May 05, 2012

Promise of U.S.-India economic partnership remains unfulfilled


Populist and protectionist pressures have undermined some of the rosier projections for the growing economic relationship between the United States and India. 

By Simon Denyer, Published: May 3,  2012 

NEW DELHI — The economic relationship between the world's two largest democracies, the United States and India, is supposed to be the bedrock for what President Obama calls "one of the defining partnerships of the 21st century," but cracks are starting to appear. 

India's delay in delivering promised economic reforms and its reluctance to open up its markets to U.S. companies such as Wal-Mart, together with a much tougher visa regime for Indians seeking to work in the United States, has infuriated the private sector, cooled investor enthusiasm and even prompted talk of a trade war that could strangle commercial ties. 

Some experts say that the U.S.-India partnership has been grossly oversold, first by the George W. Bush administration and now by Obama, and that the two nations were never destined to become comfortable partners in a new world order despite their vaunted shared democratic values. 

Much of the problem arguably stems from the nations' very democratic nature, in the form of populist pressures emanating from India's Parliament and the U.S. Congress. 

"In almost every political speech, the fact that India is a democracy was celebrated, but the fact that it is a democracy also profoundly limits its economic dynamism and reform processes," said George Perkovich at the Carnegie Endowment for International Peace in Washington. 

Unrealistic expectations have led to disappointment and frustration, he said. 

"It is a really important relationship, and a relationship that is maturing in a friendly way, in a positive way," Perkovich said. "But that is happening at the natural pace of human development, not through this type of magical transformation that people projected." 

The landmark civil nuclear agreement that the two countries signed in 2008 was supposed to lead to tens of billions of dollars in business for U.S. companies that build nuclear power plants. But it has not yielded anything except a disagreement over who would be liable in the event of a nuclear accident. 

The nuclear deal was seen as the cornerstone of the broader strategic partnership between the two nations. Both countries are wary of China's growing influence, have fallen victim to Islamist extremism emanating from Pakistan and share a commitment to rebuilding Afghanistan. 

But at the same time, each pursues its own independent strategic agenda. India's unwillingness to join international sanctions against Iran — which New Delhi sees as an important oil supplier — and its reluctance to intervene in other countries' internal affairs — in Libya and Syria, for example — are among the many wrinkles in the relationship. 

India's decision in January to buy 126 fighter jets from France's Rafale for $11 billion instead of its American competitors was a major disappointment in Washington, though high hopes persist for business between the world's largest weapons buyer and many of the world's largest defense contractors, based in the United States. 

Trade between the two countries is growing fast and reached $100 billion in 2011, but it is dwarfed by trade with China and remains a fraction of what most people see as its long-term potential. Indian concerns about U.S. agricultural policies that subsidize farmers and restrict imports are matched by American concerns about market access and jobs being outsourced to India. 

Trade, visa disputes 

This year, the bilateral strain has increased to such a degree that each country has dragged the other to the World Trade Organization's dispute settlement body, in rare if not unprecedented steps. 

The United States is unhappy with an Indian ban on American poultry imports over what it sees as spurious concerns about bird flu. India is complaining about U.S. duties on carbon steel exports, which were imposed because of concerns that the products were being subsidized in India and "dumped" in the United States. 

India is also threatening to refer the United States to the WTO over what it sees as a punitive and discriminatory rise in visa fees for professional travel, aimed at Indian information technology firms such as Infosys and Wipro, which employ thousands of people in the United States. 

Every year, tens of thousands of skilled Indian workers get H1B and L1 visas to work for American employers in the United States, often on multiyear contracts. 

Indian Commerce Ministry officials declined to comment on the dispute, but a senior official was quoted as warning of a "trade war" if the issues are not resolved at the WTO. 

Although that warning strikes experts as slightly alarmist, there is also concern about a much tougher U.S. visa approval regime that companies in both countries say is undermining their ability to operate effectively across borders and closing the door to a highly educated Indian workforce that has contributed significantly to the success of the IT industry in the United States. 

In March, more than 60 U.S. companies and trade bodies wrote to Obama complaining that "delays and uncertainty" about the issuance of L1 work visas for their foreign employees was harming the United States' job growth and economy. 

India shares those concerns. "Most of our companies are reporting back to us about a huge number of delays and rejections, for a wide variety of reasons, none of them consistent," said Ameet Nivsarkar, vice president of the Indian software industry body NASSCOM. The rejection rate for L1 visa applications from India rose from 8 percent in 2009 to 41 percent last year. 

The U.S. government, though, says India remains by far the biggest beneficiary of both types of professional visas and links the rising L1 rejection rate to an increase in applications. 

'We are going backward' 

At the heart of the economic relationship, though, lies the promise of American investment in the rapidly growing Indian market. But that promise has been dented by a series of decisions made by the Indian government in the past four months. 

In December, the government was forced into an embarrassing flip-flop over a decision to allow Wal-Mart and other foreign companies to open stores here, after opposition from its coalition partners. 

A decision announced in the budget in March to retroactively change India's tax laws relating to foreign mergers and acquisitions may have been aimed principally at Britain's Vodafone — embroiled in a $2.5 billion dispute with Indian tax officials — but it provoked strong protests from industry groups from the United States to Japan. 

Seven global industry bodies, including the U.S. Council for International Business, wrote to Indian Prime Minister Manmohan Singh in March to argue that the retroactive nature of the tax threat was "prompting a widespread reconsideration of the costs and benefits of investing in India." 

Treasury Secretary Timothy F. Geithner met Indian Finance Minister Pranab Mukherjee in Washington late last month and said the tax change had "raised significant concern amongst U.S. industry and dampened enthusiasm about India's investment climate," a Treasury spokeswoman said. 

A decision by India's patent authority in March to force German drug manufacturer Bayer to allow a local generics manufacturer to copy its kidney and liver cancer medicine has sparked concerns about the protection of intellectual property rights, while proposals to give preference to domestically manufactured electronics in government procurement provoked another letter of protest, this time from more than 30 international technology and business groups, which warned that the move could fuel global protectionist pressures that could harm Indian IT exports. 

Ron Somers of the U.S.-India Business Council says the decisions have had a chilling effect on his members' enthusiasm for investing in India. 

"It sends a signal that we are not going forward, we are going backward," he said. "It is just harder to do business here." 

Of course, none of these concerns mean that the U.S.-India economic relationship is over. Somers said the longer-term economic fundamentals "are still unbelievable," and U.S. automakers Ford and General Motors are investing heavily in India, with an eye on the country's rising and expanding middle class. 

Indian growth may have slowed, but it is still close to 7 percent. In the past five years, India's economy has risen from the 14th largest in the world to the ninth largest and is expected to become the third largest by 2025. 

"I don't see any U.S. businessperson who wants out from an opportunity of that magnitude," said Geoffrey Pyatt, a State Department official. "And as the Indian economy hits that spot, India Inc. continues to see a preferential place for the United States." 

For now, Somers is advising his members to focus on "progressive" Indian states. 

"We are heading into uncertainty at the center, so we have to find states where the leadership is strong and secure, and where they want investment, and look at deepening our links there," he said. 

The Clash of Eurasian Grand Strategies

Raffaello Pantucci, Alexandros Petersen 
May 1, 2012

In Khorgos, on the China-Kazakhstan border, trucks laden with Chinese goods line up along the road, waiting for Chinese and then Kazakhastani customs officers to give them the go-ahead to continue their transcontinental journey across Eurasia. Many will be heading to the great markets of Central Asia, like Dordoi, Barakholka and Kara Suu, while others head all the way to Europe. Squeezing through a single lane, the trucks get stuck in lengthy backlogs as they wait in the shadow of the brand new multilane Chinese customs point that sits idle next door. This idleness is the product of conflicting strategies, emblematic of a lack of coordination that is taking place across Central Asia.
It is cliché to talk about Central Asia in great-game terms, with battling rival powers elbowing each other to assert their influence. Seeing the region as either as a buffer area to other powers or as a source of natural wealth and instability, the surrounding large powers have long treated Central Asia as little more than a chessboard on which to move pawns.
These days, however, the strategic approach taken by surrounding powers has shifted. Rather than talking about dominating the region, the discussion is focused on differing approaches to development, all of them tied to great powers' particular interests. Lead amongst these are China, Russia and the United States—all of which have launched new initiatives intended to bring stability and security to the region.

Three Rival Strategies
The American strategic approach has been most clearly laid out by Secretary of State Clinton, who last year in Chennai, India told the audience of America's desire to "work together to create a new Silk Road, . . . an international web and network of economic and transit connections." While the United States is clearly eager for the entire region to be developed, later Clinton highlighted one of the U.S. key rationales for this approach: "An Afghanistan firmly embedded in the economic life of a thriving South and Central Asia would be better able to attract new sources of foreign investment, connect to markets abroad and provide people with credible alternatives to insurgency." In other words, it is a strategy focused on tying Afghanistan economically into its neighborhood, which will help facilitate American withdrawal. An "action request" leaked soon after Clinton's speech confirmed that this New Silk Road strategy was Clinton's "number-one policy priority" for Central and South Asia.

For China, whose overriding priority is to develop Central Asia to help stimulate prosperity and stability in its restive Xinjiang province, the approach of tying the region together using trade and transport links is an old one. As early as 1994, then prime minister Li Peng declared in Central Asia that "it was important to open up a modern version of the Silk Road." Years later, in a 2004 article in China Daily, the principle was expanded to include a "landbridge" between China and Europe, a network of train links that would make up a so-called Iron Silk Road and provide an alternative to lengthy and sometimes treacherous sea routes. Since then, China has moved this strategy forward, developing its own rail infrastructure at an astonishing rate, while also investing in regional train systems linking Central Asia together. While some projects such as those in Kazakhstan seem to have stalled, work is advancing on regional rail lines in Kyrgyzstan and Uzbekistan.

Russia, on the other hand, has taken an approach to the region that seeks to build on previous glory. Building on the already extant customs union that Belarus, Kazakhstan and Russia formed in 2009, in October last year President Putin proposed a Eurasian Union that would coordinate "economic and currency policy" while also being open to new members presumably drawn from the former Soviet space. As Putin put it, "membership in the Eurasian Union, apart from direct economic benefits, will enable its members to integrate into Europe faster and from a much stronger position."

An admirable goal maybe, but one that directly clashes with China's aims to try to integrate the broader region. In discussions last year in Kyrgyzstan, we were told by a former cabinet-level minister that should the Eurasian Union proceed, the markets in southern Kyrgyzstan at Kara-Suu would be "decimated." And these tensions are already visible here at Khorgos, the ambitious "trans-national free trade center" that China and Kazakhstan opened last December between their two borders. The shining new Chinese customs post is unused, and a field of construction cranes await the go-ahead to continue their work developing the rest of the special economic zone.

And it is not only the Chinese and Russian strategies that are seemingly at odds with one another. As Chinese analysts in Urumqi were quick to highlight, the American and Chinese strategies also differ: America's aim is to tie Afghanistan into its broader region, with paths largely going north-south across the region, while China's is a grander east-west ambition enabling direct trade with Europe. China also is developing different infrastructure plans across Afghanistan, opening up an east-west path across the country to Gwadar, the Pakistani port it has been helping develop. While not necessarily contradictory, different end goals drive the respective projects.

The result is a series of strategies for tying together Central Asia—with each focusing on priorities dictated by the varying interests of Beijing, Washington and Moscow. China is promoting its development and trade; America wants to leave a more stable and prosperous Afghanistan; and Russia wants closer ties with the former Soviet space. These are fundamentally divergent approaches that contradict each other and leave the region torn between competing capitals.

Greater coordination and discussion is needed on what is essentially redevelopment of the Silk Road. The end state desired by all is a prosperous and stable region brought about by economic development—rather than the barrel of a gun. But until there is greater coordination, the result will be a confused latticework of competing strategies that leave everyone the poorer.
Raffaello Pantucci is a Visiting Scholar at the Shanghai Academy of Social Sciences (SASS) and Alexandros Petersen is the author of The World Island: Eurasian Geopolitics and the Fate of the West. Their joint research is available at

Genocide in Lyari by Police & Terrorists

Join us in the rally to protest against
Genocide in Lyari by Police & Terrorists

Sunday May 06th, 2012

2:00 – 4:00 pm

Police and terrorists are carrying out one of the most ferocious and callous armed operation in the Lyari area of Karachi since 27 April 2012. In this targeted operation more than million Baloch and Sindhi people have been left to suffer and die without food, water, electricity and medicines. Thousands have left Lyari to find security. Lyari looks like a war zone. Scores have been killed. It is genocide on the pretext of war against gangsters. The international community should stop this insanity and crime against humanity.
Baloch Human Rights Council UK
World Sindhi Congress
Opposite 10 Downing Street
Nearest Tube Stations
Westminster, Charing Cross 
Contact for Information:
Samad Baloch -             07825087032      
Sultan Mahar -                         07862 207829            
For more details please read the attached Flyer Or click the links below ,

Samad Baloch
General Secretary
Baloch Human Rights Council (UK)
London     3 May 2012


The Chennai Centre for China Studies (CCCS), a premier think tank based in Chennai, India, exclusively devoted to covering developments in China, invites voluntary donations from all Indian nationals including the NRIs, in order to help its further progress and consolidation.

 The CCCS researchers include eminent analysts in India and its managing committee comprises former top civil servants, academicians and  military specialists  who remained involved in China-related work for a long time. Access to Chinese language material for research is a specialty of the CCCS. Its website is popular and being viewed throughout the world.

So far, the CCCS has been managing its working, out of self-generated funds and limited contributions from well-wishers. To enhance its capabilities further, it now needs additional financial support and wishes to appeal for donations from the interested Indian nationals, both at home and abroad.

 Following are details which may be required in connection with remitting money to the CCCS:

Account name: Chennai Centre for China Studies
Account No.: 0475 0100 0030 228
Bank: Indian Overseas Bank
Branch Address: Tower Branch, AC-56,5th Avenue,Anna Nagar(West), Chennai- 600 040
Branch Code:  0475
IFS Code:  IOBA0000475
Swift Code: IOBAINBB001

2. The prospective donors may choose any suitable banking money transfer channel for remittance to the above mentioned bank in Chennai, India. Alternately, they may wish to send a crossed cheque direct to the CCCS by courier/air post to the office address given below.

3. The CCCS is yet to be granted exemption under 80G of Indian Income Tax act; as such, the donors may not be eligible for any tax benefit.   

The CCCS will be happy to respond if there is need for further information.   
Our Contact Address:

Director, Chennai Centre for China Studies (CCCS),
 2 Apoorva Apartments,
7 Maharani Chinnamma Road, Venus colony,
Alwarpet, Chennai- 600 018
Tel:             044-42113140      
fax : 044-42113150

May 04, 2012

The Continuing Threat of Libyan Missiles


May 3, 2012 | 0857 GMT


By Scott Stewart
In March 2011, while many of the arms depots belonging to the government of Libya were being looted, we wrote about how the weapons taken from Libyan government stockpiles could end up being used to fuel violence in the region and beyond. Since then we have seen Tuareg militants, who were previously employed by the regime of former Libyan leader Moammar Gadhafi, leave Libya with sizable stockpiles of weapons and return to their homes in northern Mali, where they have successfully wrested control of the region away from the Malian government.
These Tuareg militants were aided greatly in their battle against the government by the hundreds of light pickup trucks mounted with crew-served heavy weapons that they looted from Libyan depots. These vehicles, known as "technicals," permitted the Tuareg rebels to outmaneuver and at times outgun the Malian military. Moreover, we have recently received reports that Tuareg rebels also brought back a sizable quantity of SA-7b shoulder fired surface-to-air missiles, also known as man-portable air defense systems (MANPADS).
While we have not yet seen reports of the Tuaregs using these missiles, reports of close interaction between the Tuaregs in northern Mali and regional jihadist franchise al Qaeda in the Islamic Maghreb (AQIM) raise concern that AQIM could buy or somehow acquire them from the Tuaregs. We have seen unconfirmed reports of AQIM fighters possessing MANPADS, and Algerian authorities have seized MANPADS among the weapons being smuggled into the country from Libya. For example, in mid-February, Algerian authorities seized 15 SA-24 and 28 SA-7 Russian-made MANPADS at a location in the southern desert called In Amenas.
For the Tuareg militants, the MANPADS are seen as a way to protect themselves against attack by government aircraft. They also serve the same function for AQIM, which has been attacked by Mauritanian aircraft in northern Mali. However, the possession of such weapons by a group like AQIM also raises the possibility of their being used against civilian aircraft in a terrorist attack -- a threat we will now examine in more detail.
Uses and Weaknesses of MANPADS
MANPADS were first fielded in the late 1960s, and since that time more than 1 million have been fielded by at least 25 different countries that manufacture them. These include large countries such as the United States, Russia and China as well as smaller countries such as North Korea, Iran and Pakistan.
By definition, MANPADS are designed to be man-portable. The missiles are balanced on and fired from the shooter's shoulder, and the launch tube averages roughly 1.5 meters (5 feet) in length and 7 centimeters (3 inches) in diameter. Since MANPADS are intended to be operated by infantry soldiers on the front lines, durability is an important part of their design. Also, while the guidance mechanism within the missile itself can be quite complex, a simple targeting interface makes most MANPADS relatively easy to operate.
The SA-7 has a kill zone with an upper limit of 1,300 meters, while some newer models can reach altitudes of more than 3,658 meters. The average range of MANPADS is 4.8 kilometers (about 3 miles). This means that most large commercial aircraft, which generally cruise at around 9,140 meters, are out of the range of MANPADS, but the weapon can be employed against them effectively during the extremely vulnerable takeoff and landing portions of a flight or when they are operating at lower altitudes.
Despite their rugged design, MANPADS are not without limitations. Some research suggests that battery life makes the weapon obsolete after about 22 years. Missiles treated roughly, stored poorly and not maintained well may not last anywhere near that long. Since replacement batteries can be found on the black market, battery life is not necessarily a key limiting factor. For example, two SA-7s used by al Qaeda to target an Israeli civilian flight over Mombasa, Kenya, in 2002 were 28 years old and appeared to be fully functional. It is believed they did not hit their target due to countermeasures employed by the aircraft. Some of the classified U.S. military reports released by WikiLeaks indicted that, many times in Iraq and Afghanistan, the older SA-7s were ejected from their tubes and had engine ignition but failed to acquire and lock onto the intended target. This may also have been the case in the Mombasa attack.
Perhaps the most limiting factor to MANPADS' utility has to do with the kind of aircraft being targeted. As MANPADS were developed and refined for military use, so were countermeasures for military aircraft. This means that most modern military aircraft are equipped with countermeasures that are effective against older models of MANPADS. Due to budget constraints, however, most commercial airliners and general aviation aircraft are not equipped with military-style countermeasures systems, which can alert a pilot that a missile has been launched so proper action can be taken, including evasive maneuvers, the deployment of infrared flares to decoy the missile or lasers to blind the missile's seeker. Industry estimates indicate that outfitting and maintaining the entire U.S. airline fleet with countermeasures that could foil missiles would cost $40 billion. Because of the high cost of such defensive systems, the bulk of the civilian aviation fleet worldwide remains undefended and vulnerable to MANPADS.
MANPADS in Terrorist Attacks
The SA-7 was first deployed by the Soviet army in 1968 and was sent to North Vietnam, where it was used in combat against American military aircraft in the early 1970s. But it did not take long for militant groups to understand how the weapons could be utilized in a terrorist attack. In January and September 1973, Black September militants attempted to use SA-7s against Israeli civilian aircraft in Rome (the January flight was carrying then-Prime Minister Golda Meir). Both attempts were thwarted in their final minutes.
Two years later, the first successful MANPADS attack against a civilian aircraft occurred when North Vietnamese forces launched an SA-7 missile against an Air Vietnam flight, resulting in the deaths of all 26 passengers and crewmembers. One of the most famous civilian MANPADS attacks was in 1994, when two SA-16s were used to shoot down a Rwandan government flight, killing the presidents of Rwanda and Burundi and sparking the Rwandan genocide, which resulted in approximately 800,000 deaths in 100 days (the identity of the attackers remains a matter of debate). Over the years, MANPADS attacks have been plotted and actively attempted in at least 20 countries, resulting in more than 900 civilian fatalities. The most recent MANPADS attack that resulted in loss of life was the strike by al Shabaab over Somalia in 2007 against a Belarusian cargo plane. Eleven people were killed. The attack reportedly involved a Russian SA-18 that was manufactured in Russia in 1995. It was one of a batch of SA-18s sent from Russia to Eritrea, some of which were provided to the Somali jihadist group.
A MANPADS attack does not necessarily mean certain death for an aircrew and passengers. In fact, some civilian airliners hit by MANPADS have made emergency landings without loss of human life. In November 2004, a DHL Airbus 300 was struck in the left wing by a MANPADS after leaving Baghdad International Airport on a mail delivery flight. While the aircraft was badly damaged and one engine caught fire, the pilot still was able to land safely.
The man-portable facet of MANPADS severely limits the size of the warhead that the weapon can carry compared to larger surface-to-air missile systems. They are also designed to engage and destroy low-flying military aircraft densely packed with fuel and ordnance. Because of this, MANPADS are not ideally suited for bringing down large civilian aircraft. Though airliners are hardly designed to absorb a missile strike, the damage a single MANPADS can inflict may not be catastrophic. MANPADS systems employ infrared seekers that are drawn to the heat signature of an aircraft's engine, and therefore tend to hit the engine. Large commercial jets are designed to be able to fly and land if they lose an engine, and because of these factors, nearly 30 percent of the commercial aircraft struck by MANPADS have managed to make some sort of emergency or crash landing without loss of life, despite, in some cases, sustaining significant structural damage to the aircraft.
Still, the threat is not insignificant. The other 70 percent of civilian planes that have been hit by MANPADS have crashed with considerable loss of life. Indeed, on departure from or approach to an airport, airliners do have to traverse predictable airspace at low altitudes -- well within the engagement envelope of MANPADS -- and their airframes are under considerable stress. An attack at low altitude also provides the pilot less time to react and recover from an attack before the aircraft strikes the ground. These lower-level phases of flight also frequently occur over large swaths of built-up urban terrain that would be impossible to search and secure, even temporarily. Due to the noise involved with living under a flight path, this is usually low-rent real estate. With flight paths so well established, even casual observers generally have a sense of when and where large, low-flying aircraft can be found at any given time over their city.
As noted in Stratfor's previous coverage of the MANPADS threat, since 1973 at least 30 civilian aircraft have been brought down and approximately 920 civilians have been killed by MANPADS attacks. These attacks brought about the concerted international effort to remove these weapons from the black and gray arms markets. Because of these efforts, attempts to use MANPADS against civilian airliners were down about 66 percent from 2000 to 2010 compared to the previous decade. Nevertheless, sting operations and seizures of illicit arms shipments clearly demonstrate that militant groups continue to work to acquire the weapons. There are at least 11 active non-state militant groups that are believed to possess MANPADS, and we have seen MANPADS employed sporadically in the wars in Iraq and Afghanistan. There are more than 10 other groups, such as the Revolutionary Armed Forces of Colombia, that have been making efforts to obtain them. While there is no evidence that these groups now have them in their arsenals, their efforts may have become easier as missiles from Libya have trickled onto the black arms market.
Estimates vary widely, but it appears that the Libyans had an inventory of 20,000 MANPADS. It appears that the SA-7b seems to have been the most common MANPADS in the Libyan inventory, though there were also several far more advanced SA-24 missiles (the latest Russian design) that were intended to be used in vehicle-mounted launchers sold to the Libyans but that could be used as MANPADS if they were paired with the proper gripstocks and battery coolant units. Of those 20,000 missiles, teams from the United States and NATO have secured roughly 5,000; another 5,000 are thought to be in the hands of the various Libyan militias and to still be in the country. That leaves a remainder of 10,000 missiles. While a number of them were destroyed by NATO airstrikes or launched at aircraft, it is believed that somewhere around half have been smuggled out of the country. For obvious reasons, obtaining an accurate number of missiles is very difficult. Indeed, with a variety of parties involved in the smuggling, it is doubtful that anyone knows for sure how many missiles have been smuggled out of Libya.
The U.S. government has designated $40 million for a program intended to buy back Libyan MANPADS, but clearly many of them have already made it out of the country. In addition to the February seizure in Algeria, Egyptian authorities seized eight SA-24 missiles in the Sinai Peninsula in September 2011. A month earlier, two Israeli Cobra helicopters came under fire from a MANPADS fired from Sinai during a multi-stage attack launched from Sinai that resulted in the deaths of eight Israelis. The missile missed the Cobras. Indeed, the Jerusalem Post reported that, due to the perceived increase in the MANPADS threat from Sinai, commercial aircraft landing in Eilat have changed their approach pattern.
To date, we are not aware of any attacks or attempted attacks against commercial airliners using MANPADS taken from Libyan stocks. But with the missiles in the hands of Palestinian militants in Sinai and Gaza as well as in the inventory of groups such as AQIM, there is a legitimate concern that they will be used in an attack in the immediate future. Jihadists have long had a fixation on aviation as a target. With increases in airline passenger and luggage screening, MANPADS provide jihadists with the means to bypass those security measures and conduct attacks against civilian aircraft. They may have problems getting missiles into Europe or North America, but with active jihadist franchises in Afghanistan, Pakistan, Yemen, Somalia and North Africa, there is a very real threat of a MANPADS attack directed against U.S.- or European-flagged carriers in those regions. But with a year now gone since the Libyan weapons stockpiles were looted, Libyan MANPADS could be almost anywhere in the world, and it is somewhat surprising that they have not been more widely used.

Read more: The Continuing Threat of Libyan Missiles | Stratfor

May 03, 2012

Challenges to Global Bank’s Operations – FATCA’s Requirements For Customer Identification

By Robin Farshadfar, Infoglide Director of Global Industry Solutions

Over the past few years, conducting business with the U.S. or dealing with the U.S. customers has bothered many foreign companies, more so prevalent in the finance industry. The newest spoke put in the wheels of foreign companies is the Foreign Account Tax Compliance Act (FATCA), signed into U.S law in March 2010 is coming into effect on January 1, 2013.

The legislative intent of FATCA is to ensure that the U.S. Government is able to determine the ownership of U.S. assets in foreign accounts. FATCA is about transparency and disclosure, but its aim is to catch Americans who are trying to hide money from the tax man overseas. It enlists the help of Foreign Financial Institutions (FFIs) to do it, requiring them to identify their U.S. account holders, name them and even to withhold when Americans do not disclose the existence of such funds.
It is not only U.S legislation, but also has implications for all financial institutions operating outside of the U.S.

On February 8, 2012, proposed regulations for the next phase of implementing FATCA were released. The regulations set out the process through which participating FFIs will prepare to comply with FATCA in areas such as: entering into an agreement with the IRS; identifying accounts held by U.S. persons, identifying entities in which U.S. persons hold a substantial ownership interest, information reporting and tax withholding requirements in certain situations.

The obligation for the FFIs to report information on customers, individuals and businesses that are known to be, or might be liable for U.S. tax treatments. Certain payments made after December 31, 2012 from FFIs will require disclosure compliance agreements to be entered into with the U.S. Department of the Treasury, and all those termed 'Non-Financial Foreign Entities' (NFFEs) must report and/or certify their ownership or be subject to a 30 percent withholding tax.

Organizations that choose not be compliant with FATCA, termed as 'Non-Participating' (NPFFIs), are subject to a 30 percent tax withholding on all U.S. sourced 'Fixed or Determinable Annual or Periodical' (FDAP) income made to their account holders.
This new system of reporting and withholding will impact account opening processes, transaction processing systems and 'Know Your Customer' (KYC) procedures used by foreign banks. Chief compliance officers, those responsible for reporting taxes and other key players within these organizations will need to evaluate the potential impact of these regulations and develop a plan for managing and resolving any potential risks brought about by not complying with FATCA.

FATCA is expected to radically affect the systems and operations of both U.S. and non-U.S. organizations. Even though the regulations have not yet been finalized, companies will need to make modifications to their internal systems, controls, processes and procedures for timely compliance with these regulations on or before its effective date.
The effective date for FATCA compliance concerning U.S. institutions is January 1, 2013. Non-U.S. institutions have been granted a further six month grace period before the regulations come into force on July 1, 2013.

It should not come as a surprise to learn that financial institutions are struggling with the increased demands of the new anti-money laundering and tax regulations imposed under FATCA.

Some companies have yet to begin implementing the new FATCA regulations, and many do not have enough of an understanding of the requirements of existing due diligence and KYC processes. Many are still learning about FATCA and have yet to put compliance systems in place.

FATCA will force global financial institutions to re-evaluate and invest in their programs and technology to ensure compliance while aiming to reduce the impact on their customers.

It would not be wise to wait until these regulations come into force before beginning to assess one's needs and respective costs for compliance. By conducting the proper compliance risk assessment now and evaluating necessary changes to a company's existing systems, that organization will be equipped with the information to determine the proper level of risk required in order to comply with these new withholding and reporting rules.

Companies should not delay the response to and preparation for FATCA compliance, given the extensive changes to processes and systems that can be required to comply with FATCA, in order to meet the extensive data gathering, management and retention requirements.

Banks, as an institution that does any business with the U.S., will need to adopt the processes, procedures, and systems necessary for FATCA compliance, whether the institution has named U.S. account holders or not.

If NPFFI status is opted by an FFI, it in effect means that it has no business with the U.S. In such a case the FFI is cut off from one of the world's largest economies and is limited to offering specialist services to very niche corners of the market. This is bound to damage an organizations reputation and its ability to retain and secure high net-worth clientele, and mislays its competitive edge.

In some cases, FATCA will require data that an institution may not already be recording or may simply have incorrectly recorded or maintained . Data as required by FATCA includes country of citizenship, birthplace, permanent residency, whether an account is in trust or under a power of attorney, operate from a P.O. Box or 'in care' address, or if an account has requested 'hold mail'.

An Identity Resolution solution such as Infoglide IRE can help gather the necessary information so that organizations can meet the compliance standards under FATCA.

A financial firm has to discern where the customer data is located, whether it has the correct information, and what data fields it may need to populate in the event the information is incomplete, given the multiple databases in branch offices and business units. The idea follows similar principles to customer due diligence programs, which in turn help firms comply with anti-money laundering regulations. At the core of such an analysis is a thorough understanding of customers, which comes from capturing, analyzing and maintaining customer data.

Banks and financial institutions with low data quality might struggle to comply with this requirement because they would lack of a single window view of multiple instances of the customer/recipient or beneficial owners. It is therefore imperative that they put an identity resolution solution in place, as failure to do so is not an option.

Pranab for Prez? Forget it.How will UPA survive then?


by R Jagannathan May 3, 2012


If it's not Hamid Ansari,could it be Pranab Mukherjee for president?


News channels have been reporting thatMukherjee is in with a chance since Trinamool Congress is not averse tosupporting him, and even the Left may not object to his candidature. If theSamajwadi Party hops onto the bandwagon at some point – though it is stillharping on a Muslim candidate – it would leave only the BJP really fuming overMukherjee's name. But its ally Janata Dal (United) may have no problem witheither Ansari or Mukherjee.


However, Mukherjee will notbe a shoo-in for the job, for some very rational and irrational reasons.

First, the irrational ones relate to SoniaGandhi, and her known wariness about Pranab Mukherjee's ambitions.When Indira Gandhi was assassinated, Pranab offered himself as a primeministerial choice, and this reportedly angered Rajiv and Sonia. But, moreimportantly, given his cross-party acceptability, SoniaGandhi may be happier with a resident in Rashtrapati Bhavanshe can trust in 2014 – assuming the Congress, short on numbers, needs time tocobble a majority together. So, no Pranab as president.


Second, Pranab Mukherjee has huge utility where he is – asvirtual No 2 in government, and the UPA's main trouble-shooter. Pranab's is theonly political mind at the top in UPA;ManmohanSingh has no credibility and Chidambaram is widely dislikedby his peers and opposition parties. If UPA wants to survive the remaining twoyears to 2014 without mishap, it is not ManmohanSingh or Chidambaram who are going to deliver this outcome,but Mukherjee. And Sonia knows this. She would thus prefer an Ansari or even anAK Antony for president – both are loyalists rather than movers and shakers.


Third, getting kicked upstairs to Rashtrapati Bhavan maynot suit any of his powerful ministry advisors – and especially hisall-powerful Woman Friday, Omita Paul. In UPA-2, power resides in the financeministry apart from 10 Janpath, and no one who benefits from this powerplay islikely to recommend that Mukherjee should call it a day and slink off topresidency. Consider how long the finance ministry has stalled the appointmentof a CEO for UTI Mutual Fund because Omita Paul's brother has not yet foundfavour. With Mukherjee gone, the power players will have to wind up shop inNorth Block.



Fourth, Mukherjee himself – assuming rumours of hisoccasional prime ministerial ambitions are true – may not want to be inRashtrapati Bhavan if 2014 is going to throw up a hung house where power willshift to the person with the greatest acceptability. This was the hope thatkept Sharad Pawar in the race till 2009, and this is the hope that could keepMukherjee out of the presidency.

On the other hand, there aretwo weak reasons why Pranab could consider moving to the ceremonialjob.


One, ManmohanSingh may be happy to kick him upstairs to remove the lastremaining threat to the throne before 2014. But the PM will not have a big sayon Mukherjee.


Two, Mukherjee himself may want a peaceful job – and thereare no sinecures to match the one offered by the presidency. Ask PratibhaPatil, who managed to make the most of it.

The odds are 4-2 againstPranab Mukherjee landing the highest office in the land next July. His name isprobably a red herring in the initial stages of the presidential sweepstakes.


Pranab for president! Youbet

Published: Friday, May 4,2012, 9:00 IST
By Diptosh Majumdar & Anil Sharma | Place: NewDelhi


TheCongress-led UPA appears to be ahead of others in the presidential race witheven an NDA ally — the Janata Dal (United) — making friendly noises.


Thoughthe Congress is still to officially name someone for the president's post, thepolitical tide is in favour of vice-president Hamid Ansari and finance ministerPranab Mukherjee.

Itis clear that the Congress is gradually working towards extracting a commitmentfrom three parties that command substantial votes. One of the parties is itsown volatile coalition partner, the Trinamool Congress. The two others, whichfrequently support Congress from the outside, are Mulayam Singh Yadav'sSamajwadi Party and Mayawati's Bahujan Samaj Party.

SeniorCongress leaders say there is no hurry as there is time till mid-July to decideon a candidate. Several Congress MPs feel Mukherjee and Ansari are formidablenominees.

Whilesome like the usually candid Satyavrat Chaturvedi think that Mukherjee shouldbe allowed to fulfil his ambition, there are others like Renuka Chaudhury whobelieve it will be difficult for the party to let him go.


SomeCongressmen say it is difficult to understand Trinamool chief Mamata Banerjee.She has not given any commitment even after two rounds of discussions - firstwith senior minister Kamal Nath on Wednesday night and then with Congresspresident Sonia Gandhi on Thursday afternoon.

Atpresent, she is more concerned with the financial crisis in West Bengal and sheis carefully watching the Centre's response to her demand for a three-yearmoratorium on the interest payable by her state. She is staying in the capitaltill the NCTC meet on Saturday and a lot depends on how she reacts to thecentral aid offered for Bengal.


Banerjeeis playing her own little game during her stay in the capital. Apart frommeeting the Congress chief, she spent some time with Mulayam Singh Yadav.Unlike Banerjee, Mulayam is almost on board. He told reporters on Thursday thatthe president should be a "political" person, which many haveinterpreted as his preference for Mukherjee.


TheCongress has sent feelers to Mulayam and Mayawati. The SP chief is carefullystudying the Congress approach towards building a consensus. Now that he is amajor player, following the success in UP polls, he wants to be wooed.


TheBSP has not said anything till now. Mayawati, now a Rajya Sabha MP, is spendingmore time in the capital and she will certainly work out her own deal with theCongress.

Butthe Congress has reasons to cheer. Sharad Yadav and Nitish Kumar have brokenranks with the NDA and questioned senior BJP leader Sushma Swaraj's wisdom indescribing Ansari as a person without "stature".


Infact, even on Thursday, senior JD(U) leader Shivanand Tewari said both Ansariand Mukherjee were widely acceptable candidates. A senior Congress leader pointedout that these "generous remarks" do not mean JD(U) is thinking ofmaking a clean break with its senior NDA partner, the BJP. It only means thatthe JD(U) may push the BJP towards the consensus being forged by the Congress.


TheLeft parties will meet on Friday to chalk out a plan of action. But CPI generalsecretary AB Bardhan said he was not averse to a consensus choice. CPI(M)politburo member Sitaram Yechury said the Left did not object to Mukherjee'sname when it came up in 2007. And Ansari was virtually a Left candidate then.


Infact, the Trinamool chief might find Ansari's close links with the Leftirksome. Also, she might not be too happy with Mukherjee, mostly because of hisgood chemistry with the communists. She even told reporters that the Congresshad not named Mukherjee as a candidate.


Atpresent, Ansari and Mukherjee have surged ahead. Both stand a better chance ofmaking it to the post because the UPA, along with the SP and BSP, has thenumbers. But the path is still uncertain and the Congress might just spring asurprise by fielding a wild card entry.


President poll: SushmaSwaraj meets JD-U chief Sharad Yadav


NDAconvenor Sharad Yadav met the BJP leader and Leader of the Opposition in theLok Sabha Sushma Swaraj on Wednesday , 2 May in connection with her statementon Monday that the NDA opposed Congress's Presidential nominees PranabMukherjee and Hamid Ansari.


Yadavhad reacted sharply to her comments saying that she had no right to speak onbehalf of the NDA. Swaraj reportedly clarified her statement to Sharad Yadav inthe meeting.


Sourcessaid both parties have agreed to be silent on the issue till a meeting of theNDA is held and a final call is made on the presidential candidate. "WhatSwaraj had said was BJP's view. The matter had not been discussed with otherNDA partners, including JD(U). A meeting of NDA will be held soon to discussthe matter," a senior BJP leader said.


JD(U)has reportedly conveyed to BJP that Swaraj's comments against Ansari has putthe party in difficulty in Bihar where the two are part of the ruling alliance.JD(U) has been wooing the sizable minority community in the state and hercomments would antagonise them.


JD(U)'smain political adversary RJD was the first to publicly say that Ansari can be acandidate for President. RJD chief Lalu Prasad has decided to throw his weightbehind Hamid Ansari for the President's post.


Meanwhile,BJP President Nitin Gadkari hit out at the Congress for not reaching out to theBJP for a concensus on who should be the next President.

May 02, 2012

A tweet today may be used as evidence tomorrow

<>The Use of Electronic and Social Media Evidence

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Michelle A. Malone
Cacace Tusch Santagata - Stamford Office
March 30, 2012

You may want to pause and reconsider before you submit that post. Perhaps that was the message sent after a Connecticut Superior Court judge ordered a divorcing couple to disclose their passwords to social networking and dating websites. Upon suspicions that the wife may have been posting her feelings toward her children and her feelings towards her ability to The decision causes one to question how social media and electronic communications may be submitted as evidence in a divorce proceeding.

Facebook entries, Youtube videos, email exchanges, tweets, texts and picture posts initially considered to be private exchanges amongst friends or networks are discoverable and have the potential to be used as evidence in a judicial proceeding.

Since it is possible that a printout of an electronically released communication can be altered or the initial communication itself can be generated by someone other than the purported sender or account holder, the court will first look to determine if the particular communication was properly authenticated. Under §9-1(a) of the Connecticut Code of Evidence, the requirement of authentication is satisfied when a party presents “evidence sufficient to support a finding that the offered evidence is what its proponent claims it to be.” Authentication of electronic communications can be achieved by traditional means under the Connecticut Code of Evidence such as through direct testimony of the purported originator or by presenting circumstantial evidence of distinctive characteristics within the electronic communication that are attributable to the purported originator. Due to the varying types of electronic communication mechanisms the court will make a determination as to authenticity on a case by case basis. Once authentication has been established and so long as the information contained within the electronic communication is otherwise admissible, the contents of the electronic communication may be entered into evidence.

The prevalence of electronic communication and the popularity of social networking are undeniable. Since an increasing number of litigants are attempting to offer these communications into evidence, it is best to remember that a tweet today may be used as evidence tomorrow!

May 01, 2012

P Chidambaram's son Karti is beneficiary of 2G

Janata Party President Subramanian Swamy has made fresh allegations of corruption against Home Minister P Chidambaram's son Karti. Speaking Exclusively to NewsX Swamy demanded Chidambaram quit as Home Minister. Swamy also demanded that CBI should include him and his son, Karti, in its investigation on the sale of telecom company Aircel to Malaysia-based investor Maxis.


(Written at the request of the “Hindustan Times”. An edited version of this was carried by it on May 2,2012 at

A year after the death of Osama bin Laden at the hands of the US Navy Seals at Abbottabad in Pakistan on May 2 last year, the central command and control of Al Qaeda based in Pakistan continues to be in a state of disarray.
It has not been able to recover from the severe leadership losses inflicted on it by the US Drone (pilotless plane) strikes after the death of OBL. The lack-lustre leadership of Ayman al-Zawahiri, the new Amir of Al Qaeda, who is also believed to be operating from hide-outs in Pakistan, has not been able to restore the elan and the motivation of its central command and control.
The disruption of its central command and control appears to have affected its ability to plan and launch catastrophic terrorist strikes in far way places like the US Homeland. However, its affiliates like the Talibans of Pakistan and Afghanistan, the Haqqani Network of Afghanistan, the Lashkar-e-Toiba ( LET) and the Lashkar-e-Jhangvi (LeJ) of Pakistan, al Qaeda in the Arabian Peninsula (AQAP), based in Yemen; al Qaeda in the Islamic Maghreb, based in Algeria and Mali; al Shabaab of Somalia; and Boko Haram, of Nigeria have maintained their capability for sporadic acts of terrorism involving mass fatalities in their respective areas of operation.
While the global reach of Al Qaeda has been affected due to the inability of its present leadership to plan and carry out terrorist strikes on a global scale, its regional command and control, regional cadres and regional ability to carry out strikes remain unimpaired.
The affiliates of Al Qaeda continue to use the multi-modus operandi and multi-target operations that they had learnt from Al Qaeda. This was evident from the recent commando style attacks on different targets in Afghanistan by the Afghan Taliban and the Haqqani Network. Mass casualty terrorist attacks carried out during the last one year by affiliates of Al Qaeda in Yemen and Nigeria highlight their continuing motivation and ability to strike when an opportunity presents itself.
The death of OBL has not only weakened the lethality of the central command and control, but it has also blunted its Net-based PSYWAR campaign on which Al Qaeda was dependent for winning new recruits and for imparting online training and for disseminating online instructions. As a result, there has been a decline in the flow of Arab recruits with a capability for global attacks and in attacks launched by Net-motivated “lone wolf” jihadis.
There are also indications that after the death of OBL, who was a Saudi of Yemeni origin with influential family connections n Saudi Arabia, there has been a decline in the flow of funds to Al Qaeda from so-called charity organisations and affluent Saudi families. The shortages caused by this decline have not been made good by the money earned from narcotics smuggling.
The weakening of Al Qaeda as a global terrorist organization should not be taken to mean that dangers of a catastrophic or mass casualty act of terrorism of the kind practised by Al Qaeda before the death of OBL are less likely now. The dangers will remain high so long as the intelligence agencies of the world are not able to identify and neutralize the operatives of Al Qaeda trained and placed in sleeper cells in different parts of the world by OBL when he was alive.
The central command and control of Al Qaeda has been disrupted, but not its global network of sleeper cells. If a new leader emerges who is able to rally them around and motivate them to act, we may still face new acts of mass casualty terrorism.
So long as Al Qaeda’s global network of sleeper cells is not disrupted, dangers of maritime terrorism, acts involving weapons of mass destruction material and mass disruption of the internet have to be guarded against through international co-operation in intelligence collection and sharing and physical security.
The 9/11 strikes by Al Qaeda in the US Homeland led to a decade of close international co-operation against global terrorism. We cannot afford to let this co-operation weaken till Al Qaeda is decimated beyond recovery. Al Qaeda has presently been weakened, but not decimated.
India has to maintain a high state of vigilance and preparedness against commando-style, complex terrorist strikes of the kind launched by the LET in Mumbai on 26/11 and by the Afghan Taliban in Afghanistan recently. The LET has not repeated its 26/11 style terrorist strikes in Indian territory after 2008. But, its training camps in Pakistani territory have been as active as ever and the anti-India radicalization of its leadership shows no signs of abating.
There are no indications of any change in the use of terrorism as a strategic weapon against India by Pakistan’s Inter-Services Intelligence (ISI).
If the US and other NATO forces carry out their plans to thin out their presence in Afghanistan in the coming months, the US is expected to transfer its holdings of arms and ammunition to the Afghan Security Forces. There will be dangers of the leakage of some of them into the hands of the jihadi terrorist groups in the Af-Pak region.
With the thinning down of the NATO presence, the jihadi terrorist organisations now operating in Afghanistan will find at their disposal surplus jihadis well-trained and motivated. India has to be prepared to the possibility of some of these cadres and weapons being diverted to Pakistan-Occupied Kashmir (POK) to re-kindle terrorism and the Pakistan-sponsored proxy war in Jammu & Kashmir.
At a time when there is an urgent need for revamping our intelligence collection , follow-up action and physical security capabilities through close co-operation between the central agencies and the State Police and through fresh instruments such as the proposed National Counter-Terrorism Centre (NCTC), it is worrying that the differences between the Centre and the States on the NCTC are threatening to come in the way of the exercise to strengthen our counter-terrorism capability.
Stability in the Af-Pak region is years away. Till a modicum of stability is established, the Federally-Administered Tribal Areas (FATA) of Pakistan will continue to be the epi-centre of the attempts to revive global terrorism and to keep India bleeding. The international community---and particularly India and the US, which face the maximum threats from the terrorists based in the Af-Pak region---cannot afford to slacken their vigilance.
( The writer is Additional Secretary (retd), Research & Analysis Wing.He was the head of its Counter-terrorism Division for six years)

Britain's Strategy


May 1, 2012 | 0900 GMT

Britain controlled about one-fourth of the Earth's land surface and one-fifth of the world's population in 1939. Fifty years later, its holdings outside the British Isles had become trivial, and it even faced an insurgency in Northern Ireland.

Britain spent the intervening years developing strategies to cope with what poet Rudyard Kipling called its "recessional," or the transient nature of Britain's imperial power. It has spent the last 20 years defining its place not in the world in general but between continental Europe and the United States in particular.

The Rise of Britain

Britain's rise to its once-extraordinary power represented an unintended gift from Napoleon. It had global ambitions before the Napoleonic Wars, but its defeat in North America and competition with other European navies meant Britain was by no means assured pre-eminence. In Napoleon's first phase, France eliminated navies that could have challenged the British navy. The defeat of the French fleet at Trafalgar and the ultimate French defeat at Waterloo then eliminated France as a significant naval challenger to Britain for several generations.

This gave Britain dominance in the North Atlantic, the key to global power in the 19th century that gave control over trade routes into the Indian and Pacific oceans.

This opportunity aligned with economic imperatives. Not only was Britain the dominant political and military power, it also was emerging as the leader in the Industrial Revolution then occurring in Europe. Napoleon's devastation of continental Europe, the collapse of French power and the underdevelopment of the United States gave Britain an advantage and an opportunity.

As a manufacturer, it needed raw materials available only abroad, markets to absorb British production and trade routes supported by strategically located supply stations. The British Empire was foremost a trading bloc. Britain resisted encroachment by integrating potential adversaries into trade relationships with the empire that they viewed as beneficial. In addition, the colonies, which saw the benefits of increased trade, would reinforce the defense of the empire.

As empires go, Britain resembled Rome rather than Nazi Germany. Though Rome imposed its will, key groups in colonial processions benefitted greatly from the relationship. Rome was thus as much an alliance as it was an empire. Nazi Germany, by contrast, had a purely exploitative relationship with subject countries as a result of war and ideology. Britain understood that its empire could be secured only through Roman-style alliances. Britain also benefitted from the Napoleonic Wars' having crippled most European powers. Britain was not under military pressure for most of the century, and was not forced into a singularly exploitative relationship with its empire to support its wars. It thus avoided Hitler's trap.

The German and U.S. Challenges

This began to change in the late 19th century with two major shifts. The first was German unification in 1871, an event that transformed the dynamics of Europe and the world. Once unified, Germany became the most dynamic economy in Europe. Britain had not had to compete for economic primacy since Waterloo, but Germany pressed Britain heavily, underselling British goods with its more efficient production.

The second challenge came from the United States, which also was industrializing at a dramatic pace -- a process ironically underwritten by investors from Britain seeking higher returns than they could get at home. The U.S. industrial base created a navy that surpassed the British navy in size early in the 20th century. The window of opportunity that had opened with the defeat of Napoleon was closing as Germany and the United States pressed Britain, even if in an uncoordinated fashion.

The German challenge culminated in World War I, a catastrophe for Britain and for the rest of Europe. Apart from decimating a generation of men, the cost of the war undermined Britain's economic base, subtly shifting London's relationship with its empire. Moreover, British power no longer seemed inevitable, raising the question among those who had not benefitted from British imperialism as to whether the empire could be broken. Britain became more dependent on its empire, somewhat shifting the mutuality of relations. And the cost of policing the empire became prohibitive relative to the benefits. Additionally, the United States was emerging as a potential alternative partner for the components of the empire -- and the German question was not closed.

World War II, the second round of the German war, broke Britain's power. Britain lost the war not to Germany but to the United States. It might have been a benign defeat in the sense that the United States, pursuing its own interests, saved Britain from being forced into an accommodation with Germany. Nevertheless, the balance of power between the United States and Britain completely shifted during the war. Britain emerged from the war vastly weaker economically and militarily than the United States. Though it retained its empire, its ability to hold it depended on the United States. Britain no longer could hold it unilaterally.

British strategy at the end of the war was to remain aligned with the United States and try to find a foundation for the United States to underwrite the retention of the empire. But the United States had no interest in this. It saw its primary strategic interest as blocking the Soviet Union in what became known as the Cold War. Washington saw the empire as undermining this effort, both fueling anti-Western sentiment and perpetuating an economic bloc that had ceased to be self-sustaining.

From Suez to Special Relationship

The U.S. political intervention against the British, French and Israeli attack on Egypt in 1956, which was designed to maintain British control of the Suez Canal, marked the empire's breaking point. Thereafter, the British retreated strategically and psychologically from the empire. They tried to maintain some semblance of enhanced ties with their former colonies through the Commonwealth, but essentially they withdrew to the British Isles.

As it did during World War II, Britain recognized U.S. economic and military primacy, and it recognized it no longer could retain their empire. As an alternative, the British aligned themselves with the U.S.-dominated alliance system and the postwar financial arrangements lumped together under the Bretton Woods system. The British, however, added a dimension to this. Unable to match the United States militarily, they outstripped other American allies both in the quantity of their military resources and in their willingness to use them at the behest of the Americans.

We might call this the "lieutenant strategy." Britain could not be America's equal. However, it could in effect be America's lieutenant, wielding a military force that outstripped in number -- and technical sophistication -- the forces deployed by other European countries. The British maintained a "full-spectrum" military force, smaller than the U.S. military but more capable across the board than militaries of other U.S. allies.

The goal was to accept a subordinate position without being simply another U.S. ally. The British used that relationship to extract special concessions and considerations other allies did not receive. They also were able to influence U.S. policy in ways others couldn't. The United States was not motivated to go along merely out of sentiment based on shared history, although that played a part. Rather, like all great powers, the United States wanted to engage in coalition warfare and near warfare along with burden sharing. Britain was prepared to play this role more effectively than other countries, thereby maintaining a global influence based on its ability to prompt the use of U.S. forces in its interest.

Much of this was covert, such as U.S. intelligence and security aid for Britain during the Troubles in Northern Ireland. Other efforts were aimed at developing economic relationships and partnerships that might have been questionable with other countries but that were logical with Britain. A good example -- though not a very important one -- was London's ability to recruit U.S. support in Britain's war against Argentina in the Falkland Islands, also known as the Malvinas. The United States had no interests at stake, but given that Britain did have an interest, the U.S. default setting was to support the British.

There were two dangers for the British in this relationship. The first was the cost of maintaining the force relative to the benefits. In extremis, the potential benefits were great. In normal times, the case easily could be made that the cost outstripped the benefit. The second was the danger of being drawn so deeply into the U.S. orbit that Britain would lose its own freedom of action, effectively becoming, as some warned, the 51st state.

Britain modified its strategy from maintaining the balance of power on the Continent to maintaining a balance between the United States and Europe. This allowed it to follow its U.S. strategy while maintaining leverage in that relationship beyond a wholesale willingness to support U.S. policies and wars.

Britain has developed a strategy of being enmeshed in Europe without France's enthusiasm, at the same time positioning itself as the single most important ally of the only global power. There are costs on both sides of this, but Britain has been able to retain its options while limiting its dependency on either side.

As Europe increased its unity, Britain participated in Europe, but with serious limits. It exercised its autonomy and did not join the eurozone. While the United States remains Britain's largest customer for exports if Europe is viewed as individual countries, Europe as a whole is a bigger customer. Where others in Europe, particularly the Germans and French, opposed the Iraq war, Britain participated in it. At the same time, when the French wanted to intervene in Libya and the Americans were extremely reluctant, the British joined with the French and helped draw in the Americans.

Keeping its Options Open

Britain has positioned itself superbly for a strategy of waiting, watching and retaining options regardless of what happens. If the European Union fails and the European nation-states re-emerge as primary institutions, Britain will be in a position to exploit the fragmentation of Europe to its own economic and political advantage and have the United States available to support its strategy. If the United States stumbles and Europe emerges more prominent, Britain can modulate its relationship with Europe at will and serve as the Europeans' interface with a weakened United States. If both Europe and the United States weaken, Britain is in a position to chart whatever independent course it must.

The adjustment British Prime Minister Winston Churchill made in 1943 when it became evident that the United States was going to be much more powerful than Britain remains in place. Britain's willingness to undertake military burdens created by the United States over the last 10 years allows one to see this strategy in action. Whatever the British thought of Iraq, a strategy of remaining the most reliable ally of the United States dictated participation. At the same time, the British participated deeply in the European Union while hedging their bets. Britain continues to be maintaining its balance, this time not within Europe, but, to the extent possible, between Europe and the United States.

The British strategy represents a classic case of a nation accepting reversal, retaining autonomy, and accommodating itself to its environment while manipulating it. All the while Britain waits, holding its options open, waiting to see how the game plays out and positioning itself to take maximum advantage of its shifts in the environment.

It is a dangerous course, as Britain could lose its balance. But there are no safe courses for Britain, as it learned centuries ago. Instead, the British buy time and wait for the next change in history.

Read more: Britain's Strategy | Stratfor

April 30, 2012


 by the Iraqi Civil Society Solidarity Initiative


 Press Release – 26th April, 2012


 Iraq's Journalist Protection Law, approved in August 2011 by the Iraqi Parliament which was facing  international pressure to reform its laws concerning the media, in fact constitutes a threat to independent media. It even leaves in place laws of the Saddam era that allow journalists to be imprisoned for up to seven years for insulting the government. The Iraqi Civil Society Solidarity Initiative supports a campaign to repeal the new law and asks the Iraqi Government to respect its international obligations to protect freedom of expression as guaranteed by the Universal Declaration of Human Rights and the International Covenant on Civil and Political Rights.

 In January 2012, when the Iraqi association "Society for Defending Press Freedom" (SDPF) challenged the journalists' law in the Federal Supreme Court, the Iraqi Civil Society Solidarity Initiative launched an international petition drive to support repeal of the law. SDPF's case was rejected by the Court under the pretext that the SDPF did not have current registration papers. The SDPF is a long-established and reputable Iraqi organisation. Mr. Uday Hatem, journalist and head of the association, explains that his organization is registered since 2006 and presented all papers required to update the registration according to the new NGO law but didn't receive any answer by the NGOs Directorate of the Iraqi Government, thus the SDPF's freedom of association is being violated.

 The journalists Uday Hatem, Jawad al-Khafaji, Mustafa Nasser and Rahima Ahmed are bravely filing the lawsuit again today, this time in their personal capacity as Iraqi citizens. Due to the persecution faced by Iraqi journalists who have challenged institutions and powerful politicians, we believe that they are now in a potentially dangerous position. However, they are very concerned about the consequences of this law for Iraqi freedom and democracy, and are determined to continue. We declare our support for the Iraqi Society for Defending Press Freedom in this struggle!

 What organizations and journalists can do:

-        publish the attached press release of the Iraqi SDPF English.pdf , عربي  on their website and send us the link

-        endorse this campaign and write a message of solidarity to the SDPF


 Mail to:

 More info on this campaign by ICSSI:

 Visit Iraqi Civil Society Solidarity Initiative - مبادرة تضامن المجتمع at:

Delhi scales down US war games

- Air force request to join exercise with American navy turned down SUJAN DUTTA Ships of the Indian and US navies during the Malabar exercise in the Bay of Bengal. (PTI) New Delhi, April 28: The Centre recently turned down an air force request to participate in the war games with the US navy in the Bay of Bengal that concluded last week. The seven-day Malabar 2012 exercise involved the American and Indian navies. The Centre’s move followed a quiet policy decision in the defence ministry to scale down — but not stop — the friendly military engagements with the US armed forces, which have gathered pace and increased in complexity over the past decade. The defence ministry is wary of the “hype” that the US builds around joint military exercises with India. Among the most important of the war games that the Indian and US forces conduct is the Malabar series involving the two navies. An air force component is integral to the exercises because the US deploys a carrier battle group. The Malabar exercise in 2007 in the Bay of Bengal involved the armed forces of five countries and was easily the largest international war games that India has hosted. The exercise involved three aircraft carriers and the Indian Air Force (IAF). That drill irritated the Chinese so much that Beijing asked New Delhi if it was forging a military alliance against it. For this year’s Malabar exercise, based out of Chennai, the US deployed the Carrier Strike Group-1 with the Nimitz-class carrier USS Carl Vinson in the lead. The US also deployed a Los Angeles-class nuclear submarine. When the IAF asked to be part of the exercise, the ministry turned down the request. While it was reworking its proposal, air headquarters communicated its desire to naval headquarters. The navy was of the view that involving the air force would require a change in the “Con Ops” (concept of operations). The air force wanted to deploy its Shamsher (Jaguar) fighter-bombers that are assigned to the maritime strike role. The IAF’s Maritime Air Operations are headquartered in its southern command. After the navy told the IAF that it was too late to change the “Con Ops”, the air force wanted a separate exercise with the US navy, the second-largest air force in the world. The USS Carl Vinson alone carries 85 aircraft in its hangars and flight deck. The highlight of the seven-day Malabar 2012 in the absence of complex maritime-aerial drills was the refuelling in high sea of the USS Carl Vinson by the Indian Navy’s new Italy-built feeder vessel, the INS Shakti. India also deployed the INS Satpura, the indigenously built stealth frigate commissioned earlier this year. The Carrier Strike Group-1 included, apart from the Nimitz-class aircraft carrier USS Carl Vinson, the Ticonderoga-class guided-missile cruiser USS Bunker Hill and the Arleigh Burke-class guided-missile destroyer USS Halsey (DDG 97). It also deployed the Military Sealift Command fast combat support ship, the USNS Bridge. The Indian assets included the frigate INS Satpura, destroyers INS Ranvir and INS Ranvijay (D55), and the corvette INS Kulish along with the replenishment oiler INS Shakti. The exercise took place in approximately 450 nautical miles of sea and air space. The INS Satpura led one group and the USS Bunker Hill another.

A year after: Osama's ideology remains alive in Af-Pak region

SOUTH ASIA MONITOR APRIL 30, 2012 Spotlight By C Uday Bhaskar 2 May 2012 marks one year since the dramatic US SEALS-led Abbotabad operation which led to the neutralization of Osama bin Laden and there is an unstated anxiety in the run-up to this anniversary that there could be an attempt by the al-Qaeda and its affiliates to attack American assets– either in the Af-Pak region or elsewhere in the world. Pakistan's Inter Services Intelligence (ISI) has now claimed that it had provided the original tip-off to US intelligence that led to Osama's elimination but this delayed claim has been rejected by Washington. The diplomatic stand-off between the US and Pakistan continues and the visit of US special envoy Marc Grossman to Islamabad ended inconclusively on Friday and the Karachi-Kandahar supply routes remain closed. Concurrently on Friday (27 April), Pakistan announced that two of bin Laden’s widows and other family members who were in Pakistan were being flown to Saudi Arabia and this final act, it is hoped, will bring the curtain down on the long OBL saga that began in September 2001. Since the Abbotabad operation of May 2011, the Pakistan military has been discredited in the eyes of its own citizens for a combination of duplicity and lack of integrity; and the General Head Quarters in Rawalpindi has had a strained relationship with Islamabad, the seat of the civilian leadership of Pakistan , the White House in Washington DC and the Hamid Karzai led government in Kabul. Yet it is instructive that on the same day (Friday, 27 April), senior officials of these three nations – the US, Pakistan and Afghanistan - met in Islamabad and came to a tentative agreement on arranging a ‘safe passage’ for Taliban militants wanting to join the Afghan reconciliation process. This initiative is part of the stalled effort towards finding a consensual endgame for what began with the OBL planned al-Qaeda attack of 9/11 in September 2001. The fact that these peace talks came in the wake of the 15 April Taliban attacks on Kabul provides an indicator about the fragility of the political process and the elusive nature of the Af-Pak ‘endgame.’ The orientation of the Pakistan military and its support base within the domestic religious right-wing, which in turn reaches into Afghanistan, remains the key to how the internal situation in Kabul will resolve itself. On current indication it appears that the GHQ in Rawalpindi led by General Ashfaq Pervez Kayani still believe that there are good and bad terror groups. Hence the Haqqanis and the LeT can be supported or tacitly endorsed by Pindi, but the Pakistan Taliban whose representatives made an attempt on General Pervez Musharraf’s life, and have wreaked havoc within Pakistan in abetting sectarian violence and targetting Pakistani security forces need to be eliminated. However, this selective approach to the groups that espouse the terror option is not viable– and the US has finally come to accept this reality in the aftermath of the Bin Laden Abbotabad operation, wherein the perfidy of the Pakistani military was exposed. Can the Pakistan military be compelled to sever its links with ‘good’ terror groups such as the LeT led by Hafeez Saeed or for that matter the Haqqanis ? But the divisions within Pakistan on this issue run deep, and the ongoing controversy over judicial strictures passed against Pakistan Prime Minister Yousuf Raza Gilani may be seen as part of this cleavage within Pakistan's polity. It may be recalled that the ‘Memogate’ scandal involving former Pakistan Ambassador Husain Haqqani centred around how the civilian government in Islamabad could rein in and curb the Pakistani military. The mater is still unresolved but the perception about a collusion between the Pakistan military and the judiciary to intimidate the Zardari-Gilani team is palpable. Paradoxically Pakistan is also going through another seminal judicial enquiry– which has been termed Mehrangate- which pertains to a case filed by Air Marshal (rtd) Asghar Khan in 1996. This case which accused the Pakistan Army Chief, Gen. Mirza Aslam Beg, of distributing slush money to the religious right wing party, the IJI (Islami Jamhoori Ittehad), to defeat the Benazir Bhutto led PPP in the 1990 elections has brought into the public domain what was common knowledge on the Pakistani street. In an embarrassing turn of events, former Inter-Services Intelligence (ISI) chief Lt General Asad Durrani has admitted under oath that he had indeed distributed funds to selected politicians ahead of the 1990 polls under instructions from his boss, the Pakistan army chief. In many ways the Mehrangate affair epitomizes the root of the institutional disequilibrium which afflicts Pakistan– a malignancy which has now spread to Afghanistan: namely that the Pakistan Army and its intelligence agencies – the ‘deep-state’- will use money, muscle and madrassa through any means to control the levers of power in Islamabad and hopefully- Kabul. The US which has supported the Rawalpindi General Head Quarters for over half a century through its deception and duplicity has to confront the true nature of the internal damage an uncritical White House regional policy has done to the body-politic of Pakistan and now Afghanistan. Thus it is appropriate that US Secretary of State Hilary Clinton will be in India on 7-8 May to meet with her Indian counterpart Foreign Minister S M Krishna in preparation of the next US-India Strategic Dialogue in Washington. The unscheduled Clinton visit to Delhi will come after she concludes a visit to Beijing on 3–4 May and it is evident that there are many issues that will need to be reviewed as part of the nascent strategic dialogue process. Iran and Afghanistan loom large and the US plan to reduce its military commitment to the region by 2014 will have many interpretations and implications. One year after the removal of Bin Laden physically, his presence and the ideology associated with him remain robust in the Af-Pak region and Delhi will have to read the complex patterns and contradictory undercurrents very astutely to protect its own vital interests. (C Uday Bhaskar is a leading Indian strategic analyst. He can be contacted at

Baloch leaders hail US Resolution on Balochistan

Rampant violation of human rights and continuous exploitation of the natural wealth of Balochistan by Pakistan has been taken note of by the international community. On February 8, 2012 US Congressmen Dana Rohrabacher introduced a House Concurrent Resolution, in support of the `right of self-determination of the Baloch people’, who are victims of human rights violations and oppression. The Baloch nationalist leaders believe that the US Resolution on Balochistan is the result of continuous efforts to highlight the issues concerning the Baloch people. “The U.S. resolution on Balochistan is the result of our hard work. We have convinced them and made the US Congress aware of the crisis in Balochistan. The U.S. resolution on Balochistan will benefit the entire Baloch community, not just any individual. The United States has done its research and we have also provided them evidence that made them aware that we (Balochistan) are an occupied land. Pakistan and the Punjabis have forcibly occupied our territory.” MIR SULEMAN DAUD KHAN ,Veteran Baloch Leader Balochistan that was forcibly occupied in 1948 has been resisting against Pakistan and is demanding independence. However, Pakistan army and spy agencies are carrying out operations in the region to crush the Baloch and are responsible for enforced kidnappings and killings of nationalist leaders, educated youth and other activists. The Baloch political leaders have high hopes from the international community. “Our Baloch friends in the U.S. will lobby with other Congressmen and senators in the United States. We are ready to make an alliance with forces which are ready to help us so that we create pressure for the resolution and take it to the United Nations. Let the Baloch people decide their own future. The Baloch leaders are asking for a referendum, why is the Pakistan government not ready for it. They should ask the Baloch people, and if the Baloch people are happy with Pakistan then we have no objection. But, if they ask for independence, then Pakistan must understand that it’s their fundamental right. “ MIR GHULAM HUSSAIN Information Secretary, Baloch Human Rights Council, UK The US resolution on Balochistan’s right to self-determination has raised hopes of the Baloch leaders. “ If they pass this Bill and I think this is the biggest support for us. We are hoping international community to support us and I hope international community will support us because the first step which in like the US Congress says that Balochistan was divided in three parts and in US Congress if 20 more people says the same thing the Bill will be passed and I think this is the biggest support for Balochistan and Baloch people. “ MANSOOR BALOCH Spokesperson, Baloch Republic Party, UK Even as Pakistan’s atrocities increase in Balochistan the Baloch National Movement gains momentum. The Baloch diaspora is hopeful that the international community will help Balochistan become independent.