November 16, 2012

Iran's Agenda in the Gaza Offensive

November 16, 2012 | 0034 GMT

To begin to make sense of the escalating conflict in Gaza, we need to go back to the night of Oct. 23 in Khartoum. Around 11 p.m. that night, the Yarmouk weapons facility in the Sudanese capital was attacked, presumably by the Israeli air force. There were indications that Iran had been using this facility to stockpile and possibly assemble weapons, including anti-aircraft missiles, guided anti-tank missiles and long-range Fajr-5 rockets capable of reaching Tel Aviv and Jerusalem from Gaza. 

One of the major drivers behind Israel's latest air and assassination campaign is its belief that Hamas has a large cache of long-range Fajr-3 and Fajr-5 rockets in its possession. Israel's primary intent in this military campaign is to deny Hamas the ability to use these rockets or keep them as a constant threat to Israel's population centers. This likely explains why in early October, when short-range rocket attacks from Gaza were still at a low level, Israeli officials began conditioning the public to the idea of an "inevitable" Israeli intervention in Gaza. Israel knew Hamas had these weapons in its possession and that it could require a war to eliminate the Fajr rocket threat. It began with the strike on the facility in Sudan, extended to the assassination of Hamas military commander Ahmad Jabari (the architect of the Fajr rocket program) and now has the potential to develop into an Israeli ground incursion in Gaza. 


Oct. 23 was not the first time Israel allegedly attacked weapons caches in Sudanese territory that were destined for Gaza. In January 2009, Israel allegedly carried out an airstrike against a weapons convoy northwest of Port Sudan heading to Gaza. The convoy included Fajr-3 rockets and was unusually large, with more than 20 trucks traveling north toward Gaza. The rushed shipment was allegedly arranged by Iran to reinforce Hamas during Operation Cast Lead. Iran was also exposed trying to smuggle weapons to Gaza through the Red Sea. 

Though efforts were likely made to conceal the weapons cache at Yarmouk, it obviously did not escape Israeli detection. Hamas therefore took a major risk in smuggling the weapons to Gaza in the first place, perhaps thinking they could get away with it since they have been able to with less sophisticated weapons systems. Before Hamas responded to the Nov. 14 Jabari assassination, there were two major spates of rocket and mortar attacks over the past month. The first was Oct. 8-10 and the second was Oct. 22-24. When the decision was made to carry out these attacks, Hamas may not have known that Israel had detected the long-range Fajrs. Launching Grad and Qassam mortars may have been Hamas' attempt at misleading Israel into thinking that Hamas did not even have the Fajr rockets, because otherwise it would have used them. Hamas may have also erroneously assumed that launching mortars and short-range rockets, as it periodically does when the situation gets tense with Israel, would not lead to a major Israeli response. 

By the time Israel attacked the Yarmouk facility, Hamas had to assume that Israel knew of the weapons transfer to Gaza. Hamas then quickly agreed to an Egyptian-mediated ceasefire Oct. 25. When attacks against Israel began picking up again around Nov. 10 -- including an anti-tank attack on an Israeli military jeep claimed by the Popular Front for the Liberation of Palestine and several dozen more rocket attacks claimed by Palestinian Islamic Jihad and smaller Salafist-jihadist groups -- Hamas appeared more cautious, calling the main Gaza militant groups together on Nov. 12 to seek out another truce. By then, it was too late. They had already inadvertently provided the Israelis with the justification they needed to get public relations cover for their campaign to destroy Hamas' long-range rocket program. 

On Nov. 14, Jabari was assassinated, and Hamas had to work under the assumption that Israel would do whatever it took to launch a comprehensive military campaign to eliminate the Fajr threat. It is at this point that Hamas likely resigned to a "use it or lose it" strategy and launched Fajr rockets toward Tel Aviv, knowing that they would be targeted anyway and potentially using the threat as leverage in an eventual attempt at another truce with Israel. A strong Hamas response would also boost Hamas' credibility among Palestinians. Hamas essentially tried to make the most out of an already difficult situation and will now likely work through Egypt to try to reach a truce to avoid an Israeli ground campaign in Gaza that could further undermine its authority in the territory. 

In Tehran, Iranian officials are likely quite content with these developments. Iran needed a distraction from the conflict in Syria. It now has that, at least temporarily. Iran also needed to revise its relationship with Hamas and demonstrate that it retains leverage through militant groups in the Palestinian territories as part of its deterrence strategy against a potential strike on its nuclear program. Hamas decided in the past year that it was better off aligning itself with its ascendant parent organization, the Muslim Brotherhood, than remaining tethered to an ideological rival like Iran that was being put on the defensive in the region. Iran could still capture Hamas' attention through weapons sales, however, and may have even expected that Israel would detect the Fajr shipments. 

The result is an Israeli military campaign in Gaza that places Hamas' credibility in question and could create more space for a group like the Palestinian Islamic Jihad, which has close ties to Iran. The conflict will also likely create tension in Hamas' relationship with the Muslim Brotherhood in Egypt, Jordan and Syria, since the Brotherhood, particularly in Egypt, is not prepared or willing to confront Israel beyond rhetoric and does not want to face the public backlash for not doing enough to defend the Palestinians from Israel Defense Forces. All in all, this may turn out to be a relatively low-cost, high payoff maneuver by Iran.

November 15, 2012

Lebanon: Lessons from Two Assassinations

November 15, 2012 | 1000 GMT


By Scott Stewart
Vice President of Analysis

On Oct. 19, Lebanese Brig. Gen. Wissam al-Hassan was assassinated on a narrow side street near Sassine Square in downtown Beirut. The attack involved the detonation of a moderately sized vehicle-borne improvised explosive device as al-Hassan's car passed by the vehicle in which the device was hidden. The explosion killed not only al-Hassan and his driver but also six other people and wounded about 90 more.

Al-Hassan, the intelligence chief for Lebanon's Internal Security Forces, had been a marked man for some time prior to his death. He was the security chief for former Lebanese Prime Minister Rafik al-Hariri, who was assassinated in February 2005 in an attack that most believe was conducted by the Syrian regime and its allies in Lebanon.

But more recently, as Stratfor noted in February 2012, al-Hassan played a critical role channeling support from the Gulf states and the West to the Syrian rebels through Lebanon. This involved smuggling arms from Lebanon to Syria destined for opposition forces, providing a haven for Syrian defectors in Lebanon and allowing Syrian rebels to use Lebanese territory as a staging ground for attacks in Syria. His part in the Syrian opposition movement clearly made him a prime target for Syrian intelligence and indeed the Syrian regime had previously attempted to assassinate al-Hassan -- one such plot was thwarted in early 2012 by Jordanian intelligence, which caught wind of the plot and passed a warning to Lebanese authorities.

Al-Hassan was doing dangerous work in a dangerous place, and he knew he was a marked man. His former boss had been assassinated and there were plots afoot to kill him, too. Due to the manner in which al-Hariri was assassinated, al-Hassan decided to employ a very different style of security -- low-profile security instead of the high-profile measures employed by al-Hariri -- and yet he was killed despite his different approach.

This failure does not mean that protective security measures are useless in an environment such as Lebanon or fatalistically suggest that it is impossible to keep a high-value target alive in the country. Rather, an examination of the al-Hariri and al-Hassan assassinations provides an important lesson to security practitioners everywhere -- that protective security measures alone are not enough to keep a marked target alive in such a hostile environment. Whatever security strategy is employed, whether high-profile or low-profile, it must be accompanied by a robust protective intelligence program. If potential attackers are given free rein to conduct surveillance and plan attacks, they will eventually succeed.

Details on Protective Details

As noted above, Rafik al-Hariri's protective detail utilized a heavy motorcade to travel in Lebanon. On the day he was assassinated, he was traveling in a six-car motorcade. In addition to a fully armored Mercedes-Benz limousine, this security detail also employed two lead cars and two follow cars along with an ambulance staffed by trained medics bringing up the rear of the motorcade. The motorcade used three sophisticated electronics countermeasure sets in an attempt to jam any remotely detonated improvised explosive devices, or IEDs, that might lay along the motorcade's route. Reports at the time indicated that these countermeasure sets interfered with cell phone, radio and television reception as the motorcade passed through an area.

The solution for assassinating al-Hariri despite this heavy security detail was not elegant, but it was effective. The attackers used a very large suicide vehicle-borne IED that international investigators estimated contained approximately 1 metric ton of military-grade explosives believed to be TNT. As the motorcade passed a Mitsubishi van containing the explosive device, a suicide operative initiated it, causing considerable damage to the vehicles in the motorcade and the surrounding neighborhood. The massive explosion left a 30-foot crater in the road at the seat of the blast and killed al-Hariri and 21 others while wounding another 231 people.

The van carrying the device was seen driving slowly toward the attack site just before the device was detonated. By using a mobile device, the attackers mitigated the possibility of the device being noticed at the attack site by security vehicles sweeping the route ahead of the motorcade. By using a suicide operative to activate the command-detonated device, the attackers bypassed the motorcade's electronic IED countermeasures and ensured that the device detonated when the limousine was close to the van carring the bomb.

By using a huge charge, the attackers ensured that their device would be potent enough to defeat the fully armored limousine, and they ensured that the attack would be successful even if the device were not triggered at precisely the ideal moment. Even the most sophisticated fully armored vehicle cannot survive the detonation of a 1 metric ton VBIED at close range. On Oct. 1, 2004, an attempt to kill Lebanese opposition lawmaker Marwan Hamadeh using a smaller VBIED failed; al-Hariri's attackers did not want to replicate that failure.

Al-Hariri's assassination occurred after he left the parliament building to return to a lunch he was hosting at his home with a number of people. This meant his location and destination were both likely known by his attackers. There were three different routes the motorcade could have taken to travel from the parliament to his residence. The U.N. investigation into the assassination noted that al-Hariri had appeared in public on less than 10 occasions in the three months prior to the attack but that his motorcade had taken the Maritime Road route, the one on which the attack occurred, on six of those occasions. By establishing such a clearly observable routine, al-Hariri's killers could have a fairly high degree of confidence that the motorcade would take that route on the day of the attack.

Wissam al-Hassan was intimately familiar with the security measures employed by the al-Hariri protective detail. Indeed, according to the U.N. investigation of the al-Hariri murder, a few months prior to the attack, al-Hassan and others had met with al-Hariri and urged him to increase his security due to the perceived threat from Syria and its Lebanese allies.

When al-Hassan found himself in a similar threat situation in recent months, he recognized that a high-profile detail alone could not protect him from those who would do him harm. He also lacked the resources of the wealthy al-Hariri family. He therefore decided to adopt a different form of security: keeping a low profile. The idea was to use nondescript rental cars that would be changed frequently in an attempt to blend in with other travelers on Beirut's busy streets. Al-Hassan also reportedly used a series of clandestine residences, unlike al-Hariri's well-known home, the Kuraytem Palace.

However, it appears that there were some obstacles that kept al-Hassan from maintaining a truly low profile. The night before his death, he returned to Beirut from a trip to Europe. But rather than deplaning like a normal passenger and passing through immigration and customs like an ordinary traveler, he was met planeside by the rental car that would take him to his residence for the night. Such an arrival draws attention.

Hezbollah has long controlled security at the Beirut airport. When the Western-backed government of former Lebanese Prime Minister Fouad Siniora attempted to remove Maj. Gen. Wafik Shuqayr, one of Hezbollah's fellow Shia, from his post as the director of security at the airport, Hezbollah resorted to violent protests to ensure he remained in his post.

This meant that Hezbollah was in a prime position to initiate surveillance on al-Hassan upon his arrival at the airport, or to help others pick up surveillance on him. Once it was established that al-Hassan was back in Lebanon, all that remained was to follow al-Hassan's vehicle to the residence he was using that night and then set up a VBIED along the route he would have to take to get to his office at the Lebanese Internal Security Forces headquarters building. Since the attackers knew that al-Hassan was in an unarmored rental car rather than a fully armored limousine, they were able to use a smaller explosive device than the one used in the attack on al-Hariri.

They also knew al-Hassan did not have IED countermeasure sets in his vehicle, so they could use a remotely detonated device rather than a suicide operative. However, like al-Hariri's assassination, the attack was quite inelegant. The attackers still used a larger device than required to ensure that the attack succeeded. The larger device also provided a margin of error in case it was not detonated precisely on time. Like in the al-Hariri attack, this larger-than-needed device produced quite a bit of unnecessary collateral damage, which the attackers didn't take any steps to avoid.

The Importance of Protective Intelligence

Despite using a different security concept than al-Hariri, the end result was the same -- al-Hassan was murdered, most likely by the Syrian regime and their allies in Lebanon. The Syrian military occupied Lebanon in 1976 and maintained control of the country until it withdrew in 2005. During this time, the Syrians developed a robust intelligence network in Lebanon, a network that remained largely in place after the withdrawal of Syrian forces. They also maintain close allies in various Lebanese political parties and militias, most notably Hezbollah. As noted in the U.N. investigation of the al-Hariri assassination, this intelligence network can be used to conduct surveillance that is used to plan and execute attacks against enemies of the Syrian regime.

However, that does not mean that the Syrian hand in Lebanon can move without detection. Even a sophisticated, professional intelligence network is bound by the requirements of the attack planning cycle. Their efforts are also vulnerable to detection during certain phases of that planning cycle, especially the surveillance phase.

While the Syrians and their allies have the ability to tap phones in Lebanon at will and Hezbollah controls security at the Beirut airport, these advantages do not remove the necessity for the Syrians to conduct physical surveillance in order to plan and execute attacks like those directed against al-Hariri and al-Hassan. It is therefore possible to detect such attack planning as it occurs. Indeed, it is not only possible, but essential, to detect the attack planning if protective security elements are to have any hope of keeping their principal alive in an environment like Beirut.

If attackers can freely surveil the operations of a protection detail, over time they will be able to identify the personnel, equipment and tactics employed by the security team and design ways to defeat them. A robust protective intelligence program that employs surveillance detection and countersurveillance capabilities, and that actively investigates suspicious activity, can help restrict the ability of potential attackers to gauge protective measures. Protective intelligence elements can also warn the protective detail that it needs to change tactical operations when those operations have been compromised by hostile surveillance efforts.

Unlike traditional security measures that react to threats, protective intelligence teams proactively search for evidence of hostile activity before an attack can be planned and launched. This allows the protective security team to keep on the positive side of the action/reaction equation and avoid potential problems. Certainly, protective intelligence efforts are complicated in a very busy urban environment such as Beirut, but a high level of activity on the street also complicates the operations of surveillance teams. Protective intelligence efforts such as countersurveillance teams can effectively detect and frustrate hostile activity in such places if they are properly deployed.

As evidenced by the assassinations in Beirut, any type of protective security program can be defeated if it allows potential attackers to operate freely against it. The solution lies in denying potential attackers that advantage.

Reprinting or republication of this report on websites is authorized by prominently displaying the following sentence, including the hyperlink to Stratfor, at the beginning or end of the report.
"Lebanon: Lessons from Two Assassinations is republished with permission of Stratfor."

Read more: Lebanon: Lessons from Two Assassinations | Stratfor 

November 14, 2012

Why bankers rule the world

By Ellen Brown  Asia Times 14 Nov 2012

In the 2012 edition of 
Occupy Money released this month, Professor Margrit Kennedy writes that a stunning 35% to 40% of everything we buy goes to interest. This interest goes to bankers, financiers, and bondholders, who take a 35% to 40% cut of our gross domestic product. 

That helps explain how wealth is systematically transferred from Main Street to Wall Street. The rich get progressively richer at the expense of the poor, not just because of "Wall Street greed" but because of the inexorable mathematics of our private banking system. 

This hidden tribute to the banks will come as a surprise to most people, who think that if they pay their credit card bills on time and don't take out loans, they aren't paying interest. This, says Kennedy, is not true. Tradesmen, suppliers, wholesalers and retailers all along the chain of production rely on credit to pay their bills. They must pay for labor and materials before they have a product to sell and before the end buyer pays for the product 90 days later. Each supplier in the chain adds interest to its production costs, which are passed on to the ultimate consumer. Kennedy cites interest charges ranging from 12% for garbage collection, to 38% for drinking water to, 77% for rent in public housing in her native Germany. 

Her figures are drawn from the research of economist Helmut Creutz, writing in German and interpreting Bundesbank publications. They apply to the expenditures of German households for everyday goods and services in 2006; but similar figures are seen in financial sector profits in the United States, where 
they composed a whopping 40% of US business profits in 2006. That was five times the 7% made by the banking sector in 1980. Bank assets, financial profits, interest, and debt have all been growing exponentially. 

Adapted from 
here . 

Exponential growth in financial sector profits has occurred at the expense of the non-financial sectors, where incomes have at best grown linearly. 


By 2010, 
1% of the population owned 42% of financial wealth, while 80% of the population owned only 5% of financial wealth. Dr Kennedy observes that the bottom 80% pay the hidden interest charges that the top 10% collect, making interest a strongly regressive tax that the poor pay to the rich. 

Exponential growth is unsustainable. In nature, sustainable growth progresses in a logarithmic curve that grows increasingly more slowly until it levels off (the red line in the first chart above). Exponential growth does the reverse: it begins slowly and increases over time, until the curve shoots up vertically (the chart below). Exponential growth is seen in parasites, cancers... and compound interest. When the parasite runs out of its food source, the growth curve suddenly collapses.  


People generally assume that if they pay their bills on time, they aren't paying compound interest; but again, this isn't true. Compound interest is 
baked into the formula for most mortgages, which compose 80% of US loans. And if credit cards aren't paid within the one-month grace period, interest charges are compounded daily. 

Even if you pay within the grace period, you are paying 
2% to 3%for the use of the card, since merchants pass their merchant fees on to the consumer. Debit cards, which are the equivalent of writing checks, also involve fees. Visa-MasterCard and the banks at both ends of these interchange transactions charge an average fee of 44 cents per transaction - though the cost to them is about four cents. 

How to recapture the interest
The implications of all this are stunning. If we had a financial system that returned the interest collected from the public directly to the public, 35% could be lopped off the price of everything we buy. That means we could buy three items for the current price of two, and that our paychecks could go 50% farther than they go today. 

Direct reimbursement to the people is a hard system to work out, but there is a way we could collectively recover the interest paid to banks. We could do it by turning the banks into public utilities and their profits into public assets. Profits would return to the public, either reducing taxes or increasing the availability of public services and infrastructure. 

By borrowing from their own publicly owned banks, governments could eliminate their interest burden altogether. This has been demonstrated elsewhere with stellar results, including in 
Canada,Australia, and Argentina among other countries. 

In 2011, the US federal government paid US$454 billion in interest on the federal debt - nearly one-third the total $1,100 billion paid in personal income taxes that year. If the government had been borrowing directly from the Federal Reserve - which has the power to create credit on its books and now 
rebates its profits directly to the government - personal income taxes could have been cut by a third. 

Borrowing from its own central bank interest-free might even allow a government to eliminate its national debt altogether. In
Money and Sustainability: The Missing Link (at page 126), Bernard Lietaer and Christian Asperger, et al, cite the example of France. 

The Treasury borrowed interest-free from the nationalized Banque de France from 1946 to 1973. The law then changed to forbid this practice, requiring the Treasury to borrow instead from the private sector. The authors include a chart showing what would have happened if the French government had continued to borrow interest-free versus what did happen. Rather than dropping from 21% to 8.6% of GDP, the debt shot up from 21% to 78% of GDP. 

"No 'spendthrift government' can be blamed in this case," write the authors. "Compound interest explains it all!"  

More than just a Federal solution
It is not just federal governments that could eliminate their interest charges in this way. State and local governments could do it too. 

Consider California. At the end of 2010, it had 
general obligation and revenue bond debt of $158 billion. Of this, $70 billion, or 44%, was owed for interest. If the state had incurred that debt to its own bank - which then returned the profits to the state - California could be $70 billion richer today. Instead of slashing services, selling off public assets, and laying off employees, it could be adding services and repairing its decaying infrastructure.

The only US state to own its own depository bank today is North Dakota. North Dakota is also the 
only state to have escaped the 2008 banking crisis, sporting a sizable budget surplus every year since then. It has the lowest unemployment rate in the country, the lowest foreclosure rate, and the lowest default rate on credit card debt. 

Globally, 40% of banks are 
publicly owned, and they are concentrated in countries that also escaped the 2008 banking crisis. These are the BRIC countries - Brazil, Russia, India, and China - which are home to 40% of the global population. The BRICs grew economically by 92% in the last decade, while Western economies were floundering. 

Cities and counties could also set up their own banks; but in the US, this model has yet to be developed. In North Dakota, meanwhile, the Bank of North Dakota underwrites the bond issues of municipal governments, saving them from the vagaries of the "bond vigilantes" and speculators, as well as from the high fees of Wall Street underwriters and the risk of coming out on the wrong side of interest rate swaps required by the underwriters as "insurance." 

One of many cities crushed by this Wall Street "insurance" scheme is Philadelphia, which has lost $500 million on interest swaps alone. (How the swaps work and their link to the LIBOR scandal was explained in an earlier article 
here.) This month, the Philadelphia City Council held hearings on what to do about these lost revenues. In an October 30 article titled "Can Public Banks End Wall Street Hegemony?", Willie Osterweil discussed a solution presented at the hearings in a fiery speech by Mike Krauss, a director of the Public Banking Institute. 

Krauss' solution was to do as Iceland did: just walk away. He proposed "a strategic default until the bank negotiates at better terms". Osterweil called it "radical", since the city would lose its favorable credit rating and might have trouble borrowing. But Krauss had a solution to that problem: the city could form its own bank and use it to generate credit for the city from public revenues, just as Wall Street banks generate credit from those revenues now. 

A solution whose time has come
Public banking may be a radical solution, but it is also an obvious one. This is not rocket science. By developing a public banking system, governments can keep the interest and reinvest it locally. According to Kennedy and Creutz, that means public savings of 35% to 40%. Costs can be reduced across the board; taxes can be cut or services can be increased; and market stability can be created for governments, borrowers and consumers. Banking and credit can become public utilities, feeding the economy rather than feeding off it. 

Ellen Brown is an attorney and president of the Public Banking Institute. In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://WebofDebt.com, and

(Copyright 2012 Asia Times Online (Holdings) Ltd. 
Debt and GDP
1. United States
Debt: $14.590 trillion (9 August 2011)
Per capita debt: $46,929
Debt as in percentage of GDP: 94%
The United States has the world's highest external debt at a whopping $14.590 trillion.
The US public debt burden has become unsustainable and its debt and deficit ratio will remain high for a long period unless the government cuts down spending effectively.
The economic crisis in US began with the subprime mortgage crisis. Following this, the US economy fell into a recession in 2008.  Flawed policies allowed lenders to offer loans to subprime borrowers without considering the risk of future default.
External debt (or foreign debt) is that part of the total debt in a country that is owed to creditors outside the country. The debtors can be the government, corporations or private households.
2. United Kingdom 

Debt: $8.981 trillion 
Per capita debt: $144,338
Debt as in percentage of GDP: 400
Britain's economy has also plunged into deep crisis. The budget deficit has risen to more than 156 billion pounds.
The manufacturing output fell by 0.4 per cent in June from the previous month as there is a drastic fall in domestic demand. The country GDP is expected to fall further3. Germany
Debt: $4.713 trillion
Per capita debt: $57,755 
Debt as in percentage of GDP: 142
Germany which bounced back from the 2008 recession has largely remained immune to the crisis.
However, the US downgrade and mounting debt on other Euro zone nations could hit its coffers as well.
Germany already bears the burden of the 120 billion euros of the euro bailout fund's 440 billion euros. Germany's budget deficit is 2.3 per cent of gross domestic product.
4. France
Debt: $4.698 trillion 
Per capita debt: $74,619 
Debt as in percentage of GDP: 182
A crisis is imminent in France as its budget deficit is 6 per cent of gross domestic product.
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Image: A homeless man lies in front of the Louvre Hotel in Paris. 6. Japan 

Debt: $2.441 trillion
Per capita debt: $19,148 
Debt as in percentage of GDP: 45
The devastating earthquake and tsunami has pushed the Japanese economy into a grave crisis.
Japan's high rate of growth has also been hit with massive bank loan defaults. 9. Italy
Debt: $2.223 trillion
Per capita debt: $36,841 
Debt as in percentage of GDP: 108
Italy's economy has seen one of the lowest growth rates in the world. A very high public debt highlights the fact the country cannot repay back its debt. The country lacks the resources to accelerate growth. 10. Spain
Debt: $2.166 trillion
Per capita debt: $47,069 
Debt as in percentage of GDP: 154
In Spain, long term loans, realty sector crash and bankruptcy of major companies, rise in unemployment at 13.9 per cent in February 2009 escalated the crisis.
6. Sweden
Debt: $853.30 billion
Per capita debt: $91,487
Debt as in percentage of GDP: 187
Sweden went through a bad spell between 1990 and 1993. Its GDP went down by 5 per cent and unemployment rose to record highs. The real estate boom also crashed adding to its economic woes.
19. Greece
Debt: $532.90 
Per capita debt: $47,636 
Debt as in percentage of GDP: 174
Greece is going through its worst years. Uncontrolled spending and cheap lending has seen its debt levels zoom to scary heights.
Also, the failure to implement financial reforms has resulted in losses of $413.6 billion, much larger than the country's economy.
Greece and Ireland have the highest poverty rate in the 15-member EU, while Sweden has the lowest at 9 per cent. 20. Portugal
Debt: $497.80 
Per capita debt: $46,795
Debt as in percentage of GDP: 217
Portugal's economy has posted an average annual growth of less than 1 percent over the past 10 years.
The country faces a huge foreign debt owning to reckless spending without generating any returns. Portugal is set to introduce austerity measures including tax hikes and pay cuts.

1. United States

Gold reserves: 8133.5 tonnes

The United States owns the world's largest gold reserves.

Gold constitutes 74.7 per cent of the nation's foreign exchange reserves.


Gold reserves: 3,401.0 tonnes



Gold reserves2,814.0 tonnes

11. India

Gold reserves:557.7 tonnes


India's current credit rating by S&P is BBB- (BBB minus), which, according to S&P definitions is considered lowest investment grade by market participants. 8811


India Debt Rdff10811

Although India's gross public debt to GDP ratio fell from 75.8 per cent to 66.2 per cent between 2007 and 2011, it still is among the highest in the region.

India's 66.2 per cent level compares with Malaysia's 55.1, Pakistan's 54.1, the Philippines' 47, Thailand's 43.7, Indonesia's 25.4 and China's 16.5, according to an analysis by Cornell economist Easwar Prasad in the Financial Times.

Outstanding liabilities of the Central Government

Internal liabilities

2004-5: Rs. 19,33,544 crore (Rs. 19,335.44 billion)

2009-10: Rs. 33,57,772 crore (Rs. 33,577.72 billion)

a) Internal debt

2004-5: Rs. 12,75,971 crore (Rs. 12,759.71 billion)

2009-10: Rs. 23,56,940 crore (Rs. 23,569.4 billion)

) Market borrowings

2004-5: Rs. 7,58,995 crore (Rs. 7,589.95 billion)

2009-10: Rs. 7,66,897 crore (Rs. 7,668.97 billion)

ii) Others

2004-5: Rs. 5,16,976 crore (Rs. 5169.76 billion)

2009-10: Rs. 5,90,043 crore (Rs. 5,900.43 billion)

b) Other internal liabilities

2004-5: Rs. 6,57,573 crore (Rs. 6,575.73 billion)

2009-10: Rs. 10,00,832 crore (Rs. 10,008.32 billion)

External debt (outstanding)

2004-5: Rs 586,305 crore (Rs 5,863.05 billion)

2010-10 (Sept end): Rs 1,332,195 crore (Rs 13,321.95 billion)

The components of India's external debt and the percentage they form of the total external debt are given hereunder:

Multilateral: 15.8 per cent of total external debt

Bilateral: 8.3  per cent of total external debt

IMF: 2.1 per cent of total external debt

Export credit: 6.2 per cent of total external debt

Commerical borrowings: 27.8  per cent of total external debt

NRI deposits: 16.9 per cent of total external debt

Rupee debt: 0.6 per cent of total external debt

Long-term debt: 77.7 per cent of total external debt

Short-term debt: 22.3  per cent of total external debt

External debt figures represent borrowings by Central Government from external sources and are based upon historical rates of exchange.

Total outstanding liabilities

2004-5: Rs. 19,94,422 crore (Rs. 19,944.22 billion)

2009-10: Rs. 34,95,452 core (Rs. 34,954.52 billion)

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Amount due from Pakistan on account of share of pre-partition debt

2004-5: Rs. 300 crore (Rs. 3 billion)

2009-10: Rs. 300 crore (Rs. 3 billion)

Internal liabilities (as per cent of GDP)

2004-5: Rs. 59.7 crore (Rs. 597 million)

2009-10: Rs. 54.5 crore (Rs. 545 million)

a) Internal debt

2004-5: Rs. 39.4 crore (Rs. 394 million)

2009-10: Rs. 38.2 crore (Rs. 382 million)

Total outstanding liabilities

2004-5: Rs. 19,94,422 crore (Rs. 19,944.22 billion)

2009-10: Rs. 34,95,452 crore (Rs. 34,954.52 billion)

i) Market borrowings

2004-5: Rs. 23.4 crore (Rs. 234 million)

2009-10: Rs. 28.7 crore (Rs. 287 million)

ii) Others

2004-5: Rs. 16 crore (Rs. 160 million)

2009-10: Rs. 9.6 crore (96 million)

(b) Other internal liabilities

2004-5: Rs. 20.3 crore (Rs. 203 million)

2009-10: Rs. 16.2 crore (Rs. 162 million)

External debt (outstanding) (as per cent of GDP)

2004-5: Rs. 1.9 crore (Rs. 19 million)

2009-10: Rs. 2.2 crore (Rs. 22 million)

External debt figures represent borrowings by Central Government from external sources and are based upon historical rates of exchange

November 12, 2012




On Godse

Rea        failure is the apparent success of Godse in killing Gandhi and thereby weakening Patel and empowering Nehru. National set back

West Australia Poised for Strategic Role as Hub of the Indo-Pacific Age

By Rory Medcalf
The symbolism is striking. On Wednesday, US Secretary of State Hillary Clinton and Secretary of Defence Leon Panetta will meet their Australian counterparts in Perth, Australia's booming Indian Ocean city.The West Australian setting is apt not only because it is the home state of Defence Minister Stephen Smith, who will join Foreign Minister Bob Carr in the Australia-US ministerial consultations, or AUSMIN.It's also because these talks are the perfect chance to adjust the Australia-US alliance for a horizon wider than the Asian Century -- the era of the Indo-Pacific.
Global economic and military weight -- and the potential for competition or co-operation among powerful states -- is shifting to Australia's greater region, a single strategic system spanning the Indian and Pacific oceans.In one of its smarter observations, the federal government's recent Asian Century white paper recognised the Indian Ocean as surpassing the Atlantic and the Pacific as "the world's busiest and most strategically significant trade corridor". Due to the economic rise of China and other Asian nations, a third of the world's bulk cargo and two-thirds of oil shipments now use its sea lanes. China's growth is not the only Asian drama that counts. Despite recent setbacks, India's long-term rise will also matter profoundly for Australia, in human, economic and military terms. Myanmar's future is in play. Indonesia is a rising Indo-Pacific power.

And America's strategy of shoring up its security and diplomatic investment in Asia, the so-called pivot, is as much about the Indian Ocean as it is about the Pacific.
In all this, Australia's national qualities, its two-ocean geography and its status as a US ally make it a critical player.This has deep resonance for Western Australia, which is poised to become a hub for the Indo-Pacific age.Economically, Western Australia's mineral and energy resources are meeting the needs of China, Japan, India and other Asian nations.
Its Asian time zone opens added potential in the services sector and in building knowledge and societal links, in some senses putting Perth closer to Singapore than to Sydney.
And, strategically, Australia's vast west is no longer dormant or peripheral, if ever it really was.

The US marines may be training in Darwin, but a closer Australia-US alliance could play out more in Western Australia, whether through naval access, intelligence, communications or the sometimes overlooked domain of space.So the place is right, but the timing of this year's AUSMIN is delicate -- between Barack Obama's re-election and China's leadership transition at the Communist Party's national congress, which concludes this week.It makes it doubly hard for Washington and Canberra to deny that the pivot and the strengthened alliance are not principally a response to China's growing power, and the ensuing risks of strategic uncertainty and instability in the region.It will be easy enough for China and the critics of a closer Australia-US alliance to portray this week's Perth talks as simply the next step in an American anti-China strategy caricatured as "containment".So this time Canberra has to be exceptionally deft in getting the balance of diplomatic signals just right.

There is no need to be shy about shared values, but there is little to gain from gratuitous rhetoric about China's democratic deficit, as Obama proclaimed in the Australian parliament a year ago.With last week's polls on full display, the US has led by example, and that is what matters. Nor would there be sense in hinting at big steps that neither side may be able or willing to follow through, such as a US naval base or collaborating on nuclear-powered submarines.Rather, it will make sense if this AUSMIN is about consolidating steps already in train, such as an increased tempo of ship visits, or collaboration on surveillance and space tracking.

On the diplomatic front, Clinton, Panetta, Smith and Carr have a chance to make their Perth statement a founding vision for shared security in Indo-Pacific Asia.Australia and the US are well placed as core contributors to such a framework, along with India, the essential Indian Ocean power whose ties with Australia are deepening in the wake of Julia Gillard's recent visit to New Delhi.

Indonesia and Japan also have major stakes and potential to contribute.But the vision must not exclude China. China's far-flung trade and energy links make it the quintessential Indo-Pacific nation.The Perth statement could invite China's new leaders to contribute to and respect rules, understandings and institutions for peace throughout maritime Asia. This would help puncture the myth that talk of the Indo-Pacific is code for locking China out.

Rory Medcalf is director of the international security program at the Lowy Institute and a fellow at the Australia-India Institute.



In his first foreign visit  after being re-elected, President Barack Obama will be in Cambodia, Myanmar and Thailand from November 17 to 20, 2012. His visit to Cambodia is to attend the East Asia summit. The brief  visits to Myanmar  and Thailand will be bilateral.

2. He will be in Yangon (Rangoon) where Aung San SuuKyi lives for a few hours on November 19,2012. He will have talks with President TheinSein also at Yangon and not in the capital. He will be accompanied by Mrs. Hillary Clinton, Secretary of State, for whom this will be the second visit to Myanmar.

3. The proposed visit has been projected in warm terms both by the US and Myanmar.A spokesman for President TheinSein said on November 9: "His visit is warmly welcomed. It will strengthen the resolve of TheinSein to move forward with reforms.Obama's visit shows concrete support for the democratisation process of President U TheinSein, Daw  Aung San SuuKyi, Members of Parliament and the Myanmar people.President TheinSein fully believes that the trip of President Obama will push the momentum of the process of democratic reform."

4. The proposed visit underlines the US confidence in the stability of the Government of President TheinSein and its belief that there is no opposition in the senior levels of the Myanmar Armed Forces to the policy of political and economic reforms and opening-up to the West undertaken by Mr.TheinSein and his c-operation with SuuKyi.

5.While there has been no comment so far from the Chinese Foreign Office, Qin Guangrong, Secretary of the Communist  Party of China in Yunnan, who is presently attending the 18th Congress of the CPC in Beijing, said that China saw no threat to its interests from Mr.Obama's visit. He added: "We understand and support the wish of the Myanmar authorities wanting to open up and become part of the world."

6.Mr.Obama's proposed visit will be coming less than a month after a new spell of violence between the native Buddhists of the Rakhine (Arakan) State and the Rohingya Muslims, who are projected by the Myanmar authorities as illegal immigrants from Bangladesh, not entitled to full citizenship rights.

7. The violence, which led to over 80 fatalities and added to the number of internally displaced persons living in camps, was triggered by the opposition of the Buddhists to a proposal to permit the Organisation of Islamic Cooperation (OIC) to open a permanent office in Yangon to monitor the human rights of the Rohingya Muslims and the distribution of humanitarian relief to the internally displaced refugees from both the communities living in camps in the Rakhine State.

8. While the violence has since subsided, a Commission appointed by the Government of President TheinSein to enquire into an earlier spell of deadly violence in June has not been able to make much progress in its enquiry due to non-cooperation from the Buddhists.

9. US officials dealing with the visit have maintained a discreet silence on the recent violence in the Rakhine State and sought to project the visit as meant to encourage the TheinSein Government to keep moving on the democratic path.However, there will be expectations from the Muslims of the ASEAN region, who nurse feelings of solidarity with the Rohingya Muslims, that Mr.Obama will exercise pressure on President TheinSein as well as Aung San SuuKyi to pay attention to the human rights of the Rohingya Muslims and grant them full citizenship rights.

10. The Buddhists are watching the visit with apprehension that President TheinSein and SuuKyi may soften their opposition to the grant of citizenship rights to the Rohingya Muslims under pressure from Mr.Obama. Any impression of a US pressure in this regard during Mr.Obama's visit could trigger off fresh violence in the Rakhine State weakening the ability of the TheinSein Government to restore law and order and to re-settle the displaced persons in their home villages.

11.Non-Governmental human rights organisations such as the Amnesty International have expressed their misgivings over the wisdom of Mr.Obama's decision to visit Myanmar at this delicate time. They are worried it could prove counter-productive.


12.In a report on the situation in the Rakhine State due for release on November 12, the Brussels-based International Crisis Group (ICG) has been quoted by the media as saying as follows:

"The flare-up in Rakhine State represents a deeply disturbing backward step from Myanmar's reforms.This is a time when political leaders must rise to the challenge of shaping public opinion rather than just following it. A failure to do so will be to the detriment of the country.There is a  threat of rising identity politics in Myanmar as reforms give new found freedoms to interest groups.The situation needs decisive moral leadership... by both President TheinSein and Aung San SuuKyi to prevent it spreading and contribute towards long-term solutions." The ICG urged the Government to ensure camps for the displaced do not become a precursor to the "segregation" of Rakhine and Rohingya.

13. Mr.Obama's tricky visit is coming at a time when sections of the Rakhine Buddhists are demanding a policy of separate development for the Buddhists andRohingya Muslims, with separate educational institutions, hostels and buses for RohingyaMuslim students. ( 12-11-12)

(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)


November 11, 2012

QUOTE OF THE DAY: Myth that Sanskrit graduates will not get jobs

Former top cop of AP Mr,Aravinda Rao comments on news report (Sanskrit University )that Sanskrit graduates will not get jobs.

"It is a big misunderstanding that Sanskrit graduates will not get jobs. Every year UPSC is selecting Sanskrit graduates for the All India Services like the IAS and IPS. They are as eligible as any other graduate for all the state govt jobs, where the qualification is a degree. It is a wrong impression that many parents or students have about their job opportunities.

It is also true that there are as many unemployed engineers/ science graduates as Sanskrit degree holders, in terms of percentage. Let the Sanskrit University have a small training cell to prepare students for IAS etc and the moment one person gets selected, this impression disappears, and all others will get enthused. I am a retired officer from an All India Service and so I am saying with all my experience in the system."

Aravinda rao

US-China-India: A critical strategic triangle

 By C Uday  Bhaskar

Two major national elections – that in the USA  and China - have been  the focus of considerable attention in recent weeks and their outcome  have a very abiding relevance for India and the region.

For India, both the US and China remain critical interlocutors and as per macro economic projections, these three countries will form a  distinctive strategic triangle of  the largest single state economies  by about 2030– which is the equivalent of the near future. Currently the  GDP of these three nations is as follows;  US –under US $17 trillion; China – below $7 trn; and India below $2 trn.  A Goldman Sachs estimate projects that by 2030, the line-up would be as follows: China –  $25.6 trn; USA –  $22.8 trn; and India –  $6.68 trn.

However in end 2012,  the domestic mood in these three countries is one of  considerable apprehension about the future.  Grave economic, fiscal and governance challenges  confront the leadership  in Washington DC, Beijing and Delhi  with the attendant socio-political discontent that augurs ill for the next election.
Equitable and inclusive  socio-economic growth  has eluded all these three societies and this has been aggravated by the global economic slowdown which is still taking it toll in the relatively insulated  European Union. For the USA, the immediate priority  is to deal with a looming 'fiscal-cliff' which will come into effect on January 1, 2013.  Unless some radical legislative consensus is arrived at, current US law mandates that  hefty tax  increases and certain  spending cuts  will become mandatory  to  progressively reduce the huge budget deficit.

President Barack Obama and the US  Congress will be tested for their political perspicacity and the integrity of the decisions taken will have a bearing on the credibility and  vitality of the USA as the world's  leading power. Experts aver that the scale of the public debt  the USA has now accumulated -  US$ 11. 4 trillion (October 2012 )  which is almost 72 percent of total US GDP - is just too colossal to handle. The oppressive strait-jacket situation that now obtains is that the event  - the inevitability of the 'fiscal-cliff' cannot be allowed to happen for the consequences would  push the USA into a disastrous tail-spin with no macro-tools for redress ; and  on the other hand – the problem is so big that it cannot be tackled with the current orientation of the US political establishment, the vested corporate interests and the life-style choices of the American citizen.

The picture in Beijing  is differently bleak.  Currently the top Chinese leadership represented by the new team – Xi Jinping and Li Kaoqing  - have to address growing disenchantment  among their billion plus citizens,  of whom half as many have become vocal netizens who give vent to their frustration through cyberspace and social media. In the wake  of a series of high-profile corruption scandals,  the disparity between the  rich and the poor has visibly come into the open in a society that  prizes opaque compliance from its people.

The 1989 Tiananmen experience is the socio-political  'fiscal-cliff' equivalent  that Beijing has to avoid – at any cost. That the amber lights are flashing in the Chinese Communist Party  (CCP)  apex is evident in the fine-print of the  Hu Jintao speech  at the November 8th transition.  President Hu in a very uncharacteristic manner cautioned his colleagues : ""We cannot take the old road of seclusion and stagnation, nor can we take the 'wicked way' of changing our banner."

The Hu Jintao speech has elicited enormous comment within China and among China watchers outside the country. Will Xi Jinping – who represents the fifth generation  CCP leadership adapt to a more progressive path to deal with China's complex  socio-economic  challenges? The global economic slowdown and the  consumption depression in the USA and EU  has adversely impacted China's hyper-export profile. A large component of China's phenomenal  10 percent plus GDP growth rate of the last 15 years has been  enabled by its export profile. This in turn led to China's  GDP quadrupling during the Hu Jintao  decade.

The improvement of socio-economic indicators for a billion Chinese and hence their societal stability was pegged to the 10 percent plus  GDP growth and this is now shrinking. The first half of 2012  registered below 8 percent and while this an impressive figure when compared globally (or for that matter India ) , Beijing is  worried. What are the policy  paths available to the Xi-Li combine ?

A return to the conservative Maoist ideology – which has many supporters in the CCP will lead to one kid of  Chinese orientation in relation to its principal interlocutors – USA, Japan and India. The Hu Jintao reference to  the strategic imperative for  China  to become a credible  maritime power has already led to a flurry of interpretations in the USA and Japan.

UPA 2 which has an effective political life of about a year from now will have to deal with an Obama team and a Xi-Li combine that  has these complex  challenges to address in their respective domestic context. In the interim the intractable strategic and security basket that includes Af-Pak 2014,  Iran, Syria and the  East Asian island disputes  amongst others will continue to simmer.

Obama, Xi (or Li) and Manmohan Singh will have their first meeting as part of the East Asia  Summit in Cambodia in mid November. Can they agree that  a major global  structural   review is called for to ensure that their triangular relationship is harmonized with the opportunities of this century?