May 28, 2011

Asia’s Race in Africa: What it holds for India?

Guest Column: By Dr. B.R. .Deepak

As India and China establish themselves as the two poles of world economic growth, they have started to influence the growth patterns in many countries, and the African continent is no exception. Interestingly, there are strong possibilities that Africa will emerge as yet another pole of world economic growth given the size of its huge market and natural resources. This has also lead the Asian giants to scramble for markets in the African continent, billionairefinancier George Soros has even pronounced these countries as "Africa's new colonialists" who he said were "exploiting the world's poorest continent in the same way as its old European masters." This may be an exaggeration, however, the Asian race in Africa is for real, and has been reflected in the so called India-Africa and China-Africa summits. This also demonstrates that India and China would like to forge partnership with Africa and handle this partnership with utmost care owing to latter’s huge economic and political capital. The probability of a successful partnership especially for India appears possible as African countries have many things in common with India. It is here that India can play a vital role in ‘capacity building’ as pronounced by the Indian Prime Minister Manmohan Singh during the second India-Africa Forum Summit on May 24, 2011 in Addis Ababa, the Ethiopian capital. The first Summit was held in April 2008in New Delhi.

In Addis Ababa, the Indian Prime Minister announced that "India will continue to support efforts at infrastructure development, regional integration, capacity building and human resources development in Africa." To this effect India promised 5 billion US dollars for the next three years for Africa’s infrastructure development and 700 million US dollars to establish institutions and training programs. Many experts view these summits as a move to catch up with China’s influence in that region and answering India’s impending quest for energy security. It may be recalled that China initiated similar summits with Africa since 2006 in Beijing; the second China-Africa summit was held in 2009 in the Egyptian resort of Sharm el-Sheikh. During the summit China pledged 10 billion dollars in aid to the African countries and canceled an accumulated 2.8 billion US dollars of debt for 35 African countries. The Chinese investment in Africa is estimated to be around 10 billion US dollars.

India has a historical relationship with Africa, especially during the post-colonial period. The very concept of non-cooperation and civil disobedience by Mahatma Gandhi was experimented in Africa itself during the late 19th century. However, the relationship swung from a period of great emotional and political solidarity in the 1950s and 1960s to selective engagement in the 1970s and 1980s. If we carefully analyze the Delhi Declaration issued at the close of April 2008 Summit, it is clear that India has diversified and fine-tuned its policies in political, security related, economic, science and technology, human resource development, social, cultural and other areas of mutual interest. This is a strategic partnership that would be based on the fundamental principles of equality and mutual respect. This is evident from the establishment of the 3 Africa Divisions since 2003 by the Ministry of External Affairs, India.

As regards Africa’s place in world economy, India firmly believes that like India and China, Africa is yet another "engine of world economic growth". If we talk about Africa’s integration into the global economy, it obviously includes various aspects of the globalization process, such as trade, industrialization, FDI and capital flows. A resource rich Africa is already having 108 billion dollar trade with China and 45 billion dollar with India and over 50 billion with the ASEAN. Both India and China have heavily invested in Africa’s energy resources, infrastructure development, telecommunications and mining.

In 2007, India invested $13.6 billion abroad, of which 2.3 billion has gone into Africa. The trade and investment from two of the world’s fastest growing economies going to Africa could significantly facilitate Africa’s integration into the global economy and must be translated into greater growth in Africa. If we look at the Asia- Africa trade, Africa’s primary commodity exports to Asia account for 86% of its total exports to Asia. Its processed imports, including manufactured products and food products, account for 80% of its total imports from Asia. In other words Africa provides natural comparative advantage on raw materials and resource-based products.

Since the first India-Africa summit in New Delhi in 2008, trade between the two partners has increased substantially. As regards India’s quest for energy security, yes, energy security is an essential and very important component of India-Africa partnership, for the African light crude oil, and gas account for 12% and 8% of the global oil and gas reserves. Presently 30 percent of India‘s energy needs are met by oil, with 70 percent of oil supply being imported. Much of the remaining 70 percent of energy demand is met by domestic coal reserves. If the reports of the International Energy Agency are to be believed, it is estimated that in order to maintain and sustain its current growth trajectory of 8% per annum, India will have to increase its energy consumption by at least by 3.6 percent annually, implying that if India’s energy demand would be doubled by 2025 and it would import 90 percent of its petroleum supply. Seen in this light, the India-Africa energy security becomes an important component of India-Africa relations.

As far as rules of engagements in Africa are concerned India and China have adopted equally divergent strategies. If China has adopted the model of ‘vertical integration’, India had gone for ‘horizontal integration’ with the African economies. It is true that by relying on government backing and economic strength, Chinese companies are often able to outbid competitors for procuring contracts from local governments. However, most of the Indian firms in Africa are either privately owned or under mixed private-public ownership. They are less vertically integrated, and engage in far more sales to private African enterprises.

The Indian government is also actively supporting Indian businesses in Africa through various government institutionssuch as the Export-Import Bank of India, FICCI, CII; it has been providing soft loans, cheap generic drugs and market access to goods from Least Developed African countries into India on nominal tariff rates. The case of Indian pharmaceutical companies doing business in Africa is such an example. Ranbaxy, has provided reasonably priced medicines, particularly Antiretroviral (ARV) drugs, to several African countries including Nigeria, Kenya and Zambia. Cipla another Indian pharmaceutical giant, provides HIV/AIDS drugs to 1 in 3 patients in Africa.

The ‘horizontal integration’ model may not have won many projects for the Indian companies,but has certainly earned enormous goodwill for India in Africa. There are asymmetries in the economic relations between Asia and Africa. For example, though the African export to Asia account for 25% of its global exports, it accounts only 1.6% of its global trade. Secondly, Africa’s FDI in Asia is abysmal; thirdly, African textile and apparel industry is competing with the extremely competitive Chinese and Indian textile industries globally. Therefore, it becomes imperative that the South-South economic relationship address asymmetries. Some of the measures could be reduction in tariffs on Africa’s leading exports; helping Africa in strengthening its basic market institutions, and governance; Sectoral capacity building is vital. For example, Africa’s large imports of diamonds from India could be processed in Africa itself by inviting Indian investment in this sector instead of importing processed diamonds from India. Also, Africa needs to be integrated with the global value-chain.

For example, cotton exports from Africa are increasingly being complemented by intermediate materials, say fabrics supplied by the Asean countries to apparel producers in Africa.Politically too, Africa is equally relevant to India as sub-Saharan Africa holds over 50 seats in the UN Security Council. Both have reiterated that there is need for urgent and comprehensive reform of the United Nations, in particular, the expansion of the UN Security Council, in both permanent and non-permanent categories of membership. India would also like to bolster diplomatic and security presence in Africa. The anti-piracy patrols in the key shipping routes of the Gulf of Aden and the Indian Ocean since 2008 are pointers in this direction. The routine India-Africa summits will definitely make this relationship healthier and stronger, equally important for India is to engage individual African countries at various levels and forge even closer ties with them.

Dr. B R Deepak is professor of Chinese and the Dean of School of Languages, Doon University, Dehradun India, he could be reached at


By Kandaswamy Subramanian

The bizarre sexual assault on a chamber maid in a New York hotel by Dominique Strauss Kahn (DSK), formerly Managing Director, International Monetary Fund (IMF), on 15th May, 2011 shocked public opinion across the globe. He has been charged by the New York police for seven offences and the punishment may run to 25 years, if finally convicted. However, it is surprising that the assaults made on the IMF by European countries to capture top posts have not met with similar shock. Indeed the BRICS have also been making feeble attempts; but the assaults by European countries are brazen.

The European countries were the earliest to commence the assaults and they seemed to imagine they had a natural right to get the post. They fell back on post-war history, tradition and the current euro mess in support of their claim. Emerging economies, especially those in the G-20 and its sub-group called BRICS, lean on declarations issued after G-20 Summits on the reform of the IMF. The atmosphere is indeed surcharged with drama and high expectation. It may well end up as an absurd play.

The problem of finding a successor to DSK did not begin with the New York hotel incident. Rather, it lent urgency to an issue which was already brewing within the IMF ranks. Months earlier, DSK had announced his intention to resign from the post to be able to stand in the French Presidential election as a Socialist candidate. He was viewed as a strong contender who could threaten the re-election chances of President Sarkozy.

Among the French electorate, there was the belief that DSK had the right stature and accoutrements. He was nicknamed as one of the "caviar left" which glamorised his love of luxury and ostentatious living, notwithstanding his socialist label.His presidential hopes were buttressed by his millionaire wife Anne Sinclair who was a television celebrity in France for some years. DSK’s departure from the IMF was imminent and had already given rise to internal debates over a successor.

A related development linked to DSK’s exit was that of John Lipsky, the next senior official in the IMF. Lipsky completes his term by end of August. He did not seek a second term though he is highly respected within the Treasury/Fund circles. These, together, created the need for a management change in the IMF.

The post-war unwritten tradition has been that the top post of the IMF - Managing Director- goes to Europe and the next level – Senior Deputy Managing Director – to a U.S. nominee. This tradition is not ordained by any law or Article of the IMF or the World Bank. A sudden vacancy in both the positions was double jeopardy inasmuch it strengthened the claims of emerging economies to have a share in the top management.

The other tradition linking the Washington Twins was that, in return for Europe taking the top IMF post, the U.S. would take the top World Bank post- the President. Between Europe and the U.S., this was a snug arrangement which worked well and went unchallenged for years. It took decades for demands to arise for a change in their management policy. Such demands have indeed risen In recent years and negotiations are continuing in many forums, especially the G-20.

The demands for management change formed a part of the package of proposals to reform the IMF. Share in management was linked to those seeking changes in the ‘seats’ of the IMF Executive Board and voting rights or ‘quotas’ of members. For more than two decades, economists and analysts had criticized the "democratic deficit" in the management structure of the IMF and World Bank and were making suggestions to correct them and to restore greater legitimacy to the Twins. The OECD countries, especially the U.S., were unyielding and continued with the post-war legacy regardless.

Developments in recent years like the weakening of Western economies, the relative shift of economic balance in favour of Southern developing countries, the outbreak of the financial crisis in August 2008 and the formation of G-20 as a group to coordinate global efforts to combat the global crisis, etc. would weaken their resolve. Advanced economies began to concede the demands for reforms and made some moves or gestures and declarations in that regard. They signaled willingness to shed power in the IMF and share it with the emerging economies.

The emerging economies were euphoric over such concessions and began to feel they were winning in the race. Sadly, they are not alive to ground realities. What they assume to have gained through G-20 exercises is more in form than in substance. Rather, it is work in progress and the current battle for the top IMF post would exemplify that harsh reality. With the sudden fall of DSK, European countries found themselves in a bind. Earlier when DSK had announced his intention to resign, they had time on their side to play a game on emerging economies. As Simon Johnson, former IMF Chief Economist and currently with the MIT, explained, "The prevailing belief was that the Europeans would pull one of their clever diplomatic moves and nominate one of their own managingdirector, in consultation with the Americans who want to hang on to the presidency of the World Bank.’ He went on, "This process is much harder for the Europeans and Americans to control."

Many observers felt that the departure of DSK offered a good opportunity for the emerging economies to stake their claims for higher share of the IMF management. Their grievance was that that it was not proper that Europe and America should continue to have lock on senior posts even as emerging economies are called upon to assume a larger share of the financial burden. This turned acute when the IMF began to pump trillions of dollars to bail out European banks.

Unfortunately, European officials have turned assertive in their claims to keep the post for a European as heretofore. German Chancellor Angela Merkel took the lead saying that the sovereign debt crisis in the Eurozone periphery was a good reason to propose a European candidate though she did concede, half-heartedly, that emerging market economies could mount a valid claim on the top post "in the medium term." Jose Manuel Barroso, President, European Commission, lost no time by adding that the EU would put forward a common candidate. The Belgian Finance Minister joined the chorus and said, "It would be preferable if we (Europeans) continued to hold those posts in future."

There have been very interesting and provocative analyses, comments and debates on the issues among many economists and journalists. Indeed, opinion is diametrically divided. Wolfgang Munchau, a popular and provocative columnist of Financial Times, had no hesitation in writing that at the urrent juncture the IMF needed another European head. He referred to the IMF’s programs and involvement in the Eurozone’s contagious financial crisis which constituted the biggest threat to global financial stability. Strangely, he takes the view that at an hour of crisis like the present one, the IMF’s single most important influence in Eurozone crisis was political and, "In a situation marked by a lack of political leadership, the IMF filled a vacuum." Ergo, the top post should go to a European politician. It is not economics stupid, but politics!

Coming from a respected commentator, this plea was rather strange. Arvind Subramanian countered that line of reasoning and drew attention to the changing nature of the Eurozone crisis and said, ".. there is less need for a European and more for an objective outsider." He lists the names of nine potential candidates from non-European or Asian countries who have the merit to be considered for the post. Raghuram Rajan was more forthright in his analysis. He argued against an ambitious European politician taking over the reins of the IMF. As he said, "The biggest risk of all is to have someone heading the fund whose political ambitions are still alive. Here there is a danger that decisions made by someone with substantial influence over nearly a trillion dollars of funding will be made with a view to establishing an electable record in his or her home country." He felt that the decision over the appointment should not be decided behind the closed doors of the European Council and should be transparent. Mohamed El-Erian is one of the eminent financial analysts known for his wizardry in finance and his support for the concerns of emerging economies. (He was mentioned as one of the potential candidates for the post, but has since indicated his unwillingness to be considered.) He is very critical of "the feudal process" and argues how the legitimacy of the IMF itself is undermined by it. "Nominations have been determined by political back door deals among a small set of countries, often governed by issues of national prestige rather than job qualifications

" The feudal selection process must be changed……Without a credible and quickly recovering IMF, Europe will face even more uncertain prospects, progress on structural reforms in advanced countries will recede, and the world will find it more difficult for rapidly growing economies." The harsher critique of some analysts is that if the IMF did not have an Asian to handle the Asian crisis when it was raging or a Latin American to handle the Brazilian and Argentinian crises when they were aflame, why should Europe need a European as the MD of the IMF to handle the Euro crisis?

Martin Wolf also takes the same view. He feels that the European argument does not have much force. As he explains, "The counter argument is that it is in the Europeans’ interest to receive unbiased and independent advice from the IMF. That Mr. Strauss Kahn could not give. Mme Lagarde will not be independent either."

Unfortunately, issues relating to the IMF management and appointment to top posts are seen through the prism of the current Euro crisis. It results in a myopic view and a closed mindset. This psyche seems to drive all European countries to form a chorus and make a pitch for a European candidate. There is an implicit assumption or nervousness bordering on fear that non-Europeans cannot provide leadership. This assumption, stretched to its extreme, may transform the IMF into a bucket shop to be run for Europe by Europeans. It fails to reckon with the fact that the IMF is an international financial institution which is funded by 187 members and has a remit to take care of global financial stability and larger issues like exchange rate volatility, capital management, etc. It also ignores the special responsibility to poorer developing countries. Even a Lex column in the Financial Times betrayed the same prejudice when it wrote, "Ideally, nationalities should not matter, but a Mexican or South African central banker …. would be less comfortable with intra-European intricacies, a consideration which has made Christine Lagarde, French finance minister, the favourite to succeed DSK."

In short, in all this thinking, as Moises Naim lamented, "In the IMF succession, (there is) a stench of colonialism." Latest reports suggest that most of the European countries are supporting the candidature of Lagarde. The British Chancellor George Osborne has lent support. The German Finance (Wolfgang Schauble) has said, "Should Christine Lagarde decide on a candidature, Europe would have the best chance to fill the post." Italian Prime Minister Silvio Berlusconi has called her "excellent." Indeed there are stray dissenting voices within Europe. But, these will be muffled in due course.

It is not agenda item in the G-8 meeting being held at Deauville, France, this week. (26- 27 May, 2011.) But the item is all around the gathering and is being debated informally both inside and on the sidelines. It is abundantly clear that all of Europe is united behind Lagarde and, for the first time, President Sarkozy has supported her candidature.

Mme Lagarde has entered the fray offering herself as a candidate. Perhaps, as a measure of diplomacy, she has proposed herself as a candidate and not by Europe! She says, "I am not basing my candidacy on the fact that I am European. My intimate knowledge of the European community, of the Eurozone and its leaders, can help a bit but it should not be a plus on which my candidacy should be based." More significantly, she has launched a campaign to woo developing countries. She is preparing to undertake a tour of emerging market capitals to persuade them to support her candidature. In a statement issued she has promised to remedy the management deficit in the IMF by appointing more from emerging economies to senior posts. She affirms, "I don’t think I should represent any particular constituency or region. I should serve the whole institution." It is unclear how reassuring this will be to sceptics who have been watching the performance of the IMF in the last three years. The fact that she is beginning to lobby her candidature with the developing countries is clearly an indication that times have changed somewhat. Is it enough?

The IMF has already called for nominations and hopes to finalise the appointment by the end of June. Nominations opened on 23rd May and close on 10th June according to an announcement by IMF spokeswoman Caroline Atkinson today (27 May). Nominations have been called from all the 187 members of the IMF unlike in the past when it was confined to 24 members of the Executive Board. (This is, at least on paper, one of the consequences of the demands by G-20 for a more transparent selection process.) The selection would be announced by June 30.

So far, there are only two candidates who have been officially sponsored: Mme Lagarde France and Agustin Carstens, Chief of Mexico’s central Bank. (Brazil has expressed reservations over his nomination.) Russia has been suggesting the candidature of Grigory Marchenko, head of Kazakastan’s central bank, but is yet to sponsor it officially.

Russia is also open to consider the candidature of both Lagarde and Carstens and is yet to indicate its preference.

The spokeswoman of the IMF said, "The executive board, whose members represent a country or group of countries, is aiming to select the next chief by consensus, but it could resort to a vote." If there is vote, the U.S. and Europe will win hands down. IMF data as on March show that G-7 major economies hold 44.3% of voting rights and emerging economies hold 40.5% it is more than clear that Lagarde is the winning candidate. As the Financial Times in an edit quipped, it is a "one horse race (which) will ill serve the IMF."

One issue on which her candidature could be unstuck is a pending legal issue where she is alleged to have abused her power and got a claim settled through arbitration instead of through courts in favour of a business friend. A verdict on this allegation is expected soon. Surprisingly, not one European celebrity proposing her name seems to be troubled by this stain on her record.

The other sticking point is the stand the U.S. may take on her candidature. Treasury Geithner was quick to act by replacing Lipsky as the acting Managing Director so that the IMF is not hamstrung in its regular operations. However, the Treasury has not revealed its hands over Lagarde’s candidature. Geithner made vague statements about the "ability of the IMF to be helpful" and to feel confident "that they will be able to." The U.S. has also called for an open and prompt process for choosing the new head. As the largest single shareholder wielding a shareholding of 17 per cent, the role of the U.S. is crucial. It can veto any proposal with its voting strength. However, the record of the Fund is that decisions are always taken by consensus and issues are not driven to their breaking point. They are deferred or withdrawn and brought back after backstage negotiations lead to consensus. There are enormous delays over decision due this procedure. However, this issue regarding appointment of the M.D. cannot be delayed beyond 30th June as already determined by the IMF. In 2007 also the decision to appoint DSK as the MD was taken by consensus. Further, the European crisis is getting out of hand and it needs a fully functional IMF. It is at the IMF Board that the U.S. may reveal finally its choice. On the sidelines of G-8 this week, Hillary Clinton said that Lagarde would be her personal choice and ‘is qualified for the post.".

There is no reason to believe that the U.S. will not back the European candidate. Firstly, it will like to fill the number two position (vacancy created by Lipsky) by one of its nominees. It has already picked David Lipton, a former Treasury Official and a current White House Staffer, for the slot. More importantly, it would like to keep the World Bank post as its preserve in line with the post-war tradition. There is the fear that Congress will not approve any funding for Bank programs like IDA, etc. if the Bank is not presided over by an American. The U.S. will not like to upset the apple cart. This should take us to the situation way back in 2009 when emerging economies were clamouring for reforms in the IMF and reduction of European seats in the Fund/Bank.

That issue related to the reduction of the number of seats held by European countries in the IMF Board. European states held 9 seats out of the total of 24. It was a complex matter linked to seats and shares in the IMF. The G-20 had been formed earlier and the U.S. needed the support and cooperation of G-20 to be able to coordinate and tide over the financial crisis. It was agreed that the seats held by Europe was disproportionate to their relative economic strength. The U.S., it seemed, was keen to keep the alliance of emerging economies. As explained by the Economist, "One reading is that the Treasury….. is really serious about this reform business, believing that the future of the IMS rests on its being seen by major emerging economies as an institution they have enough of a say to trust."

During the crisis and in the first two years of the crisis after the establishment of G-20, there were loud declarations and commitments on various macroeconomic issues such as financial stability, regulation, etc. One major part related to the reform of the IMF. These were covered in the London Communiqué and the Statement issued after the Pittsburgh Summit and, later, firmed up on 24 October 2010 after the G-20 meeting in Gyeongju, South Korea. DSK as Managing Director described them thus: "This makes for the biggest reform ever in the governance of the institution." It was touted as Europe giving up IMF seats to emerging powers.

It is not practicable, nor necessary, to deal with all the reform proposals. The most important one related to this issue concerning the appointment of the Managing Director. Both the London Communiqué and the Pittsburgh Leaders’ Statement stressed that future criteria for electing heads of all international institutions need to be based upon qualifications instead of regional origin. Significantly, they covered both the

IMF and the World Bank. Unfortunately, the G-20 communiqués do not provide details of such a process or the criteria included. It would possible for the US and European countries to argue that the process for election of a successor to DSK is transparent and would be on ‘merit.’ They can well exploit the vagueness and ambiguity in the earlier communiqués and commitments. Perhaps, emerging economies were taken for a diplomatic ride!

It is interesting that after the BRICS Summit held in China in April this year the leaders issued a statement seeking to end West’s monopoly on Leadership of World Bank and IMF. They said that the management structure of the institutions needs to reflect changes in the world economy. "The selection calls for a bigger role for developing countries in global institutions." Brazilian President Dilma Rousseff said, "We will insist on the fact that governance at the IMF and trhe World Bank cannot be a systematic rotation between the U.S. and Europe, with the other countries excluded."

Unfortunately, when the management crisis struck the IMF within a month after the last BRICS meeting, they were unprepared for a common, coordinated action. China called for selection "based on fairness, transparency and merit." China’s Zhu Minh was Already with the IMF as Adviser to the M.D. and is considered "not experienced enough for the position of managing director. In fact, China was hoping to elevate him to the Deputy Managing Director post in time. Reports also suggest that China may support the nomination of Lagarde. It has enormous euro assets and would like to cooperate with the EU to safeguard its assets.

The Brazilian reaction was that "it will be hard to prevent another European from taking place." As explained earlier, Brazil has reservations over Garstens of Mexico. India has not taken any initiative to nominate any candidate though its Finance Minister has indicated his attempts to find a common candidate from among emerging economies. (God bless him!)

South Africa’s Finance Minister has been supporting Trevor Manuel who has also issued strident statements criticizing the selection processes in the institutions. Every journalist and economist watching the developments began to say that there was lack of unity among emerging economies in nominating a successor. It is indeed sad that the loud and moralistic declamations made by them in platforms like G-20 and BRICS are not matched by their actions. The latest statement issued by the Executive Directors of BRICS in the IMF Board is another exercising in verbal posturing. It has been signed by those from Russia, India, China, South Africa and Brazil. If they meant it seriously, they should have issued t earlier. The statement recounts all the generalities raised in the earlier G-20 and BR%ICS gatherings and included in the Communiqués. Instead of raising them ad nauseum, had they come together earlier and nominated one common candidate, there was some hope of challenge to Europe. In the absence of such a move, it has gone by default.

The current developments and experience would suggest that the contents of G-20 agreements and statements should not be delightfully vague and should have body and contents to bind the Western powers when there is another change of guard. While suggesting this, we are aware of the difficulties in reaching such an agreement. But we in the developing world should not live in a fool’s paradise on the hope that G-20 will deliver all the goodies.

Declaration of Rejection to US Sanctions Against Venezuela's PDVSA

In response to the US State Department's decision to impose unilateral sanctions against Venezuela's PDVSA this week, individuals and/or organizations within the United States are being asked to add their names to the following 'Declaration of Rejection' (available in both English and Spanish).

Calling the sanctions against PDVSA "a grave and dangerous move by Washington to justify further aggression against the Venezuelan people", the authors of the Declaration encourage all citizens/residents of the US (and their organizations) to "sign the petition" by emailing their name (and/or name of organization) to [].


~~~English Version~~~

We Reject United States Sanctions Against Venezuela

On Tuesday, May 24, 2011, the United States Department of State unilaterally imposed sanctions against Venezuela’s state-owned oil company, Petróleos de Venezuela, S.A. (PDVSA), for its alleged relations with the government of Iran. The sanctions are a desperate and weak attempt to link Venezuela to Iran’s nuclear energy program as part of an ongoing campaign to justify further aggressive action against the South American oil producing nation.

As citizens of the United States, we unequivocally reject this latest attempt of our administration to demonize the Venezuelan government and undermine the vibrant democracy of the Venezuelan people. The Venezuelan government of Hugo Chavez has already been victim of a coup d’etat in 2002, backed by Washington, which briefly ousted the President from power. Fortunately for the health of Venezuela’s democracy, the people fought back, rescued their President, and reinstated constitutional order. Then, as now, the United States stood alone in its support for hostilities against Venezuela’s democratically-elected government.

The government of Hugo Chavez has used its oil wealth to invest heavily in improving the wellbeing of its people. Currently, more than 60% of oil industry profits are directed towards social programs in Venezuela, including free healthcare, education, job training, community media, grassroots organizations and subsidized food and housing. The results are notable. Poverty in Venezuela has been reduced by over 50% during the Chavez administration, illiteracy has been eradicated and free, universal healthcare and education are available and accesible to all. These policies of social justice have extended well beyond the borders of Venezuela to the United States though programs that supply free, discounted or subsidized heating oil and fuel to low income neighborhoods, indigenous peoples’ communities and homeless shelters throughout the nation.

More than 250,000 US citizens in 25 states and the District of Columbia have benefited to date from the Venezuelan government’s subsidized heating oil program, which is run through PDVSA’s subsidiary in the United States, CITGO. No other oil company in the world - including US companies - has offered to help low income families suffering from the inflated cost of heating oil during the past six years, except for CITGO. Venezuela’s solidarity with the people of the United States has enabled thousands of families to survive through these difficult economic times.

We find it outrageous that the United States government would attempt to demonize the one company, and country, that has been there for our neighbors, putting people before profits. And we call on our representatives in Washington to suspend these sanctions against Venezuela immediately.

-Friends of Venezuela


~~~Spanish Version~~~

Rechazamos las sanciones de Estados Unidos contra Venezuela

El martes, 24 de mayo de 2011, el Departamento de Estado de Estados Unidos unilateralmente impuso sanciones contra la empresa estatal de Venezuela, Petróleos de Venezuela, S.A. (PDVSA), por sus supuestas relaciones con el gobierno de Irán. Estas sanciones son un intento desesperado y débil de vincular a Venezuela con el programa de energía nuclear de Irán, como parte de una campaña continua para justificar más acción agresiva contra la nación suramericana.

Como ciudadanos de Estados Unidos, rechazamos contundentemente este último intento de nuestra administración de satanizar al gobierno de Venezuela y socavar la vibrante democracia del pueblo venezolano. El gobierno de Hugo Chávez ya ha sido víctima de un golpe de estado en 2002, apoyado por Washington, que brevemente sacó al Presidente del poder. Afortunadamente para la salud de la democracia venezolana, el pueblo luchó, rescató su Presidente y reinstaló el orden constitucional. En aquel momento, como hoy, el gobierno de Estados Unidos estuvo solo en su apoyo para las hostilidades contra el gobierno democráticamente electo de Venezuela.

El gobierno de Hugo Chávez ha usado su riqueza petrolera para invertir masivamente en el mejoramiento del bienestar de su pueblo. Actualmente, más de 60% de las ganancias petroleras son dirigidas hacia programas sociales en Venezuela, incluyendo la atención médica gratuita, educación, trabajo, medios comunitarios, organizaciones comunitarias, y comida y viviendas subsidiadas. Y los resultados son notables. La pobreza en Venezuela ha sido reducido en más de 50% durante la administración de Chávez, el analfabetismo ha sido erradicado, y ahora hay acceso para todos a la educación y atención médica gratuita. Éstas políticas de justicia social se han extendido más allá de las fronteras venezolanas hasta los Estados unidos, a través de programas que suministran aceite para calefacción gratis o con descuentos a comunidades de bajos recursos, tribus de nativos estadounidenses y albergues para personas sin vivienda o en situación de indigencia por toda la nación.

Más de 250 mil estadounidenses en 25 estados y el Distrito de Columbia han sido beneficiados hasta hoy a través de este programa de aceite para calefacción, gratis o con descuentos, del gobierno venezolano, lo cual se maneja a través del subsidio de PDVSA en Estados Unidos: CITGO. Ninguna otra empresa en el mundo – incluyendo empresas estadounidenses – ha ofrecido ayudar a las familias de bajos recursos en Estados Unidos que sufren de los costos inflados del aceite para calefacción, con la excepción de CITGO. La solidaridad de Venezuela con el pueblo de Estados Unidos ha ayudado a miles de familias sobrevivir estos tiempos difíciles.

Nos indigna que el gobierno de Estados Unidos intente satanizar la única empresa, y el único país, que ha estado allí apoyando a nuestros vecinos, poniendo a las necesidades del pueblo antes de las ganancias. Y llamamos a nuestros representantes en Washington a que suspendan inmediatamente estas sanciones contra Venezuela.

- Amigos de Venezuela

The Three Paths to Open Innovation

To build your capabilities and cast a wider net for ideas, you must figure out which of the three types of innovation strategies you already have — and design your R&D approach accordingly.

Finding and developing good ideas is what corporate innovation strategy is all about. That’s why the concept referred to as open innovation has dominated so many discussions about research and development during the past decade. The logic is unassailable: Every company and every line of business within a company can benefit from looking outside its organizational boundaries for innovative business ideas, for collaboration in developing those ideas, and for validation of those ideas in the real world of consumers. It is nearly impossible to be consistently smarter than the rest of the world; tapping into new sources of business ideas can be a powerful exercise for overcoming this challenge.

Moreover, the benefits of actively pursuing open innovation have been clearly demonstrated. Booz & Company’s research shows that companies with robust open innovation capabilities — including strong technology-scouting practices and cross-boundary collaboration — are seven times as effective as firms with weak capabilities, and twice as effective as those with moderate capabilities, in generating returns on their overall R&D project investment portfolio. Some companies, most notably Procter & Gamble, have maintained leadership in their industries through renowned open innovation strategies, building links between inside groups and outsiders such as customers, inventors, academics, and even competitors.

But many companies have embraced open innovation only to conclude that it doesn’t work for them. Often they take it on as a panacea for innovation ills. They then discover that putting processes in place to find, capture, and commercialize business ideas, and creating a corporate culture that promotes and protects collaboration, are not easy tasks. The problem is not the concept: Good ideas can be found outside the R&D lab, and this type of research and development strategy can be made to work. The primary problem is not even the “not invented here” form of innovation culture that is blamed for blocking outside ideas in many companies. In truth, many companies are willing to build an innovation culture that is open to the ideas of outsiders, but it isn’t always obvious how to make the shift.

The basic problem is the isolation between open innovation and a company’s current R&D strategy. Most companies already have a basic, ingrained approach to innovation, tied tightly not just to generating ideas (which is comparatively easy) but to developing and executing them (which is the hard, value-creating part of innovation). In short, if you are looking to build an open innovation practice, it will work only when you match your company’s efforts to look outside with the capabilities you already have on the inside. To do that, you must recognize the kind of R&D system you already have in place — and treat it as your strategic core.

A Trio of R&D Strategies

Every year, Booz & Company surveys data on R&D spending and performance for 1,000 publicly held companies around the world — those with the highest annual budgets. This study, the “Global Innovation 1000,” has yielded a number of insights about the best way to design an innovation strategy. Among them is the recognition that successful companies tend to choose one of three distinct approaches. They become Need Seekers, Technology Drivers, or Market Readers, and that choice, in turn, determines how they can succeed.

A Need Seeker strategy directly engages current and potential customers to better capture their unarticulated needs, shapes new products and services, and strives to make the company the first to market with those new offerings. An example is Stanley Black & Decker Inc.’s DeWalt division, a maker of power tools for professionals, which regularly sends members of its R&D group out to construction sites to research builders’ needs, observe construction crews in action, and test new products with them.

A Technology Driver strategy follows the direction suggested by the company’s technological capabilities, leveraging its investment in research and development to drive both breakthrough innovation and incremental change, often seeking to solve customers’ unarticulated needs with new technology. An example is the German technology giant Siemens AG, which spends 5 percent of its overall R&D budget on planning for the long term, and develops detailed technology road maps within individual business units.

A Market Reader strategy monitors customers and competitors with equal care, but the company maintains a more cautious approach, focusing largely on creating value through incremental change and being a “fast follower” of proven concepts. An example is the Visteon Corporation, which conducts well-designed research into market trends before investing in new innovations — such as reconfigurable digital displays for cars — but is prepared to move with full force and rapid speed when it discovers demand.

Research suggests that the three strategies deliver comparable financial success if tightly aligned with a company’s overall business strategy. But it also demonstrates that each of these innovation models requires a distinct set of innovation capabilities to succeed. (See Exhibit 1.)

In light of these findings, companies that develop the appropriate innovation strategy must align it with their overall corporate goals and assemble a cohesive set of capabilities to gain a clear financial advantage. The key isn’t to be good at everything, but rather to excel at what matters most to your success.

That’s why open innovation is a critical capability only for Need Seekers and Technology Drivers. These companies rely on being early to market, with innovations rooted in either the latest technology or new customer insight. Need Seekers are continuously looking for ideas, often from customers, to drive incremental improvements in their products as well as to spur entirely new offerings. Technology Drivers depend heavily on developing new, often untested, technologies that can be converted into products. Their success depends not just on importing fresh ideas from a wide variety of sources, but also on ensuring that the products that they do go on to develop will ultimately succeed in the marketplace.

And Market Readers? These companies have built their strategy around a fast-follower model. They should focus on being strong in other capabilities, particularly in the stages of product development and commercialization.

Establishing Open Execution

Few companies have the wherewithal to develop enough new products and services to keep growing in an increasingly competitive business climate. One thing is certain: A scattershot approach to open innovation will not succeed. If you are seriously interested in open innovation, you will need to establish a systematic process for capturing the best ideas, whether from within or outside your company, and focus on the specific set of capabilities needed to capture, develop, and commercialize the good ideas that surface. Open innovation, like any key capability, can keep you one step ahead of the competition, but only if it is approached with rigor and seriousness of purpose.

Reaping the full benefits of open innovation is no easy task, especially for companies that have yet to venture into this often complex and tricky domain. We typically divide the effort into five activity areas, which are addressed concurrently: organization, external relationships, culture, processes and tools, and incentives.

Organization. No open innovation effort will succeed without the involvement of a senior-level executive to champion the program. An innovation office with access to a dedicated innovation fund should be established under his or her auspices. The office’s mission should be to seek out new ideas, and the office should put together two kinds of teams: some dedicated to developing and managing relationships with external partners; others, chosen from different business units, to organize cross-functional innovation processes.

External relationships. The key to successful open innovation lies in establishing strong relationships with outside partners — whether they be universities, other companies, or even independent inventors and consumers — and developing systematic processes for surfacing and vetting ideas. Adequate intellectual property (IP) policies must be agreed on, policies that allow for the proper licensing of external ideas and make clear the conditions under which external partners can use that IP. But it is critical to ensure that such protections are not allowed to become legal handcuffs that restrict opportunities via an excessive aversion to risk.

Culture. Promoting open innovation may present a set of internal challenges. Companies that struggle to innovate, especially Technology Drivers, tend to lack a truly collaborative cross-functional environment. Success depends on fostering a culture that expects and rewards the free exchange of ideas across divisions and geographies, making it easy to disseminate ideas and gain access to ideas from other groups. You can’t do this by fiat; a decree that “from now on, we will be open to new ideas and experimentation” will be ignored. To build a collaborative culture and move away from the not-invented-here syndrome, start by changing behaviors; attitudes will follow. Companies that do this well have typically established a team for designing new practices. For example, the team might design and establish an active internal venture capital investment scheme, to review ideas quickly and then move right away to vetting and acting upon them if they are worthwhile. This in itself will give innovators better reasons to share their ideas.

Processes and tools. Companies that make the most of open innovation are highly disciplined in their own use of technology, and in their process innovation. They communicate frequently and use consistent processes, backed up with simple, flexible IT tools, to track new ideas, select the best ideas, manage the development stage, and link R&D with other functions such as marketing and manufacturing. Some companies are turning to social media tools to promote internal and external collaboration.

Incentives. Once discovered, good ideas need to be captured effectively. Creating solutions that benefit both you and your partners is critical to successfully developing external ideas. Internal budgets for divisions and functions should be tied in part to those areas’ innovation efforts, as should individual incentives. This will require a process for developing and tracking key innovation metrics.

Each of the three types of companies has its own approach to these activities, and gains leverage from them in a different way. For example, Need Seekers may convene cross-functional groups that can integrate their separate ideas into common innovation practices. That might not work so well for Technology Drivers, which are typically working with highly specialized and intensive R&D practices, and which may need intensive ways to train their marketing teams and bring them on board (and which may have outsourced manufacturing altogether). Although the details will vary, the basic message is clear: Companies have an enormous amount to gain from open innovation. They will, however, realize those gains only if they think of this new approach as an innate part of their distinctive R&D skill — a capability that, in the end, gives them a distinctive edge.


  • Barry Jaruzelski is a partner with Booz & Company based in Florham Park, N.J., and is the global leader of the firm’s innovation practice. He focuses on the high-technology and industrial sectors, and specializes in corporate and product strategy.
  • Richard Holman is a Booz & Company principal based in Florham Park, N.J., and a leader of the firm’s innovation practice. He specializes in highly engineered product industries such as aerospace and high technology.
  • This article was adapted from “Casting a Wide Net: Building the Capabilities for Open Innovation,” (PDF) by Barry Jaruzelski and Richard Holman, Ivey Business Journal, March/April 2011.

UK: Combating cyber attacks

May 4, 2011

By Tristan Kelly - This article has been first published in the May 2011 issue of Defence Focus - the magazine for everyone in Defence.)

After last year's SDSR, the UK Ministry of Defence's (MOD) contribution to cyber security is progressing apace. As part of last year's Strategic Defence and Security Review (SDSR) the Prime Minister announced that our ability to detect and defend against cyber attacks would be crucial to our national security, so important in fact that it was elevated to a 'Tier 1' threat alongside issues such as terrorism and international military crises. Since then, work to embed the culture of operating in cyberspace across the defence community has been taking place in earnest with the Defence Cyber Security Programme being set up to drive the necessary changes. Now, under the leadership of Major General Jonathan Shaw, Assistant Chief of the Defence Staff (Global Issues), work on the programme is moving ahead quickly and the Cyber Security Policy Team was stood up on 1 April 2011 to develop a unified and integrated response to the threat of cyber attack.

The timeliness of the initiative is not lost on David Ferbrache, the senior civil servant heading the policy team: "We were seeing a major increase in the threats to our national security through cyberspace," he said. He cited cyber crime, cyber espionage, and growing concerns about broader issues like dependency on information systems, terrorist use or cyber attack downstream as the main drivers for increased focus on the area. Indeed, in a speech last year Armed Forces Minister Nick Harvey observed that the cyber threat is not only a risk area emanating from traditional state organised forces, but also lends itself perfectly to the 'asymmetric' methods of warfare favoured by terrorist groups and insurgencies. The question of particular resonance to Defence is how would these developments in cyberspace shape the nature of future defence operations - both the opportunities and also potential threats of disruption? However, countering this relatively new threat also entails new resources and £650m was allocated for the national strategy with some £90m of that earmarked for Defence. This will be used for the mainstreaming of cyber into Defence business, improved cyber education and awareness in the Department, and the development of aspects of cyber capability for Defence purposes: "What CDS [Chief of the Defence Staff] is driving for is to get cyber into the mainstream of how we do operations and planning for the future," said Mr Ferbrache. "So in the past you would have had air, land and maritime but what he is trying to get to is a point where commanders actually think about cyberspace as an operating domain in a similar way. "For example, they may say 'what might people be doing to us through cyberspace as this military action unfolds and what are the opportunities for us to also influence and in some cases disrupt their systems and capabilities as well?'" That is seen as quite a fundamental shift as in the past, for example, contingency planning would be focused mostly around one particular joint operational area and those contingency plans would emphasise the use of physical forces - aircraft, ships etc. Increasingly commanders must now assume people will do things to us through cyberspace as that operation unfolds. Of course, the MOD does not have sole responsibility for national security. There is a desire to further link up with other agencies such as GCHQ (Government Communications Headquarters) so their capabilities are fed into military operational planning, both in the defence of our own systems and sometimes to be able to influence external systems through cyberspace in future as well: "The intent is not to grow a large cyber capability inside the MOD, but is to make a defence contribution to the national capability," Mr Ferbrache explained. However, the MOD does have a critical part to play and the funding announced in the SDSR will see the creation of a large number of new posts in Defence, drawn from all three Services as well as civilians: "It's a national effort so what we are not doing is replicating posts with skills we can get elsewhere," Mr Ferbrache said. Surprisingly there will be relatively few technical specialists in the total number, rather what recruiters are looking to find are people who can link cyber capabilities to defence systems and problems: "You will find people who are good planners, people who understand military systems and their operation, including the ways in which they can be degraded and what we might do to counter that. You will find people who can act as the translators between technical specialists and operational commanders in Defence." The locations of these posts will be geographically dispersed, with many of them embedded directly into GCHQ in Cheltenham, while some will be in the Global Operations Security Control Centre in Corsham. Others will be embedded in the operational headquarters themselves, PJHQ (Permanent Joint Headquarters) and downsteam in deployed headquarters, with individuals here acting as the commander's cyber expert or adviser on the ground. Over the next four years it is envisaged that whole new career structures in Defence will be developed to support this work, and to recognise the growing importance of cyberspace to the future of defence and national security.

COMMENT: On Managing Afghanistan Backing Northern Alliance II is the only viable option for India when US troops withdraw

An optimistic scenario that some American analysts like former Ambassador of India Robert Blackwill support and advocate. They argue that a de facto division of Afghnaistan will lead to the creation of a Pshtun entity straddling both sides of the disputed Durand Line, which no Pashtun worth his salt recognizes as an international border.

G Parthasarathy

'US authorities shouldn't have arrested Krittika'

May 28, 2011 09:39 IST

Indian Consul General in New York has said the United States State Department is wrong in its reading of the Vienna [ Images ] Convention on Consular Relations and asserted that diplomatic immunity is extended to family members of consular officers.

Prabhu Dayal was speaking in the backdrop of the controversy raging about whether Krittika Biswas, the daughter of the Vice Counsel General in New York, had diplomatic immunity that protected her against arrest.

"The rulebook is here," Dayal told PTI. "They should not have arrested her."

Biswas, 18, who claims she was wrongfully arrested on suspicion of sending obscene emails to her teacher, is suing the New York City government for $ 1.5 million.

Earlier this week, Mark Toner, US State Department deputy spokesperson, said immunity enjoyed by consular officials does not extend to Biswas.

"As a family member of consular officer, rather, she does not enjoy immunity from jurisdiction or inviolability," he told reporters.

Insisting that Toner had got it wrong, Dayal pointed to article 53 (2) of the Vienna Convention on Consular Relations, 1963, which says "Members of the family of a member of the consular post forming part of his household and members of his private staff shall receive the privileges and immunities provided in the present Convention..."

The State Department, however, said on Friday that it is sticking by Toner's earlier remarks.

"We have run into a dead wall," said Dayal. "The issue has to be resolved by the External Affairs Ministry and the State Department."

Ravi Batra, Biswas' lawyer, also said his client had diplomatic immunity and the matter needed to be revisited by the State Department for a second legal opinion.

Batra, however, added Biswas did not need diplomatic immunity because she is innocent. The teenager claims she was handcuffed and led out of school on February 8.

After her arrest and suspension from school, the real culprit was found. Biswas claims that the police did not let her use the bathroom for a long time, she could not drink water from a cooler that had vomit on it, and she spent the night feeling cold because the blanket was too dirty to use.

In India [ Images ], US Department of Homeland Security Secretary Janet Napolitano did not comment on the case since the matter is in court.

"I think that I can sympathise with this young woman who was apparently caught up in a situation not of her own making," she said. Batra added the Vienna Convention required the host government to inform the consulate of a signatory country if a citizen of that country had been arrested.

"The local authorities must make that communication," he said. "But nothing like that was done." He described the school figures and the police officials who allegedly acted against Biswas without due diligence as "bumbling idiots with malicious intent."

On Friday, the New York Police Department did not respond to request for comment.

© Copyright 2011 PTI. All rights reserved.

Book release -- Rastram by S. Kalyanaraman.

Book release -- Rastram by S. Kalyanaraman.

A call to create United Indian Ocean States as a supra nation, celebrating Hindu heritage. Indian Ocean Community will be a counterpoise to European Community to promote welfare of over 2 billion people. Available through Amazon, Barnes and Noble and other book stores.

Image gallery:


UIOS will link the lives and heritage of over 2 billion people along the Indian Ocean Rim and over 2 millennia of Indo-Iranian heritage.

I hope the leaders of Indian Ocean Community recollect the civilizational bonds which have united the cultural heritage of 59 nations along the Indian Ocean Rim for millennia.

Yes, we can form the United Indian Ocean States (UIOS) by the civilizational bonds to attain the welfare of 2 billion people.



Resolution on The Adoption of The Indian Ocean Rim-Association

for Regional Cooperation

First Ministerial Meeting, Mauritius, 5 - 7 March 1997

We, Ministers and Representatives of :
















HAVING met at Ministerial level in Mauritius on 5-7 March 1997:

RECALLING the Joint Statement issued at the first Inter-Governmental Meeting of the Indian Ocean Rim Initiative held in Mauritius on 31 March 1995, outlining the principles, objectives and areas of cooperation within the Indian Ocean Rim;

RECALLING also the report of the Chairman of the Second Inter-Governmental Meeting held in Mauritius on 10 - 11 September 1996;




Conscious of historical bonds created through millennia among peoples of the Indian Ocean and with a sense of recovery of history; cognizant of economic transformation and speed of change the world over which is propelled significantly by increased intensity in regional economic cooperation; realising that the countries washed by the Indian Ocean in their diversity offer vast opportunities to enhance economic interaction and cooperation over a wide spectrum to mutual benefit and in a spirit of equality; convinced that the Indian Ocean Rim, by virtue of past shared experience and geo-economic linkages among Member States, is poised for the creation of an effective association and practical modalities of economic cooperation: and conscious of their responsibility to promote the welfare of their peoples by improving their standards of living and quality of life; the Governments of Australia, India, Indonesia, Kenya, Madagascar, Malaysia, Mauritius, Mozambique, Oman, Singapore. South Africa, Sri Lanka, Tanzania, Yemen hereby establish the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC), with the following fundamental principles, objectives, areas of cooperation, and institutional and financial structures and arrangements.


2 The Association will facilitate and promote economic cooperation, bringing together representatives of government, business and academia. In a spirit of multilateralism, the Association seeks to build and expand

understanding and mutually beneficial cooperation through a consensus-based, evolutionary and non-intrusive approach. The Association will apply the following fundamental principles without qualification or exception

to all Member States:

i) Cooperation within the framework of the India Ocean Rim will be based on respect for the principles of sovereign equality, territorial integrity, political independence, non-interference in internal affairs, peaceful co-existence and mutual benefit:

ii) The Association will be open to all sovereign States of the Indian Ocean Rim which subscribe to the principles and objectives of the Charter and are willing to undertake commitments under the Charter:

iii) Decisions on all matters and issues and at all levels will be taken on the basis of consensus;

iv) Bilateral and other issues likely to generate controversy and be an impediment to regional cooperation efforts will be excluded from deliberations;

v) Cooperation within the Association is without prejudice to rights and obligations entered into by Member States within (he framework of (he economic and trade cooperation arrangements and will not automatically apply to Member States of the Association. It will not be a substitute for, but seek to reinforce, be complementary to and consistent with their bilateral, plurilateral and multilateral obligations;

vi) Within the framework of the Association, Member States will pursue adequate measures to promote the achievement of its objectives, and will not take any action likely to prejudice its objectives and activities;

vii) The Work Programmes of the Association will be undertaken by Member States on a voluntary basis.


3. The objectives of the Association will be:

i) To promote the sustained growth and balanced development of the region and of the Member States and to create common ground for region economic cooperation;

ii) To focus on those areas of economic cooperation which provide maximum opportunities to develop shared interests and reap mutual benefits. Towards this end, to formulate and implement projects for economic cooperation relating to trade facilitation, promotion and liberalisation; promotion of foreign investment, scientific and technological exchanges, and tourism, movement of natural persons and service providers on a non-discriminatory basis; and development of infrastructure and human resources, as laid down in the Work Programmes of the Association:

iii) To identify other areas of cooperation as may be mutually agreed;

iv) Towards promoting liberalisation, to remove impediments to, and lower barriers towards, freer and enhanced flow of goods, services investment and technology within the region;

v) To explore all possibilities and avenues for trade liberalisation with a view to augmenting and diversifying trade flows among Member States;

vi) To encourage close interaction of trade and industry, academic institutions, scholars and peoples of the Member States without and discrimination among Member States and without prejudice to obligations under other regional economic and trade cooperation arrangements;

(vii) To strengthen cooperation and dialogue among Member States in international fora on global economic issues, and where desirable to develop shared strategies and take common position in the international fora on issues of mutual interest: and

viii) To promote cooperation in development of human resources, particularly through closer linkages among training institutions, universities and other specialised institutions of the Member States.


4. All sovereign States of the Indian Ocean Rim are eligible for membership. To become members, States must adhere to the principles and objectives and objectives enshrined in the Charter of the Association. Expansion of membership of the Association will be decided by Member States.


5. There will be a Council of Ministers of the Association. The Council will meet once on two years, or more often as mutually decided, for formulation of policies, review of progress of cooperation, decisions on new areas of cooperation, establishment of additional mechanisms as deemed necessary, and decisions on other matters of general interest.

6. The will be a Committee of Senior Officials of the Association composed of government officials of Member States. It will meets as often as mutually decided. It will review implementation of the decisions taken by the Council of Ministers; and in cooperation with the Indian Ocean Rim Business Forun (IORBF) and the Indian Ocean Rim Academic Group (IORAG) establish priorities of economic cooperation, develop, monitor and coordinate Work Programmes, and mobilise resources for financing of Work Programmes. The Committee will submit periodic reports to the Council of Ministers, and refer, as and when necessary, policy matters for the Council's decision.

7. There will be a Secretariat of the Association to coordinate, service and monitor the implementation of policy decisions and Work Programmes as laid down.


8. Each Member State of the Association will set up a tripartite National Focal Point for Indian Ocean Rim cooperation to coordinate and advance implementation of its activities and achievement of its objectives.



9 The association includes bodies known as the Indian Ocean Rim Business Forum (IORBF) and the Indian Ocean Rim Academic Group (IORAG) in accordance with the tripartite nature of the Association. They may meet together with Council of Ministers and the committee of Senior Officials as mutually decided. They may also meet as and when they deem it necessary. They will interact with the Committee of Senior Officials and the secretariat in the consideration, formulation and implementation of the policies and Work Programmes of the Association. The IORBF and the IORAG may draw upon collier non-governmental regional business and academic networks, as necessary.


10. Each Member State will contribute to the finances of the Association as decided. Adequate arrangements will be made by participating Member States for providing finances for implementing the Work Programmes. This will not exclude external sources of financing where appropriate.

11. The Member States will endeavour to promote the spirit of economic cooperation enshrined in the Charter of the Association.

Book Release: Rastram -- Hindu history in United Indian Ocean States

May 21, 2011, Herndon, VA

Rastram, supranation, is about a golden page in the history of human civilizations. It is an opportunity to realize almost 2 millennia of dharma-dhamma values enshrined in the hearts of over 2 billion people along the nations of the Indian Ocean Rim.

This is a compilation of insights, analyses and excerpts from works of by many savants and scholars about Hindu history.

This book is a tribute to George Coedes who concluded, after a study of fourteen centuries of history of Southeast Asia: “ the importance of studying the Indianized countries of Southeast Asia– which, let us repeat, were never political dependencies of India, but rather cultural colonies – lies above all in the observation of the impact of Indian civilization on the primitive civilizations... We can measure the power of penetration of this culture by the importance of that which remains of it in these countries even though all of them except Siam passed sooner or later under European domination and a great part of the area was converted to Islam…we may ask ourselves if the particular aspect assumed by Islam in Java was not due rather to the influence that Indian religions exercised over the character of the inhabitant of the island for more than ten centuries…The literary heritage from ancient India is even more apparent that the religious heritage. Throughout the entire Indian period, the Ramayana and the Mahabharata, the Harivamsa, and the Puranas were the principal, if not the only, sources of inspiration for local literature, to which was added the Buddhist folklore of the Jatakas, still makes up the substance of the classical theatre, of the dances, and of the shadow-plays and puppet theatre."

The historical account provides an overview of the physical characteristics of the Indian Ocean and the concept of Rastram enunciated in the earliest human document, Rgveda. This is a compilation of insights, analyses and excerpts from works of by many savants and scholars about Hindu history.

Rastram, supranation, is about a golden page in the history of human civilizations. It is an opportunity to realize almost 2 millennia of dharma-dhamma values enshrined in the hearts of over 2 billion people along the nations of the Indian Ocean Rim.

Rastram is a federation of peoples’ republics – a supranational covenant as the true foundation of an organized Indian Ocean Community (IOC) -- a counterpoise to European Community. This IOC should remain open to all nations of Indian Ocean Rim. The states located along the rim from South Africa to Tasmania is a Community which has the attributes of Rastram. The Hindu historical traditions and the amended UN Law of the Sea help use the potential to create a 6 trillion dollar GDP and to provide for enhanced welfare of over 2 billion people. Along the 63,000 mile long rim, work can start on Trans-Asian Highway and Railway Projects and strengthen the bonds of civilizational heritage. In a way, this is a positive answer to the bogus alternative Hindu history penned by Wendy Doniger in a work which completely ignores the insights of savants like George Coedes who analysed the Hinduised States of Southeast Asia from historical accounts.

The account demonstrates how Rastram as a supranation can be articulated by establishing an Indian Ocean Community.

This historical account of Hindu history is an attempt to delineate the wealth of nations, along the Indian Ocean Rim. Together, these nations neighboring the Ocean, can chart out a path for establishing Rastram in dharma-dhamma continuum. The 1994 modified Law of the Sea extends territorial waters into 200 nautical miles from the baseline as economic zones.

Drawing lessons from the corporate forms of sreni evolved from the 6th century, Rastram (as with the experience of Rastrakutas) will be a federation of guilds in a united Indian Ocean States minimizing greed and maximizing the potential for peoples' welfare.

An overview is presented of the clash of civilizations during the post-Rastrakuta period of Indian history during the islamist jihadi onslaughts and how India coped with the onslaughts and impoverishment of India in a millennium. Post-colonial loot rivals the colonial loot and the work of Angus Madison provides a wealth of economic historical information from which lessons can be drawn on the causes of impoverishment of many Indian Ocean States subjected to colonial domination. Pen-pictures of the history and cultures of nations of the Indian Ocean Rim provide the foundation for creating a United Indian Ocean States (UIOS), the way European Union was formed after the second world war. Impact of Hindu history on world cultures, as seen by thinkers and historians provides confirmation that UIOS will be powerhouse for attaining welfare of over 2 billion people founded on dharma-dhamma values.

This account provides the portraits from Hindu history on the travails of a nation caught in the throes of civilizational clashes onslaughts during mediaeval periods of barbarism and loots of 17th to 20th century periods of a British Colonial empire and the 21st century in a swarajyam Hindusthan by post-colonial marauders, suffocating the potential for forming a Rastram. This account is clearly NOT intended to be a chronologically organized Hindu history for two millennia until 2000 CE. Portraits are presented of political economy on the banks of Hindu civilization in modern epoch for the last two millennia. It is a record since the turn of the Common Era, informed by earlier five millennia of history of Sanatana Dharma in Bharata Rastram. trans. ‘I am the Rastra moving people together for abhyudayam (welfare)’…Hindu history is presented as a quest for the establishment of such a Rastram.

IOC a supranational foundation to remove vestiges of colonial loot, to make such a loot unthinkable and materially impossible and reinforce democracy of all nations along the IOC rim as janapada (peoples’ republics) for peoples’ welfare governed by the inexorable, Hindu sanatana traditional ethic: dharma-dhamma.

Hindu history finds its pinnacle of cultural achievement in the largest Vishnu temple of the world in Angkor Wat, Cambodia and in the cultural continuum of the inexorable ethic dharma-dhamma present in the nations along the Indian Ocean Rim. Drawing lessons from history which involved clashes of civilizations, the work presents the potential to create a United Indian Ocean States, as a counterpoise to the European Union and as a 6 trillion dollar economic powerhouse providing a new lease of life to over 2 billion people of the Indian Ocean Rim.

S. Kalyanaraman, Ph.D. the editor of the book, is Director, Sarasvati Research Center, President, Ramasetu Protection Movement in India and BoD member of World Association for Vedic Studies. His research interests relate to rediscovery of Vedic Sarasvati River, roots of Hindu civilization, decoding of Indus Script, National Water Grid and creation of Indian Ocean Community. His Ph.D. is in Public Administration from the Universitty of the Philippines. He is a multi-lingual scholar versed in Tamil, Telugu, Kannada, Sanskrit, Hindi. He was a senior financial and IT executive in Asian Development Bank, Manila, Philippines and on Indian Railways. His 18 publications include: Indus Script Cipher, Indian Lexicon - a multilingual dictionary for over 25 Indian languages, Sarasvati in 15 volumes, Indian Alchemy - Soma in the Veda. He is a recipient of many awards including Vakankar Award (2000), Shivananda Eminent Citizens’ Award (2008) and Dr. Hedgewar Prajna Samman (2008).

S. Kalyanaraman

Sarasvati Research Center

May 25, 2011