence. (8-10-08)
( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: seventyone2@gmail.com )
Many terrorism experts have been concerned since 9/11 that if there is an act of terrorism involving nuclear material, it will most probably originate from Pakistan.Hence, their worries about the security of Pakistan's nuclear arsenal and about the possibility of radicalised Pakistani scientists helping Al Qaeda or pro-Al Qaeda organisations.
2. Is there a similar danger of an act of cyber terrorism, seeking to damage or destroy critical infrastructure, emanating from India because of the availability of qualified information technology experts in the Indian Muslim communuity? This question is likely to occupy the attention of the terrorism experts following the announcement by the Mumbai Police on October 6,2008, of the arrest of 20 suspected members of the so-called Indian Mujahideen (IM), who had played a role in the serial blasts in Ahmedabad on July 26,2008, in the abortive attempt to organise similar blasts in Surat the next day and in the serial blasts in New Delhi on September 13,2008.
3. Among those arrested are four IT-savvy members of the IM, who had played a role in sending the E-mail messages in the name of the IM before and after the Ahmedabad blasts and before the New Delhi blasts by hacking into Wi-fi networks in Mumbai and Navin Mumbai. These are :
Mohammed Mansoor Asgar Peerbhoy aka Munawar aka Mannu. A 31-year-old resident of Pune, who was reportedly working for Yahoo, India, on an annual salary of Rs. 19 lakhs (US $ 45,000).
Mubin Kadar Shaikh, a 24-year-old graduate of computer science from Pune.
Asif Bashir Shaikh, a 22-year-old mechanical engineer from Pune. In addition to helping in sending the E-mail messages, he also reportedly played a role in planting 18 Improvised Explosive Devices (IEDs) in Surat, all of which failed to explode.
Mohammed Ismail Chaudhary, a 28-year-old computer mechanic, who is also suspected to have helped in planting the IEDs in Surat.
4. Peerbhoy is reported to have joined the IM while he was studying Arabic in Pune's Quran Foundation, which seems to have served as a favourite recruiting ground for jihadi terrorism. The US intelligence agencies would be interested to know that he had allegedly visited the US twice in recent months. Did he go on his own or in connection with Yahoo's work? This is not clear.
5. Pune as an important recruiting centre for jihadi terrorism has come out of the investigation made so far by the Mumbai Police. One would recall with interest that Abu Zubaidah, the Palestinian, who was supposedly No.3 in Al Qaeda, was also reported to have studied computer science in Pune before crossing over into Pakistan and joining Al Qaeda. He was arrested in the house of a cadre of the Lashkar-e-Toiba (LET) in Faislabad in Pakistani Punjab in March,2002, and taken to the Guantanamo Bay detention centre in Cuba by the US intelligence. He was considered an IT expert of Al Qaeda.
6. Peerbhoy has been projected as self-radicalised during a visit to Saudi Arabia for Haj. Despite this, certain questions need to be gone into thoroughly---- were he and others self-radicalised or radicalised by Al Qaeda, which would welcome more IT experts? Were they recruits or volunteers as a result of their self-radicalisation? Were they working only for the IM or were they also helping Al Qaeda and other pro-Al Qaeda organisations?
7. Their capabilities as demonstrated till now are rather primitive relating to sending E-mail messages through hacked networks. Many young students can do this. Did they have any other capability of an ominous nature?
8. If the reports that Peerbhoy had visited the US twice in recent months are correct, it shows that he had a valid visa for the US, which he had probably got on the recommendation of Yahoo. It also shows that the Federal Bureau of Investigation (FBI) had no adverse information on him. Otherwise, the US would not have issued a visa to him. If he had managed to get himself transferred to one of the Yahoo offices in the US or in West Europe, Al Qaeda would have had a wonderful cyber sleeping cell in the West. Why did he weaken the possibility of his getting posted to the West one day by helping the IM in doing a simple job of communications, which did not require much expertise?
9. These and other questions of a similar nature require to be gone into in great detail, if necessary, by enlisting the help of the cyber experts of the US intelligence. (8-10-08)
( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: seventyone2@gmail.com )
Urgent Letter re the $700 Billion Bank Bailout -- Patrick S.J. Carmack
THE MONEY MASTERS dvd
October 1, 2008
Urgent Letter re the $700 Billion Bank Bailout
Dear Fellow American Citizen:
The ongoing, severe economic turmoil in our nation - destined to get worse if the right remedy is not enacted - was predicted in our video The Money Masters as the inevitable result of our fractional reserve banking system.
Our banking system, established by the Federal Reserve Act of 1913, works essentially like a spring. When the Central Bank, the Federal Reserve, wishes to create new money, it simply does so. There are no reserves to our money. The Fed then spends this money, usually to buy Treasury Bonds from private owners of the bonds (more recently to bailout or help huge banks buyout failing banks), which the sellers had purchased from the Treasury Department. These bonds (and Treasury bills, TIPS and notes) were initially sold to the public to fund government deficits. In our metaphor the money created by the Fed is the spring. The spring gets stretched in the following manner.
Banks, privately-owned, are permitted to loan out 90% of this new Fed-created money once it is deposited by the sellers of the bonds. That would not be a problem, except for the fact that the borrowers almost always redeposit the money (or the people they pay with their loan proceeds do). Once re-deposited, the banks can lend it out again. This re-loan, redeposit, re-loan, redeposit, etc. scheme, authorized by the Federal Reserve Act of 1913, allows banks each time to retain just 10% of the re-deposited loan proceeds as a reserve, ultimately allowing banks to lend out 9 times the original amount deposited, and to charge interest on it as many times as it was loaned. So instead of an interest rate of, for example, 6%, the banks may be collectively receiving a total of 54% interest per year (6% x 9; usually it is somewhat less due to the lack of qualified borrowers). Now you know, if have not already seen The Money Masters, why banks grow and prosper much more than other businesses, that is, until they have stretched the spring to the maximum.
Once the economy is flooded with the bank-created money 9 times in excess of the money originally created by the Fed, an expansion that increases the money supply, which reduces the purchasing power of already-existing money (including wages and savings), interest rates begin to drop (as there is more money to lend) and prices rise (inflation). The dollar begins to fall relative to the money of other countries not in this same stage of money expansion. Money begins to flow out of US Treasury bonds (due to lower interest rates and the lessening purchasing power of the dollar due to inflation). Thus ends the expansionary or "boom" part of this artificial "business cycle." To combat rising inflation and the falling dollar, the Fed begins raising interest rates.
Then the spring of the economy - the money supply - having been stretched to the maximum, begins its contraction, usually initiated by rising interest rates reaching a point that begins to inhibit borrowing and also inflation. The economic "bust" part of the cycle begins. Loans dwindle as interest rates rise and credit terms tighten. Various segments of the economy, accustomed to easy credit, begin to contract due to higher interest rates; loans become harder to get. Home prices fall, businesses begin to fail, bankruptcies increase. This "bust" part of the cycle continues, and worsens, until inflation is "tamed," prices stabilize, and the dollar rises relative to other currencies. Eventually, the higher interest rates begin to attract foreign money, and the Treasury then is able to borrow what it needs at lower and lower interest rates. Interest rates fall. The artificial cycle then begins anew.
This boom-bust economic cycle is totally unnecessary and is the fundamental cause of the inherent instability in our economy. It is due to too-rapid increases in the money supply due to deficit spending and then the multiplier effect of fractional reserve banking (described above) and to lenders greedy to take advantage of such a system that rewards lending with more and more interest revenue; followed by a too-rapid contraction of the money supply (such as we are experiencing now), necessary to combat the inflationary effects of the former phase, both the direct result of the Federal Reserve Act of 1913. We urgently need to reform this system that rewards greed and results in ever-increasing swings from boom-to-bust - destroying ordinary businesses and farms in the process. We need to repeal or fundamentally reform the Federal Reserve Act of 1913, and to replace it with a system that eliminates the ability of private banks to "create" and multiply money as loans.
The major banks of this country - the ones the government is lending your money to, and from which the Bailout Bill proposes to buy their bad assets (wouldn't you too like the opportunity to sell off your bad investments to the government!), are busily swallowing up the banks in trouble in this latest bust - one deeper because of more rapid prior monetary expansion and inflation. As after all prior bust cycles, they will emerge larger and more powerful, and fewer. Wealth will be even more concentrated under their control, which they will use in the next bust to further this process, until eventually no one will own anything but the ability to borrow - to go deeper into debt to banks than their neighbors. Not savings, but credit scores will determine the average American's ability to engage in economic activity (such as buying a home or car). No one will dare breathe a word against such power, concentrated in very few hands, and our republic will end with a whimper.
Our Congress struggles with ignorance of the complex, bank-created system enacted in 1913. It struggles with the money the bank PACs flood into the political system to defeat their critics and elect their shills. It struggles with mass media owned or controlled by the banks, which seek to stir up panic in the populace, to stampede Congress into bank-developed "solutions" that only make the fundamental problems worse and increase their wealth. Based on history, the banks will not fail to see-saw the economy and the markets to match their strategies for fooling the public, and putting pressure on the Congress to do their will. But we must resist. We must hold out for genuine reform - for repeal or fundamental reform of the Federal Reserve Act of 1913.
Here is a hyperlink to one such reform proposal, the Monetary Reform Act. It is not the only possible reform, but it is one developed, in its essentials, over many years by numerous monetary reformers including the late Nobel Laureate, Dr. Milton Friedman. Any genuine reform of our monetary system must include two basic elements: fractional reserve lending (such as described above) must be prohibited, and private banks must be forbidden from creating money, whether as loans or otherwise. The Monetary Reform Act does both. It also incorporates means of doing this that include paying off the huge national debt, and stabilizing the economy.
We have not previously written the viewers of The Money Masters. We judged the time was not ripe. But increasingly we are being asked - urgently - what can we do, and when, to be effective. Now it is clearly urgent that we flood Congress with our calls, emails and letters, to oppose the proposed taxpayer-funded Bailout of the banks. Rather, we support genuine reform, that will not result in an even greater concentration of economic power in fewer and fewer hands. We support the Monetary Reform Act, or any such Act that repeals or reforms the Federal Reserve Act so as to prohibit fractional reserve banking and money creation (as loans or otherwise) by private banks. We oppose the Bailout of the banks. We want genuine, fundamental reform, now!
Very truly yours,
Patrick S.J. Carmack
Patrick S.J. Carmack, J.D.
Producer of The Money Masters
October 1, 2008
Urgent Letter re the $700 Billion Bank Bailout
Dear Fellow American Citizen:
The ongoing, severe economic turmoil in our nation - destined to get worse if the right remedy is not enacted - was predicted in our video The Money Masters as the inevitable result of our fractional reserve banking system.
Our banking system, established by the Federal Reserve Act of 1913, works essentially like a spring. When the Central Bank, the Federal Reserve, wishes to create new money, it simply does so. There are no reserves to our money. The Fed then spends this money, usually to buy Treasury Bonds from private owners of the bonds (more recently to bailout or help huge banks buyout failing banks), which the sellers had purchased from the Treasury Department. These bonds (and Treasury bills, TIPS and notes) were initially sold to the public to fund government deficits. In our metaphor the money created by the Fed is the spring. The spring gets stretched in the following manner.
Banks, privately-owned, are permitted to loan out 90% of this new Fed-created money once it is deposited by the sellers of the bonds. That would not be a problem, except for the fact that the borrowers almost always redeposit the money (or the people they pay with their loan proceeds do). Once re-deposited, the banks can lend it out again. This re-loan, redeposit, re-loan, redeposit, etc. scheme, authorized by the Federal Reserve Act of 1913, allows banks each time to retain just 10% of the re-deposited loan proceeds as a reserve, ultimately allowing banks to lend out 9 times the original amount deposited, and to charge interest on it as many times as it was loaned. So instead of an interest rate of, for example, 6%, the banks may be collectively receiving a total of 54% interest per year (6% x 9; usually it is somewhat less due to the lack of qualified borrowers). Now you know, if have not already seen The Money Masters, why banks grow and prosper much more than other businesses, that is, until they have stretched the spring to the maximum.
Once the economy is flooded with the bank-created money 9 times in excess of the money originally created by the Fed, an expansion that increases the money supply, which reduces the purchasing power of already-existing money (including wages and savings), interest rates begin to drop (as there is more money to lend) and prices rise (inflation). The dollar begins to fall relative to the money of other countries not in this same stage of money expansion. Money begins to flow out of US Treasury bonds (due to lower interest rates and the lessening purchasing power of the dollar due to inflation). Thus ends the expansionary or "boom" part of this artificial "business cycle." To combat rising inflation and the falling dollar, the Fed begins raising interest rates.
Then the spring of the economy - the money supply - having been stretched to the maximum, begins its contraction, usually initiated by rising interest rates reaching a point that begins to inhibit borrowing and also inflation. The economic "bust" part of the cycle begins. Loans dwindle as interest rates rise and credit terms tighten. Various segments of the economy, accustomed to easy credit, begin to contract due to higher interest rates; loans become harder to get. Home prices fall, businesses begin to fail, bankruptcies increase. This "bust" part of the cycle continues, and worsens, until inflation is "tamed," prices stabilize, and the dollar rises relative to other currencies. Eventually, the higher interest rates begin to attract foreign money, and the Treasury then is able to borrow what it needs at lower and lower interest rates. Interest rates fall. The artificial cycle then begins anew.
This boom-bust economic cycle is totally unnecessary and is the fundamental cause of the inherent instability in our economy. It is due to too-rapid increases in the money supply due to deficit spending and then the multiplier effect of fractional reserve banking (described above) and to lenders greedy to take advantage of such a system that rewards lending with more and more interest revenue; followed by a too-rapid contraction of the money supply (such as we are experiencing now), necessary to combat the inflationary effects of the former phase, both the direct result of the Federal Reserve Act of 1913. We urgently need to reform this system that rewards greed and results in ever-increasing swings from boom-to-bust - destroying ordinary businesses and farms in the process. We need to repeal or fundamentally reform the Federal Reserve Act of 1913, and to replace it with a system that eliminates the ability of private banks to "create" and multiply money as loans.
The major banks of this country - the ones the government is lending your money to, and from which the Bailout Bill proposes to buy their bad assets (wouldn't you too like the opportunity to sell off your bad investments to the government!), are busily swallowing up the banks in trouble in this latest bust - one deeper because of more rapid prior monetary expansion and inflation. As after all prior bust cycles, they will emerge larger and more powerful, and fewer. Wealth will be even more concentrated under their control, which they will use in the next bust to further this process, until eventually no one will own anything but the ability to borrow - to go deeper into debt to banks than their neighbors. Not savings, but credit scores will determine the average American's ability to engage in economic activity (such as buying a home or car). No one will dare breathe a word against such power, concentrated in very few hands, and our republic will end with a whimper.
Our Congress struggles with ignorance of the complex, bank-created system enacted in 1913. It struggles with the money the bank PACs flood into the political system to defeat their critics and elect their shills. It struggles with mass media owned or controlled by the banks, which seek to stir up panic in the populace, to stampede Congress into bank-developed "solutions" that only make the fundamental problems worse and increase their wealth. Based on history, the banks will not fail to see-saw the economy and the markets to match their strategies for fooling the public, and putting pressure on the Congress to do their will. But we must resist. We must hold out for genuine reform - for repeal or fundamental reform of the Federal Reserve Act of 1913.
Here is a hyperlink to one such reform proposal, the Monetary Reform Act. It is not the only possible reform, but it is one developed, in its essentials, over many years by numerous monetary reformers including the late Nobel Laureate, Dr. Milton Friedman. Any genuine reform of our monetary system must include two basic elements: fractional reserve lending (such as described above) must be prohibited, and private banks must be forbidden from creating money, whether as loans or otherwise. The Monetary Reform Act does both. It also incorporates means of doing this that include paying off the huge national debt, and stabilizing the economy.
We have not previously written the viewers of The Money Masters. We judged the time was not ripe. But increasingly we are being asked - urgently - what can we do, and when, to be effective. Now it is clearly urgent that we flood Congress with our calls, emails and letters, to oppose the proposed taxpayer-funded Bailout of the banks. Rather, we support genuine reform, that will not result in an even greater concentration of economic power in fewer and fewer hands. We support the Monetary Reform Act, or any such Act that repeals or reforms the Federal Reserve Act so as to prohibit fractional reserve banking and money creation (as loans or otherwise) by private banks. We oppose the Bailout of the banks. We want genuine, fundamental reform, now!
Very truly yours,
Patrick S.J. Carmack
Patrick S.J. Carmack, J.D.
Producer of The Money Masters
Global financial crisis: does the world need a new banking 'policeman’?
TELEGRAPH, UK
The global economy is regulated by rules agreed at Bretton Woods in 1944. Now we must tear them up and start again, writes Gordon Rayner
Last Updated: 1:21AM BST 08 Oct 2008
With war raging across the globe in July 1944, ministers from all 44 Allied nations met at the imposing Mount Washington Hotel in Bretton Woods, New Hampshire, to thrash out a set of rules that would govern world finance once Hitler was defeated. Knowing that greater international trade would help to prevent future wars, and determined to avoid another Great Depression, the delegates signed the Bretton Woods Agreements, creating the International Monetary Fund and the World Bank. It was a big vision, driven by grand historical figures: Winston Churchill, Franklin D Roosevelt and the British economist John Maynard Keynes.
But a system that was designed 64 years ago has, not surprisingly, proved ill equipped to deal with the fiendishly complex practices of 21st-century banking that led to the current worldwide crisis. Neither the IMF, the World Bank nor any other institution has the power to police the global financial system in a way that might have prevented the excessive risk-taking which led to the sub-prime mortgage crisis and, in turn, the credit crunch.
A more recent creation, the G8 group of industrialised nations, looks hopelessly out of date without the emerging economic giants of Brazil, India and China among its ranks. And the “beggar-thy-neighbour” policies of guaranteeing savings that have sprung up in Germany, Greece and Ireland in recent days have shown that even in Europe, co-ordinated economic policy is a myth.
“The current system is in crisis and we have an environment where dog eats dog,” said Bob McKee, of the economic consultancy Independent Strategy. “Electorates will expect more regulation, and politicians will push for it.”
The new Business Secretary, Peter Mandelson, argued last week that new global solutions are needed because “the machinery of global economic governance barely exists”, adding: “It is time for a Bretton Woods for this century.”
Gordon Brown argued as long ago as January 2007 that global regulation was “urgently in need of modernisation and reform”.
So, as the world’s central bankers gather this week in Washington DC for an IMF-World Bank conference to discuss the crisis, the big question they face is whether it is time to establish a global economic “policeman” to ensure the crash of 2008 can never be repeated.
Top of the to-do list for any new or reformed body would be new rules to manage the level of risk that banks and financial institutions are allowed to take on. Major economies already have regulatory bodies designed to keep financial institutions in check, such as the Financial Services Authority (FSA) in the UK and the Securities and Exchange Commission (SEC) in the US. But even if these bodies had done their job properly, opinions differ wildly between different countries over what constitutes an acceptable risk.
Take, for example, the Basle II Accord, a voluntary international agreement which might have seemed a crushing bore when it was published in 2004, but which just might have prevented the credit crunch if the world’s major economies had realised it was actually a good idea.
In essence, Basle II, concocted by the Basle Committee on Banking Supervision, set up by 10 leading economic nations, was designed to make sure banks did not overstretch themselves by lending too much money in relation to the amount of capital they held.
If it had been implemented the moment it was written, Basle II might have prevented the collapse of Northern Rock – which had lent seven times the amount of money it held on deposit – and saved the likes of Lehman Brothers in America. Instead, motivated by national self-interest, not to mention greed, the world’s major economies dithered, so that few, if any, had implemented the agreement by the start of 2008, with 95 countries only able to promise they would adhere to it by 2015.
We can only speculate whether a global policeman would have intervened in another seismic shift in economic policy: the abolition by the US president, Bill Clinton, in 1999 of the Glass-Steagall Act, which had, since 1933, separated retail banks from investment banks. The Act had been passed during the Great Depression to prevent banks from speculating with depositors’ money, and its repeal by Mr Clinton has been blamed by some commentators for contributing to the current financial crisis, which would have been limited to investment banks if Glass-Steagall had remained in place.
Too late, then, to remedy the missed opportunity of Basle II or to reinstate Glass-Steagall. But a new global regulatory arrangement might come just in time to address another issue troubling the world’s financial watchdogs: mark-to-market accounting, about which we are likely to be hearing a great deal in coming weeks.
Mark to market is a system in which banks must declare the value of assets such as securities on a daily basis, forcing them to be transparent about their balance sheets. The assets must be valued in line with what they would fetch on the open market that day, and if their value has dropped, the banks must raise capital to make up the shortfall, even if they have no intention of selling the assets for another five or 10 years.
Many banks have argued that this is unfair, as those same assets will recover their value in the long term, and marking them down has, they claim, contributed to the current crisis of confidence.
Simon Ward, an economist at New Star Asset Management, said: “This kind of accounting is causing investors to see ghosts in banks’ balance sheets which just don’t exist. If we had suspended mark-to-market accounting a year ago, the current crisis may have been avoided.”
Why has this become such a hot topic in recent days? Because banks in America have exerted such pressure on the SEC that rules on mark-to-market accounting may soon be relaxed, giving American companies an advantage over those in the UK, where the FSA has no intention of following suit.
As chaos reigns in the financial markets, the issue of regulatory reform is never far from the headlines. So what might a new architecture of global economic regulation look like?
In essence, any organisation with the power to police the global economy would have to include representatives of every major country – a United Nations of economic regulation. Robert Zoellick, president of the World Bank, identified the weakness of the current system this week when he said international organisations that excluded countries such as China, India, Brazil, Saudi Arabia, South Africa and Russia were outdated.
Gerard Lyons, a member of the International Council of the Bretton Woods Committee, a steering group for the IMF and World Bank, said: “We need to look at the current crisis and decide what banks have been doing well and what went wrong.
'The point we’re at now is like the scene in Apollo 13 when one of the mission controllers says they’re facing the worst disaster in Nasa’s history, and his boss points out that it will turn out to be Nasa’s finest hour if they get it right.
“We have an opportunity now to make changes in global banking that make sure we keep all the good bits and eradicate the bad. For example, there is nothing wrong with young people borrowing money against their expected future income if they have genuinely good prospects, but we need to prevent the sort of irresponsible lending to people with poor credit ratings that led to the sub-prime mortgage crisis.
“What we mustn’t do is throw the baby out with the bathwater. The global banking system has helped increase living standards at a faster rate than at any point in history, and we are about to see the emergence of two-thirds of the world’s population into the developed world.”
Danny Gabay, a former Bank of England economist who now works for Fathom Consulting, suggested the answer might already be staring us in the face, in the form of the Bank for International Settlements (BIS), the umbrella organisation for the committee that came up with the sensible Basle II Accord. “The BIS has been spot on throughout this,” he said. “The problem is that it has no teeth. The IMF tends to couch its warnings about economic problems in very diplomatic language, but the BIS is more independent and much better placed to deal with this if it is given the power to do so.”
The failures of modern global capitalism have been brutally exposed in recent months. Opinion is now hardening around the case for a new global architecture to enforce rules that ensure lessons are learnt and that the actions which have brought free markets to the brink of collapse are never repeated. It remains to be seen whether the political leaders of 2008 are up to the task. If they are, the first foundations of that new world could be laid in Washington this week.
The global economy is regulated by rules agreed at Bretton Woods in 1944. Now we must tear them up and start again, writes Gordon Rayner
Last Updated: 1:21AM BST 08 Oct 2008
With war raging across the globe in July 1944, ministers from all 44 Allied nations met at the imposing Mount Washington Hotel in Bretton Woods, New Hampshire, to thrash out a set of rules that would govern world finance once Hitler was defeated. Knowing that greater international trade would help to prevent future wars, and determined to avoid another Great Depression, the delegates signed the Bretton Woods Agreements, creating the International Monetary Fund and the World Bank. It was a big vision, driven by grand historical figures: Winston Churchill, Franklin D Roosevelt and the British economist John Maynard Keynes.
But a system that was designed 64 years ago has, not surprisingly, proved ill equipped to deal with the fiendishly complex practices of 21st-century banking that led to the current worldwide crisis. Neither the IMF, the World Bank nor any other institution has the power to police the global financial system in a way that might have prevented the excessive risk-taking which led to the sub-prime mortgage crisis and, in turn, the credit crunch.
A more recent creation, the G8 group of industrialised nations, looks hopelessly out of date without the emerging economic giants of Brazil, India and China among its ranks. And the “beggar-thy-neighbour” policies of guaranteeing savings that have sprung up in Germany, Greece and Ireland in recent days have shown that even in Europe, co-ordinated economic policy is a myth.
“The current system is in crisis and we have an environment where dog eats dog,” said Bob McKee, of the economic consultancy Independent Strategy. “Electorates will expect more regulation, and politicians will push for it.”
The new Business Secretary, Peter Mandelson, argued last week that new global solutions are needed because “the machinery of global economic governance barely exists”, adding: “It is time for a Bretton Woods for this century.”
Gordon Brown argued as long ago as January 2007 that global regulation was “urgently in need of modernisation and reform”.
So, as the world’s central bankers gather this week in Washington DC for an IMF-World Bank conference to discuss the crisis, the big question they face is whether it is time to establish a global economic “policeman” to ensure the crash of 2008 can never be repeated.
Top of the to-do list for any new or reformed body would be new rules to manage the level of risk that banks and financial institutions are allowed to take on. Major economies already have regulatory bodies designed to keep financial institutions in check, such as the Financial Services Authority (FSA) in the UK and the Securities and Exchange Commission (SEC) in the US. But even if these bodies had done their job properly, opinions differ wildly between different countries over what constitutes an acceptable risk.
Take, for example, the Basle II Accord, a voluntary international agreement which might have seemed a crushing bore when it was published in 2004, but which just might have prevented the credit crunch if the world’s major economies had realised it was actually a good idea.
In essence, Basle II, concocted by the Basle Committee on Banking Supervision, set up by 10 leading economic nations, was designed to make sure banks did not overstretch themselves by lending too much money in relation to the amount of capital they held.
If it had been implemented the moment it was written, Basle II might have prevented the collapse of Northern Rock – which had lent seven times the amount of money it held on deposit – and saved the likes of Lehman Brothers in America. Instead, motivated by national self-interest, not to mention greed, the world’s major economies dithered, so that few, if any, had implemented the agreement by the start of 2008, with 95 countries only able to promise they would adhere to it by 2015.
We can only speculate whether a global policeman would have intervened in another seismic shift in economic policy: the abolition by the US president, Bill Clinton, in 1999 of the Glass-Steagall Act, which had, since 1933, separated retail banks from investment banks. The Act had been passed during the Great Depression to prevent banks from speculating with depositors’ money, and its repeal by Mr Clinton has been blamed by some commentators for contributing to the current financial crisis, which would have been limited to investment banks if Glass-Steagall had remained in place.
Too late, then, to remedy the missed opportunity of Basle II or to reinstate Glass-Steagall. But a new global regulatory arrangement might come just in time to address another issue troubling the world’s financial watchdogs: mark-to-market accounting, about which we are likely to be hearing a great deal in coming weeks.
Mark to market is a system in which banks must declare the value of assets such as securities on a daily basis, forcing them to be transparent about their balance sheets. The assets must be valued in line with what they would fetch on the open market that day, and if their value has dropped, the banks must raise capital to make up the shortfall, even if they have no intention of selling the assets for another five or 10 years.
Many banks have argued that this is unfair, as those same assets will recover their value in the long term, and marking them down has, they claim, contributed to the current crisis of confidence.
Simon Ward, an economist at New Star Asset Management, said: “This kind of accounting is causing investors to see ghosts in banks’ balance sheets which just don’t exist. If we had suspended mark-to-market accounting a year ago, the current crisis may have been avoided.”
Why has this become such a hot topic in recent days? Because banks in America have exerted such pressure on the SEC that rules on mark-to-market accounting may soon be relaxed, giving American companies an advantage over those in the UK, where the FSA has no intention of following suit.
As chaos reigns in the financial markets, the issue of regulatory reform is never far from the headlines. So what might a new architecture of global economic regulation look like?
In essence, any organisation with the power to police the global economy would have to include representatives of every major country – a United Nations of economic regulation. Robert Zoellick, president of the World Bank, identified the weakness of the current system this week when he said international organisations that excluded countries such as China, India, Brazil, Saudi Arabia, South Africa and Russia were outdated.
Gerard Lyons, a member of the International Council of the Bretton Woods Committee, a steering group for the IMF and World Bank, said: “We need to look at the current crisis and decide what banks have been doing well and what went wrong.
'The point we’re at now is like the scene in Apollo 13 when one of the mission controllers says they’re facing the worst disaster in Nasa’s history, and his boss points out that it will turn out to be Nasa’s finest hour if they get it right.
“We have an opportunity now to make changes in global banking that make sure we keep all the good bits and eradicate the bad. For example, there is nothing wrong with young people borrowing money against their expected future income if they have genuinely good prospects, but we need to prevent the sort of irresponsible lending to people with poor credit ratings that led to the sub-prime mortgage crisis.
“What we mustn’t do is throw the baby out with the bathwater. The global banking system has helped increase living standards at a faster rate than at any point in history, and we are about to see the emergence of two-thirds of the world’s population into the developed world.”
Danny Gabay, a former Bank of England economist who now works for Fathom Consulting, suggested the answer might already be staring us in the face, in the form of the Bank for International Settlements (BIS), the umbrella organisation for the committee that came up with the sensible Basle II Accord. “The BIS has been spot on throughout this,” he said. “The problem is that it has no teeth. The IMF tends to couch its warnings about economic problems in very diplomatic language, but the BIS is more independent and much better placed to deal with this if it is given the power to do so.”
The failures of modern global capitalism have been brutally exposed in recent months. Opinion is now hardening around the case for a new global architecture to enforce rules that ensure lessons are learnt and that the actions which have brought free markets to the brink of collapse are never repeated. It remains to be seen whether the political leaders of 2008 are up to the task. If they are, the first foundations of that new world could be laid in Washington this week.
L.K.Advani’s healing touch
SHRI L.K. ADVANI’S ENDEVOUR TO PROMOTE HINDU-CHRISTIAN AMITY
Joint Statement
New Delhi – 8 October 2008
A delegation of Christian leaders – Archbishop of Delhi Vincent Concessao; Archbishop of Orissa Raphael Cheenath and Rev. Dr. Dominic Emmanuel, spokesman of the Delhi Catholic Archdiocese – called on Shri L.K. Advani, Leader of the Opposition (Lok Sabha) at his residence this morning. The initiative for this dialogue was taken by Swami Chidanand Saraswati of Paramarth Niketan, Rishikesh.
The meeting, which lasted for nearly two hours, was held in a cordial atmosphere. Smt. Sushma Swaraj, Shri Chandan Mitra, Sadhvi Bhagwati of Paramarth Niketan and Shri Sudheendra Kulkarni also participated in the meeting.
Shri Advani strongly reiterated his condemnation of the violence and vandalism that marked the attack on churches and innocent Christians in Orissa and elsewhere in the country, in the aftermath of the heinous killing of Swami Laxmananda Saraswati in Kandhmal district in August this year. He described the rape of a nun in Orissa as “a shameful crime against humanity”.
Christian leaders condemned the killing of Swamiji and four of his disciples.
All participants were unanimous that religious conversions or re-conversions, using coercive, fraudulent and allurement-based means, or through denigration of others’ faiths, are condemnable and must be stopped.
At the end of the meeting, it was unanimously resolved that :
1) All efforts should be made to restore peace, normalcy and a sense of security in strife-torn areas with the cooperation of the governments concerned and leaders of the Hindu and Christian communities. Justice must be done to the victims of violence expeditiously.
2) A sustained and sincere Inter-Faith Dialogue should be initiated between leaders of the Hindu and Christian communities on all aspects of life, including the issue of religious conversions. The dialogue should be held in the spirit of the unanimous report of the Inter-Faith Dialogue on Conversions, which was organised at the Vatican in May 2006 by the Pontifical Council for Inter-Faith Dialogue and the World Council of Churches, Geneva. A copy of the report is attached.
3) Swami Chidanand Saraswati offered to rebuild one of the destroyed villages in Kandhamal district in Orissa, in cooperation with the local church and the state government. Such confidence-building and unifying efforts should be replicated elsewhere in the country.
Signed by:
Shri L.K. Advani, Leader of the Opposition (Lok Sabha)
Vincent Concessao, Archbishop of Delhi
Raphael Cheenath, Archbishop of Orissa
Rev. Dr. Dominic Emmanuel
Spokesman of the Delhi Catholic Archdiocese
Swami Chidanand Saraswati
Paramarth Niketan, Rishikesh
Report from Inter-Religious Consultation on “Conversion – Assessing the Reality”
Lariano (Italy) : May 12-16, 2006
Organised by the Pontifical Council for Interreligious Dialogue, Vatican City, and the Office on Interreligious Relations & Dialogue of the World Council of Churches, Geneva
Introduction
We, the participants in the inter-faith reflection on “Conversion: Assessing the Reality”, met at Lariano (Italy) on May 12-16, 2006. We, 27 of us, belong to Buddhism, Christianity, Hinduism, Islam, Judaism and Yoruba religion. We shared our views and experiences on this important subject over five days of co-living in the peaceful, idyllic and spiritually vibrant surroundings of Villa Mater Dei – a kind of inter-faith pilgrimage, brief but fulfilling. Our deliberations were intense, and took place in an atmosphere of cordiality, mutual respect and commitment to learn from one another’s spiritual heritage, which together constitute the common inheritance of the entire humankind.
We affirm our commitment to the process of inter-religious dialogue. Its necessity and usefulness have increased exponentially in our times for promoting peace, harmony and conflict-transformation – within and among nations in our speedily globalizing world –, especially since religion has often been used, rather misused, to shed blood, spread bigotry and defend divisive and discriminatory socio-political practices.
We hold that inter-religious dialogue, to be meaningful, should not exclude any topic, however controversial or sensitive, if that topic is a matter of concern for humankind as a whole or for any section/s thereof.
It is our conviction that honest and candid dialogue can enlighten and deepen our understanding even on the most contentious of issues. The clarification and, hopefully, resultant reduction in the areas of disagreement and ignorance can help communities to expand the possibilities for reconciliation and living together in peace, love and amity, according to our respective religious precepts.
Therefore, we wholeheartedly welcome the initiative taken by the Pontifical Council for Inter-Religious Dialogue, Vatican City, and the Office on Interreligious Relations & Dialogue of the World Council of Churches, Geneva, for organizing this consultation on an issue that is rarely a subject of inter-faith dialogue. We convey our sincere thanks to them. Our own comprehensive deliberations over the past five days on religious conversion – in its theological as well historical and contemporary contexts – have testified to the value and usefulness of sharing our reflections on an issue which is often the cause of misunderstanding and tension among communities in many parts of the world.
Many differences and disagreements among the participants remained at the end of the consultation. Indeed, there was no unanimity even on the meaning of “conversion”. Nevertheless, we wish to record that our deliberations helped us develop a convergent understanding of the several aspects of the issue of religious conversion, making us more sensitive to each other’s concerns, and thus strengthening our understanding that such concerns need to be addressed through appropriate action locally, nationally and internationally.
A summary of reflections and recommendations
This document summarizes the main points of view expressed by the participants. It also records some consensual recommendations for the consideration of our respective communities, and of the countries and organizations to which we belong.
1. All of us believe that religions should be a source of uniting and ennobling of humans. Religion, understood and practiced in the light of the core principles and ideals of each of our faiths, can be a reliable guide to meeting the many challenges before humankind.
2. Freedom of religion is a fundamental, inviolable and non-negotiable right of every human being in every country in the world. Freedom of religion connotes the freedom, without any obstruction, to practice one’s own faith, freedom to propagate the teachings of one’s faith to people of one’s own and other faiths, and also the freedom to embrace another faith out of one’s own free choice.
3. We affirm that while everyone has a right to invite others to an understanding of their faith, it should not be exercised by violating other’s rights and religious sensibilities. At the same time, all should heal themselves from the obsession of converting others.
4. Freedom of religion enjoins upon all of us the equally non-negotiable responsibility to respect faiths other than our own, and never to denigrate, vilify or misrepresent them for the purpose of affirming superiority of our faith.
5. We acknowledge that errors have been perpetrated and injustice committed by the adherents of every faith. Therefore, it is incumbent on every community to conduct honest self-critical examination of its historical conduct as well as its doctrinal/theological precepts. Such self-criticism and repentance should lead to necessary reforms inter alia on the issue of conversion.
6. A particular reform that we would commend to practitioners and establishments of all faiths is to ensure that conversion by “unethical” means are discouraged and rejected by one and all. There should be transparency in the practice of inviting others to one’s faith.
7. While deeply appreciating humanitarian work by faith communities, we feel that it should be conducted without any ulterior motives. In the area of humanitarian service in times of need, what we can do together, we should not do separately.
8. No faith organization should take advantage of vulnerable sections of society, such as children and the disabled.
9. During our dialogue, we recognized the need to be sensitive to the religious language and theological concepts in different faiths. Members of each faith should listen to how people of other faiths perceive them. This is necessary to remove and avoid misunderstandings, and to promote better appreciation of each other’s faiths.
10. We see the need for and usefulness of a continuing exercise to collectively evolve a “code of conduct” on conversion, which all faiths should follow. We therefore feel that inter-religious dialogues on the issue of “conversions” should continue at various levels.
Joint Statement
New Delhi – 8 October 2008
A delegation of Christian leaders – Archbishop of Delhi Vincent Concessao; Archbishop of Orissa Raphael Cheenath and Rev. Dr. Dominic Emmanuel, spokesman of the Delhi Catholic Archdiocese – called on Shri L.K. Advani, Leader of the Opposition (Lok Sabha) at his residence this morning. The initiative for this dialogue was taken by Swami Chidanand Saraswati of Paramarth Niketan, Rishikesh.
The meeting, which lasted for nearly two hours, was held in a cordial atmosphere. Smt. Sushma Swaraj, Shri Chandan Mitra, Sadhvi Bhagwati of Paramarth Niketan and Shri Sudheendra Kulkarni also participated in the meeting.
Shri Advani strongly reiterated his condemnation of the violence and vandalism that marked the attack on churches and innocent Christians in Orissa and elsewhere in the country, in the aftermath of the heinous killing of Swami Laxmananda Saraswati in Kandhmal district in August this year. He described the rape of a nun in Orissa as “a shameful crime against humanity”.
Christian leaders condemned the killing of Swamiji and four of his disciples.
All participants were unanimous that religious conversions or re-conversions, using coercive, fraudulent and allurement-based means, or through denigration of others’ faiths, are condemnable and must be stopped.
At the end of the meeting, it was unanimously resolved that :
1) All efforts should be made to restore peace, normalcy and a sense of security in strife-torn areas with the cooperation of the governments concerned and leaders of the Hindu and Christian communities. Justice must be done to the victims of violence expeditiously.
2) A sustained and sincere Inter-Faith Dialogue should be initiated between leaders of the Hindu and Christian communities on all aspects of life, including the issue of religious conversions. The dialogue should be held in the spirit of the unanimous report of the Inter-Faith Dialogue on Conversions, which was organised at the Vatican in May 2006 by the Pontifical Council for Inter-Faith Dialogue and the World Council of Churches, Geneva. A copy of the report is attached.
3) Swami Chidanand Saraswati offered to rebuild one of the destroyed villages in Kandhamal district in Orissa, in cooperation with the local church and the state government. Such confidence-building and unifying efforts should be replicated elsewhere in the country.
Signed by:
Shri L.K. Advani, Leader of the Opposition (Lok Sabha)
Vincent Concessao, Archbishop of Delhi
Raphael Cheenath, Archbishop of Orissa
Rev. Dr. Dominic Emmanuel
Spokesman of the Delhi Catholic Archdiocese
Swami Chidanand Saraswati
Paramarth Niketan, Rishikesh
Report from Inter-Religious Consultation on “Conversion – Assessing the Reality”
Lariano (Italy) : May 12-16, 2006
Organised by the Pontifical Council for Interreligious Dialogue, Vatican City, and the Office on Interreligious Relations & Dialogue of the World Council of Churches, Geneva
Introduction
We, the participants in the inter-faith reflection on “Conversion: Assessing the Reality”, met at Lariano (Italy) on May 12-16, 2006. We, 27 of us, belong to Buddhism, Christianity, Hinduism, Islam, Judaism and Yoruba religion. We shared our views and experiences on this important subject over five days of co-living in the peaceful, idyllic and spiritually vibrant surroundings of Villa Mater Dei – a kind of inter-faith pilgrimage, brief but fulfilling. Our deliberations were intense, and took place in an atmosphere of cordiality, mutual respect and commitment to learn from one another’s spiritual heritage, which together constitute the common inheritance of the entire humankind.
We affirm our commitment to the process of inter-religious dialogue. Its necessity and usefulness have increased exponentially in our times for promoting peace, harmony and conflict-transformation – within and among nations in our speedily globalizing world –, especially since religion has often been used, rather misused, to shed blood, spread bigotry and defend divisive and discriminatory socio-political practices.
We hold that inter-religious dialogue, to be meaningful, should not exclude any topic, however controversial or sensitive, if that topic is a matter of concern for humankind as a whole or for any section/s thereof.
It is our conviction that honest and candid dialogue can enlighten and deepen our understanding even on the most contentious of issues. The clarification and, hopefully, resultant reduction in the areas of disagreement and ignorance can help communities to expand the possibilities for reconciliation and living together in peace, love and amity, according to our respective religious precepts.
Therefore, we wholeheartedly welcome the initiative taken by the Pontifical Council for Inter-Religious Dialogue, Vatican City, and the Office on Interreligious Relations & Dialogue of the World Council of Churches, Geneva, for organizing this consultation on an issue that is rarely a subject of inter-faith dialogue. We convey our sincere thanks to them. Our own comprehensive deliberations over the past five days on religious conversion – in its theological as well historical and contemporary contexts – have testified to the value and usefulness of sharing our reflections on an issue which is often the cause of misunderstanding and tension among communities in many parts of the world.
Many differences and disagreements among the participants remained at the end of the consultation. Indeed, there was no unanimity even on the meaning of “conversion”. Nevertheless, we wish to record that our deliberations helped us develop a convergent understanding of the several aspects of the issue of religious conversion, making us more sensitive to each other’s concerns, and thus strengthening our understanding that such concerns need to be addressed through appropriate action locally, nationally and internationally.
A summary of reflections and recommendations
This document summarizes the main points of view expressed by the participants. It also records some consensual recommendations for the consideration of our respective communities, and of the countries and organizations to which we belong.
1. All of us believe that religions should be a source of uniting and ennobling of humans. Religion, understood and practiced in the light of the core principles and ideals of each of our faiths, can be a reliable guide to meeting the many challenges before humankind.
2. Freedom of religion is a fundamental, inviolable and non-negotiable right of every human being in every country in the world. Freedom of religion connotes the freedom, without any obstruction, to practice one’s own faith, freedom to propagate the teachings of one’s faith to people of one’s own and other faiths, and also the freedom to embrace another faith out of one’s own free choice.
3. We affirm that while everyone has a right to invite others to an understanding of their faith, it should not be exercised by violating other’s rights and religious sensibilities. At the same time, all should heal themselves from the obsession of converting others.
4. Freedom of religion enjoins upon all of us the equally non-negotiable responsibility to respect faiths other than our own, and never to denigrate, vilify or misrepresent them for the purpose of affirming superiority of our faith.
5. We acknowledge that errors have been perpetrated and injustice committed by the adherents of every faith. Therefore, it is incumbent on every community to conduct honest self-critical examination of its historical conduct as well as its doctrinal/theological precepts. Such self-criticism and repentance should lead to necessary reforms inter alia on the issue of conversion.
6. A particular reform that we would commend to practitioners and establishments of all faiths is to ensure that conversion by “unethical” means are discouraged and rejected by one and all. There should be transparency in the practice of inviting others to one’s faith.
7. While deeply appreciating humanitarian work by faith communities, we feel that it should be conducted without any ulterior motives. In the area of humanitarian service in times of need, what we can do together, we should not do separately.
8. No faith organization should take advantage of vulnerable sections of society, such as children and the disabled.
9. During our dialogue, we recognized the need to be sensitive to the religious language and theological concepts in different faiths. Members of each faith should listen to how people of other faiths perceive them. This is necessary to remove and avoid misunderstandings, and to promote better appreciation of each other’s faiths.
10. We see the need for and usefulness of a continuing exercise to collectively evolve a “code of conduct” on conversion, which all faiths should follow. We therefore feel that inter-religious dialogues on the issue of “conversions” should continue at various levels.
Emergency Economic Stabilization Act of 2008 : Some controversial points
"Emergency Economic Stabilization Act of 2008", legal experts point out in these reports that:
- "Section 101 (a)(1) establishes what is termed the Troubled Asset Relief Program (TARP) to which substantial portions of what the American people currently owe to their banks and financial institutions is to be turned over the US Government for redistribution to foreign banks.
- Section 101(c)(3) Designates for the first time in American history these foreign banks as financial agents of Federal Government with full law enforcement authority over the citizens in the US.
- Section 3 (b) allows the US Secretary of the Treasury to put any kind of debt, including credit card, home loans, personal loans, automobile loans, etc., into the TARP programme.
- Section 112 allows the US Secretary of the Treasury to astoundingly extend financing to foreign banks to purchase the debt of the American people.
- Section 112 (1)(a) allows the US Government to hold stocks in companies for the first time in their history and which completely destroys the capitalist economy of their Nation.
- Section 119 (2)(a) gives the US Secretary of the Treasury dictatorial powers not reviewable by courts making this position the most powerful one in America.
- Section 122 increases the US public debt to the incredible amount of $11,315,000,000,000 (Trillion)
- Section 204 puts the United States under emergency economic rule and states, "all provisions of this Act are designated as an emergency requirement and necessary to meet emergency needs".
The Indian Mujahideen Striptease-An Open Letter to The Delhi Union Of Journalists (DUJ)
By B. Raman
Sir,
I read with interest your report expressing concern over the falling standards of reporting as evident in the manner in which the police operation at Batla House on September 19, 2008 was reported by various newspapers and TV channels in the Capital. (http://www.thehoot.org/web/home/story.php?storyid=3360&mod=1&pg=1§ionId=1&valid=true).
2. Before 9/11, the intelligence agencies and the Police of the world avoided premature briefings of the media on the investigation into terrorism-related cases lest such briefings give the terrorist leaders and their State-sponsors an idea of what the agencies and the police knew from the interrogation of those arrested.
3. After 9/11, as a result of tremendous public pressure to show that their investigation is progressing, they have started briefing the media officially even as the investigation is in progress. This could lead to very embarrassing situations as one saw in connection with the case relating to the arrest of a number of persons of Pakistani origin by the British Police in August 2006 on a charge of planning to blow up a number of US-bound planes by smuggling on board liquids of every day use which can be converted into explosives and the case in Australia relating to the arrest of an Indian Muslim doctor on suspicion of his involvement with the attempted terrorist strike outside the Glasgow airport in June, 2007.
4. In the British case, many of the arrested and prosecuted suspects were acquitted by a jury on the ground that there was no evidence that they were planning to fly to the US. In Australia, an enquiry established that the arrest of the Indian Muslim was wrong.
5. Mrs. Margaret Thatcher, the former British Prime Minister, believed that publicity was the oxygen of terrorists. When she was the Prime Minister, she had banned any reference to individual leaders of the Irish Republican Army by name in the Government-controlled electronic media and she kept a tight control over the interactions between the Police and media in terrorism-related cases. Since 9/11, these restrictions and controls are no longer there.
6. After 9/11, there has been a tremendous interest in the media and in the public regarding terrorism and terrorist networks. News about terrorism sells----whether in the print or electronic media. The more sensational, the better. Nobody---neither in the Police nor in the media--- is worried that they may be red in their face tomorrow if what they reported today proves to be wrong tomorrow. They calculate that public memory is short and won't remember tomorrow what they report today.
7. After the Mumbai blasts of March,1993, Sharad Pawar, the then Chief Minister of Maharashtra, had set up a co-ordination committee chaired by him, which used to meet in his office every evening to review the progress of the investigation and decide what should be told to the media and what should not. This committee used to instruct the Commissioner of Police of Mumbai as to what the media should be told.
8. The purpose of this exercise was, firstly, not to poison the public mind against the Muslims as a community, secondly, not to give the terrorists not yet arrested, including Dawood Ibrahim, and Pakistan's Inter-Services Intelligence (ISI) the benefit of knowing who had been arrested and what they were telling the police during the interrogation and, thirdly, to avoid embarrassing situations if evidence of today was found wrong tomorrow. It took the Mumbai Police, assisted by the Central Bureau of Investigation (CBI), 17 months to complete the investigation and establish a complete chain of evidence against the accused---those arrested as well as those absconding. Only then senior officials of the Union Home Ministry held a big press conference at New Delhi in August, 1994, to share with the media the results of the investigation. Later, Narasimha Rao, the then Prime Minister, was unhappy even with this press conference. He felt that too many details had been given out which could benefit the ISI and help it in covering up its tracks." We should have kept the ISI guessing. What was the need for mentioning all these details?" he asked in a note which he sent to S. B. Chavan, the then Home Minister, after reading the sensational stories carried by the media the next day.
9. Since 9/11, one has been seeing all over the world a mushrooming growth of what are called embedded journalists because of the media interest in terrorism. The term embedded journalist, inter alia, refers to journalists, who enjoy privileged access to the powers that be and the chiefs and other senior officers of the intelligence agencies and the police and in return for this are prepared to disseminate any story given to them without applying a critical mind to it. Some months ago, the "Guardian" of London had come out with an article on some Al Qaeda analysts in the West, whose credentials require closer scrutiny. Similarly in the US, there were references to embedded journalists who let themselves be used by officials of the Bush Administration for disseminating allegations about the presence of weapons of mass destruction in Iraq and about the links of Saddam Hussein with Al Qaeda. These allegations, which were played up by the embedded journalists, were subsequently found to be false.
10. In India, as a result of the mushrooming growth of TV channels and the competitive pressure for sensational stories, the evils of premature briefing even before an investigation has been completed, different police officers talking to the media without a proper control over them, the lack of political control over the media briefings etc have been growing. The police start briefing the media within a few hours of an arrest without giving themselves time to verify the statements made by the arrested persons and analysing the evidence collected. This not only results in a media trial of the suspect even before sufficient evidence justifying a charge-sheet is collected, but also damages the credibility of the police and the intelligence agencies due to contradictory assertions by different officers.
11. One could give the following examples of the kind of embarrasing situations that could arise:
In 2002, the Mumbai Police claimed to have arrested an Indian Muslim, who was allegedly working for Al Qaeda and had undergone flying training in Australia. This could not be substantiated.
In 2006, the Mumbai Police held a high-profile press conference at which they claimed to have established that the ISI had orchestrated the suburban train blasts of July, 2006, with the help of the Lashkar-e-Toiba (LET) and the Harkat-ul-Jihad-al-Islami (HUJI). Their claim was subsequently discounted by M.K.Narayanan, the National Security Adviser, in a TV interview. Now, we are told that investigation has established that it was, in fact, the Indian Mujahideen (IM) which had carried out the blasts. If what we are told now is correct, what we were told in 2006 was wrong and vice versa.
In their recent press conference, the Ahmedabad Police said that it was the Students' Islamic Movement of India (SIMI), which was now operating under the name IM. The Delhi police claimed subsequently that the SIMI, the IM and the LET were operating in tandem. They thus resurrected the LET, which had disappeared from the media headlines for some time. If one read carefully the transcripts of the press conferences of the Ahmedabad Police and the Delhi Police, one would find contradictions in some material particulars. Such publicly-exhibited contradictions play into the hands of the terrorists.
We have had so many masterminds initially projected on the TV screens and in media columns and then downgraded. Initially Abdul Suban Quereshi alias Tauqueer of Mumbai was projected as the IT whiz-kid of the IM. Some TV channels even projected him as India's Osama bin Laden. Then, one Shabaz Hussain of Uttar Pradesh was projected as the real IT whiz-kid. Now, four Muslims of Pune are projected as the real IT whiz-kids. To point all this out is not to question the claims of the Police, but to draw attention to the pitfalls of premature media briefings before the investigation is complete. One understands that the police officers of today are under tremendous pressure from the media to give sound bytes and there is hardly any centralised control of the investigation and briefings.
12. There is a need for clear-cut instructions by the Government to the police and the intelligence agencies on media briefings and for strict enforcement of those instructions. Similarly, the media too should examine the post-9/11 evils which have crept into media reporting on terrorism and lay down a list of do's and don'ts for the guidance of the media.
13. This may please be read in continuation of my earlier article titled "Al Qaeda Striptease" of August 29, 2004, at http://www.southasiaanalysis.org/papers12/paper1103.html and http://www.atimes.com/atimes/South_Asia/FI01Df03.html
(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Directior, Institute For Topical Studies, Chennai. E-mail: seventyone2@gmail.com)
Sir,
I read with interest your report expressing concern over the falling standards of reporting as evident in the manner in which the police operation at Batla House on September 19, 2008 was reported by various newspapers and TV channels in the Capital. (http://www.thehoot.org/web/home/story.php?storyid=3360&mod=1&pg=1§ionId=1&valid=true).
2. Before 9/11, the intelligence agencies and the Police of the world avoided premature briefings of the media on the investigation into terrorism-related cases lest such briefings give the terrorist leaders and their State-sponsors an idea of what the agencies and the police knew from the interrogation of those arrested.
3. After 9/11, as a result of tremendous public pressure to show that their investigation is progressing, they have started briefing the media officially even as the investigation is in progress. This could lead to very embarrassing situations as one saw in connection with the case relating to the arrest of a number of persons of Pakistani origin by the British Police in August 2006 on a charge of planning to blow up a number of US-bound planes by smuggling on board liquids of every day use which can be converted into explosives and the case in Australia relating to the arrest of an Indian Muslim doctor on suspicion of his involvement with the attempted terrorist strike outside the Glasgow airport in June, 2007.
4. In the British case, many of the arrested and prosecuted suspects were acquitted by a jury on the ground that there was no evidence that they were planning to fly to the US. In Australia, an enquiry established that the arrest of the Indian Muslim was wrong.
5. Mrs. Margaret Thatcher, the former British Prime Minister, believed that publicity was the oxygen of terrorists. When she was the Prime Minister, she had banned any reference to individual leaders of the Irish Republican Army by name in the Government-controlled electronic media and she kept a tight control over the interactions between the Police and media in terrorism-related cases. Since 9/11, these restrictions and controls are no longer there.
6. After 9/11, there has been a tremendous interest in the media and in the public regarding terrorism and terrorist networks. News about terrorism sells----whether in the print or electronic media. The more sensational, the better. Nobody---neither in the Police nor in the media--- is worried that they may be red in their face tomorrow if what they reported today proves to be wrong tomorrow. They calculate that public memory is short and won't remember tomorrow what they report today.
7. After the Mumbai blasts of March,1993, Sharad Pawar, the then Chief Minister of Maharashtra, had set up a co-ordination committee chaired by him, which used to meet in his office every evening to review the progress of the investigation and decide what should be told to the media and what should not. This committee used to instruct the Commissioner of Police of Mumbai as to what the media should be told.
8. The purpose of this exercise was, firstly, not to poison the public mind against the Muslims as a community, secondly, not to give the terrorists not yet arrested, including Dawood Ibrahim, and Pakistan's Inter-Services Intelligence (ISI) the benefit of knowing who had been arrested and what they were telling the police during the interrogation and, thirdly, to avoid embarrassing situations if evidence of today was found wrong tomorrow. It took the Mumbai Police, assisted by the Central Bureau of Investigation (CBI), 17 months to complete the investigation and establish a complete chain of evidence against the accused---those arrested as well as those absconding. Only then senior officials of the Union Home Ministry held a big press conference at New Delhi in August, 1994, to share with the media the results of the investigation. Later, Narasimha Rao, the then Prime Minister, was unhappy even with this press conference. He felt that too many details had been given out which could benefit the ISI and help it in covering up its tracks." We should have kept the ISI guessing. What was the need for mentioning all these details?" he asked in a note which he sent to S. B. Chavan, the then Home Minister, after reading the sensational stories carried by the media the next day.
9. Since 9/11, one has been seeing all over the world a mushrooming growth of what are called embedded journalists because of the media interest in terrorism. The term embedded journalist, inter alia, refers to journalists, who enjoy privileged access to the powers that be and the chiefs and other senior officers of the intelligence agencies and the police and in return for this are prepared to disseminate any story given to them without applying a critical mind to it. Some months ago, the "Guardian" of London had come out with an article on some Al Qaeda analysts in the West, whose credentials require closer scrutiny. Similarly in the US, there were references to embedded journalists who let themselves be used by officials of the Bush Administration for disseminating allegations about the presence of weapons of mass destruction in Iraq and about the links of Saddam Hussein with Al Qaeda. These allegations, which were played up by the embedded journalists, were subsequently found to be false.
10. In India, as a result of the mushrooming growth of TV channels and the competitive pressure for sensational stories, the evils of premature briefing even before an investigation has been completed, different police officers talking to the media without a proper control over them, the lack of political control over the media briefings etc have been growing. The police start briefing the media within a few hours of an arrest without giving themselves time to verify the statements made by the arrested persons and analysing the evidence collected. This not only results in a media trial of the suspect even before sufficient evidence justifying a charge-sheet is collected, but also damages the credibility of the police and the intelligence agencies due to contradictory assertions by different officers.
11. One could give the following examples of the kind of embarrasing situations that could arise:
In 2002, the Mumbai Police claimed to have arrested an Indian Muslim, who was allegedly working for Al Qaeda and had undergone flying training in Australia. This could not be substantiated.
In 2006, the Mumbai Police held a high-profile press conference at which they claimed to have established that the ISI had orchestrated the suburban train blasts of July, 2006, with the help of the Lashkar-e-Toiba (LET) and the Harkat-ul-Jihad-al-Islami (HUJI). Their claim was subsequently discounted by M.K.Narayanan, the National Security Adviser, in a TV interview. Now, we are told that investigation has established that it was, in fact, the Indian Mujahideen (IM) which had carried out the blasts. If what we are told now is correct, what we were told in 2006 was wrong and vice versa.
In their recent press conference, the Ahmedabad Police said that it was the Students' Islamic Movement of India (SIMI), which was now operating under the name IM. The Delhi police claimed subsequently that the SIMI, the IM and the LET were operating in tandem. They thus resurrected the LET, which had disappeared from the media headlines for some time. If one read carefully the transcripts of the press conferences of the Ahmedabad Police and the Delhi Police, one would find contradictions in some material particulars. Such publicly-exhibited contradictions play into the hands of the terrorists.
We have had so many masterminds initially projected on the TV screens and in media columns and then downgraded. Initially Abdul Suban Quereshi alias Tauqueer of Mumbai was projected as the IT whiz-kid of the IM. Some TV channels even projected him as India's Osama bin Laden. Then, one Shabaz Hussain of Uttar Pradesh was projected as the real IT whiz-kid. Now, four Muslims of Pune are projected as the real IT whiz-kids. To point all this out is not to question the claims of the Police, but to draw attention to the pitfalls of premature media briefings before the investigation is complete. One understands that the police officers of today are under tremendous pressure from the media to give sound bytes and there is hardly any centralised control of the investigation and briefings.
12. There is a need for clear-cut instructions by the Government to the police and the intelligence agencies on media briefings and for strict enforcement of those instructions. Similarly, the media too should examine the post-9/11 evils which have crept into media reporting on terrorism and lay down a list of do's and don'ts for the guidance of the media.
13. This may please be read in continuation of my earlier article titled "Al Qaeda Striptease" of August 29, 2004, at http://www.southasiaanalysis.org/papers12/paper1103.html and http://www.atimes.com/atimes/South_Asia/FI01Df03.html
(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Directior, Institute For Topical Studies, Chennai. E-mail: seventyone2@gmail.com)
October 07, 2008
The World Is Curved: Hidden Dangers to the Global Economy
by David M. Smick
New York: Portfolio, 2008
David Smick keeps a low profile, but experts consider him one of the most insightful financial market strategists in the world. For more than two decades, he has conferred with central bankers (such as Alan Greenspan and Ben Bernanke) and advised top Wall Street executives and investors, from George Soros to Michael Steinhardt to Stan Druckenmiller. Political leaders (from Bill Bradley to Jack Kemp) have regularly sought his policy advice.
The World Is Curved picks up where Thomas Friedman’s The World Is Flat left off, taking readers on an insider’s tour through the private offices of central bankers, finance ministers, even prime ministers. Smick reveals how today’s risky environment came to be -- and why the mortgage mess is a symptom of potentially far more devastating trouble. He wrestles with the two questions on everyone’s mind: How bad could things really get in today’s volatile economy? And what can we do about it?
Drawing on riveting anecdotes in language anyone can understand, Smick explains:
Why the churning cauldron we call China (the next great bubble to burst) represents a powerful threat to everyone’s pocketbook
How Japanese housewives have taken control of their nation’s savings, and why it matters to us
How greed-driven bankers and investment bankers have put everyone’s pensions and 401(k)s at risk
Why today’s “incredible shrinking central banks” may not be able to save us when the next crisis hits
Why the big-money Russian, Chinese, Saudi, and Dubai sovereign wealth funds represent a tectonic shift in global financial power, away from the United States, Europe, and Japan
Why the world desperately needs a “big think” financial doctrine to guide today’s dangerous ocean of money
The World Is Curved is the rare book that speaks simultaneously to the Wall Street, Washington, and London elite, yet its apt storytelling shows Main Street readers how to survive in these turbulent times.
David M. Smick advises some of the world’s most successful money managers through his investment and strategic consulting firm, Johnson Smick International, Inc. He is also the founder, editor, and publisher of The International Economy, an acclaimed quarterly. He has served as an adviser to both Republican and Democratic presidential candidates and has written for such publications as The Wall Street Journal and The New York Times. Smick and his family live in Washington, D.C.
BJP raps Amar for questioning encounter
INDIAN EXPRESS
, Oct 8 02:17 AM
Positioning itself as the only political party "that instinctively respected the selfless, secular character of the country's security forces and police personnel", the BJP on Tuesday launched a scathing attack on the Samajwadi Party, besides the Congress, for "questioning the sacrifice of Delhi Police Inspector Mohan Chand Sharma".
"The BJP strongly condemns the highly irresponsible and shameful statement of Samajwadi Party MP Amar Singh when he questioned the supreme sacrifice of Delhi Police's Mohan Chand Sharma. What is truly shameful is that he has raised these doubts after reportedly sending a cheque to his wife for his services to the nation. This is the most ugly and cruel form of vote bank politics, which the country has witnessed," BJP spokesperson Ravi Shankar Prasad said here on Tuesday.
"Singh has tried to embolden the morale of terrorists and their patrons who routinely demoralise the security forces," he said, lambasting the trend of "sponsored campaigns" against security forces. "After self-appointed intellectuals, now mainstream political parties too are doing this for vote bank politics. This can only be termed as communal politics at it worst."
"The role of the Congress Party is no less shameful when its leaders including Kapil Sibal and Salman Khursheed compete with each other to get a so-called probe into the episode. What does Congress general secretary Digvijay Singh mean when he says that if there is a doubt there must be a probe? The Congress's only guiding force is blatant vote bank politics and the fight against terror is secondary for them," he added, besides questioning the "conspicuous silence" of Prime Minister Manmohan Singh and Sonia Gandhi over pro-SIMI statements by some of their Cabinet colleagues.
"The BJP salutes the family members of late officer M C Sharma, who have rejected the offer of Rs 10 lakh by Amar Singh," said Prasad, adding that Singh must apologise to the nation.
IMF Sees Heightened Risks to Global Financial Stability and Urges Comprehensive Action
COMPLETE REPORT : http://www.imf.org/external/pubs/ft/gfsr/2008/02/index.htm
Press Release No. 08/235
October 7, 2008
The International Monetary Fund (IMF) today said the state of the global financial system has worsened since its last assessment in April 2008. The ongoing deleveraging process has accelerated and threatens to become disorderly increasing the risk a severe adverse feedback loop between the financial system and the broader economy.
Monetary and financial conditions have tightened further, risk appetites have continued to retrench, and global macroeconomic, credit, market, liquidity, and emerging market risks have increased, according to the October 2008 edition of the IMF's Global Financial Stability Report (GFSR). The IMF also underscored the determination of governments to respond to the challenges, but said that the restoration of financial stability would benefit from a collective commitment by authorities to address the challenges effectively.
"Today's GFSR report shows how serious a crisis we currently face," IMF Managing Director Dominique Strauss-Kahn stated. "The time for piecemeal solutions is over. I therefore call on policymakers to urgently address the crisis at a national level with comprehensive measures to restore confidence in the financial sector. At the same time, national governments must closely coordinate these efforts to bring about a return to stability in the international financial system."
Mr. Jaime Caruana, Counsellor and Director of the IMF's Monetary and Capital Markets Department, which authored the report, noted, "The global financial system has undergone unprecedented turmoil in the last few months, and the situation has worsened considerably since Spring. But, as severe as circumstances are, the resolve and sense of urgency of country authorities to tackle the issues at hand and the sense of urgency to intensify international cooperation are encouraging developments."
"Concrete actions, however, are needed to tackle insufficient capital, falling asset valuations, and a dysfunctional funding market. Such a comprehensive approach, if consistent among countries, should be sufficient to restore confidence and the proper functioning of markets, and avert a more protracted downturn in the global economy," he added.
The U.S. remains the epicenter of the financial crisis, with its housing market continuing to decline and a wider economic slowdown contributing to a further deterioration in the quality of existing loans. With the turning point in the default cycle yet to be reached, the GFSR estimates that declared losses on U.S.-originated loans and securitized assets are likely to amount to about $1.4 trillion, compared to the April 2008 GFSR estimate of $945 billion. Authorities in the U.S. and a number of countries have taken measures to bolster confidence in financial institutions and markets, including injecting capital in financial institutions or proposing to buy troubled assets. "The ultimate success of these measures is difficult to gauge. But as the specifics become clear, the authorities will need to communicate clearly how the risks to taxpayers will be contained," Caruana said.
The GFSR notes borrowers and financial institutions in emerging markets, which until recently remained fairly resilient, will be confronted with a much more challenging economic environment: A combination of global credit tightening, and economic slowdown, which could accelerate a downturn in the domestic credit cycle in some countries. Those economies with greater reliance on short-term flows or with leveraged banking systems funded internationally are particularly vulnerable.
In the short term, and to bolster global financial stability, the GFSR recommends that authorities of affected countries publicly make a collective commitment to address the issue. Based on experience from earlier crises, it recommends five principles that can help authorities restore confidence in these exceptional circumstances: (i) employ measures that are comprehensive, timely, and clearly communicated; (ii) aim for a consistent and coherent set of policies to stabilize the global financial system across countries; (iii) ensure rapid response on the basis of early detection of strains in order to contain systemic repercussions; (iv) assure that emergency government interventions are temporary and taxpayer interests are protected; and (v) avoid losing sight of the objective of a more sound, competitive, and efficient financial system going forward.
Summary of GFSR's Analytic Chapters
Chapter 2 of the GFSR explores the inability of bank funding markets to perform their role in distributing liquidity across institutions and concludes that the interest rate channel of monetary policy has become much less reliable. It recommends improving the infrastructure in funding markets, increasing the authorities' attention to both credit and liquidity risks, and encouraging central bank cooperation and communication.
Chapter 3 analyses the potential procyclical role that the application of Fair Value Accounting (FVA) methods may have played in the development and outcome of the current credit cycle. It concludes that the application of FVA is still the way forward, but further enhancements of FVA methodologies will be needed to mitigate the exaggerated effects of some valuation techniques.
Chapter 4 examines equity markets in emerging market countries to assess the extent to which external and domestic factors drive equity market valuations. It finds that global factors are as important in explaining the movement in emerging market equity prices as are domestic fundamentals, and that opportunity for spillovers from advanced economies to emerging equity markets has risen, suggesting a growing transmission channel for equity price movements. Policy makers need to remain engaged over the longer run in building resilience in their local financial markets.
Press Release No. 08/235
October 7, 2008
The International Monetary Fund (IMF) today said the state of the global financial system has worsened since its last assessment in April 2008. The ongoing deleveraging process has accelerated and threatens to become disorderly increasing the risk a severe adverse feedback loop between the financial system and the broader economy.
Monetary and financial conditions have tightened further, risk appetites have continued to retrench, and global macroeconomic, credit, market, liquidity, and emerging market risks have increased, according to the October 2008 edition of the IMF's Global Financial Stability Report (GFSR). The IMF also underscored the determination of governments to respond to the challenges, but said that the restoration of financial stability would benefit from a collective commitment by authorities to address the challenges effectively.
"Today's GFSR report shows how serious a crisis we currently face," IMF Managing Director Dominique Strauss-Kahn stated. "The time for piecemeal solutions is over. I therefore call on policymakers to urgently address the crisis at a national level with comprehensive measures to restore confidence in the financial sector. At the same time, national governments must closely coordinate these efforts to bring about a return to stability in the international financial system."
Mr. Jaime Caruana, Counsellor and Director of the IMF's Monetary and Capital Markets Department, which authored the report, noted, "The global financial system has undergone unprecedented turmoil in the last few months, and the situation has worsened considerably since Spring. But, as severe as circumstances are, the resolve and sense of urgency of country authorities to tackle the issues at hand and the sense of urgency to intensify international cooperation are encouraging developments."
"Concrete actions, however, are needed to tackle insufficient capital, falling asset valuations, and a dysfunctional funding market. Such a comprehensive approach, if consistent among countries, should be sufficient to restore confidence and the proper functioning of markets, and avert a more protracted downturn in the global economy," he added.
The U.S. remains the epicenter of the financial crisis, with its housing market continuing to decline and a wider economic slowdown contributing to a further deterioration in the quality of existing loans. With the turning point in the default cycle yet to be reached, the GFSR estimates that declared losses on U.S.-originated loans and securitized assets are likely to amount to about $1.4 trillion, compared to the April 2008 GFSR estimate of $945 billion. Authorities in the U.S. and a number of countries have taken measures to bolster confidence in financial institutions and markets, including injecting capital in financial institutions or proposing to buy troubled assets. "The ultimate success of these measures is difficult to gauge. But as the specifics become clear, the authorities will need to communicate clearly how the risks to taxpayers will be contained," Caruana said.
The GFSR notes borrowers and financial institutions in emerging markets, which until recently remained fairly resilient, will be confronted with a much more challenging economic environment: A combination of global credit tightening, and economic slowdown, which could accelerate a downturn in the domestic credit cycle in some countries. Those economies with greater reliance on short-term flows or with leveraged banking systems funded internationally are particularly vulnerable.
In the short term, and to bolster global financial stability, the GFSR recommends that authorities of affected countries publicly make a collective commitment to address the issue. Based on experience from earlier crises, it recommends five principles that can help authorities restore confidence in these exceptional circumstances: (i) employ measures that are comprehensive, timely, and clearly communicated; (ii) aim for a consistent and coherent set of policies to stabilize the global financial system across countries; (iii) ensure rapid response on the basis of early detection of strains in order to contain systemic repercussions; (iv) assure that emergency government interventions are temporary and taxpayer interests are protected; and (v) avoid losing sight of the objective of a more sound, competitive, and efficient financial system going forward.
Summary of GFSR's Analytic Chapters
Chapter 2 of the GFSR explores the inability of bank funding markets to perform their role in distributing liquidity across institutions and concludes that the interest rate channel of monetary policy has become much less reliable. It recommends improving the infrastructure in funding markets, increasing the authorities' attention to both credit and liquidity risks, and encouraging central bank cooperation and communication.
Chapter 3 analyses the potential procyclical role that the application of Fair Value Accounting (FVA) methods may have played in the development and outcome of the current credit cycle. It concludes that the application of FVA is still the way forward, but further enhancements of FVA methodologies will be needed to mitigate the exaggerated effects of some valuation techniques.
Chapter 4 examines equity markets in emerging market countries to assess the extent to which external and domestic factors drive equity market valuations. It finds that global factors are as important in explaining the movement in emerging market equity prices as are domestic fundamentals, and that opportunity for spillovers from advanced economies to emerging equity markets has risen, suggesting a growing transmission channel for equity price movements. Policy makers need to remain engaged over the longer run in building resilience in their local financial markets.
Brothers in arms
DEFENCE
FRONTLINE
Brothers in arms
LYLA BAVADAM
Gentlemen Cadets of the IMA’s Third Regular Course, which celebrated its Diamond Jubilee recently, take a walk down memory lane.
COURTESY: IMA
The war memorial at the IMA, Dehra Dun.
CAMARADERIE, goodwill and an overwhelming sense of lives lived well were in abundance at the diamond jubilee celebrations of the Third Regular Course of the Indian Military Academy (IMA) in Dehra Dun. The Third Course has a unique history and the stories told by its officers go beyond personal recollections and experiences. At one level they are historical anecdotes and at another they are part of a collective memory that binds the former Gentlemen Cadets together.
The meeting of more than 60 officers and their families at the IMA on September 12 went beyond a social gathering. It was a celebration of those who had served during a historical juncture in India’s past. Hundred and eighty-five cadets were commissioned from the IMA on September 12, 1948. The numbers would have been larger, but 67 of their course mates had opted for Pakistan and finished their training at the newly created Pakistan Military Academy (PMA) in Kakul.
The Third Course was shaped by historical events in which it could not help but be immersed. It was the smallest batch ever to graduate from the IMA because of Partition. The uniqueness of the course is also seen in its truncated duration: it was cut short from two years to 21 months in response to urgent military needs of the country and a shortfall of officers in the Army. On passing out, the cadets immediately joined battalions and regiments at the front line. Moreover, while still in training they were deployed for patrolling and suppression of violent activities. Indeed, the IMA is believed to be the only military academy in the world that has used its cadets for maintaining internal security.
The history of the Third Course is closely linked with Partition. About 800 metres down the road from the IMA was a camp of about 10,000 Sikh and Hindu refugees from Pakistan. In the week after Independence, anti-Muslim riots began in Dehra Dun and the IMA suddenly found itself involved in preserving internal security. Lieutenant General Mathew Thomas of the Third Course recalls cadets patrolling on foot and in Bren gun carriers, carrying out ambushes, from August to September 1947.
By October, life in the Academy returned to normal. Some cadets had opted for Pakistan but would leave only after they completed their course. The British officers were making plans for their repatriation. But then there was another bombshell. Lt. Gen. Thomas recounted it thus: “It appeared that the fledgling Pakistani government had made representations to [General] Auchinleck regarding the safety of its cadets at the IMA. There was the possibility of hostilities breaking out between the two countries, and they [the Pakistani authorities] felt they could no longer leave them at Dehra Dun. Auchinleck could not deny their request.”
The transfer of the officers and cadets to Pakistan was codenamed Operation Exodus and remained cloaked in secrecy until the last minute. Colonel Giridhari Singh of the Third Course, and later founder of a business conglomerate, recalled the moment when the cadets were watching a hockey match and “Brigadier Barltrop, the Commandant, entered the field from the goal end and signalled to the umpire, Major Wilson, to see him. We knew at once that all was not well.” It was 5 p.m. on October 17, 1947, when all the cadets were told of the plan. It was met with stunned silence. Eight hours later, after midnight, the Pakistani contingent moved out of the IMA gates with a few belongings (the rest were sent on later) and drove to the Saharanpur air base where 10 Dakotas of the 31 Squadron of the Royal Air Force flew them to Lahore.
The parting was hurried but emotional. Giridhari Singh says he “remembered Captain Gilani addressing us with tears streaming down his face”. And Thomas remembers “emotional farewells, exchange of gifts, borrowings of suitcases and promises to keep in touch… Sadly these were to end in smoke because the two dominions would soon be at war.” The departure of 67 cadets – 66 Muslims and one Christian – was carried out with such secrecy that the next morning the bearers were surprised to see their Gentlemen Cadets missing.
Partition also divided the IMA’s assets. The guideline was a 70:30 ratio between India and Pakistan. This Herculean task had its lighter moments. Major Tikka Khan, one of the instructors, was given the task of dividing the library. When he came to the encyclopaedias, Tikka Khan suggested that every alternate volume be given to Pakistan. Fortunately the idea was recognised as absurd and the encyclopaedia sets were divided more sensibly. That is just one story about Khan, better known as the Butcher of Bangladesh (and later the Butcher of Baluchistan) and infamous for atrocities such as throwing infants up into the air and catching them on bayonets as they fell.
THE HINDU PHOTO LIBRARY
DECEMBER 9, 1948: Prime Minister Jawaharlal Nehru inspects the Passing Out Parade of the first University Graduates Course. Others seen with him are Defence Minister Sardar Baldev Singh, Major General Kulwant Singh, and IMA Commandant Mahadeo Singh.
Trouble on the northern borders and a shortfall of Army officers resulted in the Indian government pushing for the Third Course to be commissioned even earlier than December 1948. A compromise date was reached and 185 cadets passed out of the IMA on September 12, 1948. Most of the newly commissioned officers went straight into action. Those in the Infantry were sent to Kashmir. Those in the Armoured Corps saw action in Operation Polo for the liberation of Hyderabad.
The India-Pakistan war of 1971 brought the IMA and PMA course mates together again. At that time Lt. Gen. H. Kaul was commanding an armoured brigade in the western sector. By the time ceasefire was declared, Kaul knew that the Pakistani brigade commander was a former Third Course mate. Still camped along the Bein river, Kaul sent word inviting him to lunch. A while later Kaul saw a white flag approaching. It was a Pakistani second lieutenant who said the brigade commander would be unable to accept the invitation. He had apparently been removed from command. Many months later, Kaul was commanding a division in Madhya Pradesh when he got to know that another Third Course mate was in a PoW (prisoner of war) camp in Jabalpur. “I met him and took him out to lunch. We went without an escort since we met as friends and he treated me like a brother,” he recalled.
Others of the Third Course relate similar incidents. Brigadier Balbir Singh Dayal describes how the Third Course kinship helped during the post-1971 delineation of the line of control in the Kargil sector. Dayal says he found the Pakistani sector commander to be “officious” until a point when he suddenly smiled and asked if Dayal was from the Third Course. Once this was established, Dayal says he and the Pakistani officer, Brigadier Safdar Hussain Khan, reminisced about the IMA while young officers of both sides looked on in amazement. The atmosphere in subsequent meetings had “genuine comradeship and fellow feeling… and this amicability and understanding due to the common bond of the Third Course helped in a successful and extremely satisfactory delineation work in the northern sector of Jammu and Kashmir,” said Dayal.
The two officers did their bit in keeping up the spirit that their Commandant Brig. A.B. Barltrop had urged when he announced the partition of the IMA in a Special Order of the Day dated October 14, 1947.
He wrote: “I should like to say a word about the future relations between the Pakistan and the Indian Military Academies. All cadet training establishments the world over have a natural affinity, and it is consequently essential that there should exist between the PMA and the IMA a state of close cooperation and friendship. I am convinced that the officer cadre of both armies have a great part to play in restoring the happy human relationships which are so sorely needed in this country and which have deteriorated so sadly and inevitably as a result of the events of the past two weeks.”
The Third Course has done its alma mater proud, producing 12 Lieutenant Generals, 22 Major Generals, 10 Param Vishisht Seva Medals, five Mahavir Chakras (one posthumous), 15 Ati Vishisht Seva Medals, five Vishisht Seva Medals, three Vir Chakras, two Sena Medals and one Padma Shree. There have been two Army commanders, two commandants of the IMA and one Governor.
The cadets who left for Pakistan formed the First Course of the PMA. Gentleman Cadet No. 391 at the IMA, who became Cadet No. 1 at the PMA, Rahim Uddin Khan, rose to the rank of General and became Joint Chief of Staff in Pakistan and, later, Governor of one of the provinces. Lt. Gen. Saeed Qadir became a Minister and a Senator. Captain Shakir Ullah Durrani became the Governor of Islamabad.
The officers who had left also had successful careers. Major Tikka Khan became the Chief of Army Staff and Major A.B. Rahman became the Governor of Punjab, Pakistan.•
FRONTLINE
Brothers in arms
LYLA BAVADAM
Gentlemen Cadets of the IMA’s Third Regular Course, which celebrated its Diamond Jubilee recently, take a walk down memory lane.
COURTESY: IMA
The war memorial at the IMA, Dehra Dun.
CAMARADERIE, goodwill and an overwhelming sense of lives lived well were in abundance at the diamond jubilee celebrations of the Third Regular Course of the Indian Military Academy (IMA) in Dehra Dun. The Third Course has a unique history and the stories told by its officers go beyond personal recollections and experiences. At one level they are historical anecdotes and at another they are part of a collective memory that binds the former Gentlemen Cadets together.
The meeting of more than 60 officers and their families at the IMA on September 12 went beyond a social gathering. It was a celebration of those who had served during a historical juncture in India’s past. Hundred and eighty-five cadets were commissioned from the IMA on September 12, 1948. The numbers would have been larger, but 67 of their course mates had opted for Pakistan and finished their training at the newly created Pakistan Military Academy (PMA) in Kakul.
The Third Course was shaped by historical events in which it could not help but be immersed. It was the smallest batch ever to graduate from the IMA because of Partition. The uniqueness of the course is also seen in its truncated duration: it was cut short from two years to 21 months in response to urgent military needs of the country and a shortfall of officers in the Army. On passing out, the cadets immediately joined battalions and regiments at the front line. Moreover, while still in training they were deployed for patrolling and suppression of violent activities. Indeed, the IMA is believed to be the only military academy in the world that has used its cadets for maintaining internal security.
The history of the Third Course is closely linked with Partition. About 800 metres down the road from the IMA was a camp of about 10,000 Sikh and Hindu refugees from Pakistan. In the week after Independence, anti-Muslim riots began in Dehra Dun and the IMA suddenly found itself involved in preserving internal security. Lieutenant General Mathew Thomas of the Third Course recalls cadets patrolling on foot and in Bren gun carriers, carrying out ambushes, from August to September 1947.
By October, life in the Academy returned to normal. Some cadets had opted for Pakistan but would leave only after they completed their course. The British officers were making plans for their repatriation. But then there was another bombshell. Lt. Gen. Thomas recounted it thus: “It appeared that the fledgling Pakistani government had made representations to [General] Auchinleck regarding the safety of its cadets at the IMA. There was the possibility of hostilities breaking out between the two countries, and they [the Pakistani authorities] felt they could no longer leave them at Dehra Dun. Auchinleck could not deny their request.”
The transfer of the officers and cadets to Pakistan was codenamed Operation Exodus and remained cloaked in secrecy until the last minute. Colonel Giridhari Singh of the Third Course, and later founder of a business conglomerate, recalled the moment when the cadets were watching a hockey match and “Brigadier Barltrop, the Commandant, entered the field from the goal end and signalled to the umpire, Major Wilson, to see him. We knew at once that all was not well.” It was 5 p.m. on October 17, 1947, when all the cadets were told of the plan. It was met with stunned silence. Eight hours later, after midnight, the Pakistani contingent moved out of the IMA gates with a few belongings (the rest were sent on later) and drove to the Saharanpur air base where 10 Dakotas of the 31 Squadron of the Royal Air Force flew them to Lahore.
The parting was hurried but emotional. Giridhari Singh says he “remembered Captain Gilani addressing us with tears streaming down his face”. And Thomas remembers “emotional farewells, exchange of gifts, borrowings of suitcases and promises to keep in touch… Sadly these were to end in smoke because the two dominions would soon be at war.” The departure of 67 cadets – 66 Muslims and one Christian – was carried out with such secrecy that the next morning the bearers were surprised to see their Gentlemen Cadets missing.
Partition also divided the IMA’s assets. The guideline was a 70:30 ratio between India and Pakistan. This Herculean task had its lighter moments. Major Tikka Khan, one of the instructors, was given the task of dividing the library. When he came to the encyclopaedias, Tikka Khan suggested that every alternate volume be given to Pakistan. Fortunately the idea was recognised as absurd and the encyclopaedia sets were divided more sensibly. That is just one story about Khan, better known as the Butcher of Bangladesh (and later the Butcher of Baluchistan) and infamous for atrocities such as throwing infants up into the air and catching them on bayonets as they fell.
THE HINDU PHOTO LIBRARY
DECEMBER 9, 1948: Prime Minister Jawaharlal Nehru inspects the Passing Out Parade of the first University Graduates Course. Others seen with him are Defence Minister Sardar Baldev Singh, Major General Kulwant Singh, and IMA Commandant Mahadeo Singh.
Trouble on the northern borders and a shortfall of Army officers resulted in the Indian government pushing for the Third Course to be commissioned even earlier than December 1948. A compromise date was reached and 185 cadets passed out of the IMA on September 12, 1948. Most of the newly commissioned officers went straight into action. Those in the Infantry were sent to Kashmir. Those in the Armoured Corps saw action in Operation Polo for the liberation of Hyderabad.
The India-Pakistan war of 1971 brought the IMA and PMA course mates together again. At that time Lt. Gen. H. Kaul was commanding an armoured brigade in the western sector. By the time ceasefire was declared, Kaul knew that the Pakistani brigade commander was a former Third Course mate. Still camped along the Bein river, Kaul sent word inviting him to lunch. A while later Kaul saw a white flag approaching. It was a Pakistani second lieutenant who said the brigade commander would be unable to accept the invitation. He had apparently been removed from command. Many months later, Kaul was commanding a division in Madhya Pradesh when he got to know that another Third Course mate was in a PoW (prisoner of war) camp in Jabalpur. “I met him and took him out to lunch. We went without an escort since we met as friends and he treated me like a brother,” he recalled.
Others of the Third Course relate similar incidents. Brigadier Balbir Singh Dayal describes how the Third Course kinship helped during the post-1971 delineation of the line of control in the Kargil sector. Dayal says he found the Pakistani sector commander to be “officious” until a point when he suddenly smiled and asked if Dayal was from the Third Course. Once this was established, Dayal says he and the Pakistani officer, Brigadier Safdar Hussain Khan, reminisced about the IMA while young officers of both sides looked on in amazement. The atmosphere in subsequent meetings had “genuine comradeship and fellow feeling… and this amicability and understanding due to the common bond of the Third Course helped in a successful and extremely satisfactory delineation work in the northern sector of Jammu and Kashmir,” said Dayal.
The two officers did their bit in keeping up the spirit that their Commandant Brig. A.B. Barltrop had urged when he announced the partition of the IMA in a Special Order of the Day dated October 14, 1947.
He wrote: “I should like to say a word about the future relations between the Pakistan and the Indian Military Academies. All cadet training establishments the world over have a natural affinity, and it is consequently essential that there should exist between the PMA and the IMA a state of close cooperation and friendship. I am convinced that the officer cadre of both armies have a great part to play in restoring the happy human relationships which are so sorely needed in this country and which have deteriorated so sadly and inevitably as a result of the events of the past two weeks.”
The Third Course has done its alma mater proud, producing 12 Lieutenant Generals, 22 Major Generals, 10 Param Vishisht Seva Medals, five Mahavir Chakras (one posthumous), 15 Ati Vishisht Seva Medals, five Vishisht Seva Medals, three Vir Chakras, two Sena Medals and one Padma Shree. There have been two Army commanders, two commandants of the IMA and one Governor.
The cadets who left for Pakistan formed the First Course of the PMA. Gentleman Cadet No. 391 at the IMA, who became Cadet No. 1 at the PMA, Rahim Uddin Khan, rose to the rank of General and became Joint Chief of Staff in Pakistan and, later, Governor of one of the provinces. Lt. Gen. Saeed Qadir became a Minister and a Senator. Captain Shakir Ullah Durrani became the Governor of Islamabad.
The officers who had left also had successful careers. Major Tikka Khan became the Chief of Army Staff and Major A.B. Rahman became the Governor of Punjab, Pakistan.•
Iceland nationalises bank amid geyser of financial distress
1 hour ago
REYKJAVIK (AFP) — Iceland's government announced it was taking control of the country's second-biggest bank on Tuesday as Russia said it would lend it four billion euros (5.4 billion dollars) to fend off the engulfing financial turmoil.
But all savings deposited by Icelanders were protected, officials reassured.
"The Icelandic Financial Supervisory Authority (IFSA) has, under powers granted by the Icelandic parliament, proceeded to take control of Landsbanki," Iceland's second-biggest bank, the government agency said in a statement.
The IFSA stressed that a complete guarantee for all domestic accounts announced by the government in Reykjavik on Monday would cover Landsbanki's customers.
"Landsbanki's domestic branches, call centres, cash machines and Internet operations will be open for business as usual," it said.
"The action taken by the IFSA is a necessary first step in achieving the objectives of the Icelandic government and parliament to ensure the continued orderly operation of domestic banking and the safety of domestic deposits," it added.
However, the British arm of Iceland's Landsbanki stopped British customers withdrawing or depositing money on Tuesday, it announced.
The IFSA announcement came a week after the Icelandic government said it would take control of 75 percent of the country's third-largest bank, Glitnir, and as the country's biggest bank Kaupthing said it had received a 500-million-euro loan from the central bank.
And on Monday, Prime Minister Geir Haarde said his government was ready to take control of all the island's banks to ward off the prospect of national bankruptcy.
"There is a very real danger ... that the Icelandic economy, in the worst case, could be sucked with the banks into the whirlpool and the result could be national bankruptcy," Haarde said in an ominous televised speech.
A new law passed by parliament Monday enables the government to take control of financial institutions and shareholders' meetings, fire board members, take over assets, merge institutions, block the movement of funds and force institutions to declare bankruptcy.
The country's central bank meanwhile said on Tuesday that Russia had agreed to grant it a loan of four billion euros.
"Russia (will) grant the central bank a loan in the amount of four billion euros," the bank said in a statement.
"The maturity (loan duration) is three to four years," it said, adding that Russian Prime Minister Vladimir Putin had confirmed Moscow's decision.
"This loan significantly bolsters the foreign exchange reserves of the central bank of Iceland and thus underpins the stability of the exchange rate of the krona," it added.
Trading in all financial shares, including all the major banks, remained suspended on the Reykjavik stock exchange Tuesday after a full day of non-trading Monday.
Iceland, long dependent on its fishing industry, is a nation of just 313,000 people whose banks have invested aggressively abroad in recent years, enabling it to experience ballooning prosperity and become one of the world's wealthiest nations.
The growth of the finance sector -- which Haarde described on Monday as "something akin to a fairytale" -- has however made Iceland particularly vulnerable to the current global turmoil.
Its finance sector represents a huge part of the island's economy -- eight times its gross domestic product.
Banks and investment funds are interlinked through cross share dealings so any damage to one side has an automatic knock-on effect on other institutions.
Because of its prosperity in recent years, there has been an overheating of the Icelandic economy with inflation soaring to 14.5 percent and the central bank increasing its main interest rate sharply to 15.5 percent as a result.
Growth has largely been built on the meteoric rise of the banking and financial sector, which today represents two-thirds of the market capitalisation of Reykjavik's OMX 15 stock exchange index.
Its currency, the krona, has tumbled since the start of the US financial woes last year, losing 45.9 percent of its value against the euro since July 2007 as foreign investors lost confidence.
REYKJAVIK (AFP) — Iceland's government announced it was taking control of the country's second-biggest bank on Tuesday as Russia said it would lend it four billion euros (5.4 billion dollars) to fend off the engulfing financial turmoil.
But all savings deposited by Icelanders were protected, officials reassured.
"The Icelandic Financial Supervisory Authority (IFSA) has, under powers granted by the Icelandic parliament, proceeded to take control of Landsbanki," Iceland's second-biggest bank, the government agency said in a statement.
The IFSA stressed that a complete guarantee for all domestic accounts announced by the government in Reykjavik on Monday would cover Landsbanki's customers.
"Landsbanki's domestic branches, call centres, cash machines and Internet operations will be open for business as usual," it said.
"The action taken by the IFSA is a necessary first step in achieving the objectives of the Icelandic government and parliament to ensure the continued orderly operation of domestic banking and the safety of domestic deposits," it added.
However, the British arm of Iceland's Landsbanki stopped British customers withdrawing or depositing money on Tuesday, it announced.
The IFSA announcement came a week after the Icelandic government said it would take control of 75 percent of the country's third-largest bank, Glitnir, and as the country's biggest bank Kaupthing said it had received a 500-million-euro loan from the central bank.
And on Monday, Prime Minister Geir Haarde said his government was ready to take control of all the island's banks to ward off the prospect of national bankruptcy.
"There is a very real danger ... that the Icelandic economy, in the worst case, could be sucked with the banks into the whirlpool and the result could be national bankruptcy," Haarde said in an ominous televised speech.
A new law passed by parliament Monday enables the government to take control of financial institutions and shareholders' meetings, fire board members, take over assets, merge institutions, block the movement of funds and force institutions to declare bankruptcy.
The country's central bank meanwhile said on Tuesday that Russia had agreed to grant it a loan of four billion euros.
"Russia (will) grant the central bank a loan in the amount of four billion euros," the bank said in a statement.
"The maturity (loan duration) is three to four years," it said, adding that Russian Prime Minister Vladimir Putin had confirmed Moscow's decision.
"This loan significantly bolsters the foreign exchange reserves of the central bank of Iceland and thus underpins the stability of the exchange rate of the krona," it added.
Trading in all financial shares, including all the major banks, remained suspended on the Reykjavik stock exchange Tuesday after a full day of non-trading Monday.
Iceland, long dependent on its fishing industry, is a nation of just 313,000 people whose banks have invested aggressively abroad in recent years, enabling it to experience ballooning prosperity and become one of the world's wealthiest nations.
The growth of the finance sector -- which Haarde described on Monday as "something akin to a fairytale" -- has however made Iceland particularly vulnerable to the current global turmoil.
Its finance sector represents a huge part of the island's economy -- eight times its gross domestic product.
Banks and investment funds are interlinked through cross share dealings so any damage to one side has an automatic knock-on effect on other institutions.
Because of its prosperity in recent years, there has been an overheating of the Icelandic economy with inflation soaring to 14.5 percent and the central bank increasing its main interest rate sharply to 15.5 percent as a result.
Growth has largely been built on the meteoric rise of the banking and financial sector, which today represents two-thirds of the market capitalisation of Reykjavik's OMX 15 stock exchange index.
Its currency, the krona, has tumbled since the start of the US financial woes last year, losing 45.9 percent of its value against the euro since July 2007 as foreign investors lost confidence.
Welcome to the USA : Saving Wall Street from itself
Le Monde Diplomatiq
The $700bn rescue package proposed over-quickly by the US Treasury and Federal Reserve was initially rejected by one tier of US government. After horse-traded amendments, it was finally accepted by both houses. But in an uncertain future, it is already clear that 30 years of US financial policy, and Wall Street as we know it, are over.
By Frédéric Lordon
Only a child could fail to be amused by the steely response of the US authorities to the collapse of Lehman Brothers, and the speed with which the futility of that response became apparent. The decision to let the struggling investment bank go under was a risky gamble – and useless if it was supposed to signal a change of strategy.
Each in the series of critical developments was hailed as the crisis point, before the next broke, yet more serious and more spectacular. Hardly surprising that this should have plunged the regulators into confusion and bewilderment. The weekend emergencies exploded one after another, faster and faster: 16 March, the investment bank Bear Stearns; 12 July, mortgage giants Fannie Mae and Freddie Mac part one; 6 September, Fannie and Freddie part two (see “ US: from New Deal to new New Deal”); 13 September, Lehman Brothers and the financial services company Merrill Lynch; 16 September (less than a week later), the insurance group AIG (American International Group). Each time the Federal Reserve and the Treasury Department believed they had surpassed themselves, they quickly realised that nothing was working and they would have to go through it all again.
Their achievements were not enough to halt the collapse of the US financial system. And the cost wasn’t merely financial: neither Fed chairman Ben Bernanke nor Henry Paulson (former boss of Goldman Sachs, the flagship of uncompromising capitalism, and now Treasury Secretary in a rightwing administration) could ever have imagined that they would find themselves facing accusations of socialism each time they were forced to use state money to rescue private finance.
That sad paradox must have been one factor determining the decision they took as they staggered away from the rescue of Fannie and Freddie into the crisis at Lehman; they refused to intervene – a signal that the financial community would have to handle this one on its own. Personal humiliations apart, the Fed-Treasury position was understandable. The authorities were worried that each new intervention set a precedent, and were nervous that private bankers might dash happily to the brink of bankruptcy convinced that at the last moment they too, like Bear Stearns, Fannie and Freddie, would have to be saved. Such nonchalance was an affront; it was difficult to ignore the way in which arrogant financial institutions lined their pockets during the good times, then fled, screaming for protection and special treatment, to a state that they had previously dismissed as a quasi-Soviet absurdity.
Systemic risk
There is always a danger that moral indignation will preempt analysis. Anger is legitimate, a necessary spur to gathering the political resources necessary for an eventual, vigorous reaction. But, analytically, clarity is essential. The immediate issue is systemic risk: the danger that, given the complexity of inter-bank commitments, the collapse of a single institution might generate shock waves leading to a cascade of collateral failures.
Let me remind any liberals who are slow on the uptake that systemic risk means what it says: the entire system is at risk, any and all institutions of private finance are now the potential victims of a global collapse. The destruction of the system of finance, of credit, would mean the end of all economic activity. It is important to be clear about the enormity of the consequences. Once a financial bubble has burst and the genie of systemic risk has been released, central banks lose any room for manoeuvre. Private finance can take the rest of the economy hostage, fatally tying the economy’s fate to its own. Since the collapse of one entails the collapse of the other, the state has no choice except to come to the rescue. This lies at the heart of the crisis. Financial re-regulation is pointless unless it is carried out with the strategic objective of preventing bubbles from reappearing.
Once systemic risk reconstitutes and reactivates itself the battle is lost, so the only solution is to eradicate it. The Fed may demonstrate no serious will to do this, but it is at least aware of the degree to which it is strategically outmatched in its campaign against the crisis in private finance (which is all the stronger for being moribund). So the Fed has submitted hopelessly to calls to bail out tottering banks, terrified that a refusal could precipitate an irreparable catastrophe.
In March 2008 Bear Stearns threatened to default on $13.4 trillion in credit derivatives transactions (1), ten times more than Long Term Capital Management, which almost brought the US financial system down in 1998. In July Fannie and Freddie threatened to default on their $1.5 trillion debt. Leading financial institutions had invested in these securities: pension funds representing the retired, mutual funds holding the savings of ordinary people, and even foreign central banks. Such a catastrophe threatened the survival of the US financial system.
At the Treasury, Paulson didn’t hesitate: on 12 July he made $25bn of public money available as lines of credit and to start recapitalisation. On 6 September it emerged that the sum required was more like $200bn, which taxpayers duly stumped up. “I didnwant to have to do that,” said Paulson, horrified by the socialist future before him. But he did it all the same, because he had no choice.
A smaller fish
That Lehman was a smaller fish meant that the Fed and Treasury did have a choice. Determined to send the right signal, they decided to make Lehman pay for the sins of its brethren. But although Lehman afforded an excellent excuse to vent their anger, it required careful examination before being condemned to death: given its size and the exposure of the other banks that were its counterparties, did Lehman’s default constitute a systemic risk?
The bank’s exposure to derivatives was infinitely less than Bear Stearns’ – $29bn against $13.4 trillion (2). But Lehman, with debts of $613bn, overtook Worldcom to become the hugest bankruptcy in US history. Technically the default was not equivalent since Lehman had assets and the object of liquidation was to realise them. But what were those assets worth?
There was at least $85bn in damaged assets, $50bn of which was in subprime derivatives. The initial rescue plan, discussed over the weekend of 12 September but abandoned, was to warehouse these in an ad hoc “bad bank”. Their value would have dropped after liquidation, even if the authorities, conscious of the risk of letting the value fall even further, envisaged an orderly liquidation over several months.
The dramatic downgrading of its assets was just one of the problems created by Lehman. The accounting convention of mark-to-market, whereby assets are valued at what they would currently fetch in the open market, would have forced all the other financial institutions to set a Lehman special knockdown price on their holdings of similar assets, with additional collateral depreciations.
Because Lehman was involved in many unsettled transaction, there was further counterparty risk. And there was the activation of credit default swaps (CDS), derivatives that insure their purchasers against any fall in the value of their bond holdings. Since you can’t have insurance without an insurer, Lehman’s collapse would trigger the CDSs issued to cover its debts; and the settlement was likely to be costly.
The CDS insurance system looks better on paper than it has proved in practice. The market in CDSs is shaky and creates shockwaves every time it is called upon to respond to another failure. The Lehman catastrophe came soon after the threat to the CDS market from the nationalisation of Fannie and Freddie.
The Fed and the Treasury hoped such fears would help justify their refusal to bail Lehman out and help persuade other major investment banks to take it over. But no private rescue plan emerged from the discussions: Wall Street is an abstract concept that covers a collection of individual, sometimes contradictory, interests.
A game of poker
There was a rescue plan – its failure led to Lehman’s liquidation – and it involved Barclays and Bank of America (which eventually picked up Merrill Lynch) acquiring Lehman’s good assets, and Wall Street paying collectively for its bad assets to be warehoused. But this meant that those banks that couldn’t afford the good assets were left to absorb the losses on the bad assets. They were reluctant to subsidise two more fortunate institutions, while they were left to rebuild the ruined edifice.
The weekend of 12-14 September was spent over the poker table. The Fed and the Treasury refused to give way. Wall Street wrongly interpreted this as an attempt to bully a greater commitment out of the private banks. Some of these were raiders after a killing; but others were there under pressure and were struggling to balance their reluctance to do their opportunistic colleagues a favour against the awareness that their own interests depended upon Lehman’s survival.
True to their word, the Fed and the Treasury let events take their course. But what they failed to foresee was that this renunciation of socialism would only last two days. They did their best. For almost a week their supporters, somewhat disoriented, offered their enthusiastic backing. The Financial Times commented: "It is time for the authorities to step back... What has been done so far should be enough" (3). But the situation, not the FT, decided what was enough. Only 48 hours later the Fed’s renunciation of socialism looked premature.
A textbook case
AIG is a textbook demonstration of the insanity of contemporary finance. Bored with being a simple insurance company, it set up a subsidiary, AIG Financial Products, and launched itself into the specialist CDS insurance market. When the financial crisis hit, AIG found itself providing insurance on $441bn of securities, £57.8bn of it related to subprime mortgages (4). Its losses were colossal. It had already lost $18bn over the previous three quarters; now, with CDSs kicking in and collateral devaluations, the collapse of Lehman seemed likely to raise AIG’s total losses to $30bn, $600m of it due to the complete collapse in Fannie and Freddie’s shares after nationalisation.
The rating agencies, desperate to repent for previous mistakes, dramatically downgraded AIG’s credit rating. This immediately forced it to meet margin calls to compensate for the damage to its credibility as the insurer on the CDSs it had written. But where was AIG to find $10bn-$13bn when it was already sinking?
The Fed and the Treasury, still euphoric after their weekend escape from the clutches of socialism, but shaken by the scale of the potential damage, came up with a plan for a private rescue. Goldman Sachs and JP Morgan would front a $75bn syndicated loan to AIG. Coming only a couple of days after Wall Street’s 10 leading banks had refused to put up $70bn to underpin the orderly liquidation of Lehman, the failure of a private rescue plan for AIG was predictable and the necessity of state intervention inescapable. Even so, the form that this took was astonishing: in return for an $85bn bridging loan from the central bank, the state acquired 79.9% of AIG stock.
The brief statement issued by the Fed on 16 September was extraordinary. The fact that there was no precedent for it to lend to a non-banking institution is a measure of the scale of the crisis. In March it had decided to allow investment banks to refinance, something that only deposit banks had been able to do since 1929. And now here was an insurance company knocking at its door.
With the Fed and the Treasury working together, as if conjoined, the state’s 79.9% stake in AIG looked like compensation for the Fed’s loan. But since when has a loan been granted in exchange for a share of capital? The loan has to be repaid; it is guaranteed by all AIG’s assets and was deliberately set at a penal rate to encourage speedy repayment. But once the Fed’s loan has been repaid, the state will remain a 79.9% shareholder in AIG. It has taken control without spending a cent, a shocking act of expropriation.
The New York Times reported that when Paulson and Bernanke appeared on the evening of 16 September to announce their plan, they looked grim. Compared with them, Venezuela’s president Hugo Chávez is a puppet in the hands of capital. At least he pays when he nationalises.
But this was just the beginning of the socialist contortions of Paulson and Bernanke. The crisis had moved on from the liquidity problems that the Fed was equipped to handle. With astronomical losses undermining the foundations of equity capital, the financial sector had a general solvency crisis. Since March there had been a frenzy of recapitalisations in which each new crisis – Bear Stearns, Fannie and Freddie, Lehman –- had been precipitated by doubts about the ability of the banks to raise capital (5).
Recapitalisation requires capital. But by now, with the banks fighting to save what little capital they still had, there was nobody out there with enough money. The sovereign wealth funds (6), upon which everyone had, perhaps excessively, counted, examined their recent disappointments. Their dramatic intervention in March had been based upon the assumption that the prices of homes and shares had bottomed out; their subsequent losses made them more cautious. That left only the state to pick up the pieces.
So “Karl” Bernanke and “Vladimir Ilyich” Paulson still had work to do. They at least, unlike the mad neoliberals still calling for a moral purge in which the failed banks would be allowed to go under, understood what was required. The former head of Goldman Sachs was forced to recognise that there is an explosive instability built into unregulated finance: guaranteed to spark off endless catastrophes, but incapable of resolving them itself. Only the state had the sovereign power to ride roughshod over the law, nationalise now and pay later, unilaterally grab all the dividends, even from shares it didn’t own. It alone had the power to halt the disaster provoked by the mechanisms of the sacred market. It was socialism or the apocalypse.
Unknown territory
Another danger is looming. After the subprime crisis comes the threat from Alternative A-paper (Alt-A) mortgages. Alt-A loans are considered riskier than prime mortgages and less risky than subprime. They supposedly depend upon borrowers answering questions, with allowances made for incomplete information or “mistakes”. According to a study by the Mortgage Asset Research Institute, almost all Alt-A applications (drawn up by brokers for the banks) overstate borrowers’ incomes by from 5% to 50%. The Alt-A category includes option adjustable rate mortgages (Option-ARMs), which offer a range of repayment choices. Under one attractive option, for the first few years borrowers are exempt from repaying the principal and don’t even have to pay the full interest rate. The offer of an initial rate of 1% is hard to turn down.
Of course the inevitable has merely been postponed until later, when the reset – the readjustment of repayments – comes as even more of a shock. The average Option-ARM borrower can expect to see repayments increase by 63% at a stroke. According to the financial services company Bloomberg, 16% of holders of Alt-A mortgages agreed since January 2006 are more than two months in arrears. Since there is a delay of between three and five years before the rate is reset, defaults can be expected to increase next year and continue until 2011.
Subprime loans totalled $855bn; Alt-A mortgages amount to £1,000bn, of which Fannie Mae holds or guarantees £340bn. Wachovia (now taken over by Citigroup) holds £122bn in Option-ARMs; and Countrywide, saved from bankruptcy by Bank of America, £27bn. Washington Mutual (WaMu) held $53bn, £13bn of which was due for reset next year. On 15 September Standard & Poor’s (S&P) cut WaMu’s credit rating to junk bond level, the lowest. On 25 September it collapsed in the largest bank failure in US history and was sold to JP Morgan.
WaMu is a savings and loan association that holds the savings of ordinary people, who are beginning to feel the cold wind. Money market funds, hitherto assumed to be as liquid and safe as current accounts, have been overwhelmed by withdrawals since clients saw their assets devalued following the collapse of the Lehman shares in which the funds had so cleverly invested. A rush by savers would be the last straw.
Given the significant and widespread need for bank recapitalisation, and the refusal of those institutions still afloat to come to the rescue, that leaves only the state to act as the lender, shareholder and recapitaliser of last resort, and to confront a financial challenge that is becoming less susceptible to conventional solutions. On top of the $200bn it spent bailing out Fannie and Freddie, the federal state will end up buying warrants (7) and then shares, giving it ownership of AIG. Now – despite the House of Representatives’ initial rejection of Bush’s massive rescue plan on 29 September, causing further panic on the financial markets – it intends to commit a further $700bn to buying up toxic debts held by the banks.
Whether it requires across-the-board recapitalisation or a massive warehousing operation to rescue private finance from all its toxic assets, S&P puts the eventual total cost at 10 points of US GDP. If this comes, as seems likely, from taxpayers’ pockets, it will destroy what little growth still remains. If the public deficit and debt are allowed to increase, this will undermine Treasury bonds and the dollar, and extend the current private financial crisis to the public finances and the currency.
Judged by the usual rules of financial orthodoxy, every solution is bad. Which is why Bernanke and Paulson will take every necessary step to do what must be done; and also why the beliefs of so many of the faithful have been destroyed. Recapitalisation by currency issuance, confiscations or exchange controls – if things turn nasty, that could just be the beginning. We’re in unknown territory.
See also
US: from New Deal to new New Deal, by Ibrahim Warde
More about Frédéric Lordon.
Translated by Donald Hounam
Frédéric Lordon is an economist and the author of Jusqu’à quand? L’éternel retour de la crise financière (Raisons d’agir, Paris, 2008)
(1) This was not a net exposure since commitments to buy/pay compensated for others to sell/receive.
(2) Office of the Comptroller of the Currency, New York, 30 September 2007.
(3) “Decisive inaction”, The Financial Times, 11 September 2008.
(4) Housing loans to borrowers with questionable credit or even with no bank account at all.
(5) The Lehman crisis was precipitated by the collapse of negotiations for the Korea Development Bank to buy a stake in the company.
(6) See Ibrahim Warde, “Are they saviours, predators or dupes?”, Le Monde diplomatique, English edition, May 2008.
(7) Securities conferring the right to buy stock.
The $700bn rescue package proposed over-quickly by the US Treasury and Federal Reserve was initially rejected by one tier of US government. After horse-traded amendments, it was finally accepted by both houses. But in an uncertain future, it is already clear that 30 years of US financial policy, and Wall Street as we know it, are over.
By Frédéric Lordon
Only a child could fail to be amused by the steely response of the US authorities to the collapse of Lehman Brothers, and the speed with which the futility of that response became apparent. The decision to let the struggling investment bank go under was a risky gamble – and useless if it was supposed to signal a change of strategy.
Each in the series of critical developments was hailed as the crisis point, before the next broke, yet more serious and more spectacular. Hardly surprising that this should have plunged the regulators into confusion and bewilderment. The weekend emergencies exploded one after another, faster and faster: 16 March, the investment bank Bear Stearns; 12 July, mortgage giants Fannie Mae and Freddie Mac part one; 6 September, Fannie and Freddie part two (see “ US: from New Deal to new New Deal”); 13 September, Lehman Brothers and the financial services company Merrill Lynch; 16 September (less than a week later), the insurance group AIG (American International Group). Each time the Federal Reserve and the Treasury Department believed they had surpassed themselves, they quickly realised that nothing was working and they would have to go through it all again.
Their achievements were not enough to halt the collapse of the US financial system. And the cost wasn’t merely financial: neither Fed chairman Ben Bernanke nor Henry Paulson (former boss of Goldman Sachs, the flagship of uncompromising capitalism, and now Treasury Secretary in a rightwing administration) could ever have imagined that they would find themselves facing accusations of socialism each time they were forced to use state money to rescue private finance.
That sad paradox must have been one factor determining the decision they took as they staggered away from the rescue of Fannie and Freddie into the crisis at Lehman; they refused to intervene – a signal that the financial community would have to handle this one on its own. Personal humiliations apart, the Fed-Treasury position was understandable. The authorities were worried that each new intervention set a precedent, and were nervous that private bankers might dash happily to the brink of bankruptcy convinced that at the last moment they too, like Bear Stearns, Fannie and Freddie, would have to be saved. Such nonchalance was an affront; it was difficult to ignore the way in which arrogant financial institutions lined their pockets during the good times, then fled, screaming for protection and special treatment, to a state that they had previously dismissed as a quasi-Soviet absurdity.
Systemic risk
There is always a danger that moral indignation will preempt analysis. Anger is legitimate, a necessary spur to gathering the political resources necessary for an eventual, vigorous reaction. But, analytically, clarity is essential. The immediate issue is systemic risk: the danger that, given the complexity of inter-bank commitments, the collapse of a single institution might generate shock waves leading to a cascade of collateral failures.
Let me remind any liberals who are slow on the uptake that systemic risk means what it says: the entire system is at risk, any and all institutions of private finance are now the potential victims of a global collapse. The destruction of the system of finance, of credit, would mean the end of all economic activity. It is important to be clear about the enormity of the consequences. Once a financial bubble has burst and the genie of systemic risk has been released, central banks lose any room for manoeuvre. Private finance can take the rest of the economy hostage, fatally tying the economy’s fate to its own. Since the collapse of one entails the collapse of the other, the state has no choice except to come to the rescue. This lies at the heart of the crisis. Financial re-regulation is pointless unless it is carried out with the strategic objective of preventing bubbles from reappearing.
Once systemic risk reconstitutes and reactivates itself the battle is lost, so the only solution is to eradicate it. The Fed may demonstrate no serious will to do this, but it is at least aware of the degree to which it is strategically outmatched in its campaign against the crisis in private finance (which is all the stronger for being moribund). So the Fed has submitted hopelessly to calls to bail out tottering banks, terrified that a refusal could precipitate an irreparable catastrophe.
In March 2008 Bear Stearns threatened to default on $13.4 trillion in credit derivatives transactions (1), ten times more than Long Term Capital Management, which almost brought the US financial system down in 1998. In July Fannie and Freddie threatened to default on their $1.5 trillion debt. Leading financial institutions had invested in these securities: pension funds representing the retired, mutual funds holding the savings of ordinary people, and even foreign central banks. Such a catastrophe threatened the survival of the US financial system.
At the Treasury, Paulson didn’t hesitate: on 12 July he made $25bn of public money available as lines of credit and to start recapitalisation. On 6 September it emerged that the sum required was more like $200bn, which taxpayers duly stumped up. “I didnwant to have to do that,” said Paulson, horrified by the socialist future before him. But he did it all the same, because he had no choice.
A smaller fish
That Lehman was a smaller fish meant that the Fed and Treasury did have a choice. Determined to send the right signal, they decided to make Lehman pay for the sins of its brethren. But although Lehman afforded an excellent excuse to vent their anger, it required careful examination before being condemned to death: given its size and the exposure of the other banks that were its counterparties, did Lehman’s default constitute a systemic risk?
The bank’s exposure to derivatives was infinitely less than Bear Stearns’ – $29bn against $13.4 trillion (2). But Lehman, with debts of $613bn, overtook Worldcom to become the hugest bankruptcy in US history. Technically the default was not equivalent since Lehman had assets and the object of liquidation was to realise them. But what were those assets worth?
There was at least $85bn in damaged assets, $50bn of which was in subprime derivatives. The initial rescue plan, discussed over the weekend of 12 September but abandoned, was to warehouse these in an ad hoc “bad bank”. Their value would have dropped after liquidation, even if the authorities, conscious of the risk of letting the value fall even further, envisaged an orderly liquidation over several months.
The dramatic downgrading of its assets was just one of the problems created by Lehman. The accounting convention of mark-to-market, whereby assets are valued at what they would currently fetch in the open market, would have forced all the other financial institutions to set a Lehman special knockdown price on their holdings of similar assets, with additional collateral depreciations.
Because Lehman was involved in many unsettled transaction, there was further counterparty risk. And there was the activation of credit default swaps (CDS), derivatives that insure their purchasers against any fall in the value of their bond holdings. Since you can’t have insurance without an insurer, Lehman’s collapse would trigger the CDSs issued to cover its debts; and the settlement was likely to be costly.
The CDS insurance system looks better on paper than it has proved in practice. The market in CDSs is shaky and creates shockwaves every time it is called upon to respond to another failure. The Lehman catastrophe came soon after the threat to the CDS market from the nationalisation of Fannie and Freddie.
The Fed and the Treasury hoped such fears would help justify their refusal to bail Lehman out and help persuade other major investment banks to take it over. But no private rescue plan emerged from the discussions: Wall Street is an abstract concept that covers a collection of individual, sometimes contradictory, interests.
A game of poker
There was a rescue plan – its failure led to Lehman’s liquidation – and it involved Barclays and Bank of America (which eventually picked up Merrill Lynch) acquiring Lehman’s good assets, and Wall Street paying collectively for its bad assets to be warehoused. But this meant that those banks that couldn’t afford the good assets were left to absorb the losses on the bad assets. They were reluctant to subsidise two more fortunate institutions, while they were left to rebuild the ruined edifice.
The weekend of 12-14 September was spent over the poker table. The Fed and the Treasury refused to give way. Wall Street wrongly interpreted this as an attempt to bully a greater commitment out of the private banks. Some of these were raiders after a killing; but others were there under pressure and were struggling to balance their reluctance to do their opportunistic colleagues a favour against the awareness that their own interests depended upon Lehman’s survival.
True to their word, the Fed and the Treasury let events take their course. But what they failed to foresee was that this renunciation of socialism would only last two days. They did their best. For almost a week their supporters, somewhat disoriented, offered their enthusiastic backing. The Financial Times commented: "It is time for the authorities to step back... What has been done so far should be enough" (3). But the situation, not the FT, decided what was enough. Only 48 hours later the Fed’s renunciation of socialism looked premature.
A textbook case
AIG is a textbook demonstration of the insanity of contemporary finance. Bored with being a simple insurance company, it set up a subsidiary, AIG Financial Products, and launched itself into the specialist CDS insurance market. When the financial crisis hit, AIG found itself providing insurance on $441bn of securities, £57.8bn of it related to subprime mortgages (4). Its losses were colossal. It had already lost $18bn over the previous three quarters; now, with CDSs kicking in and collateral devaluations, the collapse of Lehman seemed likely to raise AIG’s total losses to $30bn, $600m of it due to the complete collapse in Fannie and Freddie’s shares after nationalisation.
The rating agencies, desperate to repent for previous mistakes, dramatically downgraded AIG’s credit rating. This immediately forced it to meet margin calls to compensate for the damage to its credibility as the insurer on the CDSs it had written. But where was AIG to find $10bn-$13bn when it was already sinking?
The Fed and the Treasury, still euphoric after their weekend escape from the clutches of socialism, but shaken by the scale of the potential damage, came up with a plan for a private rescue. Goldman Sachs and JP Morgan would front a $75bn syndicated loan to AIG. Coming only a couple of days after Wall Street’s 10 leading banks had refused to put up $70bn to underpin the orderly liquidation of Lehman, the failure of a private rescue plan for AIG was predictable and the necessity of state intervention inescapable. Even so, the form that this took was astonishing: in return for an $85bn bridging loan from the central bank, the state acquired 79.9% of AIG stock.
The brief statement issued by the Fed on 16 September was extraordinary. The fact that there was no precedent for it to lend to a non-banking institution is a measure of the scale of the crisis. In March it had decided to allow investment banks to refinance, something that only deposit banks had been able to do since 1929. And now here was an insurance company knocking at its door.
With the Fed and the Treasury working together, as if conjoined, the state’s 79.9% stake in AIG looked like compensation for the Fed’s loan. But since when has a loan been granted in exchange for a share of capital? The loan has to be repaid; it is guaranteed by all AIG’s assets and was deliberately set at a penal rate to encourage speedy repayment. But once the Fed’s loan has been repaid, the state will remain a 79.9% shareholder in AIG. It has taken control without spending a cent, a shocking act of expropriation.
The New York Times reported that when Paulson and Bernanke appeared on the evening of 16 September to announce their plan, they looked grim. Compared with them, Venezuela’s president Hugo Chávez is a puppet in the hands of capital. At least he pays when he nationalises.
But this was just the beginning of the socialist contortions of Paulson and Bernanke. The crisis had moved on from the liquidity problems that the Fed was equipped to handle. With astronomical losses undermining the foundations of equity capital, the financial sector had a general solvency crisis. Since March there had been a frenzy of recapitalisations in which each new crisis – Bear Stearns, Fannie and Freddie, Lehman –- had been precipitated by doubts about the ability of the banks to raise capital (5).
Recapitalisation requires capital. But by now, with the banks fighting to save what little capital they still had, there was nobody out there with enough money. The sovereign wealth funds (6), upon which everyone had, perhaps excessively, counted, examined their recent disappointments. Their dramatic intervention in March had been based upon the assumption that the prices of homes and shares had bottomed out; their subsequent losses made them more cautious. That left only the state to pick up the pieces.
So “Karl” Bernanke and “Vladimir Ilyich” Paulson still had work to do. They at least, unlike the mad neoliberals still calling for a moral purge in which the failed banks would be allowed to go under, understood what was required. The former head of Goldman Sachs was forced to recognise that there is an explosive instability built into unregulated finance: guaranteed to spark off endless catastrophes, but incapable of resolving them itself. Only the state had the sovereign power to ride roughshod over the law, nationalise now and pay later, unilaterally grab all the dividends, even from shares it didn’t own. It alone had the power to halt the disaster provoked by the mechanisms of the sacred market. It was socialism or the apocalypse.
Unknown territory
Another danger is looming. After the subprime crisis comes the threat from Alternative A-paper (Alt-A) mortgages. Alt-A loans are considered riskier than prime mortgages and less risky than subprime. They supposedly depend upon borrowers answering questions, with allowances made for incomplete information or “mistakes”. According to a study by the Mortgage Asset Research Institute, almost all Alt-A applications (drawn up by brokers for the banks) overstate borrowers’ incomes by from 5% to 50%. The Alt-A category includes option adjustable rate mortgages (Option-ARMs), which offer a range of repayment choices. Under one attractive option, for the first few years borrowers are exempt from repaying the principal and don’t even have to pay the full interest rate. The offer of an initial rate of 1% is hard to turn down.
Of course the inevitable has merely been postponed until later, when the reset – the readjustment of repayments – comes as even more of a shock. The average Option-ARM borrower can expect to see repayments increase by 63% at a stroke. According to the financial services company Bloomberg, 16% of holders of Alt-A mortgages agreed since January 2006 are more than two months in arrears. Since there is a delay of between three and five years before the rate is reset, defaults can be expected to increase next year and continue until 2011.
Subprime loans totalled $855bn; Alt-A mortgages amount to £1,000bn, of which Fannie Mae holds or guarantees £340bn. Wachovia (now taken over by Citigroup) holds £122bn in Option-ARMs; and Countrywide, saved from bankruptcy by Bank of America, £27bn. Washington Mutual (WaMu) held $53bn, £13bn of which was due for reset next year. On 15 September Standard & Poor’s (S&P) cut WaMu’s credit rating to junk bond level, the lowest. On 25 September it collapsed in the largest bank failure in US history and was sold to JP Morgan.
WaMu is a savings and loan association that holds the savings of ordinary people, who are beginning to feel the cold wind. Money market funds, hitherto assumed to be as liquid and safe as current accounts, have been overwhelmed by withdrawals since clients saw their assets devalued following the collapse of the Lehman shares in which the funds had so cleverly invested. A rush by savers would be the last straw.
Given the significant and widespread need for bank recapitalisation, and the refusal of those institutions still afloat to come to the rescue, that leaves only the state to act as the lender, shareholder and recapitaliser of last resort, and to confront a financial challenge that is becoming less susceptible to conventional solutions. On top of the $200bn it spent bailing out Fannie and Freddie, the federal state will end up buying warrants (7) and then shares, giving it ownership of AIG. Now – despite the House of Representatives’ initial rejection of Bush’s massive rescue plan on 29 September, causing further panic on the financial markets – it intends to commit a further $700bn to buying up toxic debts held by the banks.
Whether it requires across-the-board recapitalisation or a massive warehousing operation to rescue private finance from all its toxic assets, S&P puts the eventual total cost at 10 points of US GDP. If this comes, as seems likely, from taxpayers’ pockets, it will destroy what little growth still remains. If the public deficit and debt are allowed to increase, this will undermine Treasury bonds and the dollar, and extend the current private financial crisis to the public finances and the currency.
Judged by the usual rules of financial orthodoxy, every solution is bad. Which is why Bernanke and Paulson will take every necessary step to do what must be done; and also why the beliefs of so many of the faithful have been destroyed. Recapitalisation by currency issuance, confiscations or exchange controls – if things turn nasty, that could just be the beginning. We’re in unknown territory.
See also
US: from New Deal to new New Deal, by Ibrahim Warde
More about Frédéric Lordon.
Translated by Donald Hounam
Frédéric Lordon is an economist and the author of Jusqu’à quand? L’éternel retour de la crise financière (Raisons d’agir, Paris, 2008)
(1) This was not a net exposure since commitments to buy/pay compensated for others to sell/receive.
(2) Office of the Comptroller of the Currency, New York, 30 September 2007.
(3) “Decisive inaction”, The Financial Times, 11 September 2008.
(4) Housing loans to borrowers with questionable credit or even with no bank account at all.
(5) The Lehman crisis was precipitated by the collapse of negotiations for the Korea Development Bank to buy a stake in the company.
(6) See Ibrahim Warde, “Are they saviours, predators or dupes?”, Le Monde diplomatique, English edition, May 2008.
(7) Securities conferring the right to buy stock.
INDIA : Unmanned mission to Moon ,Chandrayaan to be launched on October 22
Bangalore, Oct 6 (PTI) After repeated delays, India's first unmanned mission to the Moon-- Chandrayaan-1-- will be launched on October 22 from the spaceport at Sriharikota, Indian Space Research Organisation(ISRO) sources said today.
The sources said weather conditions permitting the Polar Satellite Launch Vehicle (PSLV-C11) carrying the Chandrayaan-1 satellite will blast off at 6.20 AM, the sources taold PTI. The Rs 386-crore lunar mission was cleared by the Government five years back but the historic launch faced several delays.
The space odyssey moved one more step closer to fruition when the satellite was transported from here to Sriharikota in a special vehicle last week and has since reached the Satish Dhawan Space Centre in the coastal town, about 100 km from Chennai.
The spacecraft is expected to be mated with ISRO's work-horse rocket,PSLV-C11 later this week, the sources said.
The spacecraft would carry 11 payloads -- five from India and six from the US, Europe and Bulgaria.
It would orbit the Moon at an altitude of 100 km mapping the topography and the mineralogical content of the lunar soil.
Chandrayaan-1 would also carry a Moon Impact Probe payload for demonstrating the technology needed towards landing on the Moon's surface.
India believes the lunar mission is a step towards its quest for exploration of outer space and inter-planetary missions. PTI
The sources said weather conditions permitting the Polar Satellite Launch Vehicle (PSLV-C11) carrying the Chandrayaan-1 satellite will blast off at 6.20 AM, the sources taold PTI. The Rs 386-crore lunar mission was cleared by the Government five years back but the historic launch faced several delays.
The space odyssey moved one more step closer to fruition when the satellite was transported from here to Sriharikota in a special vehicle last week and has since reached the Satish Dhawan Space Centre in the coastal town, about 100 km from Chennai.
The spacecraft is expected to be mated with ISRO's work-horse rocket,PSLV-C11 later this week, the sources said.
The spacecraft would carry 11 payloads -- five from India and six from the US, Europe and Bulgaria.
It would orbit the Moon at an altitude of 100 km mapping the topography and the mineralogical content of the lunar soil.
Chandrayaan-1 would also carry a Moon Impact Probe payload for demonstrating the technology needed towards landing on the Moon's surface.
India believes the lunar mission is a step towards its quest for exploration of outer space and inter-planetary missions. PTI
CHINA’S STRATEGIC PREFERENCE: DRIVE A WEDGE IN THE ATLANTIC ALLIANCE
By Dr. Subhash Kapila
Introductory Observations
China is strategically convinced that despite its burgeoning comprehensive strategic strengths, it will be in no position to challenge that global strategic predominance of the United States in the 21st Century. China can create strategic irritations for the United States in different parts of the world but China is in no position to limit United States military power.
China is also aware that a resurgent Russia will also be in no position to effectively foil or challenge United States military might for quite some time to come. Additionally, despite the so called China-Russia strategic nexus, both nations have strategic misgivings about each other’s long term strategic goals.
United States two military interventions in Iraq, in Yugoslavia, nearer home to China, in Afghanistan, strategically haunts China’s political establishment and its strategic community. China seriously fears that the issues of Taiwan, Tibet and Xinjiang at some time could be exploited by the United States for military intervention, in case China becomes insensitive to United States global strategic interests and priorities.
China is also acutely aware, as this Author has repeatedly asserted that it has “no natural allies” on its side to strategically confront the United States.
The United States military interventions in Iraq and Afghanistan etc could have been undertaken independently by the United States military on their own. But greater political and military support by the European Union countries as member-states of NATO added international legitimacy to United States military interventions.
China is well aware that the Atlantic Alliance, namely the United States and NATO (European Union Countries) united as one strategic entity represent a major strategic force in being that dominates the global security architecture.
China following traditional Chinese military dictums that if you cannot win over your enemy, you must fragment its strengths, seems to prefer this strategic preference i.e. drive a wedge in the Atlantic Alliance by articulated campaigns as we shall see below.
On such issues, China’s articulation never comes from the policy establishment, but emerges from the written works of its noted intellectuals specializing in strategic and foreign policy affairs.
In a recent Op-Ed commentary by a noted Chinese intellectual reproduced in a Pakistani English newspaper, China’s strategic preferences are well articulated to convey the sense that China would prefer that the European Union, independent of the United States, adopt a greater role on the global strategic stage and act as a counterweight to the United States.
This Paper intends to highlight China’s strategic preference so articulated along with some associated perspectives under the following heads:
China’s Strategic Preference for the European Union as the Main Global Security Actor
Atlantic Alliance: The Global Strategic Anchor for Stability
European Security and Defence Program is Militarily Unworkable
United States’ Prime Responsibility to Nurture Atlantic Alliance
China’s Strategic Preference for the European Union as the Main Global Security Actor
In a longish commentary the Chinese intellectual surveys the international security environment, acknowledges China’s limitations to strategically challenge the United States and then outlines China’s case as to why China would prefer the expanding European Union to emerge as a ‘counterweight’ to the United States.
The commentary has selected the European Security and Defence Programme (ESDP) as the strategic mechanism that could impart greater strategic weight to the European Union in global affairs as a replacement for the US-led NATO mechanisms.
The ESDP has been under discussion since 1998 and envisages an integrated European security mechanism available for European Union’s active involvement in conflict-resolution and conflict-prevention both within Europe and outside. Associated with this is a EU Rapid Reaction Force of about 60,000 troops.
China’s strategic preferences as articulated in this commentary can best be captured in the Chinese intellectual’s own words. Selected excerpts are as under:
“China wants a strong and independent Europe and from that vantage point, it is not too early for China to envisage a truly multi-polar “global system”.
“China sees the expanding European Union as a likely counter weight to unchecked United States power.”
“In China, the concept of an independent European defence embodied in the European Security and Defence Policy (ESDP) as well as the EU’s Rapid Reaction Force and various police missions is thus seen generally as necessary and effective in a multi-polar world system.”
“But the ESDP once fully developed will not necessarily follow America’s lead unconditionally, especially if American policy continues to deviate from the norms of international law, as in Iraq.”
“As a result of acquiring a Pan-European defence capacity, the Europeans are likely to play a more independent role than at present in managing intra-Europe security relations and carrying out global missions.”
“China welcomes the expanded security role for the European Union although it remains wary of international intervention by the EU.”
“The substance and pattern of ESDP operations are likely to win respect (from China) for several reasons (abridged) as follows:
1. “Chinese leaders note that the ESDP gives priority to the legitimacy of its missions” (unlike the United States)
2. “Outside Europe, the ESDP acts to enhance good governance, rather than regime changes.” (in comparison to USA)
3. The ESDP is open to international cooperation with other non-EU states.”
In other words, Chinese leaders view that the ESDP would be their preferred strategic option in comparison to what China perceives as the unbridled domination of global security affairs by the United States both through the UN Security Council and outside it.
But the real reason for China’s strategic preference emerges in the concluding paragraph of the commentary, which reads as under:
“There are good reasons to expect that China will continue to accept an independent European Security Mechanism. There is little concern if any about the ESDP interfering in internal Chinese affairs such as Taiwan.”
The excerpts quoted above by themselves, may sound very pious along with hopes of a multi-polar world. But it is not difficult to fathom the underlying deep impulses and that is to drive a wedge in the Atlantic Alliance by emphasizing implicitly that the European Union by itself is a better alternative than the UnitedStates in managing global security affairs.
Atlantic Alliance: The Global Strategic Anchor for Stability
The Atlantic Alliance operating on the bed rock of the NATO Security Alliance has contributed towards global security for over sixty years now. The Atlantic Alliance despite periodic differences in outlook of the United States with its European partners on specific issues has withstood the test of times. The Atlantic Alliance provided security both to the United States and Europe during the testing times of the Cold War and even in the Post-Cold War era.
The Atlantic Alliance through NATO has been visible in restoring peace and stability in the Balkans and most importantly grappled with the threat of global Islamist terrorism in Afghanistan and elsewhere.
Much as many countries vilify the United States yet all of them including China wish for US military presence in their regions for peace and stability. This particularly applies today to the Middle East.
In fact in the referred Chinese commentary there are pointed references to the European Union’s strategic stakes in the Middle East being higher than the United States implying that the European Union should play a larger role in the Middle East. The underlying Chinese strategic aim seems to be to somehow to dilute the United States strangle hold over Middle East oil and gas reserves badly needed by China. Inspired campaigns to sow misgivings seems to be part of China's strategy.
The Middle East’s peace and stability today against the divisive forces out to disturb the region has been upheld by the joint efforts of the Atlantic Alliance, namely by United States strategic predominance and European Union political clout and ties with the region.
The Atlantic Alliance today is very much on the doorsteps of China’s most volatile and rebellious outlying regions and it is this factor which is of strategic worry to China and China constantly strives to somehow limit US presence in its vicinity.
It is also worth recording that unlike China there has been no espousing of the ESDP concept by Russia to the best of the Author’s knowledge. Russia has objections to NATO’s eastern enlargement and has recently employed its leverages to stem the process. Russia had also been a member of NATO’s Partnership for Peace process. Russia does not seem overly worried about the Atlantic Alliance as China is.
While all other security alliances around the world have floundered and gone extinct, the Atlantic Alliance exists today even more stronger. Obviously, there is strategic value for its members who continue to sustain it.
To the credit of the European Union’s major countries like France, Germany & Britain it needs to be recorded that despite having strategic partnership accords with China all these countries have upheld the solidarity of the Atlantic Alliance/NATO in more ways than one as follows:
Forging strategic partnerships with China by European countries gave no indications nor any evidence is available that this was meant to signal a multi-polar balancing of the United States. They were merely diplomatic exercises for economic reasons.
European countries heeded to United States call to not to breach the arms exports ban against China even though China dangled billion dollar inducements.
European countries as part of NATO have increased their troops contributions in Afghanistan on China's doorsteps.
European Security and Defence Program is Militarily Unworkable
The ESDP may be a laudable objective in terms of security integration of Europe but the achievement of the end objective needs to be viewed at two levels. Firstly, the economic integration which was the prime aim of European Union founding has yet to be achieved. The most recent example being the inability to pass the Lisbon Treaty.
In terms of security integration, the European Union countries should be well aware that their past efforts for security integration of European nations in earlier mechanisms like the WEU etc. did not meet with success. Country-specific problems along with systemic drawbacks thwarted progress in this direction.
Then arises the question of the large scale financial outlays that would be required to maintain and sustain an independent European military capability for global intervention. Unlike the United States there are limitations in the European Union as it will have to depend on member-states contributions.
Even if European Union countries were able to financially sustain such a military capability the significant question that arises is whether Europe needs to duplicate the existing NATO security architecture which has proved strategically and politically effective.
The ESDP concept presumably emerged out of pique and anger of some European leaders in the past who were unhappy with US policy stances and outlook.
The times have changed and the security environment in Europe and areas contiguous to Europe has changed significantly with multiple threats emerging including nation -specific threats.
As a stark example can the ESDP on its own handle the threats emerging within Old Europe from the millions of Muslim citizens of these countries, many of whom are under strong influence of Islamic Jihadi groups in the Middle East and South West Asia.
The European Union and even if the ESDP becomes fully effective would lack the military and political leverages that the United States can employ in the Middle East to arrest if not fully neutralize the threats to Europe.
China’s espousal of the ESDP is politically motivated to serve its own strategic ends rather than serving any security needs of the European Union.
In short the ESDP is a military untenable concept on all counts when analysed strategically and politically. And that probably is the reason as to why ESDP has till now not figured as a central focus in the planning of defence strategies of major European countries.
United States’ Prime Responsibility to Nurture Atlantic Alliance
The European Union and especially the countries of ‘Old Europe’ have contributed handsomely in providing military protection to mainland America right from the days of World War I nearly a century ago. The countries of ‘Old Europe’ were America’s ‘front-line states’ during the Cold War confrontation with the Warsaw Pact countries.
Just because a large number of ‘New Europe’ countries (erstwhile Warsaw Pact nations) are flocking to the United States camp and facilitating NATO’s eastward creep, it does not imply that the United States can overlook the strategic sensitivities and interests of the ‘Old Europe’ countries.
The United States must recognize that the strength of the Atlantic Alliance lies in the combined strengths of the United States and countries of ‘Old Europe’. The United States therefore has prime responsibilities to nurture and sustain the Atlantic Alliance.
China’s global strategic ambitions can only be effectively checkmated when the Atlantic Alliance functions in an integrated and concerted manner. The United States on its own could not have held on to Afghanistan without the contribution of NATO countries. This is an ample indicator of the frequently changing geo-political scenarios and security environment that can be met only by a combined and united Atlantic Alliance efforts.
Finally, on this issue, the United States needs to recognize that the central focus of China’s ‘Grand Strategy’ is to promote and support the emergence of rival power centres to the United States. China’s highlighting that the ESDP as a security mechanism is something that China can live with, seems to be a part of this ‘Grand Strategy’. The United States has to exhibit by strongly nurturing of the Atlantic Alliance that Europe is one region of the world where China’s strategic designs cannot succeed.
Concluding Observations
The Atlantic Alliance held together in the geo-politically challenged era of the Cold War. Today’s security environment is far more unpredictable and hence so are the geo-political challenges. Strong strategic imperatives therefore exist that the Atlantic Alliance should not be weakened.
The ESDP concept is militarily not tenable and cannot displace the Atlantic Alliance in maintaining global security. The adverse symbolism of ESDP duplicating NATO is highlighted by observations in a US think-tank website which states: “The creation of duplicate military structures with autonomous decision-making powers independent of NATO represents a major geopolitical rupture between Europe and Washington that serves neither side”.
China’s espousal of the ESDP and its strong advocacy that the Chinese leaders are willing to accept the ESDP configuration as opposed to NATO security configuration is precisely aimed at driving a wedge in the Atlantic Alliance leading to a geopolitical rupture in the solidarity of the Atlantic Alliance.
(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)
Introductory Observations
China is strategically convinced that despite its burgeoning comprehensive strategic strengths, it will be in no position to challenge that global strategic predominance of the United States in the 21st Century. China can create strategic irritations for the United States in different parts of the world but China is in no position to limit United States military power.
China is also aware that a resurgent Russia will also be in no position to effectively foil or challenge United States military might for quite some time to come. Additionally, despite the so called China-Russia strategic nexus, both nations have strategic misgivings about each other’s long term strategic goals.
United States two military interventions in Iraq, in Yugoslavia, nearer home to China, in Afghanistan, strategically haunts China’s political establishment and its strategic community. China seriously fears that the issues of Taiwan, Tibet and Xinjiang at some time could be exploited by the United States for military intervention, in case China becomes insensitive to United States global strategic interests and priorities.
China is also acutely aware, as this Author has repeatedly asserted that it has “no natural allies” on its side to strategically confront the United States.
The United States military interventions in Iraq and Afghanistan etc could have been undertaken independently by the United States military on their own. But greater political and military support by the European Union countries as member-states of NATO added international legitimacy to United States military interventions.
China is well aware that the Atlantic Alliance, namely the United States and NATO (European Union Countries) united as one strategic entity represent a major strategic force in being that dominates the global security architecture.
China following traditional Chinese military dictums that if you cannot win over your enemy, you must fragment its strengths, seems to prefer this strategic preference i.e. drive a wedge in the Atlantic Alliance by articulated campaigns as we shall see below.
On such issues, China’s articulation never comes from the policy establishment, but emerges from the written works of its noted intellectuals specializing in strategic and foreign policy affairs.
In a recent Op-Ed commentary by a noted Chinese intellectual reproduced in a Pakistani English newspaper, China’s strategic preferences are well articulated to convey the sense that China would prefer that the European Union, independent of the United States, adopt a greater role on the global strategic stage and act as a counterweight to the United States.
This Paper intends to highlight China’s strategic preference so articulated along with some associated perspectives under the following heads:
China’s Strategic Preference for the European Union as the Main Global Security Actor
Atlantic Alliance: The Global Strategic Anchor for Stability
European Security and Defence Program is Militarily Unworkable
United States’ Prime Responsibility to Nurture Atlantic Alliance
China’s Strategic Preference for the European Union as the Main Global Security Actor
In a longish commentary the Chinese intellectual surveys the international security environment, acknowledges China’s limitations to strategically challenge the United States and then outlines China’s case as to why China would prefer the expanding European Union to emerge as a ‘counterweight’ to the United States.
The commentary has selected the European Security and Defence Programme (ESDP) as the strategic mechanism that could impart greater strategic weight to the European Union in global affairs as a replacement for the US-led NATO mechanisms.
The ESDP has been under discussion since 1998 and envisages an integrated European security mechanism available for European Union’s active involvement in conflict-resolution and conflict-prevention both within Europe and outside. Associated with this is a EU Rapid Reaction Force of about 60,000 troops.
China’s strategic preferences as articulated in this commentary can best be captured in the Chinese intellectual’s own words. Selected excerpts are as under:
“China wants a strong and independent Europe and from that vantage point, it is not too early for China to envisage a truly multi-polar “global system”.
“China sees the expanding European Union as a likely counter weight to unchecked United States power.”
“In China, the concept of an independent European defence embodied in the European Security and Defence Policy (ESDP) as well as the EU’s Rapid Reaction Force and various police missions is thus seen generally as necessary and effective in a multi-polar world system.”
“But the ESDP once fully developed will not necessarily follow America’s lead unconditionally, especially if American policy continues to deviate from the norms of international law, as in Iraq.”
“As a result of acquiring a Pan-European defence capacity, the Europeans are likely to play a more independent role than at present in managing intra-Europe security relations and carrying out global missions.”
“China welcomes the expanded security role for the European Union although it remains wary of international intervention by the EU.”
“The substance and pattern of ESDP operations are likely to win respect (from China) for several reasons (abridged) as follows:
1. “Chinese leaders note that the ESDP gives priority to the legitimacy of its missions” (unlike the United States)
2. “Outside Europe, the ESDP acts to enhance good governance, rather than regime changes.” (in comparison to USA)
3. The ESDP is open to international cooperation with other non-EU states.”
In other words, Chinese leaders view that the ESDP would be their preferred strategic option in comparison to what China perceives as the unbridled domination of global security affairs by the United States both through the UN Security Council and outside it.
But the real reason for China’s strategic preference emerges in the concluding paragraph of the commentary, which reads as under:
“There are good reasons to expect that China will continue to accept an independent European Security Mechanism. There is little concern if any about the ESDP interfering in internal Chinese affairs such as Taiwan.”
The excerpts quoted above by themselves, may sound very pious along with hopes of a multi-polar world. But it is not difficult to fathom the underlying deep impulses and that is to drive a wedge in the Atlantic Alliance by emphasizing implicitly that the European Union by itself is a better alternative than the UnitedStates in managing global security affairs.
Atlantic Alliance: The Global Strategic Anchor for Stability
The Atlantic Alliance operating on the bed rock of the NATO Security Alliance has contributed towards global security for over sixty years now. The Atlantic Alliance despite periodic differences in outlook of the United States with its European partners on specific issues has withstood the test of times. The Atlantic Alliance provided security both to the United States and Europe during the testing times of the Cold War and even in the Post-Cold War era.
The Atlantic Alliance through NATO has been visible in restoring peace and stability in the Balkans and most importantly grappled with the threat of global Islamist terrorism in Afghanistan and elsewhere.
Much as many countries vilify the United States yet all of them including China wish for US military presence in their regions for peace and stability. This particularly applies today to the Middle East.
In fact in the referred Chinese commentary there are pointed references to the European Union’s strategic stakes in the Middle East being higher than the United States implying that the European Union should play a larger role in the Middle East. The underlying Chinese strategic aim seems to be to somehow to dilute the United States strangle hold over Middle East oil and gas reserves badly needed by China. Inspired campaigns to sow misgivings seems to be part of China's strategy.
The Middle East’s peace and stability today against the divisive forces out to disturb the region has been upheld by the joint efforts of the Atlantic Alliance, namely by United States strategic predominance and European Union political clout and ties with the region.
The Atlantic Alliance today is very much on the doorsteps of China’s most volatile and rebellious outlying regions and it is this factor which is of strategic worry to China and China constantly strives to somehow limit US presence in its vicinity.
It is also worth recording that unlike China there has been no espousing of the ESDP concept by Russia to the best of the Author’s knowledge. Russia has objections to NATO’s eastern enlargement and has recently employed its leverages to stem the process. Russia had also been a member of NATO’s Partnership for Peace process. Russia does not seem overly worried about the Atlantic Alliance as China is.
While all other security alliances around the world have floundered and gone extinct, the Atlantic Alliance exists today even more stronger. Obviously, there is strategic value for its members who continue to sustain it.
To the credit of the European Union’s major countries like France, Germany & Britain it needs to be recorded that despite having strategic partnership accords with China all these countries have upheld the solidarity of the Atlantic Alliance/NATO in more ways than one as follows:
Forging strategic partnerships with China by European countries gave no indications nor any evidence is available that this was meant to signal a multi-polar balancing of the United States. They were merely diplomatic exercises for economic reasons.
European countries heeded to United States call to not to breach the arms exports ban against China even though China dangled billion dollar inducements.
European countries as part of NATO have increased their troops contributions in Afghanistan on China's doorsteps.
European Security and Defence Program is Militarily Unworkable
The ESDP may be a laudable objective in terms of security integration of Europe but the achievement of the end objective needs to be viewed at two levels. Firstly, the economic integration which was the prime aim of European Union founding has yet to be achieved. The most recent example being the inability to pass the Lisbon Treaty.
In terms of security integration, the European Union countries should be well aware that their past efforts for security integration of European nations in earlier mechanisms like the WEU etc. did not meet with success. Country-specific problems along with systemic drawbacks thwarted progress in this direction.
Then arises the question of the large scale financial outlays that would be required to maintain and sustain an independent European military capability for global intervention. Unlike the United States there are limitations in the European Union as it will have to depend on member-states contributions.
Even if European Union countries were able to financially sustain such a military capability the significant question that arises is whether Europe needs to duplicate the existing NATO security architecture which has proved strategically and politically effective.
The ESDP concept presumably emerged out of pique and anger of some European leaders in the past who were unhappy with US policy stances and outlook.
The times have changed and the security environment in Europe and areas contiguous to Europe has changed significantly with multiple threats emerging including nation -specific threats.
As a stark example can the ESDP on its own handle the threats emerging within Old Europe from the millions of Muslim citizens of these countries, many of whom are under strong influence of Islamic Jihadi groups in the Middle East and South West Asia.
The European Union and even if the ESDP becomes fully effective would lack the military and political leverages that the United States can employ in the Middle East to arrest if not fully neutralize the threats to Europe.
China’s espousal of the ESDP is politically motivated to serve its own strategic ends rather than serving any security needs of the European Union.
In short the ESDP is a military untenable concept on all counts when analysed strategically and politically. And that probably is the reason as to why ESDP has till now not figured as a central focus in the planning of defence strategies of major European countries.
United States’ Prime Responsibility to Nurture Atlantic Alliance
The European Union and especially the countries of ‘Old Europe’ have contributed handsomely in providing military protection to mainland America right from the days of World War I nearly a century ago. The countries of ‘Old Europe’ were America’s ‘front-line states’ during the Cold War confrontation with the Warsaw Pact countries.
Just because a large number of ‘New Europe’ countries (erstwhile Warsaw Pact nations) are flocking to the United States camp and facilitating NATO’s eastward creep, it does not imply that the United States can overlook the strategic sensitivities and interests of the ‘Old Europe’ countries.
The United States must recognize that the strength of the Atlantic Alliance lies in the combined strengths of the United States and countries of ‘Old Europe’. The United States therefore has prime responsibilities to nurture and sustain the Atlantic Alliance.
China’s global strategic ambitions can only be effectively checkmated when the Atlantic Alliance functions in an integrated and concerted manner. The United States on its own could not have held on to Afghanistan without the contribution of NATO countries. This is an ample indicator of the frequently changing geo-political scenarios and security environment that can be met only by a combined and united Atlantic Alliance efforts.
Finally, on this issue, the United States needs to recognize that the central focus of China’s ‘Grand Strategy’ is to promote and support the emergence of rival power centres to the United States. China’s highlighting that the ESDP as a security mechanism is something that China can live with, seems to be a part of this ‘Grand Strategy’. The United States has to exhibit by strongly nurturing of the Atlantic Alliance that Europe is one region of the world where China’s strategic designs cannot succeed.
Concluding Observations
The Atlantic Alliance held together in the geo-politically challenged era of the Cold War. Today’s security environment is far more unpredictable and hence so are the geo-political challenges. Strong strategic imperatives therefore exist that the Atlantic Alliance should not be weakened.
The ESDP concept is militarily not tenable and cannot displace the Atlantic Alliance in maintaining global security. The adverse symbolism of ESDP duplicating NATO is highlighted by observations in a US think-tank website which states: “The creation of duplicate military structures with autonomous decision-making powers independent of NATO represents a major geopolitical rupture between Europe and Washington that serves neither side”.
China’s espousal of the ESDP and its strong advocacy that the Chinese leaders are willing to accept the ESDP configuration as opposed to NATO security configuration is precisely aimed at driving a wedge in the Atlantic Alliance leading to a geopolitical rupture in the solidarity of the Atlantic Alliance.
(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)
Parting the Caspian Sea
OXFORD ANALYTICA
This weekend, government and industry representatives from all five Caspian Sea littoral states -- Russia, Iran, Kazakhstan, Turkmenistan and Azerbaijan -- will meet in Astrakhan to discuss the sea’s “economic development” prospects. The Russian Ministry of Economic Development and Trade, which will host the conference, has portrayed the event as an unprecedented step forward in addressing the region’s environmental challenges and economic potential.
The region remains potentially lucrative yet also significantly underdeveloped, particularly in the hydrocarbons sector. The Caspian Sea may hold as many as 50 billion barrels of oil reserves and 6.6 trillion cubic metres of natural gas, and in 2010, Caspian oil exports are expected to exceed Venezuela’s.
The region’s economic potential can hardly be called into question. What is less clear is the status of the sea itself. Several bilateral agreements have been reached in the last five years that have helped to delimit Caspian maritime boundaries:
Azerbaijan has made the most progress, particularly in improving its formerly contentious relationship with Turkmenistan.
Baku and Astana have both resolved their maritime borders with Russia.
However, delimitation has been challenged by questions over the status and nationality of military forces that may operate in the Caspian -- a particularly thorny issue for Russia, which is loath to see enhanced US or NATO military cooperation with Azerbaijan and Kazakhstan.
Iran has also played the proverbial spoiler in Caspian delimitation talks, insisting that each state receive a 20% share of the seabed. Such a division would give Iran territorial control over several promising hydrocarbon fields that are currently claimed by Azerbaijan.
Yet this weekend’s summit will likely gloss over the legalities of dividing the Caspian. Russia is keen to portray itself as a regional leader, and will use the meeting to showcase its preponderance of local economic and military influence. Five years ago, it was virtually unthinkable that states with interests as diverse as Iran, Russia and Turkmenistan would hold economic development talks on the Caspian; as such, the conference represents undeniable progress towards normalising regional relations.
However, establishing an uncontested legal and international legal framework for doing business in the Caspian is the next -- and much higher -- threshold that must be crossed if the littoral states truly aspire to fulfil the region’s economic potential.
This weekend, government and industry representatives from all five Caspian Sea littoral states -- Russia, Iran, Kazakhstan, Turkmenistan and Azerbaijan -- will meet in Astrakhan to discuss the sea’s “economic development” prospects. The Russian Ministry of Economic Development and Trade, which will host the conference, has portrayed the event as an unprecedented step forward in addressing the region’s environmental challenges and economic potential.
The region remains potentially lucrative yet also significantly underdeveloped, particularly in the hydrocarbons sector. The Caspian Sea may hold as many as 50 billion barrels of oil reserves and 6.6 trillion cubic metres of natural gas, and in 2010, Caspian oil exports are expected to exceed Venezuela’s.
The region’s economic potential can hardly be called into question. What is less clear is the status of the sea itself. Several bilateral agreements have been reached in the last five years that have helped to delimit Caspian maritime boundaries:
Azerbaijan has made the most progress, particularly in improving its formerly contentious relationship with Turkmenistan.
Baku and Astana have both resolved their maritime borders with Russia.
However, delimitation has been challenged by questions over the status and nationality of military forces that may operate in the Caspian -- a particularly thorny issue for Russia, which is loath to see enhanced US or NATO military cooperation with Azerbaijan and Kazakhstan.
Iran has also played the proverbial spoiler in Caspian delimitation talks, insisting that each state receive a 20% share of the seabed. Such a division would give Iran territorial control over several promising hydrocarbon fields that are currently claimed by Azerbaijan.
Yet this weekend’s summit will likely gloss over the legalities of dividing the Caspian. Russia is keen to portray itself as a regional leader, and will use the meeting to showcase its preponderance of local economic and military influence. Five years ago, it was virtually unthinkable that states with interests as diverse as Iran, Russia and Turkmenistan would hold economic development talks on the Caspian; as such, the conference represents undeniable progress towards normalising regional relations.
However, establishing an uncontested legal and international legal framework for doing business in the Caspian is the next -- and much higher -- threshold that must be crossed if the littoral states truly aspire to fulfil the region’s economic potential.
Running Interpol
OXFORD ANALYTICA
The top decision-making body of the International Criminal Police Organization, or Interpol as it is better known, meets in St Petersburg on Tuesday. The General Assembly will consider admitting Vatican City as the organization’s 187th member, and reflect on Interpol’s contributions to the Olympic games, but the majority of the meeting will be turned over to discussion of more mundane, though vitally important, issues -- improving information exchange between police forces.
While the organization’s name retains a certain glamour, it has no detective staff of its own and serves largely as a conduit of information between officers from different countries (including as a secure telephone exchange through its ‘I-24/7’ system). It also maintains databases (incorporating not just offenders but also items such as lost documents), operates crisis response centres and serves as a centre for research and training.
The organization has been in the news recently, with Secretary-General Ronald Noble complaining of inadequate policing in Afghanistan, a recent member. The war on terror has demonstrated the organization’s usefulness -- since the attacks of September 2001, the organization has expanded hugely, its budget rising by 50% between 2000 and 2006, and the number of ‘Red notices’ (international notifications of arrest warrants) having increased by nearly 300% in the same period.
Every increase in the organization’s responsibility for terrorism has been marked by controversy. The organization’s constitution, after all, prohibits “any intervention or activities of a political, military, religious or racial character” –- following the exploitation of the organization by Nazi Germany in the 1930s and Eastern European Communist regimes in the 1950s. After the organization began receiving powers to investigate terrorism in the 1970s, dealing with hijacks and bombs on planes, it faced criticism over which actions fell under the definition of terrorism.
More recently, the organization’s assistance to China, which made hundreds of thousands of enquiries into Interpol databases in the run-up to the Olympics, has raised questions about the kinds of crimes to which the organization pays attention. That the meeting is taking place in Russia, with its own troubled relationship with the rule of law, is also raising eyebrows. Interpol has been required to tread carefully in indicting politicians accused of fraud, given the risk of getting politically engaged, and even anti-drug or organized crime measures can feature a political element.
The organization is vulnerable to a challenge from the other direction, too: that it’s not doing enough with the data it has collected. In spite of national co-ordination offices the launch of the I-24/7 network in 2003, getting information where it needs to be is fiendishly difficult: due to legal restrictions between countries, inter-institutional rivalries, and even differing office hours and computer formats. Even if information reaches a particular national Interpol office, there is a further challenge getting it to ordinary beat officers -– prompting European police services especially to try and widen access to I-24/7 to investigators, and trial ‘MIND/FIND’, systems for border police to check registers of lost documents. There is also a problem at the other end, in reporting problems to Interpol: during his Afghan visit, Noble complained that his organization often has to learn of incidents such as prison escapes through the media.
For all its problems, Interpol remains the most sophisticated example of police co-ordination, at a time when it has never been easier for criminals (and their money) to evade police scrutiny across borders. Other attempts, such as Europol in the EU, are at more primitive -- European police forces sent ten times more traffic to each other via Interpol than through Europol. Certainly, Interpol is keen to demonstrate its usefulness, following embarrassment earlier in the year, when the President of the organization (the representative of national members), Jackie Selebi of the South African police, stood down over allegations he received bribes from drug traffickers. Frustratingly for the organization, the key to its future reputation is with the national officers who make use of its services -- and so, to a significant extent, out of its hands.
The top decision-making body of the International Criminal Police Organization, or Interpol as it is better known, meets in St Petersburg on Tuesday. The General Assembly will consider admitting Vatican City as the organization’s 187th member, and reflect on Interpol’s contributions to the Olympic games, but the majority of the meeting will be turned over to discussion of more mundane, though vitally important, issues -- improving information exchange between police forces.
While the organization’s name retains a certain glamour, it has no detective staff of its own and serves largely as a conduit of information between officers from different countries (including as a secure telephone exchange through its ‘I-24/7’ system). It also maintains databases (incorporating not just offenders but also items such as lost documents), operates crisis response centres and serves as a centre for research and training.
The organization has been in the news recently, with Secretary-General Ronald Noble complaining of inadequate policing in Afghanistan, a recent member. The war on terror has demonstrated the organization’s usefulness -- since the attacks of September 2001, the organization has expanded hugely, its budget rising by 50% between 2000 and 2006, and the number of ‘Red notices’ (international notifications of arrest warrants) having increased by nearly 300% in the same period.
Every increase in the organization’s responsibility for terrorism has been marked by controversy. The organization’s constitution, after all, prohibits “any intervention or activities of a political, military, religious or racial character” –- following the exploitation of the organization by Nazi Germany in the 1930s and Eastern European Communist regimes in the 1950s. After the organization began receiving powers to investigate terrorism in the 1970s, dealing with hijacks and bombs on planes, it faced criticism over which actions fell under the definition of terrorism.
More recently, the organization’s assistance to China, which made hundreds of thousands of enquiries into Interpol databases in the run-up to the Olympics, has raised questions about the kinds of crimes to which the organization pays attention. That the meeting is taking place in Russia, with its own troubled relationship with the rule of law, is also raising eyebrows. Interpol has been required to tread carefully in indicting politicians accused of fraud, given the risk of getting politically engaged, and even anti-drug or organized crime measures can feature a political element.
The organization is vulnerable to a challenge from the other direction, too: that it’s not doing enough with the data it has collected. In spite of national co-ordination offices the launch of the I-24/7 network in 2003, getting information where it needs to be is fiendishly difficult: due to legal restrictions between countries, inter-institutional rivalries, and even differing office hours and computer formats. Even if information reaches a particular national Interpol office, there is a further challenge getting it to ordinary beat officers -– prompting European police services especially to try and widen access to I-24/7 to investigators, and trial ‘MIND/FIND’, systems for border police to check registers of lost documents. There is also a problem at the other end, in reporting problems to Interpol: during his Afghan visit, Noble complained that his organization often has to learn of incidents such as prison escapes through the media.
For all its problems, Interpol remains the most sophisticated example of police co-ordination, at a time when it has never been easier for criminals (and their money) to evade police scrutiny across borders. Other attempts, such as Europol in the EU, are at more primitive -- European police forces sent ten times more traffic to each other via Interpol than through Europol. Certainly, Interpol is keen to demonstrate its usefulness, following embarrassment earlier in the year, when the President of the organization (the representative of national members), Jackie Selebi of the South African police, stood down over allegations he received bribes from drug traffickers. Frustratingly for the organization, the key to its future reputation is with the national officers who make use of its services -- and so, to a significant extent, out of its hands.
ANALYSIS : Do we need investment banks? , BBC
BBC
Only six weeks ago Wall Street had four major investment banks. Now there are none.
In today's Analysis Claire Bowes ask: Do we need investment banks?
LISTEN
Only six weeks ago Wall Street had four major investment banks. Now there are none.
In today's Analysis Claire Bowes ask: Do we need investment banks?
LISTEN
October 06, 2008
Iceland: the canary in the gold mine?
http://meganmcardle.theatlantic.com/archives/2008/10/iceland_the_canary_in_the_gold.php
06 Oct 2008 03:35 pm
Felix Salmon:
Iceland has indeed bailed out Glitnir. But here's the thing: Iceland's credit default swaps are now suggesting that the sovereign itself is a distressed credit.
Contracts on Iceland's debt jumped to 17.5 percent upfront and 5 percent a year to protect 10 million euros ($13.8 million) of bonds.
This is not how triple-A sovereigns behave. It's as though the analysts at Moody's were only able to see one step ahead, and not two: they could anticipate that Iceland would bail out its banks, but they couldn't anticipate that when a tiny country bails out a bank whose assets vastly exceed the country's own GDP, then the sovereign itself loses much creditworthiness. One scary datapoint: the assets of Kaupthing Bank amount to 623% of Iceland's GDP, which is possibly why its own credit default swaps are trading somewhere over 2500bp.
How bad can things get in Iceland? Here's what one local emailed Tom Braithwaite:
They are fighting powers that they are powerless to fight. It's like tackling a storm raging in the sea with a teaspoon.
The main supermarket can't get imported goods because they have no currency. The shops are half empty. One of the store managers has advised people to start hoarding. We're running out of oil. And winter came last night - about a month early.
Received opinion has it that if Iceland backstops the Icelandic banks, then the other Nordic countries, or someone, will backstop Iceland. Which might be true: we'll find out "very soon". But there's no news yet.
Lets hope this is not a model for our future.
06 Oct 2008 03:35 pm
Felix Salmon:
Iceland has indeed bailed out Glitnir. But here's the thing: Iceland's credit default swaps are now suggesting that the sovereign itself is a distressed credit.
Contracts on Iceland's debt jumped to 17.5 percent upfront and 5 percent a year to protect 10 million euros ($13.8 million) of bonds.
This is not how triple-A sovereigns behave. It's as though the analysts at Moody's were only able to see one step ahead, and not two: they could anticipate that Iceland would bail out its banks, but they couldn't anticipate that when a tiny country bails out a bank whose assets vastly exceed the country's own GDP, then the sovereign itself loses much creditworthiness. One scary datapoint: the assets of Kaupthing Bank amount to 623% of Iceland's GDP, which is possibly why its own credit default swaps are trading somewhere over 2500bp.
How bad can things get in Iceland? Here's what one local emailed Tom Braithwaite:
They are fighting powers that they are powerless to fight. It's like tackling a storm raging in the sea with a teaspoon.
The main supermarket can't get imported goods because they have no currency. The shops are half empty. One of the store managers has advised people to start hoarding. We're running out of oil. And winter came last night - about a month early.
Received opinion has it that if Iceland backstops the Icelandic banks, then the other Nordic countries, or someone, will backstop Iceland. Which might be true: we'll find out "very soon". But there's no news yet.
Lets hope this is not a model for our future.
Japanese to build space elevator invented in Russia
17:00 | 06/ 10/ 2008
MOSCOW. (Yury Zaitsev for RIA Novosti) - Japanese engineers intend to build an elevator to deliver cargo into space. Japanese authorities are prepared to allocate $10 billion for the project.
The space elevator is expected to cut the cost of delivering cargo into space and is considered one of the most ambitious projects of the 21st century. The Japanese plan to unveil a schedule for the elevator's assembly and commissioning this November.
The idea of a space elevator is over 100 years old. Russia's Konstantin Tsiolkovsky, the founder of theoretical astronautics, suggested building a tower thousands of kilometers high attached to some firmament in orbit. Steel, the most durable material of Tsiolkovsky's time, however, was not capable of bearing even a small part of the expected physical stress.
In 1960, before the first manned flight was performed by Yury Gagarin, Yury Artsutanov, a post-gradate student at the Leningrad Technology Institute, using Tsiolkovsky's ideas, suggested creating a cable-guide connecting a spot on the equator and a space platform in a geostationary orbit at 35,786 km, whose orbit would remain synchronous to that of the location on Earth. Gravity and centripetal force would keep the cable, connecting the platform to Earth, constantly taut, making transportation possible. The time required for cargo from Earth to reach the platform was estimated at one week.
Later, science fiction writer Arthur Clark wrote of a space elevator in his novel, The Fountains of Paradise, attracting attention to the concept. In 1999, NASA and its Scientific Research Institute included it in the list of probable tasks for early third millennium.
A major problem in the construction of a space elevator is to create the cable, which must be extremely durable and light-weight. The durability of carbon nanotubes, invented in 1991, exceeds the requirements for the space elevator, with a far higher tensile yield strength and density six times less than that of steel. A one millimeter diameter strand made up of nanotubes is capable of supporting up to 60 metric tons. Still, the technology for industrial production of nanotubes and the weaving of strands into a thread is in its early development.
Some scientists say the inevitable crystal-lattice defects could decrease the durability of the nanotubes. Even if flawless threads could be produced, the micrometeorites, cosmic rays, and atmospheric oxygen could still damage the cable.
Space junk and the natural vibrations of the giant "rope" could also cause the cable to fail.
Another problem is energy supply. Existing battery technology could not provide the necessary energy for the whole distance. This means that an external energy supply will be needed, possibly a laser or microwave source, which will require corresponding receivers to be installed on the elevator itself. Another option would be to use the elevator's braking energy on its way down.
Let us assume that all the problems with materials and energy are solved. The cable weighing thousands of tons has been manufactured, and needs to be placed into space. There are no carrier rockets capable of doing this, which means the cable would have to be launched into space in pieces, which need to be joined somehow afterwards. Or one could drop down a thin strand from the orbiting platform and splice it into the full diameter of the cable. Neither placement concept seems any easier to implement than creating a suitable material for the cable.
So far scientists have been experimenting in space with cable systems of up to several hundred meters long, made of materials which are far less difficult to produce than nanotubes.
In 1965, Russia's Rocket and Space Corporation Energia, then called the Central Design Bureau for Engineering, led by Academician Sergei Korolev, was preparing the first ever space experiment with a cable system. The project involved creating artificial gravity on the Soyuz spacecraft, which would be connected with the carrier rocket's final stage via a steel cable, both rotating.
After Korolev died, however, the project was cancelled. Development of cable systems was resumed at Energia 20 years later.
A series of experiments with cable systems were performed within U.S., U.S.-Italian and U.S.-Japanese programs. Although some of them failed, part of the planned research was done.
In recent years, scientists at the Space Research Institute of the Russian Academy of Sciences have been researching the possibility of setting up a group of orbital cable systems to ensure cyclic delivery of cargo from Earth to Moon. Each system will consist of two space vehicles interconnected with a cable and rotating like a slingshot, with its centre of mass moving along a predetermined orbit. If one of the two space vehicles is "unclogged," the rotational energy released will cause its translational movement, like a jet engine.
Theoretical and experimental research has shown that, to keep a transport corridor between Earth and Moon functioning, the design should include three cable systems, two in low earth orbits, low circular and elliptic, and one in a lunar orbit. Cargo would have to be transported between the three systems, eventually making their way to the final destination.
Calculations have revealed that this kind of transport system would weigh 28 times less than the cargo it would be capable of delivering from Earth to Moon, while traditional delivery by a rocket requires an amount of fuel that weighs 16 times more than the cargo itself. This concept would be much simpler and cheaper to implement than a space elevator.
Yury Zaitsev is an academic adviser at the Russian Academy of Engineering Sciences.
The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.
MOSCOW. (Yury Zaitsev for RIA Novosti) - Japanese engineers intend to build an elevator to deliver cargo into space. Japanese authorities are prepared to allocate $10 billion for the project.
The space elevator is expected to cut the cost of delivering cargo into space and is considered one of the most ambitious projects of the 21st century. The Japanese plan to unveil a schedule for the elevator's assembly and commissioning this November.
The idea of a space elevator is over 100 years old. Russia's Konstantin Tsiolkovsky, the founder of theoretical astronautics, suggested building a tower thousands of kilometers high attached to some firmament in orbit. Steel, the most durable material of Tsiolkovsky's time, however, was not capable of bearing even a small part of the expected physical stress.
In 1960, before the first manned flight was performed by Yury Gagarin, Yury Artsutanov, a post-gradate student at the Leningrad Technology Institute, using Tsiolkovsky's ideas, suggested creating a cable-guide connecting a spot on the equator and a space platform in a geostationary orbit at 35,786 km, whose orbit would remain synchronous to that of the location on Earth. Gravity and centripetal force would keep the cable, connecting the platform to Earth, constantly taut, making transportation possible. The time required for cargo from Earth to reach the platform was estimated at one week.
Later, science fiction writer Arthur Clark wrote of a space elevator in his novel, The Fountains of Paradise, attracting attention to the concept. In 1999, NASA and its Scientific Research Institute included it in the list of probable tasks for early third millennium.
A major problem in the construction of a space elevator is to create the cable, which must be extremely durable and light-weight. The durability of carbon nanotubes, invented in 1991, exceeds the requirements for the space elevator, with a far higher tensile yield strength and density six times less than that of steel. A one millimeter diameter strand made up of nanotubes is capable of supporting up to 60 metric tons. Still, the technology for industrial production of nanotubes and the weaving of strands into a thread is in its early development.
Some scientists say the inevitable crystal-lattice defects could decrease the durability of the nanotubes. Even if flawless threads could be produced, the micrometeorites, cosmic rays, and atmospheric oxygen could still damage the cable.
Space junk and the natural vibrations of the giant "rope" could also cause the cable to fail.
Another problem is energy supply. Existing battery technology could not provide the necessary energy for the whole distance. This means that an external energy supply will be needed, possibly a laser or microwave source, which will require corresponding receivers to be installed on the elevator itself. Another option would be to use the elevator's braking energy on its way down.
Let us assume that all the problems with materials and energy are solved. The cable weighing thousands of tons has been manufactured, and needs to be placed into space. There are no carrier rockets capable of doing this, which means the cable would have to be launched into space in pieces, which need to be joined somehow afterwards. Or one could drop down a thin strand from the orbiting platform and splice it into the full diameter of the cable. Neither placement concept seems any easier to implement than creating a suitable material for the cable.
So far scientists have been experimenting in space with cable systems of up to several hundred meters long, made of materials which are far less difficult to produce than nanotubes.
In 1965, Russia's Rocket and Space Corporation Energia, then called the Central Design Bureau for Engineering, led by Academician Sergei Korolev, was preparing the first ever space experiment with a cable system. The project involved creating artificial gravity on the Soyuz spacecraft, which would be connected with the carrier rocket's final stage via a steel cable, both rotating.
After Korolev died, however, the project was cancelled. Development of cable systems was resumed at Energia 20 years later.
A series of experiments with cable systems were performed within U.S., U.S.-Italian and U.S.-Japanese programs. Although some of them failed, part of the planned research was done.
In recent years, scientists at the Space Research Institute of the Russian Academy of Sciences have been researching the possibility of setting up a group of orbital cable systems to ensure cyclic delivery of cargo from Earth to Moon. Each system will consist of two space vehicles interconnected with a cable and rotating like a slingshot, with its centre of mass moving along a predetermined orbit. If one of the two space vehicles is "unclogged," the rotational energy released will cause its translational movement, like a jet engine.
Theoretical and experimental research has shown that, to keep a transport corridor between Earth and Moon functioning, the design should include three cable systems, two in low earth orbits, low circular and elliptic, and one in a lunar orbit. Cargo would have to be transported between the three systems, eventually making their way to the final destination.
Calculations have revealed that this kind of transport system would weigh 28 times less than the cargo it would be capable of delivering from Earth to Moon, while traditional delivery by a rocket requires an amount of fuel that weighs 16 times more than the cargo itself. This concept would be much simpler and cheaper to implement than a space elevator.
Yury Zaitsev is an academic adviser at the Russian Academy of Engineering Sciences.
The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.
Push Vs. Pull Sources And Killer Intelligence Apps (Indiscriminate Intelligence) Share
Tuesday, September 30, 2008
Kristan J. Wheaton
http://sourcesandmethods.blogspot.com/2008/09/push-vs-pull-sources-and-killer.html
I had a nice talk with the good people at Laancor this morning (They have an interesting plain language search product called QUADRA that seems worth a look) and the discussion made me reflect (in the random, almost indiscriminate, way I think about this stuff ) on the nature of intelligence sources and how to describe them.
Of course, there are many ways to describe a source (not the least of which is along the lines of a traditional INT). One of the most useful ways to think about collection generally and sources specifically, however, is whether the source pushes information to the intelligence professional or whether the intelligence professional has to pull information from the source. Subscribing to a magazine or an email-based list are both good examples of push sources. In both cases, the information source pushes the information to the intelligence professional. The job of the intelligence professional then becomes one of filtering through the information to find bits and pieces that are relevant.
One of the most powerful features of the internet is its ability to push mounds of potentially relevant data to intelligence professionals. This has become particularly true since the advent of Really Simple Syndication (RSS) feeds. This feature of virtually all modern internet sites with dynamic content allows users to subscribe to particular feeds and have them sent directly to their email inboxes or to an RSS feed reader, such as Bloglines.com or Google Reader, in order to manage the influx of information. Modern services such as these allow users to tap into a variety of information sources including traditional news outlets but also social networks and personal and professional blogs.
Pull sources require effort on the part of the collector to acquire. Typically the collector must search for and identify a pull source and then attempt to make "contact" (though this contact might be as fleeting as clicking on a hyperlink) with that source in order to get the information necessary.
The question itself determines much of the difficulty inherent in collecting from a pull source. An easy question, such as the number of telephone lines in a foreign country can be pulled from a variety of sources including encyclopedias, the CIA World Factbook or the International Telecommunications Union’s database. A more difficult question, such as the specific brand name of the equipment purchased by a specific telephone company in a foreign country, would require a more specific pull source.
As a result, operational security is a much more important consideration, generally, with pull sources than with push sources. A specific question to a sensitive pull source is very likely to generate the question, “Why are YOU so interested in this?” from the source. The mere asking of a question, might, in this way, reveal or even compromise some of your own organization’s plans.
Push sources are generally easier to manage than pull sources. Getting websites, listening devices or agents to push information ensures that the intelligence unit is staying ‘in the loop”, that potentially relevant information is coming into the unit in a regular stream and that the main problem is sorting the wheat from the chaff. This, in turn, allows the intelligence unit to better focus its collection efforts on pull sources for information that is outside of the routine information flows and to manage the oftentimes considerable operational security risks associated with the most sensitive of these sources.
What struck me is that I could not think of a single system that dealt as effectively with push sources as Google Reader AND as effectively with pull sources as Zotero COMBINED with an easy storage, search and retreival function like Scrapbook AND a citation management system (think Zotero again). I think the first company that does this will have a killer app on their hands.
I am an assistant professor of intelligence studies at Mercyhurst College// 501 E. 38th St. Erie, PA 16546// # 814 824 2023// kwheaton at mercyhurst dot edu
Kristan J. Wheaton
http://sourcesandmethods.blogspot.com/2008/09/push-vs-pull-sources-and-killer.html
I had a nice talk with the good people at Laancor this morning (They have an interesting plain language search product called QUADRA that seems worth a look) and the discussion made me reflect (in the random, almost indiscriminate, way I think about this stuff ) on the nature of intelligence sources and how to describe them.
Of course, there are many ways to describe a source (not the least of which is along the lines of a traditional INT). One of the most useful ways to think about collection generally and sources specifically, however, is whether the source pushes information to the intelligence professional or whether the intelligence professional has to pull information from the source. Subscribing to a magazine or an email-based list are both good examples of push sources. In both cases, the information source pushes the information to the intelligence professional. The job of the intelligence professional then becomes one of filtering through the information to find bits and pieces that are relevant.
One of the most powerful features of the internet is its ability to push mounds of potentially relevant data to intelligence professionals. This has become particularly true since the advent of Really Simple Syndication (RSS) feeds. This feature of virtually all modern internet sites with dynamic content allows users to subscribe to particular feeds and have them sent directly to their email inboxes or to an RSS feed reader, such as Bloglines.com or Google Reader, in order to manage the influx of information. Modern services such as these allow users to tap into a variety of information sources including traditional news outlets but also social networks and personal and professional blogs.
Pull sources require effort on the part of the collector to acquire. Typically the collector must search for and identify a pull source and then attempt to make "contact" (though this contact might be as fleeting as clicking on a hyperlink) with that source in order to get the information necessary.
The question itself determines much of the difficulty inherent in collecting from a pull source. An easy question, such as the number of telephone lines in a foreign country can be pulled from a variety of sources including encyclopedias, the CIA World Factbook or the International Telecommunications Union’s database. A more difficult question, such as the specific brand name of the equipment purchased by a specific telephone company in a foreign country, would require a more specific pull source.
As a result, operational security is a much more important consideration, generally, with pull sources than with push sources. A specific question to a sensitive pull source is very likely to generate the question, “Why are YOU so interested in this?” from the source. The mere asking of a question, might, in this way, reveal or even compromise some of your own organization’s plans.
Push sources are generally easier to manage than pull sources. Getting websites, listening devices or agents to push information ensures that the intelligence unit is staying ‘in the loop”, that potentially relevant information is coming into the unit in a regular stream and that the main problem is sorting the wheat from the chaff. This, in turn, allows the intelligence unit to better focus its collection efforts on pull sources for information that is outside of the routine information flows and to manage the oftentimes considerable operational security risks associated with the most sensitive of these sources.
What struck me is that I could not think of a single system that dealt as effectively with push sources as Google Reader AND as effectively with pull sources as Zotero COMBINED with an easy storage, search and retreival function like Scrapbook AND a citation management system (think Zotero again). I think the first company that does this will have a killer app on their hands.
I am an assistant professor of intelligence studies at Mercyhurst College// 501 E. 38th St. Erie, PA 16546// # 814 824 2023// kwheaton at mercyhurst dot edu
Revolution in Intelligence Affairs
The coming revolution in intelligence affairs
International Relations and Security Network
By Kristan J Wheaton
In June 1815, according to legend, financier Nathan Mayer Rothschild stationed a scout on the outskirts of the battlefield of Waterloo. As soon as the battle was over and it was clear that the Duke of Wellington had won, the scout supposedly raced back to the London banker to deliver the news. The result, so the story goes, is that Rothschild made a fortune on the London Stock Exchange the next day.
In April 2007, Seung-Hui Cho, a mentally ill student, committed suicide at 9:51AM after having killed 32 people and injured another 23 at Virginia Tech University in the US. By 3:16 PM the same day, news of the massacre had been posted to Wikipedia, the open, online encyclopedia. Within three hours, over 300 changes had been made to the page as new information poured in. Within two weeks, over 8000 edits had been posted, causing a local newspaper, The Roanoke Times, to acknowledge that Wikipedia had “emerged as the clearinghouse for detailed information on the event.”
The contrast between these two stories, and the implications for intelligence, could not be more clear. The story about the Battle of Waterloo, while false, is believable because in 1815, only someone with Rothschild’s immense fortune and connections would have the resources necessary to acquire and the opportunity to take advantage of such an important piece of information.
By 2008, the situation has almost reversed itself. Now, the crowd, armed with a variety of speedy communication devices and simple, online tools with which to exploit them, can increasingly outpace the most sophisticated news and intelligence capabilities. As then-director of the National Security Agency, Michael Hayden, in congressional testimony on the threat posed by terrorist groups pointed out in October 2002, “Al-Qaida did not need to develop a telecommunication system. All it had to do was harvest the products of a three trillion dollar a year telecommunications industry; an industry that had made communications signals varied, global, instantaneous, complex, and encrypted.”
However, the changes that modern telecommunications technologies and their associated applications have brought to the world are only the most visible of those that are already affecting intelligence affairs. Three other trends, the ascendency of the “open,” the collapse of the so-called intelligence cycle and the changing perception of intelligence in the public eye, are likely to completely revolutionize intelligence over the next 5-10 years.
The ascendancy of the “open”
Much has been made in recent weeks of the use of open sources, or freely available information, in intelligence. On 12 September 2008 the US Office of the Director Of National Intelligence closed the second annual Open Source Intelligence (OSINT) Conference in Washington DC. Registered participants for the event rapidly exceeded available slots as organizations from all around the world sent people to attend the widely publicized convention. Interest in open sources in the US intelligence community, however, significantly predates the media hype associated with the recent conference or even its predecessor in 2007.
Sherman Kent, often referred to as the “father of intelligence analysis” within the US intelligence community, estimated in 1947, that 80 percent of the information the intelligence community used came from open sources. As he states in his 1949 book, Strategic Intelligence For American World Policy, “Some of this knowledge may be acquired through clandestine means but the bulk of it must be had through unromantic open-and-above-board observation and research (See Kent Sherman, Strategic Intelligence For American World Policy (1949), Princeton University Press, P 3-4).” By 2006, former director of the US Defense Intelligence Agency, Lieutenant General Samuel Wilson, had raised that estimate to 90 percent.
Much of the recent interest in open source intelligence, however, comes, directly or indirectly, as a result of the withering critique of US intelligence capabilities in the aftermath of the 11 September terrorist attacks on the Pentagon and the World Trade Center and the failure to find weapons of mass destruction in Iraq after the coalition invasion of that country in 2003. The 9/11 Commission found the US intelligence community “too complex and secret” while the WMD Commission went even further, devoting several sections in its report to recommendations involving the expanded use of open source information.
While the US intelligence community adopted many of these recommendations and has moved decisively to correct some of the worst imbalances and oversights in the use of open sources in intelligence, the ascendancy of the “open” in intelligence work goes beyond open sources of information. Today, increasingly, intelligence communities around the globe are playing catch-up to the proliferation of open systems. The US intelligence community, for example, announced the development of Intellipedia in 2006, five years after Wikipedia, and only recently publicized its deployment of A-Space, modeled after the highly successful social networking site, MySpace, which went online in 2003.
Part of this hesitancy to adopt open systems is due to the focus – some would say excessive focus – many intelligence professionals put on secrecy and compartmentalization. Some secrecy serves to legitimately protect sensitive sources and methods as well as to preserve a decisionmaker’s options. Excessive secrecy and compartmentalization, however, can effectively lock down important information, virtually ensuring that it cannot get to the right people at the right time. This is sometimes done for reasons that have little to do with the goals and purposes of the organization. So pervasive was this last problem that it led Rodney B McDaniel, executive director of the US National Security Council under President Ronald Reagan, to comment in 1987 that “[…] there are two uses to which security classification is put: The legitimate desire to protect secrets and protection of bureaucratic turf. As a practitioner of the real world, it’s about 90 bureaucratic turf; 10 legitimate protection of secrets as far as I’m concerned.”
Collaboration, one of the Enterprise Objectives in the first publicly available US National Intelligence Strategy, has been elevated to one of the intelligence community’s “values” in current DNI Mike McConnell’s Vision 2015 document. Furthermore, in the US’s Intelligence Community Directive 205, analysts have been ordered to “leverage outside expertise as part of their work.”
Collaboration and outreach imply openness and a variety of easy to use, off the shelf tools to maximize it. Moreover, where the US$60 billion US intelligence community leads, other national, law enforcement and commercial intelligence enterprises are likely to follow. The only other option is to retreat back into some sort of slow-moving, inflexible, safe-but-irrelevant organizational structure that remains in a permanent state of reaction to the fast, agile threats surfacing and strengthening daily. Ultimately, there is only one logical choice for the intelligence community and, as internet entrepreneur Dick Clarence Hardt put it at the Open Source (of the software variety) Convention in 2005, “Open and simple wins.”
The collapse of the intelligence cycle
There is not much theory that intelligence professionals agree on, but virtually all of them point to the so-called “intelligence cycle” when asked how intelligence works; until pressed, that is.
This consensus opinion, that intelligence flows effortlessly from the decisionmaker’s intelligence requirements, to collection of relevant information, to analysis of that information, to production of the intelligence product and then back to the (sometimes) satisfied decisionmaker, falls apart under the slightest pressure. Indeed, no seasoned intelligence professional actually believes that intelligence works, or has ever worked, in this fashion. The actual process is much less linear and much more complex.
Yet the myth persists. In fact, in many countries, it directly or indirectly drives training and funding decisions and permeates policymaker’s attitudes about intelligence. Ask a lawmaker about intelligence and, if they know anything at all, they will likely talk about the intelligence cycle.
Several attempts have been made in recent years by practitioners and academics to modify the cycle, to make it more realistic. Only one, former CIA analyst and author Robert Clark, has tried to throw it out entirely. His model, which he refers to as target-centric intelligence, supposes a group of professionals, intelligence and decisionmakers alike, that are concerned with a particular target (See Clark, Robert; Intelligence Analysis: A Target-centric Approach (CQ Press, 2006)). Each contributes information and extracts analysis from a shared understanding of the target. Radical in its approach to understanding intelligence, Clark’s vision of how intelligence does (or should) work has failed to supplant the hoary image of the comfortable, if counterproductive, intelligence cycle.
The intelligence cycle is one of the few governmental processes to survive the Cold War unscathed. The West, for example, has gone from containment to détente to engagement and globalization while the US Army has transitioned from active defense to the Airland Battle doctrine to network-centric warfare over the same time frame. Decisionmakers in areas such as these are beginning to demand sophisticated intelligence processes to support their modern doctrines. Much of the response to these demands has been ad hoc. The National Intelligence Support Teams the US deployed in Bosnia in the 1990s resemble in intent, if not in scale, the “fusion cells” in Iraq today. In both cases, from what little public information exists about their inner workings, it is clear that these initiatives are successful and that processes, very different from the intelligence cycle, are at work.
Until an intelligence agency documents one of these new processes, validates its particulars and can explain it in terms as simple and straightforward as those of the intelligence cycle, the old standard is unlikely to be discarded. Such a task is easily within the ability of any number of national and commercial intelligence organizations and the first to do so will have a decisive competitive advantage over the rest. Under these circumstances, it would seem that the intelligence cycle’s days are numbered.
The changing perceptions of intelligence
When asked to consider intelligence, most people conjure up images of Hollywood spies, codes and assassinations. While such images represent a glamorized and unrealistic version of actual intelligence work, for those working inside government and private intelligence organizations, it is still true that most did not deliberately set out to become intelligence professionals: They stumbled into it.
However, this is changing at an accelerating pace. More and more commercial, nongovernmental and law enforcement enterprises have begun to realize the value of having specialists who can extract meaning from the vast ocean of potentially relevant but unstructured and often unreliable or even deceptive information available. Dependable estimates regarding the future plans and activities of competitors, criminal organizations and terrorists, in addition to similar information regarding other states, are in particularly high demand.
Collecting and analyzing this type of information, especially in the private or law enforcement sectors where traditional anything-goes intelligence activities are illegal or unethical, requires highly trained professionals. Even the US intelligence community has had to turn to outside contractors for as much as 27 percent of its workforce.
Several large organizations, such as the International Association of Law Enforcement Intelligence Analysts and the Society of Competitive Intelligence Professionals train intelligence professionals in techniques appropriate for these sub-disciplines of intelligence. Increasingly, however, students attracted to intelligence careers are pursuing those interests in more traditional academic settings.
As the demand increases for entry level analysts and other intelligence professionals with these skills and abilities, the supply of colleges and universities offering such specialist programs will also likely increase. Already there are a number of schools offering bachelor's and master's degrees in intelligence studies or applied intelligence in the US and in other countries and this number is set to grow. The International Association Of Intelligence Education, an organization that seeks to “advance research, knowledge and professional development in intelligence education,” has grown from 60 founding members to well over 400 members from 49 organizations from around the world over the last 4 years.
As the educational infrastructure grows to meet the demand for this new kind of knowledge worker, students will increasingly come to the discipline of intelligence directly, in much the same way they now come to engineering or architecture. Likewise, employers from government and the private sector will look to educational institutions to fill their entry-level intelligence positions. Research funding directed at expanding the theoretical basis of intelligence work and at validating elements of the intelligence professional’s tradecraft will encourage younger employees of the various intelligence communities to jump ship for a life in academe.
Eventually, some educational institutions will begin to offer professional degrees in intelligence studies in much the same way many universities now offer advanced professional degrees in law or education. This normalization of intelligence as a profession will likely become, in turn, a self-reinforcing cycle, dramatically changing the ways ordinary people and institutions see intelligence.
The revolution is coming
These four trends – the advances in technology, the growing importance of open sources and open systems, the urgent need for new processes and the changing way people think about intelligence work – are combining to form a powerful force that will revolutionize intelligence over the next 5-10 years. There will be nay-sayers and the movement forward will not be without difficulties.
Intelligence is at a crossroads, however, and the choices are clear. On one side lies increasing irrelevancy as diminishing returns from slow, inflexible, overly classified systems fail to justify their expense. The other choice, which at least avoids the death spiral, is not without its own perils, however. The way ahead is unclear. Without a generally accepted understanding of what intelligence is, what it should do and who it should do it for, intelligence will continue to merely react to the changes outlined in this paper, conjuring up more and more makeshift solutions and never quite living up to its promise.
Intelligence will not disappear, though. What may change is who does intelligence best. The first entity to come to grips with these key trends and questions, to understand the core of the intelligence function and how to weave that into the fabric of the technological and other changes around us, will not only hold an invaluable edge in business and law enforcement, but in national security as well.
Kristan J Wheaton is an assistant professor of intelligence studies at Mercyhurst College.
International Relations and Security Network
By Kristan J Wheaton
In June 1815, according to legend, financier Nathan Mayer Rothschild stationed a scout on the outskirts of the battlefield of Waterloo. As soon as the battle was over and it was clear that the Duke of Wellington had won, the scout supposedly raced back to the London banker to deliver the news. The result, so the story goes, is that Rothschild made a fortune on the London Stock Exchange the next day.
In April 2007, Seung-Hui Cho, a mentally ill student, committed suicide at 9:51AM after having killed 32 people and injured another 23 at Virginia Tech University in the US. By 3:16 PM the same day, news of the massacre had been posted to Wikipedia, the open, online encyclopedia. Within three hours, over 300 changes had been made to the page as new information poured in. Within two weeks, over 8000 edits had been posted, causing a local newspaper, The Roanoke Times, to acknowledge that Wikipedia had “emerged as the clearinghouse for detailed information on the event.”
The contrast between these two stories, and the implications for intelligence, could not be more clear. The story about the Battle of Waterloo, while false, is believable because in 1815, only someone with Rothschild’s immense fortune and connections would have the resources necessary to acquire and the opportunity to take advantage of such an important piece of information.
By 2008, the situation has almost reversed itself. Now, the crowd, armed with a variety of speedy communication devices and simple, online tools with which to exploit them, can increasingly outpace the most sophisticated news and intelligence capabilities. As then-director of the National Security Agency, Michael Hayden, in congressional testimony on the threat posed by terrorist groups pointed out in October 2002, “Al-Qaida did not need to develop a telecommunication system. All it had to do was harvest the products of a three trillion dollar a year telecommunications industry; an industry that had made communications signals varied, global, instantaneous, complex, and encrypted.”
However, the changes that modern telecommunications technologies and their associated applications have brought to the world are only the most visible of those that are already affecting intelligence affairs. Three other trends, the ascendency of the “open,” the collapse of the so-called intelligence cycle and the changing perception of intelligence in the public eye, are likely to completely revolutionize intelligence over the next 5-10 years.
The ascendancy of the “open”
Much has been made in recent weeks of the use of open sources, or freely available information, in intelligence. On 12 September 2008 the US Office of the Director Of National Intelligence closed the second annual Open Source Intelligence (OSINT) Conference in Washington DC. Registered participants for the event rapidly exceeded available slots as organizations from all around the world sent people to attend the widely publicized convention. Interest in open sources in the US intelligence community, however, significantly predates the media hype associated with the recent conference or even its predecessor in 2007.
Sherman Kent, often referred to as the “father of intelligence analysis” within the US intelligence community, estimated in 1947, that 80 percent of the information the intelligence community used came from open sources. As he states in his 1949 book, Strategic Intelligence For American World Policy, “Some of this knowledge may be acquired through clandestine means but the bulk of it must be had through unromantic open-and-above-board observation and research (See Kent Sherman, Strategic Intelligence For American World Policy (1949), Princeton University Press, P 3-4).” By 2006, former director of the US Defense Intelligence Agency, Lieutenant General Samuel Wilson, had raised that estimate to 90 percent.
Much of the recent interest in open source intelligence, however, comes, directly or indirectly, as a result of the withering critique of US intelligence capabilities in the aftermath of the 11 September terrorist attacks on the Pentagon and the World Trade Center and the failure to find weapons of mass destruction in Iraq after the coalition invasion of that country in 2003. The 9/11 Commission found the US intelligence community “too complex and secret” while the WMD Commission went even further, devoting several sections in its report to recommendations involving the expanded use of open source information.
While the US intelligence community adopted many of these recommendations and has moved decisively to correct some of the worst imbalances and oversights in the use of open sources in intelligence, the ascendancy of the “open” in intelligence work goes beyond open sources of information. Today, increasingly, intelligence communities around the globe are playing catch-up to the proliferation of open systems. The US intelligence community, for example, announced the development of Intellipedia in 2006, five years after Wikipedia, and only recently publicized its deployment of A-Space, modeled after the highly successful social networking site, MySpace, which went online in 2003.
Part of this hesitancy to adopt open systems is due to the focus – some would say excessive focus – many intelligence professionals put on secrecy and compartmentalization. Some secrecy serves to legitimately protect sensitive sources and methods as well as to preserve a decisionmaker’s options. Excessive secrecy and compartmentalization, however, can effectively lock down important information, virtually ensuring that it cannot get to the right people at the right time. This is sometimes done for reasons that have little to do with the goals and purposes of the organization. So pervasive was this last problem that it led Rodney B McDaniel, executive director of the US National Security Council under President Ronald Reagan, to comment in 1987 that “[…] there are two uses to which security classification is put: The legitimate desire to protect secrets and protection of bureaucratic turf. As a practitioner of the real world, it’s about 90 bureaucratic turf; 10 legitimate protection of secrets as far as I’m concerned.”
Collaboration, one of the Enterprise Objectives in the first publicly available US National Intelligence Strategy, has been elevated to one of the intelligence community’s “values” in current DNI Mike McConnell’s Vision 2015 document. Furthermore, in the US’s Intelligence Community Directive 205, analysts have been ordered to “leverage outside expertise as part of their work.”
Collaboration and outreach imply openness and a variety of easy to use, off the shelf tools to maximize it. Moreover, where the US$60 billion US intelligence community leads, other national, law enforcement and commercial intelligence enterprises are likely to follow. The only other option is to retreat back into some sort of slow-moving, inflexible, safe-but-irrelevant organizational structure that remains in a permanent state of reaction to the fast, agile threats surfacing and strengthening daily. Ultimately, there is only one logical choice for the intelligence community and, as internet entrepreneur Dick Clarence Hardt put it at the Open Source (of the software variety) Convention in 2005, “Open and simple wins.”
The collapse of the intelligence cycle
There is not much theory that intelligence professionals agree on, but virtually all of them point to the so-called “intelligence cycle” when asked how intelligence works; until pressed, that is.
This consensus opinion, that intelligence flows effortlessly from the decisionmaker’s intelligence requirements, to collection of relevant information, to analysis of that information, to production of the intelligence product and then back to the (sometimes) satisfied decisionmaker, falls apart under the slightest pressure. Indeed, no seasoned intelligence professional actually believes that intelligence works, or has ever worked, in this fashion. The actual process is much less linear and much more complex.
Yet the myth persists. In fact, in many countries, it directly or indirectly drives training and funding decisions and permeates policymaker’s attitudes about intelligence. Ask a lawmaker about intelligence and, if they know anything at all, they will likely talk about the intelligence cycle.
Several attempts have been made in recent years by practitioners and academics to modify the cycle, to make it more realistic. Only one, former CIA analyst and author Robert Clark, has tried to throw it out entirely. His model, which he refers to as target-centric intelligence, supposes a group of professionals, intelligence and decisionmakers alike, that are concerned with a particular target (See Clark, Robert; Intelligence Analysis: A Target-centric Approach (CQ Press, 2006)). Each contributes information and extracts analysis from a shared understanding of the target. Radical in its approach to understanding intelligence, Clark’s vision of how intelligence does (or should) work has failed to supplant the hoary image of the comfortable, if counterproductive, intelligence cycle.
The intelligence cycle is one of the few governmental processes to survive the Cold War unscathed. The West, for example, has gone from containment to détente to engagement and globalization while the US Army has transitioned from active defense to the Airland Battle doctrine to network-centric warfare over the same time frame. Decisionmakers in areas such as these are beginning to demand sophisticated intelligence processes to support their modern doctrines. Much of the response to these demands has been ad hoc. The National Intelligence Support Teams the US deployed in Bosnia in the 1990s resemble in intent, if not in scale, the “fusion cells” in Iraq today. In both cases, from what little public information exists about their inner workings, it is clear that these initiatives are successful and that processes, very different from the intelligence cycle, are at work.
Until an intelligence agency documents one of these new processes, validates its particulars and can explain it in terms as simple and straightforward as those of the intelligence cycle, the old standard is unlikely to be discarded. Such a task is easily within the ability of any number of national and commercial intelligence organizations and the first to do so will have a decisive competitive advantage over the rest. Under these circumstances, it would seem that the intelligence cycle’s days are numbered.
The changing perceptions of intelligence
When asked to consider intelligence, most people conjure up images of Hollywood spies, codes and assassinations. While such images represent a glamorized and unrealistic version of actual intelligence work, for those working inside government and private intelligence organizations, it is still true that most did not deliberately set out to become intelligence professionals: They stumbled into it.
However, this is changing at an accelerating pace. More and more commercial, nongovernmental and law enforcement enterprises have begun to realize the value of having specialists who can extract meaning from the vast ocean of potentially relevant but unstructured and often unreliable or even deceptive information available. Dependable estimates regarding the future plans and activities of competitors, criminal organizations and terrorists, in addition to similar information regarding other states, are in particularly high demand.
Collecting and analyzing this type of information, especially in the private or law enforcement sectors where traditional anything-goes intelligence activities are illegal or unethical, requires highly trained professionals. Even the US intelligence community has had to turn to outside contractors for as much as 27 percent of its workforce.
Several large organizations, such as the International Association of Law Enforcement Intelligence Analysts and the Society of Competitive Intelligence Professionals train intelligence professionals in techniques appropriate for these sub-disciplines of intelligence. Increasingly, however, students attracted to intelligence careers are pursuing those interests in more traditional academic settings.
As the demand increases for entry level analysts and other intelligence professionals with these skills and abilities, the supply of colleges and universities offering such specialist programs will also likely increase. Already there are a number of schools offering bachelor's and master's degrees in intelligence studies or applied intelligence in the US and in other countries and this number is set to grow. The International Association Of Intelligence Education, an organization that seeks to “advance research, knowledge and professional development in intelligence education,” has grown from 60 founding members to well over 400 members from 49 organizations from around the world over the last 4 years.
As the educational infrastructure grows to meet the demand for this new kind of knowledge worker, students will increasingly come to the discipline of intelligence directly, in much the same way they now come to engineering or architecture. Likewise, employers from government and the private sector will look to educational institutions to fill their entry-level intelligence positions. Research funding directed at expanding the theoretical basis of intelligence work and at validating elements of the intelligence professional’s tradecraft will encourage younger employees of the various intelligence communities to jump ship for a life in academe.
Eventually, some educational institutions will begin to offer professional degrees in intelligence studies in much the same way many universities now offer advanced professional degrees in law or education. This normalization of intelligence as a profession will likely become, in turn, a self-reinforcing cycle, dramatically changing the ways ordinary people and institutions see intelligence.
The revolution is coming
These four trends – the advances in technology, the growing importance of open sources and open systems, the urgent need for new processes and the changing way people think about intelligence work – are combining to form a powerful force that will revolutionize intelligence over the next 5-10 years. There will be nay-sayers and the movement forward will not be without difficulties.
Intelligence is at a crossroads, however, and the choices are clear. On one side lies increasing irrelevancy as diminishing returns from slow, inflexible, overly classified systems fail to justify their expense. The other choice, which at least avoids the death spiral, is not without its own perils, however. The way ahead is unclear. Without a generally accepted understanding of what intelligence is, what it should do and who it should do it for, intelligence will continue to merely react to the changes outlined in this paper, conjuring up more and more makeshift solutions and never quite living up to its promise.
Intelligence will not disappear, though. What may change is who does intelligence best. The first entity to come to grips with these key trends and questions, to understand the core of the intelligence function and how to weave that into the fabric of the technological and other changes around us, will not only hold an invaluable edge in business and law enforcement, but in national security as well.
Kristan J Wheaton is an assistant professor of intelligence studies at Mercyhurst College.
October 05, 2008
Chinese Publication Dismisses Comparison with India
By Bhaskar Roy
Referring to western comparison between the development process of India and China, a commentary in the Chinese official publication, the Global Times (September 16) dismisses them as misplaced and based on wrong models. In conclusion the commentary suggested the way to understand the differences between the two countries as follows: “It will be of more significance to analyse deeply as to why the Chinese government even after winning the war of defence against an Indian attack in 1962 decided to withdraw immediately”.
The Global Times is a publication of Chinese government, and a subsidiary of the Xinhua, and mainly devoted to the external issues. The publication, especially commentaries carried by it, reflect at least a section of the official view.
The Chinese regularly fall back on the 1962 border war between China and India to emphasise Chinese superiority. Stating that the Chinese troops withdrew militarily from the territory which is India’s Arunachal Pradesh State, they try to convey that China taught India a lesson. This is a kind of psychological warfare, the CCP’s propaganda department resorts to, periodically.
The reality is, however, somewhat different. The Chinese troops obviously could not hold on to the territory. They were over stretched. More importantly, India had not used the full military force available in the area because of some internal miscommunications. Otherwise, elements of the Indian air force located in the region could have demolished the Chinese forces without any significant opposition. Equally important, the Indian Prime Minister Pt. Jawaharlal Nehru, trusted the Chinese and backed China among the international community. He felt shocked and betrayed and never really recovered from it. He died in 1964.
When the Global Times commentary says that the Indians are too orthodox to adopt to the changing situation in the world, it may be right in one way. Trust and emotion is deep rooted in the Indian culture, thus losing many a battle in the making of its history. Emperor Qin Shi Wangdi, China’s most celebrated ruler buried intellectuals alive. After his victorious Kalinga war, Emperor Ashoka could not accept the scale of deaths and became a Buddhist monk. There in lies a large chunk of difference between India and China. The cultures of each of the two countries manifest in their development model.
Chinese “official” intellectuals and writers rarely refrain from some amount of sarcasm when discussing India. This particular commentary refers to the much maligned caste systems in India and the country’s static mindset against the industriousness of the Chinese people, which determines as to which country will leave the other behind. The Indian caste problem is true, so is the industriousness of the Chinese people which has now revealed its dirty underbelly in huge scams including adulteration of baby food. Even innocent children are not spared in the quest for “profit”. Historical and cultural? The Global Times cannot answer this question.
The Global Times commentary comes following several western analytical reports including scholarly studies by Chinese experts now settled in the west, that China and India are following different models of development, and that India may be gaining over China eventually.
The recent Sanlu dairy product company scandal has gone much beyond China’s boundaries. Milk product for babies sold by this company was deliberately contaminated by the toxic chemical melamine to artificially increase the protein content. This has led to death of at least four babies and seriously affected 53,000 others, in China alone. These are Chinese government official figures. While initially it said Sanlu was the only company involved in adulteration, it is now revealed that almost two dozen Chinese dairy companies were involved in adulterating their products.
Deliberate adulteration of food products is a serious offence. This is not the first instance for Chinese companies. Earlier, a variety of preserved food exported to foreign countries were contaminated by dangerous chemical preservatives. Chinese officials quietly negotiated with the complainant countries after denying publicly any fault on their part. Toys manufactured in China had to be withdrawn the world over because of the harmful chemical contents in these. This never ending problem raises serious concerns over Chinese products all over the world, and may hurt its export market.
The problem with the Sanlu case is that the adulteration was discovered in the period ahead of the Olympic games. But the matter was kept under wraps till the games were over. In this act of omission, this product was allowed to create avoidable damage to children.
More bewildering, a foreign news agency revealed quoting Chinese officials, that senior Chinese officials and party leaders consume special grown rice and similarly reared vegetables and similarly reared livestock. This practice reminds one of George Orwell’s “Animal Farm” --- all animals are equal, but some or more equal than the others.
With such a de facto polity with leaders considered a special category against a vast majority of common people, the CCP leadership is surely inviting a people’s revolution once again. Protests and rumblings are increasing. Perhaps, they are looking for another Mao Zedong?
Hu Yasheng, a highly reputed professor of Chinese origin at Massachusetts Institute of Technology (MIT) has carefully discussed the problem with China, especially its political control in following 1989, that has created more problems. Exploitation of the people, especially the peasants by the party – bureaucracy – business nexus is another challenge. And this is most important: wasteful use of energy and raw material, and the paucity of these two vital inputs domestically. There are other negative issues, too.
In contrast, India is apparently plagued with negatives. Caste clashes, recent communal clashes, terrorism, a democratic system where each political Party is trying to undo the other, and the “static culture” as the Global Times says. The Indian media gives much more space to the negatives because excitement sells. Market economy. But the basic strength of India lies in the fact that when the warring parties come to a consensus everybody, everyone is happy. The progress may be slow, but it is firm.
In China, decisions are taken by fiats or the Emperor’s dictates. Mostly, the majority of the people are left unhappy. The Chinese leaders have brought themselves to a point that they must run to stay at the same place. This does not inspire much stability in the long term.
The Global Times commentary appears to be a deliberate though nervous reaction on India and its development as viewed by the international community vis-à-vis China.
(The author is an eminent China analyst with many years of experience of study on the developments in China. He can be reached at grouchohart@yahoo.com)
Referring to western comparison between the development process of India and China, a commentary in the Chinese official publication, the Global Times (September 16) dismisses them as misplaced and based on wrong models. In conclusion the commentary suggested the way to understand the differences between the two countries as follows: “It will be of more significance to analyse deeply as to why the Chinese government even after winning the war of defence against an Indian attack in 1962 decided to withdraw immediately”.
The Global Times is a publication of Chinese government, and a subsidiary of the Xinhua, and mainly devoted to the external issues. The publication, especially commentaries carried by it, reflect at least a section of the official view.
The Chinese regularly fall back on the 1962 border war between China and India to emphasise Chinese superiority. Stating that the Chinese troops withdrew militarily from the territory which is India’s Arunachal Pradesh State, they try to convey that China taught India a lesson. This is a kind of psychological warfare, the CCP’s propaganda department resorts to, periodically.
The reality is, however, somewhat different. The Chinese troops obviously could not hold on to the territory. They were over stretched. More importantly, India had not used the full military force available in the area because of some internal miscommunications. Otherwise, elements of the Indian air force located in the region could have demolished the Chinese forces without any significant opposition. Equally important, the Indian Prime Minister Pt. Jawaharlal Nehru, trusted the Chinese and backed China among the international community. He felt shocked and betrayed and never really recovered from it. He died in 1964.
When the Global Times commentary says that the Indians are too orthodox to adopt to the changing situation in the world, it may be right in one way. Trust and emotion is deep rooted in the Indian culture, thus losing many a battle in the making of its history. Emperor Qin Shi Wangdi, China’s most celebrated ruler buried intellectuals alive. After his victorious Kalinga war, Emperor Ashoka could not accept the scale of deaths and became a Buddhist monk. There in lies a large chunk of difference between India and China. The cultures of each of the two countries manifest in their development model.
Chinese “official” intellectuals and writers rarely refrain from some amount of sarcasm when discussing India. This particular commentary refers to the much maligned caste systems in India and the country’s static mindset against the industriousness of the Chinese people, which determines as to which country will leave the other behind. The Indian caste problem is true, so is the industriousness of the Chinese people which has now revealed its dirty underbelly in huge scams including adulteration of baby food. Even innocent children are not spared in the quest for “profit”. Historical and cultural? The Global Times cannot answer this question.
The Global Times commentary comes following several western analytical reports including scholarly studies by Chinese experts now settled in the west, that China and India are following different models of development, and that India may be gaining over China eventually.
The recent Sanlu dairy product company scandal has gone much beyond China’s boundaries. Milk product for babies sold by this company was deliberately contaminated by the toxic chemical melamine to artificially increase the protein content. This has led to death of at least four babies and seriously affected 53,000 others, in China alone. These are Chinese government official figures. While initially it said Sanlu was the only company involved in adulteration, it is now revealed that almost two dozen Chinese dairy companies were involved in adulterating their products.
Deliberate adulteration of food products is a serious offence. This is not the first instance for Chinese companies. Earlier, a variety of preserved food exported to foreign countries were contaminated by dangerous chemical preservatives. Chinese officials quietly negotiated with the complainant countries after denying publicly any fault on their part. Toys manufactured in China had to be withdrawn the world over because of the harmful chemical contents in these. This never ending problem raises serious concerns over Chinese products all over the world, and may hurt its export market.
The problem with the Sanlu case is that the adulteration was discovered in the period ahead of the Olympic games. But the matter was kept under wraps till the games were over. In this act of omission, this product was allowed to create avoidable damage to children.
More bewildering, a foreign news agency revealed quoting Chinese officials, that senior Chinese officials and party leaders consume special grown rice and similarly reared vegetables and similarly reared livestock. This practice reminds one of George Orwell’s “Animal Farm” --- all animals are equal, but some or more equal than the others.
With such a de facto polity with leaders considered a special category against a vast majority of common people, the CCP leadership is surely inviting a people’s revolution once again. Protests and rumblings are increasing. Perhaps, they are looking for another Mao Zedong?
Hu Yasheng, a highly reputed professor of Chinese origin at Massachusetts Institute of Technology (MIT) has carefully discussed the problem with China, especially its political control in following 1989, that has created more problems. Exploitation of the people, especially the peasants by the party – bureaucracy – business nexus is another challenge. And this is most important: wasteful use of energy and raw material, and the paucity of these two vital inputs domestically. There are other negative issues, too.
In contrast, India is apparently plagued with negatives. Caste clashes, recent communal clashes, terrorism, a democratic system where each political Party is trying to undo the other, and the “static culture” as the Global Times says. The Indian media gives much more space to the negatives because excitement sells. Market economy. But the basic strength of India lies in the fact that when the warring parties come to a consensus everybody, everyone is happy. The progress may be slow, but it is firm.
In China, decisions are taken by fiats or the Emperor’s dictates. Mostly, the majority of the people are left unhappy. The Chinese leaders have brought themselves to a point that they must run to stay at the same place. This does not inspire much stability in the long term.
The Global Times commentary appears to be a deliberate though nervous reaction on India and its development as viewed by the international community vis-à-vis China.
(The author is an eminent China analyst with many years of experience of study on the developments in China. He can be reached at grouchohart@yahoo.com)
Anti-Pakistan plans
Sajjad Shaukat
The most devastating suicide attack on the Marriott Hotel, Islamabad, which killed more than 50 people on September 20, cannot be seen in isolation. Similar events in one form or the other have continued to occur in other Islamic countries after 9/11 as a reaction to the massive casualties of innocent Muslims. They are against the state terrorism by the US-led allies of war on terror like India, Israel and Afghanistan. Unlike other Islamic states, Pakistan is the only nuclear country; hence it has become a special target of the US, India, Israel and Afghanistan whose secret agencies, CIA, RAW, Mossad and Khad respectively are in collusion to destabilise Pakistan to fulfil their nefarious agenda.
At present, Pakistan is facing multiple crises of serious nature. In this regard, a number of developments in the recent months such as blame-game by the US, Indian and Afghan high officials against Pakistan Army and ISI regarding their alleged links with the Afghan Taliban, accusation for the bombing of Indian embassy at Kabul on July 7, President Bush's secret approval to include Pakistan for targeting our tribal regions as part of war against terrorism, frequency of strikes by CIA-operated drones on Waziristan, killing more than 60 innocent persons within 10 days, Indian violation of Line of Control, reduction of water flow of Chenab river, etc., are open tactics of anti-Pakistan countries.
One of the important tactics, particularly of the Indo-Israeli secret agencies is that by manipulating the phenomena of world terrorism and anti-Muslim approach of the West, they have been availing this opportunity to achieve their covert goals by convincing the US-led European states that Pakistan is sponsoring cross-border terrorism in Afghanistan and Kashmir – and Iran and Syria in Palestine. In fact, they intend to divert the attention of the West from their own atrocities, being perpetrated in the occupied territories.
Indo-Israeli lobbies with the secret cooperation of their spy agencies and CIA have revived previous allegations against ISI. In this context, Indian propaganda machine led by RAW has cunningly coined a new term of 'super terrorism' in relation to Pakistan along with fabricated 'bogus stories' about our intelligence agency. This new term has been employed to blame Pakistan for allegedly encouraging the so-called Islamic militants to use chemical, biological and nuclear or radiological weapons against India, America and Europe.
Another notable tact of these foreign secret agencies is to back some Western politicians, who have introduced dangerous dimension in their societies by equating the 'war on terror' with 'war on Islam' and Pakistan. In this connection RAW has particularly aligned with Mossad and CIA is influencing the opinion makers of foreign media managers in distorting the image of Pakistan, its army and ISI.
The negative impact could be judged from US Assistant Secretary of State Boucher, who on September 15 stressed that the ISI needed to reform and its role in the war against terror should be reduced. The question arises as to why CIA, RAW and Mossad must not be reformed which are leading the world towards clash of civilisations. In this context, on October 19, 2007, the special issue of South Asia Multidisciplinary Academic Journal, reports, "In the past few years, Indian American community has gained an unprecedented visibility in the international arena and now constitutes influential ethnic lobbies in Washington. Among other factors, Hindu aligned with Jewish pressure groups in relation to the war against terrorism and to further the India-Israel-US strategic partnership play a major role in exaggerating Islamophobic overtones."
As regards the anti-Pakistan tactics of the external intelligence agencies, more than 100 training centres have been established in Afghanistan along with Indian foreign offices, clandestinely set up on our north-western border from where saboteurs are being sent by RAW with the support of other agencies to NWFP, Balochistan and other areas of Pakistan to commit suicide attacks and to support separatist elements.
Acting upon the old tactic of 'divide and rule', in Kurram Agency and Khyber Agency, RAW and Khad are helping shias against the Taliban, majority of whom is Sunnis. In these agencies, communal violence has led to the killing of over 1,000 people during the last few months. In case of Balochistan, a minority group, Balochistan Liberation Army (BLA) has been waging a separatist war with the help of RAW and Khad. Another Indian-backed separatist group, (God's soldiers) is also working against the cordial relations of China and Iran with Pakistan. After Bugti's death his grandson, Brahmdagh Bugti is currently operating it against Pakistan from Kabul.
On August 4, former President Musharraf had said that India was behind the unrest in Balochistan, providing arms and ammunition to those involved in violence in the province. Besides other provinces, RAW with the help of some external powers has intensified its sinister designs in backing the minority nationalist elements of the Northern Areas, who claim an independent Balawaristan, consisting of Gilgit and Baltistan.
Strategic location of the Northern Areas and Balochistan is of a greater geo-political importance for Pakistan. These regions are the backbone of our country's economy, and trade with China entailing future partnership with the Central Asian States. Pakistan's clandestine rivals, the US, India and Afghanistan on the one hand and our close friend, China on the other also consider it as strategically important.
In this connection, on April 18, 2008, Foreign Minister Shah Mehmud Qureshi said that that "some external forces were trying to weaken China-Pakistan strategic relations" by "creating misunderstandings" and "vowed such attempts would not be allowed to succeed". Prime Minister Yousaf Raza Gillani disclosed on June 29, 2008 that there were "several enemies of the country" and "foreign hands were also involved in the acts of terrorism". Army spokesman Major General Athar Abbas has revealed on September 15 that militants in Swat are getting arms from Afghanistan.
It is of particular attention that most of the three million Afghan refugees, who have not retuned to Afghanistan, are serving as agents of CIA, RAW and Khad, and by posing themselves as Pakistani Taliban. They are performing their assigned job in re-initiating subversive acts in Pakistan, especially Swat. They are also playing a key role in creating a rift between the patriot tribesmen, who want peace accords with the government. To achieve their sinister goals, they manipulate any 'mishap' that occurs in Pakistan.
This fact could be gauged from the US news intelligence service, Stratfor which indicated on March 25, 2008, that the new political forces of Pakistan "cannot afford to dismiss national sentiment in policy-making" and can be expected "to derive a hard bargaining with Washington on the parameters of counterterrorism cooperation". It further disclosed that "in turn, US which has extensive experience in dealing with Pakistani leaders and rulers will try to exploit differences among various stakeholders in the new regime to secure the goals"
It is of particular attention that Chairman of the US Joint Chiefs of the Staff Admiral Mike Mullen, during his visit to Islamabad on September 18, assured Pakistani leadership that its territorial sovereignty would be respected, but next day, US drones entered and killed six persons in South Waziristan.
Just one day after the trip of Mullen, President Asif Zardari, Prime Minister Yousaf Raza Gillani and Chief of Army Staff General Ashfaq Kayani met on September 19 and while reiterating their statements that they would not allow military actions by the US-led forces in the tribal areas, said that they would defend Pakistan's sovereignty at all costs.
Without any doubt, US-led India and Afghanistan have intensified the implementation of their covert strategic designs by manipulating Pakistan's present multi-faceted crises which they have themselves created through their secret agencies.
The writer is author of the book, US vs Islamic militants: Invisible balance of power
http://www.thepost.com.pk/OpinionNews.aspx?dtlid=185970&catid=11
The most devastating suicide attack on the Marriott Hotel, Islamabad, which killed more than 50 people on September 20, cannot be seen in isolation. Similar events in one form or the other have continued to occur in other Islamic countries after 9/11 as a reaction to the massive casualties of innocent Muslims. They are against the state terrorism by the US-led allies of war on terror like India, Israel and Afghanistan. Unlike other Islamic states, Pakistan is the only nuclear country; hence it has become a special target of the US, India, Israel and Afghanistan whose secret agencies, CIA, RAW, Mossad and Khad respectively are in collusion to destabilise Pakistan to fulfil their nefarious agenda.
At present, Pakistan is facing multiple crises of serious nature. In this regard, a number of developments in the recent months such as blame-game by the US, Indian and Afghan high officials against Pakistan Army and ISI regarding their alleged links with the Afghan Taliban, accusation for the bombing of Indian embassy at Kabul on July 7, President Bush's secret approval to include Pakistan for targeting our tribal regions as part of war against terrorism, frequency of strikes by CIA-operated drones on Waziristan, killing more than 60 innocent persons within 10 days, Indian violation of Line of Control, reduction of water flow of Chenab river, etc., are open tactics of anti-Pakistan countries.
One of the important tactics, particularly of the Indo-Israeli secret agencies is that by manipulating the phenomena of world terrorism and anti-Muslim approach of the West, they have been availing this opportunity to achieve their covert goals by convincing the US-led European states that Pakistan is sponsoring cross-border terrorism in Afghanistan and Kashmir – and Iran and Syria in Palestine. In fact, they intend to divert the attention of the West from their own atrocities, being perpetrated in the occupied territories.
Indo-Israeli lobbies with the secret cooperation of their spy agencies and CIA have revived previous allegations against ISI. In this context, Indian propaganda machine led by RAW has cunningly coined a new term of 'super terrorism' in relation to Pakistan along with fabricated 'bogus stories' about our intelligence agency. This new term has been employed to blame Pakistan for allegedly encouraging the so-called Islamic militants to use chemical, biological and nuclear or radiological weapons against India, America and Europe.
Another notable tact of these foreign secret agencies is to back some Western politicians, who have introduced dangerous dimension in their societies by equating the 'war on terror' with 'war on Islam' and Pakistan. In this connection RAW has particularly aligned with Mossad and CIA is influencing the opinion makers of foreign media managers in distorting the image of Pakistan, its army and ISI.
The negative impact could be judged from US Assistant Secretary of State Boucher, who on September 15 stressed that the ISI needed to reform and its role in the war against terror should be reduced. The question arises as to why CIA, RAW and Mossad must not be reformed which are leading the world towards clash of civilisations. In this context, on October 19, 2007, the special issue of South Asia Multidisciplinary Academic Journal, reports, "In the past few years, Indian American community has gained an unprecedented visibility in the international arena and now constitutes influential ethnic lobbies in Washington. Among other factors, Hindu aligned with Jewish pressure groups in relation to the war against terrorism and to further the India-Israel-US strategic partnership play a major role in exaggerating Islamophobic overtones."
As regards the anti-Pakistan tactics of the external intelligence agencies, more than 100 training centres have been established in Afghanistan along with Indian foreign offices, clandestinely set up on our north-western border from where saboteurs are being sent by RAW with the support of other agencies to NWFP, Balochistan and other areas of Pakistan to commit suicide attacks and to support separatist elements.
Acting upon the old tactic of 'divide and rule', in Kurram Agency and Khyber Agency, RAW and Khad are helping shias against the Taliban, majority of whom is Sunnis. In these agencies, communal violence has led to the killing of over 1,000 people during the last few months. In case of Balochistan, a minority group, Balochistan Liberation Army (BLA) has been waging a separatist war with the help of RAW and Khad. Another Indian-backed separatist group, (God's soldiers) is also working against the cordial relations of China and Iran with Pakistan. After Bugti's death his grandson, Brahmdagh Bugti is currently operating it against Pakistan from Kabul.
On August 4, former President Musharraf had said that India was behind the unrest in Balochistan, providing arms and ammunition to those involved in violence in the province. Besides other provinces, RAW with the help of some external powers has intensified its sinister designs in backing the minority nationalist elements of the Northern Areas, who claim an independent Balawaristan, consisting of Gilgit and Baltistan.
Strategic location of the Northern Areas and Balochistan is of a greater geo-political importance for Pakistan. These regions are the backbone of our country's economy, and trade with China entailing future partnership with the Central Asian States. Pakistan's clandestine rivals, the US, India and Afghanistan on the one hand and our close friend, China on the other also consider it as strategically important.
In this connection, on April 18, 2008, Foreign Minister Shah Mehmud Qureshi said that that "some external forces were trying to weaken China-Pakistan strategic relations" by "creating misunderstandings" and "vowed such attempts would not be allowed to succeed". Prime Minister Yousaf Raza Gillani disclosed on June 29, 2008 that there were "several enemies of the country" and "foreign hands were also involved in the acts of terrorism". Army spokesman Major General Athar Abbas has revealed on September 15 that militants in Swat are getting arms from Afghanistan.
It is of particular attention that most of the three million Afghan refugees, who have not retuned to Afghanistan, are serving as agents of CIA, RAW and Khad, and by posing themselves as Pakistani Taliban. They are performing their assigned job in re-initiating subversive acts in Pakistan, especially Swat. They are also playing a key role in creating a rift between the patriot tribesmen, who want peace accords with the government. To achieve their sinister goals, they manipulate any 'mishap' that occurs in Pakistan.
This fact could be gauged from the US news intelligence service, Stratfor which indicated on March 25, 2008, that the new political forces of Pakistan "cannot afford to dismiss national sentiment in policy-making" and can be expected "to derive a hard bargaining with Washington on the parameters of counterterrorism cooperation". It further disclosed that "in turn, US which has extensive experience in dealing with Pakistani leaders and rulers will try to exploit differences among various stakeholders in the new regime to secure the goals"
It is of particular attention that Chairman of the US Joint Chiefs of the Staff Admiral Mike Mullen, during his visit to Islamabad on September 18, assured Pakistani leadership that its territorial sovereignty would be respected, but next day, US drones entered and killed six persons in South Waziristan.
Just one day after the trip of Mullen, President Asif Zardari, Prime Minister Yousaf Raza Gillani and Chief of Army Staff General Ashfaq Kayani met on September 19 and while reiterating their statements that they would not allow military actions by the US-led forces in the tribal areas, said that they would defend Pakistan's sovereignty at all costs.
Without any doubt, US-led India and Afghanistan have intensified the implementation of their covert strategic designs by manipulating Pakistan's present multi-faceted crises which they have themselves created through their secret agencies.
The writer is author of the book, US vs Islamic militants: Invisible balance of power
http://www.thepost.com.pk/OpinionNews.aspx?dtlid=185970&catid=11
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