August 08, 2012

Jehadi takeover can prompt Indo-US attack on Pakistan: book

New Delhi, Aug 8, 2012, (IANS):

A jehadi takeover of Pakistan with its nuclear arsenal can spark an Indo-American military assault on that country, which could lead to Pakistan's reabsorption into India, says a new book.

"If the (Pakistan) army were to disintegrate in the face of a jehadist takeover, all the existing (nuke) safeguards would presumably melt away," says the book "The Unravelling - Pakistan in the Age of Jihad".

Author John R. Schmidt served as political counsellor at the US embassy in Islamabad in the years leading up to 9/11.

"If there are concerns today that terrorists might be able to seize a warhead and either use it for nuclear blackmail or seek to detonate it somewhere in the US, imagine the level of concern that would exist if jehadists were actually running the show in Islamabad," it said.

The book (Pan Macmillan) says that in such circumstance, the US "would decide to strike first, deploying its specially trained commando units, if they exist, or attempting to bomb Pakistani warhead storage facilities, if they can be located.

"The logic of the situation would seem to demand that the US attempt to liberate the country from the jehadists," it said.

"It could probably destroy all that was left of the Pakistani armed forces through the use of air power. But it would need considerable help to wrest physical control of the state away from radical Islamists."

The book goes on to say that the "obvious move would be collaborate with India".

"An Indo-American alliance could see the experience of Operation Enduring Freedom (of Afghanistan) repeated on a much larger scale, with the US providing the air power and India the bulk of ground forces," it says.

The author, who now teaches at a US university, says that it is "difficult to speculate how far into Pakistan Indians might feel inclined to push".

"Would they attempt to occupy the entire country, or perhaps call a halt at the Indus?""At the very least they would want to bottle up the remaining jehadist forces and deny them ready access to the sea. This could militate in favour of seizing Punjab, Sindh and the coastal areas of Balochistan, while leaving the Pashtun areas on the far side of the Indus as a kind of jehadist no-man's-land."

But things won't be easy.

"Once the dust had settled, the Indians and their US allies would then face a critical political question: what to do about the areas of Pakistan that had been brought under their control," the book argues.

"Should they attempt to reconstitute Pakistan politically, handing power back to the civilian feudals while trying to reconstruct a less hostile Pakistani military?

"Or would they decide to incorporate the occupied territories into India, bringing about the final unravelling of the Pakistani state?

"It would be the greatest of ironies if Pakistan ended its existence by being reabsorbed into India," the book said.



Fresh clashes between Arakanese Buddhists and RohingyaMuslims were reported on August 6,2012, from the Kyauktaw township in the Rakhine State of Myanmar bordering Bangladesh. The violence was triggered off by claims of the alleged recovery of some guns from a boat belonging to some Rohingyas by Arakanese Buddhists belonging to the village YwarNyar.

2. The Buddhists undertook searches for guns suspected to have been smuggled in by the Rohingyas following an incident in which some Rohingyas were accused by the Buddhists of burning down a Buddhist-owned rice factory in the TaungPauk village.

3. The violence led to the burning down of houses belonging to both the communities in ApaukWa, Shwe Haling, Gut Pi Taung and YwarNyar villages. Earlier,the situation in the Kyauktaw area started getting serious on August 2, 2012, the full moon day of Buddhist Lent, when a group of Rohingyas allegedly destroyed an Arakanese Buddhist-owned bus station.

4.The 88 Generation Students Group sent a team to the Rakhine State to make an on the spot study of the situation. On its return to Yangon, KoKoGyi, its leader, said he would be prepared to support the call of the UN Special Rapporteur For Myanmar for a Truth Commission to find out the truth provided it enquired into the allegations made by the Buddhists as well as the Rohingya Muslims and its enquiry covered not only allegations of violations of the human rights of the two communities, but also Myanmar’s concerns over the impact of the Rohingya problem on Myanmar’s national security.

5.Ko KoGyi said: “We found during our trip to Arakan State that local Arakanese aid groups put up signboards saying ‘Unwelcome UN and NGOs Aid’ in front of their refugee camps.This will continue to happen if [the UN] treats local people unequally.”

6.In a statement issued in Paris on August 6,French Deputy Foreign Minister Vincent Floreani called on Myanmar to find a peaceful solution to the conflict in the Rakhine State. He said: “We call on the Burmese authorities to protect all civilian populations, without discrimination, and to investigate possible abuses.” Meanwhile, there were reports thatTurkish Prime Minister RecepTayyipErdoğan will travel to Myanmar on August 9 to meet President TheinSein and discuss how to provide humanitarian aid to the displaced.

7.Prominent members of the Buddhist community in the Rakhine State have expressed their unhappiness over what they allege as the pressure being exercised by Catholic and other Christian organisations on Western Governments to exercise pressure on the Myanmar Government to show a more sympathetic and accommodating attitude to the Rohingya Muslims.

8.The United States has endorsed an appeal of the UN High Commission For Refugees (UNHCR),Geneva, urging the Bangladesh Government to reverse its order asking two French and one British humanitarian relief organisation to stop providing relief to any fresh group of Rohingyas illegally crossing over into Bangladesh.The Bangladesh’s contention is that these organisations had been permitted to provide relief to Rohingyas who had crossed over in the past and who are registered as refugees.

9.The three organisations ordered to stop the distribution of humanitarian relief are France’s Doctors Without Borders and Action Against Hunger and the UK’s Muslim Aid, all of which had set up humanitarian relief distribution centresin Cox’s Bazar, near the border with Myanmar.

10.The Bangladesh authorities have said their country is already struggling to cope with the hundreds of thousands of Rohingya refugees who fled ethnic violence in the 1990s and are living in camps near Cox’s Bazar. They say the NGOs are undermining the government’s efforts to deter more refugees from entering the country.

11.In a statement issued on August 7, the US State Department said it was “deeply concerned” over the Bangladesh ban.The same day, the UNHCR appealed to Bangladesh “to ensure that NGO assistance continues to be provided to unregistered people from Myanmar’s Rakhine state.If the order is implemented, it will have a serious humanitarian impact on some 40,000 unregistered people who had fled Myanmar in recent years and settled in the Leda and Kutupalong makeshift sites.”

12. SentuMian, an official of the NGO Affairs Bureau of the Bangladesh Government, said the aid provided by these three organisations to Rohingyas had served to encourage an influx of refugees from the latest clashes between the Muslims and the Buddhists. He added: “We found that they [the NGOs] have offered rations and financial support to unregistered Rohingya refugees from Myanmar.These activities work against the interests of Bangladesh and so we decided to impose a ban on them.”

13.The Dhaka Police are reported to have arrested nine Rohingyas who had been brought in by agents.Monirul Islam of the Detective Branch of the Dhaka Metropolitan Police, told the local media that an investigation was underway regarding hundreds of stolen passports, in a case believed to have “a Rohingya link.”

14.In the meanwhile, the local media in the Rakhine State has alleged that Radical Indonesian cleric Abu Bakr Bashir, who is currently imprisoned for supporting a jihadi training camp in Aceh, northern Sumatra, has demanded that the Myanmar Government stop harming Muslims or face the anger of his fighters.While the Muslim Governments of the region have been cautious in their statements on the situation in the Rakhine State, the Tehrik-e-Taliban Pakistan and the Jemaah Islamiya of Indonesia have reportedly expressed their solidarity with the Rohingyas. (8-8-12)

( 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: . Twitter: @SORBONNE75 )

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Too Many Hollow Promises

After all the wrangling, the government draft of the Lokpal Bill is still very much a ‘jokepal’

By - Arvind Kejriwal

In government schools in the villages, teachers rarely turn up. They collect their monthly salaries and pay a part of it to Basic Shiksha Adhikari for marking false attendance. Medicines are diverted to the black market before they reach government hospitals. Poor people are turned away when they go to hospitals. There is endless corruption in the work done by various panchayats. Rations meant for people living in extreme poverty are diverted to the black market.

This is the reality of the aam admi’s life. Yet, none of this corruption is covered under the government’s draft of the Lokpal Bill. If the Bill does not serve the common man, what options does he have when faced with such corruption? We repeatedly posed this question to the government representatives in our joint drafting committee meetings. According to them, the existing systems would continue. But when we pointed out that the existing systems have not worked, they had no answers to offer.

The government claims that it first wants to tackle high-level corruption. However, none of the ongoing large scams like the Adarsh housing scam, the Commonwealth Games scam and the Reddy brothers scam are covered by the government’s Lokpal. Even the 2G scam is only partly covered because the Lokpal would not have the jurisdiction to call for files from the prime minister’s office, which has had a role in the affair. How ridiculous is that?

Why is the government so adamant about keeping junior officers out of Lokpal? The answer lies in the fact that while slush money received at the top often makes it to personal coffers, most of the money made at the lower levels is channelled directly to political parties. More than 80% of Rs 40,000 crore of the PDS subsidy is siphoned off, all of it through ration shops and food officers. It is this money that is used to run parties and their workers at the grassroots. The Rs 35,000 crore foodgrain scam in UP over many years, which is currently being probed by the CBI, took place at the lowest rung of the bureaucracy. Several hundred employees are involved in this scam. Such scams help feed the very foundations of our political establishment. It should come as no surprise that the government does not want lower-level corruption to be covered by Lokpal.

The government says that checking the corruption of four million central government employees and two million public sector employees would need a huge workforce. Is that a legitimate reason to keep them unchecked and corrupt? Under law, corruption is a crime, as serious as murder or rape. Can the government say that it will not provide adequate staff to counter murder and rape should these get out of control? Before anything else, it is the first duty of any government to protect its citizens against crime at any cost.

Another major flaw in the government draft is that it makes no change to its stranglehold on the CBI. The meaningful approach is to take the anti-corruption wing of CBI out of the government’s direct control and merge it with the Lokpal. Even the Supreme Court has said in the Vineet Narain case that the CBI should be made independent of the government. Interestingly, all the cases of corruption mentioned earlier are either being investigated by the CBI or can be investigated by the CBI if it so desires. But Lokpal would have no jurisdiction over them. This means that the government’s version of the Lokpal will give it a very small fraction of the CBI’s jurisdiction.

Sadly, if history is any indication, the government won’t give up its control over the CBI. Prime ministers have tended to appoint only their most trusted men as CBI directors, which is why appointments and exits of CBI chiefs have usually been almost coterminous with prime ministerial tenures. Not surprisingly, no prime minister has wanted to undo Rajiv Gandhi’s unconventional order of 1988. In 1988, faced with the Bofors probe, Rajiv Gandhi brought the CBI directly under his own control. Since then, if the prime minister indulges in corruption, he can only be investigated by the agency which directly reports to him! Such a system makes a mockery of any kind of investigation. Should the need arise, it makes sense for the PM to be investigated by an independent Lokpal. Despite Manmohan Singh agreeing to this proposal, the Congress has vehemently opposed it. Perhaps the Congress is worried about Singh’s successor?

Lastly, the government wants the judiciary to be covered through the Judicial Accountability Bill. Under this Bill, if any judge is accused of having taken a bribe, the permission to register an FIR would be given by a scrutiny committee consisting of three judges of the same high court. It is inconceivable that three judges of the same court would ever grant permission for action against their own colleagues with whom they interact on a daily basis.

The government’s proposals to tackle corruption are far from sincere and will have no impact whatsoever on curbing corruption. ‘Congress ka haath, aam admi ke saath’, is how the slogan goes. But ironically, ‘aam admi’ has been abandoned in this Lokpal draft. In summary, the government draft does not cover junior officers, or the judiciary, or the PM, or any of the recent major scams. All the power is still vested with the CBI which remains directly under the control of the government. If this draft is not a joke, what is?

The writer is member of the civil society group on the Lokpal committee.

August 07, 2012

Indian History – Blind At Birth?

Unchallenged rule by Mughals and the British Raj over India, lasted for about 350 years. Cholas ruled longer than that. Why is Modern Indian history so besotted with Mughals and British Raj.

The Dancing Shiva - Probably a Chola Bronze.  |  Image source and courtesy -  |  Click for source image.

Research recently revealed that the Rijksmuseum’s monumental bronze statue of Shiva was cast in solid bronze. The thousand year-old temple statue was X-rayed, along with the lorry transporting it, in the most powerful X-ray tunnel for containers of the Rotterdam customs authority. It is the first research of its kind on a museological masterpiece.

At 153 cm x 114.5 cm, the Rijksmuseum’s Shiva is the largest known bronze statue from the Chola Dynasty (9th to 12th century) kept in a museological collection outside of India. Given its weight (300 kg), the statue has always been suspected of not being hollow, as has been common practice in Europe since the Greek Antiquity. As part of an earlier investigation, an X-ray was taken of the statue in a Rijksmuseum gallery in 1999 while visitors were evacuated as a precaution against radiation. Unfortunately, the equipment used at the time (280 KeV) was not powerful enough to determine anything definitively. The Rotterdam X-ray tunnel of the Rotterdam customs authority offered a solution.

Complete surprise

The Rijksmuseum renovation project has provided conservators and curators the opportunity to carry out in-depth research on special pieces from the Rijksmuseum collection, including this masterpiece from the Asian Art Collection. The statue was created ca. 1100 in South India. Each temple had its own set of bronze statues which were carried through the city during major temple festivals. This gives the statues their name: utsavamurti, which is Sanskrit for ‘festival images’. Chola bronzes were considered masterpieces of Indian bronze casting.

Anna Ślączka, curator of South Asian Art, comments, ‘We had expected that the statue itself would prove to be solid, but it was a complete surprise to discover that the aureole and the demon under Shiva’s feet are also solid.’ (via Dancing Shiva X Rayed -

Curious … & Interesting

The Mughals from Babur (First Battle of Panipat – 1526) to Aurangzeb (died on 3 March 1707), ruled for less than 200 years. Even with the largest State treasury of its time.

With a fugitive Humayun, deposed by Sher Shah Suri (from 1540-1555) in between.

Within 50 years of Aurangzeb’s death, after the Battle of Plassey (1757), the British gained power. With the Battle of Buxar (1764), the British gained the dewani of Bengal.

For the British, the dewani of Bengal gave untold riches and the start of a global monopoly over gunpowder. Bengal which was the largest manufactory of gunpowder elements in the world was the keys to an Empire. For the British, making money in India was as easy as shaking a pagoda tree.

For India it was ‘hello famines’. A 100 years of wars with the British followed. The Bengal Famine of 1770 (1769-1773) is much written and analysed.

Lost – even before they began

Within 200 years, the British lost India.

British rule really started somewhere between the defeat of Tipu Sultan (1800) and the annexation of Punjab after the death of Ranjit Singh (1840). By 1947, the British story was over – and they were out of India. To be charitable, take it that British misrule lasted from Battle of Plassey (1757) to Indian Independence (1947).


But the Cholas ruled over an equally large empire.

Even though Cholas rule started somewhere in 2nd century BC, their peak was from 940 AD to 1279 AD – nearly 350 years. And what does Modern Indian history know or how important are the Cholas to modern Indian history?

This statue is just a pinhole peek into the technological advancements in the Chola period.

Financial Markets, Politics and the New Reality

August 7, 2012 | 0902 GMT


By George Friedman

Louis M. Bacon is the head of Moore Capital Management, one of the largest and most influential hedge funds in the world. Last week, he announced that he was returning one quarter of his largest fund, about $2 billion, to his investors. The reason he gave to The New York Times was that he had found it difficult to invest given the impossibility of predicting the European situation. He was quoted as saying, "The political involvement is so extreme -- we have not seen this since the postwar era. What they are doing is trying to thwart natural market outcomes. It is amazing how important the decision-making of one person, Angela Merkel, has become to world markets."

The purpose of hedge funds is to make money, and what Bacon essentially said was that it is impossible to make money when there is heavy political involvement, because political involvement introduces unpredictability in the market. Therefore, prudent investment becomes impossible. Hedge funds have become critical to global capital allocation because their actions influence other important actors, and their unwillingness to invest and trade has significant implications for capital availability. If others follow Moore Capital's lead, as they will, there will be greater difficulty in raising the capital needed to address the problem of Europe.

But more interesting is the reasoning. In Bacon's remarks, there is the idea that political decisions are unpredictable, or less predictable than economic decisions. Instead of seeing German Chancellor Merkel as a prisoner of non-market forces that constrain her actions, conventional investors seem to feel that Europe is now subject to Merkel's whims. I would argue that political decisions are predictable and that Merkel is not making decisions as much as reflecting the impersonal forces that drive her. If you understand those impersonal forces, it is possible to predict political behaviors, as you can market behaviors. Neither is an exact science, but properly done, neither is impossible.

Political Economy

In order to do this, you must begin with two insights. The first is that politics and the markets always interact. The very foundation of the market -- the limited liability corporation -- is political. What many take as natural is actually a political contrivance that allows investors to limit their liability. The manner in which liability is limited is a legal issue, not a market issue, and is designed by politicians. The structure of risk in modern society revolves around the corporation, and the corporation is an artifice of politics along with risk. There is nothing natural about a nation's corporate laws, and it is those corporate laws that define the markets.

There are times when politics leave such laws unchanged and times when politics intrude. The last generation has been a unique time in which the prosperity of the markets allowed the legal structure to remain generally unchanged. After 2008, that stability was no longer possible. But active political involvement in the markets is actually the norm, not the exception. Contemporary investors have taken a dramatic exception -- the last generation -- and lacking a historical sense have mistaken it for the norm. This explains the inability of contemporary investors to cope with things that prior generations constantly faced.

The second insight is the recognition that thinkers such as Adam Smith and David Ricardo, who modern investors so admire, understood this perfectly. They never used the term "economics" by itself, but only in conjunction with politics; they called it political economy. The term "economy" didn't stand by itself until the 1880s when a group called the Marginalists sought to mathematize economics and cast it free from politics as a stand-alone social science discipline. The quantification of economics and finance led to a belief -- never held by men like Smith -- that there was an independent sphere of economics where politics didn't intrude and that mathematics allowed markets to be predictable, if only politics wouldn't interfere.

Given that politics and economics could never be separated, the mathematics were never quite as predictive as one would have thought. The hyper-quantification of market analysis, oblivious to overriding political considerations, exacerbated market swings. Economists and financiers focused on the numbers instead of the political consequences of the numbers and the political redefinitions of the rules of corporate actors, which the political system had invented in the first place.

The world is not unpredictable, and neither is Europe nor Germany. The matter at hand is neither what politicians say they want to do nor what they secretly wish to do. Indeed, it is not in understanding what they will do. Rather, the key to predicting the political process is understanding constraints -- the things they can't do. Investors' view that markets are made unpredictable by politics misses two points. First, there has not been a market independent of politics since the corporation was invented. Second, politics and economics are both human endeavors, and both therefore have a degree of predictability.

Merkel's Constraints

The European Union was created for political reasons. Economic considerations were a means to an end, and that end was to stop the wars that had torn Europe apart in the first half of the 20th century. The key was linking Germany and France in an unbreakable alliance based on the promise of economic prosperity. Anyone who doesn't understand the political origins of the European Union and focuses only on its economic intent fails to understand how it works and can be taken by surprise by the actions of its politicians.

Postwar Europe evolved with Germany resuming its prewar role as a massive exporting power. For the Germans, the early versions of European unification became the foundation to the solution of the German problem, which was that Germany's productive capacity outstripped its ability to consume. Germany had to export in order to sustain its economy, and any barriers to free trade threatened German interests. The creation of a free trade zone in Europe was the fundamental imperative, and the more nations that free trade zone encompassed, the more markets were available to Germany. Therefore, Germany was aggressive in expanding the free trade zone.

Germany was also a great supporter of Europewide standards in areas such as employment policy, environmental policy and so on. These policies protect larger German companies, which are able to absorb the costs, from entrepreneurial competition from the rest of Europe. Raising the cost of entry into the marketplace was an important part of Germany's strategy.

Finally, Germany was a champion of the euro, a single currency controlled by a single bank over which Germany had influence in proportion to its importance. The single currency, with its focus on avoiding inflation, protected German creditors against European countries inflating their way out of debt. The debt was denominated in euros, the European Central Bank controlled the value of the euro, and European countries inside and outside the eurozone were trapped in this monetary policy.

So long as there was prosperity, the underlying problems of the system were hidden. But the 2008 crisis revealed the problems. First, most European countries had significant negative balances of trade with Germany. Second, European monetary policy focused on protecting the interests of Germany and, to a lesser extent, France. The regulatory regime created systemic rigidity, which protected existing large corporations.

Merkel's policy under these circumstances was imposed on her by reality. Germany was utterly dependent on its exports, and its exports in Europe were critical. She had to make certain that the free trade zone remained intact. Secondarily, she had to minimize the cost to Germany of stabilizing the system by shifting it onto other countries. She also had to convince her countrymen that the crisis was due to profligate Southern Europeans and that she would not permit them to take advantage of Germans. The truth was that the crisis was caused by Germany's using the trading system to flood markets with its goods, its limiting competition through regulations, and that for every euro carelessly borrowed, a euro was carelessly lent. Like a good politician, Merkel created the myth of the crafty Greek fooling the trusting Deutsche Bank examiner.

The rhetoric notwithstanding, Merkel's decision-making was clear. First, under no circumstances could she permit any country to leave the free trade zone of the European Union. Once that began she could not predict where it would end, save that it might end in German catastrophe. Second, for economic and political reasons she had to be as aggressive as possible with defaulting borrowers. But she could never be so aggressive as to cause them to decide that default and withdrawal made more sense than remaining in the system.

Merkel was not making decisions; she was acting out a script that had been written into the structure of the European Union and the German economy. Merkel would create crises that would shore up her domestic position, posture for the best conceivable deal without forcing withdrawal, and in the end either craft a deal that was not enforced or simply capitulate, putting the problem off until the next meeting of whatever group.

In the end, the Germans would have to absorb the cost of the crisis. Merkel, of course, knew that. She attempted to extract a new European structure in return for Germany's inevitable capitulation to Europe. Merkel understood that Europe, and one of the foundations of European prosperity, was cracking. Her solution was to propose a new structure in which European countries accepted Brussels' oversight of their domestic budgets as part of a systemic solution by the Germans. Some countries outright rejected this proposal, while others agreed, knowing it would never be implemented. Merkel's attempt to recoup by creating an even more powerful European apparatus was bound to fail for two reasons. First and most important, giving up sovereignty is not something nations do easily -- especially not European nations and not to what was effectively a German structure. Second, the rest of Europe knew that it didn't have to give in because in the end Germany would either underwrite the solution (by far the most likely outcome) or the free trade zone would shatter.

If we understand the obvious, then Merkel's actions were completely understandable. Germany needed the European Union more than any other country because of its trade dependency. Germany could not allow the union to devolve into disconnected nations. Therefore, Germany would constantly bluff and back off. The entire Greek drama was the exemplar of this. It was Merkel who was trapped and, being trapped, she was predictable.

The euro question was interesting because it intersected the banking system. But in focusing on the euro, investors failed to understand that it was a secondary issue. The European Union was a political institution and European unity came first. The lenders were far more concerned about the fate of their loans than the borrowers were. And whatever the shadow play of the European Central Bank, they would wind up doing the least they could do to avert default -- but they would avert default. The euro might have been what investors traded, but it was not what the game was about. The game was about the free trade zone and Franco-German unity. Merkel was not making decisions based on the euro, but on other more pressing considerations.

Modern Trading

The investors' problem is that they mistake the period between 1991 and 2008 as the norm and keep waiting for it to return. I saw it as a freakish period that could survive only until the next major financial crisis -- and there always is one. While the unusual period was under way, political and trade issues subsided under the balm of prosperity. During that time, the internal cycles and shifts of the European financial system operated with minimal external turbulence, and for those schooled in profiting from these financial eddies, it was a good time to trade.

Once the 2008 crisis hit external factors that were always there but quiescent became more overt. The internal workings of the financial system became dependent on external forces. We were in the world of political economy, and the political became like a tidal wave, making the trading cycles and opportunities that traders depended on since 1991 irrelevant. And so, having lost money in 2008, they could never find their footing again. They now lived in a world where Merkel was more important than a sharp trader.

Actually, Merkel was not more important than the trader. They were both trapped within constraints about which they could do nothing. But if those constraints were understood, Merkel's behavior could be predicted. The real problem for the hedge funds was not that they didn't understand what they were doing, but the manner in which they had traded in the past simply no longer worked. Even understanding and predicting what political leaders will do is of no value if you insist on a trading model built for a world that no longer exists.

What is called high velocity trading, constantly trading on the infinitesimal movements of a calm but predictable environment, doesn't work during a political tidal wave. And investors of the last generation do not know how to trade in a tidal wave. When we recall the two world wars and the Cold War, we see that this was the norm for the century and that fortunes were made. But the latest generation of investors wants to control risk rather than take advantage of new realities.

However we feel about the performance of the financial community since 2007, there must be a system of capital allocation. That can be operated by the state, but there is empirical evidence that the state isn't very good at making investment decisions. But then, the performance of the financial community has been equally unacceptable, with more than its share of mendacity to boot. The argument for private capital allocation may be theoretically powerful, but the fact is that the empirical validation of the private model hasn't been there for several years.

A strong argument can be made -- corruption and stupidity aside -- that the real problem has been a failure of imagination. We have re-entered an era in which political factors will dominate economic decisions. This has been the norm for a very long time, and traders who wait for the old era to return will be disappointed. Politics can be predicted if you understand the constraints under which a politician such as Merkel acts and don't believe that it is simply random decisions. But to do that, you have to return to Adam Smith and recall the title of his greatest work, The Wealth of Nations. Note that Smith was writing about nations, about politics and economics -- about political economy.

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Read more: Financial Markets, Politics and the New Reality | Stratfor

August 05, 2012


Francois Gautier

Like Sonia Gandhi, I am a Westerner and a brought-up catholic. My father, a very good man, was a staunch Christian; my uncle, whom I doted upon, was the vicar of the Montmartre Church, one of the most picturesque landmarks of Paris. Like Sonia Gandhi, I have lived in India for more than 40 years, and I have had the good fortune to be married to an Indian.

But the comparison stops there. I did land in India with a certain amount of prejudices, clichés and false ideas, that most Westerners pick-up here and there (Tintin, Kipling, the City of Joy, Slumdog Millionaire, today) and I did think in the enthusiasm of my youth to become a missionary to bring back Indian ‘pagans’ to the ‘true God’. But the moment I stepped in India I felt that not only I had nothing much that I could give to India, but rather, that it was India which was bestowing me.

In fact, in 40 years, India has given me so much, professionally, spiritually, sentimentally. Most Westerners, who come here, still think they are here to ‘give’ something to a country, which, unconsciously of course, they think is lesser than theirs. It was true of the British, it was true of Mother Teresa, it is true of Mrs Sonia Gandhi.

It is a fact that Sonia brought discipline, order and cohesion into the Congress party. But the amount of power, that she, a non-Indian, a simple elected MP, like hundreds of others, possesses, should frighten her: a word, nay a glance of her is sufficient to trigger action by her entourage, using any means. Thus, the instruments of power have never been so perverted in India. The CBI blatantly and shamelessly quashed all injunctions against Quattrochi and even allowed him to get away with billions of rupees which he had stolen from India. Yet, without batting an eyelid, and with the Indian Media turning a blind eye, it goes ruthlessly after Narendra Modi, the Chief Minister of the most efficiently run state, the most corruption free, where there is electricity 24 hours, when half of India is in darkness, where there is unlimited water supply whereas a drought-like situation is evolving in many states. Today the Congress, with Sonia’s overt or silent consent, pays crores of rupees to buy MP’s to topple non-Congress governments. Her governors shamelessly hijack democracy by twisting the laws.

Are Indians aware that their country has entered a state of semi-autocracy, where every important decision comes to a single individual, residing in her fortress of Janpath, surrounded by dozens of security men, an empress of India. Are they aware that she controls tens of billions of rupees of the taxpayer’s money, which she uses to keep her party in power? Do they know that the huge amounts of the scams, whether the 2G, the CWG, or the Adarsh one, do not go into politicians pockets (only a fraction), but to the coffers of the Congress for the next general elections, and more than anything to please Sonia, who is trying to install her son on the throne of India? Thank God, the Judiciary here still holds some independence!

Nobody seems to notice what is happening under the reign of Sonia Gandhi. That many leftist intellectuals are allowed to preach secession in India, whereas on the other hand the Congress Government has been going after the army, the last body in India to uphold the time honoured values of the Kshatriya –courage, honour, devotion to the Motherland, they who alone today practice true secularism, never differentiating between a Muslim or Hindu soldier, and who, for a pittance, give daily their lives to their country. First it was the attempt of a caste census, a divide and rule ploy if there is one; then there are the many signs that the Government is thinking about thinning down the presence of the Indian army in the Kashmir Valley, which will suit Pakistan perfectly.

One hears from persons who know her well, of Sonia’s’ qualities of honesty, courtesy, or personal care. But would be impossible, in France for example, to have a non-Christian, say an Hindu for instance, who is a non-elected president or PM, to be the absolute ruler of the country behind the scenes, superseding even the PM. There are many capable people in the Congress. Why can’t a billion Indians find one of their own, who will understand the complexity and subtlety of India, to govern themselves? Not only that, but her very presence at the top has unleashed forces, visible and invisible that are detrimental to the country. There is nothing wrong in espousing the best of the values of the West - democracy, technological perfection, higher standards of living - but many of the institutions are crumbling in the West: two out of three marriages end in divorce, kids shoot each other, parents are not cared for in their old age, depression is rampant and westerners are actually looking for answers elsewhere, in India notably.
One does not understand this craze at the moment to westernize India at all costs, while discarding its ancient values. Mrs Gandhi should do well to remember that there still are 850 million Hindus in India, a billion worldwide and that whatever good inputs were brought by different invasions, it is the ancient values of the spirituality behind Hinduism, which have made India so special and which gives her today her unique qualities, making an Indian Christian different from an American Christian, or an Indian Muslim different from a Saudi one.

The tragedy of India is that it was colonized for too long. And unlike China, it always looks to the West for a solution to its problems. Sonia Gandhi, whatever her qualities, is just an incarnation of that hangover, an Empress of India in new clothes.



( To be read in continuation of my article titled “The Outsiders” at

Mr.TomasOjea Quintana, a UN Special Rapporteur on Human Rights, completed on August 4,2012, a six-day visit to Myanmar to study allegations of violations of the human rights of its ethnic minorities and Rohingya Muslims by the military regime that was in power for nearly five decades.He has called for the establishment of a Truth Commission to investigate these allegations.

2. The Myanmar Government reportedly allowed him to visit the Rakhine State ( previously called the Arakan State) on the Bangladesh border for a day.The Rakhine State was recently the scene of violent clashes between its local Buddhist population and the Rohingya Muslims, in which about 80 persons were killed. A large number of people belonging to both communities have been driven out of their homes and are living in refugee camps.

3.The Myanmar Army and civilian political leaders, including Aung San SuuKyi, do not recognise the Rohingyas as an ethnic group of Myanmar as claimed by the Rohingyas. They look upon them as illegal immigrants from Bangladesh who, in the past, had joined hands with indigenous Arakanese Muslims for the creation of an independent Arakan State. They are also concerned over their alleged links with the Bangladesh branch of the Harkat-ul-Jihad-al-Islami (HUJI), which had joined the International Islamic Front for Jihad Against the Crusaders and the Jewish People formed by Osama bin Laden in 1998. The HUJI of Bangladesh, identified as HUJI(B), has many Rohingya and Arakanese Muslim members some of whom were taken by it to Afghanistan via Pakistan for fighting along with the Taliban before 9/11.

4.The Myanmar Army and civilian leaders are not prepared to allow the Rohingyas to settle down in their territory adjoining Bangladesh. They have been saying they should either go back to Bangladesh or should be re-settled in the Muslim countries of South-East Asia.Neither Malaysia nor Indonesia nor Brunei is prepared to let them in. Bangladesh is not prepared to take them back lest they pose a threat to its national and economic security.

5. In recent weeks, helicopter gunships of the Bangladesh Armed Forces have been allegedly bombing boats carrying Rohingyas fleeing from refugee camps in the Rakhine State in order to prevent their re-entry into Bangladesh.

6. As a result, small numbers of Rohingyas are believed to have started sneaking into India. One does not know how they are coming---by boats or by the land route via Mizoram or Manipur. If this is not stopped immediately, the trickle might gather force and momentum adding to our internal security problems and aggravating communal tension.

7.Next to LET, HUJI (B) has been quite active in India in the past. If we do not act promptly and vigorously against the creeping infiltration of illegal Muslims of Bangladesh origin from Bangladesh and Myanmar into India, our internal security problems are likely to get worse. ( 5-8-12)

( 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: . Twitter: @SORBONNE75 )