August 07, 2014

Arvind Gupta : Deputy NSA named

Image courtesy: IDSA website.

Deputy NSA named, days after Sandhu quit

IDSA director-general Arvind Gupta appointed to the post

The Narendra Modi government on Monday appointed Arvind Gupta, a former Indian Foreign Service (IFS) officer, of the 1979 batch, as deputy national security advisor (NSA). This appointment comes within days of Nehchal Sandhu quitting as deputy NSA, citing personal reasons.

 According to sources, Sandhu's exit might have been linked to United Progressive Alliance (UPA) appointees being replaced in top offices under the new dispensation. Both National Security Advisor Ajit Doval and Sandhu have headed the Intelligence Bureau.

 Sixty-one-year-old Gupta takes over as deputy NSA in the Prime Minister's South Block office after relinquishing the post of director-general at the Institute for Defence Studies and Analyses (IDSA). Gupta has been appointed deputy NSA and secretary, National Security Council Secretariat (NSCS), in the rank and pay of secretary to the government of India, for three years, according to the Appointments Committee of the Cabinet (ACC).

 Gupta had served in various capacities at Indian diplomatic missions in Moscow (Russia), London (UK), and Ankara (Turkey). He was also a member of an informal group constituted by the Prime Minister to revive the action plan on nuclear disarmament presented by Rajiv Gandhi at the third Special Session on Disarmament of the United Nations General Assembly in June 1998. Gupta also worked in the Ministry of External Affairs on different assignments, before retiring in 2013.

 Gupta was a visiting member at the Tata Institute for Fundamental Research (1974-76) and served at the Oil and Natural Gas Corporation (1976) and at State Bank of India (1976-79) before joining the Indian Foreign Service in 1979. Prior to joining IDSA, he was joint secretary at the Indian National Security Council Secretariat from 1999 to 2007.

 At NSCS, he handled a wide range of international and national security issues. He also worked with the Kargil Review committee.

 While Sandhu quit the post of deputy NSA and secretary NSCS recently, there have been other exits of UPA appointees. Ajit Lal, chairman of the Joint Intelligence Council, and Prakash Menon, military advisor to the NSA, retired from the Secretariat last week.

India Has A Strategic Culture

Our Naval Diplomat notes that learning from others can advance its cause of self-discovery.


By James R. Holmes

April 19, 2013

Last month the Economist published a brace of articles setting in motion a spirited debate over whether India has a strategic culture. The authors draw an unfavorable contrast between neighboring China, whose "rise is a given," and India, which "is still widely seen as a nearly-power that cannot quite get its act together." They catalogue several factors that purportedly explain New Delhi's underperformance in diplomacy and strategy. They pronounce the diplomatic apparatus "ridiculously feeble," for example, not to mention trivial in size; the political class evinces little interest in or taste for grand strategy; civilian officials at the Defense Ministry are "chronically short of military expertise." The authors mention ideas mostly in passing. Nonalignment, quasi-pacifism, and mistrust of the West remain the north star for decision makers, inhibiting strategic thought and action.

Insightful as the Economist pieces are, they conflate several related but separate things under the rubric of strategic culture. Indian commentators such as retired rear admiral Raja Menon have largely followed suit. Individual leadership, bureaucratic politics, and civil-military relations put in appearances in such accounts alongside strategic culture itself. These dimensions are closely related but far from identical. It's worth separating them out to glimpse the challenges before India. Some of these challenges are relatively straightforward to tackle. Others will demand time, determined political leadership, and, in all likelihood, some event or series of events that demonstrates — in irrefutable fashion — that the cultural reform project is worth undertaking. Military defeats and other setbacks have a way of clearing the national mind. Often times it takes a debacle to overcome political inertia and create a constituency for modifying a nation's strategic culture.

What is strategic culture? To borrow from scholar Colin Gray , it refers to the "disarmingly elementary" notion that "a security community is likely to think and behave in ways that are influenced by what it has taught itself about itself and its relevant contexts. And that education, to repeat, rests primarily upon the interpretation of history and history's geography (or should it be geography's history?)." What have the subcontinent's geography and venerable history primed Indians to think about strategy? How should New Delhi comport itself in regional and world affairs, and what sorts of actions are unthinkable?

Conscious cultural reform is a project of mammoth scope. Inexpert individuals can be replaced with knowledgeable ones. Civil-military relations can be revamped, as the United States has done several times within living memory. One of my mentors, Professor Carnes Lord, observes that bureaucracies can be remade through the artful — and, one hopes, metaphorical — wielding of Niccolò Machiavelli's "poisoned stiletto" to remove recalcitrant officials. But revising Indian strategic culture requires investigating the dim recesses of the subcontinent's past. Scholars must foray well beyond the post-independence decades to sketch a meaningful cultural profile. Kautilya's Arthashastra, a manual of statecraft from classical antiquity, is worth studying. So are the habits of mind foisted on the nation by outsiders such as the Mughal Dynasty and the British Empire. And on and on. Figuring out where the nation stands is central to discerning its path ahead.

Once scholars and statesmen understand Indian strategic culture, what should they so about it? It's ultimately up to Indians to decide what kind of nation they want to be. To manage the culture, they could do worse than study U.S. history, especially the century after our founding. Nonalignment, quasi-pacifism, and mistrust of the West — in this case European empires — were once the watchwords of American diplomacy and strategy, just as the Economist notes they are for India today. New Delhi could do worse than review how Americans consulted their "usable past"  and used it to manage the republic's self-image, and its strategic behavior, as it ascended to world power.

India has a strategic culture. Learning from others can advance its cause of self-discovery.

ZARB-e-AZB: Phony War or Paradigm Shift?

Sushant Sareen

July 31, 2014

Touted as the 'mother of all' anti-insurgency operations, the much demanded (by the US) and long delayed (by Pakistan) military operation in North Waziristan (NWA), Operation Zarb-e-Azb has turned out to be quite an anti-climax. A few weeks into the operation, the Pakistan Army has been 'valiantly' reconquering its own territory from its own proxies and 'strategic assets'. Ironically, the Pakistan army had itself allowed 'the terror central' NWA to become a 'protectorate' where all sorts of despicable gun-totting, suicide jacket wearing, rocket wielding bunch of terrorists set up base and blithely peddled their wares in not just Afghanistan but also in Pakistan and beyond.

Quite amazingly, the Islamist terror groups were living cheek-by-jowl with the Pakistan military. For close to a decade now, the Pakistan army kept denying and deflecting all information and intelligence provided by the Americans and Afghans of suicide bomb factories, IED manufacturing units and other such grisly enterprises operating in this area. Today, these very same factories of murder and mayhem are being triumphantly discovered and displayed before Pakistan's 'embedded' media, and the very same army that allowed NWA to become something of a place out of Dante's inferno – there was reportedly even a 'man-eaters market' where the jihadists publicly beheaded people and mutilated bodies – are prancing and preening as the saviour of Pakistan.

Questions are, however, now starting to be raised about the entire operation. For all the grandstanding by the Pakistan army and the civilian government that this operation was going to be against all kinds of terror groups based in NWA, no such thing seems to be happening. By all accounts, the 'good', 'not so good' and 'bad' Taliban had received adequate notice to vacate the area and move to safer places. What is more, arrangements were made for the 'good' Taliban – Gul Bahadur, Haqqani network, and breakaway factions like that of Khan Said Mehsud – to relocate to new camps under the guise of Internally Displaced Persons (IDPs). According to Afghan intelligence and some Pakistani analysts, such camps were set up in Kurram agency of FATA.

Not surprisingly then, not one significant 'good' Taliban commander has been either killed or captured. There have certainly been some casualties caused by the aerial attacks and also skirmishes on the ground, but there has been no major firefight, let alone pitched battle, as yet. At best some middle ranking TTP commanders and cadres have died. There is also no independent verification of the 500-odd Taliban fighters claimed to have been killed by the military. On the contrary, a few published eye-witness accounts of IDPs from NWA reveal a lot of civilian casualties. But such is conspiracy of silence in Pakistan's 'independent' media that no one has bothered to follow the story. There is an almost Gestapo-like control that appears to have been imposed, what with 'good' jihadists like LeT, JeM, Jamaat Islami and such like groups being the only ones provided unfettered access to the IDPs.

Remarkably enough, six weeks into the operation, none of the fears that served as excuses for not launching the operation earlier have come true –there has been virtually no resistance; nor has there been any Taliban retaliation in rest of Pakistan. Given Pakistan's past record of deception, doubts are natural to arise when Pakistani officials claim that this time they are going for a total clean-up. The line being taken by varied spokespersons of the establishment is that there will be no discrimination and no distinction made on who is to be targeted and who is to remain unmolested. The problem is that no one believes that the Pakistanis have actually made a paradigm change in their policy. So what then is the purpose and strategy behind this entire exercise?

Clearly, this operation has been launched keeping an eye on the post-2014 situation in Afghanistan. The timing and the tactics suggest that this is Pakistan's first major gambit in the unfolding endgame in Afghanistan. What the Pakistanis are trying to do is push the war back into Afghanistan by sending in their proxies to fill the vacuum that is expected from the withdrawal of bulk of the foreign forces. Knowing full well that the Americans have been drawing down their forces, the Pakistanis have disingenuously been pointing fingers at both the Americans and Afghans for not providing the 'anvil' to their 'hammer'. In other words, the absence of the anvil is precisely why this operation has been launched at this point in time. This means that many of the Jihadists who are being 'expelled' or 'pushed out' of Pakistan are not going to face any real problem in Afghanistan. In the process, the Pakistanis are hoping to win brownie points for having launched this much awaited operation and at the same time keep their larger game plan of keeping their 'strategic assets' intact.

Another extremely critical objective of this operation is to regain some measure of control over both territory and terrorists, which seems to be slipping out of Pakistan's clutches. With the drawdown underway a window had opened for Pakistan to re-establish its control in the areas straddling the Afghan border. This window will close once the withdrawal is complete and the post-2014 jostling for power begins in Afghanistan. After Pakistan army wrests control of the Jihadists' safe base, anyone wanting to use this area will have to do so under the command and control of the Pakistan army. This means that the jihad factory will continue to operate, but without the jihadists enjoying any of the autonomy of action that they had started taking for granted.

All the talk that the attack on Karachi airport or any of the other recent attacks served as the catalyst for this operation is hogwash. Only the most naïve will believe that the new Pakistan army chief has brought about a change in the thinking, orientation and strategy of the Pakistan army. At best, the new army chief can only tweak things and lay emphasis on certain aspects of policy. To expect that he will swing his cane and the entire behemoth called Pakistan army will be ready to make an abrupt about-turn from a jihadist policy is to expect the moon. Simply put, weaning the Pakistan army off jihadism is as difficult as making it see sense on India or Kashmir.

Operation Zarb-e-Azb also has certain clear political benefits for the army, not the least of which is that it has helped the army to refurbish its image. An added bonus is the money that the Americans have been pumping into Pakistan. For all its jihadist orientation and deep anti-Americanism, the penny seems to have suddenly dropped that Pakistan needs to keep the Americans engaged one way or another in the region for the money to keep flowing. But it isn't just the Americans. The Chinese money too is critical for keeping Pakistan afloat. Ever since the operation started, the ISPR has been pointedly mentioning how the air strikes have been targeting ETIM and other Uighur terror groups based in NWA. Apparently the Chinese had been pressurising Pakistan to act against the Uighur terrorists and the Pakistanis obliged. Clearly, like the Americans, the Chinese seem to have convinced themselves that they can change Pakistan's behaviour by ploughing in more money and military assistance. But if America's blindness over Pakistan's perfidy did a lot of good to it, then China too is likely to suffer a similar fate.

As for the possibility of a blowback in reaction to the operation, more than the retaliatory strikes by the 'bad' or 'irreconcilable' Taliban – these can be written off as collateral damage. It is the larger blowback of this double game that should set alarm bells ringing. In trying to get a firmer control over the situation, Gen Raheel Sharif might well have disturbed the uneasy equilibrium that his predecessor had established between the Pakistani state and the Islamist groups. Unless the military establishment can now impose the dominance of the Pakistani state over its proxies, a pretty tall order,  chances are that a new equilibrium will be established in which the Pakistani state will recede even more by conceding more to the jihadists than it had until now. The paradigm shift resulting out of this phony war will therefore not be so much the elimination of terrorists as it will be their empowerment. 

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India

Is Putin Gearing Up for Intervening in Asia Next?


P. Stobdan

August 01, 2014

Few may have paid attention to the recently held (June 21-28) massive military "snap inspection" drill by Russia in its Central Military District (CMD) that involved 65,000 troops including Russian troops stationed in Kyrgyzstan and Tajikistan. More than 180 aircraft and 60 helicopters took part in the war game. According to media reports, President Vladimir Putin had ordered the drill to keep the armed forces on constant alert.1 In fact, when this author was on a visit to Central Asia in June, the "snap inspection" had begun at the Russian Kant air base in Kyrgyzstan and the 201st Russian military base in Tajikistan. Media had quoted Yaroslav Roshchupkin, District Assistant Commander of CMD that a comprehensive inspection was taking place simultaneously in all military units of CMD's 29 regions.

According to Eurasia Daily Monitor quoting Russian news agency Interfax (June 20–29) and Nezavisimoye Voyennoye Obozrenuya (June 29), the exercise involved forces from all the four Military Districts, which included "the 57th, 59th and Motorized Rifle Brigades and the 8th Surface-to-Air (SAM) Brigade of the Eastern Military District's 5th Combined Arms Army (CAA). The 27th Motorized Rifle Brigade in addition to the elements of the Northern Fleet and the 790th Fighter Aviation Regiment (providing MiG-31, MiG-31BM, and Su-27) represented the Western Military District. The Airborne Forces (VDV) 7th Air Assault Division (Novorossiysk) represented the Southern Military District. However, the Central Military District deployed the bulk of the forces. These included the 2nd Air Forces and Air Defense Forces Command (562nd Base) Tolmachevo (Mi-8 and Mi-24); VDV 31st Air Assault Brigade (Ulyanovsk), 3rd Spetsnaz Brigade, the 28th, 23rd (Medium) and 21st (Heavy) Motorized Rifle Brigades, the 15th Motorized Rifle Peacekeeping Brigade, 385th Artillery Brigade and the 297th SAM Brigade."2

Coming on the heels of Russia's faceoff with Ukraine, the snap drill surprised many. Western analysts including the NATO officials viewed this as a gambit to wield additional pressure on Ukraine and further escalation of the crisis. The Russian Defence Ministry website gives no details but Russian newspaper Nezavisimaya Gazeta reported that the drill evaluated the operational readiness for any possible intervention in Central Asia in the near future. The June snap inspection was supposedly the largest operational-strategic exercise since Zapad 2013. The Central Military District acted the role of strategic reserve for other three military theaters in addition to forces deployed in Russian bases in Kyrgyzstan and Tajikistan. At the end of the inspection, Russia's Defense Ministry officials announced that it had achieved the goal of creating a self-sustaining strategic operational force and strategic mobility capabilities.3 Strategic mobility over the swath of territory has been a big issue for the Russian army. Traditionally, Russians military depended heavily on railway transportation, but the exercise this time believed to have paid extra attention to using airlift to enhance mobility. Russian An-124-100 Ruslan heavy-lift transporters airlifted Mi-24 helicopters from Tolmachevo Airbase (Novosibirsk Region) to Koltsovo airfield (Sverdlovsk Region). Russian media mentioned that the drill tested out the mobility range covering a strategic depth of 3,000 kilometers (1,864 miles) within three days period. 

Quite clearly, the "snap inspection" was Russia's own drill separate of annually conducted maneuver by the Collective Security Treaty Organisation (CSTO) under the rubric Rubezh ("Frontier") exercise. This meant that Russia was building its own capability either to act along with the CSTO's Rapid Reaction Forces or to intervene unilaterally in the Central Asian Theater if required.  However, the force structure comprising all forms of Motorized Rifle Brigades was different from the formation Russia used for annexing Crimea early this year. Clearly, the June snap inspection was a preparation for meeting the threats emanating from the southern frontiers or perhaps a rehearsal for supporting a crisis in Central Asia. As the CMD representative said, the main target was to neutralize international terrorists.4

Soon after another command-and-staff drill codenamed "Rubezh (Frontier) 2014" followed the "snap inspection" drill in Chelyabinsk region on July 15-18 under the aegis of CSTO with the participation of armed forces of Kazakhstan, Kyrgyzstan, Russia and Tajikistan, as well as joint staff and secretariat of the CSTO. 5  Rubezh is an annual drill mainly to display the joint operational capabilities of CSTO's Collective Rapid Reaction Forces under a single command. It is also a platform for interactions and exchanging experiences. The drill also aimed at neutralizing extremist threats emanating from the south – the primary source of concern for the Central Asian states for two decades.

A series of CSTO war games scheduled for this year also include Vostok 2014 in the Far East in September. Not only this covers the challenges emanating from the Chinese Flank but also to counter the threats posed to Russian interests by the US in the Asia-Pacific. Interestingly, all these military maneuvers are being planned against the backdrop of the US and NATO troops pulling from Afghanistan and Central Asia. Moscow probably feels pressed to do something to defend the Central Asia flank where Russian interests are mostly concentrated. Although the scope of these maneuvers are wider to tackle conflicts erupting in any direction of Russia's near-aboard, but considerations seem more to do with the Afghan-scenario. To be sure, the larger context of the shift of focus on Central Asia could be for the following reasons:
1.To deal with the eventual Afghan fall outs after the impending withdrawal of International Security Assistance Force this year;
2.To prepare for any eventualities especially the possibility of the West propping up Ukraine-type regime change in Central Asia that would threaten the existing regimes and the Russian interest in Asia;
3.To consolidate support for ethnic Russians living near-abroad especially in Central Asia;
4.To assess the possibility of sectarian and extremist forces spreading into the Caucasus and Central Asian regions;
5.To signal the Chinese of their limits of influence in Eurasia hitherto increased unchecked.

(The second part of the series will come out Monday, August 04, 2014)

1  ITAR-TASS, June 21, 2014

2 Eurasia Daily Monitor Volume: 11 Issue: 119, July 1, 2014

3 RIA Novosti, June 27

4 Colonel Yaroslav Roshupkin described, "In one of the regions, the reconnaissance unit detected international extremist organisations attempting to intimidate and enlist locals, and store ammunition, arms and drugs in warehouses. Command has made the decision to block and destroy the extremists by using artillery and air force." Novosti reported on July 17, 2014 [

5 [], 17 July 2014


Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India

Is Russian ready to face the Afghan fallouts?

P. Stobdan

August 05, 2014

Dealing with Afghanistan remains a puzzle for Russians. It was different in 2001, when Putin acquiesced to the US request and facilitated the deployment and transit of NATO troops and cargo to neighboring Afghanistan via Central Asia. Putin had to agree then because it was not the NATO forces but the Chechen separatists, trained in Afghanistan by Al-Qaida that threatened Russia's territorial integrity. However, of late, Putin has pressed hard for eviction of the US base from Manas Airport. The US has left Manas in June this year.

In the changed context, Russia seem both happy as well as worried about the US withdrawal, for it is not sure about the future momentum of change in Afghanistan. Concerns about Central Asian security apart, now with the sectarian strife in West Asia especially in Iraq and Syria is flaring up, the Russian anxieties would heighten about possible spread of ISIS type assertion along its southern belt. The experts feel that Russia and Central Asian states have no clear idea as to how they would deal with the challenges if the chaos there flares up to engulf the region.1 Already the Islamic Movement of Uzbekistan (IMU) and Hizb-ut-Tehrir (HuT) have been espousing the creation of Khalifat in Central Asia and all along Southern belt of Russia. There would be easily over 70-80 million Muslims with affiliation to Salafi sect inhabiting the entire region. Many would also think that the US might possibly use the Islamic fault lines to pinprick Moscow in addition to the pressure the West mounts on Russian from the East and Central European flank.

Nevertheless, in the fast changing scenario in West Asia, many in Central Asia tend to think now whether it was a good decision to throw the Americans out of Central Asia. Even the Russian leaders seem concerns about NATO's hasty withdrawal leaving behind a colossal regional security issues that would threaten Russia's interests. Recently, the Deputy Defense Minister Anatoly Antonov has said that ISAF "has been too hasty about making the final decision to pull out." Privately, the Russians know that the US withdrawal will boost the Taliban insurgency and will contribute to spread of terrorism, narcotics trafficking, and instability throughout Eurasia. In fact, the influence of the Taliban has spread beyond the Hindukush range into Northern provinces of Afghanistan – something that never happened during the Soviet times. This is why Moscow has called on Afghan government to renew the Bilateral Security Agreement with the US for enabling the US troops to take care of the Afghan security beyond 2014. At the May 23- 24 Moscow International Security Conference, the Russian speakers sought to favour the NATO military campaign against the Taliban to continue beyond 2014.2

Within Afghanistan, the Russians have thus far showed no particular inclination or preference for either presidential candidate though traditionally Moscow supported the Punsheri Tajik groups. On the ground, a good degree of change of public opinion in favour of Russia said to have taken place during the Karzai regime. In addition, new generations of Afghans do not carry much negative image of Russia and the bad memories of the Soviet intervention.

However, for over two decades, the Russians have been watching the Afghan scene with lot of caution. The hands-off policy that Moscow maintained since the Soviet troops withdrawal in 1989 may have undermined Russian interests politically and economically. The Chechen separatists trained in Afghanistan and Pakistan did not help Russian interests. Rise of Islam over the years has also become a fact both in Russian and in Central Asia. To be sure, the Russians along with Central Asian regimes have successfully forestalled the Al-Qaida elements setting foothold in Central Asia. However, reports of Chechens and the Islamic Movement of Uzbekistan (IMU) cadre maintaining links with Al-Qaida has been a source of tension for the Russians. Against this fast changing scenario, Russia it seems is gearing up to face the challenges on the Afghan front through political, diplomatic, economic and military means and some of these include the following:

1.Built a fairly smooth bilateral relations with the Karzai government;
2.Upheld Afghanistan's sovereignty and joined Karzai in decrying NATO's excessive use of force and killing Afghan civilians;
3.Persistently backed an Afghan-led peace process with the Taliban;
4.Increased economic contacts by re-launching and rebuilding the Soviet era factories meant for public (appreciated by the Afghans as compared to US investments that largely went into the pockets of few Afghans); 
5.Increased military ties with Afghanistan;
6.Agreed to India's outsourcing of weapons from Russia to send to the Afghan National Army;
7.Surely maintaining contacts with ethnic groups especially Punsheri Tajiks, Uzbeks, Turkmens and Hazaras and others to retain pockets of influence;
8.Increased military contacts with Pakistan, including supplying of M-25 helicopter gunships to Islamabad meant to use against the Taliban insurgents in North Waziristan. Moscow also perhaps sees the benefits of cozying-up with Islamabad should the Taliban re-emerge to sway power in Kabul.

However, to achieve all these, Moscow will have to depend on regional nations and here Russia may encounter some problems. On both Tajik and Kyrgyz front, Russian preparations seem strong. Russian military has repositioned itself in a big way by expanding its bases in region and strengthening the Central Asian militaries with subsidized training and equipment. The lease period of Russian air base at Kant (Kyrgyzstan) is extended until 2032. More combat aircrafts are deployed at Kant. Russian pilots regularly simulate scenario of illegal armed groups equipped with modern weapons, communications, and tracking equipment intruding in Central Asia.3 Russian military has also strengthened position at other facilities it owns in Kyrgyzstan such as Russian Navy's Marevo communications hub in Kara-Balta, the radio-seismological laboratory at Mayly-Suu, and the Ozero torpedo-testing site at Karakolon (Issyk-Kul Lake) All these facilities now form a part of the Unified Russian Military Command.

Similarly, in Tajikistan, the agreement for the presence of the Russian military base in Tajikistan that houses 201st Motorised Infantry Division is extended until 2042. The 201st base is a part of the CSTO's Collective Rapid Reaction Force to guard the Afghan-Tajik borders. However, Uzbekistan, the key country and founder member of CSTO (May 15, 1992 in Tashkent) did many flip-flops in the organization and did not play ball with the Russians. It left the CSTO but rejoined in 2005 but again quit in 2012 on some pretext. Turkmenistan also has border with Afghanistan but so far, it has taken a neutral stance.

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India

1 Views gathered from the author's intense interaction with Central Asians in May and June 2014.

2 The author participated in the Moscow International Security Conference in May this year.

3 Russian air base in Kyrgyzstan conducts military exercises", AKIpress news agency, 11 September 2012

The rise of the digital bank

As European consumers move online, retail banks will have to follow. The problem is that most banks aren't ready.

July 2014 | by'Tunde Olanrewaju

Across Europe, retail banks have digitized only 20 to 40 percent of their processes; 90 percent of European banks invest less than 0.5 percent of their total spending on digital. As a result, most have relatively shallow digital offerings focused on enabling basic customer transactions.

Neither customers nor digital upstarts are likely to wait for retail banks to catch up. Recent analysis shows that over the next five years, more than two-thirds of banking customers in Europe are likely to be "self-directed" and highly adapted to the online world. In fact, these same consumers already take great advantage of digital technologies in other industries—booking flights and holidays, buying books and music, and increasingly shopping for groceries and other goods via digital channels. Once a credible digital-banking proposition exists, customer adoption will be breathtakingly fast and digital laggards will be left exposed.

We estimate that digital transformation will put upward of 30 percent of the revenues of a typical European bank in play, particularly in high-turnover products such as personal loans and payments. We also estimate that banks can remove 20 to 25 percent of their cost base by leveraging this digital shift to transform how they process and service. Put together, the economics of a digital bank will give it a vast competitive edge over a traditional incumbent. It's fair to say that getting digital banking right is a do-or-die challenge.

So why are European banks not aggressively moving in this direction? One of the reasons for the slower transformation in banking is that bank executives have tended to view digital transformation too narrowly, often as stand-alone front-end features such as mobile apps or online product-comparison charts. Commonly lost in the mix are the accompanying changes to frontline tools, internal processes, data assets, and staff capabilities needed to stitch everything together into a coherent front-to-back proposition. Although the journey may begin "digitally" on an online form or payment calculator, it does not remain so for long, as anyone who has taken on a mortgage can attest. Instead, the onerous documentation requirements and significant manual intervention that characterize the typical bank's mortgage process soon emerge. This can seem jarring to customers accustomed to more seamless interactions with nonbanking services.

Some banks point to security and risk concerns as justification for their slow approach, but this is a contrast to other industries. The airline industry, arguably beset by even stronger risk concerns, has automated just about every aspect of its customer experience in the last ten years, boosting customer service without compromising safety. Banks can do the same. What's more, the effort is likely to pay for itself—and then some.

Where exactly is the value in digital banking?

Our modeling indicates that European retail banks that pursue a full digital transformation, pulling all improvement levers, can realize improvements in earnings before interest, taxes, depreciation, and amortization of more than 40 percent over the next five years. Almost two-thirds of this potential value comes from the impact of digital on the cost base and loss provisions rather than from revenue uplift, which is why a focus beyond front-end investments is critical.

While the cost-saving opportunity for banks comes in many forms and touches every area of the bank, there are two areas that are especially significant and represent the bulk of the value: automation of servicing and fulfillment processes and migration of front-end activity to digital channels. On automation, European banks can realize 40 to 90 percent cost reductions in a range of internal processes through careful deployment of work-flow tools and self-servicing capabilities for customers and staff. On front-end transformation, beyond diverting existing branch activity into digital channels, digital tools can also be used to augment frontline servicing (for example, with iPad forms rather than paper forms, or videoconference access to specialists to maximize their utilization)—easily doubling staff productivity and enhancing the customer experience.

The potential for revenue uplift is not quite so concentrated. Rather, European banks need to pursue a broader range of opportunities, including improved customer targeting via digital marketing and microsegmentation, more dynamic, tailored pricing and product bundling, third-party integration (for example, with Facebook), product white-labeling, appropriate distribution via aggregators, and, of course, establishment of distinctive mobile and online sales offerings. In the near term, we expect shorter-tenure, high-turnover products like credit cards, loans, and payments to see the most digital transformation. In fact, these are the areas most under attack from new digital entrants. Looking further ahead, bank accounts and mortgages, which together drive more than 50 percent of many banks' revenues and usually provide "sticky" annuity streams, will be brought into the fray. Given this development, European banks will need to carefully watch the evolution of their digital share and the success rate of digital products in the front book. The future replacement rate of these annuity streams will be increasingly dependent on digital capabilities. In essence, it's about securing the future and not being lulled into a false sense of security based on the back book.

How to go digital without going crazy

Going digital doesn't have to mean millions in new investment dollars or convulsive upheaval in IT. Sizable investment will no doubt be necessary in some areas, but in general, many of the elements banks need to exploit this opportunity may already be in place. Banks just need to leverage them better and invest in these targeted ways.

Maximize the use of existing technology. Many banks have widely deployed imaging and work-flow systems, online servicing, capacity-management software, interactive-voice-response systems, and other connectivity and work-management technologies. But they're not using them widely or well enough. One European bank, for instance, installed a new high-resolution-imaging platform but never fully enforced its use. Customer-service representatives continued to send documentation by fax, and the poor image quality led to significant inefficiency in downstream processing. Addressing this problem requires systematic evaluation of existing capabilities, their usage rates, and barriers to adoption.

Apply lightweight technology interventions. Banks can generate significant performance gains with surprisingly small targeted investments. Examples include wider deployment of tools like e-forms and work-flow systems, which can be implemented relatively rapidly, sometimes without deep integration into complex legacy architectures. The relationship managers and underwriters at one bank, for instance, got together with IT to design a stripped-down and user-friendly online loan application. The form automatically adapts to input data and guides underwriters on which risk processes to follow. Another European bank sped up mortgage decisions by tweaking its existing application to follow standard rules, such as minimum down-payment thresholds and rating data, which allowed applications to be scored and routed faster, with less manual intervention.

Place a few selective big bets. There will be places where you need to pursue more sweeping transformation investments. However, instead of trying to automate every aspect of a given process or product, home in on the few that drive the most capacity consumption and give the greatest return. Do not build a gleaming digital empire for the sake of it. One European bank that went through a systematic mapping of its processes for automation potential found fewer than ten processes that represented the bulk of full-time-employee capacity. In these targeted areas, the bank embarked on more radical investments, retiring old platforms, deploying new digital solutions, and reinventing the way the process works.

Address the people dynamics

No amount of technology will help if you don't address the people issues driven by digital. Success requires more than rethinking technology; it requires rethinking the organizational model, too, especially when it comes to skills, structure, incentives, and performance management. The following steps can help.

Set the right structure and incentives. There's more than one way to organize around digital. Some European banks appoint a head of digital with profit-and-loss responsibility. Others use a center-of-excellence (COE) model to develop offerings that the rest of the business can take and deploy. Either model can work, but you must make concerted efforts to realign incentives to ensure collaboration. For instance, creating a COE but not giving the business digital targets often leads to a lot of technology being successfully built, but with limited drive and pull for adoption. In extreme cases, the wrong functionality is built—it's exciting to demonstrate to senior leaders and wins awards externally but ultimately creates no bottom-line impact.

Increase the focus on business outcomes, not digital activity. Too often, banks manage the progress of their digital transformations by tracking activity metrics, such as the number of app downloads and log-in rates. Such metrics are inadequate proxies for business value. Banks must set clear aspirations for value outcomes, looking at productivity, servicing-unit costs, and lead-conversion rates, and link these explicitly to digital investments. Only then will the collective focus be on shaping the right actions to fully capture the value available.

Formulate and implement a people vision. Finally, you need a vision for the role of employees in the new digital reality. This takes two forms: expectations of how they spend their time and how they work alongside the new technologies, and clarity on what technology competencies they need to develop. Digital transformation will clearly diminish the importance of some roles, which is why many employees will view it as a threat and be resistant to the change that digital brings. However, it also shifts the focus of many workers' time toward higher-value tasks, creating exciting new opportunities for development. For example, relationship managers will spend less time capturing customer details and more time giving valuable advice. Additionally, deeper awareness of the technical capabilities available and how they can affect processes will be a prerequisite to effectively manage in this new world. Business leaders need to be conversant in how technology can be leveraged to address commercial challenges. You cannot rely on bringing in new talent from digitally savvy industries to transform your bank. New talent provides an important stimulus, but digital needs to become a new management competence across the organization.

Digitization will change the traditional retail-banking business model, in some cases radically. The good news is that there is plenty of upside awaiting those European banks willing to embrace it. The bad news is that change is coming whether or not banks are ready.

About the author

'Tunde Olanrewaju is a principal in McKinsey's London office. This article was originally published in the Financial Times on October 25, 2013 (

August 06, 2014

US Failure: Unintended Consequence

Politics / US PoliticsJul 31, 2014 - 10:08 PM GMT

By: Jim_Willie_CB



The contributors are many as actors in the American Tragedy, to cause the systemic breakdown failed state. Faulty monetary policy, economic policy, and political policy have caused the resulting failure. The primary perpetrators are the central bankers, led by Greenspan and Bernanke. These two men have done more to destroy the US Economy, the US financial structure, the US currency, than any two men of prominence. To be sure, the Bush, Clinton, and Rubin gang played a huge role in the collapse. Their supporting cast of destructive actors is very long, like the serial bank criminals residing on Wall Street. To be sure, the system itself has played a key role in the harmful factors. The two most apparent harmful resident factors are the strong US labor unions and the influential environmental movement, which together encouraged the vast outsourcing of US industry at first to the Pacific Rim, and then fanning across the developing world. Both workmen compensation and OSHEA regulations interfered with US cost settings, but not as much as USGovt corporate taxes. The textile industry went to India and Pakistan, even Bangladesh. Call centers went to India, Philippines, even Costa Rica. The culprits are too numerous to cite.


Corporations in general sought out any foreign nation with fewer rules, and weaker unions in which to conduct business at lower cost, with lower taxes and lower fences in regulatory oversight. In the last decade, the destruction of the US system, both financial and economic, has been in a greatly accelerated mode.


Almost all actions by the USGovt to defend against defection and defiance have resulted in amplified reaction by the East in opposing the US Dollar system and all its many features, devices, weapons, and subterfuge.


The motive for actions taken is clearly in defense of the King Dollar Regime. The responses taken are clearly to reinstate the Gold Trade Standard and no longer deal with a toxic US Dollar for trade and banking. The unintended consequences are uniform if not universal. The outcome will be to develop the Eastern Gold Trade Standard while the entire Western system crumbles, deteriorates, sinks, and implodes. Review a list of factors, events, and reactions, the common theme in unmistably fashion, is a tragedy extending from the original sin, breaking the Gold Standard.


The United States has given the world two choices: war to defend the US Dollar, versus work with Eastern Alliance toward the Gold Standard. 


The nations of the world will choose commerce and trade eventually, and turn their backs on the United States. They will return to Gold. The BRICS nations will in the next several months possibly install a gold-backed currency for usage in the Eurasian Trade Zone and elsewhere. The threat of a Returned Gold Trade Standard is cause for war with the United States. Thus the series of wars, in hidden defense of the US Dollar, with distractions galore on declared reasons of thin type.


The BRICS Development Bank is a cover for a Gold Central Bank. The interference is universal by the USGovt and Wall Street bankers in control. They risk sinking the entire global economy in order to preserve power. Before they chose to prop insolvent banks, instead of liquidating them. Now they choose to wreck the global economy. They want global fascism, a veritable hell on earth.



1. Abandon the Gold Standard; begin clean economy initiative driven by financial engineering. Goal was to prevent gold depletion, while creating a utopia pristine economy. The outcome was a gutted US Economy, stolen gold reserves, horrendous imbalances, and systemic failure.


- set nation on wrong course with fake money, debt saturation, counterfeit, capital ruin

- It took over a generation, but longest record for paper money currency was 33 years

- encouraged cabal to form deeper roots, undermine financial markets

- resulted in grotesque imbalances, lost manufacturing, reliance upon asset bubbles

- USGovt debt must be covered by caustic unsterilized hyper monetary inflation

- Final phase is defense of US Dollar with war, bank fraud, and hyper monetary inflation

- astonishing isolation is coming for the United States, as allies choose trade over war


2. Outsource industry starting in 1980 decade, using blinders on long-term effects. The gains were short-term while the damage is long-term. The outcome is a gutted US Economy, absent legitimate income sources, steady deterioration, and systemic failure.


- at micro level, objective was reduced costs (low cost solution)

- at macro level, result was added dependence on asset bubbles (series bubble & bust)

- Emerging Markets are responsible for 80% of savings and majority of industry

- Eastern nations will lead the eventual disposal of the King Dollar Regime

- USEconomy lacks the critical mass from which to benefit from the 0% stimulus

- the United States urgently requires a new chapter of re-industrialization

- US has run out of activated asset bubbles, housing last, stocks & bonds now

- USTreasury Bond market is largest asset bubble in history, signals US failed state

- USEconomy has indications of being a Ponzi Scheme or debt and QE abuse


3. Chinese lease of Gold to Wall Street permitted the continued fiat paper USDollar game, with additional underpinnings in collateral declarations. The game was kept going another decade. The outcome is a more devastating transfer of US assets, for banks and commercial buildings, even farm property. The United States is on the verge of losing its sovereignty and becoming a vassal state.


- gold lease was hidden part of the Most Favored Nation grant by Clinton-Rubin Admin

- gold lease was reneged upon, due in 2007 probably, an expected default on gold return

- the subprime loan crisis was probably triggered by the gold lease renege

- China dumped many $ billions of Fannie Mae bonds, starting the subprime fire

- gold lease had collateral derivative contract behind it, from Wall Street assets

- an IRS secure stream tax bond was very likely put in place, held by Chinese Govt

- the IRS derivative bond acted like a national aggregate mortgage, putting nation at risk

- Wall Street sold out the US population twice, once with MFN, twice with IRS bond

- speculation that IRS default entitled China to begin the collateral property seizures

- China took control of Wall Street properties such as One Chase Plaza (JPMorgan HQ)

- in all likelihood, China has a significant stake in the Federal Reserve ownership

- China is exercising its collateral seizure rights directly and indirectly

- China is fast converting its vast USTBond holdings into various commercial properties

- China is keeping the US propped up, so that it can convert its USTBond reserves


4. Quantitative Easing and rampant bond monetization, which also cover derivatives is the last act of desperation. Absent creditors put full reliance on hyper monetary inflation. Rather than stimulus, the outcome ruins the Body Economic by killing capital.


- QE forced higher cost structure across the entire global economy

- results in a propped USTreasury Bond market with no integrity, fully controlled

- direct bond monetization plus Interest Rate Swap derivatives keep the USTBond propped

- official debauchery of global currency reserve motivates all nations to depart USDollar

- motivates global initiative to develop and use an alternative to USD in trade and banking

- foreign financial entities respond by hedge against inflation, diversify out of USTBonds

- effects hard felt in food prices, initially for most vulnerable nations

- entire economies have higher cost structure, with immediate business income damage

- final demand prices rising, but kept subdued by business liquidations

- profit margins vanishing slowly but surely, including for gold & silver mining firms

- QE undermines value and integrity of USTreasury Bonds reserves held by nations

- nations have begun to diversify out of all FOREX reserves in sovereign bonds

- economic effect of wrecked capital causes a vicious cycle of economic destruction

- undermined value of bank reserves make a powerful motive to seek USDollar alternative


5. Ukraine War, Iran sanctions, with Syrian adventure and Cyprus actions all had hidden motives. The real factors indicate extreme USDollar weakness. The outcome is isolation for the United States, recognition of war to defend the USDollar, and lost allies. The East will band together to formulate a USDollar alternative, based in a Gold Trade Standard.


- Cyprus was attack to obstruct Russian conversion of USTBonds to Gold

- Russia put on notice, their bank function through the Cyprus window was interfered

- Russia motivated to work with China, in further motivation to form USDollar alternative

- entire EU and NATO put at risk, both alliances to break apart, and isolate United States

- European nations will soon choose commerce over endless war

- Iran sanctions developed immediate workarounds with intermediary parties

- India bought Iran oil, used Turkey as intermediary in gold provision, paid Iran in gold

- the Gold for Oil trade was developed as a working prototype, avoiding USD settlement

- Syrian action made clear to Europe that their energy supply is at risk

- USGovt did not wish for European nations to be supplied by Iran natural gas

- Ukraine forces European nations to cut off energy supply to support King Dollar Regime

- Germany and France are the key nations for defection, choosing commerce over war

- Germany is under the microscope right here, right now

- the United States is going to lose NATO Alliance after damage hits Europe


6. Post-Lehman lashing together of big Western banks was the defensive posture to prevent the weaker banks from faltering. The goal is short-term protection, while the long-term risk is systemic. The QE effect results in weaker economies, which assures the impact of bank failures. They have begun. The outcome is systemic failure of the big Western banks from contagion.


- all big Western banks are tied together, using derivatives

- each big bank has several derivative contracts with a bigger bank for safety measure

- lashing is shipping term, tying men with ropes around waist and ship masts during storms

- if any major banks fail, then risk of contagion is enormous and difficult to halt

- QE has many destinations, mortgage bonds obviously too, but also huge derivative supply

- QE is the biggest backdoor banker bailout in modern history, for Wall Street benefit

- harsh effect, QE undermines the economies which must keep the big banks afloat

- derivative costs to sustain payments has wrecked big bank liquidity

- the big Western banks have been insolvent since 2007

- system cannot manage all the risks, like to intermediaries and mid-sized banks

- watch Portugal's Banco Espirito Santo and several other banks in Europe

- widespread reports that US banks cannot handle transfers when cash is on back end

- massive illiquidity in US banks has finally hit


7. Refusal to Repatriate German gold was a crime out of the gate. The motive was to conceal the appropriation (re-hypothecation) of German official gold accounts. The Germans are on notice of gold thefts by their own allies. Germany will work with the Eastern superpowers to develop a USDollar alternative and a Gold Trade Standard.


- the refusal event put Germany on notice that their gold was stolen

- perhaps the most significant of all indictments by Germany against US Bankers

- hastily produced wars like in Mali have been fashioned to compensate for gold delivery

- Germany motivated to work with Russia & China on alternative trade settlement

- Germany appears to be crafting four critical global indictments against United States

- Gold fraud, NSA espionage, Gazprom supply cutoff, EuroCB bond monetization

- Germany will leave the Euro, leave the EU, leave NATO, already been decided

- implementation is extremely complicated and will cause extreme bank losses

- critics overlook that Germany has two camps (commercial versus bank/politics)

- Germany will play the losing US hand until population and business leaders call halt

- Merkel premature resignation is shrill signal of winds blowing East from Germany


8. NSA espionage has a false motive to protect from terrorism. The actual motive is to control communications, to monitor anti-USDollar activity, to follow Eurasian Trade Zone progress, and to steal corporate trade secrets. The outcome will be profound US isolation, if not quarantine.


- hardly eavesdropping, the surveillance sparked tremendous distrust for USGovt

- has both political side and corporate trade secret side, with terrorism smokescreen

- the US leadership has no allies, and sees only targets to control and exploit

- Fascists attack enemies, defraud allies, gut banks, exploit subjects, kill economies

- motivates acceleration of alternative to USD in trade and banking

- the United States will be isolated in unspeakable manner like a diseased farm

- the difficult decision will be whether to convert it into a productive vassal state

- the difficult decision will be whether to liquidate the nation and its assets

- the difficult decision will be whether to euthanize its entire leadership elite class


9. Banker murders at middle level are hardly concealed anymore. They no longer appear as suicides. They have some common themes. The motive is to keep the rot concealed. The outcome is to reveal the pervasive widespread financial structure rot and systemic breakdown.


- arouses suspicion, attention, and investigation by the population

- when more than one or two cases, a pattern emerges

- hide JPMorgan's London Whale and $100 billion in Interest Rate Swap losses

- JPMorgan has biggest common thread in murders, both bankers and insurance heads

- London bankers and Swiss insurance executives have been murdered

- executives, directors, board members all protected at higher level

- lowest level workers know little, did little of systemic criminal nature

- midlevel bankers carried out projects with all the dirty details

- midlevel bankers know too much, like accounts, shell corporations, deals, funnels

- eventually formal investigations will come on patterned murders


10. Punitive motivated prosecution of PNB Paribas, Credit Suisse, Deutsche Bank each has hidden motives at work. They are well concealed. The final chapter of D-Bank attacks will reveal duplicity and corrupted financial structures. The outcome will be to anger Germany, to expose hypocrisy, and to act in forcing the split of Germany away from the US camp.


- each action incites immediate backlash by angry nation

- indications of Credit Suisse action to enable further Arab gold thefts

- forced folding of CS under UBS, where thefts are ongoing by US Bankers

- indications of BNP Paribas action to obstruct USTreasury Bond dumping

- forced folding of BNP under Societe Generale, which resides in the banker cabal

- SocGen already participates in FOREX & Gold market corruption

- French central bank head Noyer pledged to hasten efforts to avoid USD trade usage

- Switzerland is a lost cause of deeply rooted fascist banker thieves

- main Swiss value to East is from vast gold refinery business (recast gold bars)

- imminent USGovt legal attack on Deutsche Bank will be a very fatal error

- Deutsche Bank involved in falsified Euro Monetary Union qualifications (Maastricht)

- duplicity for attack of D-Bank for same violations done by Wall Street

- the double standard used against European banks, not used against US banks

- every big bank attack has a hidden motive in protecting the King Dollar Regime



Many are the truly despicable deeply damaging and heinous activities perpetrated by the cabal, keep well under wraps, with the cooperation and collusion of the subservient press networks. Many political figures are in complicity. Many big corporations are in complicity. Time and space do not permit adequate coverage. Offering details is not usually wise. Instead, consider an outlined form of some key tidbits to whet the appetite and to encourage further investigation. Each requires an entire chapter, if not a book. Bear in mind that the claims are between common knowledge and provable speculation. The motive is awareness. Some will say the Jackass is delusional, maybe on drugs, making wild accusations. However, many are the Jackass information sources, the juiciest being those connected to Secret Service bodyguards, and men who have friends involved still at the margin of nefarious deeds. One trusted client still has a friend working on the HAARP project to fabricate hurricanes and earthquakes. The client left for more respectable business ventures. Other sources bring to the table a mix of security agencies from four separate governments.


- recent large offshore oil discovery off the Palestine coast, with no desire to share profits

- thus a new war in Gaza, with the same pernicious elements, disregard for life

- the Israeli Floating Tamar Platform is already working in the area, eager to take it all

- narcotics usher in global fascist state, with entire national governments purchased

- the Afghan operations result in over $800 billion in annual heroin profits

- since 2004, the Aghan heroin output under USAgency guidance has grown 13-fold

- USGovt motive for war linked to Kremlin interfering with US-Afghan heroin routes

- the USAgency has been flooding Iran with heroin for several years

- the Afghan heroin on US streets has gone from 7% usage in 1997 to 70% in 2013

- United States has two militaries: Pentagon Regulars & the Langley Mercenaries

- they might clash in Ukraine or Syria, maybe both sites

- since Papa Bush, every US President has a principal narcotics item on his resume

- since Papa Bush, no US President has submitted a requisite medical statement

- NeoCon means NeoNazi, the Fascists rooted in USGovt politics since 1970 decade

- Obama's original mission was to kill the USDollar and to wreck the USEconomy

- Obama has a hidden $1 billion Vatican Bank account, his retainer in January 2009

- Obama has paved the way for a global fascist state, as the US beacon fades

- the Deepwater Horizon oil rig in Gulf of Mexico was sabotaged by Halliburton

- in the Southeast United States, rainfall features globs of white Corexit on the land

- Halliburton owns the monopoly on gas fracking chemicals

- Monsanto seeds are genetically modified, designed to enable virus delivery systems

- Fukushima was retribution against Japan for joining China toward regional currency

- chemtrails contain toxic benzene, along with other unsavory ingredients

- the toxic benzene was revealed in 2011 with scattered bird deaths in three states

- over 10 thousand birds fell dead in Michigan, Wisconsin, Minnesota (dosage issue)

- viruses are developed at Fort Dietrich USArmy Bioweapons Lab

- SAARS, Swine Flu, and others are designer viruses with target population

- vaccines are the delivery system, given to the unsuspecting

- recent Ebola outbreaks in Africa might be linked to the Bill Gates Foundation

- all Wall Street banks are dependent on huge narcotics money laundering profits

- Wall Street executives have giant gold holdings, held in Carlyle Group accounts

- John Snow chosen Treasury Secretary for Bush II Admin, formerly at CSX Corp

- CSX connections offered extensive port facilities for heroin distribution network

- recall the 2006 controversy over Dubai Port World (your clue)

- Ukraine War is intended to prevent Europe from becoming dependent on Russia

- Ukraine War is designed to bring down the US and EU economies

- Ukraine War tries to lay blame on Russia for the dethrone of King Dollar

- USDollar has been peeking into the morgue, and needs a scapegoat as killer

- when the USDollar is widely rejected, the United States will descend into Third World




"For over five years I have been eagerly assimilating any and all free information (articles, interviews, etc) that Jim Willie puts out there. Just recently I finally took the plunge and became a paid subscriber. I regret not doing this much sooner, as my expectations were blown away with the vast amount of sourced information, analysis tied together, and logical forecasts contained in each report."   (JosephM in South Carolina)

"Not only have I seen many of the things you talk about in the public arena come to pass, but I have seen many of the things you say repeated three months later by the other analysts. Congratulations!"   (MannyM in England)

"Jim Willie is a gift to our age who is the only clear voice sounding the alarm of the extreme financial crisis facing the Western nations. He has unique skills of unbiased analysis with synthesis of information from his valuable sources. Since 2007, he has made over 17 correct forecast calls, each at least a year ahead of time. If you read his work or listen to his interviews, you will see what has been happening, know what to expect, and know what to do."   (Charles in New Mexico)

"A Paradigm change is occurring for sure. Your reports and analysis are historic documents, allowing future generations to have an accurate account of what and why things went wrong so badly. There is no other written account that strings things along on the timeline, as your writings do. I share them with a handful of incredibly influential people whose decisions are greatly impacted by having the information in the Jackass format. The system is coming apart on such a mega scale that it is difficult to wrap one's head around where all this will end. But then, the universe strives for equilibrium and all will eventually balance out."   (The Voice, a European gold trader source)

by Jim Willie CB
 Editor of the "HAT TRICK LETTER"

August 04, 2014

Will Modi-Obama Summit Succeed Despite the WTO Setback?

By TP Sreenivasan, Former Ambassador of India:

No one can be faulted for thinking that India-US relations has hit a historic low due to India's unique stand on the WTO food subsidy issue, that has annoyed America much. But TP Sreenivasan, former Ambassador of India, while writing exclusively for Seasonal Magazine, argues that neither WTO nor the nuclear liability act nor any other such issue would hinder the inevitable success of Modi-Obama summit scheduled in September. Sreenivasan is a noted foreign affairs expert, especially so in Indo-US relations. He served in Indian Foreign Service (IFS) in various roles during a 37 year old career, including as the Permanent Representative of India to the UN, as the Governor for India of the International Atomic Energy Agency, and as the Ambassador to Austria and Slovenia.

The only time I met Narendra Modi was in Washington, before he became the Chief Minister of Gujarat. His ambition to become the Prime Minister was not even a twinkle in his eye. I received him in my office and at my home for dinner the same evening. Those were the difficult days in India-US relations after our nuclear tests, but he shared his optimism about India-US relations with some of the World Bank officials he wanted to meet and the leaders of the Gujarati community, who were already his ardent admirers. He had no doubt that India and the US had much in common and that a partnership between the two countries was inevitable.

Sushma Swaraj had also visited Washington during my stint there and she had extensive contacts with the Indian community in the aftermath of the nuclear tests and she had stressed that the strains in India –US relations would disappear when the larger interests of the two nations came into play. Her optimism was based on her assessment of the evolving global situation at the end of the twentieth century.

Today, in positions of power to shape and conduct foreign policy, both Modi and Swaraj would naturally view India-US relations in the larger context of India's global interests and their immediate priorities. Having identified these in the early days of the Government, it is clear that the Modi Government will focus on extending and deepening relations with the United States. With foreign direct investment, strengthening of India's security and liberalization for the sake of "skill, speed and size" of the Indian economy as priorities, the US should be his prime destination and strategic partner.

The fact that the US has not been one of Modi's early destinations is partly by accident and partly because of the present state of relations, which he has inherited. Showing over-enthusiasm for the US is not fashionable for any political leader in India. When the then Prime Minister Inder Gujral decided to change his schedule of visit to New York to accommodate a meeting with Bill Clinton, he travelled via Africa for cosmetic reasons. Bhutan, Brazil, Nepal and Japan have both symbolic and substantive meaning. Meeting Vladimir Putin and Xi Jinping before Obama, though by chance, gave a hint of his other options. Japan occupies a special place in Modi's global calculations.

The trough in relations that Modi has inherited is deep, but there is reason to believe that the relations will be on the upswing after the Modi-Obama summit. Neither the visa issue, nor the Devyani Khobragade fiasco will stand in the way. Even more substantial issues like WTO, the nuclear liability act, India-China relations, Ukraine, NSA snooping of BJP and the demand for further liberalization of the Indian market will not be insurmountable in the face of geopolitical and economic compulsions on both sides. The recent visit of Secretary of State John Kerry and the strategic dialogue have set the stage for a remarkable recovery, for which the credit must go to the principals. It would have been impolitic for Kerry and Swaraj to steal the thunder of their masters.

In one masterstroke, Kerry solved the highly emotive issue of the denial of visa by dismissing it as a decision taken by a previous Government, thus distancing Obama from any "Modiphobia".  Modi himself had never played it up as an impediment and now it has become a non-issue. The snooping issue was similarly dealt with in a forthright manner, with Swaraj insisting that it was not acceptable and Kerry giving assurances of non-intervention without discussing intelligence matters. Swaraj did not provide any alibi for the US in the name of ant-terrorism measures, as her predecessor did on an earlier occasion.

Kerrry may have hastened to visit India to see whether he could persuade India not to block the WTO Trade Facilitation Agreement without reaching a permanent solution to the problems relating to food security in India. The strong message he got from the Indian Prime Minister himself may have disappointed him, but this was not entirely unexpected, as Modi is known to stick to his positions. But the unjustness of the insistence that the minimum support price for food grains should be only 10% more annually over the 1986-88 prices is evident. By speaking for the poor of India on this issue, Modi also tried to remove the impression that his Government was only for the corporate world.

This is not the first time that India has stood against a global consensus in order to protect its vital interests. The celebrated cases of the Nuclear Non-Proliferation Treaty (NPT) and the Comprehensive Test Ban Treaty (CTBT) show that bilateral relations would not be held hostage to our positions on the multilateral stage. The majority may employ its own devices to isolate India, but it will not hurt bilateral relations. The India-US nuclear deal is an example of a bilateral arrangement overcoming the disagreements in multilateral treaties.

The intractable nuclear liability act was a device used by the opposition in India, including the Bharatiya Janata Party (BJP) to nullify the nuclear deal. The lawyers on both sides have not yet found a way to facilitate nuclear trade without amending the liability act. The grievance is clearly on the US side since the expectation of commercial deals of billions of dollars worth of reactors and nuclear material did not fructify. India, on its part, has designated sites and asked the Nuclear Power Corporation Ltd (NPCL) to get the preliminary work done with the US companies. It is believed that a lack of agreement on this issue would jeopardize bilateral relations.

Although the US Government has made this issue a litmus test of India's bona fides with regard to the nuclear deal, Obama may not, in his heart of hearts, consider it an obstacle to working with Modi. As a senior White House official told me in 2009, Obama will not be particularly unhappy if there is no nuclear trade with India because it goes against his own conviction that the US should not contribute to India's nuclear capability. The real reward he will seek is the massive arms deals under the agreement signed by Pranab Mukherjee, ahead of the nuclear deal. The key to a solution will be found when Defense Secretary Chuck Hagel visits India shortly to seek more arms deals. Modi has emphasized the need for self-reliance in defense, but that is more a dream than a reality and it is possible that the US will bag defense contracts, which will be large enough to compensate for the loss of nuclear trade. The increase in foreign direct investment in the defense sector will be music to the American ears and the clamor against the nuclear liability bill will subside. The announcement of the India-US-Japan joint exercise in the Indian Ocean has already cheered up the Americans.

Would Modi's warming up to China, particularly in economic matters, and his affinity to China in the context of Asia's economic growth be an irritant in India-US relations? Would the BRICS Bank be seen as a challenge to the Bretton Woods institutions? These would definitely come up in Washington, but neither of these developments would match the mammoth Chinese involvement in the US economy. Obama is aware of the built-in distrust between India and China and the exploitative nature of China's trade with India. The massive Chinese investments expected in Indian infrastructure and other sectors may well turn out to be a pipe dream. The Chinese challenge may act as an incentive for the US to be more sensitive to India's aspirations.

While Modi has tried to moderate India's position on Palestine to gladden the hearts of the US and Israel, he has shown no such enthusiasm in the case of Ukraine, where the US and the European Union is engaged in a struggle with Russia. He was more than friendly with Vladimir Putin in Brazil and he declared eternal friendship with Russia. But as long as these declarations have no substance on the ground, the Americans will take them in their stride.

John Kerry may have accomplished little during his visit, but the Joint Statement is a veritable list of the components of a strategic relationship in the making. The list includes counter terrorism, India's entry into Nuclear Suppliers Group (NSG) and related bodies, appreciation of the ratification of the Additional Protocol, space and nuclear cooperation, foreign investment climate in India, cooperation in Afghanistan, call for action against the Mumbai attackers in Pakistan, unity and integrity of Iraq, Violence in Gaza and Israel, UN Security Council reform and even capacity building in half a dozen African countries. They reflect the lowest common denominators in each of these issues, but they underline the potential for a truly strategic relationship, once the chemistry between Modi and Obama begins to work at the summit and dynamism is generated.

Modi and Obama are seen as men of destiny in their respective nations and both are determined to succeed. Obama is under extra pressure to contribute to his legacy, while Modi can ill afford to start on the wrong foot with the United States. Success is, therefore, imperative and inevitable when the two meet in Washington in the balmy September weather.

 Posted by  Seasonal Magazine     at  4:58 PM

The untold stories of Narendra Modi’s social media plan in Lok Sabha polls

The untold stories of Narendra Modi's social media plan in Lok Sabha pollsThe untold stories of Narendra Modi's social media plan in Lok Sabha polls

By Krishna Kumar, ET Bureau | 5 Aug, 2014, 04.00AM IST


READ MORE ON » Social media | settlement option | Radhakrishnan Pillai director | Modi | Lok Sabha | Insurability | Facebook

Led by its national co-convenor Vinit Goenka, the party got in touch with the army officers, professors and other experts.

MUMBAI: Narendra Modi's successful prime ministerial bid was attributed in large part to the aggressive social media campaign unleashed by the BJP's IT cell. Not many outside the party know, however, that the strategy included exploring Kautilya's 'Arthashastra' - the ancient Indian text on statecraft, economic policy and military strategy - to taking tips from retired lieutenant generals on psychological warfare and picking the brains of an IIM-A professor.

 The BJP is set to deploy much the same strategy in the upcoming assembly elections in Maharashtra and other states that resulted in the blitzkrieg that eclipsed the competition's efforts in the run-up to the general elections.

 The story began in 2012, when the top rung of the BJP's IT cell decided it was time to get back into the driver's seat at the Centre with a foolproof plan to approach the masses because they felt that the mainstream media was ignoring them.

 Led by its national co-convenor Vinit Goenka, the party got in touch with the army officers, professors and other experts. Not one of these experts was a BJP supporter, but they agreed to help out after members of the IT cell reached out to them.

 Radhakrishnan Pillai, director of Chanakya Institute of Public Leadership, who also teaches and researches 'Arthashastra', taught the top BJP cadre about how mass psychology works.
The untold stories of Narendra Modi's social media plan in Lok Sabha pollsThe untold stories of Narendra Modi's social media plan in Lok Sabha polls
 "Vinit wanted to learn about how the masses think, how to influence 121 crore people, using the IT communication platform. We borrowed from the Arthashastra on how to target different groups and how best to reach out to, say, those above 60, those between 18 and 35, etc.," Pillai said. Pillai also taught them the importance of gathering all information early in the morning.

 "For any king, information gathering and foreign policy are key. In the Arthashastra, a king is supposed to use his spies in the night so that by early morning he has all the information required to prepare his strategy," he said.

 So, every morning before 6 am, Goenka's team was already on the job finding out what was trending on social networks like Twitter and Facebook. The BJP team also sought out army officers - two (retired) lieutenant generals and one retired lieutenant colonel with military intelligence, who did not wish to be named - for tips on how to ensure discipline and order among the rank and file.