March 27, 2010

Pakistan’s other fault lines —Sanaullah Baloch

Daily Times, Pakistan

Islamabad’s unkind approach and over-centralised political and discriminatory policies have resulted in massive despair among the Baloch masses. Conflict in the region has resulted in killings, displacement and human rights crises well documented by reputable organisations

Predominantly, the fear of the Taliban and al Qaeda, and the rise of religious militancy has become Pakistan’s hallmark. In fact, there are numerous other fault lines and factors behind Pakistan’s gradual fall into fundamentalism, sectarianism, rise of ethnic conflicts and mounting political instability.

Pakistan’s colonial rule and policies, ethnically structured institutions, over-centralisation, inflexible constitutional arrangements and lack of formally designed conflict resolution mechanisms are the main causes behind the endless crisis.

Repeated martial laws, supremacy of the military establishment and inferiority of the democratic system, including monotonous democratic regimes in a multi-ethnic country of 170 million people, have resulted in deep polarisation, where the citizens no longer identify themselves with the state and its policies.

The political situation is volatile and deeply fragmented — once again institutions are muscling against each other, extremism is on the rise, social standards are sharply declining, economic activities and direct foreign investment are diminishing and the energy crisis is frustrating.

Violence and intimidation are largely used as powerful instruments, both by state and non-state actors for asserting their unacceptable opinion. The political and non-violent solution to this discrepancy is conspicuous by its absence in Pakistani society.

Given the ongoing war on terrorism, Pakistan’s significantly bordered regions with Afghanistan and Iran, such as Balochistan, the NWFP and FATA are currently undergoing political and geographical tensions and are shaping new security concerns in the region.

The sheer rate of acceleration of violence in Pakistan is an index of the enveloping loss of control. In the year 2003, the total fatalities in terrorism-related violence amounted to just 189, but mounted dramatically thereafter to the unprecedented minimum of 6,715 in 2008 and 11,529 in 2009.

Although the US has promised multi-billion dollar monetary aid — a typical procedure of appeasement — the Obama administration needs to facilitate and influence the Pakistani establishment to rethink its colonial system of governance and opt for more modern political arrangements.

The peaceful resolution of the prolonged Balochistan conflict, integration of FATA into the NWFP, investment in human development, activation of economic development and eradication of poverty to include political empowerment and self-rule for significant regions, i.e. Balochistan, are all very much related to the broader peace and security agenda.

There is no disagreement that undiluted democracy is the best means of conflict resolution and political stability in multi-ethnic states. But since the February 2008 elections, there has not been a major shift in Pakistan’s internal and external policies. The current democratic dispensation’s lack of institutional control and ambiguous policies make all these issues extra complicated.

The situation in FATA is worsening and the Taliban terror drive has grown beyond their traditional homeland. The last six decades of deliberate ignoring of the task to integrate FATA into the mainstream has gradually transformed the 27,220 sq km vicinity into ‘Talibanistan’.

The political conflict in Pakistan’s southwest region continues to haunt the region. Islamabad’s unkind approach and over-centralised political and discriminatory policies have resulted in massive despair among the Baloch masses. Conflict in the region has resulted in killings, displacement and human rights crises well documented by reputable organisations.

The Texas-sized, resource-rich Balochistan, with 750 km of strategically significant Arabian Sea coastline, is the largest, but least developed, of Pakistan’s four provinces. Balochistan shares a sizable and strategically significant border with Afghanistan’s southwest, volatile provinces and Iran’s Balochistan regions.

The conflict has recently turned more critical, as Pakistan officially incorporated the Balochistan crisis into the high-level Indo-Pak joint statement at Sharm el-Sheikh on July 16, 2009. Afghanistan, in unison with the international community, unabatedly claims a Taliban presence in the province’s capital city of Quetta.

In fact, Balochistan is also an important transit route for NATO’s military goods to Afghanistan. Unsettled, the Baloch-Islamabad conflict will have a damaging impact on Obama’s troops-surge plan in Afghanistan. In 2009, there was an unprecedented increase in attacks on NATO supplies in the region. The weak-kneed political administration in Balochistan is incapable of protecting and guaranteeing the safe passage of much-needed supplies to the International Security Assistance Force (ISAF).

Simmering unrest in the resource-rich and second largest populated province of Sindh has remained unaccounted for. The Sindhis, including the Baloch natives, are politically alienated and their social and economic participation is restricted to very few areas. No doubt, ethnically carved institutions are one of the major reasons behind repeated ethnic unrest in Sindh and Balochistan provinces, where security and economic institutions have mainly been encroached upon by non-natives.

Socio-economic and political priorities in multi-ethnic Pakistan are not arranged on a fair and transparent scale. Evident political and economic inequalities are widening the gap among the communities and regions. Political questions are being responded to by absolute force. Human and basic rights are not recognised and intimidation is the only tool to keep dissidents silent.

Repeated military rule and ethnocracy in Pakistan have shattered the very basics of political affairs, where Islamabad employs undesired and unpopular policies by force on non-core groups. Society in Pakistan is divided along ethnic, sectarian and regional lines. Only a few districts in central Punjab, which are the core beneficiaries of the state, are peaceful and thriving. However, populations in the resource-rich and strategically significant regions of Sindh and Balochistan are starving.

The US, being a major stakeholder in the peace and security of the region, bears the responsibility to look beyond the Taliban issue and encourage Pakistan’s super-establishment to fairly and peacefully resolve the political conflict in Balochistan. The monetary and military approach must be part of a consequential discourse with the government of Pakistan to integrate FATA into the NWFP without further delay, and establish a more modern but decentralised governance mechanism for the region.

No doubt, the successful termination of the exhausting war in Afghanistan is reliant on regional actors, including Pakistan, which is going through a severe internal crisis. The country’s old-fashioned institutions are unable to deal with delicate challenges.

Understanding the underlying causes of the unfolding crises in Pakistan and their timely resolution is in the interest of regional peace and security.

The writer is a Baloch leader and a former Senator. He is a Research Fellow at Inter-parliamentary Union Geneva, Switzerland, and can be reached at

'China's Military Buildup is Affecting Regional Balance'


The buildup of Chinese armed forces is continuing "unabated" and Beijing's goals appears to be power projection beyond Asia and to challenge America's freedom of action in the region, a top US Admiral has said.

Outlining that Chinese buildup was affecting regional military balance, Admiral Robert Willard, Commander of the US Pacific Command said, "China's rapid and comprehensive transformation of its armed forces holds implications beyond the Asia-Pacific region".

The Admiral's comments came in a testimony to the Congress armed services committee and raised concerns that whether Beijing harboured global military ambitions.

"Of particular concern is that elements of China's military modernisation appear designed to challenge our freedom of action in the region," Willard said.

Elaborating, the top American Admiral said China had augmented its submarine and air defence fleet, which was now the dominant presence in crucial Asian waters in South China Sea, East China Sea and the Yellow Sea and these forces constituted "anti-denial and anti-access" capability against the American and regional forces.

"The PLA Navy has increased its patrols throughout the region and has shown an increased willingness to confront regional nations on the high seas and within the contested island chains.

Additionally, China lays claim to the Senkakus, administered by Japan, and contests areas on its border with India," Willard said.

The US armed forces officials also told the Congressional committee that over the past several years, Beijing had begun a new phase of military development by beginning to articulate roles and missions for the PLA that go beyond China’s immediate territorial concerns, but has left unclear to the international community the purposes and objectives of the PLA’s evolving doctrine and capabilities.

In his opening remarks, Senator Carl Levin, Chairman of Senate Armed Services Committee said as China's influence and military grow, traditional alliances and partnerships in the region may come under pressure from a perception that the balance of power is shifting. And other countries in the region may deem it necessary to grow their militaries as well.

"Such developments need to be understood and inform our decision making. China's growing involvement with Iran, including investment in the Iranian energy sector, is an example of China's global influence expansion efforts,” he said.

"China is the primary obstacle to more stringent United Nations Security Council sanctions against Iran,” Levin said.

Another powerful Sen Joseph Lieberman said his impression is that over the last year or so there seems to have been a move up in the assertiveness of China economically, diplomatically and militarily.

To these probing queries by the influential senators, Willard said the Chinese buildup ranged from integrated air defence systems off their coastline, which stand off well beyond their territorial waters and air space, to their investments in submarines, which is pretty profound.

That particular capability now that is ranging throughout the South China Sea, East China Sea and Yellow Sea and beyond, and other capabilities that together provide sizable area denial capability, he said.

"Over time they have very much appeared to zero in on US capabilities and a potential ability to counter those, as a framework for these investments. But I would offer that they not only concern the United States but our regional allies as well.

As you suggest, Japan, the Republic of Korea, our allies in Southeast Asia, the Philippines and Thailand, and our partners in Vietnam and elsewhere in the region, all have to deal now with capabilities that could potentially infringe on their freedom of action throughout this very important part of the world," he said.

The US commander also said that American military and government networks and computer systems continue to be the target of intrusions that appear to have originated from within China.

Iran is losing the game to regional actors in its strategic depth

Rethink before It’s Too Late

Iran is losing the game to regional actors in its strategic depth –Afghanistan. By Houman Dolati

It is no more a surprise to see Iran absent in Afghanistan affairs. Nowadays, the Bonn Conference and Iran’s contributions to Afghanistan look more like a fading memory. Iran, which had promised of loans and credit worth five-hundred million dollars for Afghanistan, and tried to serve a key role, more than many other countries, for reconstruction and stabilization of Afghanistan, is now trying to efface that memory, saying it is a wrong path, even for the international community.

Iran’s empty seat in the Rome Conference was another step backward for Afghanistan’s influential neighbor. Many other countries were surprised with Iran’s absence. Finding out the vanity of its efforts to justify absence in Rome, Iran tried to start its unique diplomatic initiative. While most experts believe in the higher efficiency of an international attitude towards Afghanistan’s problems, Iran wants to rely on an Iran-centered or neighbors-centered way of dealing with the problem. Meeting between foreign ministers of Iran, Pakistan and Afghanistan in Islamabad was the fruit of this point of view.

The London Conference could make up for the vacuum felt due to Iran’s non-cooperative behavior towards the international community, but it turned into another instance of Iran’s diplomatic apparatus lethargy. That is when prior to the conference in Britain, a trilateral ‘summit’ was held between Turkey, Afghanistan and Pakistan in Istanbul. Another step for Turkey to turn into the new leader of the Muslim World and the mediator between Islam and West. Turkey’s presence in the post-Taliban Afghanistan despite the non-existence of shared borders is intelligent, with cultural and economic priority and based on a support for the small Uzbek minority.

After the fall of Taliban and presidency of Hamed Karzai, Turkey exhibited strong military and economic presence in Afghanistan. Turks are now a key player in the reconstruction process. Looking from an economic viewpoint, even the deployment of Turkish troop is to support the financial security of investors and businessmen who are involved in construction projects. Seven-hundred Turkish soldiers are the guardians of Turkey’s economic plans in Afghanistan.

The significance of London Conference lied in its timing. It was right after Obama announced his new Afghanistan policy, thus it served as a forum to discuss how to control and direct new operations in collaboration with the international community and Afghanistan’s neighbors. ‘Coordination of efforts’ was in fact the key objective of the London Conference and we see how Iran easily lost that opportunity. Political, economic and cultural chances were squandered and now we have to look at the futile multilateral meetings whose only achievement is the release of joint communiqués.

Iran may be critical towards the policies of NATO and West in Afghanistan, but could that justify its absence and indolence in international processes? Doesn’t Iran consider itself the most influential global player in Afghanistan? Doesn’t it believe that any decision it has not been consulted about will end in failure? So why is it sitting at a corner instead of helping, and watching other countries fighting for the bigger share?

Iran’s decision to become the diplomatic hub for international Afghanistan policies is interesting, but only in papers and seminars. But there is definitely a difference between international diplomacy and good-for-college speeches. Diplomatic dreams with no feasibility can only enjoy the audience clap. Diplomatic smiles can never function as pragmatic strategies.

Iran’s diplomatic apparatus should seriously revise the diplomatic approach towards its strategic depth. Otherwise, sooner or later it will have to pay a high price to compensate for being left behind by the international community. In diplomacy you cannot take back the time. Your cards today may fall in hands of your opponent tomorrow.

Iran’s Nuclear Program and Chain UNSC Resolutions

By Mahdi Mohtashami

On Tuesday, White House threatened Iran with further sanctions if it did not stop its enrichment activities and U.S. alleged nuclear weapons program. Barack Obama’s spokesman Robert Gibbs added that America’s allies are serious about the head-on and time was running out for Iran.

Evidences signal that Iran’s nuclear dossier will once again fall at the hands of the United Nations Security Council. As the records show, IAEA resolutions are usually followed by UNSC resolutions when a dossier is referred from UN atomic watchdog to the Security Council. The big difference this time is that Five plus One has long planned for referral of Iran’s case to the council. Iran’s treatment of the nuclear dispute will affect future measures by the global powers in the upcoming days and months; however, new resolutions and further sanctions are not unlikely at all.

As the groundwork for new resolutions against Iran is laid, the United States is also getting prepared to impose new administrative sanctions against Iran unilaterally. The bill passed by the US Congress which allows the US president to punish companies involved in exporting refined petroleum products to Iran is the most prominent case, awaiting Obama’s approval. It seems that both Democrats and Republicans in the United States agree that the state should set further sanctions against Iran in addition to what the United Nations has approved.

China and Russia seems to be tacitly supporting a new sanction against Iran. As their diplomatic behavioral pattern illustrates, the two emerging powers always get on board at the last moments and support tougher measures against Iran. Vain hopes inside Iran that fantasize a multipolar world in which East stands against West should have vanished by now. The most China and Russia can do is to soften the resolutions tone, but their vote is in favor of a new bill for sure.

Chain resolutions against our country will have certain consequences. Politically, they will have undeniable impact on our ties with other countries. Economically, their deleterious effects on our international and domestic commerce should have been felt by now. It is still a question whether Iran yields to the resolutions and changes its nuclear course. So far, Iran has tried to defy the resolutions and counter their impacts.

Iran-Pakistan Pipeline accord: “Grand Religio-Commercial deal of the century”, says Baloch Leader

WASHINGTON DC, March 26- Baloch Society of North America (BSO-NA) strongly opposes Iran-Pakistan Gas pipeline operational accord signed between Pakistan and Iran in Istanbul on March 17th . The proposed project doesn’t take into consideration the aspirations of Baloch people on either side of the border, as pipeline passes through Balochistan. Dr. Wahid Baloch, President of BSO-NA said, “Baloch people cannot guarantee safety and security of the pipeline that passes through Baloch territory. We consider Balochistan as an occupied territory and Pakistan has no legal and moral right to sign any such deal.”

He warned both countries that “Those who invest in the project without taking into account Baloch consent are at their own risk, as Baloch are fighting their war of independence against the occupying forces”. It is time to reiterate our stand by quoting our leader Shaheed Nawab Akbar Bugti’s words said in 2005, on the pipeline projects that passes our Baloch land. He said “only the goodwill of the Baloch people can allow the proposed gas pipeline from Iran and Central Asia to India to pass through their soil”, and we stand by his words.

The $.7.5 Billion project that originates from Iran’s South Pars gas field passing through Balochistan to India and China will remain a pipe dream for stakeholders. Dr. Baloch warned that Baloch freedom fighters will not let this pipeline pass through their Land with any benifit to local Baloch people. This grand Religio-Commercial Deal of the century between radical Sunni Pakistan and Theocratic Shia Iran, at the cost of secular Baloch people is a threat to the global security and unacceptable to Baloch people. We at BSO-NA appeal to all major powers to take cognizant and pressurize Pakistan to dissociate from this project. An Independent Secular Baloch nation as a buffer state between theocratic Shia Iran and Sunni Jihadi Pakistan is the only solution for regional peace and stability.

Finally we appeal to India and China to exercise utmost caution before investing in this project and advice them to keep away until Balochistan is free and sovereign.

About Baloch Society of North America:

Baloch Society Of North America (BSO_NA) is Non-Profit Organization, working to unite and Organize all Baloch in North America, to expose the Occupation and Oppressive policies of Pakistani and Iranian Governments against Baloch people and our Baloch land (Balochistan), and to bring their Human Rights Violations in Balochistan into the world’s Notice.

China's hollow constitution


In many ways, the Chinese Constitution is a marvelous document. It guarantees Chinese citizens a host of rights, including "freedom of speech, of the press, of assembly, of association, of procession and of demonstration."

The problem is that these rights exist only in theory, not in practice. The latest human rights report on China released by the U.S. State Department shows just how far removed from reality these rights are for many Chinese citizens.

Last year was supposed to see a marked improvement in human rights, with the unveiling of a National Human Rights Action Plan. The trouble is, by the end of the year, the plan had not yet been implemented.

The human rights report talks about extrajudicial killings, executions without due process, torture and coerced confessions of prisons and the use of forced labor.

What is most depressing is the realization that these things go on even though they are contrary to the constitution and the law that the government is supposed to uphold.

Let us look at how things are supposed to work in theory and how they actually work in practice, beginning with the detention of a suspect.

Under Chinese law, most suspects have the right to seek legal counsel shortly after their initial detention and interrogation but, in reality, as the report says, "police frequently interfered with this right."

But let's say you, the suspect, are lucky and get to choose a lawyer. However, it turns out, the lawyer may not be allowed to accept your case. Lawyers are not infrequently warned not to accept sensitive cases on pain of punishment. Well, suppose you get the lawyer of your choice and the case goes to court. The law says that courts exercise judicial power independently. But in reality, we learn, "the judiciary was not independent" and received policy guidance from both the government and the Communist Party.

One example of blatant intervention last year was the trial of Tan Zuoren, who was charged with defaming the party. He had attempted to collect the names of students who died in the May 2008 Sichuan earthquake.

On the day of his trial, "police blocked persons who tried to attend the proceedings." Someone who traveled from Beijing to Chengdu to testify on Tan's behalf was beaten by security forces, who "prevented him from leaving his hotel room until the trial had adjourned."

But, even after conviction, Chinese law continues to protect individuals. Thus, we are told that "the law prohibits the physical abuse of detainees and forbids prison guards from insulting prisoners' dignity and beating or encouraging others to beat prisoners." That is the theory.

The reality is quite different. "In January, Lin Guoqiang died suddenly while in custody at the Fuqing Detention Center in Fujian Province," the report says. "His family claimed that his body was swollen and covered with bruises. At year's end there was no official investigation into the case."

In another case, a Uighur, Shohret Tursun, was detained during the July 5 riots. "In September police returned his disfigured body to family members and ordered them to bury him," says the report. "The family refused to do so without an explanation of his death from the police. On Sept. 20, the police surrounded the family home and forced the family to bury the body without an autopsy."

The two most egregious cases of the year were those of Liu Xiaobo and Gao Zhisheng. Liu, who drafted a document called Charter 08 calling for human rights and democracy, was sentenced to 11 years in prison. Gao Zhisheng, a human rights lawyer, was picked up by the police in February and has since vanished from the face of the Earth.

Ironically, despite the large number of political cases, the government denies that there are any political prisoners.

A white paper on human rights issued by the government in 2002 maintains that "ideas alone, in the absence of action which violates the criminal law, do not constitute a crime; nobody will be sentenced to punishment merely because he holds dissenting political views."

That is to say, if you disagree with the Communist Party and do not make it known, you have not committed a crime. Even if you write your thoughts down in your diary, it is not a crime. But if you show your diary to another person or somehow make your thoughts known to other people, that would constitute action and could land you in prison where, of course, your rights will be fully protected. At least in theory.

Frank Ching is a journalist and political commentator.
The Japan Times: Thursday, March 18, 2010

IRAN: Gasoline Near Top of Imports List: 150 Percent Increase in Gasoline Imports

Regime Hoarding Gasoline, Reducing Consumption in Anticipation of US Sanctions

ISNA – Summary translation by Persia House
March 17, 2010

With the import of over five million tons of gasoline worth over [$3.3 billion*] during the [Iranian calendar] months of Azar, Dey, and Bahman [November 22 – February 19], the amount of gasoline imports during the first 11 months of this [Iranian calendar year, March 2009 – February 2010] reached about $4.5 billion. This was a 62 percent increase over the same period the year before, despite a 30 percent drop in the price per kilo of gasoline.

Persia House Analysis:

The dramatic spike in Iran’s gasoline imports in recent months indicates that the Iranian government is seriously concerned about the effect gasoline sanctions may have on the already ailing Iranian economy. In the absence of sufficient refining capacity to meet the country’s domestic gasoline needs, the government is attempting to reduce the country’s vulnerability to gasoline sanctions in the short term by reducing consumption, and increasing gasoline reserves. Based on Tehran’s ability to weather three decades of US sanctions, however, it is doubtful that gasoline sanctions will provide enough leverage to change the Iranian regime’s behavior.

Reducing Consumption

  • The government has reduced the amount of gasoline rations (the amount of gasoline available for purchase per vehicle at subsidized prices) it allots to the population, in order to curb consumption. Gasoline rations were reduced from 100 to 80 liters per vehicle per month last fall, and to 60 liters per month beginning March 21 of this year.
  • Between the Iranian calendar year 1387 (March 2008 – March 2009) and 1388 (March 2009 – March 2010), gasoline consumption declined by just under five percent.
  • As a result of gasoline rationing, first implemented in June 2007, the percentage of the country’s domestic consumption supplied by imported gasoline has decreased. That figure has fallen from 40 percent in 1385 (March 2006 – March 2007) to between 32 and 36 percent in the past three years.

Increasing Gasoline Reserves

  • Between November 22, 2009 and February 19, 2010, Iran’s gasoline imports increased by over 1,500 percent in weight, compared to the same period last year. The government has been, in effect, hoarding gasoline.
  • Iran’s gasoline imports jumped 150 percent between 1387 (March 2008 – March 2009) and 1388 (March 2009 – March 2010).
  • The Iranian government says it increased its gasoline stocks by 58 percent in 1388 over the previous year.

Even before being implemented, the threat of America’s gasoline sanctions is having an effect on Iran’s gasoline imports. Recently, Royal Dutch Shell, and Swiss-based oil traders Vitol, Glencore, and Trafigura announced that they will no longer sell gasoline to Iran. Their decisions were made in anticipation of theIran Refined Petroleum Sanctions Act, which has passed both chambers of the U.S. Congress.

  • The act directs the President to impose sanctions against any company which, among other things, invests more than $20 million over a 12-month period in Iran’s petroleum sector, or supplies Iran with refined petroleum products worth more than $200,000 (or $1 million over a 12-month period).

Sanctions will squeeze Iran but not choke off its gasoline imports. In the September 2009 lead-up to the P5+1 nuclear negotiations with Tehran, for example, Chinese companies increased their gasoline sales via intermediaries to Iran. Russian and Malaysian gasoline sales, as well as gasoline smuggling across Iran’s porous borders, will also enervate any American-led sanctions regime.

Source Information:

The Iranian Students News Agency (ISNA), which is run by Iranian university students and funded in part by the Iranian government, is considered more independent and Reformist-leaning than other state news organizations.

March 26, 2010

Analytic Best Practices :Dungarvan Conference 2010

Dungarvan Conference 2010
Sunday, July 11, 2010 - Tuesday, July 13, 2010

Dungarvan, County Waterford, Ireland
United States

As one of the United States’ thought leaders on intelligence analysis, and an innovative research institution on intelligence analysis best practices,Mercyhurst College has embarked on a number of outreach initiatives to capture best practices in the Intelligence Community. Toward that end, Mercyhurst is hosting the first of what we hope to be annual conferences inDungarvan, Ireland that will focus on key intelligence issues from a global perspective.

We believe that the intelligence discipline can best be explored and comprehended by taking a holistic and generalist approach. Therefore we are reaching out to our friends across the globe in a wide variety of fields to converse and discuss analytic best practices. The conference panels will be composed of leading practitioners in the fields of medicine, the law, finance, technology, journalism and the sub disciplines of national security, law enforcement, and business intelligence.

The goal for this year’s conference is to explore the nature of analysis and its application in various disciplines, building bridges between analytic practitioners and scholars within those disciplines, and exploring best practices in terms of teaching analytic methodologies. Intended takeaways for attendees include a deeper and broader appreciation of the value of different analytic methods which can be borrowed as “best practices” from other disciplines, as well as instruction on the application of at least two of them.

Subsequent annual conferences will continue to address analytic best practices but with a larger vision to include intelligence as an enterprise essential to organizational success and learning. We plan to host the conference each year in Dungarvan in an effort to provide a more central location for our European partners, and continue to grow the relationship between Mercyhurst and Ireland.

Chermany vs. Gremerica

The Daily Reckoning Presents

Bill Bonner Bummer! You work hard. You save your money. You make a product and sell it at a profit. Everybody's happy. And then, your customers, the silly spendthrifts, go broke. And what do you know? Everybody points his finger and blames you!

"World leaders are choosing recession," charges The Financial Times. The "world leaders" the FT is talking about are Premier Wen Jiabao of China and Germany's Finance Minister, Wolfgang Schauble.

The FT says they should loosen up; have some fun. China should raise the value of the yuan, adds Nobel Prize winner Paul Krugman, backed by 130 members of Congress. Germany should raise wages, says France's finance minister Christine Lagarde. That is, they should be more like grasshoppers than ants.

But neither the Germans nor the Chinese prospered by being grasshoppers. They got rich by being ants. And they're still at it. China is still exporting...and making a $291 billion current account surplus this year. Germany will clear $187 billion. And now everyone is on their backs. La Tribune, in Paris, even dusts off a prophecy from a defunct 19th century critic, Friedrich Engels: "They will ruin not only other nations' industries but those of their own country too."

Economists are normally reserved. This is not because they are well mannered. It is because they have nothing to say. But occasionally, timid bewilderment gives way to dangerous bursts of confident opinion. An opinion that has the support of The Financial Times, Paul Krugman, Christine Lagarde, Friedrich Engels and 130 congressmen is almost by definition a threat to the public weal and thereby a suitable subject for today's back page.

To bring us all up-to-date, the world appeared to prosper in the boom years '97 to '07 years (the micro-recession of '01 excepted). The big exporters - China and Germany, who Martin Wolf calls "Chermany" - ran big trade surpluses. The big spenders - notably Greece and the US, who we will call Gremerica - ran large trade deficits. From these facts, Mr. Wolf infers that if the Cherman ants prosper by making, someone must impoverish himself by taking. In this case, the Gremericans...along with other grasshopper nations such a Great Britain.

The gist of the Krugman, Wolf, and Lagarde et al position is that in the world economy is ruled neither by good nor by evil, but by mathematics. An exporter, such as China or Germany, can only run a trade surplus equal and opposite to the deficits of other nations. What's more, a grasshopper nation - such as the US - can only run a deficit insofar as the ants are willing to finance it. A deficit is no sin. Nor is hard work and savings anything to be proud of.

We have heard this value-free line of talk before. Ben Bernanke claimed that the US was not making a mistake by spending too much; instead, it was doing the world a favor by consuming its "surplus savings." Lately, between them, Britain and America consumed as much as 70% of the world's total savings. While this couldn't go on forever, it went on long enough to give China a $2 trillion pile of the grasshoppers' money...and long enough to make Germany the moneybags of Europe. But by 2007, the consumer nations of Gremerica were completely spent. The cost of continuing to live beyond their means was too great. They couldn't afford to go on. And now, the world appears to suffer. The grasshoppers are laid up. Who will buy? The proposed remedy, in a nutshell... where it belongs, is to stimulate consumer demand in Chermany.

It is hard enough for a sensible man to turn the knobs and adjust the levers of his own family budget. He wouldn't dare fiddle with a whole economy, let alone the economy of a foreign nation. The meddlers, though, are ready to throw the switch on the whole worldwide shebang. And as usual, those who presume to tell others what to do are those whose presumptions are idiotic. The math says it works. But common sense tells us it is absurd to pressure the world's most thrifty and productive people into not working so hard.

Trade balances must sum out to zero, but that doesn't mean that consuming goods is just as good as producing them. Alas, the world economy is not organized in a way that makes it easy for an economist with a calculator. Instead, it's infinitely complex. Turn any knob you want; you'll get results you didn't expect. Turn the ants into grasshoppers? Maybe. But the bugs have ideas too - shaped by experience, culture and calculations of their own.

Wolf's math tells him that raising German wages will make Greece more competitive. But don't expect the Greeks to build a Maybach any time soon. Instead of turning Germans into grasshoppers it will more likely turn them into unemployed ants. Likewise, you can raise the yuan. But China's export economy already looks like a bubble. And making it harder for Chinese manufacturers to sell their wares looks like a pin. Even the threat of sanctions has a sharp edge to it. It was just this sort of high-minded central planning - led by Misters Smoot & Hawley in the '30s, with their sharp pencils and dull wits - that tipped the world into a deeper, darker depression.

Chermany isn't responsible for Gremerica's problems. Chermany can't solve them. Gremerica made mistakes. It must now correct them.

Bill Bonner
for The Daily Reckoning

Joel's Note: If you're what Bill likes to call a "long suffering reader," you'll know that our Reckoner-in-Chief is a very well-traveled man, with contacts from Bombay to Buenos Aires and back again. If you think you could benefit from the kind of "who-you-know" investment information this kind of contact list affords, you might be interested in this invitation from the Bonner & Partners Family Office. Details Here.

US-Pakistan strategic dialogue :Hype and hyphen

Saturday , Mar 27, 2010 at 0225 hrs

The US-Pakistan strategic dialogue in Washington marks the formal beginning of the endgame on the Afghan war. The Americans are searching for a grand bargain with Pakistan to help destroy Al-Qaeda and its proliferations and to conclusively break their link with the Taliban. Total destruction of the Taliban is no longer on the agenda. If the Obama administration can report success on this, it can claim victory and bring back most of its forces from Afghanistan in a victory of sorts rather than in a retreat in defeat. A bit like the story unfolded finally in Iraq.

The Pakistanis know this but somehow seem impatient. As if this is their one great, last opportunity and as if Brand Pakistan will go out of fashion. Let us, for a bit, look at the picture from Pakistani eyes, rather than ours. We can then see why the Pakistanis nurse grievances for the Americans. They see 1965, and even 1971, despite the Kissinger-Nixon side-show, as Great American Betrayals of an ally they were treaty-bound to protect. In the fifties they entered into military-strategic nuptials with the Americans on the pretext of fighting communism. They are, to date, bewildered as to why the Americans took that so much on face value that they objected to the use of military hardware gifted by them against India in 1965, and then banned any fresh supplies in punishment. This, the Pakistanis believe, hurt them grievously in 1971. In spite of the short but spectacular “tilt” in 1971, Washington dumped a defeated, dismembered Pakistan that was no longer of use. Worse, it was led by Bhutto whose fake, leftist, anti-American demagoguery was only matched by his genuine love for aristocratic, decadent high life.

It took the Soviet invasion of Afghanistan in 1979 to make the Americans re-discover Pakistan. Remember, this came just when the first post-1971 US-Indian warmth was beginning, with Jimmy Carter becoming the first US president to visit (Morarji Desai’s) India in 15 years. This was the peak of the Cold War: the Americans, as also the Chinese, were desperate to trap the Soviets in Afghanistan and Pakistan became an indispensable ally. Zia-ul-Haq, who was till now being charged with the murder of Bhutto and Pakistan’s constitution, was hailed as the second stalwart ally, after Ayub in the sixties. Aid, both military and civil, flowed in again. And then what happened? As soon as the Soviets left in 1993, the US began lecturing Pakistan on democracy and moderation while warming up to India. Again, Kargil and the Clinton visit to the subcontinent both convinced the Pakistanis — with good reason — of an American tilt away, towards India. Bush only leaned further in the same direction, and while the post-9/11 turnaround helped Musharraf gain legitimacy, and Pakistan strategic relevance, India had now broken away as a strategic and politico-economic entity.

To sum up, therefore, the story from the Pakistanis’ eyes reads as follows: when the Americans have a strategic purpose of their own, they embrace us. The moment it is over, they go right back where their hearts and long-term interests belong, to India. When they need us, they give us some hardware, and then they tell us not to use it against India and hit us with moratoriums. The Americans can’t be so delusional as to believe that we need their weapons to fight their battles against communist expansion, Al-Qaeda-Taliban or whoever threatens them next. Our (Pakistanis) strategic concerns are not the same as theirs (Americans). And unless they accept that India is the central, and mostly only, focus of our strategy, they are dishonourable, seasonal, disloyal cheating allies.

This is what the Pakistani establishment is hoping to change this time round. The stakes for Obama in Afghanistan are much higher than for Reagan and Bush Sr in the last jehad. Also, the American dependence on Pakistan is total this time round. If reports of the talks so far are accurate, the Pakistanis have almost got the Americans to confess and apologise for their past “betrayals”. The question now, particularly for India, is how the Americans will compensate Pakistan for these let-downs of the past, and what guarantees they can offer for the future.

It is for this reason that the Pakistanis are approaching this as some kind of a strategic clearance sale and attempting to fill their shopping cart as high as possible with goodies, discounted as well as freebies. This is the exact meaning of their 56-page list of demands that preceded this dialogue. It’s as if Brand Pakistan or its strategic currency will go out of fashion the moment the military part of the Af-Pak project is over.

Should India worry? Our responses so far have been generally measured. This is welcome. It is natural for the Pakistanis to demand everything we have, the nuclear deal being one. Deep down, armaments apart, what the Pakistanis wish for most dearly is the rehyphenation of American policy in the subcontinent. It is almost as unlikely a possibility as the Americans delivering anything on Kashmir to anybody. It is for us, therefore, to move with caution and avoid any of the traditional neuroses. An increased American engagement with Pakistan, and I dare to say even a US nuclear deal with them, may be beneficial for us, as it forces greater transparency in the Pakistani nuclear establishment and moderates its militaristic vision.

And of course we have to start making use of the new strategic space of our own, particularly after that much-celebrated de-hyphenation. Only we must not let ourselves down. We look stupid protesting any arms consignment to Pakistan when we fail to buy even one of our desperately needed and budgeted artillery guns just because some dim-witted CBI director produced a list of charges against one likely vendor on an unsigned sheet of plain paper. We have to fix that nonsense, because big powers must learn to look after their own security. Similarly, India should exploit this expanding strategic space to look more carefully at the world besides America and terrorism. The continuing vote against Iran at the IAEA is principled and should continue. But we have to be less shy of negotiating energy deals with Iran, giving visas to its students, even launching its civilian satellites. The Af-Pak endgame in Washington also signals an opportunity for India to dehyphenate its own America policy.

Brazil: we’ve got the power
Lula Da Silva’s resources and ambition

Brazil wants to broker international diplomacy, host presidential missions and ignore the US. It now has serious economic sway in South America, and it is aiming for much more and much wider influence

by Lamia Oualalou

“It is embarrassing that Brazil is receiving the head of a repressive dictatorial regime. It is one thing to have diplomatic relations with dictatorships; it is quite another to welcome their leaders to Brazil” (1), wrote José Serra, the governor of São Paulo state and one of President Luiz Inácio Lula da Silva’s main political opponents. He was commenting on the visit of Iran’s president Mahmoud Ahmadinejad, on 23 November 2009. Serra is rarely so vehement in his attacks on “Lula”, who enjoys an impressive level of popularity.

Apart from social programmes, foreign policy is the area in which Lula, the leader of the Workers’ Party has made the greatest changes. Lula may have abandoned part of his economic agenda under pressure from the financial sector (although he has partially revived it during his second term) but he has parted ways with the political elite, which had aligned itself with the United States in the struggle against communism.

This change of direction should not be mistaken for a clear ideological position on Lula’s part, even if his two principal collaborators, Celso Amorim, the minister of foreign affairs, and Marco Aurélio García, the president’s special foreign policy adviser, have unequivocally declared themselves to be leftwing. At the most, it indicates robust economical pragmatism, a preference for popular governments, a conviction that Brazil has a historic debt to Africa (because of the role of slavery in its past) and a belief that the country needs to lose its inferiority complex.

At his investiture in January 2003, Lula reserved his warmest welcome for Cuba’s president, Fidel Castro. He then appeared to establish a frank and open relationship with the US president, George W Bush, to the despair of Workers’ Party militants. The Brazilian president is, first and foremost, a trade unionist who firmly believes it is important to talk to everyone and that a sound agreement requires that both parties be satisfied, even when that agreement comes at the end of a long struggle. And that, as in the 1970s, there is really no reason why he should not enjoy a whisky with the boss between bouts of industrial action.

For the outside world, it all began in September 2003 when Brazil upset the routine of the World Trade Organisation summit in Cancún by leading a revolt of 20 emerging economies (the G20). For the first time, these insisted that the rich nations (the G8) give them something in return for opening up their markets. “When someone wants to buy something, Brazil should be on hand to sell it to them,” said Lula.

The Elizabeth Arden circuit

Since the beginning of his first term, Lula has spent 399 days on overseas visits (2), usually accompanied by a large number of business people. His itinerary has taken in Latin America (his number one priority) and the larger emerging economies (including South Africa, India, China and Russia) but also areas of the world traditionally scorned by the economic elite, such as Central America, Africa and the Middle East. In May 2005 Brazil hosted the first ever Latin American-Arab summit from which the US was excluded (it had wanted to attend as an observer). And in 2006, Brazil attended the Africa-Latin America summit at Abuja, in Nigeria.

At first, Brazil’s foreign ministry was at a loss. Politically conservative and mostly from privileged backgrounds, its diplomats preferred the glamour of what is referred to in Brazil as “the Elizabeth Arden circuit”: Rome, Paris, London, Washington. But Brazil’s business leaders were delighted: the policy has brought growth for its multinationals. The state controlled oil company Petrobras, mining giant Vale, civil engineering groups Odebrecht and Camargo Corrêa, beef giant JBS-Friboi, chicken giant BRF, aircraft manufacturer Embraer and the private bank Itaú, as well as hundreds of ethanol and soy bean producers, have all seen their exports and foreign investments explode. The discovery of substantial oil deposits off the Brazilian coast has made the country even more export-orientated. China has loaned $10bn to Petrobras in a bid to guarantee its future access to Brazilian oil. This year China has for the first time supplanted the US as Brazil’s largest export market.

In Latin America politics and business go hand in hand. Brazil has been the first to benefit from the explosion of demand in neighbouring Venezuela. Venezuela’s poorest citizens are becoming consumers (of meat, milk, small electrical appliances) but it lacks any real agriculture or industry and has had to rely on imports from Colombia, then, as relations with Bogotá have deteriorated, from Brazil. In Argentina, the Brazilian beverage company AmBev is keeping quiet about its takeover of the Argentine brewery Quilmes. Argentina’s largest meat producers have all been taken over by Brazilian companies and the situation is similar in Uruguay, where most rice production is under Brazilian control. In Bolivia, Brazilian firms control more than one-fifth of the economy, in the form of soybeans and natural gas. In Paraguay, the fertile farmlands of the departments of Alto Paraná, San Pedro, Concepción, Amambay and Canindeyú are planted with Brazilian soybeans.

Everywhere Brazilian enterprises go they are accompanied by loans from the Brazilian Development Bank (BNDES) (3). Matias Spektor, assistant professor in international relations at the Getúlio Vargas Foundation in Rio de Janeiro, says that Brazil’s trade policy is not merely about making the nation wealthier, but also about making it more powerful.

This has created tensions. Brazil is used to presenting itself as a “gentle giant” but is now being accused of imperialism – by Argentina, which complains it is being flooded with industrial products; by Ecuador, which has accused Odebrecht of shoddy workmanship; and by Bolivia, where the big Brazilian landowners in the east of the country make no secret of their alliance with political parties opposing the government of Evo Morales. Anxious to reconcile business interests with good neighbourliness, Lula has frequently had to intervene. In most cases, he has invoked regional integration, forbidding his government from taking the kind of retaliatory action the press has been demanding.

Since the demise of the Free Trade Area of the Americas, one of Washington’s pet projects, Latin American integration has become a pillar of Brazilian policy. Lula repeats that Brazil has every interest in ensuring that its neighbours are robust and are not impoverished or weakened by social and political crises. He demonstrated his commitment to this position in May 2006 by calling Evo Morales’ decision to nationalise Bolivia’s gas fields (which were being exploited by Petrobras) “sovereign”, while some were demanding that Brazilian troops be sent in as a response to “the stupidity of the Bolivian government” (4).

Last July Brazil also ended a long-running dispute with Paraguay, its other fragile neighbour, by agreeing to revise the terms (very unfavourable to Paraguay) of their agreement on the exploitation of Itaipú, the gigantic bi-national hydroelectric power station on the border between the two countries. This gesture proved vital to the stability of the government of Fernando Lugo, who was able to claim a victory over his powerful neighbour.

Public embrace

Lugo and Morales irritate both the Brazilian elite and Washington, but not as much as Venezuela’s president Hugo Chávez, with whom Lula has established a solid alliance. The two have refused to let themselves become embroiled in the rhetoric of the “two left wings” – the modern and responsible left, which is anxious to maintain financial stability, led by Brazil and including Chile and Uruguay; and the radical, populist, anti-American left, led by Venezuela and Cuba and including Bolivia, Ecuador and Nicaragua. When the press play on the differences between their countries, Lula and Chávez are quick to organise a meeting for the inauguration of a bridge or the laying of the foundation stone of a factory, a pretext to be seen embracing on camera. When Chávez was accused of authoritarianism, Brazil responded by backing Venezuela’s application to join Mercosur (the Southern Common Market).

The alliance between the two countries is the keystone of the major Latin American institutions established in the past few years. The most important of these is Unasur (Union of South American Nations), established at Brasília in May 2008, which includes 12 South American countries and aims to replace the Organisation of American States – which has its seat in Washington DC, a sign of its dependence on the White House. Unasur has a defence council and although the organisation is as yet fragile, it managed to ease tensions between Ecuador and Columbia (5). And in September 2008 it blocked an attempt to destabilise the Bolivian government (orchestrated by opposition parties) by reaffirming the legitimacy of the Morales administration. In both cases, it managed without intervention by the US.

Brazil also used Unasur to oppose the establishment of seven US military bases in Columbia. Brazil feels that any conflicts in the region should be settled without outside intervention. For the same reason, Lula denounced the reactivation in 2008 of the US Fourth Fleet, whose mission is to patrol South American and Caribbean waters.

But it is over Honduras that Brazil and the US are most clearly at odds. Immediately after the coup of 28 June 2009, Unasur insisted that President Manuel Zelaya should be reinstated and allowed to complete his term of office. On 21 September, with the deposed head of state ensconced in the Brazilian embassy, Lula found himself in the front line again. Foreign minister García was furious: “Brazil has used all the sanctions and pressures it can bring to bear, but that isn’t much compared with what the US could have done. If we’d had the kind of instruments they have at their disposal, we would have used them.”

The irritation increased in November, when President Obama wrote to his Brazilian counterpart to explain his decision to recognise the elections organised by the putschist government on 29 November and his positions on the WTO negotiations and the Copenhagen summit, which Brazil had openly criticised. Sent on the eve of Ahmadinejad’s visit to Brazil, this letter also reminded the Brazilian president of Iran’s violations of human rights and the dangers inherent in its nuclear programme.

Part of the club

Lula is irritated by what he calls the hypocrisy of the nuclear-armed nations. Last December he said that to have the moral authority to demand that others should not have the bomb, they would have to give it up themselves. He also pointed out that Brazil’s constitution explicitly prohibits the development of nuclear weapons. Sources close to the president feel it is important that Iran be allowed to develop civil nuclear technology: from Brazil’s viewpoint a ban would be a dangerous precedent.

Lula is obsessed with making his country a permanent member of the UN Security Council, just as he is with reforming the International Monetary Fund. (The larger emerging economies make a substantial contribution to the IMF but enjoy only a small percentage of voting rights.) In 2004 this obsession prompted Lula to agree that Brazil should lead the military side of the UN peace mission to Haiti after the expulsion of President Jean-Bertrand Aristide, so gaining admission to the club of “grown-up” nations.

The UN has been pressing Lula to send more troops on other UN peace missions. But without a reform of the institution that would really allow them to make their voice heard, Brazil’s military are refusing to get involved in missions such as those to Darfur or the Congo, over which they have no control.

Lula’s latest venture is participation in the Middle East peace talks. In November 2009, he received not only Ahmedinejad, but also Israel’s president Shimon Peres and the head of the Palestinian Authority, Mahmoud Abbas. Thomas Trebat, executive director of the Institute of Latin American Studies at Columbia University, says: “By not being too closely aligned with the United States, [Brazil] can still be seen as an honest broker.” Once again Lula, the seducer, hopes that his skills as a negotiator will open up new opportunities for Brazil to become a world power.

Lamia Oualalou is a journalist based in Rio de Janeiro

(1) José Serra, “Visita indesejável”, Folha de São Paulo, 23 November 2009.

(2) “Como o Brasil é visto lá fora”, Zero Hora, November 2009.

(3) A bank linked to the ministry of development, industry and foreign trade.

(4) Two Brazilian papers, Estado de São Paulo and Veja, in May 2006 carried cartoons showing Lula with a bootprint on the seat of his trousers.

(5) In March 2008 Colombia infringed Ecuador’s sovereignty by attacking a guerrilla camp on Ecuadorian soil.

Reunion, integrated island

India’s Waning Regional Influence: Bad policy Making or Lack of Political Will?

Chacko Philip, France

In recent weeks, lot of things were happening in the Afghanistan-Pakistan theatre which are critical to the evolution of India’s regional role and its foreign policy. On 26 February 2010, at least nine Indians, including three army officers were killed in a terrorist attack in Kabul. The attack was carried out focussing the residential areas used by Indians working in Afghanistan. The Indian National Security Advisor, Mr. Shiv Shankar Menon made a two day visit to Kabul on 5 March 2010 to review the security situation of the Indians working there. Following his visit, Pakistani Army Chief General Pervez Kiani met the Afghan President, Hamid Karzai in Kabul, on 6 March 2010, to discuss “matters of mutual interest”. On 7 March 2010, the US Defense Secretary Robert Gates carried out an urgent visit to Kabul. This was in view of the scheduled visit of the President of Iran, Mahmud Ahmadinejad on 10 March 2010. The Iranian president’s visit was aimed at showing strong their support for President Karzai and to secure Afghan support. This was followed by a two day visit by President Karzai to Pakistan on 10 March 2010. During this visit, Karzai held talks with his Pakistani counterpart, President Asif Ali Zardari and also had a separate meeting with Pakistani Army Chief, General Kiani.

Loosing Karzai and Afghanistan:

Indian government officials and strategic thinkers till now took Indian influence in Afghanistan for granted. They dealt with Afghanistan as an Indian outpost, using it to monitor Pakistan and to secure India’s national interests. Following the London conference on Afghanistan in February 2010, while the international community accepted the idea of involving moderate Taliban in the political settlement, India vehemently opposed it. India always remained cynical about involving Taliban in the Afghan national reconciliation process. India’s opposition is based on the ground that there is no difference between a good and bad Taliban. The geopolitical reason behind this Indian opposition is that, if Taliban is involved in this process, then it will become inevitable that, Pakistan will play a major role in the formation of any future afghan government.

President Karzai is going ahead with the reconciliation program. In view of that, he is planning to hold a “loya jirgha” or “grand council” on 29 April 2010. President Karzai’s recent visit to Pakistan should be looked at from this angle. Karzai needs Pakistan’s support to be successful in his reconciliation plan. During his visit to Pakistan, President Karzai said, “India is a close friend of Afghanistan but Pakistan is a brother of Afghanistan. Pakistan is a twin brother. We are conjoined twins, there's no separation.” He also stressed Afghanistan's neutrality by saying, “Afghanistan does not want any proxy wars on its territory. It does not want a proxy war between India and Pakistan. It does not want a proxy war between Iran and the U.S. on Afghanistan.” In addition, during his talks with Gen. Kiani, the Pakistani army chief offered him to train the Afghan army. To this Karzai said, “as far as the training of Afghan soldiers, my minister of defence will study and we will come back on this”. All these developments are not fitting well with the plans envisioned by the Indian strategic thinkers. India has no one else to blame for this predicament other than itself. India lost its influence over Karzai following its miscalculated backing of the opposition candidate, Abdullah Abdullah, fielded by the US and also having failed to support Karzai in the recent months. It is evident that in the coming weeks, President Karzai will be working closely with Pakistan to ensure that the “Loya Jirgha” ends successfully.

India’s Distancing its relations with Iran:

Iran was one of India’s long standing allies in the region over decades. However, during its flirtation period with the Bush administration, the Congress led United Progressive Alliance (UPA) government (2004-2009) in Delhi forfeited this special relationship. In January 2003, under Prime Minister Atal Bihari Vajpayee, India and Iran signed a landmark agreement known as “the Delhi Declaration”. As per the declaration, “the combat against international terrorism should not be based on double standards. States that aid, abet and directly support international terrorism should be condemned”. The declaration added that in the field of oil and gas, the two sides would formulate a joint mechanism to promote cooperation. Prime Minister Vajpayee added that the joint India-Iran initiative to develop the Chahbahar port in Iran and to connect it to Afghanistan by road have started a new trend of investment in infrastructure development. During this period India was considering the construction of a pipeline from Iran through Pakistan, commonly know as the IPI (Iran-Pakistan-India) pipeline. This was the high point in the Indo-Iranian cooperation.

The first major blow to Indo-Iranian relationship came on 24 September 2005, when, for the first time, India voted against Iran at the International Atomic Energy Agency (IAEA) meeting in Vienna. The Indian government declared that “decisions are taken in conformity with our stated foreign policy and also in the interest of India and the world”. Iran was surprised by India’s vote against it. Following this, Ali Larijani, the secretary of the Supreme National Security Council of Iran said that “India was our friend”.

India voted against Iran at the IAEA to please the Bush administration to continue with the plans for a civilian nuclear cooperation between India and the US. In October 2008 both sides formally signed the civilian nuclear deal. However, since Barack Obama came to power in November 2008, the deal remains unimplemented due to his reluctance to the transfer of “dual-use technology” to India. In November 2009, India once again voted against Iran at the IAEA. Any chance of placating Iran was lost with this gesture. Countries like Brazil, South Africa, Pakistan, Afghanistan, Egypt and Turkey abstained from the resolution. It is interesting to note how countries like Pakistan, Afghanistan and Turkey have been successful in maintaining their cordial relationship with the US and Iran at the same time.

India-US: Mid-life crisis?

The Indo-US relationship reached a new height during the UPA led government in Delhi and the Bush administration in Washington. This period saw a continued increase in Indo-US cooperation in many fields. The glorious hour of Indian diplomacy came with the successful signing of the ‘Indo-US Civilian Nuclear Agreement’ in October 2008. However, one thing which Indian strategic thinkers missed out was that it was also the starting point of the declining graph of Indo-US Cooperation. Since Barack Obama came to power in November 2009, the US administration have not shown much enthusiasm in going ahead with the nuclear deal. Honouring President Obama with the 2009 Nobel Peace Prize for his promotion of nuclear non-proliferation also have further complicated this issue.

After coming to power, President Obama had not been in a hurry to warm up relations with India. The Indian government and the Indian strategic community were lost in every sense, at this new posture taken by the US administration. Faced with the economic crisis back home, war in Afghanistan and the rise of Taliban in Pakistan, his priorities lie elsewhere. India no more enjoys the equal status it enjoyed under the Bush administration. For Obama, priorities are Afghanistan, Pakistan and China in the region. Indian policy makers and strategic thinkers misinterpreted the fact that Pakistan is US’s major non-NATO ally in the region and also underestimated Pakistan’s influence over the US policies in Afghanistan, Pakistan and Central Asia.

India-China: Brothers in Arms?

India’s obsession with China as its greatest security threat dates back to its defeat in the 1962 war with the Chinese. Since then, China has remained a hot topic for Indian diplomats, military strategists, policy makers and researchers. It is a fact that China is a threat to India, but not to the extent to which they are being projected by the media.

From the Indian point of view, all these Chinese development projects in the region are part of the larger Chinese plan to encircle India. For Indian military analysts and policy makers, the Chinese are everywhere in the region, including the Indian Ocean, which India has traditionally considered as its sphere of influence. The encirclement of India with ports, also known as ‘the string of pearls’, can be looked at from another perspective. Chinese are trying to safeguard their national interest and protect its economy. China’s dependence on imported oil and natural gas has led it to think of possible openings in this part of the world, rather than depending completely on the Malacca Strait for the passage of its vessels. They are trying to protect their back. In case of a future conflict with the US, China does not want the US to be successful in blockading its shipping lane. The reason behind developing ports in the Indian Ocean is to ensure continued oil and energy flow to China. It is wrong to interpret the increased Chinese presence in the Indian Ocean as the result of their obsession to encircle and monitor India. China will never be ready to give that much predominance to Indian military capabilities. The Chinese have never considered India as a major power or a threat. It considers India as a regional player. On the geopolitical map, the US is their only contender.

By projecting China as its greatest menace, it is India who is loosing in the Great Game nations play. India needs an approach to China diplomatically.

India-Russia: Rediscovering old Comrade

Since the 1990s the relationship between India and its long time ally and friend, Russia, has declined considerably. Changes in the government, economic policies and ideologies resulted in this drift. India’s leaning towards the US during the Bush administration has led to a weakened relation with Russia. But, with the visit of the Russian Prime Minister, Vladimir Putin to India on 12 March 2010, both sides are trying to reset this. During this visit, Putin successfully secured a list of agreements and contracts.

This includes:

1: $1.5 billion deal for the supply of 29 additional MiG-29 Fulcrum D-based fighter aircraft.

2: An agreement to sign a contract on the joint development of a new fifth-generation fighter.

3: A revised deal of $2.3 billion on the upgraded Admiral Gorshkov aircraft carrier.

4 Deals to establish a joint venture to produce navigation equipment for GPS (global positioning system) and its Russian equivalent Glonass, and the use of Glonass signal for military use by India.

5: Agreements for the construction of up to 16 nuclear power plants in India worth tens of billions of dollars.

These contracts and agreements signed by both sides will play a vital role in increasing India’s cooperation with Russia. It is to be noted that, during Putin’s one day working visit to New Delhi, which did not include any state dinner, he went ahead with offering India with the technology and partnership that India had been looking for over the years, from the US and other western powers. Hopefully, this new boost in Indo-Russian relations can help to change the US centric mindset of the Indian strategic community and policy makers.


It is a fact that whichever government is in power in Delhi, be it the ruling Congress Party or the opposition Bharathiya Janata Party (BJP), India’s foreign policy remains US-centric. Even India’s strategic community is so obsessed with “America” that any future policy making, independent of US influence and aiming at India’s national interest would be a difficult task. Allowing India’s diplomatic relations to be controlled or reviewed by other countries like the US or the European Union, will only undermine India’s capacity to project itself as a rising power.

Looking at India’s geopolitical priorities and the policies and actions taken to achieve it, it is clear that India’s diplomatic capabilities are not very ingenious. It is important to learn from history and experience, rather than repeating the same mistakes again. India has to start engaging with countries with which it have limited contacts or strained relations. At this point, it is important for India to concentrate on improving its relations with Russia, China, Iran and other countries in Asia, Africa and South America. It is important that India engages closely with China, Iran and Russia on issues relating to regional security. All these countries have stakes in Afghanistan. Afghanistan should be taken as a common point to start communicating with these countries. India’s tailing of the US policy in Afghanistan is a barrier in conducting overt dialogues with Iran, China and Russia on regional security. Pakistan is cleverly using this Indian inability to strengthen its stand with all the other important players in the region. India can use regional groupings like South Asian Association for Regional Cooperation (SAARC) and Shanghai Cooperation Organisation (SCO) as platforms to discuss regional security issues.

India has to make a clear and concerted approach in framing an independent foreign policy. Even though it might hurt some of India’s close allies, in the long run it will only strengthen India’s position on the international stage. It will demonstrate India’s independent policy making capacity, to protect its vital national interest.