June 15, 2012

America persuades India to expand Afghan footprint

Chidanand Rajghatta, TNN | Jun 14, 2012, 08.25PM IST

India and the United States on Wednesday pledged to hold a regular trilateral dialogue with Afghanistan, signaling a long-term commitment to stability in the war-ravaged country in the face of Pakistan's depredations.

WASHINGTON: India and the United States on Wednesday pledged to hold a regular trilateral dialogue with Afghanistan, signaling a long-term commitment to stability in the war-ravaged country in the face of Pakistan's depredations. The forceful pledge, buried deep in a 13-page joint U.S-India statement of some 4200 words, signals an expanded Indian footprint amid a diminishing American military intervention in Afghanistan, and outflanks Pakistan, which is seen as a spoiler in the region. 

The broadening Indian involvement includes training greater number of Afghan military personnel, but no major induction of Indian troops in Afghanistan. India External Affairs Minister S.M.Krishna told journalists at a press conference at the conclusion of the U.S-India Strategic dialogue that the trilateral confabulations would cover a "whole gamut of issues hovering around Afghanistan" including security matters and "building up capacity"to ensure Afghanistan's peace and security. 

Asked if that involved Indian military training of Afghan troops, Krishna guardedly said, "We have been giving training for security forces of Afghanistan. It has been India's approach that they should be self-reliant to defend their frontiers, boundaries and their sovereignty." 

"India would be willing to cooperate with other nations in order to make Afghanistan realize that it has to deal with terrorist forces which are constantly attacking it. It is necessary to strengthen the Afghan efforts, but India's position is it has to be Afghan-led and Afghan-owned," he added. India is said to train a limited number of Afghan officers at its military academies but that program could now expand to meet U.S plans for an strengthened Afghan National Army to meet the challenges ahead. 

The remarks, and the institutionalization of a trilateral dialogue at the expense of Pakistan, which as an immediate neighbor of Afghanistan claims a lead role in its affairs, points to deeper U.S-backed Indian involvement in stabilizing Afghanistan at the persuasion of the Obama administration, a far cry from the days when Washington restrained India from military involvement because of Pakistan's sensitivities. 

While Krishna refrained from naming Pakistan as the trouble-maker in his news conference, the U.S-India joint statement left little to doubt on this front. "They (Hillary Clinton and Krishna) reiterated that success in Afghanistan and regional and global security require elimination of safe havens and infrastructure for terrorism and violent extremism in Afghanistan and Pakistan," the statement noted. 

However, both sides left the door open for Islamabad to come around in a cooperative mode, noting that Pakistan, along with China, was an invitee to the Afghanistan investment summit in New Delhi late June. "I told Minister Krishna how much we appreciate India's efforts in Afghanistan and the region and how much we are looking forward to the investment conference that India will host later this month in New Delhi," Secretary Clinton observed on her part, signing off on U.S approval of the growing Indian role.
In fact, bilateral issues aside, the strategic dialogue broadly served to demonstrate growing U.S outsourcing of an expanded influence and role for India in keeping with its rise. 

"The United States and India have a shared vision for peace, stability and prosperity in Asia, the Indian Ocean region and the Pacific region and are committed to work together, and with others in the region, for the evolution of an open, balanced and inclusive architecture," the joint statement noted, adding, "Secretary Clinton welcomed India's growing engagement in the Asia Pacific."

In 'an affair of the heart' with US, India has an independent mind

Chidanand Rajghatta, TNN | Jun 14, 2012, 10.24PM IST

External Affairs Minister S M Krishna and US Secretary of State Hillary Rodham Clinton at a joint news conference after India-US Strategic Dialogue in Washington on Wednesday.(PTI Photo)

WASHINGTON: Any questions whether New Delhi would serve as a US stooge and become a patsy following the American strategic embrace disappeared in vapor trails as India's foreign minister flew out of Washington DC on Thursday after what officials from both sides agreed was a successful engagement. The route he took itself was illustrative of the complexity international relations. To go south to Havana, S M Krishna had to first fly north to Toronto, Canada, because the United States forbids direct flights to its bete noir Cuba. 

Heading out to Cuba on an official trip soon after a visit to the US is just one example of New Delhi refusing to be a pushover, an illustration of it remaining true to its independent foreign policy DNA. A few weeks from now, India will again irk Washington pundits by consorting with the usual suspects from the Non-Aligned Movement in what US regards as enemy territory: Teheran. 

Not that the US is unused to such in-your-face moves. In fact, Secretary of State Hillary Clinton, who once described ties between US and India as "an affair of the heart," acknowledged herself at a presser that there are bound to be differences. "Well, with respect to affairs of the heart, they usually have ups and downs," she chuckled amid knowing laughter, with Krishna by her side. "But that does not make them any less heartfelt - (laughter) - or any less of a commitment." 

Indeed, the differences between the two sides were many and they were expressed quite candidly by both sides during the strategic dialogue. For all the talk of strategic convergence, India did not refrain from raising several contentious issues, from demanding access to terror suspects David Headley and Tawahur Rana, to pressuring Washington to examine humanely the issue of Kairi Abha Shepherd, an India-born orphan whom the U.S is seeking to deport after 30 years following a cock-up over her citizenship. 

There were also differences over US market access for Indian products and personnel, not to speak of Washington blindly robbing Indian workers of $ 1 billion annually in social security payments. 

On its part, the US too had its laundry list of complaints - from the same market access issue to roadblocks in foreign retail investment to unstated but unfulfilled promises in arms procurement. 

But several issues that were resolved partly demonstrated the ability of the two sides to work through contentious matters: The Iran oil sanctions issue, the civilian nuclear deal gridlock, and the arms purchase question. 

New Delhi met the U.S benchmarks for scaling down Iranian oil imports while retaining its right to engage Tehran (demonstrably so when it attends the NAM meet); both sides persuaded the American nuclear power company Westinghouse to commit to negotiate an Early Works Agreement with India's Nuclear Power Corporation, without New Delhi budging from its nuclear liability law which U.S firms are leery of; and India is buying enough U.S weapons to offset the slight Washington felt at the rejection of its multi-role combat aircraft. 

These were small, incremental steps in resolving differences but officials said they were illustrative of the desire on both sides to overcome wrinkles. 

As for Clinton, she took as swipe at what Washington famously refers to as the nattering nabobs of negativity. "I think that it's always a temptation to zero in on what the differences are. That is understandable and it certainly is to be expected by the press. That's part of your job," she scolded the media. "But...I always look at the totality of the relationship. And I would be never in a position to say we don't have differences." 

"How could two great nations with our histories and our political systems - these raucous, incredibly pluralistic democracies - not have differences? That would be quite odd if that were the case," she added.

Will America's Afghan gamble pay off?

June 15, 2012 11:42 IST

By letting Delhi [ Images ] keep an open line with Tehran, the United States seeks to balance its dependency on Pakistan in managing Afghanistan, says Jyoti Malhotra

The US decision to remove India [ Images ] from its list of sanctions against nations who continue to trade in Iran oil has, expectedly, given a boost to the India-US strategic dialogue that has just concluded in Washington, especially, since one of the main motives for the waiver is to encourage India to expand its relationship with Afghanistan.

Since timing is everything in diplomacy, the US has shown by its action that despite the scores of mistakes it has made in the region, it at least understands the nature of the great game still unfolding here.

On its part, India ostensibly stuck to its public position that it would only acknowledge UN sanctions -- and ignore those applied by the US. But, in practice, India has reduced its oil trade with Iran by about a fifth in the last six months. Iraq has now replaced Iran as India's second-largest supplier of oil, while Saudi Arabia still remains the largest supplier of crude.

None other than the US point person for South Asia, Robert Blake [ Images ], acknowledged India's Iran-Afghanistan connection at an address at the Carnegie Endowment International Peace think-tank in Washington last week. Blake agreed that the US "understood" that India has 'important interests' in Iran and that if it wanted to 'continue all the important things that it is doing in Afghanistan, it must have access to Iranian ports to get its equipment and other supplies into Afghanistan because they cannot do so directly overland through Pakistan'.

That's a great leap forward for the Americans. Not for nothing is one of the world's big powers realistic about the situation on the ground in the Afghanistan-Pakistan region. With Barack Obama [ Images ] seeking re-election by November and committing to withdrawing a majority of US troops by 2014, the Americans must find like-minded countries who can step into the vacuum.
From the Washington point of view, there aren't that many options in the first place. Pakistan, best friend and ally in the war against terror, has been at daggers drawn since the Americans mistakenly killed 24 soldiers and civilian in a strike intended for the Afghan Taliban [ Images ] in November 2011.

The Pakistanis, insisting that the US apologise, have shut the overland routes on which the supplies intended for Afghanistan are moved. The Americans are not about to say sorry, because Obama doesn't want to look weak in an election year. That's the first impasse.

Then there's Turkey, one step removed from the Afghan action; the Central Asian republics, still playing the Russians and the US against each other; and China, certainly not a country that the US wants to be responsible for boosting its already magnified influence in north Asia.

That leaves Iran and India. So guess what -- and why -- just happened.

By moving India off the sanctions list, the US is encouraging it to engage with Iran much more so that it opens out Afghanistan's options and, in fact, reduces its dependency on Pakistan. India is a good country to keep an open line with Teheran.

This is the first step. Indian companies can now, without fear of being slapped around by the US, sell agricultural commodities and drugs and medical equipment to Iran, ostensibly because these are pro-people goods. The second step is not far to see.

Indian companies will likely soon be able to push the development of Iran's Chabahar port, a short truck ride away from the Afghan border, from where supplies can take the Zaranj-Delaram road -- built by India some years ago -- and onwards into Kabul.

To be sure, External Affairs Minister S M Krishna [ Images ] must have briefed his counterpart, Secretary of State Hilary Clinton, during their dialogue this week about Prime Minister Manmohan Singh's [ Images ] phone conversation with Iranian President Mahmoud Ahmadinejad [ Images ] in mid-May and the visit of the Iranian Foreign Minister Ali Akbar Velayati to India later in the month.

The bitterness between the US and Pakistan is so deep these days that it seems the US is willing to bite the bullet by engaging with its chief enemy, Iran, so that its own dependency on Pakistan is reduced.The idea, of course, is to bring pressure on the Pakistan army [ Images ] to stop funding and giving shelter to the Afghan Taliban as well as the Haqqani network that commits crimes inside Afghanistan and then escapes back into Pakistan. No prizes for guessing that India has the same motivation.

It's clear, too, that the US is pushing Indian industry to engage much more deeply with Afghanistan, in the hope that Afghanistan can learn to stabilise itself in different ways. On the one hand, it has supported the move to extend the Afghanistan-Pakistan trade and transit agreement to the republics of Central Asia, theoretically allowing Central Asian goods -- and perhaps, energy pipelines, such as from Turkmenistan -- to come all the way to India.

On the other, Afghan Foreign Minister Zalmai Rassoul, during his visit to Delhi last month to hold the first meeting of the India-Afghanistan strategic partnership, agreed that India would hold two investors conferences from around the region. These would be organised by two major chambers of commerce -- the Confederation of Indian Industry and the Federation of Indian Chambers of Commerce and Industry.

On its part, the improving relationship with the US allows India to maximise its own influence, in Pakistan, Afghanistan and in Iran. Partnering with a much-weakened US, after its interventions in Afghanistan and Iraq, can only enhance Delhi's leverage in the region.
Jyoti Malhotra

Indian Ocean Global Forum 2012

"Enhancing Partnerships for Trade, Infrastructure and Resource Development"
25 – 26 September 2012: Hotel Le Meridien, New Delhi
The Confederation of Indian Industry (CII) and the Commonwealth Business Council (CBC) in partnership with the Ministry of Commerce and Industry, Government of India is organizing the "Indian Ocean Global Forum" from 25 – 26 September 2012 at the Le Meridien Hotel, New Delhi.
The Hon'ble Minister of Commerce and Industry & Textiles, Mr Anand Sharma has very kindly agreed to inaugurate the Forum on 25th September morning.
The focus of the Forum will be on the potential of the Indian Ocean countries with a particular emphasis on building new global economic partnerships for trade, investment and sustainable development in key sectors like energy, mining/ mineral, education, skills/ training and infrastructure.
Under the theme, "Enhancing Partnerships for Trade, infrastructure and Resource Development", the forum will bring together over 500 global business stakeholders including Ministers and senior Government officials as well as academia, media organizations to highlight, discuss and debate the various opportunities appearing on India's horizon.
The Forum will highlight the increasing importance of the trade and investment links between India, Africa, the Middle East, the South and South East Asia and Australia; and their potential for further development.
Through this forum CII and CBC will jointly promote globalization by enhancing and deepening business networking opportunities and fostering a good business environment between India and other Indian Ocean nations wishing to strengthen their trade and investment linkages with India.
The Forum will also be an important preparatory meeting for the Commonwealth Business Forum to be held in conjunction with the Commonwealth Heads of Government Meeting (CHOGM) in Sri Lanka on October 2013.
We cordially invite you to join us at this Forum. Grateful, if your office could kindly fill and send back the enclosed reply form to us, to enable us initiate your formal online registration. The last date to register for getting an online access to the B2B portal of the forum is 10 September 2012.
We look forward to receiving you at the Forum this September.
With warm regards,
Neerja Bhatia
This message comes to you from
Ms Neerja BHATIA
Head, Multilaterals and Special Projects & Events

Confederation of Indian Industry (CII)
The Mantosh Sondhi Center
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Website : www.cii.in

June 14, 2012



Political controversies before and during the Presidential elections are nothing new. We have seen them before. They are part of the democratic process,

2. I still remember the debate and unhappiness triggered among large sections of the admirers of Rajaji, particularly in the then undivided Madras State, over the perceived reluctance of Jawaharlal Nehru, the then Prime Minister, to support the nomination of Rajaji, the then Governor-General,  for election as the first President of the Republic of India after the promulgation of the Constitution.

3.Nehru worked hard for the nomination of Dr.Rajendra Prasad as the first President and he was ultimately elected.Nehru explained his decision not to support the continuance of Rajaji as the head of state with the argument that the Congress required his services in the Madras State, where the Dravidian movement was gathering strength..

4. Nehru's argument did not convince many of us---including me---in Madras. We believed in our heart of hearts that Nehru did not want the independent-minded, the rightist-oriented and the intellectually brilliant Rajaji as the first President. So, he had him eased out from Delhi.

5. The new generation of Dravidian leaders then coming up perceived Nehru's easing out of Rajaji as reflecting the basic prejudice of North Indian leaders against those from the South.This added to their determination to fight for a Dravidian political movement with Dravidian objectives.

6. Even though we felt unhappy over Nehru's easing out of Rajaji, we did not make a drama out of it. We accepted it in our stride and maintained our sense of political balance.It did not affect our admiration for Nehru.

7. We faced another controversy during the Presidential elections of 1969 when Indira Gandhi was the Prime Minister and V.V. Giri supported by her and her followers in the Congress Party defeated N.Sanjiva Reddy, the official candidate of the Party. The controversy was the outcome of her feelings of humiliation over her views as to who should be the party nominee not being given importance by the Party leadership, then known as the Syndicate.

8. Indira Gandhi saw the nomination of Sanjiva Reddy as the candidate by the Party leadership overriding her objections, as Prime Minister, to him as an ill-concealed attempt by the Syndicate to restrict her powers and manoeuvrability as the PM and to use Sanjiva Reddy to keep her under control.

9. She revolted against this with the support of a new generation of Congress leaders and ultimately prevailed. Giri was elected and the designs of the Syndicate to keep her under check failed.Those of us like me, who had just then joined the corridors of power in Delhi, still remember the heat and drama that accompanied the election.

10. The drama of 1969 took place at a time of a major crisis inside the Congress Party, but not in the nation. There was no major crisis of governance. The economy was doing badly, but not too badly. The credibility of the Prime Minister was good. The success of Giri supported by her  added to her credibility and political self-confidence and set in motion a process of psychological upswing that led to her triumphs of 1971.

11.The tussle for power and influence between her and the Syndicate in the Party was dramatic and kept the attention of the nation gripped, but there was nothing petty about it.Regional leaders outside the Congress fold did not play much of a role in the drama.It was essentially an in-house drama in the Congress from which she emerged triumphant.

12. The 1969 events were thus largely an inner party drama which did not have much of a damaging impact on the nation. The unedifying drama that we are witnessing presently over the forthcoming Presidential elections marks a total collapse of leadership in the Union Cabinet  as well as in the Congress Party. It is not an inner party drama. 
13.It is a national drama taking place at a time when governance is in a shambles, when the credibility of the Prime Minister, never high in the past, has reached its nadir, when the Prime Minister as a political and constitutional entity has virtually  ceased to exist and when the economy is on the downslide.

14. The drama of 1969 was the result of the assertion by the Prime Minister of her right to have a say as to who should be the candidate of the party in the Presidential elections. Nothing illustrates more ominously the extent of the collapse of the image and the authority of  Prime Minister Dr.Manmohan Singh than the fact that he seems to be playing no role in the current drama.His views just don't count either in the Party or in the Government or in the nation.

15. Over the last one year, one had seen the inexorable withering away of the credibility andthe  authority of the  Prime Minister. We are now witnessing the process of the withering away of the image and influence of Mrs.Sonia Gandhi too as the President of the Congress. The maladroit manner in which she has handled the important prelude to the Presidential elections would bring no credit to her or her party. 

16. The Congress Party, under her leadership, has totally failed to foresee and appreciate the importance and the likely complexities of the forthcoming Presidential elections which would be taking place at a time of national crisis of worrisome proportions.

17. As the leader of the largest single political formation, one would have expected her to intelligently and imaginatively  steer and control the pre-Presidential political process, keeping the control in her hands all the time while accommodating the wishes and sensitivities of the coalition partners of her party. She has badly failed to do so.

18. As a result, the Presidential poll process is in a roller coaster ride. If this is not arrested, there is a danger of this roller coaster ride affecting the governance too. One ought to blame two political leaders for this roller coaster. Mrs.Sonia Gandhi for her inept handling of the pre-Presidential process and Miss Mamata Banerjee for the way she has allowed her unfortunate and unsatiated  ego to vitiate the entire process.

19. Now is the time for all well-wishers of the nation to re-introduce an element of sanity and sobriety into the process. Dr.AbdulKalam, the much revered former President and ethical role model, and ShriMulayam Singh Yadav, one of the most intelligent political leaders we have, should decline to let themselves be further used by Miss Mamata Banerjee in her divisive political games. The search for a consensus candidate and for an honourable end to the Presidential poll process has to be  pursued vigorously.

20. The immediate objective is to arrest this vitiation and to bring the Presidential poll process to an honourable culmination. Thereafter, it is important for the Congress  to initiate an exercise for bidding a dignified  farewell  to Dr.Manmohan Singh as the Prime Minister,  to democratise the functioning of the Congress Party so that its fortunes are not damaged further by a maladroit leadership and to go for premature elections even at the risk of losing them. The nation and its economy cannot afford to continue any longer with the present sleep-walking of Dr.Manmohan Singh and his Cabinet. ( 15-6-12) 

( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai, and Associate, Chennai Centre For China Studies. E-Mail: seventyone2@gmail.com . Twitter: @SORBONNE75 )

Baloch Leader welcomed USS Enterprise in Pakistani water near Balochistan

US moves USS Enterprise into Pakistani water near Balochistan
By Shahid Abbasi - Jun 14th, 2012  

Karachi: After failing to strike a deal on Nato supply with Pakistan, violating international laws the US has moved its USS Enterprise, the nuclear-powered aircraft carrier, into Pakistani territorial waters near Gawadar city of Balochistan province.

"After the deployment of the aircraft in Pakistani sea the country's security agencies are now investing into the matter. The movement apparently shows the increasing interest of the US in Balochistan province of Pakistan," sources said.

"The US has moved its biggest aircraft carrier 65 to 70 nautical miles away from Gawadar in the second week of June," a well informed source told The News Tribe correspondent.
The USS Enterprise, which holds a crew of over 4,000, had taken part in several wars.

Prominent Baloch leader in US Dr.Wahid Baloch welcomed the move and said "We welcome US Enterprise and NATO forces in Balochistan. Baloch people in Occupied Balochistan have been asking the international community to intervene in Balochistan for long time, where Pakistani army is committing war crimes against the defenseless Baloch people"

'Dark Angel' and the Mexican Meth Connection

'Dark Angel' and the Mexican Meth Connection

June 14, 2012 | 0901 GMT

By Ben West

In a U.S. operation dubbed "Dark Angel," local and federal law enforcement officers on May 30 arrested 20 individuals involved in methamphetamine trafficking across five states. Authorities confirmed that the leader of the trafficking network, Armando Mendoza-Haro, has links to Mexico, where the methamphetamine was likely produced. The group appears to have used legitimate companies to transport methamphetamine from California to the Denver area and elsewhere in the Western and Midwestern United States. The group then sent the profits back to California, where the cash was wired to banks in China and the Cayman Islands.

Mexico's methamphetamine trade seems to be booming these days. Earlier in 2012, the Mexican military made the largest single seizure of methamphetamine ever (15 tons, worth around $1 billion) outside Guadalajara. As the United States increased its restrictions on the pharmaceutical chemicals used to produce methamphetamine, Mexican producers stepped in to meet the growing demand. Details from Operation Dark Angel provide insight into how traffickers in the United States are getting their product to market and, more interestingly, how they are laundering their profits.


The Mendoza-Haro organization appears to be a midsized trafficking operation. Agents who arrested the group and raided properties seized only 2.7 kilograms (6 pounds) of methamphetamine and $715,340 in cash (the approximate street value of 7.2 kilograms of methamphetamine). However, this only represents a single shipment. The group handled what appear to be dozens of similar-sized shipments, so total revenues likely added up to millions of dollars over time. According to The Denver Post, authorities involved in Operation Dark Angel believe the drugs were made in Mexican methamphetamine labs. Additionally, the U.S. Drug Enforcement Administration (DEA) special agent in charge of the operation said the group was transferring drug proceeds to drug cartel members in Mexico.

One of the defendants, Miguel Angel Sanchez, owned Playboyz Trucking LLC in San Bernardino, Calif. Authorities say that some of the Playboyz drivers knowingly transported the group's methamphetamine and cash revenues between California and Colorado, while other drivers were unaware of their cargos' contents. For example, the $715,340 in cash that authorities seized during the May 30 raid was found hidden in a truck carrying milk.

According to the indictment, more than a dozen people in Colorado, California, Utah and Iowa were involved in trafficking methamphetamine under the command of Mendoza-Haro and Sanchez. The evidence comes from intercepted telephone conversations between Mendoza-Haro, Sanchez and the other defendants that indicate the defendants knowingly participated in the drug smuggling. And there is a pattern in the intercepted phone calls: Mendoza-Haro was evidently in contact with nearly all of the accused smugglers, but there were very few conversations among the smugglers themselves. This group is a good example of how trafficking rings tend to compartmentalize their operations for the sake of operational security.

Money Laundering

The indictment connects two individuals in California to most of the money-laundering charges: Ricardo Paniagua-Rodriguez and Carlos Martin Segura Chang. There are no public records available for Paniagua-Rodriguez that explain how he may have been involved in the trafficking group. He was arrested near the U.S.-Mexico border in San Ysidro, Calif., a location that would easily allow him to facilitate financial transactions with groups in Mexico. As for Chang, public records indicate that he used to own (and may still own) Schang Import/Export Service, which is registered under a residential address in Downey, Calif., where police arrested him.

The indictment does not specifically mention the import/export company as a part of the operation; according to public records, the company opened its doors in August 2008 and reported trade activity only in November 2008, so it's difficult to say definitively whether the company was used to help launder drug money. However, the only country Schang was licensed to import from was China, which means the company would most likely have bank accounts to transfer money to China to buy goods. Since some of the trafficking group's laundered money was going to China, we find it likely that Chang served as some kind of international conduit for the Chinese money-laundering aspect of the operation.

The details of this case aren't necessarily normal operation procedure for drug traffickers in the United States. Many midsized, U.S.-based trafficking gangs like the Mendoza-Haro group purchase drugs wholesale from intermediary groups in the border area who have already paid the cartels in Mexico and derive most of their profits from simply getting the drugs across the border -- a specialized, value-added skill in its own right. But DEA evidence of the Mendoza-Haro group's links to Mexico and the routes the group's revenues were laundered through suggest that it may not have exclusively dealt with border intermediaries.

The border drug trade is complicated and diverse. There is not necessarily a standardized practice that everyone follows. It is likely that in this case, the Mendoza-Haro group was purchasing from a contact in Mexico. If so, then routing drug sale revenues through China would make sense. Many money-laundering cases have involved U.S.-based launderers transferring illicit funds to China to purchase consumer goods like refrigerators and televisions that were then shipped to Mexico and sold legitimately to recuperate the profit from the methamphetamine sales. Another possible motive for moving the money to China would be to purchase precursor chemicals in China that would then be exported to Mexico to make more methamphetamine. Additionally, the group could have used the Cayman Islands' banking system -- which is known for its privacy -- to transfer money to drug kingpins anywhere in the world.

It appears that the leaders of the Mendoza-Haro group compartmentalized the money-laundering arm of the operation as well as the transportation arrangements. The indictment charges Paniagua-Rodriguez and Chang only with money laundering; there is no indication that they were involved in actual trafficking. Frequently, owning a legitimate business is a boon to money launderers because it provides a legal cover for illegal activities -- much as Sanchez's legitimate trucking company gave him a way to move methamphetamine discreetly.

Authorities allege that the Mendoza-Haro group laundered money using the "smurfing" tactic. This involves breaking a lump sum -- likely valuing in the hundreds of thousands of dollars -- into smaller individual deposits under $10,000 that are then put into various accounts. (It is standard banking practice to issue suspicious activity reports for deposits of $10,000 or more.) In this case, Denver police alerted the DEA of the group's activities in July 2011, so the authorities were able to track the group's smurfing tactics even though the deposits were too small to be automatically flagged by the banks. The police also probably retrieved banking statements after the fact to confirm the amounts deposited. Charges in the indictment support the smurfing allegations: According to the indictment, members of the gang typically engaged in a flurry of financial activity over the span of a day or two, followed by a week of inactivity before another flurry of deposits. This financial activity likely corresponded with the arrival of cash shipments that went from Colorado back to California on Sanchez's Playboyz trucks.

While the Mendoza-Haro group was able to utilize a legitimate trucking company and possibly Schang's import/export company, it does not appear that it had much legitimate help depositing the money. Larger trafficking and money-laundering operations usually set up shell companies with high cash turnovers, such as restaurants or casinos, to blend illegitimate funds with legitimate funds by fudging the accounting books. This more sophisticated approach makes smurfing unnecessary but also requires more organization and a wider network of individuals. Once the money is cleanly deposited into a bank account, it can be moved around through legitimate financial channels to reach its intended recipients.

A small group like the Mendoza-Haro organization, however, probably didn't have sufficient funds to justify an elaborate system of concealing their payments, which were likely in the hundreds of thousands of dollars. If a group is only moving hundreds of thousands of dollars in revenues at a time, rather than millions of dollars, smurfing is much more feasible than creating and using shell companies.

The Mendoza-Haro operation is one of hundreds, if not thousands, of midsized, U.S.-based trafficking groups likely using legitimate businesses to move their drugs and launder the proceeds. In this case, a trucking company and possibly an import/export business appear to have provided cover for the group's illegal activities. While this particular organization doesn't appear to have used legitimate companies to deposit its money, many other trafficking groups have the resources for sophisticated laundering operations that do utilize the legitimate economy. The largest criminal organizations are powerful enough to enlist the aid of corrupt bankers and other financial service providers.

While the violence associated with the Mexican drug trade is highly visible to the public, less visible financial crimes stemming from the drug trade occur on a daily basis and receive far less attention from the media. The scale of violence seen in Mexico has not yet crossed the border into the United States, but the financial crimes that fund the violence certainly have.

Read more: 'Dark Angel' and the Mexican Meth Connection | Stratfor 

June 13, 2012

U.S. Escalates Military Penetration of Africa

by BAR executive editor Glen Ford

"Africa is to be dominated by military means."

According to the Army Times newspaper, the United States will soon deploy a brigade of about 3,000 troops – "and likely more" – for duty "across the continent" of Africa. The "pilot program" has all the markings of a permanent, roving presence, joining the 1,200 U.S. soldiers stationed in Djibouti and the 100-plus Special Forces dispatched to Central Africa by President Obama, last October.

As always and everywhere, the U.S. is looking for bases to occupy – although the U.S. military command in Africa doesn't call them bases. Rather, "as part of a 'regionally' aligned force concept,' soldiers will live and work among Africans in safe communities approved by the U.S. government," said AFRICOM's Maj. Gen. David Hogg.

The First Black U.S. President, who in 2009 lectured Africans that "corruption" and "poor governance," rather than neocolonialism, were the continent's biggest problems, has made the U.S. military the primarily interlocutor with African states. Functions that were once the purview of the U.S. State Department, such as distribution of economic aid and medical assistance, are now part of AFRICOM's vast portfolio. In Africa, more than anyplace in the world, U.S. foreign policy wears a uniform – which should leave little doubt as to Washington's objectives in the region: Africa is to be dominated by military means. Obama's "good governance" smokescreen for U.S. neocolonialism is embedded in AFRICOM's stated mission: "to deter and defeat transnational threats and to provide a security environment conducive to good governance and development." Translation: to bring the so-called war on terror to every corner of the continent and ensure that U.S. corporate interests get favorable treatment from African governments.

"In Africa, more than anyplace in the world, U.S. foreign policy wears a uniform."

AFRICOM's array of alliances and agreements with African militaries already embraces virtually every nation on the continent except Eritrea and Zimbabwe. All but a handful of Black African states routinely take part in military maneuvers staged by Americans, utilizing U.S. command-and-control equipment and practices. The new, roving U.S. brigade will further institutionalize U.S. ties with the African officer class, part of AFRICOM's mission to forge deep "soldier-to-soldier" relationships: general-to-general, colonel-to-colonel, and so forth down the line. The proposed network of "safe communities" to accommodate the highly mobile U.S. brigade is a euphemism for joint bases and the most intense U.S. fraternization with local African militaries. Regime change will never be farther away than a drink at the officers club.

According to the Army Times article, the composition of the new brigade, in terms of military skills, is not yet known. However, the brigade is conceived as part of the "new readiness model," which "affords Army units more time to learn regional cultures and languages and train for specific threats and missions." This sounds like special ops units – Rangers and Special Forces – which have been vastly expanded under President Obama (and are quite capable of carrying out regime-change operations on their own or in close coordination with their local counterparts).

In most cases, coups will be unnecessary. Regional African "trade" blocs like ECOWAS, the 16-member Economic Community of West African States, and IGAD, the six-nation Intergovernmental Authority on Development, in East Africa, have provided African cover for U.S. and French military/political designs in the Ivory Coast and Somalia, respectively. These blocs will doubtless become even more useful and compliant, as U.S. military commanders and their African counterparts get cozier in those "safe communities."

"The Americans are following a European chart in Africa that goes back centuries."

Americans, no matter how bloody their hands, have always liked to think of themselves as "innocents abroad." "As far as our mission goes, it's uncharted territory," said AFRICOM's Gen. Hogg. Not really. The Americans are following a European chart in Africa that goes back centuries, and their own long experience in the serial rape of Latin America, where the close fraternization of U.S. and Latin American militaries in recent decades smothered the region in juntas, dirty wars, torture-based states, and outright genocide.

The U.S. and its African allies perpetrated of the worst genocide since World War Two: the death of six million in the eastern Democratic Republic of Congo. Uganda, which acts as a mercenary for the U.S. in Africa, is complicit in mega-death in Congo and Somalia. As Milton Allimadi, publisher of Black Star News,reported: "In 2005 The International Court of Justice (ICJ) found Uganda liable for the Congo crimes. The court awarded Congo $10 billion in reparations. Uganda's army plundered Congo's wealth and committed: mass rapes of both women and men; disemboweled pregnant women; burned people inside their homes alive; and, massacred innocents."

Naturally, as a henchman of the United States, Uganda has not paid the $10 billion it owes Congo. Ugandan leader Yoweria Museveni, who became Ronald Reagan's favorite African after seizing power in 1986 with a guerilla army packed with child soldiers, and who for decades waged genocidal war against the Acholi people of his country, now plays host to the Special Forces continent sent by President Obama, ostensibly to fight the child soldier-abusing Joseph Kony and his nearly nonexistent Lord's Resistance Army.

"Uganda, which acts as a mercenary for the U.S. in Africa, is complicit in mega-death in Congo and Somalia."
Rwanda, the Pentagon's other hit man on the continent, has been cited by aUnited Nations report as bearing responsibility for some of the millions slaughtered in Congo, as part of its ongoing rape and plunder of its neighbor.

Gen. Hogg says AFRICOM's mission is to combat famine and disease. Yet, the AFRICOM-assisted Ethiopian invasion of Somalia in late 2006 led to "the worst humanitarian crisis in Africa – worse than Darfur," according to United Nations observers. The 2007 humanitarian crisis and the escalating U.S.-directed war against Somalia made the 2010 famine all but inevitable.
Ugandan soldiers, nominally working for the African Union but in the pay of the Pentagon, kept watch over western interests in the starving country, as did the 1,200 soldiers stationed at the U.S. base in neighboring Djibouti – a permanent presence, along with the French garrison.

There's nothing "uncharted" or mysterious about AFRICOM's mission. The introduction of the 3,000-strong mobile brigade and a network of supporting bases prepares the way for the arrival of much larger U.S. and NATO forces – the recolonization of Africa. Gen. Hogg swears up and down there are no such plans. "For all the challenges that happen and sprout up across Africa, it really comes down to, it has to be an African solution," he said.
That's exactly the same thing they said in Iraq, Afghanistan, and Libya.

BAR executive editor Glen Ford can be contacted atGlen.Ford@BlackAgendaReport.com.

What might the third Indo-US strategic dialogue be about?


- What might the third Indo-US strategic dialogue be about?
Ronen Sen

The third annual Indo-US strategic dialogue to be held in Washington DC today provides a timely opportunity for a comprehensive high-level review of our most broad-based and important relationship. The secretary of state, Hillary Clinton, and the external affairs minister, S.M. Krishna, and their ministerial colleagues would cover a wide vista of bilateral partnerships encompassing strategic co-operation, clean energy, climate change, economy, trade, agriculture and food security, higher education, health, science and technology, innovation and related areas. A number of these collaborative programmes holds great promise of transforming the lives of millions of our people. I will, however, limit myself to an analysis of some security-related issues.

India and the United States of America have many common challenges in the Asia-Pacific, or rather, Indo-Pacific region. President Barack Obama's initial inclination to imitate Bill Clinton in working out a G2 relationship with China appears to have been reversed by Obama's decision on a US "re-balancing" towards the region. Earlier pronouncements by him and Hillary Clinton were elaborated by the defence secretary, Leon Panetta, last week in terms of enhanced US force deployments to underpin this new strategy.

We are on the same page as the US on the freedom of navigation and peaceful settlement of differences in international waters, including the South China Sea. The defence minister, A.K. Antony, stressed the "need to strengthen the multilateral security architecture in the Asia-Pacific and to move at a pace comfortable to all countries concerned". This could be a signal that India would not always march lock-step with the US, as well as an indication of our preference for building on the existing multilateral regional regime envisaged by the US rather than a US-China condominium apparently favoured by China.

Both India and the US have significant stakes in engaging China. We have no interest in confronting or containing China. India and China should have mutual interest in respecting their respective roles in a multi-polar Asian and global order. India has no one but itself to blame for the growing economic and military gap between India and China. Yet we have to factor this current reality, as well as China's military build-up and deployments and other actions in our neighbourhood, in our contingency planning for countervailing or balancing measures.

In spite of his misgivings, Obama had continued with Bush's policy of relying primarily on Pakistan to achieve US objectives in Afghanistan. Much has happened since Obama launched his Af-Pak initiative in early 2009. Pakistan's double-dealing on terrorism stands exposed as well as its continued objective of a Taliban regime of its choice in Kabul. However, there is mutual recognition of the need to maintain a working relationship between the US and Pakistan. The US appreciates India's significant contributions in developing and stabilizing Afghanistan as well as our role in training the Afghan security forces.

Contrary to general perceptions, the Bush administration had also confidentially encouraged such security co-operation by India notwithstanding strong reservations on Pakistan's part. The US has kept us fully in the loop on Af-Pak developments in the run-up to the 2014 troop withdrawal deadline. Continued US advocacy of improved Indo-Pakistan relations as well as a more prominent Indian role in Afghanistan is all the more understandable in view of the erosion of its own influence in Pakistan.
US policies in south Asia take into account India's vital interests. Pakistan is no longer an irritant. Nor is Myanmar. However, Iran remained a recurring source of mutual recrimination. Rhetoric on both sides had obscured the convergence of our longer term interests and had also remained at odds with realities. For instance, our first vote against Iran at the International Atomic Energy Agency was not because of, but in spite of, US Congressional pressures. This also applied to our subsequent actions. There is now better appreciation of the substantial and continued decline of our oil imports from Iran. The waiver of US sanctions vis-à-vis India was therefore a most welcome but expected goodwill gesture on the eve of the strategic dialogue.

The Indo-US civil nuclear deal and the US-led initiative to exempt India from the application of Nuclear Suppliers Group guidelines were historic milestones. They were the most important manifestations of the transformation of the relationship into a strategic partnership. In view of the US leadership and unprecedented political capital invested in these initiatives, there is understandable disappointment that American firms will be the last to finalize agreements to commence commercial operations of nuclear power plants in India.

Particularly after the June 2005 defence framework agreement, our co-operation in this strategic field has grown exponentially. The armed forces of our two countries conduct more joint exercises with each other than with any other country. Orders worth around $9 billion have been placed for defence equipment. Other major contracts are in the pipeline. None of these involved technology transfers. Even consultancy contracts involving dated American technologies were rejected. Reiterated expressions of intent on promoting defence industrial production, including joint R&D and co-development, remain unimplemented.

On the other hand, there is widespread angst amongst US and European suppliers about our defence off-set policies. We do not have integrated national procurement policies for our armed forces, paramilitary, defence research, defence production, ordinance and related needs, against which we could more effectively leverage technology transfers and facilitate economic scale of production by foreign and domestic private and public sector companies. We should subordinate ideological predilections to larger geo-strategic considerations, including on questions related to inter-operability with friendly armed forces. As the nuclear deal demonstrated, ideological and bureaucratic mindsets can be changed not through inter-agency consultations but by decisive political directives from the highest level.

Another strategic area of co- operation has been in counter- terrorism. There had been a steady improvement in our intelligence co-operation since 2007. There has been a major boost in recent years, particularly after 26/11, in operational co-operation, including in intelligence sharing.

A vitally important aspect of any healthy bilateral partnership is trade and economic links. The US remains our largest trading partner, with trade in goods and services currently totalling about $100 billion. The US also remains the largest investor in India, including through Mauritius. At the same time, Indian investments in the US were over $25 billion between 2005 and 2009. A top priority of our strategic partnership should be to impart greater economic content to our relationship.
India, until recently, had an unblemished record of honouring all international commitments. We were confronted by several challenges since our Independence by assassinations of our leaders, natural disasters of unprecedented magnitude, border conflicts, economic shocks and so on, but we met our obligations nonetheless. Unfortunately, this legacy has been severely damaged in the recent past. While India had rightly blamed US fickleness in retrospectively applying domestic legislation to abrogate the Indo-US Tarapur atomic agreement, India now requires the US to accept that our inter-governmental commitment to abide by the Vienna Convention on Supplementary Compensation will be subject to retroactive reconciliation with the liability law adopted subsequently by our Parliament.

Just as we resumed negotiations on an India-US bilateral investment treaty, a number of global investors from Germany, Mauritius, Norway, Russia, Singapore, the United Kingdom, United Arab Emirates and so on initiated international arbitration proceedings and filed notices with our government citing violations of BITs. More such arbitration cases are under preparation. We need to address these issues and also adopt long-pending economic reforms without being mesmerized into inaction by lack of political consensus. Continued procrastination would seriously undermine our image as a global business destination and retard our economic growth. This, in turn, will have a major negative impact on our socio-economic development and our national security. We can no longer afford to pay such a heavy price on account of the so-called compulsions of coalition politics.

The author is the former ambassador to the US

Manmohan Singh: Economic Hitman

By Ambi

Whenever I see manmohan singh and today's India's economic situation, it reminds me of a joke which ex US President Ronald Regan told to ex fed chairman alan greenspan. I first burst into laughter when i read it, but as i realize the depth and seriousness behind it, chill goes down my spine.

As the joke goes: in earlier USSR Comrade Brezhnev was observing the annual military parade at red square. first came the army, then commandos, then navy followed by airforce, then tanks followed, later missiles. And now program was about to end then only spectators found a bizarre scene. After the missiles a bunch of civilians was following the missiles, they were extremely shabby looking, without any military drill, looking here n there, waving hands to spectators. They were looking so odd. All the fellow comrades got cold feet. They knew there ass is going to get kicked. One of them hurriedly went to Comrade Brezhnev "forgive me sir, but i really don't know how these guys managed to get in. Pls give me some time, i ll find it and let you know. Brezhnev calmly told them, don't worry i have specially invited them to be a part of the parade. They are our most talented economists and my most lethal weapon. (Once penetrated in the enemy country) you don't know what damage they can do

Our fureeen ( Foreign) return talented economist PM. Mr,Manmohan sing is our economic hitman. Ha ha ha !
On a serious note, when Shankar Sharma left the stock market then only I realized crisis in congress is far deep, its just a matter of time before it comes out open.

BALOCHISTAN: Efforts on to explore oil, gas

From the Newspaper | Saleem Shahid | 21 hours ago    0

Kurd said that the Balochistan government has purchased a new airplane, adding, "This would benefit the future government which would come in power after next general elections."
QUETTA: The government is making an all-out effort to explore new oil and gas reserves sites in different parts of Balochistan.

This was stated by Balochistan Finance Minister Mir Asim Kurd at a post-budget press conference here on Tuesday. He was accompanied by provincial minister for information Younis Mullahzai and finance secretary Mir Dostain Khan Jamaldani.

"The provincial government is well aware of the depleting gas reserves and realises that the situation would also affect Balochistan's share in the federal resources. At present, different companies are working in Zain Koh area of Dera Bugti district, Jhal Magsi and some others area. Huge gas reserves have been found in Zain Koh area. This reserve is much bigger than the Sui reserves in Sui," Kurd informed.

Replying to a question, he said that the provincial government has allocated around Rs5 billion for the energy sector. He said that 77 schemes of energy sector have been included in the next year's Public Sector Development Programme, along with 52 new schemes.

"We are working on different projects to resolve the energy crisis in the province, including installing wind miles in Nokondi area of the
Chagai district. Also, a survey report reveals that 10,000 MW electricity could be generated using underground warm water in Koh-e-Sultan area of Balochistan," he said.

He further informed that Iran was supplying around 130 MW of electricity in coastal areas of Balochistan. "Iran would further provide 1000MW and a memorandum of understanding has been signed in this regard," he said.

"Rs13.53 billon has been earmarked for law and order in the Balochistan Budget for Fiscal Year 2012-13. Police budget has been increased by 19.6 per cent, Balochistan Constabulary by 13 per cent and Levies Force Budget by 16 per cent," he said.

The budget for procurement of equipments, vehicles and weapons for law enforcement agencies has also been increased by 50 per cent in comparison with previous year.

Referring to the education sector, he informed that 85 per cent of the Education Budget is allocated for release of salaries to teachers and other staff.

Kurd said that the Balochistan government has purchased a new airplane, adding, "This would benefit the future government which would come in power after next general elections."

On health, he said that the provincial government has provided Rs700 million to major public hospitals in the country so that patients from Balochistan could get medical treatment there.

He said that Rs179.93 billion Balochistan Budget for fiscal year 2012-13 includes Rs107.28 billion for ongoing expenditures, Rs36.83 billion for investment expenditures and Rs35.81 billion of development expenditures.

How to bring down a nation

-- Colonel Dan (2001)

How to Bring Down a Nation

Colonel Dan, SASS #24025, Life/Regulator

If you were intent on bringing down a powerful rival whose philosophy, as originally founded, was strong, independent and entirely opposite from your own—a country that you would not want to confront militarily—how would you go about it? The answer is simple; orchestrate the society's destruction from within. 

Although possibly taking longer than a military victory and requiring great patience, the damage would be just as effective if not more so. When you destroy from within, you do it by using that country's own people, no blood is spilled in combat and the physical infrastructure is left intact. 

In any country, there are but a few key areas that determine how the citizens mature, live, and develop their beliefs. These are the focal points that must be attacked. In his book, On War, Clausewitz referred to this concept of identifying and then focusing on select points as attacking the center of gravity. 

The center of gravity is that key element, if controlled or destroyed, would most hurt your opponent and is the critical factor in achieving your objective. In this case, when taking control of or destroying a country from within, the key is to attack and control the mind of the inhabitants—you must shape the way people view life and the values upon which their life is based. Shape the mind and you control their direction. Control their direction and you can lead them down a pathway to hell.

The centers of gravity I would shape in orchestrating a country's downfall from within are its perception of truth, its future generations, the political philosophy, its sense of nationalism and of course, the economy.

To shape truth, control the media: Most people absorb what they know about life from the major media centers these days. The media paints the picture for all to see. If that picture is constantly distorted, lies become accepted as truth, i.e. tell enough lies repeatedly and soon those lies are accepted as fact. Spin and concoct, distort and influence using the public platforms such as television, radio and print and you can influence, sway and control the mind of the vast majority of its population in any area you choose. This subversive influence includes pitting one group against another in order to foment internal discord as well as ridiculing, discrediting and challenging moral principles and national values in order to destroy any hint of a strong spiritual foundation or allegiance to a unique national culture. This is a much easier task if many in your target audience have become lazy, ill-educated, ill-informed, unthinking and apathetic.

To shape future generations, control the schools: Incrementally indoctrinate the children with principles that are sympathetic to your philosophy. Make future generations weak in mind, body and spirit. Avoid teaching children the basic facts about their own history, constitution or rights. Teach them that natural aggression is wrong and docile submission is right. Teach them that any basis of a moral foundation, like the principles of religion, is a weakness to be avoided in the name of freedom and also redefine the concept of patriotism to support your views. Teach them to cast off old values and traditions in the interest and name of sensitivity—after all, we wouldn't want to offend anyone with our old fashioned or traditional beliefs now would we? And guns, guns are wicked, dangerous, and socially unacceptable—an evil that must be eradicated from society—for the good of the children of course. 

To shape the political philosophy, infiltrate the government: Whenever and wherever possible place those sympathetic to your philosophy into office at all levels—the higher, the better—so they can sway the direction of the country within every function of government, promising solutions, handouts and benefits for all. In such a way you can tilt legislation toward incrementally increasing the control of and dependency on government—a government that you are shaping. Concurrently, if you can pack the courts with appointed judges who will not hold you accountable to the law and its constitution, you can act with virtual impunity. Infiltration at the highest levels can also be employed to weaken the military through budget cuts, unwarranted restrictions and over commitment, degrading both force morale and effectiveness. A country without a strong military is like a bull without horns or a tiger without claws—defenseless and vulnerable.

To shape the sense of nationalism, dilute the culture and the language: A strong society has at its foundation a unique culture and a common language. Simply put, it is the culture and language which ultimately defines and unites a nation. If you can manipulate these two critical elements through legislative action and social pressure, you can weaken the foundation of any country. How? Introduce and eventually force the acceptance of a multi-cultural concept and refuse to accept a common tongue as the official language. In short, prevent cultural assimilation and undermine any sense of nationalism. Encourage and orchestrate a mosaic society rather than a melting pot and you will eventually mortally wound the national fabric. 

To shape the economy, spend, spend, spend and tax, tax, tax: A country with a strong economy is financially independent and its people unlikely to look toward the government for much of anything. If free people don't depend on their government, that government has limited sway over them. By legislating large sums from the public treasury you accomplish two important goals. First you create dependents of the public and private business that are now subject to conditions, rules and regulations you dictate. Secondly, you are putting that country into unsustainable debt, reducing the value of the currency while undermining its economy. And of course, to support all this spending, you now make the case that the people must "invest" in all these government provided "benefits" so you tax them relentlessly stealing money from their pockets and independence from their lives. Eventually, if you tax and spend enough, you financially oppress the people to the point of serfdom and overload their economic structure to the point of collapse.

Through patient manipulation and clever coordination of these few centers of gravity, you can, in time, weave the downfall of even the most powerful nation, using its own citizens and systems to orchestrate the destruction. 

The irony is that in just a few generations, the indoctrinated masses will be convinced this trail which has been shaped for them is truly the enlightened path for mankind and they will unwittingly look forward to the trip! You have thus taken control of a powerful rival without firing a shot or spilling a drop of blood.

Post Script: Periodically, I review articles I've written in the past to determine my accuracy concerning how the present's past actually unfolded compared to the view from my saddle at the time. I wrote this one in 2001 for my column in an international news organization. You be the judge as to its accuracy. What I can say with 100% assurance is that we certainly live in interesting times my friends.

Just a review from my archived saddle…

Contact Colonel Dan: coloneldan@bellsouth.net



The Congress Party finds itself caught in a bind by the decision of the Samajwadi Party of Mulayam Singh Yadav and the Trinamool Congress of Miss Mamata Banerjee to propose in public their own options as possible Presidential candidates which are totally different from  the preferences of the Congress.

2. According to the TMC, the preferences of the Congress  are Shri Pranab Mukherjee , the Finance Minister, and Dr.Hamid Ansari, the Vice-President. Shri Yadav and Miss Banerjee have sought to circumvent the preferences of the Congress without having to reject them by proposing three options of their own, namely,Dr.Abdul Kalam, former President, Prime Minister Dr.Manmohan Singh and Shri Somnath Chatterjee, former Speaker of the Lok Sabha.

3. Through their preferences indicated in public, Shri Yadav and Miss Banerjee have sought to convey three messages to Mrs.Sonia Gandhi, the Congress President.Firstly, the political paralysis and the economic melt-down in the country can be broken only by changing the Prime Minister without humiliating him. Secondly, the only way of doing so will be by elevating him as the President.Thirdly, if Mrs.Sonia Gandhi wants a Congress candidate as the President, it can be only Dr.Manmohan Singh and not Shri Pranab  Mukherjee.

4. The Congress is now facing two cruel alternatives both of which could cause it a loss of face.Firstly, it defiantly goes ahead with the candidature of Shri Pranab Mukherjee hoping that he could somehow scrape through.This could be unlikely if the SP and the TMC manage to persuade Dr.Kalam to contest against Pranabda.If Kalam is a candidate against Pranabda, the NDA allies and the Tamil Parties from Tamil Nadu may join the SP and the TMC in supporting him thereby making it difficult for Pranabda to win. Shri Karunanidhi has hinted on many occasions that while he may have no problem in supporting Pranabda, the situation could change for his party if there is a son of the soil from Tamil Nadu in the fray.

5. Secondly or alternatively, the Congress could accept the face-saving offered by the SP and the TMC by dumping Pranabda and persuading Dr.Manmohan Singh to contest the Presidential poll. Such a decision by the Congress could have a negative impact on both Pranabda and Dr.MMS and could be seen as a loss of face by both of them.

6.This could create a serious crisis in the Congress, thereby further damaging its authority and credibility and further affecting its ability to continue to govern the country.If a non-Congress candidate such as Abdul Kalam becomes the President, the Congress may not be able to suggest new elections at a time of its choosing because the President may not accept its recommendation.

7. From the developments of June 13, it is fairly clear that by its ham-handed handling of the search for a Presidential candidate, the Congress Party has lost control of the political ground situation.Whichever way the situation evolves, it will be seen as a loss of face for the Congress.

8. The definite loss for the Congress need not necessarily be a definite gain for the opposition parties because their political incompatibilities are bound to come out in the open and render the situation intractable as the Presidential elections approach. ( 13-6-12)

( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi,and, presently, Director, Institute For Topical Studies, Chennai, and Associate of the Chennai Centre For China Studies. E-mail: seventyone2@gmail.com. Twitter: @SORBONNE75)


Despite the proclamation of a state of emergency in the Rakhine State (old Arakan State) of Myanmar on the night of June 10,2012, and the patrolling of the streets of the capital Sittwe and other Townships by the security forces, the TheinSein Government has not yet been able to restore normalcy.

2. Incidents of sectarian violence between the Buddhists and the Bengali-speaking Rohingya Muslims continue to be reported. Though there are no reports of any new fatalities, incidents of arson with the Muslimsallegedly  setting fire to the houses of Buddhists are being reported. Muslims carrying small-arms have been patrolling the Muslim-inhabited areas of Townships to protect the Muslims from retaliatory attacks by the Buddhists. This reflects their lack of confidence in the ability of the security forces to protect them.

3.Representatives of the Rohingyas have accused the TheinSein Government of imposing a news black-out in the State in order to prevent news of the real state of affairs from reaching the international community.

4.Despite their continuing support to the TheinSein Government's policy of reforms, the US and the European Union countries are concerned over the inability of the security forces  to restore law and order.

5.At a time when the situation continues to cause concern, the decision of the United Nations to withdraw all its staff numbering over 40 from the Rakhine State has come in for criticism from Western human rights organisations.
6. The Human Rights Watch of the US has alleged that the situation in the State was tending to get out of control and called for the despatch of international human rights observers to the State.

7. To the disappointment of the Rohingyas, Aung San SuuKyi, who met the representatives of the agitated Muslim community in Yangon, has not chosen to visit the Rakhine State. Nor are there reports of her taking up vigorously with the authorities the measures required for putting an end to the sectarian violence.

8. She is going ahead with her European tour starting on June 14, covering Switzerland, Norway,the UK, Ireland and France. She seems confident of the stability and durability of the Government of TheinSein and reportedly does not anticipate any threat to it from hardline pro-Beijing elements in the Army during her absence from the country.

9. In the past, whenever she was released from house arrest, she had avoided going abroad due to fears that the Army, which was then in power, might not allow her to return  to the country.She does not appear to have any such fears this time.Since 1988, she went out of the country for the first time last month when she went to Bangkok.

10. She is not taking any of the senior leaders of her National League for Democracy (NLD) with her. They will stay behind in Myanmar during her absence. She is being accompanied to Europe only by two of the younger members of the NLD.

11. Western human rights organisations have been concerned over the continued refusal of the Bangladesh authorities toallow entry ofRohingya women and children fleeing from the violence in the Rakhine State. There are already about 300,000Rohingyas in camps in the Cox's Bazaar area of Bangladesh for many years posing security problems to the Bangladesh authorities. They apparently do not want to add to their number. ( 14-6-12)

( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai, and Associate, Chennai Centre For China Studies. E-Mail: seventyone2@gmail.com . Twitter: @SORBONNE75 )

June 12, 2012


Dear Mrs.Sonia Gandhi,

The country is facing a crisis of major proportions due to the inexorable withering away of the credibility of the Government headed by Dr.Manmohan Singh.The undoubted economic crisis is the outcome of the melt-down of political credibility.

Unless the downfall of the political credibility is arrested, the economic melt-down is not going to stop.

This is the time for action. Since it is the Congress Party that is in power at the head of a coalition, only you can act to arrest this downfall.

If you fail to act, history will judge you and your party cruelly.

The forthcoming Presidential elections provide an opportunuity for a mid-course correction.The nation needs some electrifying decisions that can re-awaken our brain and limbs and make us active again.

Dr.Manmohan Singh is commanding less and less attention and his authority is less and less visible and palpable.

I feel sincerely that you should avail of the opportunity provided by the Presidential elections  to have him approved by your coalition as the next President of the country in recognition of his undeniable services to the nation in the past. He might have failed recently, but he had done wonderful work in the past.

If you succeed in persuading your coalition partners to support his candidature for the Presidential polls, the Congress should persuade Priyanka Gandhi to enter the political scene and take over the leadership of the Congress and the coalition as the Prime Minister.

The nation wants to see a Prime Minister who is a bundle of energy and enthusiasm and who commands attention without having to thump the table.

From whatever I had seen and heard of Priyanka, she is that bundle of energy and enthusiasm.

The nation needs a psychological turn-around. I feel she can provide that turn-around.

After going through one dark moment after another, the nation needs some electrifying moments. She can provide them.

Let her take over as the PM and form a Cabinet in which the GenNext of the Congress leaders will occupy the commanding heights of decision-making and their implementation.

Let her advise the new President to dissolve the Lok Sabha and call for fresh elections.

Let the elections to the Lok Sabha and the Gujrat Assembly be held simultaneously in November-December.

The nation may still be able to recover its balance and the process of the withering away of political credibility may still be arrested.

This is the time for bold and imaginative decisions.

Will you take those decisions? Or will this letter remain another cry in the wilderness?

With warm regards.

Yours sincerely,


Additional Secretary (retd),

Cabinet Secretariat, Govt of India.

Presently living in Chennai.

Why India Snubbed U.S.

June 12, 2012
By Nitin Gokhale

The U.S. might hope for a closer military and strategic alliance with India. But don't expect New Delhi to get excited about the proposal.
If he felt any disappointment at not achieving any substantial breakthrough in talks with Indian Defense Minister A.K. Antony, U.S. Defense Secretary Leon Panetta didn't show it publicly. On a swing through Asia that started with Singapore's annual Shangri-La Dialogue, Panetta had hoped to bring the Indian defense establishment on board for a rebalancing strategy that many believe is aimed squarely at China.

But it wasn't to be.

Antony, known as a particularly cautious policymaker, reportedly told Panetta politely but firmly that India doesn't wish to be seen as a U.S. alliance partner as it embarks on its Asia-Pacific strategy. His comments came within days of Panetta's announcement in Singapore that the United States intended, by 2020, to have 60 percent of its naval fleet based in the Asia-Pacific even as it looks to build new alliances in the region.
Speaking to an audience of strategic thinkers, defense officials, diplomats and journalists at one of the biggest events on the annual Asia defense calendar, Panetta stated that the "United States military…will be smaller, it will be leaner, but it will be agile and flexible, quickly deployable, and will employ cutting edge technology in the future.
"While the U.S. military will remain a global force for security and stability," he added the United States "will of necessity rebalance towards the Asia-Pacific region. We will also maintain our presence throughout the world. We will do it with innovative rotational deployments that emphasize creation of new partnerships and new alliances."
Yet while New Delhi has been open to increasing bilateral engagement with Washington – and does in fact undertake a number of joint exercises across the three defense services – the establishment in India is still wary of any military alliance, or even a formal partnership with the United States.

Why? It's partly because India doesn't want to upset China, its main competitor in Asia, by openly embracing the United States.However, more fundamentally, Indian lawmakers and politicians continue to have reservations over the United States itself, doubts born largely from India's perception of the past half a century that Washington has tended to side with India's arch rival, Pakistan. 

Antony, who last month became India's longest serving defense minister, has been especially careful not to publicly cozy up to Washington. Indeed, he has often instructed ministry officials to downplay joint bilateral exercises with the United States, resisted signing deals tied to weapons systems weapons, and he has consistently told officials that India believes any U.S. disputes should be dealt with bilaterally.
As a result, even as India has agreed to scale up training for Afghanistan's armed forces, it has refused to openly back the U.S. lines on the South China Sea and the Indian Ocean. Although India is aware (and wary) of China's increasing assertiveness in both expanses of water, it prefers to work with smaller countries in the region – such as Vietnam, the Philippines and Indonesia – as well as China to resolve regional tensions.

Antony raised exactly these issues at Shangri-La. "As countries seek to bolster their capabilities to respond to perceived challenges in the maritime domain, there also arises a need to avoid conflict and build consensus," he said. "In this connection, keeping in view the issues that have arisen with regard to the South China Sea, India has welcomed the efforts of the parties concerned in engaging in discussion, and the recently agreed guidelines on the implementation of the 2002 Declaration on the Conduct of Parties between China and ASEAN. We hope that the issues will be resolved through dialogue and negotiation."

According to Defense Ministry sources, Antony's plain talk, both in Singapore and in bilateral talks with Panetta, was a disappointment to Panetta and U.S. efforts to weave together an "anti-China" alliance. But Panetta apparently hid his disappointment well at a talk delivered immediately after conversations with Antony at the Indian Defense Studies and Analyses (IDSA), a government-funded, New Delhi-based think tank. Indeed, despite the setback, Panetta tried to stay upbeat.

"I believe our relationship can and should become more strategic, more practical, and more collaborative," Panetta said. "Our defense policy exchanges are now regular, candid, and invaluable. Our partnership is practical because we take concrete steps through military exercises and exchanges to improve our ability to operate together and with other nations to meet a range of challenges. And our defense relationship is growing ever more collaborative as we seek to do more advanced research and development, share new technologies, and enter into joint production of defense articles."
Still, although Panetta didn't say so explicitly, accompanying U.S. officials told their Indian counterparts that they are looking to move beyond a transactional relationship between the two countries as far as weapons and platforms are concerned. India, which recently became the world's largest weapons importer, is in the process of buying U.S. arms worth more than $8 billion dollars over the next two years. However, India is also eyeing high technology, dual-use items. If such deals can be achieved, it would mark a notable shift in the U.S. from the late 1990s, when many Indian entities found themselves sanctioned following India's twin nuclear tests.

With the changing geo-political environment, and the impending U.S. drawdown from Afghanistan, Washington sees India as a critical partner in ensuring stability and security in Asia, including over cyber and space security, which are seen as potentially major areas of collaboration. This view is backed by two IDSA scholars, Ajey Lele and Cherian Samuel, who argued in a commentary on Panetta's visit that there are a number of potential areas of military collaboration on space and cyber security, including satellite navigation. They noted that the Indian Space Research Organisation has an ongoing GPS-Aided Geo Augmented Navigation (GAGAN) project that's expected to yield major benefits for the civil aviation sector.
"Since the currently used GPS does not guarantee the availability of precision services during conflict situations, it is important for India to invest in space assets…India and the United States could work on compatibility and interoperability aspects of both these systems," they wrote.

Washington can be expected to continue to push New Delhi to accept a role as a lynchpin in a U.S.-led security architecture in Asia. But for now, at least, India will at best be a very reluctant ally.
Nitin Gokhale is Defence & Strategic Affairs Editor with Indian broadcaster, NDTV 24×7.


Kunwal Sibal

US Defence Secretary Leon Panetta's recent visit to India brings to the fore again the question of    the depth India should impart to India-US defence ties. Panetta has been explicit about US interest in deepening them.

The itinerary that took him to the US Pacific Command Headquarters in Hawaii, Singapore, Cam Ranh Bay and Hanoi in Vietnam, New Delhi and Kabul illustrates the new US defence priorities in Asia, a counter "pearl of strings" strategy of sorts that includes India.


This new defence strategy, Panetta acknowledged, consists of "rebalancing" toward the Asia-Pacific region, with an expansion of US military partnerships and presence in the arc extending from the Western Pacific and East Asia into the Indian Ocean region and South Asia.The US will shift the bulk of its naval fleet including as many as six aircraft carriers to the Pacific Ocean by 2020. 

Panetta said candidly in Delhi that defence cooperation with India is a lynchpin in this US strategy. General Dempsey, chairman of the Joint Chiefs of Staff, has underlined subsequently India's enormously important geostrategic location on the sea lanes of communication from the Mid-east to the Pacific. The Pentagon says it sees India as a net provider of security from the Indian Ocean to Afghanistan and beyond.

In Delhi Panetta spoke publicly of India-US defence relationship becoming more strategic, practical and collaborative through regular defence policy exchanges, military exercises  covering all functional areas of naval warfare, prospects for advanced R&D, sharing of new technologies and joint production of defence equipment, besides defence sales and intelligence sharing. 
Noting that India will soon have the world's second largest fleet with an expanded reach and ability to rapidly deploy, Panetta visualizes a peaceful Indian Ocean region supported by growing Indian capabilities with America making military deployments in the region including rotating marines in Australia and Littoral Combat Ships through Singapore. 
These statements and plans make clear that the US pivot towards Asia envisages a buttressing Indian role in it. This pivot aims at re-asserting the American role in the Asia-Pacific region with a view to balancing and countering the rising power of China, as circumstances demand.

US overtures put India in a delicate and difficult situation. The US is changing its geopolitical calculus towards India. Panetta equated US difficulties in dealing with Pakistan with those India faced, disregarding Pakistani sensitivities about western leaders criticising it from Indian soil. He welcomed a more active political and economic Indian role in Afghanistan, including training of the Afghan security forces.

India cannot easily spurn defence advances by the world's foremost military power in a changing global context. India has its own concerns about China's adversarial policies. It cannot unreservedly grasp the US hand either, as it is independently engaging China and has convergence of interests with it on issues of global governance where India has differences with the West. 

We have to factor in our response our relations with Russia, our principal defence partner, the growing strategic understanding between Russia and China, and our dialogue with both countries in the Russia-India-China (RIC) format and that of BRICS. Any perception that just as Russia is moving closer to China because of US/NATO pressure we are moving closer to the US would be politically undesirable.

This calls for a very sophisticated handling of the strategic advantage of strengthening defence ties with the US and the strategic disadvantage of being dragooned into US interventionist policies across the globe. The challenge is how to separate Indian interests from those of the US while deepening the strategic partnership between the two countries.


Understanding the dynamics of the US-China relationship is extremely important. This relationship is multi-dimensional, with twin tracks of cooperation and competiton. Economically and financially cooperation predominates, despite periodic US complaints about China's trade and exchange rate policies; politically and strategically competition is dominant, even if elements in the US, recognizing the inevitability of China's rise, talk of joint US-China management of global affairs.

US-China economic interdependence may raise doubts among US allies about the constraints this imposes on US political choices in dealing with China-provoked regional tensions, but the allies also gain freedom to expand economic ties with China as Japan, South Korea and Taiwan have done. All sides thus see shared gains in expanding trade exchanges.

On the poliical and strategic front, the situation is more complex. The US has an established military presence in the region, with several alliance relationships. The US may tolerate losing economic power to China in relative terms as part of win-win arrangements, but not political power as there are no win-win arrangements there and no shared gains for US allies in security terms.

The US pivot towards Asia seems therefore a defensive move, to prevent China from materially changing the political and strategic status quo in the region in its favour in the way the economic one has shifted to China's advantage.

Panetta noted in Delhi that as the US and India deepen their defense partnership, both will also seek to strengthen their relations with China. He welcomed the rise of a strong and prosperous China that  "respects and enforces the international norms that have governed this region for six decades"- a phrase encapsulating the core aim of the Asia pivot. 
The US-India-China trilateral dialogue proposed by the US State Department is a subtle way to attenuate Indian concerns about the US incorporating India into its check-China strategy more than it would want. It would, by balancing the RIC dialogue, dilute its unique importance.

A pragmatic Indian response to US defence overtures is required- cautious and measured, but not negative.

The writer is a former Foreign Secretary

Spain, Debt and Sovereignty

June 12, 2012 | 0900 GMT

By George Friedman 

Eurozone countries on June 9 agreed to lend Spain up to 100 billion euros ($125 billion) to stabilize the Spanish banking system. Because the bailout dealt with Spain's financial sector directly rather than involving the country's sovereign debt, Madrid did not face the kind of demands for more onerous austerity measures in exchange for the loan that have led to political instability in countries such as Greece.

There are two important aspects to this. First, yet another European financial problem has emerged requiring concerted action. Second, unlike previous incidents, this bailout was not accompanied by much melodrama, infighting or politically destabilizing threats. The Europeans have not solved the underlying problems that have led to these periodic crises, but they have now calibrated their management of the situation to minimize drama and thereby limit political fallout. The Spanish request for help without conditions, and the willingness of the Europeans to provide it, moves the European process to a new level. In a sense, it is a capitulation to the crisis.

This is a shift in the position of Europe's creditor nations, particularly Germany. Berlin has realized that it has no choice but to fund this and other bailouts. As an export-dependent country, Germany needs the eurozone to be able to buy German products. Moreover, Berlin cannot allow internal political pressures to destabilize the European Union as a whole. For all the German bravado about expelling countries, the preservation and even expansion of the existing system remains a fundamental German interest. The cycle of threats, capitulation by creditors, political unrest and then German accommodation had to be broken. It was not only failing to solve the crisis but also contributing to the eurozone's instability. In Spain, the Germans shifted their approach, resolving the temporary problem without a fight over more austerity.

The problem with the solution is that it does nothing to deal with the larger dilemma of European sovereignty and debt. Germany is taking responsibility for solving Spain's banking problem without having any control over the Spanish banking system. If this becomes the norm in Europe, then Germany has moved from the untenable threat of expelling countries to the untenable promise of underwriting them. Europe, in other words, has accommodated itself to the perpetual crises without solving them.

In our view, the root of the problem is the struggle to align the world's second-largest exporter with a bloc of nations that ought to be enjoying positive trade balances but are instead experiencing trade deficits. Germany, however, views the root of the problem as undisciplined entitlement and social program spending that leads to irresponsible borrowing practices. Thus the Europhiles, led by Germany, don't look for solutions by redefining the European trading system, but rather by disciplining countries, particularly within the eurozone, on their spending and borrowing practices.

According to a report in German magazine Der Spiegel, European Central Bank President Mario Draghi, Eurogroup President Jean-Claude Juncker, European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso are drafting a plan to stabilize the system. Under the purported plan, all eurozone members would be required to balance their budgets. Borrowing would be permitted only if approved by a Europe-wide finance minister, a position that would have to be created and supported by a select group of eurozone finance ministers. If approved, money could be borrowed by issuing eurobonds.

The report appears to be well grounded, with European leaders confirming that the four individuals are working on a plan (though they did not confirm the plan's details). The approach outlined in the report would attempt to resolve Europe's problems by increasing the Continent's political integration -- a concept that has been discussed extensively, particularly by the Germans and Europhiles. Given the circumstances, this would seem to be a reasonable position. If all of Europe is going to be responsible for sovereign debt issued by member countries, then the stakeholders who have the most invested in the European project must have control over borrowing. The moral hazard of de facto guarantees on borrowing without such controls is enormous.

There are two problems inherent in this approach. The first, as we have said, is the assumption that Europe's core problem is irresponsible borrowing and that if borrowing were controlled, the European problem would be solved. Irresponsible borrowing is certainly part of the problem, but the deeper issue is trade.

The European Union is built around Germany and therefore the sort of economic dynamism that Germany enjoyed in the 1950s and 1960s, when the country benefited from access to the U.S. market while retaining some protection for its own emerging industries. Eurozone countries' inability to cover debt payments stems in part from their inability to compete with Germany. Under normal circumstances, the economies of developing countries grow through exports driven by lower wage rates, but the shared currency prevents developing European countries from taking advantage of low wages. Borrowing may be too high, but Germany's dependence on exports makes it impossible for Berlin to allow a Greece or a Spain the time and space to develop critical economic sectors in the way that the United States allowed Germany to develop after World War II.

The second problem is the more serious one. The ability to manage a national budget, including the right to borrow, is a central element of national sovereignty. If the right to borrow is transferred from national governments to unelected functionaries appointed by a multinational entity, a profound transformation of democracy in Europe will take place. The European Union has seen transfers of sovereign rights from national governments and their electorates before, but none as profound as this one. Elected governments will not be able to stimulate their economies without approval of this as-yet-unnamed board, nor will they be able to undertake long-term capital expenditures based on the issuance of bonds. This board thus will have enormous power within individual countries.

This prospective solution involves more than simply an attempt to solve banking and debt problems. It reflects a fundamental principle of European political philosophy: the belief that disinterested officials are likely to render better decisions than interested politicians. This idea derives from deep in European intellectual history. Georg Hegel, a German philosopher, made the argument that the end of history was its full rationalization, represented by the rational and disinterested civil servant. Jean-Jacques Rousseau distinguished between the general will and the popular will. He argued that the latter did not represent the interests of the people but that the general will, the source of which was not altogether clear, did.

There is a strand of thought in Europe that regards the disinterested professional as both safer and likely to make better decisions than the popular will and its politicians. This is not an altogether anti-democratic view, but it is a view that says that politics must be moderated by disinterested experts. This idea heavily influenced the structure that was created to manage the European Union and is clearly behind the idea of a European budget board.

The question of the budget is central to a democracy and a highly politicized process. It is one of the places in which the public and its representatives can debate the direction in which the nation should go. The argument has been made that the public and its politicians cannot be trusted with absolute power in this area and that power should be limited to unelected people. In a sense, it is the same argument that has been made for central banks, with even greater power.

The problem, of course, is that the decisions made by this board will be highly political. First, the board must be appointed. The selection of the chief eurozone finance minister and the finance ministers represented on the board will be determined in some process that likely will not take the views of average European citizens into account. Second, the board will make decisions that will determine how the citizens of individual nations live. The board derives from a political process and shapes national life. It is apolitical only in the sense that its members don't stand for election by the populations they oversee and thus are not answerable to them.

There was a similar agreement before the current crisis called the Stability and Growth Pact, which said that the national deficit of a European nation could not exceed a certain percentage. If the deficit did, the nation would pay massive fines. The French (and even the Germans) consistently exceeded these limits but did not pay fines. They were too powerful to be sanctioned, so the system broke down.

Today, we see a concept that goes far beyond the Stability and Growth Pact. The idea is that nations will have no deficits without the permission of an appointed board and that any debt they do take on will be issued through an EU mechanism. That mechanism will eliminate the option of cheating. It may be possible to issue unauthorized bonds, but without a European guarantee, the market would charge a country like Greece prohibitively high interest rates.

But the core problem is the decision about who will and will not be allowed to borrow. Ideally, this decision would be completely transparent and predictable. In practice, the differences and needs of different countries will be so vast that the board will have to make some decisions. Given that the board will be composed of the finance ministers of some eurozone countries -- and that they will have to go home after a decision -- the question of who will be denied permission will be perceived as highly political and, in some cases, as extremely unfair. In some cases, both will be true.

The ultimate issue has nothing to do with economics, save for the trade issue. It is a question of the extent to which European publics are prepared to cede significant elements of national sovereignty in exchange for secured lines of credit, subject to the authority of people they never elected. For EU supporters, the notion that political leaders must be selected by the people they govern is not an absolute. Rational governance by disinterested leaders is an alternative and, at times, a preferred alternative. This is not entirely alien to the European tradition. In practice, however, it could create an explosive situation. The board will determine its willingness to grant deficits based on its own values. It may not permit deficits to fund hospitals for the poor. It may allow borrowing to fund bank bailouts. Or the reverse.

In any event, by taking power from the electorate, it risks a crisis of legitimacy.

The system has evolved to a point where, to some Europeans, this crisis of legitimacy may be preferable to the current cycle of endless crises. It may work for a time. But the first time a nation's government is thwarted from borrowing to fund a project while another nation is allowed to borrow for its project, a new crisis will emerge. Who in the end will determine which deficit is permitted and which is denied? It will not always be the representatives of the country denied. And that will create a crisis.

During the U.S. Civil War, the future of the Union was challenged by the secession of the South. The decisions were made on the battlefields where men were willing to die either for the Union or to break away from it. Who will die for the European Union? And what will hold it together when its decisions are unpopular? The concept of extended integration can work, but not without the passion that moves a Greek or a German to protect his and his country's interest. Without that, the glue that holds nations together is missing in the European Union. The greater the integration, the more this will reveal itself.

Read more: Spain, Debt and Sovereignty | Stratfor