May 23, 2009

INTERNAL SECURITY: Man who ushered in a new work culture at Home Minstry

P.Chidambaram

Home braces for taskmaster PC
NISHIT DHOLABHAI
New Delhi, May 23: Home ministry bureaucrats are bracing for a tough time when P. Chidambaram returns as their boss.

“He knows his subject, one cannot bluff to him,” a senior official said.

Chidambaram, who replaced Shivraj Patil following the Mumbai attacks, had ushered in a new work culture at the ministry, forcing senior bureaucrats to rush in by 9am for his first briefing of the day. PC rarely left before 7pm and worked on deadlines.

The pressure has been the heaviest on the secretaries, the chiefs of the Intelligence Bureau and spy agency RAW, and the additional secretaries and joint secretaries.

Chidambaram revived the multi-agency centre, which co-ordinates among the various intelligence agencies, so inputs from across the country and abroad got analysed regularly. That will continue, ensuring long hours in the intelligence establishment.

The senior officials may wince a bit, but from their juniors down to the sweepers and peons, the lower rungs are enthused by the new culture. Sources said that even if a Grade IV employee complained about a senior’s behaviour, the minister summoned the accused official directly.

“This happened several times in the past few months. Juniors sent a letter to the minister personally and he took action,” a source said.

Even those who find Chidambaram “arrogant” concede, however grudgingly, his efficiency.

Officials had earlier said that if Chidambaram returned as home minister, his priority would be streamlining the anti-terror mechanism and going hammer and tongs at the Maoists. The first step in that direction would be the choice of the next home secretary.

Madhukar Gupta retires next month and is likely to be replaced by either commerce secretary G.K. Pillai, a 1972-batch officer from the Kerala cadre, or revenue secretary P.V. Bhide, an Andhra cadre officer from the 1973 batch. Both have had stints in the home ministry and are known to be hard taskmasters like PC.

Chidambaram, buoyed by a terrorism-free election (although there was Maoist violence), would like to focus his attention on the promises in the Congress manifesto.

The party has guaranteed “maximum possible security to each and every citizen” and zero tolerance for terrorism “from whatever source it originates”, and pledged to “take forward vigorously” the modernisation of the security forces and capacity-building for special forces to tackle terror and Maoism.

Whatever of that is achieved, one thing that is expected is a change in attitude in the ministry. Just like the fresh paint on the walls of the North Block lobbies, and the new colours on the blinds, that will welcome the new government in.

Source http://www.telegraphindia.com/1090524/jsp/nation/story_11013263.jsp

CHINESE ECONOMY MONITOR: CAUTIOUS OPTIMISM

B.RAMAN

(What will be the impact of the global financial and economic melt-down on the Chinese economy? This question should be of interest to the other countries of the South and the South-East Asian region. If the Chinese economy is badly affected, they too are likely to feel the negative consequences of the down-turn in the Chinese economy. Keeping this in view, we have been bringing out a periodic "Chinese Economy Monitor" based on open information. This is the seventh in the series)

ASSESSMENT

Driven by an increase in domestic demand, the Chinese economy has started showing signs of a recovery. The signs are stronger in the interior provinces in Central and Western China where the industries are not dependent on exports than in the coastal provinces where the manufacturing sector is dependent on exports. While domestic demand, encouraged by the Government's stimulus package of last November, is increasing, exports continue to decline, but the rate of decline is slower. Chinese analysts expect that the decline in exports, at a slower rate, will continue till the end of the year. The exports may start picking up again next year if the US economy improves, but not otherwise. While the Asian Development Bank has been upbeat on the signs of a recovery in China, the World Bank has been more cautious and warned against premature optimism. One of the factors for the caution is that most of the recovery has been due to an increase in Government spending and not to an increase in private investment .Another factor is that some of the data tend to be confusing and contradictory. This has been pointed out even by Chinese analysts. An analysis of the recovery by the official Xinhua news agency points out that while industrial production, driven by an increase in domestic demand, is reported to be going up again, power consumption by the industries continues to go down. It points out that that no explanation for this contradiction has been forthcoming. There are definite signs of a recovery driven by an increase in domestic demand, but are these signs ephemeral or will they be sustained? The Chinese analysts are keeping their fingers crossed. As one studies the way the Chinese leadership has been dealing with the economic down-turn, one is impressed by the refreshing transparency exhibited by the Chinese leadership in dealing with the economic distress.Instead of covering up their economic difficulties, they have been taking their people into confidence, explaining to them the reasons for the difficulties and the action being taken by the Government in dealing with the difficulties and appealing for the understanding and co-operation of the people. President Hu Jintao, Prime Minister Wen Jiabo and other leaders have been touring inside the country extensively and repeatedly for this purpose. Their efforts are showing results as could be seen from the fact that warnings by foreign analysts of extensive social unrest due to large-scale job losses have been belied so far.



MANUFACTURING SECTOR EXPANDS AGAIN, BUT TO MEET DOMESTIC DEMAND, NOT EXPORTS

2.In a report dated May 4,2009, the Credit Lyonnais Securities Asia (CLSA) based in Hong Kong, which monitors the Chinese economy, reported as follows: "The CLSA China Manufacturing PMI (Purchasing Managers' Index) rose sharply to 50.1 in April, from 44.8 in the previous month, to signal an expansion of the Chinese manufacturing sector for the first time in nine months. The upward trend observed in the index since posting a survey low last November, suggests that the sector is showing signs of stabilisation. April data pointed to the first rise in production levels at Chinese manufacturers since last July. Where firms signalled an increase in output at their plants, this was commonly attributed to modest gains in new business. Growth of new orders was signalled by April’s survey, following eight consecutive months in which order books have deteriorated. Chinese manufacturers widely reported that improved domestic demand had led sales higher in April. Despite an overall gain in new business, Chinese manufacturers pointed to a modest decline in export sales in April. That said, the latest drop in foreign orders was the least marked for eight months, with panellists commenting that improved demand from some external sources had acted to limit the rate of decline. A modest increase in staff numbers at Chinese manufacturers was recorded in April, which was the first in nine months. Employment growth largely reflected an improvement in order books and higher output requirements.
Prices charged by Chinese manufacturers for their finished goods fell further in April, extending the current period of decline to eight successive months. Anecdotal evidence frequently linked the marked drop in output charges to competitive pressures and falling input costs. Average cost burdens faced by Chinese manufacturers declined for the seventh month running in April. The latest reduction was still sharp but much weaker than the rapid declines recorded towards the end of 2008. "

3.Commenting on the survey, Eric Fishwick, Head of Economic Research at CLSA, said: "China's Government has been extremely successful in stimulating investment and, combined with a sharp improvement in export orders, this has pushed the PMI back into positive territory in April. The Export Orders Index should soften again in the coming months as, inventories having been brought under control, orders track final demand overseas. However, we hope that firmer domestic demand, as Government spending gains traction, will keep the PMI above 50 in months to come."

---- CLSA survey dated May 4,2009, available at https://www.clsa.com/about-clsa/media-centre/2009-Media-releases/clsa-china-pmi-report-on-manufacturing-may-2009.php


ON THE RECOVERY PATH, SAYS ADB CHIEF

4.Addressing a press conference at the end of the annual meeting of the Asian Development Bank (ADB) at Bali in Indonesia on May 5,2009,Haruhiko Kuroda, President of Asian Development Bank, said:"China's economy is on recovery course and it could recover much earlier than other economies, but of course, at the same time, we have to be very cautious. The South Korean economy had showed signs of recovery, and Japan's industrial production showed some signs of bottoming out.On the whole, I'm cautiously optimistic that Asia will recover by the end of next year."

------ Xinhua report dated May 5,2009.

DOMESTIC CONSUMPTION DRIVES ECONOMY UP

5. China's domestic demand has started to become more of a driving force for the country's economic growth than in the past.
Signs of a domestic consumption boost are apparent as people are spending more on domestic commodities and the Government plans for more consumption stimulus. Data from the National Bureau of Statistics (NBS) released on May 20,2009, showed that China's domestic consumption had maintained an upward trend since the beginning of the year. China's retail sales rose 14.8 per cent in April year on year. It was 0.1 percentage points higher than in March. Rural spending, driven by a Government rebate policy on home-appliance purchases and other commodities, grew by 16.7 per cent in April, which was 2.8 percentage points higher than urban growth. The property and auto market also showed the same trend as China became the world's largest vehicle market again with more than 1.15 million cars sold in April, up 25 per cent from a year earlier. In the housing sector, China's real-estate climate index was finally back to growth after ten months of decline. Property sales rose by 17.5 per cent in acreage from a year earlier in the first four months of 2009. "China's economic structure has started to enter a transforming period to a consumption-driven growth model," said Li Daokui, Director of the Department of Finance at Tsinghua University. According to Li, economic growth of China's inland western and central regions, which relied less on export, had exceeded that of the coastal areas in the first quarter, reflecting a strong pull from domestic consumption and investment. Data from regional statistics bureaus had shown that Western and Central China accounted for nine of the 11 provincial areas that had seen double-digit economic growth year on year in the first quarter. Such growth was contrasted by coastal regions whose economy has been mainly driven by export, such as Shanghai, Zhejiang and Guangdong. Gross domestic production (GDP) growth there dropped to three- to- six per cent. "Domestic consumption, together with fixed assets investment, had become the main forces of China's economic recovery as export continues to weaken," Li told Xinhua.

--- Xinhua dated May 21,2009

IS THE RECOVERY EPHEMERAL OR SUSTAINABLE?

6."With stronger domestic demand, China is very likely to see its economy facing better conditions this year and the Government's goal of 8 per cent growth will be more than achievable," said Wang Yuanhong, senior economist and head of the Economic Forecasting Department of the State Information Center at a seminar organized by the All-China Journalists Association. Wang, however, expressed concerns on whether the current economic recovery is sustainable. Xu Lin, Director-General of the fiscal and financial affairs department at the National Development and Reform Commission, said China can achieve its goal of 8 per cent growth this year as it has enough resources to add to Government spending if needed. Many observers suspect this may be an overestimate. The World Bank estimates that a 6.5 per
cent growth is more realistic and said the enthusiasm about an economic recovery in China may be "premature" as private investment lags behind Government spending. Most China watchers, however, feel that an 8 per cent growth is required to boost employment.China will also have to identify new growth sectors apart from the saturated automobile and real estate markets, Wang said.

------" China Daily " dated May 21,2009

MIXED SIGNALS: NEED FOR CAUTION

7."With the world keeping a close watch on the Chinese economy for signs of revival, the latest data are sending mixed signals and fueling concern that a recovery, if there really is one, is not on solid footing. When gross domestic product (GDP) and exports were soaring, indicators like electricity use didn't get much attention. Now, analysts are closely examining every scrap of data. But the problem is, many statistics don't seem to be giving much insight into economic trends. Old patterns are breaking down and long-standing relationships are breaking apart. Also, many figures for the first two months of 2009 are especially confusing, because the long Lunar New Year holiday fell in January this year, two weeks earlier than in 2008. Many statistics were only released as an aggregate figure for January and February, making it almost impossible to derive accurate year-on-year data. The National Bureau of Statistics (NBS) reported this week that China's industrial output rose 7.3 per cent year on year in April, at the higher end of analysts' expectations. But power generation fell 3.55 per cent last month from a year earlier, to 274.76 billion kilowatt hours, according to the State Grid Corp. of China. Since industry consumes about 70 per cent of China's power, how do economists account for a rise in industrial production accompanied by a decline in power consumption?
A breakdown of electricity use sheds a little light on the situation. Electricity consumption started declining on a year-on-year basis last October, when it fell 3.7 per cent, the first drop since 1999.That was also before the Government announced a 4-trillion-yuan($586 billion) stimulus package in November. Power consumption fell 4 per cent to 781 billion kw/hrs in the first quarter from a year earlier. But in March, it fell 2.02 per cent, a little more than half the rate of decline in October. And not all sectors reported a power consumption drop. Consumption of agriculture and tertiary industry rose 5.12 per cent and 7.41 per cent year on year in the first quarter, respectively, according to the China Electricity Council (CEC). Residential use rose 9.88 per cent.But industrial use declined 8.21 per cent, and with exports falling, use in the manufacturing and export hubs of Guangdong and Zhejiang provinces, was "below the national average," the CEC said. Indeed, the latest industrial output figures for exporters also show a sharp decline last month, down 14.3 per cent to 566.21 billion yuan. An export revival is evidently way off, and that's bound to delay an overall economic recovery. Zhang Liqun, a researcher with the Development Research Center of the State Council, a government think-tank, told Xinhua that exports would continue declining in the second half but at a slower pace. Zhang said the likelihood of further deterioration in the global economy was "slim" and Chinese exporters were trying to change their product mix.Exports fell 22.6 per cent last month, the sixth monthly drop in a row. Zhang predicted that for the whole year, exports might fall about 10 per cent to 15 per cent. He noted that when looking at the decline in industrial power use, it was important to remember that industrial upgrading was still in progress. The decline of electricity consumption by heavy industry, which accounts for 82 per cent of total industrial power consumption, was the leading cause for the overall decline. China has spent years working to scale back its smokestack industries so it can cut energy intensity by 20 per cent and major emissions by 10 per cent between 2006 and 2010. China plans to eliminate 15 million kw/hrs of power provided by small coal-powered plants, as well as obsolete capacity of 10 million tonnes in the iron industry and 6 million tonnes in the steel industry this year. The first-quarter output growth rate of the six most energy-intensive sectors (iron and steel, nonferrous metals, building materials, petrochemicals, coking and chemicals) fell 12.5 percentage points on average from a year earlier, to 2.3 percent, NBS figures showed. Power use by those sectors also showed large declines: iron and steel (10.24 per cent), chemicals (13.14 per cent) and nonferrous metals (16.78 per cent) in the first quarter, according to the CEC.Meanwhile, efforts to upgrade and rebalance industry showed progress in the first quarter, with tertiary industry's weight in the economy up 1.6 percentage points and secondary industry's weight down 1.9 points. Despite discouraging data on the industrial front, policy makers have taken heart from consumer behavior in recent months, which seems to show that the effort to get more economic growth out of domestic demand and less from external factors is succeeding. GDP expanded 6.1 per cent in the first quarter, and the domestic consumption provided the largest share at 4.3 percentage points, accounting for 70.5 percent of the total growth. Investment generated another 2 points, accounting for 32.8 per cent of the total growth, while the decline in exports shaved 0.2 point of the total, according to NBS figures. The economy expanded by 10.6 per cent year on year in the first quarter of 2008. Consumption accounted for 44.4 per cent of total GDP growth, with investment generating another 46.7 per cent and exports providing the remaining 8.9 per cent of the total, according to Zhu Baoliang, an expert with the NBS.
China has become the world's largest vehicle market, with more than 2.67 million cars sold in the first quarter, up 3.88 per cent year on year.
Car sales were buoyed by government stimulus policies, said Zhang Yunpeng, an analyst with Beijing-based Huarong Securities. In January, China halved the purchase tax on passenger cars to 5 per cent for models with engine displacements of less than 1.6 liters. More than 1.15 million vehicles were sold last month in China, up 25 per cent in terms of units, while sales in the United States fell 34.4 per cent year on year to 819,540 units, according to the China Association of Automobile Manufacturers. Other NBS figures this week showed that retail sales rose 14.8 per cent in April year on year to 934.32 billion yuan, and the 18.5 per cent monthly vehicle sales growth in terms of sales revenue dwarfed other items by 3.7 percentage points. Private-sector housing sales rose 8.2 per cent year on year in 70 mid-sized and large cities in the first quarter, including Beijing, Shanghai, Guangzhou and other metropolises. Auto and home sales were the most important consumption sectors and their revival showed a trend of consumption recovery in China. This would stimulate the growth of related industries. Boosted by the surge in housing transactions, sales of construction and interior decoration materials rose 10.8 per cent in April from a year earlier, according to the NBS. Zhuang Jian, a senior economist with the Asian Development Bank office in Beijing, told Xinhua that although sales of cars and homes had picked up in recent months, Chinese consumers needed to have more confidence before they would spend and invest more. The Government needed to take new, responsive measures as new situations emerged. Zhuang also noted that contradictory data had been seen from time to time in earlier years in China, when the country's economy was maturing, and there still might be some difficulties ahead. He added that it had only been half a year since the major stimulus plan was announced and it would be wise to wait for another quarter to see the effects of the stimulus package. "The stimulus has already paid off, with rising investment in government-supported projects. As the weather in the second quarter is more suitable for construction work, we can expect this type of investment would continue to grow," Zhang said. China's fixed-asset investment jumped 28.8 per cent to 2.81 trillion yuan in the first quarter. The growth pace accelerated further to 34 per cent in April. Analysts said they expected further gains in shares, car sales and housing transactions in the coming months, but they warned that economic data could still be confusing and disappointing.The ADB forecast in a March report that China's economy might grow 7 per cent this year. "Judging from current conditions, economic growth might even exceed that forecast," Zhang said.

------ Xinhua analysis dated May 14,2009

GLOBALISATION OF THE YUAN

8. Chinese experts have welcomed the remarks made by Timothy Geithner, US Treasury Secretary, on May 20,2009, before the US Senate Banking Committee that China did not manipulate the renminbi for export advantage and had taken steps to enhance exchange rate flexibility. Commenting on his statement, Zhai Peng, economist, Guotai Jun'an Securities, said: "China's yuan has appreciated by 20 per cent between July 2005 and February 2009. The currency even appreciated slightly against the dollar when most other emerging markets and other currencies fell sharply against the greenback during the financial crisis.Unlike the Asian financial crisis in 1997 when the Chinese Government intervened to hold the renminbi's value against depreciation, it has become much more market oriented ever since China launched the reform of its foreign exchange mechanism in July 2005."Li Jianfeng, economist, Shanghai Securities, said: "The fact that Shanghai is to be built into a global financial center by 2020 would greatly drive the yuan to play a bigger international role. This will consequently enable the Government to promote the reform of the foreign exchange mechanism and thus result in a steady appreciation of the currency." Du Peng, the head of the current account department at the State Administration of Foreign Exchange (SAFE), said that China would give the nation's banks more price-setting capacity in the exchange of foreign currencies with customers as part of Government efforts to create a more market-oriented yuan. "The foreign exchange regulator will relax limits on exchange rates commercial banks offer customers to meet demand for two-way fluctuations of the yuan," he said and added that China would also push forward the opening of the capital account and improve the management of current account."After several years of reform, China's foreign exchange market has developed quickly and has made great strides,"he said. Zhang Guangping, deputy head of the Shanghai branch of the China Banking Regulatory Commission, said that a series of conditions would have to be met for the yuan globalization trend to gather momentum."China would have to gradually make the yuan convertible on the capital account; it needs a more liquid foreign exchange market; its bond markets and banking system needs to be more developed; and there has to be proper monitoring of cross-border capital flows," Zhang said.

------ "China Daily " dated May 22,2009

CHINA TO CONTINUE TO BUY US TREASURY BONDS

9.Addressing a press conference on March 23,2009,Hu Xiaolian, a Vice- Governor of the People's Bank of China, made the following points: (i).China will continue to buy US Treasury Bonds, viewing the credit risk as low overall."Investing in American Treasuries, as an important part of our foreign exchange reserve management, will continue." (ii). China would pay close attention to changes in the value of its Treasury holdings. "US Treasuries are an important part of our foreign exchange reserves. So we naturally care about the security and investment return on US Treasuries." (iii). She disputed the argument heard in some circles that the US economy and markets were in such deep trouble that the dollar's global supremacy was under threat. She said China's view was that studies could begin of a multi-polar global currency system but that the dollar remained the key currency in terms of trade, settlement, payments and pricing. The dollar also dominated financial investment. That was why China, though favoring research into a new multi-currency system, believed the current priority is to step up supervision of the US economy and its financial markets. (iv).The Central Government took long-term factors into account such as the structure of China's payments and trade; the risks and returns on various currencies; and the liquidity of different currencies. China would not be swayed in determining the make-up of its portfolio by short-term volatility in currency markets.

---"CHINA DAILY" dated March 23,2009.

CONSUMER GOODS PRODUCTION UP

10.China's consumer goods industry kept stable development in the first four months this year, thanks to rising domestic demand that offsets falling export, said the Ministry of Industry and Information Technology (MIIT) on May 22,2009. In the past four months, the industrial output of consumer goods grew by 8 per cent. The figures were higher for March and April at 9.8 per cent and 9.2 per cent each. Among its major sectors, textiles, tobacco and pharmaceutical, and light industry grew by 8.1 per cent, 6.6 per cent, 6.1 per cent and 13.8 per cent in industrial output respectively.Industrial output of the four sectors accounted for 30.4 per cent of the national total, statistics from MIIT showed.The light and textile industries, which had been among the ten industries supported by the Government's stimulus plans, reported shrinking decline in exports.Exports in the light industry fell by 10.9 per cent and exports in the textile industry dropped 8.4 per cent from January to April. However, the decline rates were 4.8 and 7.4 percentage points lower compared to that of the whole industrial export in the same period.

----- Xinhua dated May 22,2009

BREAK-UP OF STIMULUS PACKAGE

11.In a statement issued on May 20,2009, the National Development and Reform Commission gave for the first time a break-up of how the stimulus package of US $ 586 million announced by the Government in November last year would be utilised. At the time the stimulus package was announced, some analysts had pointed out that the Government had included in the package the amounts which it intended spending for the relief, rehabilitation and reconstruction of the quake-hit areas of the Sichuan Province.Confirming this, the statement indicated that one-fourth of the stimulus package was going towards the reconstruction in quake-devastated Sichuan province.Another 37.5 per cent of the package is going towards the construction of roads, railways, airports, irrigation and other basic infrastructure across the country. The balance is being utilised for construction of new houses and the improvement of existing houses, village improvement schemes and the improvement of public health services and education. The Central Government is providing 29.5 per cent of the funding for the overall stimulus program, with the balance coming from local governments and other sources.

---- "China Daily" dated May 22,2009


IRON ORE PRICE INDEX

12.China will unveil its first iron ore trade platform called the Rizhao International Iron Ore Trade Center in the Shandong province on May 25, 2009. It will signal that the establishment of the country's iron ore price index is under way, according to Bai Wenhui, executive of Shandong Huaxin Trade Co Ltd, a major shareholder of the trade center. Jointly started by five local private companies pursuing bulk commodity transaction in Shandong, the center mainly provides electronic commerce services for iron ore suppliers and steelmakers. Its registered capital totals 20 million yuan ($2.93 million). The trade center will offer services including electronic transaction, information exchange, quality inspection, storage, transportation, insurance, and settlement for the two parties in iron ore trading, according to Wang Lei, head of the preparation team for this program."As the biggest iron ore importer, China has not set an iron ore price index to date. The iron ore trade center will promote orderly iron ore imports and standardize activities of trading parties, and gradually facilitate China to launch its own iron ore price index in the future," said Bai.Data from China Customs shows that the country imported 443.7 million tons of iron ore in 2008, half of the world's overall iron ore exports volume over the year, and the imports in January-April period in 2009 hit 188 million tons.

----Xinhua dated May 22,2009.

( 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 )

May 22, 2009

INDIA: Setting up National Counter Terrorism Centre (NCTC) a challenge

Economic Times, India
23 May 2009, 0236 hrs IST, Bharti Jain, ET Bureau



NEW DELHI: Now that the multi-agency centre (MAC) is operating 24x7 to collate terror-related information, the Manmohan Singh government is all set
to create a National Counter Terrorism Centre (NCTC) as well to take care of operational aspects of the fight against terror.

The recommendation for setting up the NCTC was made by the taskforce on ‘developing an integrated capability to address internal security challenges’ headed by national security adviser MK Narayanan. Among the other key proposals — some with set deadlines ranging from one month to three months — are the creation of special crack units in the states to handle terror emergencies, especially in key urban centres where NSG cannot be immediately deployed. The taskforce has, in its report, also sought the creation of a CISF-like industrial security force in each state to protect economic and infrastructure assets.

In its report finalised recently, the taskforce recommended a joint police command to facilitate borderless operations against Naxalites operating in contiguous districts of the affected states. The modalities for such a proposal would however have to be worked out in consultation with the states as it involves jurisdiction issues. The taskforce comprising top intelligence officials also called for strengthening of the intelligence structure and better connectivity among MAC, SMACs and special branches to enable real-time data sharing and quick follow-up action.

The NCTC, which will have due representation of intelligence agencies, Central paramilitary forces and Army, will essentially focus on operational objectives. Proposed as a supplement to multi-agency centre (MAC) that would have access to all information collated by the latter, the NCTC would draw up operational plans to counter the “specific” terror threats.

It will also oversee the implementation of these action plans in close coordination with the Central and state police agencies. However, the NCTC proposal is still in a nascent stage and the new government will be discussing its possible legal backup with the law ministry. The options available include a special Act to empower the NCTC to plan and oversee counter-operations against terror or its creation by an executive decision.

The proposed state-level anti-terror crack units, which may be headed by the local police chief, will be located in vulnerable cities where NSG may not be hand during a terror crisis. The special units are proposed to be raised on the lines of the India Reserve battalions, with a Central component thrown in.

While special intelligence units are also proposed at the police station level in vulnerable cities to gather local intelligence inputs and anticipate terror threats, there will be collation centres at the district level which in turn will channel intelligence flow into the fusion centres at the state level. The same would then to routed to the subsidiary MACs to the MAC.

Interestingly, the taskforce has suggested a separate intra-state information-sharing network for the north-eastern region. Calling for a dedicated
action plan to counter the various insurgent threats, it has suggested electronic transfer of salaries and contractual payments to rule out their diversion for funding the rebel outfits.


In a recommendation that may not be very easy to implement, the taskforce has called for easing the NSG from VIP duties. It has also called for a time-bound plan for proper staffing, funds and manpower for NIA, strengthening of the authority under the Prevention of Money Laundering Act, putting activation of the research and technology centre within the IB on fast track by giving it the mandatory clearances within a month and the creation of a special command within the BSF and CRPF.

International Conference: Summary of event by Kristan J. Wheaton

http://sourcesandmethods.blogspot.com/2009/05/new-challenges-day-2-international.html
Kristan J. Wheaton

The ISF Conference began yesterday at the International Conference Centre in Geneva. It is a magnificent facility, with 640 attendees, and the speaker's list looks very interesting but the rules of the conference are going to cramp my style.

The whole ISF is being held under the Chatham House Rule and this prohibits me from citing who said what. That said, I can report some of the ideas to emerge from the conference.

Some of these ideas were unsurprising but some of them either had surprising twists or were brand new ideas entirely. I will start with the unsurprising ones first:

The Parade of Horribles. Climate change, war, terrorism, energy, food and water shortages, the demographic time bomb, WMDs, cyberwar, economic collapse... Lawyers call a lengthy string of terrible things like this the "Parade of Horribles". It is a rhetorical device designed to engage attention and compel action and it was used in much the same way here. What was interesting was the degree of consistency -- the same list of threats came up in multiple different contexts.

China and India. There seemed to be a good bit of concern and a certain sense of inevitability that China and India would emerge as future powerhouses. Nothing new here, of course, but the degree of certainty about this shift in power was noticeable. Certainly I heard more of this type of talk here in 24 hours than you do in the States over the course of several months. In addition, it was rarely just "China" and mostly "China and India".

Solutions. There was also a remarkable consensus about solutions: Reinforce international institutions (including the UN Security Council and regional initiatives); establish the "right amount" of regulation for markets; and increased coordination between defense, diplomacy and development agencies/organizations.

Some of the surprises:

Cyberwar/crime. There was far more talk concerning this issue than I thought there would be. If you take a look at the panels in detail, you can see that cyber takes up quite a bit of real estate. Interestingly, there is not a single panel devoted exclusively to terrorism (though it permeates the discussions here) but there are several devoted exclusively to cybersecurity issues. At one point there was even talk of Alternate Reality Games!

Emphasis on intelligence analysis tools and methods. No one called it that, of course. No, they used code words such as "security foresight" but they couldn't fool me -- they were talking about intelligence. Collection of information did not seem to be an issue; figuring out what the info we have actually means did.

"Resiliency". I think I witnessed the birth of a buzzword. The word "resiliency" kept coming up. The need to build resilient societies, have resilient systems. I think that the use here is similar to the way environmentalists use the word "sustainable" and the way network theorists use the word "robust". There was a sense that the runaway process of globalization had sacrificed too much of the world's resiliency for the sake of efficiency and that at least part of the current set of problems was due to this imbalance (Note: John Robb has been talking about the "resilient community" for quite some time but it was interesting to see the same term crop up here).

After a quick trip to the Routledge booth to talk about books past and future, I trotted off to a full day of seminars on various topics tied to the parade of horribles from yesterday.There are four time slots today with six panels in each slot. This means that you can see no more than one-sixth of what the conference has to offer. Since I am presenting in one of those time slots, that limits my participation even more. I am not a big fan of this type of conference format as it really limits your exposure to new ideas. It also explains some of the hit and miss quality of this post. Still, I managed to pick up some new stuff of interest today as well.(Note: In case you are new to this series of blog posts, this conference is being held under the Chatham House Rule which does not limit my use of the ideas that come out of the conference but does prohibit my use of the names or affiliations of the people speaking about those ideas. The ideas mentioned below, then, are not my own. In some cases, I don't even agree with them. I am reporting them merely because I found these ideas interesting.)When can NGOs do better with non state actors than states or international organizations? When the non-state actor wants to be seen like a state (i.e. has political ambitions, needs international attention, leadership under pressure to deliver something to the people, etc.). This condition often occurs late in the game -- when the non-state actor has tried other avenues. Likewise, because of the timing and the purpose, states typically do not want the NGO to succeed.

The legal framework is an important factor in cyberwar. The lack of an adequate legal framework actually impeded efforts to respond effectively to the series of cyber attacks in Estonia 2 years ago. There has been some good thinking on this issue but it is not widely known and has not yet been incorporated into legal systems. This results in a continuing exploitable weakness in the system despite efforts to more directly address the cyberwar threat.

Russia. The current sabre rattling over Georgia is likely just that. The next major crunch point with Russia is likely in Ukraine and will revolve around the status of the Black Sea Fleet currently stationed in Sevastopol. Russia's ability to act has not been hurt as much as some people think by the recent sharp decline in gas and oil prices or by the economic meltdown generally.Secrecy is a force divisor in asymmetric warfare. Asymmetric warfare is anti-Clausewitz. It focuses on weaknesses in the system rather than on the center of mass. Fighting an asymmetric war, then, requires more knowledge than force ("all the force you need to deal with most terrorists is a cop with a gun"). Secrecy is an impediment to the system effectively applying its collective knowledge, ergo, secrecy reduces the efficacy of force.

The Intelligence Cycle can be thought of as an out of date operating system. Dealing with modern intelligence problems using the framework of the intel cycle is like trying to get Windows 95 to run Vista programs.

US Air Force leaders issue posture statement


Posted 5/22/2009 Updated 5/22/2009
5/22/2009 - SAN ANTONIO (AFNS) -- The Air Force's top leaders presented the official Air Force posture statement May 19 to the U.S. House Armed Services Committee. During their testimony, they focused on the upcoming budget as well as current and future Air Force capabilities.Secretary of the Air Force Michael Donley and Air Force Chief of Staff Norton A. Schwartz said that the United States today faces a spectrum of challenges to our national security and global interests. As an integral member of the joint team, America's Air Force provides the critical capabilities of Global Vigilance, Global Reach, and Global Power. "The United States Air Force is 'All In' today's joint fight. At the same time, our investments in new capabilities will ensure we are ready for tomorrow's challenges. The mission of the United States Air Force is to 'fly, fight, and win...in air, space and cyberspace' -- as an integral member of the Joint team that ensures our nation's freedom and security, Secretary Donley and General Schwartz said."The 2009 Air Force Posture Statement articulates the vision of an Air Force ready to fulfill the commitments of today and face the challenges of tomorrow through strong stewardship, continued precision and reliability, and dedication to persistent Global Vigilance, Reach and Power for the nation," they said. Click here to read the Air Force Posture Statement.

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SPACE SUPERIORITY
America’s ability to operate effectively across the spectrum of conflict rests heavily on our space capabilities. Recognizing this importance, our FY10 budget proposal includes investment in space and space-related support systems.

The Joint force depends upon space capabilities provided by the Air Force, which fall into five key areas: Early Warning; Space Situational Awareness; Military Satellite Communications; Positioning, Navigation and Timing; and Weather capabilities. We will field several new satellites, including the Global Positioning System Block IIF, Advanced Extremely High Frequency (AEHF),Space Based Surveillance System (SBSS), and the Space Based Infrared System-Geostationary (SBIRS-Geo) – recapitalization programs that are important to both the United States and its Allies. The FY10 budget proposal discontinues the Transformational Satellite (TSAT) program and supports procurement of additional AEHF and Wideband Global SATCOM (WGS) satellites.

CYBERSPACE SUPERIORITY
Operating within the cyber domain has become an increasingly critical requirement for our networked force. In order to develop and institutionalize cyberspace capabilities, and to better integrate them into the Joint cyberspace structure, we are consolidating many Air Force cyberspace operations into a new 24th Air Force under Air Force Space Command. The Air Force is firmly committed to developing the necessary capabilities to defend the cyber domain, and our FY10 budget proposal includes $2.3B to grow this important Core Function.

PAKISTAN: Slouching towards balkanization

THE ROVING EYE
Asia Times Online

By Pepe Escobar

*) Washington is focused on Balochistan like a laser.

*) The geopolitical secret is not to antagonize but to court them, and offer them total autonomy. In an evolving strategy of balkanization of Pakistan - increasingly popular in quite a few Washington foreign policy circles - Balochistan has very attractive assets: natural wealth, scarce population, and a port, Gwadar, which is key for Washington's New Great Game in Eurasia Pipelineistan plans.

*) McChrystal(Afghan Commander) still has the luxury of raising any amount of calibrated hell in neighboring Balochistan to suit Washington's plans - be they to provoke Iranians or incite Balochis to revolt against Islamabad

*).....Pakistan as we know it would break up. India might intervene to subdue Sind and Punjab, keeping both under its sphere of influence. Washington for its part would rather concentrate on exploiting the natural wealth and strategic value of an independent Balochistan.


Happy Days are here again. It's as if the George W Bush years in Afghanistan had never left, with Washington still wallowing in an intelligence-free environment. A surge is coming to town - just like the one General David Petraeus engineered in Iraq. A Bush proconsul (Zalmay Khalilzad) wants to run the show - again. A hardliner (General Stanley McChrystal) is getting ready to terrorize any Pashtun in sight. A new mega-base is sprouting in the "desert of death" in the southern Afghan province of Helmand. And as in Bush time, no one's talking pipeline, or the (invisible) greatest regional prize: Pakistani Balochistan.

Bush's "global war on terror" (GWOT) may have been rebranded, under new management, "overseas contingency operation" (OCO). But history in Afghanistan continues to repeat



itself as farce - or as an opium bad trip.

Zalmay does Pipelineistan
It was hardly stunning that Bush's pet Afghan hound Zalmay Khalilzad, a US citizen born in Afghanistan and former envoy to both Afghanistan and Iraq, would now be angling - via his pal President Hamid Karzai, who tried to get President Barack Obama on board - to become the unelected CEO of Afghanistan, or a sort of "unofficial" prime minister. Any Afghan that believes the West is not behind this racket must be a stone statue in the Hindu Kush.

United States Secretary of State Hillary Clinton and Obama's AfPak envoy Richard Holbrooke are supposed to be very excited about the scheme. Karzai and Khalilzad have had what the New York Times quaintly described as "a long and sometimes bumpy relationship". Khalilzad certainly has CEO experience - acquired as US ambassador to Afghanistan (2003-2005), when he was the real power behind Karzai's shaky throne (as much as he was totally blind to anything happening outside of Kabul).

Karzai has always denied - including to this correspondent - he was a minor Unocal employee plus entertainer of Taliban delegations visiting Houston and Washington in 1997. Khalilzad's relationship is less murky: he was a certified Unocal advisor. The "prize" - from president Bill Clinton to Bush and now Obama - is still the Turkmenistan-Afghanistan-Pakistan pipeline, then known as TAP and now known as TAPI, with the inclusion of India (See Pipelineistan goes Af-Pak Asia Times Online, May 14, 2009).

Khalilzad was a key player in setting up the Afghanistan-America Foundation in the mid-1990s, a lobby that during the Clinton administration became very influential because of its spinning of TAP, hyped as a key pipeline to bypass both Iran and Russia.

Karzai's brother Qayum was on the advisory board, along with Khalilzad and Ishaq Nadiri, who later conveniently became "economic advisor" to Karzai. Qayum and another Karzai brother - Mahmoud - owned a Baltimore-based restaurant chain in the US (that's why people in Kabul and western Pakistan call Karzai "the kebab seller"). Hamid got a lot of kebab money during his exile in Quetta right up until the end of 2001, when he was miraculously parachuted into Kabul by US special forces.

Khalilzad, as Bush's Afghan pet, was absolutely key in convincing suspicious former mujahideen, many of them Tajiks, to have Hamid (from a minor Pashtun tribe) installed as "interim" leader of Afghanistan after the Taliban fell in December 2001. The mujahideen wanted King Zahir Shah. With the puppet guaranteed in power, Karzai, Pakistan's president General Pervez Musharraf and Turkmenistan's Saparmurat "Turkmenbashi" Nyazov signed an agreement to build TAP in December 2001. The pipeline, now TAPI, is an absolutely key plank of Washington's Central Asia strategy. Khalilzad as CEO will move mountains to make sure that TAPI defeats its much more sound rival, IPI, the Iran-Pakistan-India pipeline, also known as the "peace pipeline".

It will be a bumpy ride. And - tragedy of tragedies - it will eventually lead to Khalilzad having to talk pipelines with the Taliban all over again. Karzai does not even control Kabul, not to mention the rest of a ravaged country ranked as the fifth-most corrupt in the world by Transparency International. The more Karzai's local governors get corrupted, the more the Taliban advance village by village and tribal clan by tribal clan, propelled by their nasty mix of outright threats and hardcore punishment. The Taliban, on top of it, have struck alliances with myriad criminal groups, and are supported by their Pashtun cousins in the Pakistani tribal areas.

The helpless Karzai, profiting from the good services of Islamabad and Riyadh, is trying to talk to everybody - from the neo-Taliban to the historic Mullah Omar-commanded Taliban and also old Saudi/Pakistan favorite Gulbuddin Hekmatyar. And this while Obama's strategic advisers spin that the war is "winnable" if Washington captures - with a lot of cash - the hearts and minds of tribal Pashtuns.

Some of this new US cash flowing into Afghanistan has been diverted to the Orwellian Afghan Social Outreach Program, which builds anti-Taliban local councils, while the no less Orwellian Afghan Public Protection Force has started to build Sunni Awakening-style militias. Arming Pashtun militias who will inevitably turn against the Western occupiers does not exactly qualify as brilliant counter-insurgency.

Balochistan revisited
Meanwhile, Balochistan, the biggest prize in the region (see Balochistan is the ultimate prize Asia Times Online, May 9, 2009) remains totally under the radar of the frenetic US news cycle. Numerous Balochi readers pointed out to this correspondent that it is now in fact a 50% Balochi/Pashtun province. Most Pashtuns live near the Afghan border. And many happen to be neighbors of Afghanistan's Helmand province - the key site of the upcoming Obama surge.

In case of a hypothetical balkanization of Pakistan, Balochis and Pashtuns would go separate ways. Quetta, the provincial capital, in terms of population and business activity, is already dominated by Pashtuns.

Balochistan's internal politics are complex. Balochis and Brahvies are separate nationalities - with different spoken languages and culture. Quite a few Balochis do not accept Brahvies as Balochis. What all Balochi tribal leaders agree on is to demand maximum autonomy and control over their natural resources. Islamabad always responds with firepower.

What is now Balochistan and Sind in Pakistan was conquered centuries ago by the Balochi Rind tribe. They never submitted to the British. During the Ronald Reagan 1980s, Balochis tried - in secret - to strike a deal with the US for an independent Balochistan in return for the US controlling regional Pipelineistan. Washington procrastinated. Balochis took it very badly. Some decided to go underground or go for armed struggle. Islamabad still doesn't get it. Washington may.

If the Pashtunwali - the ancestral Pashtun code - is still king (don't threaten them, don't attack them, don't mislead them, don't dishonor them, or revenge is inevitable), Balochis can be even more fearsome. Balochis as a whole have never been conquered. These are warriors of ancestral fame. If you think Pashtuns are tough, better not pick a fight with a Balochi. Even Pashtuns are terrified of them.

The geopolitical secret is not to antagonize but to court them, and offer them total autonomy. In an evolving strategy of balkanization of Pakistan - increasingly popular in quite a few Washington foreign policy circles - Balochistan has very attractive assets: natural wealth, scarce population, and a port, Gwadar, which is key for Washington's New Great Game in Eurasia Pipelineistan plans.

And it's not only oil and gas. Reko Diq (literally "sandy peak") is a small town in the deserted Chaghi district, 70 kilometers northwest of already remote Nok Kundi, near the Iran and Afghanistan borders. Reko Diq is the home of the world's largest gold and copper reserves, reportedly worth more than US$65 billion. According to the Pakistani daily Dawn, these reserves are believed to be even bigger than similar ones in Iran and Chile.

Reko Diq is being explored by the Australian Tethyan Copper Company (75%), which sold 19.95% of its stake to Chile's Antofagasta Minerals. Only 25% is allocated to the Balochistan Development Authority. Tethyan is jointly controlled by Barrick Gold and Antofagasta Minerals. The Balochis had to have a serious beef about that: they denounce that their natural wealth has been sold by Islamabad to "Zionist-controlled regimes".

Washington is focused on Balochistan like a laser. One of high summer's blockbusters will be the inauguration of Camp Leatherneck, a vast, brand new US air base in Dasht-e-Margo, the “desert of death” in Helmand province in Afghanistan. Quite a few of Obama's surge soldiers will be based in Camp Leatherneck - a cross-border, covert ops stone's throw from southeast Iran and Pakistani Balochistan.

Under McChrystal, the new US and North Atlantic Treaty Organization top commander in Afghanistan, one should expect a continuous summer blockbuster of death squads, search-and-destroy missions, targeted assassinations, bombing of civilians and all-out paramilitary terrorization of tribal Pashtun villages, community leaders, social networks or any social movement for that matter that dares to defy Washington and provide support for the Afghan resistance.

"Black Ops" McChrystal is supposed to turn former Chinese leader Mao Zedong upside down - he should "empty the sea" (kill and/or displace an untold number of Pashtun peasants) to "catch the fish" (the Taliban or any Afghan opposing the US occupation). There couldn't be a better man for the counter-insurgency job assigned by Obama, Petraeus, Clinton and Holbrooke.

American journalist Seymour Hersh has detailed how McChrystal directed the "executive assassination wing" of the Pentagon's Joint Special Operations Command. No wonder he was a darling of former vice president Dick Cheney and secretary of defense Rumsfeld. The Obama administration's belief in his extreme terrorization methods qualifies as no more than Rumsfeldian foreign policy.

And McChrystal still has the luxury of raising any amount of calibrated hell in neighboring Balochistan to suit Washington's plans - be they to provoke Iranians or incite Balochis to revolt against Islamabad.

According to Pakistani writer Abd Al-Ghafar Aziz, writing for al-Jazeera's Arabic website, Balochistan has been accused by the US for years of "supporting terrorism and harboring the leaders of the Taliban and al-Qaeda". US Predator drones "have been striking 'precious targets', resulting in the death of over 15,000 people". Aziz described Balochis as "orphans without shelter and without protection".

Neighboring Iran is taking no chances; it is testing sophisticated border patrolling techniques this week in its southeast province of Sistan-Balochistan, along the 12,500 kilometers of border with both Afghanistan and Pakistani Balochistan. One of Tehran's ultimate national security nightmares is US-cross border covert ops launched from Pakistani Balochistan, the kind of stuff that's music to McChrystal's ears.

Slouching towards balkanization
There's little doubt Obama's surge will fail. Washington's plan B is also lame - it boils down to some kind of arrangement with the Taliban, something that Saudi Arabia has been frantically mediating.

The problem is the military/Inter-Services Intelligence nexus in Islamabad will continue to support the Taliban in Afghanistan - no matter what Washington concocts - because the only possible outcome in their minds is the defeat of the "pro-India" Northern Alliance, which is the de facto power in Kabul with Karzai as a puppet. The Northern Alliance will renege on its alliance with India over their dead bodies. And backed up not only by India but also Iran and Russia, they will never allow the Taliban in power.

In the long run, Obama's AfPak strategy may acquire its own relentless, volatile momentum of addicting the military in Islamabad to make war on their own people - be they Pashtuns or Balochis. So Washington may in fact be setting the slow but inexorable march towards the balkanization of Pakistan. If Pashtun cousins on both sides of the border - 26 million in Pakistan, 13 million in Afghanistan - would eventually find an opening to form a long-dreamed-of Pashtunistan, Pakistan as we know it would break up. India might intervene to subdue Sind and Punjab, keeping both under its sphere of influence. Washington for its part would rather concentrate on exploiting the natural wealth and strategic value of an independent Balochistan.

Thus a Pakistan not unlike an Iraq still under US occupation - broke up into three parts - now starts to emerge as a distinct possibility. Unless an improbable Pakistani popular revolt, backed by middle-ranking Pakistani soldiers, rumbles on to make the top heads of the army/security/politico establishment roll. But drones, not guillotines, are the flavor of the moment in AfPak.

Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007) and Red Zone Blues: a snapshot of Baghdad during the surge. His new book, just out, is Obama does Globalistan (Nimble Books, 2009).

He may be reached at pepeasia@yahoo.com .

(Copyright 2009 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

PAK ARMY'S TALIBAN HUNT: SEEMING MOTION WITHOUT MOVEMENT

B.RAMAN

The operations of the Pakistani security forces against the Tehrik-e-Taliban Pakistan (TTP) and its affiliate the Tehrik-e-Nifaz-e-Shariat-e-Mohammadi (TNSM) have been marked by a lack of intelligence, physical security in the non-tribal areas, an over-all strategy, direction and prioritisation of different stages of the operations.

2. The disconcertingly inadequate intelligence is evident from the fact that neither the Inter-Services Intelligence (ISI) of the Army nor the Intelligence Bureau (IB) of the Ministry of the Interior seem to have the vaguest idea of the command and control of either the TTP or the TNSM. One knows more about the command and control of Al Qaeda than about those of the TTP and the TNSM. One knows a lot about their leaders---- Baitullah Mehsud of the TTP and Sufi Mohammad and Maulana Fazlullah of the TNSM--- but beyond that one knows very little. How are they organised, where are they trained, who are their individual commanders, where and how are they deployed----the answers to these questions are inadequate. So much is known about their ideology, but so little about their operational capabilities and potential.

3. A basic requirement of a good counter-insurgency operation is your ability to protect your back as you are engaged in your battle against the enemy. Your ability to protect your back depends on good physical security behind you. Good physical security depends on the police and the IB of Pakistan. The fact that the TTP and the TNSM have been able to indulge repeatedly in terrorist strikes in non-tribal areas----even in Islamabad, Rawalpindi, Lahore and Sargoda---- even as the security forces are confronting them in the tribal areas speaks poorly of the state of physical security in Pakistan. This is the result of long years of neglect of the police and the IB. The need for their revamping and modernisation has not received the attention of either Pakistan or the US.

4. No counter-insurgency operation can be effective unless it is sustained and driven by a determination to succeed in the over-all national interest. The counter-insurgency operations of the Pakistani security forces in the Pashtun tribal belt have neither been sustained nor marked by a determination to succeed. One has been seeing this in the operations undertaken by them in 2003 in South and North Waziristan, in the Swat Valley since 2007 and subsequently in the Bajaur Agency, the two Dirs and Buner districts of the Malakand Division of the North-West Frontier Province (NWFP).

5. The operations have been in fits and starts depending on the extent of the pressure to act exercised on the Pakistani leadership by the US. When the pressure is high, the action is high. When the pressure declines, the action declines. The repeated statements by President Asif Ali Zardari, Prime Minister Yousef Raza Gilani and Gen.Ashfaq Pervez Kayani, the Chief of the Army Staff (COAS), on Pakistan's determination to defeat the TTP and the TNSM have not been reflected in appropriate operational action on the ground. These statements have been made to reassure the US leaders ----President Obama as well those in the Congress--- of the determination of the Pakistani security forces to act. They have not come out of a genuine conviction in the Pakistani political and military leadership that Pakistan's future would be in danger if the Security forces do not neutralise the Taliban.

6.Openly, to reassure the US, Pakistani leaders charactetrise the Taliban as a threat, but, in reality, they look upon it more as a worrisome nuisance than as a serious threat to the state of Pakistan. Since Pakistan became independent in 1947, the Pakistan Army never had effective control over the Federally Administered Tribal Areas (FATA) and the Malakand Division, which had always remained the spawning ground of religious extremism. After 9/11, even the little control that was there before 9/11 has further weakened and the religious extremism emanating from this area has further increased. Large sections of the Pakistani civil society have been concerned over this development, but not the political class and the military-intelligence establishment. The Army's objective is to reduce this nuisance to its pre-9/11 level and to contain it.

7. It thinks it will neither be possible nor advisable to totally eradicate the influence of the Taliban. It is not possible because it would not have the required local support for its operations in the tribal belt. It is not advisable because, in the Army's view, the tribals such as the Mehsuds and the Wazirs have acted as force multipliers against India during the past conflicts with India and will be prepared to do so again in any future conflict. It is also not advisable because of the strategic potential of the Taliban to serve Pakistan's interests in Afghanistan.

8.The lack of a determination to succeed is evident from the lack of an over-all strategy, direction and prioritisation of different phases of the operations. The areas affected by the activities of the Taliban fall into three categories. The first category consists of North and South Waziristan, which are under the virtual de facto control of Al Qaeda, the Taliban and their allies since 2003. The increasing number of Predator strikes by the US in this area have kept the terrorists on the run without weakening their operational presence and capability. Only sustained and effective ground operations either by the US or by Pakistan or by both can achieve this result. Pakistan is opposed to any US role in the ground operations. At the same time, it is either unwilling or unable or both to undertake such ground operations on its own.

9. The second category consists of Bajaur, Swat and other areas of the Malakand Division. The Taliban has a certain measure of de facto control in these areas. There is no role for the US in these areas. Counter-Taliban operations in these areas have to be the responsibility of the Pakistani security forces. Through their open statements, Pakistani political and military leaders seek to give the impression of admitting their responsibility for action, but this admission has not been translated into effective action. Instead of first identifying the weakest points in the control of the Taliban, targeting them, removing the Taliban from there and then expanding the operations to areas where the Taliban control is stronger, the security forces have been hitting around blindly here and there without an over-all plan. There are too many fronts and too little progress.

10. The third category consists of the other districts of the NWFP where the Taliban's presence is more ideological than operational. No plan has been drawn up for preventing these areas from coming under the operational control of the Taliban.

11. The Obama Adminiastration's policy of showering Pakistan with money and arms and ammunition even in the absence of proof of sincerity and conviction and even in the absence of progress on the ground is once again creating a worrisome impression in the Pakistani leaders that to continue to benefit from US support and largesse all they have to do is to create an illusion of motion without actual movement. That is what they are doing.

12. That is what Pervez Musharraf did when he was the President. The two Waziristans came under the effective control of Al Qaeda, the Taliban and their associates and the Neo Taliban of Afghanistan, operating from sanctuaries in Balochistan, staged its spectacular come-back in Afghanistan when he was the President and was the beneficiary of billions of dollars given by the Bush Administration. What promises he made to the Bush Administration to reform and modernise the madrasas and prevent their misuse for jihad! How much money he took from the US for madrasa reforms! What happened to those reforms?

13. That is exactly what Zardari, Gilani and Kayani are doing now. Creating an illusion of motion without actual movement, while extracting billions of dollars from the US. The Pakistani leadership---political and military--- has developed into a fine art the extraction of money from the US by exploiting the presence of Al Qaeda and the Taliban in their territory.

14. If the Taliban ultimately succeeds in further strengthening and expanding its control in Pakistan, the US will have to share a major portion of the responsibility for failing to make Pakistan act effectively instead of merely seeming to do so. ( 22-5-09)

( 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 )

May 21, 2009

Somalian Piracy: Comments From An Expert

Guest Column By Vinod Goyal

(We carry with pleasure the following comments received from Shri Vinod Goel, a reader of SAAG, on the article titled “ Somalian Piracy Update (As on May 11,2009)” written by B.Raman at http://www.southasiaanalysis.org/papers32/paper3190.html --- Director, SAAG)

I read your article updating Somali piracy posted on the internet under SAAG. Safety on the high seas is of special interest and concern to me. I am a Master-Mariner (one remains a Master-Mariner for life) and served the now defunct Scindia Steam Navigation Company. I was Chief Port Harbor Master in Nigeria and saw helplessly common piracy go unchecked at anchorage off Lagos where at one time about 300 ships were at anchor awaiting berthing. A lack of political will and possible nexus between the pirates and local authorities did not allow a robust response that would have halted piracy.

In the United States I earned the MBA, MMA and Ph.D. degrees. I earned the MBA degree from the Illinois Institute of Technology at Chicago, and the latter two degrees at the University of Southern California at Los Angeles. The MMA program covered the United Nations Conference on the Law of the Sea in depth. I earned a Ph.D. in international relations and was an adjunct at USC for about one year. My doctoral dissertation was on international regimes; specifically maritime regimes.

UNCLOS III does not cover piracy. It addresses the issue of weapons on board vessels when it provides requirements on how naval vessels, including submarines and aircraft carriers can transit the Exclusive Economic Zone of another country. To protect their vessels from piracy attacks, Denmark has begun to allow armed guards aboard. Your article reports that the U.S. Coast Guard expects U.S. flagged vessels to carry guards, armed or otherwise, when going through pirate invested waters. Recently the U.S. Congress held hearings on protecting merchant vessels from piracy.

As merchant vessels call at many foreign ports, the control of weapons aboard these ships becomes an issue. Merchant ships should be seen as first responders before military and para military assistance arrives to ward off pirates. As such merchant ships would be lightly armed and are unlikely to be seen as a threat to the authority of a local jurisdiction , such as a port, much less the sovereignty of a state. A regime could be worked out that will allow the Customs to seal all weapons aboard a vessel as bonded goods that can be accessed once the vessel puts out to sea.

As UNCLOS III does not cover piracy, foreign vessels are reluctant to pursue pirates once they enter the EEZ of another country. This is a serious problem. In a recent case, the Indian Coast Guard was shadowing a sea-jacked vessel whose identity had been altered. The sea-jacked vessel was trying to reach Pakistan's EEZ in the hope that the Indians would then abandon their pursuit.

Legal jurisdiction over pirates is another issue that requires international guide-lines. An international piracy court along the lines of international criminal court could be set up in several countries, Kenya, Singapore, Philippines, etc.

Long term measures that would curb piracy will require a new international regime or an adjunct to UNCLOS III that will specify the control and custody of weapons on board merchant ships when in port, the authority of a foreign flagged government vessel when pursuing pirates in another country's EEZ, and international courts that have the jurisdiction over piracy cases.

Merchant sailors or the hired guards will have to be trained on the use of force as first responders. Training is vital as merchant ships carry inflammable and explosive cargoes.

Terrorists must be watching organized piracy. If terrorists can sea-jack a laden super-tanker (300,000 deadweight tons of crude) and explode it alongside the coastline of a targeted state, then they would have carried off their most successful terrorist act to date. Sailors and sea-borne guards must be trained to prevent this.

Oceans are vast, and piece-meal naval task forces will not be able to cover the ocean space where pirates operate. A more inclusive approach is needed. Naval units from different countries must be assigned sectors to patrol under a unified command. An ideal solution will be if all littoral states develop a level of paramilitary capabilities and cooperate with the navies patrolling the oceans. If a naval vessel is pursuing pirates in an EEZ, instead of law becoming a hindrance, the alerted Coast Guard of the littoral state mobilizes in assisting the pursuit.

Piracy is a security, economic, labor and humanitarian issue. Ship-owners and insurance companies are said to be willing to pay ransom to the pirates than use deterrence. But there are other stake-holders. In the United States, Non-Vessel Operating Carriers, NVOCC, would not like their cargoes held up indefinitely or lost. Receivers do not want their factories idle or shops empty for lack of shipments. An international fund should be established into which all the stake-holders should contribute. The cost of any rescue or response to sea-jacking should be debited to this fund. This will be cost effective for all. In the days of Conference Lines, Conferences contributed to a mutual indemnity fund. IMO should be asked to undertake studies on safety of life and cargoes if vessels are armed. Taking sailors hostages is a labor and humanitarian issue. ILO and NGOs can play a role.

Finally there is a role for diplomacy. Can we put on uniforms on the young Somali pirates and make them into Coast Guardsmen? We can. A Coast Guard manned by ex pirates could be the first effective organ of a failed state.

May 20, 2009

An Israeli Prime Minister Comes to Washington Again

Source: STRATFOR


May 18, 2009

Israeli Prime Minister Benjamin Netanyahu is visiting Washington for his first official visit with U.S. President Barack Obama. A range of issues — including the future of Israeli-Palestinian negotiations, Israeli-Syrian talks and Iran policy — are on the table. This is one of an endless series of meetings between U.S. presidents and Israeli prime ministers over the years, many of which concerned these same issues. Yet little has changed.

That Israel has a new prime minister and the United States a new president might appear to make this meeting significant. But this is Netanyahu’s second time as prime minister, and his government is as diverse and fractious as most recent Israeli governments. Israeli politics are in gridlock, with deep divisions along multiple fault lines and an electoral system designed to magnify disagreements.

Obama is much stronger politically, but he has consistently acted with caution, particularly in the foreign policy arena. Much of his foreign policy follows from the Bush administration. He has made no major breaks in foreign policy beyond rhetoric; his policies on Iraq, Afghanistan, Iran, Russia and Europe are essentially extensions of pre-existing policy. Obama faces major economic problems in the United States and clearly is not looking for major changes in foreign policy. He understands how quickly public sentiment can change, and he does not plan to take risks he does not have to take right now.

This, then, is the problem: Netanyahu is coming to Washington hoping to get Obama to agree to fundamental redefinitions of the regional dynamic. For example, he wants Obama to re-examine the commitment to a two-state solution in the Israeli-Palestinian dispute. (Netanyahu’s foreign minister, Avigdor Lieberman, has said Israel is no longer bound by prior commitments to that concept.) Netanyahu also wants the United States to commit itself to a finite time frame for talks with Iran, after which unspecified but ominous-sounding actions are to be taken.

Facing a major test in Afghanistan and Pakistan, Obama has more than enough to deal with at the moment. Moreover, U.S. presidents who get involved in Israeli-Palestinian negotiations frequently get sucked into a morass from which they do not return. For Netanyahu to even request that the White House devote attention to the Israeli-Palestinian problem at present is asking a lot. Asking for a complete review of the peace process is even less realistic.

Obstacles to the Two-State Solution
The foundation of the Israeli-Palestinian peace process for years has been the assumption that there would be a two-state solution. Such a solution has not materialized for a host of reasons. First, at present there are two Palestinian entities, Gaza and the West Bank, which are hostile to each other. Second, the geography and economy of any Palestinian state would be so reliant on Israel that independence would be meaningless; geography simply makes the two-state proposal almost impossible to implement. Third, no Palestinian government would have the power to guarantee that rogue elements would not launch rockets at Israel, potentially striking at the Tel Aviv-Jerusalem corridor, Israel’s heartland. And fourth, neither the Palestinians nor the Israelis have the domestic political coherence to allow any negotiator to operate from a position of confidence. Whatever the two sides negotiated would be revised and destroyed by their political opponents, and even their friends.

For this reason, the entire peace process — including the two-state solution — is a chimera. Neither side can live with what the other can offer. But if it is a fiction, it is a fiction that serves U.S. purposes. The United States has interests that go well beyond Israeli interests and sometimes go in a different direction altogether. Like Israel, the United States understands that one of the major obstacles to any serious evolution toward a two-state solution is Arab hostility to such an outcome.

The Jordanians have feared and loathed Fatah in the West Bank ever since the Black September uprisings of 1970. The ruling Hashemites are ethnically different from the Palestinians (who constitute an overwhelming majority of the Jordanian population), and they fear that a Palestinian state under Fatah would threaten the Jordanian monarchy. For their part, the Egyptians see Hamas as a descendent of the Muslim Brotherhood, which seeks the Mubarak government’s ouster — meaning Cairo would hate to see a Hamas-led state. Meanwhile, the Saudis and the other Arab states do not wish to see a radical altering of the status quo, which would likely come about with the rise of a Palestinian polity.

At the same time, whatever the basic strategic interests of the Arab regimes, all pay lip service to the principle of Palestinian statehood. This is hardly a unique situation. States frequently claim to favor various things they actually are either indifferent to or have no intention of doing anything about. Complicating matters for the Arab states is the fact that they have substantial populations that do care about the fate of the Palestinians. These states thus are caught between public passion on behalf of Palestinians and the regimes’ interests that are threatened by the Palestinian cause. The states’ challenge, accordingly, is to appear to be doing something on behalf of the Palestinians while in fact doing nothing.

The United States has a vested interest in the preservation of these states. The futures of Egypt, Saudi Arabia and the Gulf states are of vital importance to Washington. The United States must therefore simultaneously publicly demonstrate its sensitivity to pressures from these nations over the Palestinian question while being careful to achieve nothing — an easy enough goal to achieve.

The various Israeli-Palestinian peace processes have thus served U.S. and Arab interests quite well. They provide the illusion of activity, with high-level visits breathlessly reported in the media, succeeded by talks and concessions — all followed by stalemate and new rounds of violence, thus beginning the cycle all over again.

The Palestinian Peace Process as Political Theater
One of the most important proposals Netanyahu is bringing to Obama calls for reshaping the peace process. If Israeli President Shimon Peres is to be believed, Netanyahu will not back away from the two-state formula. Instead, the Israeli prime minister is asking that the various Arab state stakeholders become directly involved in the negotiations. In other words, Netanyahu is proposing that Arab states with very different public and private positions on Palestinian statehood be asked to participate — thereby forcing them to reveal publicly their true positions, ultimately creating internal political crises in the Arab states.

The clever thing about this position is that Netanyahu not only knows his request will not become a reality, but he also does not want it to become a reality. The political stability of Jordan, Saudi Arabia and Egypt is as much an Israeli interest as an American one. Indeed, Israel even wants a stable Syria, since whatever would come after the Alawite regime in Damascus would be much more dangerous to Israeli security than the current Syrian regime.

Overall, Israel is a conservative power. In terms of nation-states, it does not want upheaval; it is quite content with the current regimes in the Arab world. But Netanyahu would love to see an international conference with the Arab states roundly condemning Israel publicly. This would shore up the justification for Netanyahu’s policies domestically while simultaneously creating a framework for reshaping world opinion by showing an Israel isolated among hostile states.

Obama is likely hearing through diplomatic channels from the Arab countries that they do not want to participate directly in the Palestinian peace process. And the United States really does not want them there, either. The peace process normally ends in a train wreck anyway, and Obama is in no hurry to see the wreckage. He will want to insulate other allies from the fallout, putting off the denouement of the peace process as long as possible. Obama has sent George Mitchell as his Middle East special envoy to deal with the issue, and from the U.S. president’s point of view, that is quite enough attention to the problem.

Netanyahu, of course, knows all this. Part of his mission is simply convincing his ruling coalition — and particularly Lieberman, whom Netanyahu needs to survive, and who is by far Israel’s most aggressive foreign minister ever — that he is committed to redefining the entire Israeli-Palestinian relationship. But in a broader context, Netanyahu is looking for greater freedom of action. By posing a demand the United States will not grant, Israel is positioning itself to ask for something that appears smaller.

Israel and the Appearance of Freedom of Action
What Israel actually would do with greater freedom of action is far less important than simply creating the appearance that the United States has endorsed Israel’s ability to act in a new and unpredictable manner. From Israel’s point of view, the problem with Israeli-Palestinian relations is that Israel is under severe constraints from the United States, and the Palestinians know it. This means that the Palestinians can even anticipate the application of force by Israel, meaning they can prepare for it and endure it. From Netanyahu’s point of view, Israel’s primary problem is that the Palestinians are confident they know what the Israelis will do. If Netanyahu can get Obama to introduce a degree of ambiguity into the situation, Israel could regain the advantage of uncertainty.

The problem for Netanyahu is that Washington is not interested in having anything unpredictable happen in Israeli-Palestinian relations. The United States is quite content with the current situation, particularly while Iraq becomes more stable and the Afghan situation remains unstable. Obama does not want a crisis from the Mediterranean to the Hindu Kush. The fact that Netanyahu has a political coalition to satisfy will not interest the United States, and while Washington at some unspecified point might endorse a peace conference, it will not be until Israel and its foreign minister endorse the two-state formula.

Netanyahu will then shift to another area where freedom of action is relevant — namely, Iran. The Israelis have leaked to the Israeli media that the Obama administration has told them that Israel may not attack Iran without U.S. permission, and that Israel agreed to this requirement. (U.S. President George W. Bush and Israeli Prime Minister Ehud Olmert went through the same routine not too long ago, using a good cop/bad cop act in a bid to kick-start negotiations with Iran.)

In reality, Israel would have a great deal of difficulty attacking Iranian facilities with non-nuclear forces. A multitarget campaign 1,000 miles away against an enemy with some air defenses could be a long and complex operation. Such a raid would require a long trip through U.S.-controlled airspace for the fairly small Israeli air force. Israel could use cruise missiles, but the tonnage of high explosive delivered by a cruise missile cannot penetrate even moderately hardened structures; the same is true for ICBMs carrying conventional warheads. Israel would have to notify the United States of its intentions because it would be passing through Iraqi airspace — and because U.S. technical intelligence would know what it was up to before Israeli aircraft even took off. The idea that Israel might consider attacking Iran without informing Washington is therefore absurd on the surface. Even so, the story has surfaced yet again in an Israeli newspaper in a virtual carbon copy of stories published more than a year ago.

Netanyahu has promised that the endless stalemate with the Palestinians will not be allowed to continue. He also knows that whatever happens, Israel cannot threaten the stability of Arab states that are by and large uninterested in the Palestinians. He also understands that in the long run, Israel’s freedom of action is defined by the United States, not by Israel. His electoral platform and his strategic realities have never aligned. Arguably, it might be in the Israeli interest that the status quo be disrupted, but it is not in the American interest. Netanyahu therefore will get to redefine neither the Palestinian situation nor the Iranian situation. Israel simply lacks the power to impose the reality it wants, the current constellation of Arab regimes it needs, and the strategic relationship with the United States on which Israeli national security rests.

In the end, this is a classic study in the limits of power. Israel can have its freedom of action anytime it is willing to pay the price for it. But Israel can’t pay the price. Netanyahu is coming to Washington to see if he can get what he wants without paying the price, and we suspect strongly he knows he won’t get it. His problem is the same as that of the Arab states. There are many in Israel, particularly among Netanyahu’s supporters, who believe Israel is a great power. It isn’t. It is a nation that is strong partly because it lives in a pretty weak neighborhood, and partly because it has very strong friends. Many Israelis don’t want to be told that, and Netanyahu came to office playing on the sense of Israeli national power.

So the peace process will continue, no one will expect anything from it, the Palestinians will remain isolated and wars regularly will break out. The only advantage of this situation from the U.S. point of view it is that it is preferable to all other available realities.

US, Israel: Overstated Divergence


While differences are emerging, the divergence between the US and Israel on most key issues should not be overstated, Dr Dominic Moran comments for ISN Security Watch.
By Dominic Moran in Tel Aviv for ISN Security Watch




The usual pleasantries and platitudes of the public moments of Monday's White House meeting between US President Barack Obama and Israeli Prime Minister Binyamin Netanyahu say little of the actual points of difference between the two governments as they warily negotiate their mutual relations.

Too much is made of the divergence of opinion between Israel and the US on the Iranian nuclear program. While Israel would prefer further, rapid moves toward the implementation of punitive measures on Tehran, it understands that these are largely off the table, as is a direct unilateral military strike against Iranian atomic facilities.

The formation of a predominantly right-wing Israeli government has no bearing on the possibilities for an Israeli attack, which would risk more than it would gain.

The Obama administration understands the limitations of its dialogue with Iran, while Israeli fears that the US will enter a quid pro quo agreement with Iran involving its own nuclear program are invalid.

The centrality of a Palestinian-Israeli peace to US strategic imperatives in the region is often overstated, but the resolution of the conflict is of import to Jordanian and Egyptian stability. Despite hopes for a new direction from Washington, the US and Quartet’s room to maneuver is greatly constrained by facts on the ground in the West Bank and Gaza.

There is no way to reinvent the wheel here. The US has tried both suasion and threats in the past to seek greater Israeli concessions on issues of concern such as the crippling impact of security strictures on the Palestinian economy and settlement construction, to little effect.

New US special envoy to the region George Mitchell is treading lightly in the early days of his posting, seeking to prompt the Saudis and others to make early normalization moves as sweeteners to Israel. Such moves are not mistakes but are of little interest to the Israeli government or public.

Netanyahu had until recently maintained the farce of not formally accepting the need for a two-state solution as his government looked to limit early pressure from Washington.

In reality, the Israeli leader understands that he will need to re-enter negotiations on this basis – a fact of little real importance to the Israeli government. Indeed, we may well see a repeat of the recently halted process whereby both the PA and Israel played for time in negotiations while seeking to counter Hamas.

Perhaps the most interesting potential point of conflict between the US and Israel is on relations with Syria and Hamas. The Obama administration is moving to reinstate diplomatic ties with Syria (despite the renewal of sanctions) and to allow the passage of aid funds to a future PA government involving Hamas.

A realistic and laudable initiative, the funding bill instigating the latter has been watered down significantly by congressional opposition. However, an important message was sent to Israel that the Obama administration is willing to diverge from fundamental Israeli positions beyond the impolitic diminution of bilateral security ties.

Ultimately, it will be the extent to which Obama chooses to utilize these points of leverage that will decide the prospects for meaningful change.

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

Quote of the day: N S Rajaram

Just as 'secularism' was a loser because people saw it for what was-- vote bank politics-- 'Hindutva' has also lost credibility. It was a cover for mental laziness and political and intellectual bankruptcy. In reality the youth of the country has spoken and told the NDA it is time for them to go and let in new blood.

Nobody believed that BJP believed its Hindutva

Hardline Modi pushed away voters, feels BJP



ECONOMIC TIMES

N.S. Rajaram,Bangalore,says:

It is the same old story, looking for scapegoats instead of facing reality. The BJP must recognize that it looks like the Tired Old Party. It is easy to find scapegoats like Modi and blame the media, but where were the faces in the BJP to counter Rahul Gandhi, Jyotiraditya Scindia, Sachin Pilot & Co? They are not only young but educated, modern and articulate to whom the BJP had no answer. Even the 'second' rung of Shourie, Jaitley & Co are aging faces. So, what should the media do but project the aging face of the BJP, when there are no other faces? The BJP ran a bankrupt campaign. Nobody believed its Hindutva. Worse, nobody believed that BJP believed its Hindutva.

20 May 2009, 0539 hrs IST

SRI LANKA: Likely Scenarios

By B. Raman

(To be read in continuation of my earlier note on the LTTE at http://www.southasiaanalysis.org/papers33/paper3204.html )

The Ground Situation:

1. No reason to doubt the statement of the Sri Lankan Army about the death of Prabakaran, the leader of the Liberation Tigers of Tamil Eelam ( LTTE), and other leaders of the LTTE. Doubts about the circumstances relating to their death will remain. These doubts will have no impact on the ground situation. Pointless wasting time and space analyzing the doubts.

2. Almost the entire Northern component of the LTTE, including the leadership and a large number of cadres, wiped out. The Northern component specialized in terrorism and in air and naval action. Its capability for conventional military operations on land was low.

3.The Eastern component of the LTTE, which had the largest number of well-trained conventional fighters, led by Karuna split from the LTTE leadership in March 2004. They accused Prabakaran of looking down upon the Eastern Tamils and discriminating against them. About 5,000 well-trained and competent conventional fighters from the Eastern Province under Karuna deserted from the LTTE and helped the SLA in re-capturing the territory controlled by the LTTE in the Eastern Province.

4. Differences developed in the Eastern component itself between a group of conventional fighters led by Karuna and another led by Sivanesathurai Chandrakanthan alias Pillaiyan. Without taking sides, the Government kept both the groups on its side. It made Pillaiyan the Chief Minister of the Eastern Province and Karuna a member of the Central Cabinet in Colombo. Pillaiyan and Karuna don’t get along well with each other.

5. There is a fourth group led by Douglas Devananda, which has also been collaborating with the Government. It is alleged that Devananda himself was trained in the past by the Popular Front For the Liberation of Palestine (PFLP) of George Habash in the Lebanon. Devananda is also a member of the central Cabinet. He is reportedly hoping that President Mahinda Rajapaksa will make him the Chief Minister of the Northern Province.

6.It is estimated that there are about 5,500 well-trained Tamil fighters in the Eastern Province--- 5,000 of them from the two groups supporting Karuna and Pillaiyan and about 500, who did not desert with Karuna and remained loyal to Prabakaran. When Prabakaran lost control of the Eastern Province, he asked these 500 Easterners loyal to him to stay behind in the Eastern Province to keep harassing the SLA and the followers of Karuna and Pillaiyan. One does not know how many followers Devananda has and from which province.

7. It is likely that some of the Northern cadres of the LTTE have evaded capture by the security forces and have merged with the population. Difficult to quantify them.

8. The Tamil diaspora in the West and Australia is predominantly from the Northern Province ---- affluent, intelligent, well-educated, articulate and good in networking. It was fiercely loyal to Prabakaran and hated Karuna, Pillaiyan and Devananda. The SL Tamil refugees in Tamil Nadu are predominantly from the Easteren Province---- poor, form the economically deprived classes, not well-educated, not accepted by the northerners and the diaspora in the West as their social and intellectual equals. More sympathetic to Karuna and Pillaiyan. There are hardly any supporters for Devananda either in the West or in India.

9. Post-Prabakaran, President Rajapaksa will implement at least some of his promises to the Tamils. He will try to have elections in the Northern Province and appoint a Tamil as the Chief Minister. He will not merge the Northern and Eastern Provinces and will not change the present unitary status of the country into a genuine federal state. He will keep certain important powers relating to Defence, internal security, the police, communications and taxation in the hands of the central government and devolve other powers to the constituent States. He will seek to make Sri Lanka a union of equally empowered States, but not a federation. The constituent States will be equally empowered among themselves, but not vis-à-vis the centre, which will occupy the commanding heights. These measures should be acceptable to the Tamils even though they will fall short of their expectations.

10. In addition, he will be under pressure from the Army to take two more steps. Firstly, re-settle the internally displaced Tamils in the Sinhalese majority areas and not to allow them to re-settle in the Tamil areas. Secondly, re-settle the Sinhalese soldiers, who will be retrenched from the army now that the fight against the LTTE is over, in the Northern and Eastern provinces by giving them land or by recruiting them to the police. The Army calculates that these measures are necessary to prevent a recrudescence of insurgency and terrorism. He will be similarly under pressure from Pakistan, which had helped the Armed Forces in their operations against the LTTE, to divide the Eastern Province in order to create a separate Muslim majority province.

11. The Govt. and the Army had given considerable importance to Karuna, Pillaiyan and Devananda and the Eastern deserters. They played an important role in helping the Army against the LTTE. Now that the war is over, there will be a temptation in the Government and the Armed Forces to downgrade their importance. In the event of Rajapaksa taking the steps discussed in sub-paras 10 and 11, the divide between the Sinhalese and Tamils will get aggravated. This could give rise to a fresh spell of insurgency. The insurgency-cum-terrorism under Prabakaran started in the North and spread to the East. If there is a fresh insurgency, it will most probably start in the East.

12. How successful will be such insurgency? Will it have the support of the diaspora in the West and Australia? Without such support, it cannot gain momentum. For the moment, the diaspora is not inclined to support a fresh insurgency. It feels disappointed by the attitude of India. Many leaders of the diaspora are voicing the view that the Tamil cause can succeed only with the support of the West. The West will not support any resort to a fresh insurgency, but will be prepared to keep pressure on the SL Government to meet the political aspirations of the Tamils. It will use SL’s difficult economic situation as a pressure point. It will also use threats of an international enquiry into the deaths of a large number of civilians during the counter-insurgency and counter-terrorism operations. India has mishandled the Sri Lanka situation so badly that it finds itself without any pressure point or stick.

(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 )