October 06, 2012
October 05, 2012
Indian-born dominate US tech start-ups founded by immigrants: study
By Sarah McBride
SAN FRANCISCO | Wed Oct 3, 2012 2:03am IST
(Reuters) - A new study showing that immigrants founded one quarter of U.S. technology start-up companies could fuel calls to relax immigration rules ahead of next month's U.S. presidential elections, where the economy and immigration are key issues.
The study "America's New Immigrant Entrepreneurs: Then and Now," shows that 24.3 percent of engineering and technology start-up companies have at least one immigrant founder serving in a key role. Indian-born entrepreneurs, representing 33 percent of the companies, dominated the group.
The study paid particular attention to Silicon Valley, where it analyzed 335 engineering and technology start-ups. It found 43.9 percent were founded by at least one immigrant.
"High-skilled immigrants will remain a critical asset for maintaining U.S. competitiveness in the global economy," wrote the authors of the study, sponsored by the Kauffman Foundation, a non-profit organization that promotes entrepreneurship.
One of the authors, Singularity University's Vivek Wadhwa, called for a visa designed for entrepreneurs.
"If we had a startup visa, we would have tens of thousands of new startups nationwide," he said via email.
In recent years, the number of start-ups overall in Silicon Valley has mushroomed, as entrepreneurs have found it easier to access "seed" or early capital.
Those opposed to relaxing immigration rules, including many unions, argue that immigrants displace higher-paid U.S. workers in key technology professions such as software engineering.
And while many lawmakers support allowing more immigrant entrepreneurs into the country, powerful Washington lobbies do not want to relax rules for one group without addressing the broader issue of illegal immigration.
Immigration is a flashpoint among Hispanic voters, a key voting block that both President Barack Obama and his Republican rival Mitt Romney are courting.
President Obama recently told TV network Univision he considers the lack of comprehensive immigration reform his "biggest failure" during his first term in office.Romney has promised to put in place an immigration reform system and has said he believes the Republican party is the "rightful home" of Hispanic voters.
Some 40 million people living in the U.S., or 13 percent of the population, were born overseas, according to the U.S. Census Bureau. (Reporting By Sarah McBride; Editing by Michael Perry)
October 04, 2012
China’s growing role in counter-piracy operations
Contributor: Jack Moore
While China continues to pursue an agenda that is driving its global rise in relative isolation, the People's Liberation Army Navy (PLAN) has maintained a counter-piracy presence in the Indian Ocean for four years. This begs the question: why is China becoming increasingly cooperative in counter-piracy operations?
The rise of China is one of the prominent issues that scholars of International Relations encounter today and will continue to do so in the future. The PLAN deployment is a fascinating component of the wider China debate as it represents the first time that Chinese vessels have conducted a 'far-seas' operation to protect Chinese interests since the fifteenth century.
Even more remarkable is the fact that the typically isolationist and paranoid Chinese Communist Party (CCP) is now openly cooperating with a variety of traditional foes in the area of counter-piracy; states such as India, Japan and the US are now closely communicating and operating in conjunction with their PLAN counterparts in the Indian Ocean.
This raises a series of intriguing questions. From a Chinese perspective, what are the motivating factors behind this operation? Is it economic, political or geostrategic concerns that have driven the PLAN to cooperate in the Indian Ocean? Is this deployment merely benign in nature or does it imply an element of self-interest? Why is China cooperating over the issue of piracy when it refuses to align itself with international norms, like in the case of human rights?
PLAN deployment
This deployment did not arise out of a policy vacuum; when Jiang Zemin was replaced by Hu Jintao in 2002 he affirmed that the PLAN must develop towards 'far-seas defence, enhancing the far-seas manoeuvring operations capabilities'.
In the years since Hu's statement, there has been a significant evolution in the PLAN capacity from a 'near-seas active defence' strategy (jinhai jiji fangyu) to 'far-seas operations' strategy (yuanhai zuozhan). Chinese defence expenditure has increased year after year in line with its burgeoning economy; official figures show that, prior to the PLAN counter-piracy operation began, defence expenditure rose to RMB417.876 billion ($65.71 billion) in 2008, representing an increase of 17.5% upon the previous year. So it's clear, with an enlarged budget and a new 'far-seas' doctrine, the naval modernisation observed in the PLAN has certainly influenced the Chinese decision to join the international response in the Indian Ocean.
Traditionally, the East and South China Seas have been the significant regional chokepoints that had a strategic bearing on Chinese interests; however, as mentioned in the introduction, the Indian Ocean has now become a crucial expanse for China due to piracy, rising energy demand and trade interdependence. Hijackings, such as the Tianyu 8 and Zhenhua 4 incidents, are appropriate examples of how piracy is detrimental for Chinese trade.
Subsequently, the passing of UN Security Council resolutions 1814, 1816 and 1838 provided the PLAN with the supranational authority it required and it joined the international counter-piracy effort on 26 December 2008, becoming fully operational on 6 January 2009. In searching for legitimacy to conduct this operation, it is expected that the presence of the EU, NATO and CTF-151 counter-piracy task forces had a positive influence upon China's decision.
Chinese caution towards a potential deployment can be explained by the realpolitik that remains embedded in a post-Mao China and an enduring belief in the adages of Deng Xiaoping. A former PRC leader himself, Deng recommended that the Chinese leadership 'bide time', maintain a low profile and take advantage of international opportunities to gradually maximise its power and position in the world. China seemingly aspires to take advantage of the unique situation of Somali piracy rather than become an established torch-bearer of international peace and security. By participating in counter-piracy operations, China is afforded the opportunity to deploy into the far-seas without an immediately hostile reaction from the international community.
Counter-Piracy Cooperation
The PLAN signified upon the initiation of the deployment that its undertaking would primarily consist of the independent escort of Chinese and foreign vessels. Despite its underdeveloped operational capabilities in comparison with other naval forces, it is clear that China wishes to be both seen and consulted as an equal within the international counter-piracy effort. China is not comfortable with communicating openly with institutions such as the EU and NATO as they do not represent a single voice but a multitude of perspectives; Beijing prefers to conduct dialogue on a bilateral basis.
In the wider operational dimension, China has repeatedly declined proposals to integrate with the collective maintenance of the International Recommended Transit Corridor (IRTC). Again, China does not wish to integrate itself within a multinational command structure. Instead, China conducts its escort operations approximately 'five nautical miles north and south of the IRTC' rather than within the box system. While the PLAN is still a 'green-water' navy and their model of participation is not unusual among the other independent actors, the refusal to participate in the IRTC indicates that China is not prepared to truly contribute to the 'global good' in a manner that is harmonious with the Western world, as much as its rhetoric suggests otherwise.
However, there are now signals that China's actions in the Indian Ocean might begin to match their rhetoric; their counter-piracy strategy is outwardly evolving to incorporate a greater degree of coordination with the broader counter-piracy coalition. The first year of the PLAN was characterised by unilateralism, but the De Xin Hai hijacking on 19 October 2009 served to alter PLAN perceptions on counter-piracy cooperation when maritime cooperation could have prevented such an episode. It is widely agreed that only rigorous cooperation and coordination can help the international community to deal with the problem of piracy in an efficient way at sea.
Accordingly, the PLAN has taken progressive steps to enhance coordination with other navies in the Indian Ocean. Firstly, the key to successful and effective coordination is to communicate and, consequently, a web-based communication system entitled Mercury has been introduced amongst all naval forces apart from Iran. Secondly, China concluded an agreement in January 2012 with its traditional enemies, Japan and India, to strengthen coordination and adjust each other's escort schedules to achieve maximum efficiency in the fight against piracy.
Lastly, and most importantly, are the coordination mechanisms of the Contact Group on Piracy off the Coast of Somalia (CGPCS) and the Shared Awareness and Deconfliction (SHADE) group. China was a founding member of the CGPCS as it is based around 'voluntary cooperation' in counter-piracy rather than under the command of another power or institution. SHADE is a scheme that assembles the wider counter-piracy community for regular meetings in Bahrain. China has now participated in the rotating chairmanship of the SHADE meetings and even expressed an interest in a co-chair position, usually held by the EU, CMF or NATO. However, this initial interest never materialised.
Nevertheless, it is patently clear that China is unwilling to enhance collaborative efforts with the wider counter-piracy community. Reasons for collaborative deficiency in Chinese foreign policy vary from a lack of operational experience to a lack of political will; it is true that much mistrust remains over ideological differences and issues such as human rights and Taiwan.
PLAN motives
This defensive position is reflected in the PLAN's counter-piracy deployment and their coordination with the international effort in several ways: firstly, the Indian Ocean represents a vital strategic arena in which China's energy security is increasingly vulnerable. Secondly, China has evidently taken extra care not to arouse the 'China threat' theorem in its counter-piracy and wider foreign policies. Secondly, China is clearly endeavouring to protect Chinese national interests through the PLAN deployment and their naval modernisation. Thirdly, Chinese naval diplomacy in the Indian Ocean signifies a defensive policy, not one of aggression. Lastly, China is practicing 'security through cooperation' unilaterally with traditional foes.
What is clear is that the Indian Ocean is a vital arena for China; every year some 100,000 cargo ships pass through the Indian Ocean, as well as 66% of the world's oil shipments. The significance of this expanse becomes apparent upon learning that Chinese total energy consumption from 2005 to 2012 has risen 60% and is predicted to increase a further 72.9% between now and 2035. Accordingly, there is now a growing energy demand within China to sustain its economic growth and, as the majority of China's oil imports derive from Africa (Angola, Sudan) and the Middle East (Saudi Arabia), it is obvious that the Indian Ocean is the critical route for its external energy requirements.
China has been determined to dispel the 'China threat' theory. Before the PLAN deployed in the Indian Ocean, they waited patiently to gauge the international reaction to the counter-piracy mission. They also ensured that the deployment had the authorisation of both the Somali government and the UN. In line with the maxims of Deng Xiaoping, China knows that any sign of aggressive behaviour would be criticised by the international community and potentially harm their development. Thus, China is essentially employing a neo-Bismarckian strategy, manoeuvring peacefully towards Great Power status without provoking the international community into a counter-balancing reaction.
This is embodied within China's 'peaceful rise' policy. Chinese actions and rhetoric attest to this guiding principle in the CCP's foreign policy; the counter-piracy operation in aid of the global commons allows China to justify their naval modernisation, along with the opportune location of the piracy problem. China speaks of a foreign policy that pursues 'peace and promotes friendly cooperation with all countries on the basis of the Five Principles of Peaceful Coexistence', in addition to Hu Jintao's 'harmonious world' vision.
Moreover, Chinese counter-piracy policy is distinctly aimed towards the protection of Chinese national interests. There is an evident gap between China's defensive interests and its actual capabilities; therefore, it is aiming to close this gap through the advancement of the PLAN's operational capabilities, increased field experience and the acquisition of modern naval assets. For example, China has now acquired its first ever aircraft carrier, the ex-Soviet Varyag, and it is expected to become operational by the end of 2012.
By coordinating in the counter-piracy effort, China is able to learn how a 'far-seas' fleet is operated, offer PLAN personnel invaluable experience for future expeditions, and gain knowledge from other international naval forces. As such, China has evolved its naval strategy to meet the demands of its expanding interests in the Indian Ocean and it can therefore be deduced that the PLAN deployment is an extension of this defensive strategy.
As a result of the PLAN's new 'far-seas' mantra, the counter-piracy deployment has also increased Beijing's diplomatic network across the Indian Ocean. After each task force rotation, the PLAN 'sails along the East coast of Africa and visits Kenya, Tanzania, Mozambique, South Africa, Madagascar and the Seychelles' to parade the Chinese flag and to foster goodwill within these countries. Further Chinese engagement with the Indian Ocean littoral states consists of port and refuelling developments at Gwadar in Pakistan, Hambantota in Sri Lanka and Chittagong in Bangladesh with the Seychelles also offering China an invitation to establish a military presence on the islands.
Yet, by cooperating to some extent with traditional regional adversaries, China hopes that it can begin to assuage their doubts about their growth as a power and hopefully continue along the path of development. On cooperation in counter-piracy and the wider Indian Ocean region it is imperative that China 'go along to get along' in protecting their national interests.
As Donald Rumsfeld proffered, it is 'the mission that determines the coalition' and the issue of piracy has clearly determined China's participation and cooperation with the international community in the Indian Ocean. From a Chinese perspective, they have participated out of self-interest; on a wider scale, their participation has beenfacilitated by the ad-hoc regime that has emerged. For China to protect its national interests and continue on its path towards a 'peaceful rise' it now appreciates that 'problems will be global – and solutions will be, too'; this is what truly accounts for Chinese cooperation in counter-piracy operations in the Indian Ocean.
What do you think about China's counter-piracy operations? To comment or write an article in response email haveyoursay@defenceiq.com or andrew.elwell@iqpc.co.uk
BALOCHISTAN: THE BNP ISLAMABAD MARATHON FOR SIX POINTS AGENDA
Written by --- Munir Mengal, France.
“The illiterate of the 20th Century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn.” Allvin Toffler
Initially it was stated by the BNP spokes person Sana Baloch and then also endorsed by the BNP President that "I am in Islamabad only to submit my statement to the supreme court of Pakistan regarding the missing persons issue" said Sardar Akhtar Jan Mengal to the media in Islamabad.
Then within the next 48hrs a bang of six points was heard by the Akhtar Mengal by utilizing the media forums as way head for the resolution of the Balochistan issue. The rest of the three days were utilized by Akhtar Mengal and team for gaining political support from the main stream political parties of Pakistan i. e. Muslim league-Nawaz and Tahreek Insaf Imran Khan.
Before moving forward, it is highly important to have a brief view of the issues which forced Pakistan to drag down Akhtar Mengal to Islamabad.
Pakistan Army with its secret services wings, F.C., and dummy Armed organization neither been able to break the will of the Baloch people, nor been able to bring a succeeding distortion among the Baloch struggling groups.
The safe escape of Brahimdagh Bughti from Afghanistan to Switzerland highly demoralized the will of the Pakistani establishment.
The change of regime is expected to take place within the following six months, giving a good reason to both parties, i. e. Pakistan and BNP to look for new opportunities.
The Pakistan Army and the law enforcement agencies are highly under pressure from the Baloch insurgency, almost it had became impossible for them to eliminate the Baloch insurgents by military operations, on the contrary been accused for high levels of human rights violations in Balochistan even at International forums.
The US Congressional hearing about Balochistan also created a high panic in the Pakistani strategic thinkers’ corridors.
Then the visit of UN Body Working Group on Involuntarily / Enforced Disappearances less than the lapse of a period of four months rang a bang in the years of Pakistani establishment and related authorities announced it as interference in internal and judiciary issues.
The striking fear hanging on the heads of the Pakistani diplomats is the coming Universal Periodic Review (UPR) of Pakistan in the Human Rights Council on 30th October 2012.
The unprecedented US strategic policy after 2014 towards South Asia, a change of policy is expected, which has already posed a fear in the Pakistani strategic decision makers. Pakistani establishment has already started consolidating its assets, i.e. negotiations with Talibans, taking CBM measures with old Jehadi groups, etc.
In late 2011, the Pakistani strategic policy makers started to think it is right time to play the Balochistan card. They are trying to shift the move systematically, initially motivated the Punjab feudal politician on the plate form of friends of Balochistan and then the Supreme Court Bar was also seen organizing conferences for submitting proposals for the resolution of the Balochistan issue.
It hardly took Islamabad two months engagement at Dubai and Qatar to celebrate cheers with Akhtar Mengal in Islamabad. But highly tactful diplomacy was played. Neither the establishment nor the political regime took any responsibility or promise on his shoulders for resolving any issue of Balochistan. The ball was rolled between Ifthikhar Chaudary and Akhtar Mengal. After getting the response of establishment, which was very negative. Soon Akhtar realized that he has been trapped. He started presenting a six point’s agenda for bringing peace and calamity in Balochistan and equilibrium those with Sheikh Mujeeb’s six points to gain weight-age and pressurize the establishment. Akhtar Mengal turned to the facilitators some of them were media men. The Pakistani media declared the Akhtar Mengal visit and bowing in front of Pakistan Supreme Court as "ray of hope". The TV anchors started the jugglers game by giving Akhtar a star representation and presenting the game is over. For instance just have a look on the stance of Hamid Mir, who in the Supreme Court Bar Conference about Balochistan was claiming that the solution of the Balochistan is in the hands of middle class and none of the sardars and lords can play any role.
However the Pakistani strategic policy makers and thinkers are expected to claim this visit a great success particularly at International forums i.e. at UN, UN Human Rights Council Sessions, at Pakistan UPR, and at state level discussions. They will claim it as internal issue and present that the state is engaged with the Baloch political leadership to resolve the issues of law and order. This might be considered as the first strike on the Baloch struggle at diplomatic forums.
Akhtar Mengal and particularly his team of advisors failed to anticipate the impact of this visit on the Baloch struggle. They were seen focused merely on the form of the event having no calculation of the nature of the activity and its broad impact in the diplomatic forums. Where many seem to be hope less from the Islamic state. Particularly from the state rough elements, Islamic fundamentalism as strategic policy, dubious army role on war on terror, economically failed state, abusing human rights etc. After the current Islamabad marathon BNP leadership has to think twice infact many times for their stance of move a head towards the solution of Balochistan issue. The preceding year message to BNP representatives from international forums was to look forward for something new for the future. Which at all doesn’t mean to creat failed hopes from Ifthikhar Chaudhri and present a mismatch agenda of six points at least Baloch could expect nothing from that?
October 03, 2012
Rare Earths Could Be Pawn in Island Spat... Again
By: Heiko Ihle, CFA, Senior Research Analyst
Heiko Ihle is a Senior Research Analyst with Euro Pacific Capital.
We've written before about rare earth elements (REEs): the futuristic sounding group of 17 minerals with unpronounceable names that play a critical role in everything from hybrid cars to flat screen TVs. Of course, "rare" is something of a misnomer, as the minerals that make up the group are not all that rare. They are, however, difficult to mine in profitable concentrations.
As of now, China controls over 90 percent of the world's rare earth mining concerns. In the past, this near monopoly has allowed them to exert a significant influence over both price and supply. In 2010 and 2011, China used its position to send prices on a roller coaster ride, causing some individual minerals to quadruple in price. In 2011, prices for some elements doubled again, hitting record highs.
The catalyst that caused China's use (or misuse) of its near-monopoly power in 2010 was a dispute over some seemingly meaningless rocks in the South China Sea. Though currently uninhabited, many believe that the islands sit on top of valuable oil and gas reserves. Beyond that, both countries view the territory as an issue of sovereignty in the East China Sea. Until very recently, the islands, while officially controlled by Japan, were privately held. In September of that year, Japan arrested a Chinese fishing crew whose boat had collided with two Japanese Coast Guard vessels near the contested Diaoyu Islands (called the Senkaku Islands by Japan). The islands have been claimed by China but are under official Japanese control. The boat captain's 16-day incarceration ignited long simmering tensions between the two Asian powers.
Over the course of the dispute, China took the gloves off and hit Japan where it hurts: It halted shipments of rare earth elements to Japan, the world's largest importer. Japan had traditionally bought 60% of China's rare mineral supply for its high tech manufacturing industries. Predictably, prices spiked around the world.
The embargo even spread briefly to the United States and Europe after US officials announced plans to investigate China for possible WTO violations. Through it all, China stuck with its official stance, stating that no countries were being targeted but, rather, the shipment slowdowns were a result of increased regulation in the rare earths industry. But as many experts have suggested, China's unofficial embargo served as an effective ploy to manipulate prices (and punish international rivals) without implementing a policy change that would have exposed her to withering World Trade Organization (WTO) complaints from rival nations. Even without an overt policy change, the US, EU, and Japan did ultimately file such a complaint.
After simmering down for a year or so tensions over the islands have flared up again. This time around, things could get worse. In mid-August, Japan arrested 14 Chinese activists for planting a flag on the disputed islands. While the protesters were quickly sent home, their arrest reignited tensions. To make matters even more volatile the Japanese government just announced plans to buy the islands (which had been privately held even while they have been under Japanese political control).
The announcement has produced a stronger reaction from China than the arrest of its citizens. According to the FT, China's news organization, Xinhua, reacted to the decision by saying, "that Tokyo had thrown bilateral relations into the scalding pot" and by warning that Japan's actions would have "serious consequences." It is unclear what, exactly, Beijing will do in response to the move, but the official government position views it as a violation of China's sovereignty and a breaking of long-held-if essentially unspoken-agreements between the two countries. What's more, a new crop of Chinese leaders is currently taking the helm in Beijing, and taking a tough line with Japan may be seen as a rite of passage.
Since tensions first broke out in August, it has been almost impossible to read media coverage of these events that didn't hark back to the 2010 embargo. Price spikes in 2010 and 2011 caused many companies to stock up on the resources, leading to price drops and lower Chinese exports. At this point, some analysts are unsure whether rare earth prices have hit a floor yet. Still, it is impossible to tell what China will do. With such power and unpredictability concentrated in a few hands, many understandably view REE investing as gambling at best. That may be true, but the best gamblers always look for an edge.
One major result of dicey diplomacy in the South China Sea and the rare earth price spikes over the past few years has been the desire to diversify away from the current near-monopoly held by Chinese producers. In 2012, Chinese exports dropped significantly, and even fell below the country's quota. At the same time, various rare earth consumers scrambled to set up new mining operations in places like Australia, the US, and Malaysia. In August of this year, Japanese technology concern Toshiba announced that it would replace a Chinese-sourced rare earth with one found in Australia and the US in a new motor.
The dispute between Japan and China should only speed up this process. The fight over a few small islands stands as more bad news for Chinese rare earths producers, but it may be great news for companies producing rare earths elsewhere.
OBAMA VS ROMNEY:SOME OBSERVATIONS
aB.RAMAN
I watched with fascination the first Presidential debate between President Barack Obama and Mr.Mitt Romney, the Republican presidential candidate, at Denver on the morning of October 4,2012.
2.At the very beginning, my kudos to the American TV professionals from different channels who worked together as a team to organise a debate of very high quality.
3.We too have world class TV professionals such as MadhuTrehan, BarkhaDutt, Prannoy Roy and Karan Thapar.Individually, they might have been able to organise a very good debate, but I am not sure of their ability to work as a team despite their belonging to different channels and project a debate in which the focus and attention remain on the debaters and their ability to debate issues of public and national interest.The egos of our TV professionals might come in the way of the kind of team work that we saw in Denver today.
4. In the discussions among the panellists before the debate started, the focus was not on the past, but on the future. What the panellists were trying to foresee was what kind of a promised land each candidate would offer to the voters. Jim Lehrer, the moderator, kept the focus of the debate on the future and gently nudged Mr.Romney to talk of what he would do and not what he did as the Governor.
5.One was amazed by the kind of homework the candidates had done before the debate with the help of their aides and the kind of insight and comprehension they displayed throughout the debate.
6.A debate of this nature will be very difficult to organise in India. Firstly,a Presidential form of Government as in the US lends itself better to such debates than a parliamentary style of Government with a multiplicity of parties. Secondly, we have very few political leaders with the kind of knowledge, insights, comprehension and debating skills that both Mr.Obama and Mr.Romney exhibited throughout the debate.Our TV debates are largely cock-fights and slanging matches with the anchors and moderators unable to impart gravitas and intellectual depth to the discussions.
7. I watched the post-debate discussions in the CNN, the BBC and other Western TV channels. The overall impression among independent panellists not belonging to either of the two political parties was that it was Romney's night. He was more self-confident, less testy and more engaging than Mr.Obama. Mr.Romney's body language and facial expressions were more Presidential than Mr.Obama's. As one panellist remarked, Mr.Obama was rusty. His classy style and debating skills of 2008 were missing.
8. One panellist remarked that Mr.Obama was condescending in the beginning, but as he realised that Mr.Romney he was facing today was different, he became defensive.
9.Mr.Obama had to be defensive because today's debate was on the state of the economy which has not been doing well. The next debate is going to be on foreign policy in which Mr.Romney is likely to be aggressive focussing on the murder of the US Ambassador to Libya and three other Americans at Benghazi in Libya on September 11 by a group of terrorists suspected to be from Al Qaeda and themessy situation in Syria and Egypt.
10. Mr.Romney came to today's debate with the image of a potential loser in the elections. He managed to have this perception of himself changed and left the debate with the image of a candidate who might repeat the challenges of Ronald Reagan to Mr.Jimmy Carter in 1980 and Mr.Bill Clinton to Mr.George Bush Sr in 1992.
11. Mr.Romney is very much in the fight and cannot be prematurely written off.Mr.Romney we saw today is not a bungler and sure loser. ( 4-10-12)
(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai, and Associate of the Chennai Centre For China Studies. E-mail: seventyone2@gmail.com Twitter @SORBONNE75)
Indian and US special forces to conduct counter-terror exercise
Last Updated: Tuesday, September 25, 2012, 23:58
New Delhi: The Indian Army will hold its largest war game ever when top commanders from all key formations will gather at Pune this week to validate its latest pro-active war fighting concepts aimed at traditional rivals, Pakistan and China.
This is the first such warfare strategising exercise under present army chief General Bikram Singh.
The war game, played over a tabletop, is being held at a time when Pakistan is holding its largest two-month army field exercise by its Karachi-based V Corps beginning Tuesday (and will go on till middle of November), at a location overlooking Jaisalmer across the border in India's Rajasthan, to finalise its warfare concepts aimed at India.
Hosted by the Pune-based Southern Army Command from Wednesday to Friday, the war game is expected to have Gen. Bikram Singh taking part, a top army officer told a news agency here.
"Tabletop war games are much more complex and sophisticated in terms of content, brain-storming and evolving of warfare concepts to counter the enemy's defensive tactics and offensive strategies. Field exercises are for validating the concepts evolved at tabletop war games," a senior army officer explained.
"Senior officers from all seven commands of the Indian army and key formations are participating in the war game," he said.
"The war game will evolve a proactive strategy in punishing enemy forces at the time of battle. It will also work on effective ways of coordination between the army and the air force, key for a joint war effort for maximising gains during battle," the officer added.
Southern Army Command is the largest in terms of Indian territory that it is tasked to defend, from the coastal states of Tamil Nadu and Kerala to the Rann of Kutch in Gujarat.
The war game is a follow-up to the three major field exercises carried out by the army in the summer and winter of 2011.
1. The 2011 summer exercise Vijayee Bhava was held in the Rajasthan desert in May by the Ambala-based 2 Kharga Corps, one of the three offensive strike formations of the Army.
It was followed by the summer exercise Pine Prahar in the plains of Punjab, also in May, staged by the Jalandhar-based 11 Vajra Corps, a pivot formation with both defensive and offensive elements among its ranks.
Both 2 Corps and 11 Corps are under the Chandimandir-based Western Army Command.
In November that year, the army's Bhopal-based 21 Sudarshan Chakra Corps, under the Southern Army Command, carried out the Sudarshan Shakti exercise.
These 2011 exercises, held under then chief Gen VK Singh who spearheaded a transformation process in the army, aimed at building the capacities of the strike formations in delivering deadly blows to enemy forces in a short offensive by breaching the hostile army's defences and capturing important strategic assets deep inside enemy territory.
These exercises were also meant to test the army and air force's jointness and their firepower with the use of over 200 battle tanks and infantry combat vehicles, and artillery guns, apart from attack helicopters.
IANS
__________
The US is also cornering a major chunk of the lucrative Indian arms import market despite having lost out in the almost $20 billion MMRCA (medium multi-role combat aircraft) project to supply 126 fighters to IAF. T
he US has notched up sales worth over $8 billion to India over the last decade, with New Delhi emerging as Washington's second largest FMS (foreign military sales) customer in 2011. These include the big-ticket ones like $4.1 billion for 10 C-17 Globemaster-III strategic airlift aircraft, $2.1 billion for eight P-8I maritime patrol aircraft and $962 million for six C-130J 'Super Hercules' planes. Negotiations are now being finalized for acquiring six more C-130J as well as four more P-8I aircraft.
Two other defence deals are in the pipeline, even though some hurdles are still to be cleared. The first is the acquisition of 145 M-777 ultra-light howitzers from the US in a direct government-to-government deal worth $ 647 million under the FMS programme. The second one is the $1.4 billion contract to supply 22 missile-armed helicopter gunships to the IAF after Boeing's AH-64D Apache Longbow outperformed Mil Moscow Helicopter Plant's Mi-28N 'Night Hunter' in the field trials, as reported by TOI earlier.
October 02, 2012
LACK OF SECURITY FOR GEN BRAR IN LONDON: SHOCKING INEPTITUDE
B.RAMAN
Lt.Gen. (retd) K.S.Brar, who played a prominent and courageous role in the military action code-named OP Blue Star in the Golden Temple in Amritsar in June 1984, was the target of a pre-planned and determined attack by unidentified elements in London on the night of September 30,2012.He escaped death.
2. In an interview to Sonia Singh of NDTV on the night of October 2,2012, his wife said that before they left India for London, the Army unit responsible for their physical security in India was informed of their travel plans and their planned stay at London.
3.Despite this, the British security agencies do not appear to have been informed of their visit to London either by the Indian High Commission in London or by the Indian intelligence agencies in order to ensure their protection till they returned to India.
4.Their physical security in India is taken care of by the Army. Their security during their foreign travels is the responsibility of our intelligence agencies and diplomatic missions.
5.For reasons that are not clear, neither our intelligence agencies nor our mission in London appear to have taken any action to ensure his protection.He escaped largely due to his bravery, alertness and military reflexes.
6. Many senior officers of the security forces---military and civilian--- have over the years played leadership roles in counter-terrorism and counter-insurgency operations. Some of them like those who played a role in Ops Blue Star in 1984 and Black Thunder in 1988 against Khalistani terrorists are vulnerable to retaliatory attacks by the terrorists.
7. Their security is taken care of by their units while they are still in service. After they retire, they are dependent on their units and the concerned civilian departments for their continued protection.
8. In retirement, military officers are more vulnerable than civilian officers. Retired civilian officers have a web of contacts in the civilian departments concerned and in the Ministry of External Affairs. They use these contacts to ensure security for them when they go abroad.
9. Military officers spend their career mostly in barracks or cantonments. They do not have that kind of contacts in the civilian security bureaucracy.They intimate their travel plans to the Army unit responsible for their security in India and presume that necessary follow-up action will be taken. That is what Gen.Brar seems to have done.
10. Shockingly, there does not appear to have been any follow-up action on his intimation. He and his wife found themselves without protection in London.
11. Nothing can be more embarrassing or distasteful for a military officer than to go around asking for physical security in retirement. They expect and presume that the Government in recognition of their brave role would do whatever needs to be done on its own to ensure their protection.
12.This was apparently not done in the case of Gen.Brar, one of the most vulnerable officers. The Government should immediately hold a detailed enquiry into this and see that such instances of ineptitude are not repeated. ( 3-10-12)
(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai, and Associate of the Chennai Centre For China Studies. E-mail: seventyone2@gmail.com Twitter @SORBONNE75)
Salafism and Arab Democratization
October 2, 2012 | 0900 GMT
Stratfor
By Kamran Bokhari
Vice President of Middle Eastern & South Asian Affairs
The outbreak of the Arab Spring in 2011 brought significant attention to groups -- known as Islamists -- seeking to establish Islamic states in countries once ruled by secular autocrats. The bulk of this attention went to already established political groups such as the Egyptian Muslim Brotherhood, which caused consternation in the West when its Freedom and Justice Party won control of both Egypt's parliament and its presidency.
Much less attention was paid to the Brotherhood's principal Islamist competitors, members of the ultraconservative Salafist movement, despite their second-place finish in Egypt's parliamentary elections. This changed in late September when certain Salafists played a key role in the unrest in reaction to an anti-Islamic video posted on the Internet.
Since then, Salafism has become the subject of much public discourse -- though as is often the case with unfamiliar subjects, questions are vastly more numerous than answers. This is compounded by the rapidity of its rise from a relatively minor, apolitical movement to an influential Islamist phenomenon.
Origins and Goals of Salafism
Modern Salafism is based on an austere reinterpretation of Islam, calling for Muslims to return to the original teachings outlined in the Koran and the practices of the Prophet Mohammed as understood by the earliest generation, i.e., the Companions of the Prophet. From the Salafist perspective, non-Islamic thought has contaminated the message of "true" Islam for centuries, and this excess must be jettisoned from the Islamic way of life.
Salafists are a minority among the global Muslim population and even among Islamists. Unlike members of the Muslim Brotherhood, Salafists do not belong to a singular organization. Instead, the movement comprises a diffuse agglomeration of neighborhood preachers, societal groups and -- only very recently -- political parties, none of which are necessarily united in ideology.
In many ways, Salafism can be seen as a rejection of the political ideology of the Muslim Brotherhood. For most of the movement's existence, it shunned politics -- and thus Islamism -- in favor of a focus on personal morality and individual piety, arguing that an Islamic state could not exist without Muslims first returning to the tenets of "true" Islam. This means Salafism also was at odds with the concept of jihadism -- itself a violent offshoot of Salafism -- as practiced by groups such as al Qaeda that sought to use force to manifest their Islamist ideology.
The Salafist movement could also afford to stay away from political activism in large part because it had a political backer in the government of Saudi Arabia. While many Salafists didn't agree with some of Riyadh's policies, its historical role as the birthplace of Salafism and role as the patron underwriting the global spread of Salafist thought kept the movement within the Saudi orbit.
This remained the case until the 1991 Gulf War, in which Saudi Arabia was forced to allow some 500,000 U.S. troops into the kingdom to protect itself from Baathist Iraq, after the latter's brief occupation of Kuwait. The move caused an uproar over the religious legitimacy of allowing non-Muslim soldiers on what many consider to be holy grounds, and it also gave way to a wider debate about the political state of affairs of the Saudi kingdom. Prominent scholars began publicly calling for reform, which led to Salafists in general engaging in political discourse and, eventually, to the concept of Salafism as an Islamist philosophy.
Nevertheless, Salafists would not become a political force for another two decades, simply because it takes time for an apolitical religious movement to develop a political philosophy. At the same time, the Saudi leadership was rallying the country's religious establishment to contain these newly politicized Salafists. The 9/11 attacks and subsequent U.S. actions against jihadism further advanced Salafist thought as the sect tried to hold on to its core values amid U.S.-led international pressure for reform, distinguish itself from jihadists and come up with a viable political alternative to the Muslim Brotherhood.
The Arab Spring
By the end of the 2000s, Salafism had spread across the Arab world, most notably to Egypt and Tunisia, expanding both the number of its adherents and its institutional scope, which now included social organizations engaged in charity, relief and community work. They stopped short of formal political groups, largely because of the autocratic regimes under which they lived, but they quietly developed the infrastructure for such groups. It was under these circumstances that the Salafists found themselves at the beginning of the Arab Spring.
The case of Egypt's Salafists is the most telling. Like the Muslim Brotherhood, they were caught unprepared when the popular agitation largely led by liberal youth groups broke out and began to consume decades-old secular autocratic regimes. While they eventually were able to overshadow the largely non-Islamist forces that played a key role in forcing the ouster of then-President Hosni Mubarak, they lacked the political machine that the Brotherhood had developed over the course of some 80 years. The result was the rise of various Salafist forces haphazardly trying to assert themselves in a post-authoritarian Egypt.
Several Egyptian Salafist groups applied for licenses to form political parties. Two prominent parties -- al-Nour and al-Asala -- emerged along with a host of individuals, such as Hazem Salah Abu Ismail, who ran as an independent candidate for president. The two Salafist parties banded together with the newly formed political wing of the former jihadist group Gamaa al-Islamiya -- the Building and Development Party -- to form the Islamist Bloc. The alliance was able to garner more than a quarter of ballots cast in the parliamentary polls late last year, coming in second place behind the Brotherhood.
What was most important about these Salafists participating in mainstream politics is that they embraced the electoral process after decades of having denounced democracy as un-Islamic. In other words, they ultimately adopted the approach of the Muslim Brotherhood, which they had hitherto vehemently rejected. This transformation has been more a rushed affair stemming from expediency rather than a natural ideological evolution.
There is an expectation that radical forces joining the political mainstream could, over time, lead to their de-radicalization. That may be true in the case of states with strong democratic systems, but in most Arab countries -- which are just now beginning their journey away from authoritarianism -- the Salafist embrace of electoral politics is likely to delay and perhaps even disrupt the democratization process and destabilize Egypt and by extension the region.
Much of this chaos will stem from the fact that the move to accept democratic politics has led to further fragmentation of the Salafist landscape. Many Salafists still are not comfortable with democracy, and those who have cautiously adopted it are divided into many factions. The result is that no one Salafist entity can speak for the bulk of the sect.
What Lies Ahead
Clearly, the Salafists are bereft of any tradition of civil dissent. That said, they have exhibited a strong sense of urgency to exercise their nascent freedom and engage in political activism. The outcome of this was the rioting that took place in reaction to the anti-Islamic film.
The Salafists are not just suffering from arrested political development; they face an intellectual discrepancy. On one hand, they wish to be part of the new democratic order and a mainstream player. On the other, they subscribe to a radical agenda that dictates the imposition of their stern interpretation of Islamic law across the Arab and Muslim world.
Their envisioned order is not just a problem for secularists, Christians, Jews and other minorities but also for more moderate Islamists such as the Muslim Brotherhood. The Brotherhood lost its monopoly on Islamism close to four decades ago but back then it didn't matter because the Brotherhood was an opposition movement. Now that the group has won political power in Egypt, the Salafists represent a threat to its political interests.
Some of the more politically savvy Salafists, especially the political parties, are willing to work with the Muslim Brotherhood toward the common goals of furthering the democratic transition and containing radical and militant tendencies. Ultimately, however, they seek to exploit the Brotherhood's pragmatism in order to undermine the mainstream Islamist movement's support among religious voters. Additionally, the Salafists are also trying to make use of their role as mediators between the Brotherhood-led government and the jihadists active in the Sinai region to enhance their bargaining power and lessen the Brotherhood's.
Salafists -- whether they operate through legal means or through raw street power -- can be expected to create problems for Egypt's new government led by President Mohammed Morsi, especially when it comes to foreign policy matters. A prime example is the recent case of the film-related violence, during which Morsi had a difficult time balancing the need to placate the masses at home and maintain a working relationship with the United States, upon which Egypt relies for its economic well-being. While the anger over the film is a passing phenomenon, the underlying dynamic persists.
There is also no shortage of issues for right-wing Islamists to exploit. U.S. imperatives in the region will continue to place the Morsi government in a tight spot and provide reasons for the Salafists to oppose Cairo's policies. Even more volatile than the dealings between the Morsi administration and Washington will be Israeli-Egyptian relations.
So far, Morsi has managed to avoid dealing too directly with Israel. But the Egyptian president and the Brotherhood cannot avoid this for too long. They know that they will face situations where they could be caught between the need to maintain peaceful relations with Israel and deal with Salafists taking advantage of the widespread anti-Israeli sentiment among Egyptians. This is one of the reasons Morsi and his associates have been speaking of revising the peace treaty with Israel, which is an attempt to manage the inevitable backlash on the home front.
Egypt's difficulties are particularly pronounced given the country's status as the leader of the Arab world, but Salafists of various stripes are slowly emerging as political stakeholders across the region, especially in Libya, Tunisia, Yemen, Gaza, Lebanon, Jordan and Syria. Democratization by its very nature is a messy affair in any context, but in the case of the Arab spring, Salafist entities can be expected to complicate political transitions and undermine stability and security in the Middle East.
The major challenge to stability in the Arab world thus lies only partially in the transition to democracy from autocracy. Greater than that is the challenge mainstream Islamists face from a complex and divided Salafist movement.
Read more: Salafism and Arab Democratization | Stratfor
India clashes with Pakistan over Kashmir at UN General Assembly
By Associated Press, Published: October 1
UNITED NATIONS — India's external affairs minister took on Pakistan at the United Nations on Monday for raising the disputed Himalayan territory of Kashmir.
S. M. Krishna told the General Assembly that India has resumed dialogue with Pakistan and wants to normalize relations. But he lashed out at a speech last week by Pakistani President Asif Ali Zardarif, saying the neighboring nation had no business meddling in India's predominantly Muslim state of Jammu and Kashmir, which India claims as sovereign territory.
"An unwarranted reference has been made to Jammu and Kashmir from this podium," he said, adding, "We wish to make it abundantly clear that Jammu and Kashmir is an integral part of India."
Zardari said in his speech that Kashmir remained "a symbol of the failures of the United Nations system rather than its strengths." He said a solution could only be reached in an "environment of cooperation."
As the annual high-level meeting of the General Assembly wound down Monday night, representatives of India and Pakistan traded several rounds of rebuttals before a mostly empty chamber. The Pakistani delegation was seen smiling and shaking their heads as an Indian diplomat issued yet another reply to a statement by Pakistan.
A violent separatist insurgency that started in 1989 drew a crackdown by Indian forces that has killed about 68,000 people in Kashmir, where public resentment against Indian rule runs deep.
The rebellion is largely suppressed, with occasional flare-ups. The Indian army said last week that a fierce gun battle killed a suspected rebel and a soldier.
Earlier this month, Indian police arrested Merajuddin Wani, one of the longest-surviving rebel commanders in Indian-controlled Kashmir.
Editorial: Mengal’s Political Blunder
Mallik Siraj akbar
Baloch Hal
The unilateral decision of former Balochistan Chief Minister Sardar Akhtar Mengal to return to Pakistan to support the country's Supreme Court will hurt Baloch interests. Sardar Mengal, who heads the Balochistan National Party (BNP), certainly has a democratic right to make his own decisions but his actions will tarnish the international image of the Baloch nationalist movement.
At a time when the United Nations sent a Working Group in Balochistan to investigate the cases of enforced disappearances and also come up with recommendations criticizing the Pakistani military, this was not the right step for a senior Baloch leader to express faith in the Pakistani Supreme Court. Balochs have reached some steps away from a next U.N. intervention or decision on Balochistan but Sardar Mengal's return will provide the United Nations a reason to step aside and treat Balochistan as Pakistan's "internal issue". At this point, the Baloch interest lies in internationalizing the issue so that more international human rights groups and representatives of the media observe transparency in resolving the Balochistan conflict according to the wishes of the Baloch people.
With such a dramatic decision, one is compelled to doubt the depth and clarity of B.N.P.'s political vision for Balochistan. The B.N.P. had previously asked for provincial autonomy for Balochistan but subsequently hardened its stance and began to ask for the right to self-determination. People seek the right to self-determination when they fully lose confidence in a state. Expression of trust in the Pakistani Supreme Court completely disqualifies B.N.P.'s plea for international intervention in Balochistan.
2012 was a glorious year in Balochistan's history when the nationalist movement made extraordinary achievements. In February, the United States Congress held a hearing on Balochistan and members of the U.S. Congress, both from the Democratic Party and the Republican Party, supported the Baloch right to self-determination. On March 27th, these congressional friends of Balochistan addressed a press conference in Washington DC's National Press Club to once again reiterate their support for the Baloch people's right to self-determination. As the Baloch issue gained more international attention, the United Nations also sent a Working Group to probe the cases of missing persons. With his return, Sardar Mengal has made Islamabad's job easier: to shut down all doors for future U.N. interventions in Balochistan. Because, as understood from Sardar Mengal's decision, Pakistani institutions can internally manage the Balochistan imbroglio.
We agree with the Baloch Students Organization (BSO-Azad) that Sardar Mengal's action amounts to joining hands with those who are responsible for killing the Baloch people.
The Supreme Court has been bluffing with the Baloch people. While this court has remained in place for ages, the first disappearances (in the ongoing insurgency) began in early 2000. A decade after the initial disappearances, this Supreme Court has not been able to punish a single official for their illegal action. There is an enormous wealth of evidence that proves the security establishment's involvement in brutal actions against the Balochs. The Chief Justice has been using the Baloch missing persons as a political card but failed to deliver.
It does not make much sense when Mr. Mengal says that the Supreme Court is last hope for the Balochs. How can one trust the Pakistanis when their executive and legislative branches of government have made no confidence building measures to appease the Baloch? While the issue of the missing persons is the most sensitive and critical one, it is not the sole bone of contention between Balochistan and Islamabad. Balochistan's problem is not as narrow as the issue of human rights. Balochistan's is a much more complicated political vendetta which cannot be resolved only by addressing human rights issues. However, if Islamabad genuinely addresses the issue of human rights then it should be considered as a confidence building measure to start dialogue on other outstanding political issues.
Balochs have been receiving bullet-riddled dead bodies even during the visit of the working group. The so-called Pakistani liberal politicians like Senator Raza Rabbani have gone public to express their anti-Baloch intentions by brazenly announcing that the United Nations would not be allowed next time to send another mission on Balochistan. When Pakistani politicians and opinion makers unite against the Baloch people, our leadership must also learn the art of putting forward Baloch demands without mincing words.
We do not fully know the details of Sardar Mengal's understanding with the Pakistani government that culminated in ending his four-year self-imposed exile. We consider it a political blunder by B.N.P. which may offer it some temporary benefits but any contacts with Pakistan at this point will harm the broader Baloch interest. While some Baloch parties criticized Sardar Mengal in 2006 for not consulting them while quitting parliamentary seats in protest against Nawab Bugti's killing, he now deserves his share of criticism for making another decision without consulting other key stakeholders. B.N.P. is going to isolate itself and end up getting itself recognized among soft pro-Establishment parties like the National Party or the Jamori Watan Party.
Malik Siraj Akbar
Editor-in-Chief
The Baloch Hal
BSO Azaad
<azaadbso@gmail.com> wrote:
Dear Malik Siraj Akbar,
Thank you for writing this timely excellent editorial. However, it is not a Political blunder or political suicide but a part of a secret deal that was made in Dubai between Sardar Akhtar Mengal and ISI which is now being implemented with the help of ISI. According to informed reliable sources, ISI will help Akhatr Mengal's BNP thugs to win in the upcoming elections by rigging and bogus votes, and provide them with security, media coverage, rent a crowd to promote and project them as the biggest political Party in Balochistan, in exchange for helping ISI and FC to put down the freedom movement in Balochistan by helping to eliminating more Baloch political activists, especially of BSO-Azaad and BNM members by labeling them as "anti-State" and terrorists. This is a big conspiracy against the Baloch people to pit Baloch against Baloch. Every Baloch must be aware and prepared to challenge these perfidious evil plans of Saradr Akhtar Mengal and render them fail.
October 01, 2012
It was an assassination attempt by 'pro-Khalistan elements': Lt Gen KS Brar
By Prasun Sonwalkar | Place: London | Agency: PTI
Lt Gen K S Brar, who was assaulted by four people in central London on Sunday night, is convinced that it was an attempt to assassinate him by "pro-Khalistan elements" for his role in the 1984 "OperationBluestar". Brar, who kicked and fought three of the four assailants, suffered a knife wound in the neck and is recovering after receiving medical treatment at a London hospital soon after the attack on him near the busy Marble Arch area. He is due to return to India on Tuesday.
"This was a pure assassination attempt on me. Even on Internet there are so many threats being sent to me to say that there have been many attempts on your life but they haven't succeeded, but the next one will succeed. They've been after me." Brar told a television channel on Monday night.
"On 6th of June, which is the anniversary of Bluestar, particularly in London, the radical Sikhs come out in procession with banners and make pledges to kill me. So it was a pure assassination attempt," he said. Brar said it was "obvious" that the assailants were Khalistan sympathisers, who, he added, wanted to kill him since "Operation Bluestar". Describing the incident, 78-year-old Brar said that he fought with the assailants, with "abnormal strength", and added: "Now when I think back, I can't imagine how I fought with those three big guys. But I suppose being a soldier and having been in the army for so many years, one learns to defend oneself".
One of the four assailants, he said, separated his wife from him, while the other three "went for me". His wife fell down when one of the assailants pushed her against the wall, he said.
Everything happened within a couple of minutes, "maybe one minute", he said. The police, Brar said, had told him that a mobile phone had been recovered from the site of assault, which may lead them to the assailants.
The retired Lt General praised the police and hospital authorities who treated him after the assault.
Operation Bluestar was aimed at flushing out Sikh terrorists led by JarnailSingh Bhindrawale from the Golden Temple, who were demanding a separate state for Sikhs called Khalistan.
Brar saw action in the 1971 war with Pakistan, and was among the first to enter Dhaka when the Indian army forced Pakistani army into surrender.
General AS Vaidya who was the Army Chief in 1984 planned the highly controversial Operation Bluestar. Vaidya was shot dead in Pune in 1986.
Thirsty work : How long does it take to afford a beer?
Sep 24th 2012, 16:04 by The Economist online
How long does it take to afford a beer?
ON SEPTEMBER 22nd, the beer started flowing at Oktoberfest in Munich, an annual Bavarian beer festival which confusingly begins at the end of September. Last year, over the course of the 16-day event, visitors glugged 7.5m litres of beer, sold at an average princely price of €9 ($12.50) a litre, which is what a typical large stein holds. Germans love beer and down around 100 litres per person a year. Away from the Oktoberfest beer is readily affordable. Analysts at UBS, a Swiss bank, have calculated that it takes a German earning the national median wage just under seven minutes of work to purchase half a litre of beer at a retail outlet. At the bottom of the pint glass, low wages and high taxes mean that boozers in India must toil for nearly an hour before they have earned enough to quench their thirst.
How strategists lead
A Harvard Business School professor reflects on what she has learned from senior executives about the unique value that strategic leaders can bring to their companies.
Seven years ago, I changed the focus of my strategy teaching at the Harvard Business School. After instructing MBAs for most of the previous quarter-century, I began teaching the accomplished executives and entrepreneurs who participate in Harvard’s flagship programs for business owners and leaders.
Shifting the center of my teaching to executive education changed the way I teach and write about strategy. I’ve been struck by how often executives, even experienced ones, get tripped up: they become so interested in the potential of new ventures, for example, that they underestimate harsh competitive realities or overlook how interrelated strategy and execution are. I’ve also learned, in conversations between class sessions (as well as in my work as a board director and corporate adviser) about the limits of analysis, the importance of being ready to reinvent a business, and the ongoing responsibility of leading strategy.
All of this learning speaks to the role of the strategist—as a meaning maker for companies, as a voice of reason, and as an operator. The richness of these roles, and their deep interconnections, underscore the fact that strategy is much more than a detached analytical exercise. Analysis has merit, to be sure, but it will never make strategy the vibrant core that animates everything a company is and does.
The strategist as meaning maker
I’ve taken to asking executives to list three words that come to mind when they hear the word strategy. Collectively, they have produced 109 words, frequently giving top billing to plan, direction, and competitive advantage. In more than 2,000 responses, only 2 had anything to do with people: one said leadership, another visionary. No one has ever mentioned strategist.
Downplaying the link between a leader and a strategy, or failing to recognize it at all, is a dangerous oversight that I tried to start remedying in a Harvard Business Review article four years ago and in my new book,The Strategist, whose thinking this article extends.1 After all, defining what an organization will be, and why and to whom that will matter, is at the heart of a leader’s role. Those who hope to sustain a strategic perspective must be ready to confront this basic challenge. It is perhaps easiest to see in single-business companies serving well-defined markets and building business models suited to particular competitive contexts. I know from experience, though, that the challenge is equally relevant at the top of diversified multinationals.
What is it, after all, that makes the whole of a company greater than the sum of its parts—and how do its systems and processes add value to the businesses within the fold? Nobel laureate Ronald Coase posed the problem this way: “The question which arises is whether it is possible to study the forces which determine the size of the firm. Why does the entrepreneur not organize one less transaction or one more?”2 These are largely the same questions: are the extra layers what justifies the existence of this complex firm? If so, why can’t the market take care of such transactions on its own? If there’s more to a company’s story, what is it, really?
In the last three decades, as strategy has moved to become a science, we have allowed these fundamental questions to slip away. We need to bring them back. It is the leader—the strategist as meaning maker—who must make the vital choices that determine a company’s very identity, who says, “This is our purpose, not that. This is who we will be. This is why our customers and clients will prefer a world with us rather than without us.” Others, inside and outside a company, will contribute in meaningful ways, but in the end it is the leader who bears responsibility for the choices that are made and indeed for the fact that choices are made at all.
The strategist as voice of reason
Bold, visionary leaders who have the confidence to take their companies in exciting new directions are widely admired—and confidence is a key part of strategy and leadership. But confidence can balloon into overconfidence, which seems to come naturally to many successful entrepreneurs and senior managers who see themselves as action-oriented problem solvers.3
I see overconfidence in senior executives in class when I ask them to weigh the pros and cons of entering the furniture-manufacturing business. Over the years, a number of highly regarded, well-run companies—including Beatrice Foods, Burlington Industries, Champion, Consolidated Foods, General Housewares, Gulf + Western, Intermark, Ludlow, Masco, Mead, and Scott Paper—have tried to find fortune in the business, which traditionally has been characterized by high transportation costs, low productivity, eroding prices, slow growth, and low returns. It’s also been highly fragmented. In the mid-1980s, for example, more than 2,500 manufacturers competed, with 80 percent of sales coming from the biggest 400 of them. Substitutes abound, and there is a lot of competition for the customer’s dollar. Competitors quickly knock off innovations and new designs, and the industry is riddled with inefficiencies, extreme product variety, and long lead times that frustrate customers. Consumer research shows that many adults can’t name a single furniture brand. The industry does little advertising.
By at least a two-to-one margin, the senior executives in my classes typically are energized, not intimidated, by these challenges. Most argue, in effect, that where there’s challenge there’s opportunity. If it were an easy business, they say, someone else would already have seized the opportunity; this is a chance to bring money, sophistication, and discipline to a fragmented, unsophisticated, and chaotic industry. As the list above shows, my students are far from alone: with great expectations and high hopes of success, a number of well-managed companies over the years have jumped in with the intention of reshaping the industry through the infusion of professional management.
All those companies, though, have since left the business—providing an important reminder that the competitive forces at work in your industry determine some (and perhaps much) of your company’s performance. These competitive forces are beyond the control of most individual companies and their managers. They’re what you inherit, a reality you have to deal with. It’s not that a company can never change them, but in most cases that’s very difficult to do. The strategist must understand such forces, how they affect the playing field where competition takes place, and the likelihood that his or her plan has what it takes to flourish in those circumstances. Crucial, of course, is having a difference that matters in the industry. In furniture—an industry ruled more by fashion than function—it’s extremely challenging to uncover an advantage strong enough to counter the gravitational pull of the industry’s unattractive competitive forces. IKEA did it, but not by disregarding industry forces; rather, the company created a new niche for itself and brought a new economic model to the furniture industry.
A leader must serve as a voice of reason when a bold strategy to reshape an industry’s forces actually reflects indifference to them. Time and again, I’ve seen division heads, group heads, and even chief executives dutifully acknowledge competitive forces, make a few high-level comments, and then quickly move on to lay out their plans—without ever squarely confronting the implications of the forces they’ve just noted. Strategic planning has become more of a “check the box” exercise than a brutally frank and open confrontation of the facts.
The strategist as operator
A great strategy, in short, is not a dream or a lofty idea, but rather the bridge between the economics of a market, the ideas at the core of a business, and action. To be sound, that bridge must rest on a foundation of clarity and realism, and it also needs a real operating sensibility. Every year, early in the term, someone in class always wants to engage the group in a discussion about what’s more important: strategy or execution. In my view, this is a false dichotomy and a wrongheaded debate that the students themselves have to resolve, and I let them have a go at it.
I always bring that discussion up again at the end of the course, when we talk about Domenico De Sole’s tenure at Italian fashion eminence Gucci Group.4 De Sole, a tax attorney, was tapped for the company’s top job in 1995, following years of plummeting sales and mounting losses in the aftermath of unbridled licensing that had plastered Gucci’s name and distinctive red-and-green logo on everything from sneakers to packs of playing cards to whiskey—in fact, on 22,000 different products—making Gucci a “cheapened and over-exposed brand.”
De Sole started by summoning every Gucci manager worldwide to a meeting in Florence. Instead of telling managers what he thought Gucci should be, De Sole asked them to look closely at the business and tell him what was selling and what wasn’t. He wanted to tackle the question “not by philosophy, but by data”—bringing strategy in line with experience rather than relying on intuition. The data were eye opening. Some of Gucci’s greatest recent successes had come from its few trendier, seasonal fashion items, and the traditional customer—the woman who cherished style, not fashion, and who wanted a classic item she would buy once and keep for a lifetime—had not come back to Gucci.
De Sole and his team, especially lead designer Tom Ford, weighed the evidence and concluded that they would follow the data and position the company in the upper middle of the designer market: luxury aimed at the masses. To complement its leather goods, Ford designed original, trendy—and, above all, exciting—ready-to-wear clothing each year, not as the company’s mainstay, but as its draw. The increased focus on fashion would help the world forget all those counterfeit bags and the Gucci toilet paper. It would propel the company toward a new brand identity, generating the kind of excitement that would bring new customers into Gucci stores, where they would also buy high-margin handbags and accessories. To support the new fashion and brand strategies, De Sole and his team doubled advertising spending, modernized stores, and upgraded customer support. Unseen but no less important to the strategy’s success was Gucci’s supply chain. De Sole personally drove the back roads of Tuscany to pick the best 25 suppliers, and the company provided them with financial and technical support while simultaneously boosting the efficiency of its logistics. Costs fell and flexibility rose.
In effect, everything De Sole and Ford did—in design, product lineup, pricing, marketing, distribution, manufacturing, and logistics, not to mention organizational culture and management—was tightly coordinated, internally consistent, and interlocking. This was a system of resources and activities that worked together and reinforced each other, all aimed at producing products that were fashion forward, high quality, and good value.
It is easy to see the beauty of such a system of value creation once it’s constructed, but constructing it isn’t often an easy or a beautiful process. The decisions embedded in such systems are often gutsy choices. For every moving part in the Gucci universe, De Sole faced a strictly binary decision: either it advanced the cause of fashion-forwardness, high quality, and good value—or it did not and was rebuilt. Strategists call such choices identity-conferring commitments. They are central to what an organization is or wants to be and reflect what it stands for.
When I ask executives at the end of this class, “Where does strategy end and execution begin?” there isn’t a clear answer—and that’s as it should be. What could be more desirable than a well-conceived strategy that flows without a ripple into execution? Yet I know from working with thousands of organizations just how rare it is to find a carefully honed system that really delivers. You and every leader of a company must ask yourself whether you have one—and if you don’t, take the responsibility to build it. The only way a company will deliver on its promises, in short, is if its strategists can think like operators.
A never-ending task
Achieving and maintaining strategic momentum is a challenge that confronts an organization and its leader every day of their entwined existence. It’s a challenge that involves multiple choices over time—and, on occasion, one or two big choices. Very rare is the leader who will not, at some point in his or her career, have to overhaul a company’s strategy in perhaps dramatic ways. Sometimes, facing that inevitability brings moments of epiphany: “eureka” flashes of insight that ignite dazzling new ways of thinking about an enterprise, its purpose, its potential. I have witnessed some of these moments as managers reconceptualized what their organizations do and are capable of doing. These episodes are inspiring—and can become catalytic.
At other times, facing an overhaul can be wrenching, particularly if a company has a set of complex businesses that need to be taken apart or a purpose that has run its course. More than one CEO—men and women coming to grips with what their organizations are and what they want them to become—has described this challenge as an intense personal struggle, often the toughest thing they’ve done.
Yet those same people often say that the experience was one of the most rewarding of their whole lives. It can be profoundly liberating as a kind of corporate rebirth or creation. One CEO described his own experience: “I love our business, our people, the challenges, the fact that other people get deep benefits from what we sell,” he said. “Even so, in the coming years I can see that we will need to go in a new direction, and that will mean selling off parts of the business. The market has gotten too competitive, and we don’t make the margins we used to.” He winced as he admitted this. Then he lowered his voice and added something surprising. “At a fundamental level, though, it’s changes like this that keep us fresh and keep me going. While it can be painful when it happens, in the long run I wouldn’t want to lead a company that didn’t reinvent itself.”
About the Author
Cynthia Montgomery is the Timken Professor of Business Administration at Harvard Business School, where she’s been on the faculty for 20 years, and past chair of the school’s Strategy Unit.
Elements of this article were adapted from Cynthia Montgomery’s The Strategist: Be the Leader Your Business Needs (New York, NY: HarperCollins, 2012).
Notes
1 For more, see Cynthia Montgomery, The Strategist: Be the Leader Your Business Needs, New York, NY: HarperCollins, 2012; and “Putting leadership back into strategy,” Harvard Business Review, January 2008, Volume 86, Number 1, pp. 54–60.
2 R. H. Coase, “The nature of the firm,” Economica, 1937, Volume 4, Number 16, pp. 386–405.
3 For more on managerial overconfidence, see John T. Horn, Dan Lovallo, and S. Patrick Viguerie, “Beating the odds in market entry,” mckinseyquarterly.com, November 2005; as well as Dan Lovallo and Olivier Sibony, “The case for behavioral strategy,” mckinseyquarterly.com, March 2010, and “Distortions and deceptions in strategic decisions,” mckinseyquarterly.com, February 2006.
4 For more detail on the Gucci case, see Mary Kwak and David Yoffie, “Gucci Group N.V. (A),” Harvard Business Publishing, Boston, May 10, 2001.
Subscribe to:
Posts (Atom)
Posts
