December 19, 2009

Chinese Economy Monitor--- Note No 9: REAL ESTATE TIGER & HIDDEN CREDITS ICEBERG


(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 ninth in the series)


If official Chinese statistics are to be believed, the Chinese economy is showing signs of coming out of the down-turn into which it has got consequent upon the global economic meltdown of 2008 and 2009. The Chinese authorities believe that the worst in the export sector will be over in 2010 and the unemployment situation which they faced consequent upon the closure of a large number of export-dependent industries, has been satisfactorily managed. New jobs are once again being created by boosting the domestic demand through the Government’s stimulus package and many of those who lost their jobs due to the decline in exports have managed to find new jobs. The widely-predicted social tensions due to the loss of millions of jobs have been belied. The Chinese people have taken in their stride the economic difficulties of the last two years. A lot of credit should go to President Hu Jintao and Prime Minister Wen Jiabo for explaining the economic difficulties to the people through frequent touring in the affected parts of the country and the measures taken by the Government for alleviating the problems of the people. The warnings of Cassandras about a looming social explosion in China due to the economic difficulties have proved incorrect. At the same time, objective analysts---- Chinese as well as foreigners---- continue to be concerned over the inherent strength of the economy and over what they see as the lack of transparency in certain economic matters, which the Chinese authorities see as sensitive. One area of concern is the real estate sector. Many fear that there is a bubble developing which may result in an unpredicted explosion. The difficulties increasingly faced by the people in buying houses could result in large-scale social tensions. In a surprisingly forthright article on the subject, the “Global Times” of the party-owned “People’s Daily” group drew attention to the looming danger of a real estate bubble. How sensitive this subject has become for the Government would be evident from the fact that the Government allegedly ordered the discontinuance of a series of TV reportage on this subject, which was attracting a large number of viewers. Not many observers are convinced by the claims of the Government about the health of the Chinese banking sector. They suspect that there is an iceberg of hidden credits against which the economy might collide one day. Another example of disbelief in the Government claims relates to the automobile sector. The Government claims that there has been a dramatic increase in the domestic purchase of automobiles thereby reducing the dependence of the sector on exports. There is no reason to doubt the official statistics about the surge in the domestic sales of cars. These figures are corroborated by industry sources. But the skepticism arises from the fact that the increase in the domestic sales of automobiles has not been accompanied by a noticeable increase in the domestic consumption of petrol and diesel.


2.Mainland stocks fell for a fourth day on December 18,2009, the longest losing streak since August, due to concerns that the Government might step up measures to curb property speculation and new share sales will divert funds from existing equities. The Poly Real Estate Group Co slumped for a ninth day after the Government increased down payments on land purchases. The China Life Insurance Co, the nation's biggest insurer, dropped 2.6 percent to a two-month low. Initial public offerings on the ChiNext board have drawn almost 900 billion yuan in subscriptions, the China Securities Journal said on December 18."It looks like the Government is using new share sales as a way to avoid an asset bubble on the stock market," said Zhang Xiuqi, a Shanghai-based strategist at the China International Fund Management Co, which oversees about $10.2 billion. "The crackdown on the property industry is tougher than was previously expected." The Shanghai Composite Index fell 65.19, or 2.1 percent, to 3,113.89 at the close, the lowest since November 27. It dropped by 4.1 percent this week, a second weekly loss. The CSI 300 Index declined by 2.5 percent to 3,391.74. The Shanghai gauge had jumped by 71 percent this year as Government spending and a credit boom helped the nation's economic growth recover from its steepest slump in more than a decade. The
Poly Real Estate, China's second-largest developer by market value, fell 7.5 percent to 21.88 yuan, capping a nine-day, 16 percent slump. Gemdale Corp, the fourth largest, lost 7.8 percent to 13.20 yuan. The Shanghai Shimao Co, a property developer controlled by billionaire Xu Rongmao, declined by 4.8 percent to 15.77 yuan. The Government set the down payment requirement for land purchases to at least 50 percent of the total price. The new down payment level is an increase from earlier levels, said Zhou Hu, a real estate analyst at Bohai Securities Co in Beijing. An index tracking 33 property stocks traded on the Shanghai Composite tumbled 5.4 percent , its biggest loss since Aug 31. Property stocks have slumped after the government said it would target "excessive" growth in property prices in some cities. That follows the Cabinet's statement last week that it will re-impose a sales tax on homes sold within five years, after cutting the period to two years in January. The country's property and stock markets are a "bubble" that will burst when inflation accelerates in 2011, former Morgan Stanley chief Asian economist Andy Xie said.

---“China Daily” of December 19,2009


3.Financial stocks also declined after the Fitch Ratings said Chinese banks' capital strength is likely to be more "strained" than it appears as lenders increasingly use off- balance sheet transactions to free up room for further loan growth. The growing amount of unreported loan transactions, including re-packaging loans into wealth management products to sell to investors and the outright sale of loans to other financial institutions, represent a "growing pool of hidden credit risk" and may lead to downward revisions for some Chinese banks in 2010 and 2011, Fitch said in its latest report.

---“China Daily” of December 19,2009.


4.In an article on the concerns over the state of the real estate market published on December 16,2009, the “Global Times” of the “People’s Daily” group wrote as follows: “With house prices skyrocketing in China's cities, urban residents are finding themselves stripped of purchasing power, causing concern of social unrest and prompting government measures to rein in prices, curb speculation and demand the construction of more low-cost homes. He Keng, an official with the Financial and Economic Committee of the National People's Congress, complained about the growing housing bubble in a CCTV interview over the weekend. "If even a vice minister-level official like me can't afford a decent home, it will be a huge problem for most ordinary people," he said. For the majority of the wage-earning public, the soaring prices have taken the dream of buying their own home further out of reach. It also explains why a TV series called "Snail House," which reflects people's difficulty in affording a house, has been an instant hit. It has also become controversial, as it was called to a halt after only 10 episodes broadcast by Beijing-based BTV, reportedly due to pressure from real estate developers. Noticing the smoldering public discontent, the central and local governments have been cautiously making small moves, trying to prevent the danger of an outpouring of anger that may jolt society as a whole. Shanghai Mayor Han Zheng said last week that house prices in the municipality are rising too fast and could eventually harm the interests of the Shanghai people. In southern China, the Guangzhou government has planned to release 80 square kilometers of land onto the market in order to curb soaring prices, local media reported Monday. An executive meeting of the State Council, chaired by Premier Wen Jiabao, announced on Monday that the central government would rein in the overheated momentum of housing prices by increasing the supply of low-cost homes, curbing speculation and strengthening the supervision of the real estate market. The stock market in Shanghai and Shenzhen saw real estate-related stocks falling across the board, some down 6-8 percent at closing Tuesday. Nanfang Daily reported Tuesday that major institutional investors dumped a net 2.9 billion yuan ($424.6 million) worth of real estate stocks on the yuan-denominated A-share market last week, representing over 11 percent of the net fund outflow of the entire market, the highest among all the sectors. However, analysts are not optimistic about the Government's determination to take steps to control housing prices, saying that the Government is at a dilemma in the face of growing social discontent and a recovering economy boosted largely by the real estate market and related industries. "The Government is riding on a tiger," a People's Daily senior editor, who asked to remain anonymous, told the Global Times. "It's dangerous to keep on riding, and even more risky to get off." "Restraining home prices from soaring too quickly in recent months is the government's intention," Chen Guoqiang, director of the real estate research center at Peking University, said yesterday. "But the government doesn't want the commercial real estate sector to fluctuate too much in 2010 because it needs to keep the real estate market booming to ensure the country's economy runs well," he said. Tian Yun, vice president of the China Macro Economics Institute, said, "the latest measures will be ineffective." "The current high prices are pushed by joint efforts by the central government and local governments," he explained. "State-owned enterprises have become the hands that are pushing the high prices, and local governments depend on high property prices to assure local expenditure," he said. Developers also prefer not to develop low-price housing, and how the government will execute its relevant policies remains a question, Yang said. Yi Xianrong, a researcher at the Chinese Academy of Social Sciences, confirmed Tuesday that tightening credit lines would be the most effective way to curb the housing market, because the soaring home prices at present are caused by lax credit policies. Experts said the State Council's action guidelines announced Monday show its intent to restrict the credit policies for mortgage loans so as to curb speculation. "From what the guidelines indicate, the buyers who want to buy their second or third houses need to pay a down payment of no less than 40 percent of the total value," Chen Guoqiang said yesterday. "This means that profiting from fast re-sales will be under control." The Central Government also announced on December 9 that people must now keep their houses for five years before they can resell them, a change from the previous minimum of two years. Zhong Wei, director of the Financial Research Center at Beijing Normal University, said the growth of the real estate market is expected to slow down next year, with total sales of 3.3 trillion yuan, compared with this year's 3.6 trillion.”

-----“ Global Times” of December 16,2009


5.China created 9.4 million new jobs in urban areas in the first ten months, the Ministry of Human Resource and Social Security said on December 12. The number represented 104 percent of the whole year target for 2009, the Ministry said. Around 4.4 million laid-off workers were re-employed in the January-October period, or 88 percent of the 5-million goal for the whole year.

----- Xinhua News Agency of December 12,2009.


6.China's foreign trade is projected to grow 15 percent next year, according to a report released by the China Institute for WTO Studies on December 18. The report forecasts imports to increase by 15 percent and exports up 13 percent. With the external demand improving and the global economic recovery gaining momentum, "the declining trend of China's exports would come to an end next year," the report says.
The Government stimulus package would boost imports through enhancing domestic demand, while the growing competitiveness of Chinese enterprises in the international market would increase exports, said Zhang Hanlin, head of the institute based in the University of International Business and Economics. Net exports would contribute 0.3 percent to China's GDP growth next year, said Zhang, compared with a minus 4.4 percent this year as predicted by the World Bank in a recent report.

---- Xinhua News Agency of December 18,2009.


7.In the first 11 months this year, China's imports and exports totaled US$1.96 trillion, down 17.5 percent compared with the corresponding period last year, according to the General Administration of Customs. Exports dropped 1.2 percent year on year in November, but were up 2.6 percent from October, the fifth consecutive monthly increase. And imports rose 26.7 percent from year on year. However, the China Institute for WTO Studies report also warns of rising protectionism against Chinese products in 2010. Faced with worsening unemployment situation and shrinking market share, some countries tended to make China a scapegoat, said Zhang. "China will suffer from more trade frictions in the years to come." The report says, in the first nine months this year, 19 countries have launched 88 trade remedy investigations against China, involving 10 billion dollars, a year-on-year rise of 125 percent. China suffered 14 trade remedy investigations from the United States, involving US$5.84 billion, or 639 percent more than that of the corresponding period last year. Some countries might resort to new remedy measures which are often in disguised forms but with more destructive effects, Zhang said.

------ Xinhua News Agency of December 18,2009


8.China's imports and exports rose 9.8 percent in November year on year, ending a 12-month decline, to stand at 208.2 billion U.S. dollars, the General Administration of Customs announced on December 11. The trade surplus was 177.96 billion dollars in the January-November period, down 30.6 percent from a year earlier. Exports stood at 113.65 billion dollars in November, down 1.2 percent from a year earlier, but were up 2.6 percent from October for the fifth consecutive monthly increase. Imports rose 26.7 percent in November to 94.6 billion dollars.
From January to November, the country's imports and exports totaled 1.96 trillion dollars, down 17.5 percent compared with the corresponding period last year. Imports for the first 11 months were 893.02 billion dollars, down 15.8 percent year on year; exports dropped 18.8 percent to 1.07 trillion dollars. The EU remained China's biggest trading partner, though bilateral trade declined 17 percent to 326.27 billion dollars in value in the first 11 months; the United States was second with trade at 266.54 billion dollars, down 13.4 percent; Japan followed with trade down 17.4 percent to 203.33 billion dollars.

----- Xinhua News Agency of December 11,2009


9.China's industrial output growth accelerated to 19.2 percent in November year on year, following a 16.1-percent increase in October, data from the National Bureau of Statistics showed on December 11. The figure increased 10.3 percent year on year over first 11 months this year, 0.9 percentage points higher than that of the first 10 months, said the NBS. Production of heavy industries was up 22.2 percent in November, and that for the light industries rose 12.6 percent. China's continued economic growth had brought the acceleration in industrial growth, said Sheng Laiyun, a spokesman with NBS. He also attributed the rapid growth to the sharp industrial decline in the corresponding period last year. In November 2008, China's industrial output growth slowed to 5.4 percent year on year.

---Xinhua News Agency of December 11,2009.


10.China's retail sales rose 15.8 percent year on year to 1.13 trillion yuan (166 billion U.S. dollars) in November, the National Bureau of Statistics (NBS) announced on December 11. The rise was 5 percentage points lower than that of a year earlier. It was also down 0.4 percentage points from that in October, the NBS data showed. In the first 11 months, total retail sales topped 11.27 trillion yuan, up 15.3 percent year on year. The rate was 6.6 percentage points down from that of the corresponding period last year, but unchanged from the first 10 months this year. In November, urban retail sales rose 16.5 percent year on year to 760.6 billion yuan, while those in counties and sub-county areas were up 14.4 percent to 373.3 billion yuan. Retail sales grew 14.5 percent year on year for grain and edible oils in November, 24.9 percent for household electric appliances, and 61.5 percent for autos. To stimulate domestic consumption, the government put into place a series of measures, including tax cuts for auto and property purchases and introduced subsidies for home appliances in rural areas. In November, auto sales reached 1.34 million units, bringing the total sales from January to November to 12.23 million, up 42.39 percent year on year, according to the China Association of Automobile Manufacturers.

-----Xinhua News Agency of December 11,2009


11.President Hu Jintao commissioned on December 14,2009,a landmark pipeline to transport Turkmen natural gas to China.Hu, together with Gurbanguly Berdymukhamedov, President of Turkmenistan, Islam Karimov, President of Uzbekistan, and Nursultan Nazarbayev, President of Kazakhstan, turned a symbolic wheel at a refinery in Samandepe in Turkmenistan's vast Karakum desert during a ceremony that opened the pipeline to start the first gas supply flowing. The 7,000-kilometer gas pipeline first runs for 1,800 kilometers in Central Asia – snaking through Turkmenistan, Uzbekistan and Kazakhstan – before linking up with a further 5,000-plus kilometers of pipeline in China's far-west Xinjiang region. The China National Petroleum Corp will eventually import up to 40 billion cubic meters of gas a year through the pipeline when it reaches full capacity in 2012-2013.

---- “Global Times” of December 15,2009.

12.The China-Central Asia natural gas pipeline starts from the border between Turkmenistan and Uzbekistan, runs through Uzbekistan and Kazakhstan, and finally ends at Horgos City in China. It is a double-line pipeline, including line A and line B. Line A passing through the Central Asian States has a length of 1,833 kilometers. It was tested and put into operation at the beginning of December 2009. According to the project's construction plans, both lines will be completed and begin transporting natural gas in 2010. After the natural gas imported from Turkmenistan reaches China, the gas will be transported to other provinces and cities including Shanghai and Guangzhou through the Line B pipeline of the west-east natural gas transportation project. This pipeline is 4,978 kilometers long, and is designed with an annual gas transportation capacity of 30 billion cubic meters. The connection between the two pipelines can guarantee China a sufficient and steady natural gas supply. When interviewed by Chinese media, Turkmenistan President Gurbanguly Berdymukhamedov said that Turkmenistan will offer China 40 billion cubic meters of natural gas annually for the next 30 years. The China-Central Asia natural gas pipeline and the No. 2 pipeline play important roles in optimizing the energy structure and improving the environment. It is predicted that after the No. 2 pipeline is completed and put into operation, the proportion of the natural gas consumption to primary energy consumption will rise by 1 to 2 percentage points. Compared to coal consumption, the annual 30 billion cubic meters of natural gas consumption can reduce carbon dioxide emissions by 130 million tons per year. "China can become a steady purchaser of Central Asia's oil and natural gas resources," Xia Yishan, an energy issue expert at the China Institute of International Studies believes, "As China's economy develops and the Chinese people's environmental protection sense rises, China's demand on clean energy will increase sharply." Pan Guang, Director of the SCO (Shanghai Cooperation Organisation ) Research Center under the Shanghai Academy of Social Sciences, believes that China's huge foreign exchange purchasing capacity and advantageous geographical position are extremely attractive to Central Asia’s natural gas exporting countries.

----“ People’s Daily Online” of December 15,2009.


13 . Sinopec Group, China's second largest oil company, said on November 23,2009, that it remained active in its efforts to bid for oilfields in Iraq despite being rebuffed in the second round of bidding. "Sinopec is still in talks with the Iraqi Government over the bid," said a source from Sinopec who declined to be named. Sinopec's offer to pay participation fees to bid for oilfields on offer in Iraq's second bidding round was rebuffed by the Iraqi Government due to Sinopec's existing deals with the Kurdish regional government, Reuters reported. In June, Sinopec agreed to buy Swiss oil explorer Addax Petroleum Corp for $7.3 billion, which had signed deals with the Kurdish authorities in northern Iraq. The source from Sinopec said the contract with Addax was not likely to affect Sinopec's other businesses in Iraq, based, as it was, on an evaluation it did before purchasing the Swiss oil company. Baghdad's refusal, however, indicated that the Addax deal clearly had a negative impact on Sinopec's effort to further tap oil reserves in Iraq. "Sinopec asked to pay the participation fee to get the data package but we refused due to the deals they have with the Kurdish regional government," Reuters quoted Sabah Abdul Kadhim, head of the legal and commercial section of the Petroleum Contracts and Licensing Directorate, as saying. "Our position is clear. We will not deal with any oil companies that sign contracts with the Kurdish authorities without the approval of the central government," Kadhim was quoted as saying. Analysts said the failure of Sinopec in its bidding effort indicates that it is still not easy for Chinese oil producers to acquire overseas oil assets when deals are intertwined with sensitive political issues. "Oil, unlike many other resources, is closely linked with national interests and political issues," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University. "It is still not easy for Chinese oil companies to tap overseas oil reserves when resources become intertwined with political interests," he said. Lin, however, noted that Sinopec was not likely to give up easily and was expected to continue in its efforts to bid for Iraqi oilfields to expand its upstream oil asset overseas.

-----“China Daily” of November 24,2009


14.Overseas crude oil output for Sinopec would touch 17 million tonnes in its total output of 60 million tonnes for this year. The acquisition of Addax Petroleum Corp this year has boosted the company's overseas oil production to a large extent, company spokesman Huang Wensheng was quoted by the China Daily as saying. The company pumped 9.01 million tonnes crude oil last year from its 35 overseas projects in Africa, South America, the Middle East and Russia, according to Huang. The refiner wrapped up the 7.3 billion U.S. dollars purchase of the Geneva-based Addax Petroleum Corp. in August, gaining reserves in Iraq's Kurdistan and West Africa.

------ Xinhua news agency of December 12,2009


15.A delegation of the China National Petroleum Corporation arrived in Rangoon on October 29 to discuss the gas pipeline project, which is to link western Burma’s coastal area to China’s Yunnan province and the recent spate of protests against it. The delegation was to hold talks with the Myanmar authorities about technical issues regarding the controversial project, which began in mid-September amid criticism by human rights groups. The 980-kilometre pipeline is part of a 30-year natural gas purchase and sale deal CNPC sealed in December , 2008, with a consortium of the Myanma Oil and Gas Enterprise, South Korea’s Daewoo International, ONGC Videsh Limited and Gail (India) Limited. The strategically important pipeline, which will transmit oil and natural gas from Africa and the Middle East, will shorten the transportation distance, and will pass through the Arakan (Rakhine) State, the Magwe division, the Mandalay division and Yunnan in China. Currently it is transported by tankers through the Malacca strait to China. The consortium found commercially viable gas deposits in A-1 and A-3 offshore blocks in Myanmar, which is also known as the Shwe gas project.

------Myanmar political exiles


( 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: )

Pakistan finally admit to holding missing Baloch journalist

http://www.rsf. org/spip. php?page= article&id_article=35381

PAKISTAN - Police finally admit to holding missing Baloch journalist
Reporters Without Borders condemns the behaviour of the authorities in the southwestern province of Balochistan in letting seven days go by before admitting that they were holding Rehmatullah Shaheen, a reporter for the Baloch nationalist newspaper Daily Tawar in Bolan District.

Shaheen was reported missing on 8 December but it was only after a wave of protests that the local authorities finally acknowledged on 15 December that he had been arrested. Reporters Without Borders is also concerned about the disappearance of a radio station presenter in the northeastern city of Faisalabad.

“Arresting and holding a journalist incommunicado for a week without notifying his family or lawyer is unacceptable,” the press freedom organisation said. “By acting in this way, the local officials are exceeding their authority and are violating the fundamental rights of the people they arrest. The authorities must now release Shaheen and explain why they kept his arrest secret.”

Officials said Shaheen, 25, had been arrested under the Explosives Act in connection with the discovery of a grenade in his home and had been questioned on suspicion of “anti-state activities.” One official was quoted as saying: “The case was registered on 14 December, but the journalist was missing since 8 December.” Shaheen had received a summons from the police prior to his arrest.

Meanwhile, Mast FM 103 reporter and presenter Abdul Wahab has been missing for a week in Faisalabad, His relatives, who reported his disappearance to the local authorities, fear that he has been kidnapped. His colleagues accuse the police of failing to investigate the case properly and have appealed to the prime minister to ensure that he is found quickly.

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http://www.rsf. org/spip. php?page= article&id_article=35380

PAKISTAN - Un journaliste baloutche, dont on était sans nouvelles depuis huit jours, était en fait détenu par la police

Rehmatullah Shaheen, correspondant pour le quotidien baloutche nationaliste Daily Tawar, était porté disparu depuis le 8 décembre 2009, à Bolan au Baloutchistan (Sud-Ouest). Il aura fallu attendre une vague de protestations pour que les autorités locales admettent avoir placé le journaliste en détention. Reporters sans frontières condamne cette mesure répressive. L’organisation s’inquiète également de la disparition d’un animateur de la radio Mast FM 103, à Faisalabad (Nord- Est).
"L’arrestation et la détention au secret d’un journaliste pendant plus d’une semaine, sans que sa famille ni son avocat ne soient avertis, est inadmissible. Les autorités locales, en agissant de la sorte, outrepassent leurs pouvoirs et bafouent les droits fondamentaux des personnes qu’elles privent de liberté. Il est impératif que les autorités locales relâchent Rehmatullah Shaheen et s’expliquent sur cette détention au secret", a déclaré l’organisation.

Le 15 décembre, la police de Bolan a admis être à l’origine de la détention de Rehmatullah Shaheen. Le journaliste, âgé de 25 ans, aurait été arrêté en vertu de l’"Explosive Act", suite à la découverte d’une grenade à son domicile. Selon un officiel, "l’arrestation n’a été enregistrée que le 14 décembre alors que le journaliste était porté disparu depuis le 8 décembre".

Rehmatullah Shaheen aurait été convoqué et interrogé par la police en raison de ses "activités anti-gouvernemental es".

Par ailleurs, le reporter et animateur radio Abdul Wahab, employé par Mast FM 103 à Faisalabad, est porté disparu depuis une semaine. Sa famille, qui a informé les autorités locales, craint qu’il n’ait été enlevé. Les collaborateurs d’Abdul Wahab ont affirmé que la police était inefficace dans ses recherches, et ont appelé le Premier ministre à prendre des mesures pour le retrouver rapidement.
Vincent Brossel
Asia-Pacific Desk
Reporters Without Borders
33 1 44 83 84 70

Did America keep mum on 26/11?

Vir Sanghvi , Hindustan Times
Email Author
December 20, 2009
First Published: 01:09 IST(20/12/2009)
Last Updated: 01:14 IST(20/12/2009)

Did the Americans have detailed advance information about the 26/11 plot which they did not share with India, only passing on a watered-down warning? And was there an American spy within the Lashkar-e-Tayyeba who kept Washington (or Langley) informed of terror acts planned against India — even if this information was never handed over to us?
It is certainly beginning to look that way.

When Headley was first arrested, the Americans declared that they had foiled a plot to kill a Danish cartoonist. Then, more details began to trickle out. The terror suspect, we were told, was a US citizen of Pakistani origin. He had some links with the LeT. He had visited India. He may have been part of an advance team for 26/11.

Indian investigators, intrigued by these reports, flew to Washington to meet Headley. They were denied any access to him. They tried to work out if Headley was in fact somebody they themselves had been looking for. They had asked the CIA if it had any information about an American who, their sources had told them, was part of the LeT. They received no real cooperation.

Then, even as the Indian media were obsessing about Headley’s friendship with Mahesh Bhatt’s son, investigative journalists in America tracked down court papers pertaining to Headley’s arrest on drug charges in 1998. These papers showed that Headley had been convicted and sent to jail. But after 9/11, he had been set free and sent to Pakistan to work as an undercover agent for the Drug Enforcement Administration (DEA).

According to US journalists, Headley had been given a new passport in the American name of David Headley (his American mother’s maiden name is Headley) rather than his original name of Daood Gilani. He flew around the world, entering and leaving the US at will, avoiding the sort of attention that a convicted drug criminal was certain to attract at US airports.

Further, suggested US journos, the DEA assignment may have been a cover. After 9/11 America was under pressure to infiltrate Pakistan’s terror groups and many undercover agents were sent into Pakistan for this purpose.

Upto this point, we had two stories. The first was the version of the US government that it had arrested a terrorist. The second was the version favoured by the US media that this ‘terrorist’ had actually been sent to Pakistan by the Americans as an undercover agent.

American journos, on the whole, refused to believe that he worked only for the DEA and thought that he was probably in the pay of the CIA. But, many said, Headley had clearly gone rogue, becoming a double agent and owing true loyalty to the LeT.

Indian investigators had many questions. We know now that the US tipped us off that attacks on the Taj Mahal Hotel were imminent and that the terrorists would use the sea route. (Of course, our local flatfoots ignored the warnings.) At that stage, it was believed that the intel came from a CIA mole within the terror network. Could Headley have been that mole?

Besides, if US investigators had been on Headley’s trail for a while — as the US officially claims — and they knew that he was regularly visiting India on behalf of the LeT, why was this information never passed on to New Delhi? If you accept the official version, that Headley was a terrorist they were tracking, then surely we had a right to be informed of his visits to India? If he was an agent who had gone rogue (the non-official US version), even then we should have been told. So why were we kept in the dark?

As far as I know, there has been no official answer to any of these questions.
So all we have is the theory of the Indian investigators. It goes like this:
In the aftermath of 9/11, the US was desperate for spies it could sent into Pakistan. Headley was sprung from jail and asked to infiltrate terror groups. Assisted by the US government (new passport etc.), he worked for the LeT using his American passport to gain access to places where he would normally have been treated with suspicion if he had revealed his Pakistan roots.
He came to Bombay not just to check out the Taj but do a recon of Nariman House. He posed as an American Jew and sent back detailed reports. Along the way, he revealed details of the 26/11 plot to his American handlers. The US was caught in a bind. If it told us everything, the LeT would know that Headley was the source and his cover would be blown. Yet, it could not sit by. So, it compromised by giving us some intel about the attack that could not be traced back to Headley. And Headley continued to operate as a US asset inside LeT.

A few months ago, Indian agencies began tracking a Bangladeshi with US links. That trail led to an American who was involved with LeT. They asked the US for help. Headley was arrested soon afterwards.

The arrest took India by surprise. The way these things work is that if the US knows about a terrorist, it allows him to fly to Pakistan or India (both frequent Headley destinations) and then tips off the local intelligence service. The terrorist is arrested and tortured to extract information. (Americans are now banned from using torture.) When the terrorist has been wrung dry, he is handed over to the US, along with his confession.

In this case, however, the Americans arrested Headley before he could fly out. He was formally charged, allowed to appoint a lawyer and is now entitled to all the protections of the US Constitution: he would be within his rights to tell Indian investigators to take a flying jump.
Why would the US treat a 26/11 suspect with such consideration?

The only explanation that fits is this: he was an American agent all along. The US arrested him only when it seemed that Indian investigators were on his trail. He will be sentenced to jail, will vanish into the US jail system for a while and will then be sprung again — as he was the last time.

So, could 26/11 have been avoided? If this theory is right, then yes, the Americans could have told us more. And we could have foiled the plot.

On the other hand, given that we ignored the warnings they did give us, who is to say that our inept national security structure would not have failed yet again, even if we did have full information?

Ultimately, intelligence is only useful if it is accessed by the intelligent.
The views expressed by the author are personal.

India wants tapes from FBI to identify 26/11 handlers

Sachin Parashar & Vishwa Mohan,
TNN 20 December 2009, 02:00am IST

NEW DELHI: India is looking forward to getting from FBI the voice recordings of the phone conversations between David Headley and his Pakistani

handlers to ascertain the identity of those who sent out instructions to the perpetrators of 26/11. Sources said that Indian agencies want to compare them with the voicerecordings of the 26/11 masterminds to find out if these men indeed were Headley's handlers too.

The US agency has in its possession recordings of Headley's conversations with LeT member A, not yet identified, and individual A identified by the FBI as Abdur Rehman Hashim Syed alias Pasha. Pasha is said to be the link between Headley and Ilyas Kashmiri and the person who had informed Rana in advance during a meeting in Dubai that the Mumbai attack was happening.

Indian agencies are particularly interested in the identity of LeT member A who is believed to be none other than retired Pakistan army major Sajid Mir, one of the men who allegedly directed the 26/11 terrorists in Mumbai over phone while they were carrying out the attacks. In case the voice sample of informer A matches with that of any of the 26/11 masterminds, it would confirm India's own estimate that it was Mir who choreographed the Mumbai massacre last year.

It will also expose Pakistan since Mir is said to have been in Pakistan custody for several months now for his alleged involvement in 26/11. It would mean that despite being in custody of Pakistan agencies for a terror attack, the Lashkar jehadi was allowed to freely communicate with Headley.

According to security expert B Raman, it is doubtful whether or not the US would share the voice recordings with India. ``If it doesn't, that would show that the co-operation is even now not whole-hearted despite the improvement and that the keenness to protect the Pakistani State from adverse consequences still influences US decisions vis-a-vis counter-terrorism co-operation with India,'' says Raman.

As is now evident, Headley and Rana's links with Mir run deep. According to FBI, Headley sent an email to LeT member A or Mir in which he said that he and Rana had heard some ``music videos'' on Internet. This was apparently a coded reference to conversations between Mir and Mumbai attackers which had been broadcast by the media.

The email also brings out Rana's admiration for Mir. Headley said in the email that Mir had been named Mir Khalid bin Waleed by Rana because of his achievements in carrying out terror attacks. Khalid bin Waleed is remembered in the Islamic world for his military prowess and as the man who commanded Prophet Mohammad's forces.

During the car conversation recorded by the FBI, Rana asked Headley to pass on a message to Mir that the Lashkar was the best among jehadi commanders. Rana says in the conversation that Mir was the best ``in the world, if there had been...a medal for command, top class''. When Headley told him that he had already conveyed to Mir that he had been named Khalid bin Waleed, Rana responded by saying that it was a ``very befitting name''. During this conversation, it is clear that Rana had given the name to Mir for his role in the Mumbai attacks and not, as he claimed, just for his role in ``freedom fighting'' in Kashmir.

The recording of the conversation between Headley and Tahawwur Rana while on a drive on September 7 this year, taped clandestinely by the FBI, too will be sought from the FBI.

Why India should send troops to Afghanistan

It’s about strategy, not popularity
There is often a negative correlation between popularity and good policy: what is popular is often not good policy, and vice versa. This is especially true when it comes to foreign policy. For instance, the Times of India thinks nothing of publishing an op-ed article titled “Call Pakistan’s bluff”, in other words, “Let’s attack them and see if they respond with nuclear weapons”. It seems unimportant to consider the question of “what if they press the red button first”.

Since no political leader will accept such a policy recommendation, perhaps writing and publishing it just serves the purpose of playing to the galleries. (Forget newspaper columns, even the FICCI task force report on national security & terrorism identifies surgical strikes, all-out war and ‘leveraging the water issue’ as among the hard options for the Indian government’s consideration.)

Now there is every reason for India to invest in capabilities to carry out a number of military missions across its borders, including for conventional warfare under the shadow of nuclear weapons. But any recommendation that India ought to carry out a direct military retaliation in response to a future terrorist attack is not only so irresponsible as to make it a non-serious option. It is also strategically unsound, because nothing serves the interests of the Pakistani military-jihadi complex more than an old-fashioned war with India.

Despite all its shortcomings, the “let’s strike Pakistan” option is popular, at least among some pundits, in college canteens and in most middle-class drawing rooms. But you have only to mention the idea of sending Indian troops to Afghanistan that suddenly you end up on the other end of the popularity-policy correlation. You begin to hear “What if the Pakistanis retaliate with more terror attacks?”, “What will the ‘Muslim world’ say?”, “It won’t be popular with Indian Muslims”, “Remember IPKF!” and “Why should we become footsoldiers of the Americans?”. [Some of which were reflected in the very interesting open discussion thread on this blog last week]

The proposal to deploy Indian troops in Afghanistan is based on the simple logic of force fungibility. That since it is not feasible for Indian troops to directly attack Pakistan’s military-jihadi complex, India should ensure that US troops do so. Since it is in India’s interests that as many US soldiers are committed to operations ‘along the Afghanistan-Pakistan border’, it is sensible to relieve US troops of duties in areas where they are not actually fighting the taliban—especially in Western and Northern Afghanistan.

India has the capacity to equip, station and supply several divisions of its troops in Afghanistan. Many Afghan political leaders—from President Hamid Karzai to the Northern Alliance—are highly likely to welcome India’s decision. Neighbouring countries, including Iran and Tajikistan, will support an Indian military presence in Afghanistan provided their interests are taken into account. And not least, the United States will welcome it—for even if Indian troops do not eventually deploy, the very possibility of their deployment will change Washington’s bargaining terms with Kayani & Co.

What if the Pakistanis retaliate with more terror attacks? This is the most serious question. It is highly likely that the military-jihadi complex will escalate the proxy war against India. While the impact of this escalation is less significant compared to what the Pakistani army might do in response to a ’surgical strike’ it is must be accepted as the cost of the option. The cost can be mitigated—but not eliminated totally—through better intelligence co-operation with the United States and intensification of the internal security mechanisms put in place after 26/11. But let’s not forget that the Pakistani military-jihadi complex might escalate the proxy war against India even if India doesn’t send troops to Afghanistan. If you think otherwise, you haven’t been reading the news since the 1980s. (You should make up for it by reading Praveen Swami’s book).

In fact, ensuring that the United States stays committed to the objectives outlined by President Barack Obama is ultimately in India’s interests—for the US cannot succeed in that mission unless it transforms the Pakistani state. Now, it can be argued that the US will pack up and leave if the situation gets too hairy, but if India doesn’t do anything to keep the US focused, such arguments are gratuitous, sanctimonious and ultimately, self-fulfilling.

The real options are to do nothing, and allow the United States and Pakistan to work out a solution and hope that the outcome of that bargaining will secure India’s interests. Or to eschew both pusillanimity and grandstanding and indirectly crush the Pakistani military-jihadi complex. As for popularity, it’s a question of timing. If the Indian government had announced that “we will go to Afghanistan” on November 28th, 2008, few would have raised their hands in objection. For that reason, it is imperative that India’s military planners develop and have on the ready a comprehensive, well-thought out policy option involving the stationing of Indian troops in Afghanistan.

December 18, 2009

Why does India need a strong BJP?

An interesting way to look at the evolution of political parties in India is to try and understand each party's idea of India, their views on the relative powers of the Center and the states, the class and caste base of the leaders and the voters.

CJ: SHAILESH Thu, Dec 17, 2009 04:17:29 IST

AS ALL the hyperbole about elections 2009 recedes, I think it is appropriate to objectively discuss the elections. Some of the things that are interesting are the failures of the Bharatiya Janata Party and the Left (seemingly parties with committed voter bases) to enthuse the voters, the inability of psephologists and markets to predict the results and the decline of regional parties. I think no person is (or should be) politically neutral, it is necessary to have a stand as long as the stand is not dogmatic and as long as one is upfront about this and doesn’t pretend to be unbiased.

This piece is about the necessity of the BJP in Indian society. An interesting way to look at the evolution of political parties in India is to try and understand each party’s idea of India, their views on the relative powers of the Center and the states, the class and caste base of the leaders and the voters and their views on key issues of national importance – security, corruption, economy etc. This usually gives a good idea of what these parties stand for.

The BJP’s idea of India has always been one based on a strong nationalism. India is one strong entity, all Indians share a common culture (as per the Rashtriya Swayamsevak Sangh and key intellectuals in the BJP, one based on Hinduism) and should be governed by the strong civil and personal laws (hence, an ideological commitment towards the uniform civil code). All regions in India should have the same rights. The BJP’s voter base has historically been the educated, urban middle class and largely committed to free market economic policies.

Rajagopalachari’s Swatantra Party India’s first and only openly capitalistic party. But the BJP’s economics never supported the capitalism of the rich and the incumbent businesses often nurtured by the license quota raj. This was a free market policy for the shopkeepers, small businessmen and entrepreneurs; who largely formed its voter base.

My case is that India needs a strong BJP, as much in the opposition as in power. From time to time, voters may choose to vote it out of power, but the relevance of the BJP remains.

Why it is so?

The need for a strong, secure India:
The BJP’s governing ideology naturally makes it committed to national security. Security implies not only external security, it also includes the ability to deal with internal threats like the Naxalite movement.

The need for a balanced, free market economics: India needs a party committed to free markets subject to reasonable regulations, a party with a belief in competition, the rights of the small entrepreneur and moderate taxation. The record of the Congress on all of these remains questionable. While the government under Dr Singh might be pro-market, whether the Congress Party itself believes in those policies remains to be seen. At the same time, beliefs in a free market should not be dogmatic; for instance, the Congress Party’s support for financial sector reforms, foreign investment through the back door.

The need for a correct definition of secularism: No reasonable person can question the secular character of India. But the definition of secularism is ambiguous. While the constitution meant it to imply a state that didn’t support any religion, it has been twisted to imply a state that appeases minorities. I hate to be controversial, but anybody who doubts this should read about the Shah Bano case which gave rise to the BJP’s demand for a uniform civil code; the case was not about complex legal issues, it was about an old, divorced lady’s right to maintenance and whether a religion could be allowed to ignore that. Rajiv Gandhi overruled a court verdict to pass a legislation declaring that the right to maintenance was not absolute. It is a rather twisted notion that a party demanding similar laws for all religions is considered communal.

The need for anti-Congressism: The BJP promised to be a party with a difference – free from nepotism, factionalism, dynasty worship and an institutionalisation of corruption, a party committed to the freedom of institutions meant to safeguard democracy. A party with strong internal democracy where the grassroots workers could truly aspire to be the leader. The extent to which the BJP has achieved this remains questionable; what can’t be denied is the relevance of these ideas.

In spite of this, why has the BJP stagnated? The problems are many: A failure to articulately communicate its stand on key economic issues, a failure to contain the fringe elements within the Sangh parivar and a disconnect with the youth. Also, the party with a difference is falling prey to what has best been described as ‘The Congressisation of the BJP’. An inability to sufficiently adapt its stand on key issues, not being able to give up obsolete issues and a failure to build a cohesive second rung (though it has succeeded in building an extremely talented one). The party also needs to consider why do the kids of BJP supporters not vote for the BJP? Why is the BJP seen as a party for the old? Why has the party’s core urban voter grown disenchanted with it? Why does the BJP seem like a creature caught between trying to be someone she is not and not being able to give up the idea of who she really is?

Copenhagen: Three Lessons

(1) Vast majority of countries do not support any renegotiation or dilution of UNFCCC (2) Kyoto Protocol should remain a valid legal instrument (3) any agreement on climate change should respect the need for development and growth in developing countries

Remarks by PM at the Informal Plenary of Heads of States/Governments at the 15th COP at Copenhagen

I would like to thank Prime Minister Rasmussen for his efforts in trying to build a global consensus on highly complex issues, involved in climate change, attempting to balance divergent and varied interests.

We have all worked hard to reconcile our different points of view. The outcome may well fall short of expectations. Nevertheless, it can become a significant milestone. I therefore support calls for subsequent negotiations towards building a truly global and genuinely collaborative response to climate change being concluded during 2010.

As we embark on future negotiations, we would do well to take stock of what we have learnt from our efforts over the past two years. I draw three lessons, which should guide us in the task ahead.

Firstly, the vast majority of countries do not support any renegotiation or dilution of the principles and provisions of the UNFCCC, in particular the principle of equity and common but differentiated responsibilities and respective capabilities.

Further, the need for action on our part is more and not less than what was envisaged at the time of the Rio Convention or the Kyoto Protocol. That is why the Bali Action Plan commits us to enhancing the implementation of the UNFCCC.

To settle for something that would be seen as diminished expectations and diminished implementation would be the wrong message to emerge from this Conference. We should therefore reaffirm categorically that our negotiations will continue on the basis of the Bali mandate.

Secondly, the Kyoto Protocol should continue to stand as a valid legal instrument. Parties to the Protocol should deliver on their solemn commitments under the Protocol. It would go against international public opinion if we acquiesce in its replacement by a new and weaker set of commitments.

Finally, it is clear that any agreement on climate change should respect the need for development and growth in developing countries. Equitable burden sharing should underlie any effective global climate change regime. Any new regime will have moral authority and credibility only if it acknowledges that every citizen of the globe has an equal entitlement to the global atmospheric space.

India has a vital stake in the success of the negotiations as we are among the countries most likely to be severely impacted by climate change.

We have therefore adopted and started to implement a major National Action Plan on Climate Change, relying upon our own resources. Our targets include installation of 20,000 MW of solar energy capacity by 2022, improving energy efficiency by 20% by 2020 and adding an additional 6 million hectares of forests over the next several years.

Excellencies, each one of us gathered here today acknowledges that those worst affected by climate change are the least responsible for it. Whatever emerges from our negotiations must address this glaring injustice, injustice to countries of Africa, injustice to the Least Developed Countries, and injustice to the Small Developing States whose very survival as viable nation states is in jeopardy. We in India, too, are vulnerable, but nevertheless as responsible citizens of the globe, we have agreed to take on a voluntary target of reducing the emission intensity of our GDP growth by around 20% by 2020 in comparison to 2005. We will deliver on this goal regardless of the outcome of this Conference. We can do even more if a supportive global climate change regime is put in place.

Excellencies, we have a difficult task ahead of us. I hope we will all play a positive and constructive role so that we can bridge differences and come up with a balanced and also an equitable outcome during the coming year. India will not be found wanting in this regard.

In Pakistan, a Sex Industry Has Begun to Boom

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By William Sparrow

BANGKOK – Prostitution in the Islamic nation of Pakistan, once relegated to dark alleys and small red-light districts, is now seeping into many neighborhoods of country’s urban centers. Reports indicate that since the period of civilian rule ended in 1977, times have changed and now the sex industry is bustling.

Early military governments and religious groups sought to reform areas like the famous “Taxali Gate” district of Lahore by displacing prostitutes and their families in an effort to “reinvent” the neighborhood.

While displacing the prostitutes might have temporarily made the once small red-light district a better neighborhood for a time, it did little to stop the now dispersed prostitutes from plying their trade. Reforming a neighborhood, instead of offering education and alternative opportunities, appears to be at the core of early failures to curb the nascent sex industry. This mistake would become a prophetic error as now the tendrils of the sex trade have become omnipresent in cities like Islamabad, Rawalpindi, Karachi and Lahore, not to mention towns, villages and rural outposts.

An aid worker for an Islamabad-based non-governmental organization (NGO) recently related a story: quickly after his arrival in the capital, he realized the house next to his own was a Chinese brothel. The Chinese ability to “franchise” the commercial sex industry by providing down-trodden Chinese women throughout Asia, North America and Europe would be admirable in a business sense if it were not for the atrocities – human trafficking, sexual slavery and exploitation – which cloud its practice.

Chinese bordellos, often operating as “massage parlors” or beauty salons, are across Pakistan, even spread even to war-torn and restive locations such as the Afghan capital Kabul. Chinese in the sex industry have developed a cunning ability to recognize areas where the demand for sex far outstrips the supply.

The NGO worker said that after months of living adjacent to the brothel things were shaken up – literally. One evening a drunk Pakistani drove his car into the brothel. Later the driver told authorities the ramming was a protest by a devout Muslim against the debauchery of the house and its inhabitants. The NGO worker, however, had seen the same car parked peacefully outside the house the night before.

The local sex industry comprised of Pakistani prostitutes has also grown in recent years. One can easily find videos on YouTube that show unabashed red-light areas of Lahore. The videos display house after house with colorfully lit entranceways always with a mamasan and at least one Pakistani woman in traditional dress. The women are available for in-house services for as little as 400 rupees (US$6) to take-away prices ranging 1,000 to 2,000 rupees. These districts are mostly for locals, but foreigners can indulge at higher prices.

Story of a true prostitute! in heera mandi Lahore Pakistan

Foreigners in Pakistan have no trouble finding companionship and may receive rates similar to locals in downtrodden districts. More upscale areas like Lahore’s Heera Mundi or “Diamond Market”, cater to well-heeled locals and foreigners. At these places prettier, younger girls push their services for 5,000 to 10,000 rupees for an all-night visit, and the most exceptional can command 20,000 to 40,000 rupees for just short time.

Rumors abound online that female TV stars and actresses can be hired for sex. “You can get film stars for 50,000 to 100,000 rupees but you need good contacts for that,” one blogger wrote after a trip to Lahore.

“The Lahore, Karachi and Rawalpindi sex scenes are totally changing and it’s easier and easier to get a girl for [sex],” another blogger wrote. “Most of the hotels provide you the girls upon request.” Bloggers also reported that it is easy to find girls prowling the streets after 6 pm, and foreigners can find young women hanging out near Western franchises like McDonald’s and KFC. Such women, the bloggers claim, can lead the customer to a nearby short-time accommodation.

Short-time hotels offering hourly rates can be found all over major cities, underscoring the profits being reaped by the sex industry.

Pakistan can also accommodate the gay community with prostitution. Unfortunately, this has also given rise to child prostitution.

A Pakistani blogger wrote, “We [ethnic] Pathans are very fond of boys. [In Pakistan] the wives are only [had sex with] once or twice a year. There are lot of gay brothels in Peshawar – the famous among them is at Ramdas Bazaar. [One can] go to any Afghan restaurant and find young waiters selling sex.”

As in many societies, access to technology, the Internet and mobile phones has only facilitated the sex trade in Pakistan. “Matchmaking” websites serve the male clientele, while providing marketing for prostitutes.

The root causes of prostitution in Pakistan are poverty and a dearth of opportunities. Widows find themselves on the streets with mouths to feed, and for many prostitution offers a quick fix. A local Pakistani prostitute can earn 2,000 to 3,000 rupees per day compared to the average monthly income of 2,500 rupees.

Forced prostitution is not rare. Women in hard times are often exploited and pushed into prostitution. Sandra (not her real name), said that after the death of her father she was left alone; friends and relatives deserted her after the grieving period. As a middle-class, educated woman she was surprised to find herself forced into prostitution from her office job.

“My boss initially spoiled me at first,” she told Khaleej Times. “[But] now I am in [the sex industry].” Sandra first thought her boss was being gracious, but quickly learned he was grooming her for sex for his own pleasure, and then acting as her pimp.

Many of Pakistan’s contemporary sexual mores may have evolved from traditional practices. For example, the polygamy permitted in Muslim society stemmed from the need for larger family units, the better to support familial ties and tend for widows. Until such ancient customs are updated, women such as Sandra will continue to be bought and sold.

It’s time for Pakistan to admit that prostitution is doing a roaring trade within its borders, and will continue to prosper until it is addressed in a modern manner. Let us hope that the people and government of this proud Muslim country will stop pretending the problem simply isn’t there.

William Sparrow has been an occasional contributor to Asia Times Online and now joins Asia Times Online with a weekly column. Sparrow is editor in chief of Asian Sex Gazette and has reported on sex in Asia for over five years. To contact him send question or comments to

A military coup in Pakistan?

Restive generals represent the backers of the Taliban and al-Qaeda – bad news for the war next door

By Tarek Fatah 09 Dec 2009 The Globe and Mail (Canada)

A military coup is unfolding in Pakistan, but, this time, there is no rumbling of tanks on the streets of Islamabad. Instead, it seems the military is using a new strategy for regime change in Pakistan, one that will have adverse consequences for Western troops deployed in Afghanistan.

A year after rogue elements of Pakistan’s intelligence services disrupted Indian-Pakistani peace talks by staging the Mumbai massacre, the democratically elected government of President Asif Zardari is facing a putsch from within its ranks, engineered by the men who run Pakistan’s infamous military-industrial complex.

The men who wish to replace Mr. Zardari represent the religious right-wing backers of the Taliban and al-Qaeda, adding a new obstacle in Barack Obama’s war effort in Afghanistan. A change of guard in Pakistan will also place Canadian troops at a higher risk of attack from a Taliban that will get unimpeded access to safe havens across the international border.

In the West’s war against terrorism, Mr. Zardari is probably the only politician in Pakistan who has the guts to identify the cancer of jihadi extremism and order the Pakistani army to root it out. With reluctance, the army has complied, but only half-heartedly. With him gone, it’s almost a certainty that Canada and the United States, as well as Afghanistan and India, will once more face the deception and fraud that became the hallmark of Pervez Musharraf’s military regime.

For years, the Pakistani army received billions of dollars in direct American aid while it backed the Taliban and staged faked armed encounters to deceive the Pentagon.

The army views the government’s efforts at peace with both Afghanistan and India not only with suspicion but also with alarm. Peace with India would undermine the very raison d’être of Pakistan’s massive military.

The army’s patience with Mr. Zardari ran out in October, when the U.S. Congress passed the Kerry-Lugar bill that promised billions in aid to Pakistan, but with a crucial caveat: The money would go through the channels of the civilian administration and if the military interfered with the democratic process or bullied the politicians and the judiciary, the Americans would halt all aid to the military.

The generals were in an uproar. Having lived their entire lives with a sense of entitlement that rivalled medieval caliphs and emperors, the men in uniform started a campaign to dislodge Mr. Zardari and his ambassador in Washington, Husain Haqqani – the authors, they said, of their misfortune.

Addicted to the billions in U.S. aid that have made them among the wealthiest in their impoverished country, Pakistan’s generals are in a Catch-22. If they overthrow the government, they risk losing the manna from America. If they do nothing, they lose their veto over government policymaking, domestic as well as foreign.

Stung by this loss of power, the generals have asked the pro-Taliban media to whip up an anti-U.S. and anti-India frenzy in the country, claiming that Mr. Zardari has sold out to the Americans and the Indians.

Mr. Zardari also is being depicted as the epitome of corruption and thus unworthy of governing Pakistan. Working from within the government, military intelligence was able to coax a junior minister to release a list of thousands of supposedly corrupt politicians and public officials in the country. Leading them was Mr. Zardari himself – notwithstanding the fact that before he was elected president, he had been imprisoned for more than a decade by the military without a single conviction.

What irks the generals is not just that they are now answerable to a civilian but that Mr. Zardari belongs to an ethnic group that is shunned by the country’s ruling Punjabi elite. Mr. Zardari is a Sindhi.

The hysteria among Pakistan’s upper-class elites demanding a military dictatorship is best reflected in an article [ actually, letter - PTH] written by a retired military officer in the right-wing newspaper The News: “Military rule should … return. … The problem with democratic governments is that they remain under pressure to go with what the majority of the citizens want, not what is best for them. … People of several South American countries that have returned to civilian rule after a long time are now beginning to feel they were better off under dictatorships.”

If Mr. Obama wishes to succeed in bringing the Afghan war to an end, he had better make sure Mr. Zardari’s elected civilian administration is allowed to govern until the end of its term. A coup in Islamabad will mean failure in Kabul.

Tarek Fatah is a former activist in Pakistan and founder of the Muslim Canadian Congress. He is author of Chasing a Mirage: The Tragic Illusion of an Islamic State.



A somewhat amateurish attempt to clandestinely transport a large consignment of weapons from North Korea to an as yet unknown destination has ended in the consignment, the aircraft transporting it and its crew falling into the hands of security officials from the US and Thailand, who are presently interrogating the crew and examining the consignment and its documentation.

2. The aircraft, which was transporting the consignment, has been identified as an Ilyushin 76 of a dubious background whose operators figured on the black-list of many countries either because of their poor safety standards or because of the suspicion that they were involved in gun-running. The aircraft had a crew of five of whom four were reportedly from Kazakhstan and the fifth was from Belarus.

3.The “Wall Street Journal” has quoted the AeroTransport Data Bank, an Internet service that tracks aircraft, as saying that the plane had recently been seen at airports in Podgorica, Montenegro, and Bujumbura, Burundi. According to the same paper, Russia's Interfax News Agency has cited a senior transport ministry official in Khazakstan, Radilbek Adimolda, as saying at a news conference that the detained Ilyushin-76 was previously owned by a Kazakh airline, East Wing. The plane was acquired in October by Air West Georgia. The WSJ also says that the East Wing is on the European Union's blacklist of airlines prohibited from flying in the EU because they violate global air-safety rules. According to AeroTransport Data Bank, East Wing is the successor to another Kazakh airline, GST Aero Co., which also is on the EU blacklist. The WSJ has reported that investigators at Amnesty International and other advocacy organizations have linked GST to international arms trafficking. Mr. Adimolda said the four Kazakh members of the crew were listed among East Wing's staff, but were on unpaid leave.

4.The aircraft, without any consignment on board, came to Bangkok from the United Arab Emirates on December 9. It was reportedly allowed by the Thai authorities to refuel at the Don Mueang airport in Bangkok. After refueling, it took off for Pyongyang. When it returned to Don Mueang from Pyongyang with the consignment on December 12 the Thai authorities arrested the crew and took the plane in their custody for examination of its consignment.

5. It has been reported that both during the onward and return journey the aircraft was allowed to land in a Thai military airport for refueling. This is surprising and indicates that US intelligence officials were probably already in touch with the crew before the aircraft left the UAE for Pyongyang and facilitated its refueling at the airport in Bangkok in order to lay a trap for capturing the arms consignment during the return journey. If the crew had not been co-operating with the Americans, they would have got suspicious by the ease with which they were able to get the aircraft refueled during the onward journey and avoided re-touching Bangkok during the return journey.

6. According to media reports in Thailand and South Korea, the plane was carrying about 35 tons of arms and ammunition, including surface-to-air missile parts. Though the crew have reportedly been saying that they were under the impression that the consignment consisted of oil drilling equipment and that they were not aware that it contained weapons, this is not believable. The Americans, who are closely involved in the investigation and the interrogation of the crew, must be able to find out who had ordered the consignment. The needle of suspicion points to Pakistan or Iran.

7. If it was Iran, by now, the US would have gone to town with their allegations against Teheran. The fact that they have not yet done so indicates that they are not yet certain on this. Pakistan has been clandestinely purchasing missiles and missile parts from North Korea and has been using its own aircraft as well as hired planes to transport them.

8. It is an important success for the US in its efforts to stop gun-running by North Korea, but it is unlikely to have any deterrent effect on North Korea. It will continue to look for opportunities for gun-running in order to earn foreign exchange. ( 18-12-09)

( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: )

Pak meltdown & India

The Manmohan Singh government couldn't have chosen a worse time to withdraw troops from J and K under US pressure, says N.V.Subramanian.

18 December 2009: The Manmohan Singh government couldn't have chosen a worse time to withdraw thirty thousand troops from Jammu and Kashmir, because Pakistan is facing an unprecedented meltdown situation, and the reflex of the Pakistan army and terrorists is to engage India in hostile action to divert attention from internal crises.

What's the internal crisis this time? The Pakistan Supreme Court, while voiding the NRO (see Commentary, "The Pakistani cooker," 16 November 2009), has permitted prosecution of the country's corrupt politicians belonging to the Asif Zardari / Yousef Raza Geelani government and of the ruling PPP. As Pakistan's president, Zardari is immune from prosecution, but he can hardly enjoy that immunity if PPP ministers and functionaries are targeted for corruption and he escapes. At some point, he will have to resign, whence he becomes the target as well. Sooner or later, the PPP-led Pakistan government has to go, and Zardari would prefer to go down with it and hope to fight another day, than, in trying to save his skin, see the PPP break up.

But the United States' hopes to democratize, de-fundamentalize, de-terrorize and clean Pakistan (via the Kerry-Luger legislation) are ironically linked to the survival of Zardari, the most pro-US Pakistan president to date. If Zardari cannot be saved, the US may opt for Geelani, but that is subject to Zardari's approval, which may not be forthcoming. Gilani has no political base to speak of and his differences with Zardari and growing closeness to the Pakistan army may further disqualify him. Zardari legitimately may fear that once he "blesses" Geelani, Geelani may use the Pakistani army to politically destroy him. If it cannot be Geelani, no other non-Bhutto family nominee appears readily available to lead the country who may be acceptable both to Zardari/ PPP and to the US.

If only to keep the Pakistan army from taking advantage of the looming political vacuum to seize power, Zardari may, on an outside chance, send word that he would prefer a Nawaz Sharief leadership supported by the PPP. Although Sharief has little love lost for Zardari (who tried to keep him disqualified from seeking high office under the terms of Sharief's settlement with the former dictator, Parvez Musharraf), Zardari may still hope that, because of their previous government partnership, Sharief may not prosecute him to political death. This is a risky gamble to take, but Zardari may prefer this to military rule, and so would, in the final reckoning, Sharief.

But the US has issues with Nawaz Sharief. If anything, Sharief will totally ally with the Pakistan army (partly from conviction and partly to shore up his political position) to keep US counterterrorism operations out of Waziristan and Baluchistan. Sharief's closeness to the Saudi ruling dynasty should also worry the US. If Sharief comes to power, the US would not be able to execute the intrusive audits required of by the Kerry-Luger legislation for disbursing democracy-enabling funds to Pakistan. Already, Pakistan's military and intelligence establishment is systematically trying to disrupt the audit by harassing US military attaches and diplomats in Pakistan and Pakistan is refusing to renew visas of key American audit personnel.

What are the chances of a coup if the political crisis deepens? US military commanders who claim closeness to Pakistan's army chief, Ashfaq Parvez Kayani, reject this possibility. It reminds this writer of his own experience with India's Military Intelligence Directorate, which unambiguously ruled out a coup in 1999. This writer, on the other hand, analyzed differently, and went on clearly to anticipate a Musharraf-led coup in a March 1999 piece published in Sunday (the former Calcutta-based) newsmagazine.

The Pakistan army has always acted on the so-called "doctrine of necessity", be it stated or unstated. While Pakistan's Supreme Court has shamefully held up this doctrine in the past, the present chief justice, Iftikhar Muhammad Chaudhry, has claimed to have "buried" it, but sidelining him, as Musharraf once did, and getting a pliant judiciary in place, cannot be ruled out. Already, public opinion has turned against Zardari, called Mr Ten Per Cent, and Nawaz Sharief is making common cause with the Pakistan army against him. General Kayani or his corps commanders may push for a coup, and the worst that will go is the $7.5 billion Kerry-Luger aid package, which the Pakistan army and intelligence establishment may hope to detain by making breakable promises on the "war on terror" to the US like Musharraf earlier did.

In fact, the Pakistan army would be convinced that it needs to seize power both to manage the counterterrorism war in Waziristan/ Baluchistan to suit its interests and to create conditions for a Afghan Taliban/ Al-Qaeda/ Haqqani network takeover of Afghanistan once the US quits the country under president Barack Obama's eighteen-month withdrawal plan. A pre-9/ 11 Afghanistan situation with a smouldering civil war evacuates Pakistan's internal terrorists like the Pakistani/ Punjabi Taliban to that country (assuming a Northern Alliance II situation, which has been explained in a previous commentary, "Northern Alliance II?"), plus it gives Pakistan "strategic depth" against India. Since the US is so dependent on the Pakistan army to fight its war against the Al-Qaeda in Pakistan, the Pakistanis will manufacture enough compelling reasons for the US to continue the Kerry-Luger aid, even though its central purpose to build and strengthen Pakistan's democracy would stand defeated.

Such a scenario appears almost irreversible because the pro-US puppet government of Asif Zardari cannot continue for long, and Pakistan army interests in Pakistan and in Afghanistan won't be served by keeping a democratic government in power. If the United States stretches the life of the Zardari government beyond meaningfulness, compromising Pakistan army and intelligence interests, they would retaliate by sponsoring another 26/ 11-type attack on India, and could even risk a limited war like Kargil 1999. In the circumstances, should the US have compelled India to make the troops withdrawals in J and K, and should the Manmohan Singh government, throwing caution to the wind, have tractably agreed? India has not caused the meltdown in Pakistan, but India pays the price for it again. It is ultimately the price of seeking subservient ties with the US.

N.V.Subramanian is Editor,

Tokyo Plays Hard to Get with Washington

18 Dec 2009

Japan drags its feet over a US base relocation agreement, perhaps hoping to finally earn a bit of respect from Washington, but the new government in Tokyo has few, if any alternatives to offer, Dr Axel Berkofsky writes for ISN Security Watch.

By Axel Berkofsky in Tokyo for ISN Security Watch

Much to Washington’s growing annoyance, the newly elected Japanese government led by Prime Minister Yukio Hatoyama’s Democratic Party of Japan (DPJ) has yet to announce whether it will or will not seek to reduce the US military presence on Okinawa, home to 75 percent of the roughly 50,000 US troops stationed on Japanese soil.

On the campaign trail, Hatoyama - who came to power after a landslide election victory over the incumbent Liberal-Democratic Party (LDP) this August - pledged to review a 2006 agreement codifying the relocation of the US Marine Corps Air Station Futenma from the residential area of Ginowan in the densely populated southern part of Okinawa to Henoko, a less densely populated area in the northern part of the island.

As part of the agreement, which was signed after 13 years of bilateral negotiations, Washington also agreed to reduce the number of US military personnel stationed in Japan by relocating 8,000 Marines from Okinawa to Guam by 2014.

As far as Washington is concerned, Japan has been dragging its heels for long enough over a decision on whether to stick to the 2006 relocation agreement.

Lost in translation

Last Friday, Mikio Shimoji, head of the policy research committee of the People's New Party, a junior partner in the DPJ-led coalition, was told by US Assistant Secretary of State Kurt Campbell that Tokyo had one more week to officially forget about re-negotiating existing agreements.

On Tuesday, Japanese Foreign Minister Katsuya Okada notified US Ambassador John Ross that Tokyo would not comply, and that a decision on the base relocation issue had been postponed until next year.

Fearing just that, Washington has in recent months threatened that it might not be able (read: willing) to request a budget allocation from the US Congress for the planned transfer of US Marines from Okinawa to Guam for fiscal year 2011 if Tokyo chose not to stick to the 2006 agreement.

Last week, the US Congress adopted a budget of $310 million for the transfer of the marines to Guam in 2010.

As far as Campbell is concerned, when Hatoyama told US President Barack Obama “Trust me on the base issue” during a Japan-US summit in November in Tokyo, that was as good as the Japanese prime minister promising to accept the current base relocation plan by the end of the year.

However, that is not apparently how Hatoyama remembers the conversation with Obama who in an interview with Japan’s NHK news upon arrival in Tokyo in November said that it was “perfectly appropriate” for a new Japanese government to review existing bilateral agreements.

The politics of respect

In essence, Hatoyama is second-guessing Washington - something that Paul Midford, associate professor and director of the Japan Program at The Norwegian University for Science and Technology in Trondheim, Norway, says should have happened long ago.

"The previous LDP governments were too often too cooperative with Washington,” Midford told ISN Security Watch.

“A policy toward an ally should not be too intransigent but also not too cooperative. Japan will better defend its national interests and gain greater respect from the US if it exercises more independent judgment and says no to Washington when its demands do not accord with Japan’s own definition of its national interests,” he said.

Or, as Chalmers Johnson, president of the Japan Policy Research Institute (JPRI) at the University of San Francisco, told ISN Security Watch: “Tokyo is obliged to seek renewed discussions with the US if it is dissatisfied with what previous LDP governments have negotiated. These discussions should be routine and not a cause for friction.”

However, the prospect of Washington accepting that Tokyo would get to decide who stays and on what terms is not good, Johnson said.

“The Obama appointments from [Defense Secretary Robert] Gates on down, are completely routine and do not include even a hint of new thinking,” he said. “The Japanese-American relationship is bogged down by excessively old-fashioned, Cold War-type thought, and Obama has not altered it in any way. The US is likely to react to any sign of Japanese independence with belligerence.”

Out of alternatives

Japanese Foreign Minister Katsuya Okada - who has until recently been the prime advocate of a revision of the current base relocation agreements - admitted that attempts to revise the agreement were likely to fail, simply because of the lack of realistic proposals on where to send the US forces to instead.

Earlier in November, Hatoyama instructed Okada to explore possible relocation sites other than Henoko, including in Guam. Last week, he concluded that “There is no other option any more but to go with the Henoko plan without risking that the entire US forces realignment plan falls apart.”

Fumiaki Kubo, professor of political science at the University of Tokyo, agrees that in the end there will be little choice but to cave in to US pressure. “It would take years to find a new site and woo an amenable host community,” he said in a recent interview with the Japanese press.

And while some (mostly US) analysts and commentators fear that Japanese requests to change the existing agreements will inevitably and seriously damage the bilateral alliance, there a few real indications of such. In fact, the Japanese government has recently begun allocating funds for the base relocation plans.

The fiscal 2010 budget includes 28.8 billion yen to relocate the US Futenma air station, probably an indication that Tokyo will indeed and eventually stick to the existing realignment plan. Furthermore, Tokyo has earmarked 34.6 billion yen for the transfer of US Marines from Okinawa to Guam by 2014.

While this should appease Washington somewhat, there is more bad news.

For years, Tokyo has sought (admittedly with fairly limited persistence) to change the so-called US-Japan Status of Forces Agreement, which protects American troops from legal prosecution in Japan. It has also recently resumed the debate about reducing Japan’s so-called Host Nation Support (financial support) for the US military in Japan, which currently stands at $5 billion per year.

Hatoyama has promised to get serious about both issues in the months ahead, but then again, he has also promised to reduce the burden of the US military on Okinawa. Something will have to give.

Professor Axel Berkofsky is Gianni Mazzocchi Fellow at the University of Pavia, Italy and Senior Associate Research Fellow at the Milan-based Istituto per Gli Studi di Politica Internazionale (ISPI).

USA: What’s So Special about Special Ops?


The U.S. military’s elite training programs offer a model for the strategic deployment of human capital and for building effective teams.
by Andrew Sobel

Illustration by Lars Leetaru

During the fall of 2001, a small task force of U.S. military special operations forces arrived in Afghanistan. It was named Task Force Dagger, and its mission was to work with the Northern Alliance to overthrow the Taliban and uproot the terrorist training camps they were harboring. In just a few months, fewer than 200 Army Special Forces, Navy SEALs, and Air Force Special Tactics operators expelled nearly 100,000 entrenched Taliban and al Qaeda forces. It was an extraordinary success, and one that drew heavily on the multifaceted capabilities of special operations forces, who can build alliances with local fighters (all Army Special Forces must learn a second language, for example), infiltrate enemy lines, and bring to bear intense firepower in small, mobile units. Many Americans remember the now-iconic photograph, taken during that operation, of a U.S. special operator on horseback, holding the reins of his horse in one hand and a satellite phone in the other. In that picture, he is wearing long hair, a beard, and traditional Afghani robes. It’s a portrait of a modern-day, high-tech warrior equally at ease with Kevlar and leather, comfortable both launching a commando raid and helping local villagers improve their water supply.

The post–9/11 world has brought U.S. military special operations into the limelight as never before. For many observers, there is something inspiring and even mysterious about these highly trained teams of men (like all frontline U.S. combat troops, they are all male) who are motivated to achieve their mission at any cost. In business, we talk about being willing to “walk through walls” to achieve our goals, but special operations teams really do things like that.

So what’s the secret? What’s so special about special operations? Can business professionals learn something from them besides the obvious truisms about the importance of focus and discipline? In fact, the effectiveness of special operations forces is rooted in a carefully designed and comprehensive system of recruiting, training, infrastructure support, leadership, and organizational culture.

Can private-sector organizations emulate these techniques in the same consistent and integrated manner? They can, although we must acknowledge the significant differences between the private sector and the military. For example, in the military you make a long-term commitment (often four or six years in special operations) and cannot just quit because you find a better job. You have a legal requirement to follow the orders of your superior officers. Service members are also, explicitly or implicitly, willing to risk their lives to defend their country.

For the moment, however, let’s set these differences aside and look at what we can learn from the key elements of this high-performance system. As we’ll see, in fact, many special operations practices can be and have been adapted to the corporate world.

Elite Magnetism
The term special operations forces (SOF for short) refers to a wide variety of specialized forces in all four of the armed services. The lessons that follow are based primarily on a study of three major groups of SOF: the Army Special Forces (also known as Green Berets), the Navy SEALs, and Air Force Special Tactics units. Their fame is disproportionate to their numbers: There are only about 15,000 special operations servicemen in a military of more than 2 million active-duty and reserve personnel.

Although their missions overlap quite a bit, each of these special operations groups receives slightly different training and has a slightly different focus. Army Special Forces are often used to help train indigenous forces, for example, whereas Navy SEALs tend to be used more for direct action engagements. Air Force Special Tactics forces include Pararescuemen, a specialized group of search-and-rescue trauma paramedics, and combat controllers, who call in airstrikes from the field.

Special operations forces use an attraction strategy to get access to the best raw talent in the military. Their elite status is a magnetic draw for young men who want to prove themselves and be among the best. The average education level of special operations recruits is above that for conventional forces, and it is not uncommon to find individuals with advanced degrees from top colleges or managerial experience in a corporation. The exclusive branding of special operations draws many recruits at the front end, where a high percentage are turned down before even being given a chance in the selection program.

When it comes to recruitment, SOF units are not unlike highly desirable employers in their ability to attract the best. Their selectivity has another positive effect: It is well documented that the steeper the hurdle to get accepted into a group, the more loyalty and commitment you have to it once you’re in. This certainly motivates the bankers at elite firms like Goldman Sachs, where the prospective status, pay, and influence that go along with being a partner propel them to work long hours and develop extraordinary loyalty to the organization if and when they do reach that elite inner circle.

Total Training
The training that SOF personnel go through is a key to their success in real missions. Their training is in-depth, realistic, and repetitive, and it is run by the most experienced SOF operators — not classroom-schooled educators. This type of training puts true meaning into the overused term total immersion. If you add up the different phases of training that SOF candidates must go through, including specialized courses (such as high-altitude free-fall parachuting) and advanced training in their units, it may take two or three years at minimum to produce a fully developed SOF operator.

Five important aspects of SOF training reveal why it’s so effective, and also why much of the one-off, classroom-based training conducted by private-sector companies is of limited value.

1. Winnowing. SOF training is designed to eliminate all but the most determined and qualified individuals. A hundred highly motivated, intelligent, and experienced men might start the Navy SEALs eight-week Phase I course, for example, and usually only about 20 or 25 successfully pass just that first phase — a ratio that is also typical for the other services’ special forces selection programs. If during a test you do 59 pushups instead of 60, you may get a second chance, but if you fall short again, you’re sent back to a conventional unit. That is a vital point: The Navy doesn’t stigmatize these men or kick them out, but rather deploys them in other areas and tries to commend them and make them feel good about just trying out to be a SEAL. In corporations, there is often no “Plan B” when someone drops out of a program or fails to make a promotion, and a disappointment or setback may very well mean the employee leaves the company altogether.

Many trainees are eliminated during the initial selection phase, but others continue to be dropped during later training phases — there’s a continual process of culling. This winnowing process can be seen as never-ending. Colonel Wesley Rehorn, a veteran Army Special Forces leader who heads the U.S. Joint Forces Special Operations Command, comments that “the system is very intolerant of mistakes, even for someone who is 20 years into his career. I may accept an error of commission, but rarely an error of omission.”

2. Deliberate practice. A second characteristic of the training is that it embodies the concept of deliberate practice. Deliberate practice entails isolating the specific elements of performance that will enable you to excel at an activity, repeating them over and over again, and getting objective feedback. A great deal of research supports the notion that intensive, deliberate practice — not innate talent — is the secret of exceptional performance. An Army Special Forces weapons specialist, for example, must master nearly 50 different weapons systems during 65 days of intensive training.

In 1970, Army Special Forces launched a daring commando raid on the Son Tay prisoner of war camp near Hanoi. To prepare for the mission, they conducted 170 full dress rehearsals at a mock-up of the prison camp in Florida. The operation went flawlessly, and although the U.S. prisoners had been moved before the raid, news of the attempt spread throughout POW camps in North Vietnam; many captured servicemen later said that it gave them the will to survive.

Is doing 170 rehearsals of a major sales presentation to a client a reasonable expectation for a corporation? No, but how about just one rehearsal? That would be above the norm for most managers. Walmart Stores Inc. showed how powerful this type of preparedness can be when Hurricane Katrina hit the Gulf Coast of the United States in 2005. The U.S. Federal Emergency Management Agency was woefully unprepared for the disaster. Walmart filled the gap in supplying aid to many Louisiana communities because of the exceptional preparedness of its emergency management department and emergency operations center, which had repeatedly rehearsed for similar contingencies and put in place a series of procedures and protocols for responding to a natural disaster.

3. Realism. Special forces training is characterized by extreme realism. Medics will treat “injured” soldiers who have pumps squirting “arterial blood” and sport Hollywood-quality makeup. For a simulated mission, men may be kept awake for two or three nights in a row and subjected to lifelike explosions and bullet fire. The final exercise to earn the Army’s Green Beret lasts a full two weeks and involves more than 1,000 personnel.

Some corporations use computer-based business simulations or lengthy case-study scenarios to teach executives — putting them in charge of a fictitious company for three days, for example — but it is not a widespread practice.

4. Constant feedback. A key feature of SOF training is constant and relentless feedback about performance. Nearly every exercise — from tying knots while holding your breath underwater to building a camouflaged shelter — is graded by experienced instructors, and most exercises have an “after action” review that bluntly analyzes what went well and what could have been improved. At regular intervals, instructors rank the men in their training units according to performance, and often ask each team member to rank everyone in his unit. They might very well confront a trainee and ask, “Why do you think your team members ranked you dead last?”

5. Physical and mental stress. Hell Week, or some variation of it, is a feature of most SOF training programs. Navy SEAL trainees, for example, are forced to function over a span of 100 hours while being allowed a total of five hours of sleep. These experiences have a purpose: They simulate actual combat conditions, they expand the trainees’ comfort zone, and they provide a benchmark experience that makes subsequent hardships more manageable. They also create a powerful (albeit painful) shared experience that is an indelible part of the culture of special operations.

Some companies create such shared experiences early on in their employees’ tenure, and it is a very effective technique. General Electric Company’s leadership development center at Crotonville, for example, is a legendary hotbed of intense learning experiences that form part of the shared culture of many GE employees. And Japanese companies have traditionally put new recruits through multi-month training and indoctrination programs. These experiences don’t approach the brutality of Hell Week, but they often require late nights or weekends spent with colleagues working to solve common problems.

Hanging Together
Business organizations talk endlessly about the importance of teamwork, but in special operations, teamwork is truly rooted in the culture. Training instructors take a black-and-white approach: If the team does well, everyone is rewarded; if a single individual commits an infraction, the entire team is punished. During SOF qualification programs, many activities are designed to promote teamwork; these might include carrying large logs together or doing “buddy breathing” underwater, in which four men must share a single snorkel to get their oxygen. The log-carrying exercise, in which a team of 10 or 12 trainees must carry around a 1,000-pound log for several hours each day — including to and from meals — looks like pure punishment but is actually a powerful team-building activity. One recently graduated SOF operator described it this way: “If you are not all perfectly in step as you walk, the log starts to sway from side to side and go out of control. You master the log together, as a team, or you just fall apart.”

For special operations forces, teamwork is ultimately a matter of life and death. Slogans such as “never leave a man behind,” “never give up,” and “that others may live” permeate the SOF culture. In the private sector, the stakes are never this high and never will be. The real problem is that corporate leaders say they want a teamwork culture, but don’t actually make the investments and changes needed to develop one.

Most special operations forces report directly to the U.S. Military Special Operations Command in Tampa, Fla., which is run by a four-star general. In the field, SOF teams sometimes report through local, conventional force commanders, but within the parameters of their mission, they have a great deal of independence and flexibility, and are thus able to rapidly make decisions and adjust to conditions on the ground without interference or second-guessing.

Although many corporations talk about empowerment in their annual reports, excessive rules and heavy supervisory oversight too often belie the very notion of employee autonomy. There are nonetheless some standout examples, such as Nordstrom and Four Seasons, where staff are authorized to take whatever steps are needed to please a customer or rectify a mistake without getting approval from a supervisor.

In SOF, being able to pull your weight and having a depth of combat experience are more important than rank. To this end, officers and enlisted men go through the special forces qualification programs together, not separately as in other parts of the military. Trained operators usually do not spend a lot of time saluting and saying “sir.” Their respect for one another is rooted more in the recognition of capabilities than in titles. Most special forces operators are what could be called “deep generalists.” They usually have a core specialty — such as weapons, communications, or medicine — but everyone on a six- or 12-man team knows something about everyone else’s expertise, and it’s the job of each specialist to conduct ongoing training for his teammates. Collaboration is enhanced by this shared vocabulary and body of SOF operating practices.

The selection and training practices help ensure that SOF operators are smart, independent, and highly motivated. But they can also be high-strung and thrill-seeking. What, one might ask, keeps them from getting out of control or exceeding their authority? The answer is that direct leadership of SOF is exercised by highly experienced noncommissioned officers who have dozens, if not hundreds, of missions under their belt, and when these individuals speak, everyone listens.

In this respect, the difference between military SOF and a private corporation is stark. Business leaders tend to promote the most experienced field staff out of the field and into management — for example, a great saleswoman may become a district sales manager and a Six Sigma expert may be promoted to operations VP. This is done, in part, because managers expect it: Advancement in the organization is measured by titles, offices, and having more responsibility over other people. The two-tiered command structure in the military — consisting of noncommissioned officers (sergeants) and commissioned officers (lieutenants through generals) means that individuals with vast operational experience can be kept in the field, close to the action — and this is where they want to be.

What Business Can Learn
As noted above, the differences between the civilian and military environments mean that some aspects of the SOF’s high-performance system cannot be reproduced in the private sector. Yet what executive wouldn’t want to field similarly motivated, flexible, and skilled teams in his or her own company? This article has explored a number of important lessons business can learn from the experience of special forces. Here is a summary of the most important goals to which corporate leaders might aspire.

1. Creating recruiting gravity. One of the secrets of special operations is their ability to attract large numbers of recruits at the front end of the system. How many businesses have a similarly elite image with prospective employees? I believe that with some effort, both large and small organizations can create a highly desirable “employment brand.” Google, Apple, Procter & Gamble, and some others have already achieved this, as have smaller organizations like Teach for America, which attracts disproportionately large numbers of highly qualified undergraduate and graduate students.

2. Reinventing training. Companies in the United States spend more than US$100 billion on training each year. Much of it is little more than a one-time classroom experience punctuated by PowerPoint presentations. At the same time, it is well established that the skill improvement and behavioral changes that would truly affect on-the-job performance require a sustained program of interventions consistent with the concept of deliberate practice. Corporate training needs to become more realistic and sustained.

3. Developing an all-for-one culture. The notion of teamwork too often means helping others as long as it’s easy and convenient to do so. In researching my recent book, All for One: 10 Strategies for Building Trusted Client Partnerships (Wiley, 2009), I identified three specific factors that help create a true teamwork culture. First, leaders have to model the collaborative values and behaviors that they seek to instill in employees, and communicate them relentlessly. Second, the organizational systems and processes — such as assessment and reward and information management — must support and reinforce teamwork. And third, in global organizations, Web 2.0 applications and collaboration technologies need to be leveraged to facilitate teamwork across boundaries. A sense of shared purpose underpins all these efforts. Business leaders cannot always invoke a purpose as weighty as fighting for one’s country, but they can always be sharper and clearer about what their mission represents, besides earning a return for shareholders — a goal that, in itself, rarely motivates employees.

In SOF, finally, selfish behavior will get you kicked out, whereas in private-sector organizations it may very well be tolerated as long as the individual is perceived as making money for the company. Punishing the wrong behavior is just as important as rewarding the right behavior — studies have shown that when executives publicly reprimand freeloaders, greater organizational collaboration will result. Business leaders must get much tougher about doing this.

4. Creating your own special operations teams. An opportunity undoubtedly exists to increase the use of small, powerful teams that are focused on specific, high-value tasks — not unlike the 12-person Operational Detachments Alpha of the Army Green Berets or the six-person Navy SEAL teams deployed on critical missions. These SOF teams, as we have seen, are made up of individuals who possess deep operational experience — people who in conventional units would be leading large numbers of men and women. These experienced individuals are empowered to make rapid decisions and use a variety of tactics in order to achieve their missions, and they often remain together as a unit for several years or more. Some engineering, manufacturing, and high-technology companies use a similar team concept for product development programs (for example, Apple’s development of the iPod), but there is no reason it could not be applied to more general management issues, such as strategy, customer relationships, marketing, and human resources.

The secret of special operations forces is, in essence, the strategic development of human capital. If companies want to leverage these lessons, they must commit to longer-term investments in their people than is often the norm today. The high-performance system that SOF represents thrives because of a multiyear investment strategy by military commanders and their civilian overseers; it would surely founder if it were subject to the start/stop approach, hazy measures, and lack of accountability characteristic of many corporate programs.

Reprint No. 09403

Author Profile:
Andrew Sobel is president of Andrew Sobel Advisors. He is a consultant to leading companies worldwide on the management of services businesses and the development of long-term client relationships. He is the author of three books, including All for One: 10 Strategies for Building Trusted Client Partnerships (Wiley, 2009), and more than 100 articles and book chapters. For more of his work, visit