October 18, 2008

Time for New Bretton Woods

Jacques Cheminade, spoke with Christian de Boissieu, President of the Economic Analysis Council for President Sarkozy on France's 24 Monde.

The interview was aired today, in English, in several English speaking countries, as French President Nicolas Sarkozy arrived in Washington to discuss the Global Economic crisis with U.S. President Bush.

Cheminade and de Boissieu discussed the notion of a New Bretton Woods Conference to overhaul the hopelessly Bankrupt World Financial System.



President Asif Ali Zardari of Pakistan, who paid a bilateral visit to China from October 14 to 17,2008, was to return to Pakistan on October 17 and go back to Beijing on October 23 to attend the summit of the Asia-Europe Meeting (ASEM) being held in Beijing on October 24 and 25,2008. It remains to be seen whether he goes back himself as originally scheduled or deputes Prime Minister Yousef Raza Gilani to attend it.

2. Coinciding with his visit, one of the Chinese engineers kidnapped by the Swat branch of the Tehrik-e-Taliban Pakistan (TTP) on August 29,2008, reportedly managed to escape from custody and was picked up by a helicopter of the Pakistan Army before the TTP could re-capture him. However, the other engineer, who also managed to escape, was reportedly re-captured by the TTP before he could be picked up by the Pakistan Army.

3. This kidnapping incident, coming in the wake of three other incidents directed against Chinese nationals in Pakistan last year, is learnt to have figured prominently in the one-to-one discussions of Zardari with important Chinese investors and businessmen during which he invited them to invest more in Pakistan. Among those who called on him were Ma Zhigeng, Chairman of the NORINCO, Zhang Liansheng, Chairman of the Poly Technologies, Liu Minkang, Chairman, Chinese Banking and Regulatory Authority, and Fan Jixiang, President of the Sinohydro.

4.In an interview to the "People's Daily", Zardari claimed that the Chinese business executives, who met him, had expressed no security concerns about Pakistan. “I met with heads of many companies and 99.9 per cent told me how secure they were feeling,” he said. He added that though Pakistan had some problems, the Government was giving full attention to address the situation. He also said that he was trying to convince everyone that terrorism was a regional as well as an international problem and that the international community should come forward as Pakistan could not fight it alone. “We are looking towards the world for cooperation in curbing this menace.”

5. Jin Zheping, the Deputy General Manager of the China International Water and Electricity Corporation (CWE), is reported to have assured Zardari that the CWE would invest $1.7 billion for generating low-cost hydel electricity in Pakistan. A memorandum of understanding has already been signed for CWE assistance to one hydel project (the Bhasa dam) and CWE assistance for another (the Kohala dam) is under negotiation.

6. The visit also saw the announcement of Chinese assistance for launching a telecommunication satellite, named PakSat-1R, for Pakistan in 2011. The assistance will be provided by the China Great Wall Industry Corporation (CGWIC).

7. Among important Chinese leaders whom Zardari met were President Hu Jintao, Prime Minister Wen Jiabao, Jia Qinglin, Chairman of the Chinese People’s Political Consultative Conference, and Wu Bannguo, Chairman of the National People's Congress. While the atmosphere of the visit and meetings had the usual warmth and friendliness marking China-Pakistan bilateral exchanges, in terms of concrete outcome the visit was not quite satisfactory from the Pakistani point of view.

8. Zardari was expecting three concrete results relating to an immediate Chinese credit to enable Pakistan meet its payment difficulties and avoid default of its international obligations due early next year, a Chinese initiative to get for Pakistan a waiver of the restrictions on nuclear trade from the Nuclear Suppliers' Group (NSG) similar to the initiative taken by the US to get a waiver for India and a firm declaration of Chinese interest in the three pending proposals for a petrochemical complex in Gwadar and a railway line and a gas pipeline connecting Gwadar with the Xinjiang region of China.

9. Briefing the media after Zardari's meeting with Wen Jiabao on October 16, Qin Gang, a spokesperson of the Chinese Foreign Office, said: "As a long friend of Pakistan, China understands it is facing some financial difficulties.We’re ready to support and help Pakistan within our capability.” But he did not mention any specific figure of the credit which China would be prepared to extend. China had agreed to provide $500 million in a concessional loan to help Pakistan meet its balance of payment needs in April last.

10.Before Zardari's arrival in Beijing, Masood Khan, Pakistan's Ambassador to China, had claimed that an agreement on civilian nuclear co-operation with China could be reached during the visit. No such agreement figures in the list of agreements signed by the two countries during the visit as released by the Xinhua, the Chinese New Agency. (Annexure).

11. It is, however, learnt from reliable sources that while the Chinese reiterated their commitment in principle made to Pervez Musharraf to supply two more nuclear power stations (Chashmas III and IV ), they avoided any commitment on Pakistan's request for a Chinese initiative to get an NSG waiver. Without such a waiver, Chashmas III and IV would remain non-starters. In view of the expected US opposition to any waiver till Pakistan allows the International Atomic Energy Agency (IAEA) to have Dr.A.Q.Khan, the Pakistani nuclear scientist, interrogated by an independent team of investigators on his non-proliferation activities, China is not confident of a waiver in favour of Pakistan till the A.Q. Khan issue is resolved. It reportedly does not want to take any initiative in this matter lest it face an embarrassment if its proposal is rejected by the NSG. The present Government in Pakistan, like the previous Government of Musharraf, is opposed to any IAEA interrogation of Khan. The Chinese are also not very keen on that since Khan knows a lot not only about the proliferation activities of Pakistan, but also of China.

12. Farhan Bokhari, the Islamabad correspondent of the CBS News of the US, has reported as follows: "China has privately agreed to follow a "step-by-step" approach to fulfilling Pakistan’s aspiration for an expanded nuclear energy program, rather than sign an ambitious civil nuclear program of the kind recently struck between the U.S. and India, senior Pakistani and Western officials said on Thursday (October 16). Private discussions are believed to have been held on expanded nuclear cooperation between Pakistan’s president Asif Ali Zardari and Chinese leaders during Zardari’s four-day visit to China.A senior Pakistani government official, familiar with discussions between Zardari and Chinese officials, claimed Thursday that China had agreed to “consider further nuclear power reactors to fulfill our needs. The relationship (on the nuclear issue) remains intact”. Speaking to CBS News on condition of anonymity, the official added, “there is now a complete understanding on our future cooperation”. However, a second Pakistani official who spoke to CBS News on condition of anonymity said China is eager to avoid a direct confrontation with the West on its nuclear energy cooperation with Pakistan. “China is not seeking a head-on clash with anyone. It wants to broaden its relations with Pakistan but without the risk of a stiff U.S. reaction,” said the official.
U.S. reluctance to offer a civil nuclear power agreement to Pakistan stems mainly from revelations in 2004 that Abdul Qadeer Khan, the founder of Pakistan’s nuclear weapons program, traded nuclear secrets and technology with Iran, Libya and North Korea. Khan has remained effectively under house arrest since then. Requests from the Western officials, notably the U.S., to interview Khan have all been denied by the Pakistani government."

13. There was no reference to the pending Gwadar proposals during the visit. The bilateral trade between the two countries touched US$7 billion last year ($ 30 billion between India and China). It was agreed that the two countries would try to increase it to US$15 billion by 2011.(18-10-08)

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


Text of Pakistan-China joint statement

The following is the text of the joint statement between China and Pakistan issued on October 16, 2008, after the end of the formal talks between the leaders of the two countries.

“On the invitation of President Hu Jintao, President Asif Ali Zardari paid a state visit to China on 14-17 October 2008.

President Hu Jintao held talks with President Zardari. Wu Bangguo, Chairman of the Standing Committee of the National People’s Congress, Wen Jiabao, Premier of the State Council, and Jia Qinglin, Chairman of the Chinese People’s Political Consultative Conference, met Zardari respectively.

Talks between the two presidents and Zardari’s meetings with other Chinese state leaders were characterized by traditional warmth, friendship and mutual understanding. The two leaders reached broad agreement on strengthening China-Pakistan strategic partnership of co-operation and on international and regional issues of mutual interest under the new circumstances. The Pakistani president also held wide-ranging discussions with the leaders of Chinese corporations and financials institutions.

The leaders of the two countries reviewed with satisfaction the growth of China-Pakistan relations over the past 57 years since the two countries established diplomatic ties. They agreed that the friendship between China and Pakistan has withstood the test of time and practice, notwithstanding changes in the international, regional and domestic environments.

The all-weather friendship and all-round cooperation have become the distinctive features of China-Pakistan relations.

Both sides agreed that it is essential that the two sides make continuous efforts to strengthen good neighbourly relations and friendship, develop mutually beneficial cooperation and deepen strategic partnership of co-operation between China and Pakistan which serves the fundamental interests of the two peoples and contributes to peace and development in the region.

Both sides agreed that the Treaty of Friendship, Co-operation and Good-neighbourly Relations between the People’s Republic of China and the Islamic Republic of Pakistan (Treaty) signed in April 2005 is of great historic and immediate significance, laying a solid legal foundation for the long-term, stable and healthy growth of China-Pakistan relations. Both sides decided to abide by the policies and principles enshrined in the Treaty, earnestly implement the bilateral legal documents signed since the two countries established diplomatic ties and further intensify cooperation in the areas of economy, defence, science and technology, people to people contact, thus constantly advancing the China-Pakistan strategic partnership of co-operation.

China stressed that Pakistan is China’s good neighbour, close friend, dear brother and trusted partner. China will continue to view China-Pakistan relations from a strategic and long-term perspective, and make joint efforts with Pakistan to lift China-Pakistan Strategic partnership of co-operation to a new high.

Pakistan stressed that Pakistan-China relationship is the cornerstone of its foreign policy, and friendship with China represents the common desire of all Pakistani people. Pakistan appreciated the strong support and assistance provided by the Government and people of China to Pakistan in its economic development. Pakistan remained committed to continuing its policy of friendship towards China and making unremitting efforts to promote the healthy and steady growth of relations between the two countries.

Pakistan unequivocally upholds the one-China policy and considers Taiwan as an inseparable part of the People’s Republic of China and supports all efforts made by the Chinese government to realize national reunification.

China appreciated Pakistan’s long-term and staunch support to China on issues concerning China’s sovereignty and territorial integrity, reaffirmed its support for Pakistan’s effort to uphold its sovereignty, independence and territorial integrity, and appreciated Pakistan’s important role in promoting regional peace, stability and security and strengthening international counter-terrorism efforts.

Both sides opposed to all forms of terrorism, extremism and separatism, resolved to co-operate with each other to fight the above-mentioned three forces. China conveyed its complete support to Pakistan’s commitment and efforts to fight terrorism and appreciated the sacrifices made by the government and people of Pakistan in this regard.

The two sides agreed that economic co-operation is an important part in the strategic partnership between the two countries. The two countries enjoy great economic complementarity and should fully tap the potential and comprehensively deepen mutually beneficial co-operation in the economic field.

Both sides agreed to fast track the implementation of the Five Year Development Programme on Economic Co-operation and make full use of the Free Trade Agreement in Goods and Investment and Pakistan-China Joint Investment Company. In this regard, they agreed to convene a meeting of Pakistan-China Economic Co-operation Group under the Five Year Development Programme on Economic Co-operation at an early date. They also agreed to hold the next meeting of the Joint Economic Commission at the convenience of both countries.

Both sides agreed to enhance co-operation to further develop and boost Pakistan’s Mineral and Energy sectors as well as broaden financial and banking sector co-operation. They also agreed to further enhance ‘connectivity’ by developing new communication links including fibre optic links. They agreed to explore the concept of Integrated Border Management, overland trade and development of trans-border economic zones.

Both sides agreed to maintain communication and co-ordination on major international and regional issues to safeguard their common interests. Both sides agreed to continue to co-operate closely on issues such as the reform of the United Nations, climate change and energy and food security to promote world peace and development.

Zardari offered congratulations to the Chinese government and people on the successful hosting of the Beijing Olympic Games and the successful completion of Shenzhou VII’s mission. Hu Jintao congratulated Zardari on his election as the president of Pakistan and thanked Pakistan for its valuable assistance in the wake of the devastating earthquake in Wenchuan, China. He also appreciated Pakistan’s support to ensure the success of the Beijing Olympics and Paralympics Games. Pakistan applauded the outstanding achievements China has made in the 30 years of reform and opening-up and believes that China’s development will contribute to world peace and prosperity.

Zardari invited Hu Jintao to visit Pakistan once again at his convenience. Chinese president thanked Pakistani president for his kind invitation.

Both sides signed the following agreements and memoranda of understandings (MoUs) during the visit:

1. Agreement on economic and technical co-operation between the Government of the Islamic Republic of Pakistan and the Government of the People’s Republic of China.

2. Amending protocol to free trade agreement between the Government of the People’s Republic of China and the Government of the Islamic Republic of Pakistan.

3. Framework Agreement on co-operation in the field of minerals between the national development and reforms committee of the People’s Republic of China and the Ministry of Petroleum and Natural Resources of Pakistan.

4. MoU on co-operation between the Ministry of Land Resources of the People’s Republic of China and the Ministry of Petroleum and Natural Resources of Pakistan.

5. Agreement on environmental protection co-operation between the Ministry of Environmental Protection of the People’s Republic of China and the Ministry of Environment of Pakistan.

6. Framework agreement for co-operation in the field of radio and television between the state administration of radio, film and television, Government of the People’s Republic of China and the Ministry of Information and Broadcasting, Government of the Islamic Republic of Pakistan.

7. Paksat-1R satellite procurement contract by and between China Great Wall Industry Corporation (CGWIC) and Pakistan Space and Upper Atmosphere Research Commission (SUPARCO).

8. MoU on scientific collaboration in agricultural research and technical co-operation between Chinese Academy of Agricultural Sciences and Agricultural Research Council of Pakistan.

9. Agreement on properties exchange between the Ministry of Foreign Affairs of the People’s Republic of China and the Ministry of Foreign Affairs of the Islamic Republic of Pakistan.

10. Co-operation agreement between Beijing Museum of Natural History of the People’s Republic of China and the Museum of Natural History of the Islamic Republic of Pakistan.

11. MoU on co-operation between the cricket association of the People’s Republic of China and the Cricket Board of the Islamic Republic of Pakistan.

12. MoU regarding the project of x-ray container and vehicle inspection system between NUCTECH Company Limited, Tsinghua University, the Ministry of Education of the Peoples Republic of China and the Ministry of Interior of the Islamic Republic of Pakistan.



"Maritime counter-terrorism has received considerable attention in India, but till now the focus has naturally and mostly been on maritime counter-terrorism and security in the waters off Sri Lanka and in the Malacca Strait. There has been inadequate attention to terrorist threats of a strategic nature from the seas to the west of India---- whether from the Gulf, the Arabian Sea, the Strait of Hormuz or the Mediterranean.
Over 80 per cent of the terrorist organisations with a capability for maritime terrorism operate in the areas and seas to the West of India. Over 90 per cent of successful maritime terrorism strikes have taken place in the areas and seas to the West of India. Israel has been the largest single victim of maritime terrorism in the Mediterrannean, with nearly 60 strikes by organisations such as the Hamas, the Hizbollah, the Popular Front for the Liberation of Palestine (PFLP) etc. The only two successful strikes and one unsuccessful attempt by Al Qaeda were off Aden. Almost our entire energy supplies come from this area. The security of the Malacca Strait has limited relevance for our energy security, whereas our entire energy security depends on maritime security in the areas to the West of India. One would have, therefore, expected that the concentration of our maritime counter-terrorism efforts would have been on building a database of capabilities, threats and risks from the areas and seas to the West of India, adopting a vigorous proactive policy of co-operation with the navies of this region and developing preventive and termination capabilities, which would have relevance in the areas to the West of India. Unfortunately, this is not so.The Americans do not want our Navy playing any proactive role in maritime security in the waters to the West of India lest it cause any undue concern in the minds of Pakistan. They, therefore, try to keep our Navy confined to the East and the Malacca Strait. We seem to be happy to go along with this role. This has to change. It is high time the Indian Navy starts paying more attention to threats of maritime terrorism that could arise from the West. Presently, the deployment of a large number of naval ships belonging to the US-led coalition has thwarted any other serious incident of maritime terrorism after the suspected Al Qaeda attack on Limburg in October, 2002 and the attacks on oil terminals in Iraq post-April, 2003. We should not leave the protection of our shipping and our energy supplies totally in the hands of the US-led coalition. We should develop our own capabilities and networking with the countries of the region."

---Extract from my article dated December 28,2005, titled MARITIME COUNTER-TERRORISM: NEED TO LOOK WEST at http://www.southasiaanalysis.org/papers17/paper1655.html


"The Malacca Strait is not India's life-line. It is the life-line of China and the ASEAN countries. Our presence in the Malacca Strait tickles our ego and gives us a feeling of being a great power, but it does not help in protecting the lives and property of our citizens and our maritime trade. The major threats to our maritime security are from the seas to the West of us and not to the East of us. Ninety per cent of our foreign trade in terms of volume and 77 per cent in terms of value and practically all our energy imports pass through the seas to the Weast of us. There are more Indian and foreign ships with Indian crew in the seas to the West of us than to the East of us. We should reduce our over pre-occupation with the security of the Malacca Strait and devote more attention to our maritime security in the seas to the West of us."

2. This has been a point repeatedly stressed by me in my presentations on maritime security since 2004. I always found myself in a minority of one. This was so even in a seminar on South-East Asia held at Vizag earlier this year.

3. After a recent increase in the incidents of piracy off the Somali coast and the hijacking of ships with Indian crew by the pirates, the Government of India has at long last been forced to take action to fill up the gaps in our maritime security in the seas to the West of us. One would have seen on the CNN-IBN news channel two days ago dramatic scenes of the relatives of the crew of a hijacked ship accusing the Government of India of inaction in the face of the threats to the lives of their relatives. Of what consolation to them that our naval ships had in the past rescued some Japanese and Indonesian seamen in the seas to the East of us when we are not able to fulfill the obligation of protecting our mercantile seamen in the seas to the west of us? Today, the danger has arisen in a dramatic manner from pirates. Tomorrow, it could be from Al Qaeda or pro-Al Qaeda terrorist groups.

4.On August 15,2008, Somalian pirates hijacked a Japanese-owned merchant vessel MV Stolt Valor with 18 Indians among the 22 sailors on board. Since then, the 18 Indian crew members are being held hostage at a Somalian port and the shipping company is holding negotiations with the pirates for their release. India is not the only country to suffer due to the activities of the pirates in this area. Ships carrying foodgrains and medicines for the starving people of Somalia have also been the targets of attacks by the pirates.

5. In a recent interview, Josette Sheeran, Executive Director of the UN World Food Programme, said: "Time is running out for Somalia. As many as three million people — one-third of the country — live under threat of starvation. Their lifeline is the sea, from which food, medical supplies, and other aid arrives. And there lies the problem. Heavily armed bands of modern-day pirates in speedboats are terrorising ships in Somalia’s coastal waters. So far this year they have raided more than 50 vessels, stealing cargos and hijacking ships, from private yachts to oil tankers, and extorting some $100 million a year in ransom. Just a few weeks ago, a Ukrainian freighter carrying heavy weaponry, including tanks, was hijacked. A Greek petrochemical carrier was seized, and another attacked, as was an Iranian oil tanker. These pirates currently hold more than a dozen ships hostage in Somali ports. Ships laden with tens of thousands of tons of maize, sorghum, split peas, and cooking oil from the United Nations World Food Programme and other international aid organisations must navigate these dangerous waters. Keeping Somalia’s sea-borne supply line open is imperative. It carries 90 per cent of the humanitarian assistance delivered by the WFP, which in turn supplies nearly 90 per cent of the aid that feeds so many Somalis.These pirate terrorists are not particularly powerful. Estimates put their number at around 1,200. But they are growing increasingly brazen, all the more so when not confronted.
Since November 2007, following a series of pirate raids, Canada, the Netherlands, Denmark, and France deployed naval frigates to escort WFP aid ships safely into harbour. Under their protection, not a single ship has come under attack, ensuring the uninterrupted flow of assistance. Yet despite that clear success, the future is uncertain. The Canadian naval mission ends in late October, and no country has stepped forward to replace it. Without naval escorts, food aid will not get to Somalia. The WFP has stockpiled sufficient supplies to keep relief flowing for some days. But once those warehouses are empty, the country and its people will be on their own. I am optimistic that some nation will come to the rescue — but we must not risk this happening too late, or not at all. Beyond that, we need a long-term plan. We at the United Nations are duty-bound to do what compassion and human decency demand of us. Is the world really going to stand by and watch more children die of starvation? Somalia’s political future is uncertain at best. Yet we need to set to work on a plan for deploying a viable multinational force to help secure peace there, or at the very least sustain its people. There is a clear way to begin. The first step is for some country or countries to volunteer the naval force needed to preserve Somalia’s humanitarian lifeline. The next is to develop a comprehensive strategy, in conjunction with the UN Security Council, to eliminate piracy in Somali waters. "

6.According to news agency reports, Somali pirates have seized more than 30 ships this year and attacked many more. Most attacks have been in the Gulf of Aden between Yemen and north Somalia, a major global sea artery used by about 20,000 vessels a year heading to and from Suez, including Gulf oil shipments. The most dramatic incident has been the hijacking of an Ukrainian ship MV Faina carrying 33 tanks bound for an unidentified destination. The Kenyan and Ukrainian authorities have claimed that these tanks are meant for Kenya, but the Americans seem to suspect that the ship was carrying these tanks for the autonomous government of South Sudan, in possible contravention of a UN arms embargo.The pirates ,estimated to be 50 in number, are reportedly demanding a ransom of US $ 20 million for releasing the ship with its cargo and crew. An American and a Russian naval ships have reached the area, but have refrained from intervening so far---- probably due to some unconfirmed reports that the ship was also carrying some chemicals.

7.A spokesman for the US Navy's 5th Fleet, Lt Nathan Christensen, has been quoted by news agencies as saying that the USS Howard was within 8km (5 miles) of the Ukrainian vessel, but refused to say whether they were preparing to attack the pirates. He said the ship's cargo of battle tanks made it a particularly worrying situation. "We're concerned that this might end up in the wrong hands, such as terrorists or violent extremists," he said.

8. In the wake of these developments, the Government of India announced on October 16,2008,the deployment with immediate effect of an Indian naval warship with helicopters and marine commandoes on board in the Gulf of Aden to carry out anti-piracy patrols on the route usually followed by Indian commercial vessels between Salalah ( Oman) and Aden (Yemen). A Government spokesperson said: " The presence of the Indian Navy warship in this area will be significant as the Gulf of Aden is a major strategic choke point in the Indian Ocean region and provides access to the Suez Canal through which a sizable portion of India's trade flows. This anti-piracy patrol will be carried out in co-ordination with the Directorate-General of Shipping , who will keep Indian flagship vessels informed in case they want to travel in the Indian Ocean along with the Indian Navy ship. The presence of the Indian Navy in the area will help to protect our seaborne trade and instil confidence in our seafaring community as well as function as a deterrent for pirates."

9. This statement and other clarifications by the Government spokespersons have highlighted the following:

This is a permanent measure to protect vessels with Indian flags and Indian crew carrying goods for India.
It is not a one-shot measure triggered off by the hijacking of a Japanese ship with Indian crew.
The deployment of more ships for the anti-piracy patrol is not ruled out.
The deployment is not a prelude to intervention by the Indian ship to rescue the Indian crew.
10. While this welcome action will to some extent take care of the protection of Indian commercial ships transiting this area, it does not address the problem of controlling and eradicating piracy in this area. India alone will not be able to address this menace. It will have to act jointly with the navies of the US, the United Arab Emirates and other Gulf countries and possibly, one day, even Pakistan. This requires careful study. There is a need for more and sustained joint anti-piracy patrolling and exercises in this area. (18-10-08)
( 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 )

October 17, 2008

American Indians Fight for Their Rights

Western Hemisphere: American Indians Fight for Their Rights

“The population of the pre-Columbus America was about 100 million, but during the next 150 years 95% of the indigenous peoples disappeared. I`d like to ask whether this can be called colonization, civilization, culturalization or evangelization? We must dispel the myth! Genocide! That's what it was!”

President of Venezuela Hugo Chavez told this at the opening ceremony of an aqueduct in one of the God`s forgotten villages in the state of Zulia on October, 12th. The event was timed to the celebrations of the Indian Resistance Day (which used to be called ''Columbus Day''). In recent years Chavez has repeatedly commented on the genocide against the American Indians and accused not only European crusaders but the US invadors as well.

Washington also has plenty of reasons to blame Chavez, who is viewed in the US as the one who wants to found an ''anti-imperialist Indian front» in Western hemisphere and involve the indigenous US citizens residing in Arizona, Minnessota, Nebraska, North and South Dacota, Oklahoma and other states.

The pro-American Indian activists from US are permanent guests at numerous forums and seminars held in Venezuela and other countries of Latin America. Those people are viewed as especially dangerous for the Bush administration as CIA and FBI experts say these activists are being regularly brainwashed by Chavez's ''Bolivarian commissioners''. An attempt to use “last of the Mohicans” is said to be one of the means the ''Venezuelan dictator'' keeps in mind to undermine U.S.

That is why the U.S intelligence agents are working hard in Latin America to find any evidence of Chavez`s plans to revive progressive pro-American Indian organization in the United States by providing financial assistance to them so that they could instigate violence. Under Bush, the U.S special services took up the habit of wishful thinking, so there will be no surprise if the ''evidence'' is found. There is hardly anything the U.S intelligence agents can't do to succeed in career.

Is there really a Chavez`s trace in the revival of the pro-Indian movement on the continent? Yes, there is. First of all, Venezuela offers a plan how to settle the problem with American Indians. The rights of the indigenous peoples are protected by the Constitution of 1999 in practice. Their native lands have the untouchable status. Their communities are quickly developing as huge sums are allocated for health care, education, housing and culture. Even minor American Indian peoples have their written language. Their commercially unprofitable books are also published by the state. Where else this can be found amid the global dictatorship of market economy? While doing his military service, Chavez lived in a hut with the aborigines, enjoying their cuisine, way of life and religious rites. That is why each time he meets the American Indians, he focuses all his attention on their traditions.

Chavez is also preoccupied with the consolidation of the American Indian movement on the continent. And this happens not because of his attempt to undermine democratic governments but due to this belief that historical justice must be restored.

American Indians are facing hardships not only in the United States. In Columbia thousands of them have become victims of a home conflict. To save their lives they flee to Venezuela. In a Mexican state of Chiapa they had to use arms to protect themselves and defend their rights for the territories. Hundreds of thousands of Mapuche (Araucano) people have been fighting for the autonomy but the government believes they do not differ anyhow from other Chileans. The same thing happened during the Pinochet dictatorship.

However, there were some moments of optimism during those 500 years of fight: a representative of the Aymara ethnic group, Evo Morales, became the first indigenous president of Bolivia, although the local oligarchs and the US Embassy in Bolivia did everything to prevent his victory. This encourages American Indians in Peru, Guatemala and Ecuador to stand up for their rights. Hugo Chavez decided that to form the Indo-Andean Federation (Federacion Indo-Andina), comprising all the countries from Bolivia to the Caribbean Sea, would be the right thing in that situation. He also keeps a close watch on the work of the American Indian parliament in America as its mere existence inspires hopes for the renaissance of all indigenous peoples on the American continent. Hugo Chavez takes steps to create the Pan American TV. And the chances are very high as the TeleSur channel, which owes its appearance to Chavez, now is CNN`s major Spanish-language competitor.

At the First Congress of Indian and Anti-Imperialist Warriors of the Americas, held in Venezuela on August 8-9, 2007, the delegates discussed the question raised by Chavez: “North American Imperialism: its danger to the indigenous people of Abaya Ayala”. There is nothing mysterious in the last two words. That's how the continent was called long before the arrival of Columbus on October,12, 1492. In many countries of the Western hemisphere this day is marked as the America Day, the Race Day or even Hispanic Day (Dia de la Hispanidad). The initiative to rename the holiday into the Indian Resistance Day was backed by all Chavez supporters from Canada to Chile.

Indeed, whether the US imperialism is so dangerous for the present-day American Indians? The cases of inhuman treatment of the “natives” by “educated” Anglo-Saxons have been almost forgotten. The creation of the most powerful state could hardly be devoid of such kind of incidents. The US Conservative politicians and historians quite often name the genocide of the American Indians among them, using, of course, a politically correct interpretation of those events. According to it, the natives had begun the confrontation as they won`t share lands, forests, rivers and lakes with the invaders. Official reports say mainly the indigenous peoples demonstrated their aggression while the white settlers only defended themselves, sometimes with the help of the army. So no kind of genocide of the indigenous people, which has long become one of the most disgusting periods in human history, took place in the US.

Driven into ghettos, the natives never recognized the fact of the invaders` victory. Indifferent at first sight, they were actually very insulted and humiliated, and passed on the legacy to restore the justice by all means from fathers to sons. One of the best known activists for the rights of American Indians, the leader of the Sioux tribe, Russel Means, made an attempt.

On February, 27th, 1973, he organized the coup in the town of Wounded Knee in South Dacota (Pine Ridge Indian Reservation) to topple the local corrupt regime and begin the tribal rule. The rebellion lasted for more than 2 months and attracted attention worldwide. The attempts made by the FBI agents to compromise the insurgents and accuse them of Communist-like ideology and cooperation with criminal groups were in vain. The federal authorities persuaded the natives to surrender. During the judicial process all the extremism and terrorism charges were proved groundless. Means and his supporters were freed and continued to stand up for the rights of American Indians peacefully.

Thirty years after the Wounded Knee incident, on December, 19th, 2007, members of the Lakota tribe, Russel Means among them, denounced all 33 deals with the federal authorities (“useless words on useless paper”, that is how they called it), and proclaimed the creation of an independent state of American Indians. “We are no longer US citizens, and everyone who lives in one of the five states which belong to our country, can join us”, - they said.

The proclamation of the Republic of Lakotah can mark the beginning of the process leading to the formation of other independent countries on the US territory which can thus result in a confederation. Some experts predict that the process can receive a boost if a Republican John McCain wins the November presidential election in US. The most radical analysts do not rule out that the American Indian headmen may use arms again, like it was at Wounded Knee. Others say they would either do this if Venezuela, Bolivia, Ecuador, Nicaragua or any other country of the Bolivarian project faces foreign aggression. “Chavez's gold” or his “propaganda” are not the reasons. The American Indians just can easily distinguish between friends and enemies. That is why a portrait of smiling Chavez (and never George W. Bush) is often encountered in their houses in the Republic of Lakotah.

Russia - Georgia cyber war : Project Grey Goose’s report I


Infowar Monitor
The Infowar Monitor and Citizen Lab participated in an Open Source Intelligence (OSINT) initiative to investigate the Russia - Georgia cyber war of August, 2008. Project Grey Goose sought to establish whether the Russian government was involved in coordinating the DDOS attacks on Georgia's internet infrastructure, or if it was a emergent, grass roots "social movement" led by patriotic Russian hackers . .

Project Grey Goose’s remit was to utilize a combination of open sources, tools and human skill sets to probe the matter from new angles with fresh evidence. It is an entirely volunteer effort with no funding . .

The Grey Goose team worked inside Palantir Technologies' data visualization and analytics platform, pushing the state of the art in search, collaboration, and Human-Computer Interaction.

This report was generated from data collected from two Russian hacker forums, cross-referenced with network log files detailing 29,000 status events indicating the Up/Down status of 149 Georgian web sites. Our collection effort was done manually in Russian, and then machine-translated to English.


You can read the report here.

Key findings:

We assess with high confidence that the Russian government will likely continue its practice of distancing itself from the Russian nationalistic hacker community thus gaining deniability while passively supporting and enjoying the strategic benefits of their actions.

We assess with high confidence that nationalistic Russian hackers are likely adaptive adversaries engaged in aggressively finding more efficient ways to disable networks.

We judge with moderate confidence that a journeyman-apprentice relationship will continue to be the training model used by nationalistic Russian hackers.

We estimate with moderate confidence that hacker forums engaged in training Russian cyber warriors will continue to evolve their feedback loop which effectively becomes their Cyber Kill Chain.

BALOCHISTAN : Interview With Khan Suleman Daud Khan

The case against Musharraf

By Sanaullah Baloch

IN the last six decades a significant number of so-called state leaders have been prosecuted and
brought before various domestic and international courts and tribunals for their official and unofficial
crimes against humanity and genocide.

Unfortunately, the most unpopular state leaders have enjoyed lifetime immunity in domestic and
foreign courts for their sanctioned and unsanctioned crimes. Many of them enjoyed personal immunity
that lasts during their tenure for all unofficial acts such as looting state coffers or murdering political

After creating political and economic disarray and committing atrocities, the majority of detested world
leaders moved to different countries that offered them protection and pleasure. But, including Pakistan’
s former military dictator Gen (retd) Pervez Musharraf, a great number of the world’s reviled state heads
have remained in their countries, benefiting from their institutional connections, an incapable judicial
system and the state’s lack of will to try former and sitting rulers for unlawful and inhuman acts.
The lack of legal and institutional capacity and willingness to try dictators and corrupt civil-military bureaucrats has resulted in an endless crisis of
governance and trust in Pakistan. Deliberate ignorance by the legal and state institutions have benefited human rights violators, corrupt and criminal
prime ministers, presidents, and miscreant dictators to escape justice, to live in cosy retirement, often with wealth dishonestly accumulated.

But internationally a positive change of approach has been experienced, to try rogue leaders for their crimes. Consensus also has been developed
among the legal community around the world that all those involved in crimes against humanity must be prosecuted domestically and internationally,
because some of these crimes are so disgraceful they can never be considered a part of any leader’s official duties. The statutes of the International
Criminal Court and other international tribunals specifically declare that an official capacity or rank by itself is no defence against prosecution.

This month in Poland the country’s former communist leader and head of state, Gen Wojciech Jaruzelski, who is now 85 and in poor health, has gone
on trial accused of committing a crime by imposing martial law in 1981. Reading the charges, the prosecutor said the men had violated their own
communist constitution when they created what he called a “criminal military organisation” to implement martial law in Dec 1981. Eight other former
officials will also be tried for the clampdown against the opposition Solidarity movement, during which dozens of people were killed.

However, there is little hope among the marginalised people and victims of Musharraf’s rule that the former military dictator will be persecuted for
looting, treason and grave human rights violations. No doubt, there is a general perception among the marginalised people of Pakistan that ethnically
dominant and superior leaders in Pakistan are above any law and protected for all their crimes. This time round there is a need that an ex-army man
must be held accountable for his evident and committed crimes.

There is little disagreement among Pakistani citizens that the Musharraf era is marked with state highhandedness against citizens. Undermining the
constitution, bombing Balochistan, killing and persecuting Baloch veteran leaders, kidnapping political activists, sacking judges, killing lawyers,
promoting centre-province confrontation and corruption are enough to prosecute Mr Musharraf in domestic and international courts.

In the recent past, a number of the world’s errant leaders have been brought before the domestic and international courts for human rights abuses.
Some have been convicted, others are on trial.

Internationally there is a growing trend to make all leaders accountable and prosecute rogue rulers. Radovan Karadzic has been recently arrested
and shifted to ICC at Hague to face criminal charges. Sudan’s president Omar Al-Bashir has also been summoned by the International Court of
Justice for his human rights crimes and genocide in Darfur.

We have an entire history of cases where war criminals and human rights abusers have been brought before tribunals and convicted for their sins.
During 1945-49, the Nuremberg trials, the largest in history, that lasted four years, brought the Nazi regime and the engineers of the Holocaust to
justice. Major war criminals were sentenced to death. In the 12 other cases that followed, 65 defendants were convicted and more than 20 executed.

In 1948 under the watch of US Supreme Commander Douglas MacArthur, an international military tribunal prosecuted and executed Japan’s former
Prime Minister Hideki Tojo and 28 high-ranking Japanese leaders for war crimes. In 1989 after almost 25 years of communist reign in Romania,
President Nicolae Ceausescu and his wife, Elena, were found guilty of crimes against humanity by a secret military tribunal. The two were executed
on Christmas Day 1989. Rwanda’s former prime minister, Jean Kambanda, pleaded guilty and was sentenced to life imprisonment by the
International Criminal Tribunal for Rwanda. Argentina’s military dictator Captain Adolfo Scilingo (1976-1983) was convicted in April 2005 by the
Spanish court (1995-2005) almost 10 years after his alleged human rights crimes. The late Chilean leader Pinochet was prosecuted by the country’s
supreme court in 2004.

The UN-Sierra Leone joint tribunal was set up in 2002 to try Liberia’s former President Charles Taylor and those most responsible for crimes against
humanity, for war crimes and attacks against UN peacekeepers. Musharraf including his team must be put on trial before domestic and international
courts for official and unofficial crimes. All victims must be provided an opportunity to come forth with evidence before the judicial institutions. This
process will not only assist the overall failed state system to improve its stained image, it will also strengthen the people’s trust in institutions.

The Supreme Court Bar Council of Pakistan, the HRCP, vibrant civil society and other concerned organisations need to go for a fresh strategy, to
discourage human rights violators and take their cases to world bodies. The legal community must activate its professional capacity to surround the
high-profile culprits taking them before domestic and international courts of law for their unforgettable crimes.

The writer is a former member of senate.


Related Links:


Gazprom’s Expansion in the EU – Co-operation or Domination?

This report outlines the key aspects of natural gas trade cooperation between the EU and Russia. The first part presents the scope and character of Gazprom’s economic presence in the EU member states. The second part shows the presence of the EU investors in Russia. It provides the factual base and data and concludes with policy recommendations.

© 2008 Centre for Eastern Studies (CES)

Download: English (PDF · 23 pages · 3.0 MB)
Author:Agata Łoskot-Strachota, Katarzyna Pełczyńska-Nałęcz, Tomasz Dąborowski, Joanna Hyndle
Publisher: Centre for Eastern Studies (CES), Warsaw, Poland

October 15, 2008

John Perkins Speech : Confessions of an Economic Hit Man

John Perkins, Part 1 The first of a three part speech given to the Veterans For Peace National Convention, Seattle, WA in August 2006. Author of Confessions of an Economic Hit Man, in this part John discusses, from a hit mans perspective, the reasons and background to why we are at war in the Middle East

The second of a three part speech given to the Veterans For Peace National Convention, Seattle, WA in August 2006. Author of Confessions of an Economic Hit Man, in this part John discusses, from first hand experience, the globalization efforts of the corporatocracy in Central and South America

John Perkins, Part 3. The third of a three part speech given to the Veterans For Peace National Convention, Seattle, WA in August 2006. Author of Confessions of an Economic Hit Man, in this part John takes Q & A and discusses actions which can be taken to counter the globalization efforts of the multi-national corporation

Repercussions, Alternatives To World Financial Crisis

This interview appears in the October 17, 2008 issue of Executive Intelligence Review.

Repercussions, Alternatives
To World Financial Crisis

Lyndon LaRouche was interviewed on Quito, Ecuador Radio 530 AM on Oct. 6, along with Pedro Páez, Ecuador's Minister of Economic Policy Coordination. Their host was Patricio Pillajo. LaRouche appeared on the same program with Mr. Páez on Jan. 30, 2008 (see EIR, Feb. 7, 2008). Translation from Spanish was supplied by EIR's Dennis Small. Here is an edited transcript.


Financial crisis — What India needs to do


Though abundant caution was exercised by the RBI Governor to insulate the country from a major financial crisis, a further lowering of CRR and reduction in the repo rate would be in order, not only to infuse greater liquidity but also to lower interest rates.

It is also time for the RBI to initiate measures to ease liquidity in the economy as the commercial banks are finding it difficult to meet genuine credit requirements of industry and trade.

S. D. Naik

The financial crisis in the US, the worst since the Great Depression of 1929, is threatening to reach perilous proportions. The collapse of the big five financial giants on Wall Street — Fannie Mae, Freddie Mac, AIG, Lehman Brothers and Merrill Lynch — with revenues totalling nearly $322 billion in 2007, followed by two of the largest banks — Washington Mutual (WaMu) and Wachovia — has sent shock waves through global financial markets.


The gravity of the financial crisis that has hit the US economy can be gauged from the fact that the cost of the rescue of these financial giants to the Federal Reserve and Treasury Department has been estimated at close to a trillion dollars (equivalent to India’s national income).

According to some analysts, the total cost on this count could go up to $2 trillion since the financial turmoil is not likely to end anytime soon. Most of these banks had created debts to the tune of 30-40 times their equity against the prudential norm of not exceeding ten times.

According to some estimates, the derivatives trade had grown five times between 2002 and 2007 to exceed $500 trillion, thus making this ‘shadow’ economy almost ten times bigger than the real economy of the world.

After a tense week and prolonged debate, the US Congress on October 3, finally passed the $700-billion financial bailout plan to avert a major national crisis.

However, even after the clearance of the bailout package, the stock markets, world over, have plunged further as the feeling of uncertainty continues. The financial turmoil is fast spreading to Europe, whose economies are also showing signs of sliding into a recession, and the ripple effects are bound to have some adverse effects on the rest of the world, including China and India.


What is more worrisome, tIn India, the Reserve Bank of India has been pumping in liquidity into the system and local banks have been borrowing at least Rs 70,000 crore on an average over the past three weeks under its liquidity adjustment facility (LAF). Even so, liquidity has been drying up.

Recently, the Asian Development Bank (ADB) down-scaled the growth expectations of many Asian economies, including India’s, in its half yearly report: Asian Development Outlook 2008.

The ADB attributes this to the worsening conditions in major industrial economies that will weaken demand for goods and services. “The myth of uncoupling has been exploded”, the report says.

India’s GDP growth estimate for the current fiscal (2008-09) has been downgraded from 8 per cent to 7.4 per cent and, for the next financial year (2009-10), from 8.5 per cent to 7 per cent.

ADB bluntly states that “very large fiscal imbalance created by the current level of subsidisation of oil, fertiliser and food, as well as other off-budget items, sets a daunting task for economic management.”

With the financial turmoil in the US and Europe showing signs of worsening since the publication of ADB’s half-yearly report, one need not be surprised if GDP growth in India turns out to be even lower than that projected by ADB — just around 7 per cent or so for the current fiscal. In line with the falling capital markets across the world, which have already wiped out investor wealth of over $10 trillion this year so far, the Indian stock market has witnessed an unprecedented fall over the past few weeks. Not surprisingly, FIIs have been pulling out from the stock market in a big way, corporate borrowings from the global markets are becoming increasingly difficult, raising money for new investments through public issues is on hold, and liquidity in the economy is fast drying up.


At the outset, it must be admitted that the abundant caution exercised by the former RBI Governor, Dr Y. V. Reddy and going slow on opening up new complex financial products helped to insulate the country’s from a major financial crisis.

Following the sub-prime crisis in the US over a year ago, his approach was cautious (non-reformist according to critics) on all fronts — whether in allowing the hedge funds to invest in Indian equities and real estate, greater FDI in the banking sector or allowing excessive capital inflows.

Dr Reddy has received compliments from a number of experts, including the Chief Economic Advisor, Dr Arvind Virmani. This is, of course, not to suggest that India should not go ahead with financial sector reforms. But such reforms should be accompanied by prudential norms, efficient regulatory systems, and above all, sticking to healthy capital adequacy norms.

The ongoing upheavals in the banking and financial sectors worldwide, have thoroughly exposed the inadequacies in the system to contain huge losses, solely because of the absence of a healthy risk assessment and management system and a strong capital base to absorb the shocks of these losses.

Meanwhile, the growing trade and current accounts deficits following a steep rise in oil and non-oil imports, slowdown in capital inflows and services exports, call for appropriate policy response. Evidently there is a need to go slow on capital account convertibility. It is also time for the RBI to initiate measures to ease the liquidity position in the economy as the commercial banks have been finding it difficult to meet the genuine credit requirements of industry and trade.

True, in a welcome measure, it has announced a 1.50 basis point cut in the cash reserve ratio (CRR) from a record 9 per cent to 7.5 per cent to infuse Rs 60,000 crore into the system.

But this is far from adequate. A further lowering of CRR as well some reduction in the repo rate will be in order not only to infuse more liquidity but also to lower interest rates to ensure that the growth of the economy is not hampered.

For, there is already evidence that the relentless monetary tightening by the RBI for quite sometime to rein in inflationary pressures has been hurting the growth prospects of the economy

Festival time for Pakistani Hindus

By M Ilyas Khan
BBC News, Rama Pir, southern Pakistan

Festival in pictures

Jodha, a Hindu woman from the nomadic Jogi tribe of snake-charmers, made a vow at the temple of Rama Pir in southern Pakistan that if blessed with a son, she would make a pilgrimage to the temple every year for the rest of her life.

That was just after her wedding, more than four years ago, when her husband took her to the temple fair in Tando Allahyar town of Sindh province.

Her son was born a year later.

Before the partition of India, the Jogis, one of several low caste Hindus, or Dalits, roamed from the Tharparkar desert in Sindh, now Pakistan, to Gujarat and Rajasthan in India.

They still travel vast distances between Sindh's south-western industrial city of Karachi and the agrarian and desert communities they inhabit in the areas eastwards towards the Indian border.

But no matter where she is, when the time comes for the annual fair in honour of Rama Pir, a holy man who lived some 400 years ago, Jodha heads to Tando Allahyar, with her son and husband in tow.

Extra money

The family is among tens of thousands of Dalits that make the pilgrimage.

There is an atmosphere of celebration in the air

Some, like Reshma and her family, come to do business that would earn them a little extra money besides paying homage to Rama Pir.

Others combine religious duty with fun and games as an entire amusement park - complete with mechanised merry-go-rounds and roller-coaster rides - appears in an open space behind the temple.

Most of them come to seek deliverance from one worldly ordeal or another.

Basanti, a Dalit woman from the Bheel sub-caste, is childless after three years of marriage.

She has bought several kilograms of sweets from the market outside the temple for distribution among the pilgrims as prasad, or offering.

"I will keep doing it until Rama Pir blesses me with a child; I don't mind if it is a boy or a girl," she says.

'Dalit event'

A chemistry graduate from Tharparkar, Pratap Rai, has been distributing prasad on all three days of the fair for the last five years.

"My brother was critically ill, but he miraculously recovered when I made a vow at the temple that I will offer sweets to pilgrims every year for as long as my legs carry me from Tharparkar to Tando Allahyar," he said.

A good time is had by all

Unlike the vast majority of pilgrims, Pratap Rai is not a Dalit, but an upper caste Brahmin.

According to the Pakistan Hindu Council, there are approximately three million Hindus in Pakistan. Nearly 2.5 million of them live in Sindh province and more than 80% of the total are Dalits.

Local people describe Rama Pir's festival as a nearly exclusive Dalit event, even though the caretaker of the temple is a Brahman.

Arjun Solanki, a local Dalit who is studying medicine at Sindh University, offers an explanation for this.

"Rama Pir was a Dalit convert to the Ismaili Shia faith. He organised lower-caste Hindus against the exploitative Brahmanic and Bania classes of medieval Rajasthan. He was a secular, revolutionary leader," he says.

But after his death, the upper-caste Hindus Brahanised his cult by declaring him as an ethnic Rajput - an upper-caste Hindu warrior clan, says Arjun.

Rama Pir lived and died in Ranuja, a town some 150km (93 miles) from Jodhpur, the capital of Rajasthan.

The temple in Tando Allahyar, according to a local tradition, was built by a native Dalit in the latter half of the 19th Century in fulfilment of a vow he had taken during an earlier pilgrimage to Ranuja.

Like Jodha, he had wished for a son, which was granted to him.

'Wrong religion'

The three-day festival commemorates that event. It falls in the Hindu solar month of Buddo - the last month of the Indian monsoon cycle - when the winter crops have been sown.

Basanti is still childless after three years of marriage

Its actual date is calculated from the new moon occurring in this month. As a result, the fair falls either in September or October.

While many claim their wishes have been granted by Rama Pir, the major beneficiary of the fair appears to be the shopkeepers of the market outside the temple.

More than 90% of them are Muslim, and an increasing number have grown beards in keeping with the increasing influence of Islamists in the region.

A Hindu festival, where non-Muslim women go about without a veil, is not to the liking of some of them.

"These people are poor and ignorant, they follow the wrong religion," comments one shopkeeper when I introduce myself as a BBC reporter.

He has a word of advice for me.

"Do your duty as a Muslim. Don't give them coverage."

But he wouldn't stop selling his merchandise to the pilgrims.

"I have been selling an average of 150 crates (1,800 bottles) of Pepsi each day since the fair started," he comments in an unguarded moment.

Intelligence in India's Sri Lanka War

Col R Hariharan

(This article is based on a presentation made at the seminar "Indian Experience in Force Projection" organised by the Centre for Joint Warfare Studies (CENJOWS) at New Delhi on September 15 and 16, 2008).


A review of India's military intervention in Sri Lanka (1987-90) now after two decades has the benefit of hindsight. During those two decades a number of global developments have enlarged the concept of strategic security. As a result, Military Intelligence (MI) has undergone changes in form, content and expectations.

When Indian forces operated in Sri Lanka, the Cold War confrontation between the Soviet Union and the U.S. was at its peak after the Soviet military intervention in Afghanistan. The US-Pakistan relations were perhaps at the closest, making India's Pakistan-centric security focus more acute. Only two months before signing of the India-Sri Lanka Agreement (ISLA) in July 1987, Operation Brass Tacks, in which the two countries almost went to war, had concluded. Indian army suffered from this Pakistan-centric preoccupation and Indian army had to pay a price for it in Sri Lanka.

Viewed in the overall context of India-Sri Lanka relations, India's war in Sri Lanka might be termed as Indian state's reactive military response to a largely internal political situation in Sri Lanka that affected India's interests also. Unfortunately, at that time the nation did not have a structural frame work to plan, conduct and monitor such overseas response. There was no integrated body with accountability to take informed decisions on national security issues. Cabinet Committee on Political Affairs (CCPA) was the only forum to carry out this task. During the Sri Lanka operations, a Core Group was formed to look after the day to day issues. This empowered group functioned under the Chairmanship of the Minister of State, External Affairs.

Sri Lanka operation was India's first -ever overseas force projection. Before that Indian troops had operated overseas only as part of United Nations forces. For the first time all the three services were involved in an overseas joint operation. Perhaps it was also the first time Indian army was drawn into a counter insurgency operation for which it had either planned or prepared in advance. To cap it all, the counter insurgency conflict involved operating in urban as well as jungle settings.

Communication technology was just making its early breakthroughs. The battlefield competencies of armed forces were yet to benefit from them. The MI did not enjoy the advantages imparted by information technology and its applications. It was essentially a HUMINT and COMBATINT operation.

MI had limited organic HUMINT capability and what little was there was focused on Pakistan. By modern standards, the then available ELINT and SIGINT resources would be considered primitive. However, over the years the MI had gained certain amount of expertise in HUMINT operations and interrogation in counter insurgency setting. The divisional intelligence units deployed in insurgency affected regions were the main sources of this expertise.

When the Sri Lanka army's crackdown on Tamil militants reached a critical stage in Jaffna Peninsula around April 1987, Directorate General of Military Intelligence (DGMI) moved a small MI team to Chennai to cover Sri Lanka. It had very limited capability. Thus till Indian Peace Keeping Force (IPKF) was inducted into Sri Lanka, this MI team was DGMI's sole organic source of intelligence. Of course, it had access to some of the inputs of the external intelligence agency Research & Analysis Wing (RAW) and the counter intelligence service Intelligence Bureau (IB). The IB had been keeping a watchful eye on the activities of thousands of Sri Lanka Tamil refugees present in Tamil Nadu. It also had very good knowledge of the Liberation Tigers of Tamil Eelam (LTTE)'s activities in Tamil Nadu. However, the DGMI had no access to the Tamil Nadu State Police (Q Branch) which was yet another rich source of intelligence on Sri Lanka Tamil militancy.

Intelligence before the outbreak of war

Southern Command based in Pune established the Operational Force Commander's Headquarters (OFC HQ) at Chennai to for the task of overseeing the operation when India decided to send troops to Sri Lanka to help implementation of the ISLA. As soon as the ISLA was signed on July 29, 1987, opposition to the Agreement snowballed in Sri Lanka threatening the stability of the regime of President JR Jayawardane. 54 Infantry Division (less most of the support arms) was hastily despatched to Sri Lanka in the first week of August 1987 as a show of support to the President and the Tamils. The Southern Army Commander as the OFC had an ambiguous mandate on Sri Lanka. As a corollary 54 Infantry Division also was not given a clear role at that stage.

The DGMI attached a dozen Tamil speaking Intelligence Corps officers and NCOs to the OFC HQ at Chennai to assist the OFC. The attachment of the MI team was fire fighting measure as it had neither exposure to Sri Lanka nor had a briefing on its task. The team moved to Jaffna (Palali) in the first week of August, a few days after 54 Infantry Division arrived there. The OFC HQ assigned no specific task to the MI team except to 'keep an eye' on the happenings there. The team was provided no functional resources

The MI team tasked itself to study and understand the environment in north-eastern Sri Lanka. It familiarized itself with the terrain, and important personalities and decision makers among militant groups notably the LTTE. The team forwarded its reports directly to DGMI under whose command it operated. There was very little intelligence input from either DGMI or from civil intelligence agencies to either OFC HQ and as a result 54 Infantry Division had only marginal information.

From September 1987 onwards the LTTE showed marked reluctance in implementing the ISLA refusing to surrender of the arms it held. As the IPKF task looked a long haul, DGMI moved 57 Mtn Div Int & FS Company to Palali to augment MI resources in the island. Tamil speaking officers and NCOs were posted to man the unit.

The Divisional Headquarters in Palali perhaps due to the confusing command and control structure of the MI team did not use it. In fact the Divisional Headquarters kept the MI team out of all its interactions and political parleys with the LTTE. The Division Headquarters also did not project specific intelligence requirements of any kind to the MI team. For reasons not very clear, the services of the MI team were never used during the Division's operational planning process prior to the Jaffna operations. (According to the RAW, the Army Headquarters also did not take the RAW into confidence or sought its advice prior to the Jaffna operations). Thus the Division launched the Jaffna operation on its own steam.

Intelligence during the operations

Only after the Jaffna operation commenced and troops were rapidly inducted from mainland, the Division asked the Officer Commanding, 57 Div Int & FS Coy to brief the troops prior to their induction into the war zone! Similarly, as the operation progressed, the intelligence unit was tasked to interrogate suspected civilians and prisoners.

There was no advance planning at either the OFC HQ, or the Divisional HQ for screening of civilian population or holding prisoners. This was in direct contrast to 1971 operational experience in eastern theatre when we had meticulously planned in advance the handling and interrogation of prisoners. Short duration training was also imparted to NCOs from infantry units on combat interrogation. This resulted in the failure to gain tactical information through interrogation in the early stages of operation.

However, by the time Jaffna operations ended, the force level of IPKF was increased with the induction of two more divisions. The command and control structure of the Advance Headquarters of the OFC at Chennai was also streamlined. In addition to the 57 Int and FS Coy, another intelligence unit was specifically raised for the IPKF operations and inducted. The unit had both intelligence acquisition and interrogation capabilities. The unit had its headquarters in Chennai; one team and an interrogation centre each from this unit were deployed in Vavuniya, Trincomalee and Batticaloa. 57 Int and FS Coy provided the intelligence cover for 54 Div sector including Kilinochchi. Both the units served under the command of Col GS (Int) of the Advance HQ OFC.

Communication intelligence was provided by the SIGINT detachments and EWCP. Though they were under Army Headquarters, they worked closely with forward troops and provided accurate real time information.

The RAW after its initial false start, improved its linkages with the Advance HQ OFC, after the Jafffna operations commenced. From then onwards, the Chennai RAW unit maintained close touch with the Advance HQ OFC, and provided valuable inputs particularly on political developments in Sri Lanka. Though RAW provided up to date information on overall developments, it could not provide specific information on the LTTE's military capabilities or cogent assessments on their likely course of action.

Despite the MI officers enjoying excellent rapport at the senior level, both the Q Branch of the Tamil Nadu State Police and the IB at Chennai provided no information to the IPKF throughout the period of operation. Their information resources on the LTTE activities in Tamil Nadu could have helped the IPKF in planning and conduct of its operations. Thanks to the vehement opposition of the ruling Dravida Munnetra Kazhagam (DMK) party to the IPKF operations, the Tamil Nadu government issued no formal orders to the Q Branch on sharing of information relevant to the IPKF. The IB fared no better. It usually fobbed off our requests saying that they had no military information, though political information had a lot of relevance to IPKF operations.

MI performance: Army Headquarters level

There was practically no intelligence sharing between the three services intelligence wings at the functional level in Sri Lanka. Perhaps the confusion in the overall command and control equation among the three services was the reason for this aberration. The DGMI also probably did not identify and articulate its needs to the other two services.

The DGMI had built no intelligence assets on Sri Lanka before the ISLA. It is surprising that this requirement was not visualised, despite India's close political involvements there since 1983. This was only symptomatic of the lack of mission clarity that had marked Indian army's foray into Sri Lanka. Thus DGMI could not provide timely information to the forces in Sri Lanka either during the political parleys with the LTTE or before Jaffna operations. However, once the role of the IPKF was crystallised, the DGMI rose to the occasion. It made available maximum possible intelligence resources within the first few months. It also assisted in recruiting Sinhala knowing Tamils migrants from Sri Lanka to help MI and SIGINT units.

But the biggest failure of the Army HQ and the DGMI was in their inability to change the Tamil Nadu government's negative attitude not only on information sharing but also in taking follow up actions requested by the IPKF on specific LTTE activity in the state. During the entire period of operations, the LTTE had an unprecedented freedom to operate with impunity in Tamil Nadu despite being at war with Indian state. This not only exposed the troops traversing the state to potential LTTE threat but reflected the callousness with which the whole operation was treated. This created a great feeling of insecurity among Tamil sources, who felt the MI did not have enough "influence" to ensure their security even at home. This lack of confidence affected MI's performance.

The DGMI's also showed its inability to provide down assessments to the IPKF, even though it received regular inputs from RAW, IB and other agencies at the Army HQ. Similarly the HQ Southern Command GS (Int) also failed to provide useful assessments or inputs, presumably because it had no operational responsibility. The absence of such top down assessments handicapped the MI planning and collection process at the Advance HQ OFC. The DGMI could have helped the IPKF to assess the situation better with appropriate and timely inputs on developments at home that had impacted MI's intelligence operations in Sri Lanka.

MI performance: OFC MI

At the field level, OFC MI had set itself the task of keeping abreast of three strategic developments that could destabilise the IPKF operations. These were: the acquisition of MANPADS by the LTTE, contacts between the LTTE and the Marxist Sinhala militant group Janatha Vimukthi Peramuna (JVP) operating in other parts of Sri Lanka, and collaboration between the LTTE and elements of the Government of Sri Lanka. In all the three aspects, the OFC MI all along kept abreast of the developments. Despite the initial glitches of command and control and limited resources, the MI units in Sri Lanka made some positive contributions. Their assessments were generally more accurate than any other national intelligence agency.

OFC MI had used the period of troubled peace from August to October 1987, to create useful assets both within the LTTE and among influential pro-LTTE elements in Jaffna and Trincomalee. These assets came in handy when the operations started. They provided valuable inputs on political and strategic moves of the LTTE as well as Sri Lanka government. During the IPKF's consolidation phase, after Jaffna was cleared, the OFC MI's was able to provide useful information on movement of LTTE pistol groups within Jaffna and in eastern Sri Lanka. It also provided clinching evidence of collusion between elements of the Sri Lankan government and army, and the LTTE. These helped us to understand the changing operational environment and assess the depth of the emerging equation between the Sri Lanka President and the LTTE.

Generally frontline troops had high expectation of tactical intelligence from OFC MI units. To certain extent these were met wherever close coordination existed between the MI elements and troops, notably in Jaffna, Trincomalee, and Batticaloa sectors. Unfortunately this could not be achieved fully in Vavuniya and Mullaitivu districts where the jungle terrain made HUMINT operations difficult. Troops in those areas had to depend upon their own combat intelligence. However, the front line infantry units lacked adequate intelligence awareness to successfully carry out combat intelligence tasks. On the other hand, Para Commando units showed excellent response and added some 'muscle' to MI operations conducted with their help. And naturally their operational performance was far superior to regular infantry units.

The OFC MI established useful links with Sri Lanka's National Intelligence Bureau (NIB). Though some of the NIB information was misleading, it helped in understanding the official line of Sri Lanka. The OFC MI had to maintain constant vigilance against NIB efforts to thwart its operations, particularly in the year 1988-89.

Communication and electronic intelligence produced valuable inputs. However, such information was not validated adequately due to paucity of intelligence staff. In future operations of force projection such inputs are likely to increase enormously. In order to get the overall picture, intelligence staff at the formation level would require better training to evolve realistic assessments combining HUMINT, ELINT and SIGINT inputs.

There was practically no input from Air and Naval Intelligence sources. Presumably MI failed to seek specific information from them. Navy could have been useful particularly in gaining information on the LTTE's supplies from Tamil Nadu across the Palk Strait. MI did not fully tap the Tamil media both in Tamil Nadu and Sri Lanka that were rich open sources of information.

Coordination with civil intelligence agencies

Coordination between the MI as the user and the RAW as the provider had always been one sided. The RAW usually did not meet DGMI's military intelligence requirements in a usable form. Presumably RAW's own priorities were different from those of the armed forces. Ideally when the IPKF was inducted, the RAW had the capability to produce a comprehensive handbook on Sri Lanka containing all the information forces required. Probably the DGMI did not project such a requirement nor did the RAW anticipate it. This speaks for the limited coordination that had existed between the Army and the RAW. However, after initial hiccups on this count in Sri Lanka, the RAW – Army cooperation improved once the Advance HQ OFC was created.

Though over a period of time, some form of top level agency coordination emerged in New Delhi it never percolated down to formation level in Sri Lanka. At present interaction between the Army and RAW counterparts is based only on personal equation established between the two in the absence of standard operating procedures for information sharing. Thus officers on both sides grow up in a culture of denial rather than sharing. Perhaps we can take a leaf out of the Japanese industrial management practice of forming Small Group Activity for the user and producer to understand the user's problems to evolve workable solutions.

As far as the IB was concerned, internal political intelligence appeared to be their focus. Functionally in critical internal situations in India the IB representatives had been forthcoming in sharing information of military interest. However, this does not apply to IB's political intelligence sharing with the army even in counter insurgency situation in India. However, in the case of counter insurgency operations in Sri Lanka, the fine line dividing political and operational intelligence got blurred. Perhaps the IB was not able to appreciate this need for forces operating in alien environment. That would explain its reluctance to share information of any kind relating to Sri Lanka with the IPKF.

The failure of the State police machinery to share intelligence relevant to the IPKF represented the dissonance in our national security perceptions. The failure of the Tamil Nadu Home Department to act in the interest of national security for political reasons had kept up the morale of LTTE fighting with our forces in Sri Lanka. This has been well documented in the Jain Commission report. The precedent set by Tamil Nadu Government during the IPKF operations on this count taking roots now in the political culture cannot be ruled out. To avoid a similar contingency arising in our future overseas operations, it would be prudent for the armed forces to handle with more alacrity by demanding clear mandates in advance with clear guidelines and responsibilities.

Intelligence in overseas operations of the future

The IPKF operations in the early stages were hastily conceived, inadequately planned and executed because there was a lack of role clarity. This was mainly due to the absence of an empowered national decision making body on national security at the government level. Similarly there was an inadequate framework for conducting combined operations overseas at the joint services level. Remedial action has been taken since then to address these limitations, though they might not be wholly satisfactory as the Kargil war had demonstrated. However, it is likely to improve as the nation gradually gains more experience in handling strategic security issues on a global perspective.

Intelligence on a real time basis will be the catalyst of success of armed forces in future overseas operations. MI will be required to meticulously plan and be ready to meet the intelligence requirements in overseas operations before and after the induction of troops. As sources of information have enlarged in scope and width, MI should be in a position to provide reasonable assessments in real time to forces operating in battle fields dominated by larger force levels, great mobility and high fire power. This would require a greater degree of intelligence integration of MI with its counterparts in other services as well as civil intelligence agencies. Thus there is an urgent need to integrate this need in perspective planning of operations for such contingencies.

To achieve such readiness, MI will require clear policy formulations applicable to the three services as well as civil intelligence agencies, better integration and coordination of inputs and assessments through a structured mechanism. It will also require coordinated advance planning by all the intelligence stakeholders at various levels.

Over the long term, MI will also have to build its own expertise in areas of potential operational interest. Ideally, a defence university will be the appropriate forum to create such knowledge banks. In the absence of such an institution, repositories of knowledge can be created in selected academies of excellence like university departments of defence studies so that there is continuity of effort. Intelligence Corps officers should be encouraged to specialise in regions or countries of national interest. Unless MI plans and evolves such an integrated intelligence matrix, success in future overseas operations will come only at great cost of men and material.

Military intelligence is a specialised job that requires the application of military knowledge to understand the information needs of the battle field and provide useful assessments to the fighting forces. In future operational environments, MI staff will be required to make real time assessments to assist operational decision making. No doubt the quantum jump in communication and information technology provides useful tools for the MI to meet this requirement. However, much of its success would depend upon the training imparted to intelligence staff to be technologically savvy in keeping with the dynamics of the emerging battle field needs.

With the nation poised to emerge as a regional power in the near future, MI has to transform itself into a technology driven organisation to meld TECHINT, ELINT, SIGINT and HUMINT inputs to meet the requirements of force projection overseas. Focus on intelligence management rather than mere information management has become the order of the day. That will remove the aberrations of intelligence acquisition and coordination at all levels and contribute meaningfully to operational planning and execution.

(Col. R Hariharan, a retired Military Intelligence specialist on South Asia, served as the head of intelligence of the Indian Peace Keeping Force in Sri Lanka 1987-90. He is associated with the South Asia Analysis Group and the Chennai Centre for China Studies. E-mail:colhari@yahoo.com)

US standing in Caspian drips away

Source : Asia Times Online

By M K Bhadrakumar

On Sunday, en route to Astana, Kazakhstan, after a "very nice trip to India", US Secretary of State Condoleezza Rice told reporters accompanying her, "I just wish I could have stayed longer in India". New Delhi must be one of a handful of capitals where officials from the George W Bush administration receive an expectant welcome, and the doomsday warnings emitted from New York and Washington do not seem to matter.

But there was another reason for Rice's trepidation as her jet descended to Astana - US influence and prestige in Central Asia and the Caspian region has again plummeted. Rice realizes there is hardly any time left to retrieve lost ground, and the Bill Clinton administration's legacy in the Caspian and Central Asia has largely dissipated. Central to this has been the failure of the Bush

administration to handle relations with Russia. The stocktaking has already begun.

Writing in The Washington Post on Wednesday, former secretaries of state Henry Kissinger and George Shultz rebuked the Bush administration for its "drift towards confrontation with Russia" and pointed out that "isolating Russia is not a sustainable long-range policy". They said much of Europe is "uneasy". Their target was Rice, a self-styled "Sovietologist", and her inexcusably vitriolic attack on the Kremlin in a speech at the Marshall Fund of Germany in Washington on September 18.

Confrontational diplomacy
Kissinger and Shutlz particularly cautioned the Bush administration against encouraging confrontational diplomacy towards Russia by its neighbors, which would be counter-productive. Most certainly, there is already a backlash in the region. Azerbaijan, which the Bush administration once regarded as close regional ally, snubbed Vice President Dick Cheney during his visit to the capital, Baku, last month. Washington pretended not to notice, and deputed to Baku last week yet another top official - Deputy Secretary of State John Negroponte - whom the State Department's website describes as Rice's "alter ego".

On arrival on October 2, Negroponte forthwith said he was carrying a "simple message" - that the US has "deep and abiding interests" in Azerbaijan and these are "important interests" which hold implications for regional and international security. He implied Washington that was not going to roll over and give way to Moscow in the southern Caucasus.

Against the backdrop of the conflict in the Caucasus in August, the Caspian Sea basin has become a focal point. This was inevitable. At the core lies Washington's determination to avoid Russian participation in the European energy-supply chain. To quote Ariel Cohen of US conservative think-tank the Heritage Foundation, "Since August, US diplomats have been busy trying to shore up Washington's geopolitical position all around the Caspian, including Baku, [Turkmenistan capital] Ashgabat and Astana."

Russia is gaining the upper hand in the region. Despite robust US diplomacy in Ashgabat - over 15 American delegations arrived there in the past year - Turkmenistan, which already exports around 50 billion cubic meters of its gas through Russia, has responded well to Moscow's overtures. It has decided to stick to the terms of an April 2003 deal whereby virtually all its exports are handled by Russia "up through 2025", and Turkmen gas exports to Russia are expected to rise to 60-70 billion cubic-meters by 2009, leaving hardly any surplus for Western companies. Ashgabat has also committed to the construction of a pipeline to Russia via Kazakhstan along the eastern coast of the Caspian Sea.

The clincher was Russia's offer to buy Turkmen gas at "European prices" - the same approach that Moscow adopted for securing control of Kazakh and Uzbek gas exports. Russia has since made a similar offer to Azerbaijan, which Baku is considering. Azerbaijan was the true success story of US oil diplomacy in the post-Soviet era. Clinton literally snatched it from Russia's orbit in the 1990s by pushing through the Baku-Tbilisi-Ceyhan [BTC] oil pipeline against seemingly impossible odds. Azerbaijan is now edging back toward Moscow.

It is negotiating with Russia an increase in the annual capacity of the Baku-Novorossiisk pipeline. Azerbaijan reducing its commitment to the US-supported Baku-Supsa and BTC pipelines, which have a massive capacity of 60 million tonnes annually and could easily handle Azeri oil exports, is a breakthrough for Russia.

Russia's resolute stance in the Caucasus has caught Baku's attention. Baku understands Russia's resurgence in the southern Caucasus, and President of Azerbaijan Ilham Aliyev dislikes the mercurial personality of Georgian President Mikheil Saakashvili. Azerbaijan might have lost $500 million in revenues due to the suspension of oil transportation via the Baku-Supsa and Baku-Tbilisi-Ceyhan pipelines in August due to the conflict, and Baku's new interest in the Russian pipeline stems from a desire to protect its relationship with Moscow.

The implications are quite serious for Washington. Any reduction in the Azeri exports via BTC could impact the viability of the pipeline, which has been a cornerstone of US oil diplomacy in the Caspian, pumping early 1 million barrels of oil per day from Azerbaijan to Turkey's Mediterranean coast, where most of the supply is then shipped to Europe. The BTC pipeline looks secure for now, but has come under the increased watch of Russia.

Again, question marks have appeared regarding the future of the Nabucco gas pipeline, which, if constructed, would bypass Russian territory and bring Caspian gas from Azerbaijan via Georgia and Turkey to the European market. What if Azerbaijan accepts the Russian offer to buy gas at "European prices"? Has the Caucasus conflict fatally hurt Nabucco's prospects?

Russia comes out on top
There is indeed a new ambivalence in the geopolitics of the region. All across Western Europe, Eurasia and China countries are assimilating what happened in the Caucasus in August and are assessing their stakes vis-a-vis a resurgent Russia. They seek accommodation with Russia. Moscow has come out very much on top.

The war in Georgia has somewhat clouded the relations between Russia and the European Union. The final declaration of the EU summit on September 1 underscored the need to reduce energy dependence on Russia. But the EU's options, too, are limited. Europe has pinned its hopes on Nabucco, but it can only be implemented with Russian participation. Claude Mandil, former head of the International Energy Agency, said recently in an interview with the Russian daily Kommersant, "There is much oil and gas in Central Asia, but still less than in Russia or Iran."

Mandil, who advises French President Nicolas Sarkozy on energy issues, was critical of the US pressure on Europe to isolate Russia, calling it "counter-productive". He said, "The EU alone should decide the issue of energy security. The US itself is highly dependent on oil imports from Venezuela, but no EU members tell Washington that it's time to attend to that problem".

China also recognizes the Russian consolidation in the Caspian-Central Asian region. A commentary in the People's Daily in early September took note that Russia's Central Asia diplomacy has been "crowned with great success". It noted that visits by Russian leaders to Central Asian capitals in August helped "consolidate and strengthen" Moscow's ties with the region and achieved "substantial outcomes" in energy cooperation.

The Chinese commentary concluded: "Against a global backdrop of Russia's growing contradictions with the West � the high-level shuttle diplomacy of Russian leaders will further enhance Russia's strategic position in Central Asia, beef up the control of oil and gas resources and help coordinate the positions of Russia and these Central Asia nations on the Transcaucasia issue". Beijing has obviously made a realistic assessment of its own options in Central Asia.

In fact, during Russian Prime Minister Vladimir Putin's visit to Tashkent on September 1-2, Uzbekistan and Russia agreed to build a new pipeline with a capacity of 26 to 30 billion cubic meters (bcm) annually to pump Uzbek and Turkmen gas to Europe. Such a pipeline will undermine the US efforts to develop a trans-Caspian energy route bypassing Russia. Again, Russia's LUKoil has announced plans to produce 12 bcm gas in Uzbekistan's Kandym and Gissar fields annually.

All in all, therefore, Rice's visit to Kazakhstan took place against a grim backdrop. Neither Azerbaijan nor Kazakhstan appears interested in US entreaties to re-route energy exports to bypass Russia. Both hope to maintain good relations with the US but that cannot be done by picking a quarrel with Russia. At a press conference with Rice in Astana on Sunday, Kazakh Foreign

Minister Marat Tazhin stressed relations with Russia will remain a top priority. "Our relationship with Russia, I can formulate, is just excellent. We have very good political relations. Russia is our strategic partner� At the same time, I should underline that our relationship with the United States has a stable, strategic character."

Neither Tazhin nor Kazakh President Nurusultan Nazarbayev apparently made any commitments to Rice regarding US-sponsored pipelines. On the contrary, addressing the media jointly with Russian President Dmitry Medvedev following the Russian-Kazakh border region forum in Aktyubinsk, Kazakhstan, on September 22, Nazarbayev said Kazakhstan will be increasing its oil production by 12 million metric tons in 2009 and it proposes to pump the additional oil via Russia. "It is very important that Kazakh oil should pass through Russia", he said.

Kashagan puzzle
Nazarbayev hinted Astana would use the Russian-controlled Caspian Pipeline Consortium (CPC) to carry Kazakh crude from the Kashagan deposit in 2012-2013 to the Russian terminal on the Black Sea. Nurlan Balagimbayev, adviser to Nazarbayev, said on Thursday that Kazakhstan is interested in buying an additional 13.7% of stakes belonging to both BP and Oman in the CPC, in which Russia holds 24% besides Chevron, Shell and ExxonMobil.
Rice would have utilized her visit in Astana to check out Kashagan. Kazakhstan and a group of Western oil companies led by Italy's Eni are due to finalize details on Kashagan's future by October 25. A new operating company is expected to be formed and individual companies - Eni, Shell, ConocoPhillips, Japan's Inpex Holdings and Kazkhstan's KazMunaiGas - are likely to control different aspects of the operation such as production or shipping.

Kashagan is estimated to hold 7 billlion to 9 billion barrels of recoverable reserves and is undoubtedly the jewel in the crown of the Caspian Sea Basin. Several different routes are likely to be needed for delivering oil from Kashagan to customers, involving the construction of major new oil pipelines. Rice would have easily anticipated the keen rivalries that lie ahead in advance of the 2013 production start date of Kashagan. The battle for Kashagan is about to be joined.

The transportation route for the Kashagan will have a vital bearing on the long-term economic viability of the BTC pipeline. But Astana has shown no hurry so far in committing Kashagan oil to the BTC. Kazakhstan may well be playing for time and synchronizing with Russia's expected completion of the pipeline from East Siberia to the Pacific (ESPO) by 2012 for routing oil to the Asian markets.

Russian Energy Minister Sergei Shmatko said on Wednesday that Kazakhstan's state-owned oil pipeline operator KazTransOil is interested in transporting Kazakh oil through the ESPO. "Our Kazakh partners are looking at the project with great interest and enthusiasm. We are happy about that", he said at a function launching a section of the ESPO between Talakan and Taishet. The Taishet-Talakan section of the ESPO line was completed in September, while the remaining stretch to Skovorodino, near the Chinese border, is scheduled to be completed by end-2009.

Will Astana decide to ship its projected oil output - 150 million tons a year by 2015 - through ESPO? If that happens, China will be a huge beneficiary and the geopolitics of the Caspian will undergo a historic transformation.

Russian-Kazakh "oil alliance"
Rice put on an appearance, saying, "This is not some kind of contest for the affection of Kazakhstan between the countries of the region". But it is very obvious that Washington is nervous Kazakhstan is showing alarming signs of shifting towards Moscow. Astana supported the Russian action in the Caucasus and cut down its investment in Georgia. If Rice was hopeful of encouraging Kazakhstan to stand up to Russian "bullying", she was disappointed.

On the eve of Rice's arrival in Astana, Nazarbayev said, "I personally was a witness to the fact that Georgia attacked first. I was in Beijing on August 8 with Mr Putin, when we first heard the news. I think the coverage of those events was biased. Whoever you may blame for the conflict, the facts are bad enough."

Since assuming office in the Kremlin on May 7, Medvedev has visited Kazakhstan three times. During his last visit, he promised, "We [Russia and Kazakhstan] will keep building up the production and the export of hydrocarbon raw materials, build new pipelines when it is beneficial and necessary, and attract large-scale investment into the fuel and energy sector."

On Wednesday, while on a visit to Almaty, Kazakhstan's largest city, the influential head of the CIS (Commonwealth of Independent States) committee of the Russian parliament, Vadim Gustov, floated a new idea that the two countries needed to develop a common energy market. He said an "oil alliance" would be mutually advantageous.

"A common energy market of Russia and Kazakhstan would help develop energy cooperation, supply cheap energy resources to the domestic markets and increase energy supplies to third countries", Gustov said. According to him, Russia and Kazakhstan should develop and adopt a joint concept of the energy market, which could serve as basis for Euroasian Economic Community space.

Evidently, Washington is barely keeping pace with the Russian diplomacy. To make matters worse, the financial crisis at home has eroded US credibility. An entire ideology of economic development that US diplomats propagated in the region stands discredited.

There is huge political symbolism when Iceland expresses "disappointment" with the Western world and turns to Moscow for a 4 billion euro (US$5.5 billion) loan to salvage its economy from imminent bankruptcy. Such images make a lasting impression on the Central Asian steppes.

M K Bhadrakumar served as a career diplomat in the Indian Foreign Service for more than 29 years, with postings including ambassador to Uzbekistan (1995-98) and to Turkey (1998-2001).

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