August 24, 2012

Cry of a Baloch Mother - Bibi Hayrbibi Baluch

A Baluch mother and her daughter talking about how Pakistani military forces and the ISI, abducted, killed and dumped their family members, Bibi Hayrbibi Baluch and her daughter has lost more than Five men in their family namely: Khalid, Ghulam Qadir, Noorbakhsh, Sheyhak and Bibagr are the martyrs who have been killed by Pakistani military forces and ISI agencies and Mazaar who has been abducted and is still missing. Thanks to Pakistan no man left in the family.

Too Much of a Good Thing, Continued...

The Daily Reckoning Presents

Bill Bonner

Economists cannot know what is ‘better.’ They can only know what is ‘more.’ They have numbers. They can count. They can add up ‘more’. As for ‘better,’ they have no idea. So, in their little minds, more is better.

That is the thinking that has driven the profession...and much of the world absurdity. Throughout the last 50 years, more looked so much like better, no one worried too much about the difference. More cars. More houses. More food. More gadgets. What was not to like?

But the cost was more debt. And by the 21st century the burden of debt had become so great that the system could no longer move forward. Here is how it worked, up until the early spring of 2007:

The Chinese, and others, made more stuff. The Arabs, and others, pumped more oil.

Americans, and others, created more credit and used the money to buy more stuff.

Rather than demand payment — in gold — for their excess dollars, as they would have before 1971, the exporters took the money and lent it back to the Americans. In this way, the US never really had to settle up. Approximately $8 trillion of purchasing power — the accumulated trade deficits between 1970 and 2007 — was created in this way. There is supposed to be ‘no such thing as a free lunch’ in economics. But for years Americans ate breakfast, lunch, and many of their dinners too at foreigners’ expense.

Not needing to redeem the old credits, new ones were made available to Americans. Cheap credit drove up housing prices...and gave them the collateral to borrow more money and buy more stuff.

But when subprime mortgage market collapsed in ’07-’08, suddenly, US real estate prices stopped rising. This left millions of households in a bind. They could no longer borrow against rising house prices because housing was going down. They had to cut back on spending...which meant less stuff could be sold to them...and it left producers with bulging warehouses with unsold goods.

Economists looked at this situation, after the crash of subprime mortgages in ’07 and ’08, and came to the same conclusion they had on the occasion of every other slowdown over the previous 60 years. The economy needed more “stimulus” to encourage consumers to buy more stuff. They did not notice that consumers already had too much stuff...and that they were now paying the price for buying more stuff than they could afford. Nor did they wonder whether consumers’ lives might be better if they focused more on quality and less on quantity. ‘More’ is all they know; it is all they can do. So they called for ‘more stimulus,’ more debt, more credit, more spending, and more stuff.

But more is not always the right answer. There are times when less is better.

One of those times was in the mid-1930s...when Germany faced a critical decision. More? Or less?

Adam Tooze, a British historian, has written a marvelous book on the Nazi economy, The Wages of Destruction. He shows that, far from illustrating the success of intelligent central planning, the German economy of the Third Reich was a disaster. The National Socialists — or “Nazis” — had their plans for Germany. They were determined to put them into practice, regardless of what the Germans may have wanted for themselves. They fiddled with one sector after another. When one fix failed to produce the desired results, actually bringing unintended and undesired consequences, they tried to fix the fix with a new fix. Most of these fixes involved spending money — if not on actual output, then on bureaucracies that regulated output. And most of them were directed towards a goal that only a demagogue politician or a lame economist would find attractive — making Germany self-sufficient. Imports cost money, they reasoned. Besides, trade forced a nation to behave. Neither was attractive to the Nazis.

Like America in the 2000s, by the mid-1930s Germany had already spent too much money — with the military as its biggest single expense. It faced enemies much more real and dangerous than America’s ‘terrorist’ adversaries. And under Adolph Hitler’s leadership it had decided to invest heavily in armaments. This created a sense of purpose for many people and a source of ‘demand’ that got people working again. Germany was still a relatively poor country, with a standard of living only about half the US equivalent. An autoworker in Munich, for example, could not expect anywhere near the same lifestyle as one in Detroit. Henry Ford paid his workers so well they were able to afford large houses with hot and cold running water and electricity. They could buy automobiles too...which gave a huge boost to America’s heavy industry. When war began, the US could fairly quickly convert its auto factories to production of jeeps, tanks and trucks. Germany could not.

In Germany, automobiles were still a luxury item. Few people owned them; certainly not the people who made them. Military orders made up for the lack of demand from the civilian population.

In this regard, many economists looked at Germany and labeled the rearmament program — from an economic standpoint — as a central planning success story. It ‘put people back to work.’ It ‘got the economy moving again.’ More stuff was being produced. ‘More’ worked! From all over Europe, people came to admire the revival in Germany. American Congressmen praised Hitler. So did many magazine editors and other leaders in France and Britain too.

Besides, compared to what was going on in Russia, Japan and Italy... Germany looked positively benign, if not a perfect role model. Stalin was purging or starving his enemies — millions of them. Benito Mussolini had invaded Abyssinia and was busily massacring the locals. The Japanese were beginning their bloody war against the Chinese. Hitler may have sounded mad from time to time, and he may have murdered many of his rivals on the ‘night of the long knives,’ but now — by 1935 — he was beginning to sound reasonable, at least in comparison.

But vast spending on the military brought problems for the Nazi leadership. The German economy was still recovering from the destruction of WWI, the loss of the Ruhr heavy industrial area, the Great Depression and the reparations payments. Germany. While other economies had been forced off the gold standard, Germany held to its strong mark policies. It lacked the raw materials needed to build heavy military equipment and the fuel needed to power a modern economy and modern war machine. Those could only be bought with foreign currencies, which it could earn by trade, or by drawing down its own hard currency reserves of gold.

By 1936, it was clear that the government would run out of money in just a few months. The Nazi leadership had already ‘fixed’ the farm sector — with various jury rigs and many unintended consequences. The market system had largely been replaced by a system of bureaucratic meddles and price controls which, naturally and predictably, led to shortages that had to be reconciled by rationing.

Now, this same sort of meddling was causing shortages in the manufacturing sector too. If something were not done, the whole rearmament effort could come to a halt. Germany was not rich enough to be able to afford guns and butter — at least not on the scale promised by the Nazi Party. And with their spreading system of bureaucratic management, neither the guns nor butter were likely to last long.

August 22, 2012

Bandar on offensive against Damascus, Tehran


King Abdullah appointed Bandar bin Sultan as the new head of the General Intelligence Directorate (GID), the Saudi external intelligence service, on July 19, with a view to expanding the kingdom's covert operations in the region. The two objectives he was given were to hasten the fall of Bashar al-Assad’s regime in Syria and to provide a counterweight to Iranian expansionism in the Middle East. ( Source:

David Ignatius: Is Saudi kingdom on the edge?
August 09, 2012 10:57:42 PM

WASHINGTON — By appointing Prince Bandar bin Sultan as its new intelligence chief, Saudi Arabia has installed what looks like a war cabinet at a time of rising tensions with Iran and growing internal dissent from its Shiite minority.

The Saudis have also heightened their alert level in other ways to prepare for possible regional conflict. Some Saudi military and security personnel were mobilized last month — called back from summer leave or told to cancel planned vacations. One explanation of the mobilization making the rounds in Riyadh is that the Saudis expected that Turkey might retaliate against Syria for the shoot-down of one of its fighters in late June.

The installation of a new intelligence chief came as Saudi Arabia was stepping up its support for insurgents in Syria seeking to topple the regime of President Bashar al-Assad.

In this covert effort, the Saudis are working with the US, France, Turkey, Jordan and other nations that want Assad out.

Bandar will succeed Prince Muqrin bin Abdul Aziz, who was barely visible in the West during his years as Saudi intelligence chief. This led to widespread comment that Muqrin had been fired, but he is said to retain the confidence of King Abdullah, who will use him as a special emissary to Pakistan and other Muslim nations where Muqrin's traditional Saudi demeanor will be useful.

Bandar, the flamboyant former ambassador to Washington, had appeared to be sidelined in the past several years because of poor health and personal issues. His appointment now as intelligence chief probably signals the desire of both King Abdullah and the new Crown Prince Salman to have an experienced covert operator to handle sensitive foreign contacts at a time of sharply rising tensions.

Bandar would be a useful intermediary, for example, if Saudi Arabia sought nuclear weapons or ballistic missile technology from China to defend against such threats from Iran.

Bandar was the go-between in a secret 1987 missile deal with China, known as "East Wind." Bandar has also been active in secret missions with Syria and Lebanon for decades, and The Wall Street Journal reported that he helped arrange a recent visit to Saudi Arabia by Gen. Manaf Tlass, the highest-ranking Syrian defector.

Bandar is especially well-placed to manage intelligence liaison with the United States, given his several decades here as ambassador. Bandar maintained close relations with the CIA during Ronald Reagan's presidency, and was said to have helped organize secret funding for joint Saudi-American covert actions in the Middle East. During the run-up to the 1991 Gulf War, Bandar was so close to President George H.W. Bush that he became known as "Bandar Bush," a moniker that continued under President George W. Bush.

Bandar continued to play a behind-the scenes role even after he left Washington in 2005. He was said, for example, to support Vice President Dick Cheney's confrontational policy against Iran, to the consternation of Prince Turki al-Faisal, his successor as ambassador, who was working with less hawkish members of the Bush administration.

Interestingly, Bandar has been a special target for Iranian media attacks in recent days. Iran's Press TV on Aug. 2 described him as "the linchpin in the 'dastardly subterfuges' of the CIA and Mossad against Syria."

Press TV also carried an uncorroborated report early last week (July 31) claiming that Bandar had been assassinated; the rumor was rebutted Aug. 3 by a source who said that Bandar had been in telephone contact with non-Saudis.

At home, the Saudis have been struggling to contain Shiite protests in Al-Qatif, in the kingdom's oil-rich eastern province.

Those protests, which the Saudis believe are Iran-inspired, led to two deaths in early July, according to a July 9 BBC report. The demonstrations continued last week and there were reports of more casualties.

The Saudis haven't been able to stop the insurgency in Al-Qatif; indeed, it appears to be worsening. The protesters may hope to provoke the Saudis into a bloody crackdown, which would leave scores dead and encourage much wider demonstrations and international outcry. So far, the Saudis have avoided such an escalation through relatively restrained tactics. Saudi reformers argue that the best way to quell Shiite protests is to give them the full economic and political rights of citizenship.

Iran's Press TV on July 27 featured an interview with an analyst headlined: "Collapse of al-Saud regime becomes more realistic than before." The information may have been Tehran's propaganda, but it helps explain why the Saudi monarchy is going to battle stations.

Read more:



Intelligence is the collection of information from the real world that could be important for our national security.

2.Counter-intelligence is the technique of preventing our ill-wishers from collecting intelligence about us that could weaken our national security.

3. Cyber-intelligence is the collection of intelligence having a bearing on our national security by systematically monitoring the web.

4.Cyber counter-intelligence is the prevention, detection and neutralisation of attempts by our ill-wishers to weaken our national security by misusing the web for destabilising us. It is also the prevention, detection and neutralisation of attempts by our ill-wishers to penetrate our cyber security architecture for the collection of  information about us and for using this capability for disrupting our economy and the fighting capabilities of our armed forces.

5.The Task Force For the Revamping of the Intelligence Apparatus headed by Gary Saxena, former head of the R&AW, which was set up by the Government of A.B.Vajpayee in 2000, had, inter alia, gone into our cyber intelligence and counter-intelligence capabilities and made a set of recommendations.

6.It had suggested that the Intelligence Bureau (IB) should be given the additional responsibility for cyber intelligence and counter-intelligence. It had also recommended that the IB should be made responsible for all counter-intelligence----whether in the real or virtual world--- and that its capabilities in this regard should be further strengthened,

7.One was given to understand that the NDA Government accepted these recommendations, but gave these new responsibilities for cyber intelligence and counter-intelligence to the National Technical Research Organisation (NTRO), which was set up as a Techint agency on the pattern of the National Security Agency (NSA) of the US.

8. In the US, the NSA used to have additional responsibility for cyber intelligence and counter-intelligence. Two years ago, it was decided to set up an independent Cyber Command for this purpose, but to place it under the head of the NSA. TheNSA and the Cyber Command are separate organisations with separate staff and separate budgets, but they have a common chief.

9. As a result of the NDA Government's decision to entrust the responsibility for cyber intelligence and counter-intelligence to the NTRO, we now have the IB dealing with intelligence and counter-intelligence in the real world and the NTRO in the virtual world of the Internet and the social media sites that have come up in recent years.

10. The recent incidents relating to Psyjihad sought to be waged against us through the Net and its social media sites and mobile telephones by exploiting Muslim anger over the anti-Muslim violence in the Rakhine State of Myanmar and in our Assam State and our incoherent and ill-coordinated reaction to it bring out two serious deficiencies:

( a).The NTRO has not been systematically monitoring the Net and its Social Media Sites for cyber chatter that could have a bearing on our internal and external security in order to sound a wake-up call to the Govt when the contents of the cyber chatter indicate possible attempts at destabilisation. This is clearly evident from the fact that the large number of websites disseminating exaggerated accounts of the anti-Muslim violence with the help of morphed images seems to have been noticed by the NTRO only after the violent incidents in the Azad Maidan of Mumbai on August 11 and the panic departure  from South India and Pune of many people from the North-East working and living there. Had these web sites and their false and provocative propaganda been noticed in time,the Government might have been able to take pre-emptive action to prevent the violence and contain the panic.

( b ).The NTRO has not yet developed a capability for the identification of suspects who have been misusing the Net and its social media sites for their Psyjihad meant to destabilise us. As a result, one could see over-reaction and an attempt at a disproportionate use of the powers under the existing laws for cyber surveillance. After the surveillance failed initially due to lack of alertness  on the part of our agencies, there has been a disproportionate use of the surveillance powers by way of large-scale blocking of web sites and attempted control over social media sites without applying our mind. Instead of targeting our counter-action on the suspects responsible for the Psyjihad, we have been targeting the instruments used by them for their Psyjihad such as Facebook and Twitter. These instruments have benign and malign uses.Our actions should have been targeted against malign uses, but there is an impression that we have been trying to discourage both benign and malign uses in order to deter the use of these sites and instruments  even for well-intentioned criticism of the Government and its policies.The misuse by ill-wishers of the country has been sought to be  exploited for preventing legitimate uses of the social media networks even by well-wishers of the country.

11. There is a need for a mid-course correction in the follow-up actions initiated after the recent panic in order to introduce an element of finesse in our cyber intelligence and counter-intelligence architecture and techniques. Target the ill-wishers of the country who have been misusing the Net and the social media sites for nefarious purposes, but don't target the well-wishers.Make the ill-wishers dysfunctional and not the Net and the social media sites.

12. The Naresh Chandra Task Force on national security has in its report submitted to the Prime Minister on May 24 devoted a chapter to cyber security. Its chapter on intelligence revamp also contains some important recommendations on this subject. While vetting them, the lessons drawn from our recent experience in handling our existing  cyber intelligence and counter-intelligence architecture and techniques should also be taken into consideration in order to see whether any modifications in the recommendations during implementation are called for. (23-8-12)

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

In Pakistan, underground parties push the boundaries

People dance to the beat of the house music at Centrifuge, a Pakistani underground rave party at a farmhouse on the outskirts of Pakistan’s capital, Islamabad early July 15, 2012. — Photo by Reuters

ISLAMABAD: Women in short skirts and men with gelled hair bump and grind on a dance floor as a disc jockey pumps up the volume.

The air is thick with illicit smoke and shots of hard liquor are being passed around. Couples cuddle in a lounge.

This is not Saturday night at a club in New York, London or Paris.

It is the secret side of Pakistan, a Muslim nation often described in the West as a land of bearded, Islamic hardmen and repressed, veiled women.

Starting in the 1980s, Pakistan has been drifting towards a more conservative interpretation of Islam that has reshaped the political landscape, fuelled militancy and cowed champions of tolerance into silence.

But the country remains home to a large wealthy and Westernised elite that, in private, lives very differently.

Every weekend, fashion designers, photographers, medical students and businessmen gather at dozens of parties in Islamabad, Karachi and Lahore to push social boundaries in discreet surroundings that would horrify, and enrage, advocates of the stricter brand of Islam.

“This is just epic,” said Numair Shahzada, bobbing his head to the beat at a party in a farmhouse outside Islamabad as fitness instructors moonlighting as bouncers looked on. “The light and smoke show is phenomenal.”

Young men and women mix freely, dancing, talking or drinking. Some curl up together in quiet areas.

Although alcohol is prohibited in the country, many have brought their own liquor. Whisky is carried in paper bags and vodka is disguised in water bottles arranged along the dance floor.

The party-goers form only a tiny minority of the country’s 180 million people, but overall, Pakistan is not repressive.

Women can drive, are enrolled in universities and have played prominent roles in politics. Unmarried men and women can interact without risking the wrath of religious police.

People from its most populous province, Punjab, are renowned for their exuberance.

But a conservative form of Islam is chipping away at the tolerance.

A few hours drive from Islamabad’s party circuit, parts of remote tribal regions have fallen under the sway of hardline Taliban militants, who dream of toppling the US-backed government and creating a society where revellers would face flogging, or worse.

“Men and women who dance together are damned by God. Whenever we see such displays of vulgarity we will definitely make them a target,” said a senior Taliban commander.

Creeping Conservatism

While the vast majority of Pakistanis abhor the Taliban’s violence, there are many who share their belief that Islam should be Pakistan’s guiding force.

Religious parties, which do poorly at the polls but exert considerable sway over public debate, believe Islam should govern all spheres of life.

“It’s so messed up,” said Myra, a 23-year-old Pakistani who has dyed her hair reddish-brown. “You see the servants and the drivers at the parties watching you and you wonder what kind of a person they think you are.”

To avoid prying eyes, the kind of alcohol-fuelled blow-outs enjoyed by Myra and her friends are held in lonely farm-houses in the outskirts of Islamabad and other cities, or in affluent neighbourhoods behind high walls.

Organisers charge on average a $60 entry fee, an amount most Pakistanis earn in a month.

Rafia, petite with long, black hair and wearing tight jeans and a low-cut black blouse, is a regular on the party scene.

She frowns on women who carry secret cell phones unmonitored by their parents and wear revealing outfits under conservative dress that come off before getting on the dance floor.

“You can either be God-fearing or you can party,” she said, taking a drag on a marijuana joint at a recent rave.

“I don’t pray regularly and I usually stick to my fast. But at the end of the day, I don’t say I am a very religious person.”

Not everyone agrees.

Bina Sultan, 40, an attractive fashion designer, showcases nude paintings and topless male models in shows. She also wears a silver pendant engraved with a verse from the Koran.

“People think I am shameless but I am actually very religious,” she said at her studio, peppering her sentences with “jaani”, Urdu for darling, while chain smoking.

“My faith is very strong. But everything I do is between my God and me.”

Lonely Liberal

Conservatism began sweeping through Pakistan during the military dictatorship of General Mohammad Zia ul-Haq in the 1980s under a drive to Islamise the state.

Zia’s policies are widely blamed for a creeping culture of intolerance that has further isolated liberals.

In the growing climate of fear, the space for liberal voices is shrinking.

Pakistani rapper Adil Omar, who attends weekend parties, pokes fun of the Taliban and rising conservatism in his songs. But he never goes too far.

“A lot of people seem to be torn and seem to have an identity crisis,” said Omar, who wears the traditional flowing shirt and baggy trousers. His elaborate forearm tatoo featuring a semi-naked woman and a unicorn has drawn fire on his Facebook page from some fans who see it as an offence to Islam.

“I am careful not to give any opinions regarding religion on the record,” he said, adding: “I don’t want some crazy person chopping off my head.”

Pakistan: The demon the West created



August is a month that brings both joy and grief to the 1.3 billion people of the Indian subcontinent. Joy, as we celebrate the end of nearly 200 years of British colonial rule in 1947, and sorrow as we remember the one million who were slaughtered unnecessarily in a genocidal frenzy of religious hatred.

Punjab, my ancestral homeland, was sliced in two by the departing British to create the new state of Pakistan. In a few short months, the entire population of Punjab’s indigenous Sikhs and Hindus in Pakistan was either slaughtered or driven out by raging mobs of Muslim fanatics. On the other side of the border, there was more bloodshed.

The question often asked is, who penned the partition of India? Who was responsible for carving out Pakistan, a country that seems to have an insatiable appetite for bloodshed, and that has been responsible for, or associated with, more acts of jihadi terrorism then any other country on earth?

From Khalid Sheikh Mohammad’s 9/11 plans to the recent recruitment of jihadis in Burma; from the Toronto 18 to the London 7/7 bombings, fingerprints of Pakistan-based jihadi groups and ideologies are ubiquitous.

Conventional wisdom and traditional scholarship dictates, Pakistan came about as a result of Muslim grievances and fear of a Hindu-majority rule in post British India. Mohammad Ali Jinnah and the All India Muslim League are given credit for tapping into this sense of victimhood that still drives much of Islamist anger around the world.

However, there is more to it than meets the eye. On May 5, 1945, the very day Germany surrendered, Prime Minister Churchill ordered an appraisal of “the long-term policy required to safeguard the strategic interests of the British Empire in India and the Indian Ocean.” Two weeks later Churchill received the top-secret report that, among other proposals, mentioned the necessity of British presence in Northwest India (today’s Pakistan) “from which British air power could threaten Soviet military installations.” When this was brought to the attention of Mahatma Gandhi, Jawaharlal Nehru, India’s Prime Minister and the Congress, they made it clear they would not accept British bases on Indian soil. On the other hand, Muslim League leader Jinnah was amenable to such an idea.

Two months later, Churchill was shockingly defeated by the Labour Party in the election, leaving the task of creating Pakistan for the sake of Western military strategic needs to the socialists.

By June 1947, the decision to amputate India was announced in London. It was left to British foreign secretary Ernst Bevin to explain to his party activists why London would seek to destroy what it had built over 100 years as the “Jewel of the British Crown.” Defending the decision that would devastate the lives of millions for decades, Bevin told delegates at a Labour Party Conference that the division of India was necessary because it “would help to consolidate Britain in the Middle East.” It’s no coincidence that within a few years, the U.S. would establish an air base in Pakistan to launch its high altitude U2 spy aircraft until one day in 1960 when a U2 was shot down over Russia and Gary Powers was captured.

Thus came the great divide on August 14-15, 1947. After partition, the UK handed over the baton to the US ,who invested heavily into Pakistan becoming a frontline anti-communist military state. Today, the USSR is dead, but Pakistan is alive and has become America’s demon; one that successive U.S. administrations cannot put back into the bottle.

My next book, “Pakistan: The Demon America Created” dwells in detail the tragic division of India and the monster of Islamism that morphed out of the Cold War and now haunts and hunts its own maker.

War fever as seen from Iran


By Pepe Escobar ATimes 22812

Absent the possibility of joining the Curiosity rover on Mars, there's nowhere to hide from the "Bomb Iran" hysteria relentlessly emanating from Tel Aviv and its Washington outposts. Now that even includes third-rate hacks suggesting US President Barack Obama should go in person to Israel to appease the warmongering duo Bibi-Barak [1].

So it's time for something completely different - and totally absent from Western corporate media; sound Iranian minds rationally analyzing what's really going on behind the drums of war - regarding Iran, Turkey, the Arab world and across Eurasia.

Let's start with ambassador Hossein Mousavian, a researchscholar at Princeton University's Woodrow Wilson School of Public and International Affairs, a former spokesperson for the Iranian nuclear negotiating team from 2003 to 2005, and the author of The Iranian Nuclear Crisis: A Memoir .

Writing at the Arms Control Association website [2] , Mousavian goes straight to the point; "The history of Iran's nuclear program suggests that the West is inadvertently pushing Iran toward nuclear weapons."

In seven key steps, he outlines how this happened - starting with Iran's "entrance into the nuclear field", owed largely, by the way, to Washington; "In the 1970s, the Shah [of Iran] had ambitious plans for expanding the nuclear program, envisioning 23 nuclear power plants by 1994, with support from the United States."

Mousavian stresses how, from 2003 to 2005, during the first Bush administration,
Iran submitted different [nuclear] proposals, which included a declaration to cap enrichment at the 5% level; export all low-enriched uranium (LEU) or fabricate it into fuel rods; commit to an additional protocol to its IAEA safeguards agreement and to Code 3.1 of the subsidiary arrangements to the agreement, which would provide the maximum level of transparency; and allow the IAEA to make snap inspections of undeclared facilities. This offer was intended to address the West's concerns regarding the nature of Iran's nuclear program by ensuring that no enriched uranium would be diverted to a nuclear weapons program. It also would have facilitated the recognition of Iran's right to enrichment under the NPT. In exchange for these Iranian commitments, the Iranian nuclear file at the IAEA would be normalized, and Iran would have broader political, economic, and security cooperation with the European Union. Furthermore, Iran was interested in securing fuel for the research reactor in Tehran and was ready to ship its enriched uranium to another country for fabrication into fuel rods.
The Bush administration refused everything. Mousavian recalls "a meeting I had at the time with French Ambassador to Iran Francois Nicoullaud, he told me, "For the US, the enrichment in Iran is a red line which the European Union cannot cross."

So "the West was not interested in solving the nuclear issue. Rather, the West wanted to compel Iran to forgo its enrichment program completely." This could only lead Tehran to "change its nuclear diplomacy and accelerate its enrichment program, as it sought self-sufficiency in nuclear fuel."

'Zero stockpile', anyone?
Fast forward to February 2010. Tehran proposed, "keeping its enrichment activities below 5% in return for the West providing fuel rods for the Tehran reactor. The West refused this offer."

Then, in May 2010, "Iran reached a deal with Brazil and Turkey to swap its stockpile of LEU for research reactor fuel. The deal was based on a proposal first drafted by the Obama administration with Brazilian and Turkish officials under the impression that they had the blessing of Washington to negotiate with Iran. Regrettably, the United States trampled on their success by rejecting the plan; the UN Security Council subsequently passed additional sanctions against Iran."

Every unbiased observer following the Iranian nuclear dossier knows these facts. Another flash forward, to September 2011, "when Iran had completely mastered 20% enrichment and had a growing stockpile, it proposed stopping its 20%-enrichment activities and accepting Western-provided fuel rods for the Tehran reactor. Once again, the West declined and made it necessary for the Iranians to move toward producing their own fuel rods."

Moving on to this year's talks in Istanbul and Baghdad, Mousavian stresses, "with each blockage and punitive Western action, Iran further advances its nuclear program."

And it gets worse; "A comparison of the June 19 statement in Moscow by Catherine Ashton, the EU foreign policy chief and lead negotiator for the P5+1, with her April 14 Istanbul statement reveals a major difference. The P5+1 is now giving more emphasis to Iran's compliance with its international obligations, namely, UN Security Council resolutions, rather than focusing on the country's obligations under the NPT. This is a clear setback from the Istanbul position. It indicates a focus on suspension of Iran's enrichment activities, a demand that has been a deal breaker since 2003."

The bottom line is "not only has the West pushed Iran to seek self-sufficiency, but at every juncture, it has tried to deprive Iran of its inalienable right to enrichment. This has simply propelled Iran to proceed full throttle toward mastering nuclear technology."

The conclusion is inevitable; "The progress of Iran's nuclear program is the product of Western efforts to pressure and isolate Iran while refusing to recognize Iran's rights."

Washington and its European followers simply can't understand that "sanctions, isolation, and threats would not bring Iran to its knees. On the contrary, these policies have led only to the advancement of Iran's nuclear program." With even more devastating sanctions and the "Bomb Iran" fever turning into an attack, one consequence, says Mousavian, is assured; "Iran would be likely to withdraw from the NPT and pursue nuclear weapons."

What makes it even more absurd is that there is a solution to all this madness:
To satisfy the concerns of the West regarding Iran's 20% stockpile, a mutually acceptable solution for the long term would entail a "zero stockpile". Under this approach, a joint committee of the P5+1 and Iran would quantify the domestic needs of Iran for use of 20% enriched uranium, and any quantity beyond that amount would be sold in the international market or immediately converted back to an enrichment level of 3.5%. This would ensure that Iran does not possess excess 20% enriched uranium forever, satisfying the international concerns that Iran is seeking nuclear weapons. It would be a face-saving solution for all parties as it would recognize Iran's right to enrichment and would help to negate concerns that Iran is pursuing nuclear weapons.
Will Washington - and Tel Aviv - ever accept it? Of course not. The dogs of war will keep on barking.

A new security game
It's also quite refreshing to examine Iranian analysts' take on Syria.

Mehdi Mohammadi, writing at the IranNuc.IR website [3] notes "the fear that the Sunni majority has of a Salafi minority is a very important, and often censored, reality about the situation on the ground in Syria. It is the same reality which has prevented the opposition to accept any form of negotiations or even free elections". This fact is absolutely anathema in Western corporate media's coverage of Syria.

Mohammadi correctly evaluates the discrepancies among different Muslim Brotherhood (MB) factions inside Syria; one hardline faction wants Sharia law; another is convinced the future of the whole region is essentially at the hands of the MB anyway, so they are on a mission from God; but the majority wants to extract as much money as they can from Saudi Arabia while allied with France, the US, Sunnis in Lebanon and Jordan; "this part forms the spine of the armed opposition in Syria".

The bottom line is that even in the best-case scenario, the MB "is making a dire strategic mistake ... Even if Assad's government falls, the Americans will not allow the Syrian government to fall into the hands of that part of the Muslim Brotherhood which seeks to continue and even give more depth to the existing conflict with Israel."

Mohammadi also observes, right on the money, how the US, Israel, Saudi Arabia and Turkey "reached the conclusion that the best way for preventing Arab Spring developments to serve Iran's increasing power in the region was to turn the whole situation into a conflict between Shi'ites and Sunnis."

Essentially, how does Tehran see it? According to Mohammadi, "there is a high degree of confidence that the Syrian government will not fall in medium term." On top of it, "it is very unlikely that Russia and China will reach an agreement with the West over Syria", and "even on Iran's nuclear dossier".
So Tehran is betting on the strategic achievement of a "reliable anti-West front consisting of Russia and China". His conclusion; "The strategic equation of the region as a result of the ongoing developments in Syria has by no means changed to the detriment of Iran."

In an interview to the Iranian Diplomacy (IRD) website [4] former ambassador and strategic analyst Mohammad Farhad Koleini comments on how "some Arab countries, which have very bleak records in the field of human rights, have joined hands with the United States in the current equation in Syria in order to define a new security game. This security game, however, has been somismanaged that it will certainly taint the international image of the United States."

Koleini notes that as the West goes for a new security arrangement in the Mediterranean, Moscow is trying "not to allow the West to impose its geopolitical monopoly." So the Russian approach to Syria "is not necessarily focused on what is actually going on inside the country, but it stems from a regional package and how Moscow aims to regulate that package in relation to its interactions with the West."

That explains why Russia "will never allow Western states to impose a no-fly zone region over Syria". Is this confrontation? Not really; "Russia is doing its best to avoid outright confrontation by any means. China has also shown all along the way that it is following the same policy."

Mehdi Sanaei, the director of the Russia Studies Group at the University of Tehran and the director of the Iran and Eurasia Research Center (IRAS), writing at the Tabnak News website[5] goes way deeper; Moscow is now working under "unprecedented suspicion of the United States' goals and intentions in the Middle East and Eurasia."

So forget about the famous "reset" between Washington and Moscow.

Sanaei refers to the famous foreign policy article [6] published by Putin on the eve of the Russian presidential election: "Putin took a direct shot at the United States by accusing Washington of deception and abuse of the UN structure and resolutions, applying double standards to various global issues in different countries, as well as seeking its own interests under the cover of advocating democracy."

Sanaei also correctly describes how Russian analysts see the Obama administration's foreign policy as "based on two theories: 'ultimate realism', and 'new liberalism.' As a result, the Americans actually believe that world countries are simply divided into the United States' friends and enemies. Hostile countries, therefore, should be weakened and their presence in global and regional strategic arenas should be limited and even suppressed in political, economic and cultural terms."

So, for Moscow, "a new wave of the world order has been initiated by the United States in order to create a new version of the past unipolar world system. The main targets of this wave, Moscow maintains, include North Africa, the Middle East, Iran, Eurasia, and finally China and Russia."

Koleini, this time writing for the Tehran Emrooz daily [7], introduces the Pipelineistan theme in the Iran-Russia relationship; "Despite its cooperation with Iran's nuclear energy program, Russia has been always willing to cut Iran's hand in the European natural gas market. Therefore, Russia has been interacting with Turkey and certain Eastern European countries on the Blue Stream project. This proves beyond any doubt that Russia is trying to take the lead in engineering security structure in Europe through its energy policy and reduce Europe's reliance on other energy sources."

All this while "trying to play a balancing role in Iran's nuclear case."

Koleini also outlines the main challenge to the "Eurasian policy" laid out by Putin before his election; "The point is that the West is designing new political games, especially in Central Asia to give new problems to Russia and divert Moscow's attention from Eurasia to traditional spheres of the former Soviet Union."

Egypt and Iran kiss and make up
Iranian intellectuals are carefully monitoring neighboring Turkey. Turkey and Caucasus expert Elyas Vahedi observes how "the Turkish government came up with such concepts as 'neither state religion, nor religious state,' 'secular government, not secular man,' 'civilizing the constitution,' 'democratic openness / Kurdish openness / Alawite openness,' and 'civil control and supervision over the army' and has been using them to strengthen and maintain the political clout of the Justice and Development Party."
And of course, before the Arab Spring, all talk was about "zero problems with our neighbors" and Turkey's "strategic depth" doctrine.

But now that Turkey is stuck in Syria, the AKP government is "trying to justify its failure by claiming that the policy of minimizing problems with neighboring countries has just entered is second phase ... Turkey believes that the main feature of the second version of this policy is interaction with people in neighboring countries rather than interaction with their governments."

It simply doesn't hold, says Vahedi: "This viewpoint, despite some shortcomings, was somehow justifiable in some countries like Libya, Egypt and Tunisia, but this is not the case in Syria." Besides, Ankara "remained silent toward the predicament of people in Bahrain, under the pretext that political protests in Bahrain are not popular."

Moreover, Turkey's foreign policy "has also nurtured speculations that Ankara has joined the Shi'ite-Sunni conflict which has been fostered by the West. The damage that this notion will do to Turkey's regional and international standing and prestige will be too costly for Ankara."

Vahedi sees Turkey, as well as Saudi Arabia and Qatar, as just following the West, which is leading from behind, Obama-style. Turkey "has apparently read the West's mind and is trying to accept that role on behalf of the West in return for certain concessions." But it won't work - as, for instance, facilitating Turkey's accession to the EU over immense French and German objections.

Not to mention that Ankara "is facing scathing criticism from nationalist figures. They allege that while the rights of Turks are being ignored in Karabakh as well as in the Balkans through the oversight of the Western powers, the government of Turkey has made defending the rights of the Syrian people its first and foremost priority."

Ali Akbar Asadi, from the International Relations Dept at the University of Allameh Tabatabaei, expands on the key event of the next few weeks: the renewed diplomatic relationship between Iran and Egypt - which is drawing Washington's unmitigated wrath; the State Department, in a childish move, is even saying that Iran "does not deserve" to host the summit of the Non-Aligned Movement (NAM) in Tehran, which will be attended by Egypt's President Mohamed Morsi. [8]

Asadi goes to the jugular - the Gulf Cooperation Council (GCC) petro-monarchies are terrified that "Egypt may renew relations with the Islamic Republic of Iran or even enter into strategic relations with Turkey, thus working to undermine the influence and clout of the GCC in the new balance of regional power."

So the GCC is doing what it usually does; showering a bit of cash. "They want to keep Egypt, as a big and important Arab political player, on their own side."

Besides, they are demanding from Morsi and the MB that "they do not take any step to export their revolution and activate affiliates" of the MB in the GCC. And they "expect Cairo to avoid adopting a new approach to strengthening Hamas against Fatah, helping Gaza and the Palestinian population there, and taking an adamant stance against the Israeli regime."

The GCC policy, supported by the West and Israel, is "to keep Egypt entangled in its domestic challenges" and thus unable to exercise its" historical claim to leadership of the Arab world."

This is just a sample of the level of intellectual discussion going on in Iran. Compared to the bombing hysteria in Tel Aviv and Washington, it does look like it's coming from Mars.

1. An Obama Visit to Israel Could Stall Iran Attack, Bloomberg, August 21.
2. See
3. See
4. See
5. See
6. See Russia and the changing world, RIANOVOSTI
7. See
8. US says Iran doesn’t deserve to host summit of Non Aligned Movement, Washington Post, August 21.

Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007) and Red Zone Blues: a snapshot of Baghdad during the surge. His new book, just out, is Obama does Globalistan (Nimble Books, 2009).



Till 1972, under the long-time Director of the USA's Federal Bureau of Investigation (FBI) J. Edgar Hoover, only men could be FBI agents. After his death in May 1972, partly under the pressure of the equal rights laws, the FBI started recruiting women as Agents. The first two women agents of the FBI joined the FBI in July 1972 and underwent training in the FBI Academy along with men recruits. They and many other women who followed their example have since distinguished themselves as Agents of whom the FBI and the US can be proud .

2.The Office of Strategic Services (OSS), the Second World War precursor of the Central Intelligence agency (CIA),  had a few legendary women operatives. Well-known amongst them was Virginia Hall, who served behind Nazi lines in France.

3. Despite this, the CIA, which came into existence in 1947, inherited some of the prejudices of the FBI against women as secret Agents. There were many women who were recruited as administrative staff and analysts, but hardly any to serve as secret Agents in the top secret operations division.

4. As Valerie Wilson, a former CIA woman operative wrote: "CIA's premier spy cadre was carefully recruited from the male, moneyed, white, establishment crowd that went to the Ivies. For the first four decades of the CIA's existence, the very few females that got into operations were usually drawn from the secretarial or support staffs. These smart, persistent, and gutsy women tired of seeing the men have all the fun and back-doored themselves into case-officer jobs—meeting and recruiting assets, planning ops, and in some rare cases in the 1970s, managing operations overseas. These women were tough as nails—they had to be—and they poured everything into their careers, often at the expense of their personal lives. I met some of these women during my time at the CIA and they could intimidate me like nobody else. My female colleagues and I owe them a deep debt of gratitude for their groundbreaking careers."

5. Despite the success of these women who managed to gravitate into the Operations Division from the Administrative or analysis divisions, the number of direct women recruits to the Operations Division remained low till Ronald Reagan became the President. During his presidency, under the pressure of the operational requirements for the covert war against the USSR in Afghanistan, the recruitment of women operatives to the CIA increased.

6. To quote Valerie Wilson again: "Under Director Bill Casey, the CIA loosened its recruitment policies, involving schools other than the Ivies. Additionally, they began hiring women specifically to go into operations. Of course, attitudes take a long time to change and many a dinosaur who thought women should really just be at home and not running clandestine agents still roamed the halls at headquarters."

7. In 1991, 400 women employees of the CIA working in various divisions filed a class action suit alleging discrimination against women in the agency under various pretexts.An enquiry declared their complaints legitimate. Since then,  there has been an improvement in the position of women Agents who have been doing as well as their male counterparts. It took nearly 40 years for the CIA to admit that women Agents could be as daring, as capable and as successful as male Agents.The death in December 2009 ofElizabeth Hanson, an officer of the analysis division posted as the station chief in Kabul, along with seven of her colleagues in a suicide attack by Al Qaeda at Khost brought the much-deserved recognition for the women operatives of the CIA and their bravery.

8. In September 2010, women crossed another landmark in the history of the US intelligence community when Letitia A. Long became the first woman director of a major U.S. intelligence agency  takingover as the chief of the National Geospatial-Intelligence Agency, a Techint agency.

9. Reports published in sections of the US media at that time indicated that women represented  38 percent of the total intelligence work force. In six of the most prominent agencies, 27 percent of senior intelligence positions were held by women.

10. While women in the US had to wait till 2010 to be accepted as capable of heading an intelligence agency, in the UK, Dame Stella Rimington became the head of the Security Service known as the MI-5 in 1992 and continued in that post till 1996.The MI-5 had the distinction of being headed by another woman chief DameEliza ManninghamBuller from 2002 to 2007, during the Iraq war in 2003 and the London Metro attacks by some jihadi suicide terrorists in 2005.The MI-5 and the MI-6, the external intelligence agency known as the Secret Intelligence Service, had a longer tradition of accepting women as analysts and operatives on par with men than their US counterparts.

11.Till 1972, the Indian intelligence community had some women serving in administrative posts such as stenographers and ministerial assistants, but no officers serving as either analysts or operatives. The R&AW under R.N.Kao was the first in the Indian intelligence community to induct women as officers to perform analysis as well as operational duties in the headquarters as well as in the field.The first women inductees into the R&AW were taken on deputation from other Government services. Thereafter, three women fresh from the universities were directly recruited into the Research and Analysis Service (R&AS). This was followed by the induction of two women officers of the IPS and one economic expert on deputation. The Intelligence Bureau (IB) emulated the example set up by Kao and started taking women IPS officers on deputation.

12.Unfortunately, while the women intelligence agents of the US and the UK have been doing as well as, if not better than, their male counterparts, this cannot be said of the women operatives of the R&AW. Two of the deputationists of the 1970s created problems because of their alleged inability to maintain a low profile and their alleged habits of dropping names and throwing their weight around.

13. Of the three direct recruits, two got involved in embarrassing controversies due to personal reasons or professional inadequacies. The economic expert and the two IPS deputationists did well, but one of them went back to the State. Of the eight officers taken into the organisation since 1972, four were found to be professionally unsatisfactory.

14.Whereas in the intelligence agencies of the US and the UK, women analysts and operatives have been doing extremely well, it is perceived to be not so in the case of the R&AW. What is it due to? Careless selection?Inadequate training?Unfair discrimination and prejudices that come in the way of their giving off their best? One does not know the answers to these questions. While women officers  have been doing extremely well in other services and departments of the Government of India, it is said to be not so in the R&AW.

15.It is important to go into this in a professional manner to improve the intake of women officers into the R&AW and their performance. ( 22-8-12)

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



The way Arup Patnaik, the Commissioner of Police of Mumbai, handled a Muslim mob that went on a rampage at the Azad Maidan in Mumbai on August 11,2012, has come in for mixed comments. The mob had been demonstrating against the recent anti-Muslim violence in the Rakhine State of Myanmar and India’s Assam State.

2. Some, including me, have praised Patnaik for bringing the situation quickly under control and for preventing its degenerating into widespread communal riots. Others, including some pro-Hindutva organisations, have criticised him for not dealing with the mob more forcefully and for not preventing it from widespread vandalising, including at a monument erected in homage to the Unknown Indian Soldier.

3. I found it difficult to believe Patnaik when he told BarkhaDutt of NDTV in her The Buck Stops Here Show on the night of August 21 that there were no political instructions and that riot control in general is rarely influenced by directions from the political leadership.

4.In the few years that I had spent as an IPS officer in Madhya Pradesh between 1962 and 1967, I had handled many instances of violent agitation by industrial workers at Kymore and Bhilai and violent anti-Muslim agitations by Hindu refugees from Pakistan at Katni. Those were the days when the Congress was in power at New Delhi and in Madhya Pradesh.

5.There used to be a continuous flow of directions from the Congress leadership as to how to handle the situation. These directions did not come directly to the field police officers, but through the Chief Secretary and the Inspector-General of Police.If the instructions came directly from the political leadership, one could have said ‘no” to any of them considered incorrect, but when they came as orders of the Chief Secretary and the IGP one had to comply with them in the interest of discipline.

6.Things have much worsened since then and there is much greater interference in police working by the political leadership now than there was when I was a police officer in the field.The assertions of Patnaik that there were no political directions do not, therefore, carry conviction.

7. After having stated that,I do feel that Patnaik deserves credit for bringing the situation quickly under control and for preventing over-reaction by his force in the face of the rampaging Muslim mobs.Not infrequently, situations get out of control not because of the violent mobs, but because of over-reaction by the police in dealing with the mobs and disproportionate use of force by the police.

8. When Patnaik reached the spot after the mobs had gone on rampage, his first reflex was to ensure that his force did not add to the heat of the riots by losing its cool and over-reacting. If Patnaik had not kept its force under control, there might have been many more fatalities resulting in a serious aggravation of the situation. In literally forcing the policemen to keep their cool and not to overact, Patnaik had acted according to his professional instincts, the training that he had received as a young officer and his long years of experience in dealing with such situations.Let us give him the credit for the way he exercised his leadership during those critical moments when the riots could have spread to many parts of Mumbai.

9. Generally political directions come before a riot and thereafter and not during a riot. I am prepared to believe that his permitting the Muslims to hold a protest meeting must have been on the directions of the political leadership or in consultation with it. I won’t be surprised if instructions continue to come from the political leadership as to what legal action he should take against the Muslims who indulged in acts of violence and vandalising.

10. It is to be expected that, keeping in view the 2014 elections, the political leadership will try to prevent the law from taking its course against the Muslim rioters. There will be political pressure on Patnaik to let bygones be bygones and not to pursue the cases against the rioters vigorously.From the way Patnaik denied, in response to questions from Barkha, that there were many instances of the molesting of women members of the Police by the mob I got the impression that he is already under pressure not to be too severe in his follow-up legal action.

11.If he resists the pressure, he may be transferred out. If he succumbs, he might lose some of the credit that he earned from many of us for the way he handled the riots. The real mettle of a police officer comes out not only during a riot, but equally thereafter in taking legal action disregarding political pressure against those who rioted.

12. We saw the best of Patnaik from the way he handled a volatile situation. Will we see the best of him again from the way he pursues the cases against the rioters? One has to keep one’s fingers crossed. ( 22-8-12)

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

August 21, 2012

What Chinese shoppers really do but will never tell you

When Chinese shoppers purchase most consumer products, they typically choose among several brands instead of showing loyalty to a specific brand. Winning shoppers in this environment is both a challenge and an opportunity for marketers. Success rests on understanding actual shopper behavior—what they do at the point of sale as opposed to what they say they’ll do in surveys.

Bain & Company partnered with Kantar Worldpanel to study the shopping habits of 40,000 Chinese households. Our study helped us gain invaluable insights into how shoppers make purchases in 26 important consumer goods categories.......... READ MORE

August 20, 2012

Quote of the Day...

The best argument against democracy is a five-minute conversation with the average voter.
— Winston Churchill

An ideal form of government is democracy tempered with assassination.
— Voltaire

Pakistan’s Mobile Phone Curfew

Added by Malik Siraj Akbar on August 20, 2012.
Saved under Malik Siraj Akbar, OPINION
On August 14, the government of Pakistan deliberately suspended mobile phone service for millions of subscribers in the country's largest province of Balochistan. Ironically, it was Pakistan's Independence Day and the citizens were supposed to enjoy their freedom. The government restricted phone calls and text messages in an effort to freeze the communication system of the political opposition. The opponents of the government increasingly use modern technology to mobilize political gatherings and criticize the official policies. Frustrated with Islamabad over the lack of political freedom and internal sovereignty, Balochistan's indigenous people mark August 14 as a "black day."

The Balochs, unlike the rest of Pakistan, celebrate their independence day on August 11 instead of August 14.

According to the Express Tribune, a respected Pakistani English language newspaper, "August 11 marked the day the state of Kalat [now known as Balochistan] announced its independence from British India with its parliament stating that it would be acceding neither to Pakistan nor to India. This was accepted by the British rulers of the colony. Kalat makes up 23 percent of the population of the territory of Balochistan. The state joined the federation of Pakistan on March 27, 1948 as a result of what the Baloch say was severe military pressure. The Khan of Kalat had acknowledged this."

The newspaper further noted, "according to some reports, the flag of Pakistan was burnt at some places on this occasion and calls were made hailing an independent Balochistan."

Civil society groups that oppose official restrictions on the freedom of expression have vented absolute displeasure over Pakistani government's growing intolerance toward political dissent and mismanagement of public dissatisfaction with government policies.

"We express strong reservations against the Balochistan Government's blockade of cellphone services in the province, on Independence Day," said a statement issued by the widely revered Bolo Bhi, a not-for-profit organization that advocates government transparency and freedom of expression, "access to communication is a fundamental human right enshrined in the Constitution of Pakistan and the State has the responsibility to protect and uphold citizens' rights across Pakistan."

Bolo Bhi, which in Urdu means to "speak up," says it opposes the official pretext that such freedoms are curtailed in order to maintain law and order.

"The State has the responsibility to maintain law and order but that shouldn't come at the cost of citizens' rights. To cut off communication services citing miscreants as an excuse not only violates the rights of citizens,' but is an unjust and discriminatory practice. On the day we celebrate our Independence, it is ironic that residents of Baluchistan face hardships due to a communication blackout."

Governments in Pakistan have had a long history of censoring newspapers and television channels but restricting access to cell phones is a new method to discourage and restrict communication between and assembly of political opponents. It was the second time in less than six months that the Pakistani authorities have imposed such blatant restrictions. While preventing people from using traditional means of communication compels political opponents to opt for alternative covert and violent approaches to continue their activism, such extra-constitutional measures also add to the miseries of neutral citizens who do not wish to take sides in a battle between the government and the opposition. However, there is a greater possibility that such unreasonable curbs will increase public sympathy against the government in the wake of the opposition parties' quest for more civil liberty.

On March 23, 2012, the Pakistani government also shut down mobile phone services in Balochistan for around 14 hours on the eve of another national holiday known as the Pakistan Day. The government said cell phone services were suspended in order to implement the obscure 'national security plan.'

As proponents of freedom of expression, we passionately opposed the government's action and viewed it as the harbinger of a negative trend which could be repeated, as it was on August 14, by the government.

"…Pakistan has been treating Balochistan as a colony since 1947 but day-by-day it is resorting to more oppressive tactics to terrorize the Baloch population. Such practices are unacceptable in the 21st century. 'National security' is too weak a pretext to justify this anti-citizen practice," I wrote in the Baloch Hal, Balochistan's first online English language newspaper which has been blocked inside Pakistan by the government since November 2010 due to its critical stance on government policies:

"We have not seen such widespread denial of access to public service in Islamabad under the excuse of national security even during worst terrorist attacks such as the bombing at the Marriott Hotel which killed at least 50 people. Such measures were not taken in Rawalpindi where former prime minister Benazir Bhutto was assassinated in 2007 or in Karachi where former military dictator Pervez Musharraf escaped an assassination attempt. What, after all, is Islamabad's philosophy behind this overly-protective attitude?"

Pakistan is the home to millions of mobile phone users and robust political movements. An effort on the part of the government or the military to curtail people's freedom of expression and access to digital information may lead to serious confrontation between the government and the citizens. An unstable and deeply polarized country, Pakistan will immeasurably hurt its interests if it reacts frantically toward dissent and limit communication among citizens. Coercive attitude normally triggers more trouble than what the governments anticipate amid normal circumstances. (Courtesy: The Huffington Post)

China Takes over IFC - A Silent Coup?

Guest Column by Kandaswami Subramanian 

What has happened at the International Finance Corporation (IFC) is a silent coup which has not been much publicized in the media of emerging economies like India. On 10th August, President Jim Yong Kim of the World Bank announced that Cai Jinyong, a Chinese national, has been appointed as the new executive Vice President and CEO of the IFC. The announcement sounded so routine resembling one of those corporate announcements in New York.

IFC is one of the funding triumvirates of the World Bank Group. The other two, more known, are the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD) aka the World Bank (WB). The President of the WB is the President of the IFC. Its management and operational duties devolve on the executive Vice President and CEO.

The IFC has 182 members on date with a capital base of $2.4 billion. Only members of the WB may be members of the IFC. Seven of the major economies of the OECD hold 51 percent of the equity. The IFC established in 1956 is the private sector arm of the WB Group and has been promoting unabashedly the growth of the private sector in developing countries. Rather, it is done to fulfill the laudable mandate of the World Bank Group, viz. alleviating poverty in developing countries!

The IFC has been an influential agency in recent years and extended its reach globally ranging from Latin America, Asia to Africa. Reports show that it invested about $18.7 billion worldwide in 513 projects in the fiscal year 2011, a modest increase from $18 billion in 2010. In 2012 it is expected to hit $20 billion. Its global investments have doubled in the past five years. Though it has a low capital base, it raises capital through bond issuance in global markets. In the past, it used to raise most of it in dollars from the U.S. market. However, in recent years, it is raising capital in several other currencies such as Yen, Renminbhi (Yuan), the relevant market even as the U.S. market has dried up after the financial crisis.

On all accounts, Mr. Cai has an impressive record both academic and professional as also the requisite expertise. As President Jim Yong Kim said, "I am pleased that a world class financial and development professional like Jinyong had decided to bring his considerable talent to the work of the International Finance Corporation." He went on to add, "With his extensive knowledge of global financial markets and investment climates, he'ill help IFC identify sound, strategic private sector investments and public-private partnerships that will help reduce poverty and create greater prosperity to people in the developing world."

Cai is the first Chinese national to hold the senior position and his appointment was greeted with pride by the Chinese media. As Bloomberg suggested [1], it confirmed China's growing influence in the World Bank coming, as it did, two months after Justin Yifu Lin left the World Bank as its Chief Economist after a four year stint. Dr. Lin had left its imprint on the research work in the Bank on Development Economics. Along with President Robert Zoëllick, he made the Bank more open and transparent. His views on restructuring developing economies drawn on his experience in China breathed a fresh air in the WB and made its policies less rigid and more pragmatic.

Cai has more than 20 years of experience in the financial services industry. He started his career as a Young Professional at the WB and worked as an Economist in Central Europe and Asia. He moved to Morgan Stanley and was later seconded to China International Capital Corporation (CICC) when it was established in 1995. CICC is one of the largest investment banking and research services agencies floated in association with foreign banks like Morgan Stanley. In later years he moved over to Goldman Sachs and became one of its managing partners. He graduated from Peking University and secured a doctorate in Economics from Boston University.

Cai will take over the post on 1st October, 2012. As earlier explained, he has spent more than two decades in the financial sector and has full faith in the role of the private sector. After knowing his appointment to the post he said, "The private sector has a vital role to play in building prosperity in developing countries." He went on to add, "As the world's leading private sector development institution, IFC has done much to create opportunity for people to escape poverty and improve their lives. Much more can be done, and I look forward to working with all IFC's stakeholders and clients to build on its impressive record." It does seem that it is a proper fit and the IFC and Cai are made for each other!

What is surprising is that the appointment of Cai seems to have come about as a silent coup worked backstage in the board rooms of the WB. More surprising is that when the posts of the President of the World Bank and the Managing Director of the IMF fell vacant last year, there was so much debate, commotion and jockeying even as the developing countries attempted to wrest the posts from the developed and failed. There were many factors leading to that fiasco. I have detailed these issues in separate papers. [2]

The most important factor was that the vote shares are loaded against developing countries and the reform of the IMF/Bank promised in successive G-20 meetings had not come about. Also there was no unity among developing countries in the G-20, especially the BRICS, and the G-7 was able to run away with the trophies. Though China appeared to be cooperating with the developing countries in G-20 and agreed with all the statements issued by them, it had its own private agenda of gaining access to posts in the organisations and arranged a grand bargain with the G-7. [3]

When it came to the top post of the IFC, it seems, there were no claimants from the BRICS Group. It was only China which had greater interest than any other member. For G-7, the IFC is a second tier agency and its role is to promote private sector in developing countries which is in their favour. In any case, they hold 51 per cent shares in the IFC and can control its policies and programs. However, China's involvement with the IFC has been longer and deeper.

The primary aim of China's policymakers when they embarked on the strategy of opening up their economy was to modernize its industry and to integrate it with the global economy. Premier Deng had a vision and did it in stages, gradually and on a trial and error basis. One of the pillars of this policy was to promote the private sector. Private industry remained repressed during the years of communist regime and bank credit was denied to it. The whole emphasis was on state-owned enterprises. With the advent of the new policy, the private sector needed to be lifted and modernized. Equally important was the financial sector. In modernizing its financial sector, as also the private sector SMEs, China did not hesitate to avail of the technical services of the World Bank Group. Rather, China was looking more to their technical services than to their aid or financial assistance. Over the years, the IFC has played a significant role in these endeavours.

The IFC is proud over its pioneering role in China. In one of its reports it claimed. "The IFC was at the vanguard of foreign investors' first forays into the Chinese banking market, starting with technical advice in the 1990s and later expanding to investments. We took equity stakes at a time when most other commercial banks were still reluctant to put money into the Chinese banking sector." It went on to say, "IFC is among the first foreign investors supporting China's city commercial banks, and rural finance institutions. We partner with them and industry associations to improve corporate governance, risk management, and commitment to expanding financing for small and medium enterprises, farmers, manufacturers, and shop owners."

One of the important projects secured by the IFC in China was from the People's Bank of China (PBOC) in 2004. The PBOC recognized the financing difficulties among SMEs and sought IFC's technical support in the modernization of "Secured Transactions System." The main objective was to increase access to credit to firms, especially SMEs, by developing an appropriate legal and institutional framework to allow and facilitate the use of movable assets such as receivables as collateral for loans. China's enterprises had more assets in the form of equipment, inventory and receivables than capital. This was pre-reform legacy created by the lack of bank credit to the private enterprises. The IFC successfully implemented the project. It is estimated that up to end June 2011, they have been able to facilitate $3.58 trillion accounts receivable financing including $1.09 trillion of SME lending. The impact of this project would be visible all across China.

The IFC has been cooperating with the Chinese government in the development of western China. The strategy is to shift the economic balance from the east (coastal) to the less developed west. The IFC indicated that its funds will be used to support private enterprise in western China in the fields of renewable energy, rural finance and agribusiness. "IFC will focus on investments in infrastructure, improved access to finance for small and medium sized enterprises, and combating climate change through the use of clean energy and improved energy efficiency." [4] The same report quoted the finding of the Chinese Academy of Social Sciences that the GDP growth rate for western China which includes the provinces of Sichuan, Yunnan and Gansu, was 14.2 percent, faster than the average 103 percent recorded nationwide. The IFC was also investing in wind power projects in the private sector.

There are global dimensions to China's collaboration with the IFC. China has been able to spread its wings across several countries in Africa to the dismay of western powers. After initial skepticism and reservation, the World Bank took the view that it would be pragmatic to cooperate with China in its African program. The policy frame was suggested by Zoëllick while addressing a meeting in Beijing on 14 September 2010. [5] He referred to the role played by China in building infrastructure in Africa and also emphasized that "growing role of China in Africa is part of a broader shift to a new multipolar economy, in which the developing world represents and increasingly important source of global demand." He suggested that IFC and MIGA can offer financing and insurance to companies in special zones in Africa.

The IFC made on of its earliest investments in project in Tanzania promoted by China Railway Jianchang and a local company for a commercial complex. The IFC will provide $10 million. As a report in Financial Times [6] suggested, ".. with other deals with Chinese investors in Africa under negotiation, including the possibility of financing special industrial zones, the IFC hopes that a growing proportion of Chinese investment can be covered by internationally recognized standards."

The appointment of Cai to the top post creates a more favourable atmosphere to promote CHINA-IFC projects in Africa and indeed in other countries. China has been worrying about the diversification of its reserves estimated at $3.6 trillion and is seeking various routes for dispersal. It has nagging worry about the fall in reserve values with dollar depreciation. It attempted to move a substantial part to euro. Now the euro is in doldrums and the euro assets are more vulnerable. Thus China has been trying to make investments in industries in the US and Europe. Even here it meets with road blocks and it meets with resistance in the garb of security considerations when high technology companies are involved. It seems that China is looking more towards investments in Latin America, Africa and other areas. This will help shore up and possibly improve the value of assets. More importantly it helps China to access raw material, minerals, etc. needed for its economic growth. In the past there was resistance to investments by Sovereign Wealth Funds and in recent years, especially after the eruption of the financial crisis, there is a more benign approach to investment by SWFs. China's role in the IFC will facilitate this objective.

One way China has been attempting to internationalise its currency is to facilitate the use of RMB (Yuan) by its trading partners. It has greatly encouraged the floatation of Dim Sum bonds in Hong Kong and other financial centres. There is a proposal to float it in London too which has been welcomed by British Prime Minister Cameron. China has extended swaps to many countries. The longer term strategy is to displace the dominance of U.S. dollar. It will take a very, very long time and much depends on the future course of the global economy. In the meantime China is attempting incremental steps to make Yuan a global currency. It can encourage the IFC to draw on the Chinese reserves and step up its investments. China cannot be too ambitious as the G-7 countries hold controlling interest. But China may be happy with modest achievements.

As we had narrated in the earlier articles on the Fund/Bank posts, China has an independent strategy of its own. It is conscious of the limits to the powers of developing countries in the current context, especially with the current articles of the Fund and the Bank and the inability of developing countries to bring about radical changes in the management structure. It has used its current strength to get senior posts in the Fund and the Bank. A senior post in the IFC will enhance its influence and, in particular, promote its capability to deploy its foreign exchange reserves. The U.S. and western economies also perceive a common cause with cause especially in promoting private investments globally. It is not surprising that there was no scramble for the post and what happened was a palace coup, a silent one at that.

 (The writer is a Former Joint Secretary, Ministry of Finance, Government of India)    


[1] Sandrine Rastello, Goldman Sachs Partner Cai Jinyong to Head World Bank Unit, Businessweek, August 10, 2012 available at

[2] Please see the following articles by me:

  The race for the World Bank post, South Asia Analysis Group, Paper No.4095 dated 10th February 2012.

   More on the race for the World Bank post, South Asia Analysis Group, Paper No.4937 dated 28 February, 2012.

   Assault on the IMF, South Asia Analysis Group, 28 May, 2011

   How the BRICS Lost the Crown-Analysis, South Asia Analysis Group, Paper No.4585 dated 6 July, 2011. 

[3] Subramanian, K, More on How the BRICS Lost the Crown: The China Angle, Chennai Centre for China Studies, C3S Paper No.833 dated July 11, 2011. 

[4] IFC to continue investments in China, People's Daily online, July 28, 2011 available at,html

[5] The World Bank, Remarks for the High-Level China-Africa Experience-Sharing Program on Special Economic Zones and Infrastructure, September 14, 2010 available at

[6] Alan Beattie, World Bank Unit to finance Chinae3se African venture, Financial Times, April 22, 2010.