September 05, 2014

China’s ‘nine-dot’ line makes for choppy South China Sea

China's economic influence in Cambodia and Laos is set to undercut ASEAN's response to China's maritime assertiveness. Meanwhile, a nationalist turn in China -- vis-à-vis both the South China and East China Seas -- will lead Beijing to ignore pressure to revise its nine-dot line and reject a binding Code of Conduct in the disputed waters. The United States' Asia 'pivot' will act as an important counterweight, but risks fuelling Beijing's insecurity -- and counterproductively -- its nationalism.

While Myanmar -- as ASEAN's 2014 chair -- attempts a fine geostrategic balance, South-east Asian littoral states are likely to be more assertive, particularly Vietnam, which will extend military and economic engagement with likeminded stakeholders Japan and India and seek to invoke the UN Law of the Sea Convention.
Competing claims mapped out in the South China Sea

Islamic State will use water as weapon in Iraq, Syria

The Oxford Analytica Daily Brief ® - Tuesday, September 2 2014

The US airforce carried out three airstrikes on Islamic State group militants near Mosul Dam yesterday. The dramatic advances made by the group this year have grave implications for the water resources of Syria and Iraq. Large swathes of the Euphrates and Tigris rivers have fallen under the group's control in 2014. Beyond the direct humanitarian and food security implications, this development raises the prospect of the group using water resources as a weapon in the conflict.


Water scarcity is a perennial problem in the Middle East, particularly given the region's population growth. Annual renewable internal freshwater resources per capita are 1,108 cubic meters in Iraq and 325 cubic meters in Syria:

Syria. Prior to the conflict, a combination of drought and the regime's poor agricultural policies resulted in massive rural-to-urban migration, putting pressure on the country's aging water infrastructure.
Iraq. Dwindling surface water availability from Turkey and Syria's dam construction put more pressure on the country's water resources.
Sharing scare resources

The Tigris and Euphrates Rivers originate in mountainous eastern Turkey, flowing into Syria and Iraq and emptying into the Arabic-Persian Gulf. The three states have oscillated between conflict and cooperation with each other since 1975. Upstream Turkey, which dams the effluent for hydroelectric purposes, dominates this dynamic. By the time the water reaches Iraq, the Euphrates flows at less than a third of its natural volume (see MIDDLE EAST: Water crisis looms in absence of reforms - February 28, 2013).

What next

The Islamic State group's territorial gains have placed Shia-dominated southern Iraq at the bottom of the water hierarchy. The group now has the capability to withhold water resources, curb economic activity and disrupt electricity and communications through selective allocation of hydroelectric power from captured dams. The risk of dam rupture has also increased, which would result in the flooding of populated areas and agricultural lands.

New regional dynamics

Syria's fragmentation and the federal government crisis in Baghdad mean that both states' capacity to pressure their upstream neighbours has diminished considerably.

In addition, the advances made by the Islamic State group's state-building enterprise in Syria and Iraq since the start of 2014 have turned it into a new riparian actor in the region, adding a further difficulty to the historically complicated water-sharing relationship between Turkey, Syria and Iraq.


The group now controls:

all 710 kilometers of the Euphrates in Syria; significant sections of the river in Iraq, from Qaim to Haditha, and from Fallujah to the north of Karbala; and the Tigris from south of Mosul to just south of Tikrit. Water as a weapon

Control of these resources gives Islamic State the ability to withhold water resources from communities downstream. It has already begun to leverage this new power:

Ilamic State flooded land upstream from the Fallujah Dam in April, reducing water levels in Iraq's southern provinces and putting pressure on Iraqi security forces' siege and attempts to liberate the city.
Accounts from inside eastern Syria indicate that Ilamic State has withheld water to restrict electricity production downstream and assert control over newly conquered areas, as well as to consolidate populations by making rural life unlivable.
In June and July, local media reported that Euphrates flows into Syria had been cut by Turkey, de facto depriving Iraq of its water share, although other sources contended that Islamic State was responsible.
The group's Sunni-supremacist, anti-Shia ideology means that it could seek to use water as a weapon against the predominantly Shia areas downstream. Manufactured water scarcity was a tactic similarly used by Saddam Hussein during his regime as a mechanism to oppress the Shia population.

Southern Iraq relies on upstream dams for irrigation

Southern Iraq is now in a position of heightened water and food insecurity. Most of Iraq's cultivated area south of Baghdad is under major irrigation and relies on the operation of upstream dams.

Water mismanagement

Another key risk to Iraq and Syria's water resources stems from the potential for mismanagement of dams along the Tigris and Euphrates.

Dam management is a technical affair and requires trained engineers to both operate and maintain the dam infrastructure. Iraqi infrastructure is also highly reliant on foreign aid to cover rehabilitation costs post-war. The Mosul Dam, Iraq's largest hydraulic infrastructure, poses particular concerns as it is built on a water-soluable foundation that requires constant re-grouting, a process that stopped when Islamic State temporarily took control of the dam in early August.
Click on this graphic for a larger image
Flooding risk

Rupture of the dam, either deliberately or from mismanagement, would cause major flooding of populated areas and agricultural lands and result in massive loss of life and property. According to a 2006 report from the Office of the Special Inspector for Iraq Reconstruction, cited by local media, its rupture would release a 65-foot wave that would destroy Mosul with floodwaters potentially reaching as far as Baghdad.

Given that Islamic State's de facto capital Mosul and Sunni-majority areas would flood before reaching Baghdad, the group would be unlikely to destroy the dam deliberately.

Strategic targets

To protect against such risks, last month's US airstrikes concentrated on supporting Iraqi fighters' operation to retake the dam (see IRAQ: Counter-offensive will limit threat to KRG - August 11, 2014). As a result Islamic State has lost control of the primary source of water for Baghdad and the southern agricultural area, meaning they are no longer in the position to manufacture widespread drought along the Tigris.

US intervention has concentrated on Mosul Dam

However, it retains control of the Fallujah Dam, which it has held since February, and is seeking to take control of the Haditha dam, both in western Iraq.

Islamic State control of Haditha dam (the country's second largest) could have similar destructive consequences to that involving the Mosul dam. It controls water along the Euphrates agricultural area and forms Lake Qadisiyah -- a rupture would result in flooding, water rationing problems for irrigation and loss of life.

Energy supplies

Islamic State's water control has the capability to disrupt several services integral to economic activity.

Hydropower accounts for about 9% of Iraq's electricity generation capacity. However, given the preponderance of energy generated by petroleum (nearly 90% of Iraq's energy needs), the impact of hydroelectric power uncertainty will most acutely affect localities:

Northern Iraq, particularly Mosul, where hydropower constitutes a significant portion of the electricity budget.
The capture of Haditha dam would be particularly problematic as it supplies part of Baghdad's electrical power.
Knock-on effects such as communications disruptions from lack of electricity would also ensue.

Iran Builds Space Radars, Uses New Passive Phased Array Radars

 Iran's unveiled its long-range Ghadir radar near Garmsar in early June. (Fars News Agency)

TEHRAN (FNA)- Iran announced on Saturday that it has finalized construction of space radars to detect satellite and space objects' trajectories, adding that the country is now using new passive phased array radars to detect stealth targets and cruise missiles.

"The executive stages of Sepehr (Sky) space radar with the range of over 2,500km have been accomplished and the point for its deployment has also been specified," Commander of Khatam ol-Anbia Air Defense Base Brigadier General Farzad Esmayeeli told reporters in Tehran on Saturday.

He also pointed to the designing and building of new passive phased array radars under the name of 'Soundless Project', and said, "The radar is capable of detecting stealth (radar-evading) targets and cruise missiles and enjoys a high movement and mobility capabilities and acts in different ranges."

In relevant remarks in February, former Iranian Defense Minister Brigadier General Ahmad Vahidi said that Iran planned to develop different types of radar systems with satellite detecting capabilities.

Addressing the second conference on radar technology systems here in Tehran at the time, Vahidi said Iran has witnessed "a jump" in the field of radar designing and manufacturing.

"Today, we have many achievements in different fields. Radars covering ranges of 500km to 700km have been manufactured and production of radar systems with 1,000km to 3,000km of range is underway," Vahidi explained.

He added that Iran is trying to develop radar systems to detect satellites, and said to do so, the radar systems are connected in phased arrangements to cover very long ranges and detect and track satellites.

Iranian officials have announced that the country has now reached self-sufficiency in producing radar systems in different frequencies and for various ranges.

Urbanization and Demographics Could Skew China's Economic Rebalancing

SEPTEMBER 3, 2014 | 0415  Print   Text Size 

China's urban population may grow by as many as 230 million people in the next 15 years. But most growth will take place not in metropolises like Beijing, Shanghai and Chongqing but in the myriad small- and medium-sized satellite cities around them. And as residents flock to these cities, China's working-age population will begin to decline, and its elderly population will grow dramatically.

Together, these processes will underpin major changes not only in China's overall economic structure, but also in the financial, fiscal and political relationship between central and local government. The added burdens facing small- and medium-sized cities, especially those located deep inside China that are sequestered from mainstream global trade, will be substantial and perhaps socially and politically destabilizing. 


In July, the Chinese government announced that a revision to the one-child policy had been implemented throughout the country's provinces and regions. The announcement of the revision, which allows couples in which either partner is an only child to have up to two children, heralded the end of the controversial policy. More relaxed family planning measures have long been in place for rural and ethnic minority communities, and most urban Chinese of childbearing age now were the only children in their families, so the revision dramatically narrows the portion of China's population to which the original one-child policy still applies.

The purpose of the one-child policy -- limiting the population shaping demographic trends -- was superseded many years ago by the far more fundamental forces of industrialization and urbanization. Two decades ago, China's fertility rate fell below 2.1, the generally accepted population replacement rate. Since then, it has dropped to roughly 1.5 or, by some measures, as low as 1.4. These are comparable to fertility rates in Russia and Italy but well below those of the United States, Australia, the Netherlands and many other more advanced economies.

It is a coincidence, but a symbolically loaded one, that China's fertility rate fell below the population replacement rate in the same year that the Chinese government enacted new fiscal policies and other measures that would necessitate and drive the housing construction booms of the 1990s, early 2000s and post-global financial crisis era. The almost continuous two-decade property boom cycle underpinned rapid growth in the portion of China's population living in cities -- from less than 30 percent in the early 1990s to the current 54 percent. In doing so, it introduced hundreds of millions more Chinese to urban life, with all its associated costs. Far more than the one-child policy, these costs have shaped family planning practices in China in recent years, as have rising education levels and the transition from an agriculture-based economy to one based on manufacturing and construction.

The urbanization of the past two decades has altered the country's demographic balance rapidly and profoundly. The change has hastened the decline in fertility and population growth rates, particularly those of China's working-age population, as the size of the country's elderly population has risen.

In the next two decades, these trends will only grow as the Chinese government attempts to push the country's urbanization rate above 70 percent, thus bringing the proportion of China's rural and urban populations more in line with those of advanced industrial economies with robust domestic consumer bases. If the government achieves its target, China's urban population will grow by more than 230 million between now and 2030, reaching approximately 975 million.

One-Way Street

For China's leaders, further urbanization on a significant scale is not optional: It is imperative. China is in the early stages of an effort to rebalance toward an economic model grounded in robust domestic consumption and characterized by greater economic integration between, and equality across, its diverse regions. Because of its large population, China has one of the world's largest domestic consumer markets, but relative to the country's economy as a whole, private consumption remains weak. In 2013, China's household consumption was equivalent to only 34 percent of its gross domestic product, compared with 70 percent in the United States, 61 percent in Japan, 57 percent in Germany and 52 percent in South Korea. Even if private consumption is somewhat stronger than official statistics show, it is nonetheless far from enough to support China's current rates of growth. As a result, too rapid a drop-off in housing construction activity before domestic consumption has had time to grow would likely cause a dramatic decline in China's overall economic activity and employment.

Moreover, private consumption is highly concentrated geographically and socially in more heavily urbanized coastal provinces and in a handful of major inland urban centers. Much of China's population, not only in rural regions but also in the hundreds of small cities that dot China's interior, does not participate meaningfully in the country's consumer economy.

The Chinese government wants to change this. It is experimenting with several reforms and tools to boost domestic consumption, including financial liberalization, expansion and modernization of the country's logistics industry (to more efficiently transport goods from the coast to the interior and back), and expansion of social security and health insurance programs. These measures are intimately tied to urbanization: Their success will depend on the progress Beijing makes with efforts to urbanize and integrate the country's interior, along with less developed parts of coastal provinces, into its more developed and largely coastal urban industrial economy.

Whatever form it takes, continued urbanization will have important implications for China's overall demographic balance and its political and economic structure for the next two decades. But how it affects Chinese demography, and how this in turn plays into major underlying issues in Chinese political economy, will depend very much on how China urbanizes.

After three decades of focusing on coastal urban development to suit the needs of China's heavily export-oriented economy, Beijing has redirected its attention to the interior in the past five to seven years. Now, with major inland metropolises like Chengdu, Chongqing and Wuhan approaching levels of development and population comparable with top-tier coastal cities, the government's attention appears to be shifting once again, this time to smaller cities in the interior and, to a lesser extent, along the coast. These cities are satellites of larger metropolises, once-forgotten river towns along the Yangtze and its tributaries, and other minor outposts on the rail and highway trunk lines that connect China's north and south and its coastal and interior regions.

It is these smaller cities that Beijing expects to drive future urbanization in China -- to house, employ, care for and educate most of the new urbanites China hopes to create by 2030. In the government's vision, these cities will serve not only as manufacturing bases and lower-end service providers for consumers in China's wealthier top-tier cities, but also as sources of marginal but rising consumer demand.

The government has made clear its intent to limit immigration into top-tier coastal cities, and it will continue to use tools like the household registration (hukou) system to make it harder for all but the most established non-resident workers to live and raise families in these cities. Meanwhile, it will use those same tools -- relaxed hukou restrictions, programs to bring rural laborers into small- and medium-sized inland cities, greater job availability and other social and economic incentives -- to encourage laborers from the interior to migrate or re-migrate to these cities.

Small-Town Demographics

In under a decade more than a quarter of China's population will be over the age of 60, compared with slightly less than 15 percent today. In that time, the portion of China's population too young or too old to work will rise from approximately 38 percent to 46 percent, with the balance of China's dependent population shifting substantially from young to old.

At the same time, with China's working-age population (defined here as ages 20-59) set to decline by as much as 80 million people between 2015 and 2030, China will need to increase worker productivity significantly to sustain growth rates even remotely close to present levels. For example, for China to sustain 5 percent average annual growth between now and 2020 and then 2 percent between 2020 and 2030, worker productivity must almost double. Given China's low productivity levels, some gains will come naturally as Chinese industry gradually moves up the value chain and incorporates more advanced machinery. But those gains will also require less tangible improvements in education levels and skills, increased market competition, greater freedom of movement for labor and increased financial support to small businesses, which account for most of the employment and manufacturing output in China.

As China's workforce shrinks and its elderly population grows, pressure will mount to raise wages and expand the social services necessary to help that workforce manage the social and financial pressures of caring for the elderly while continuing to spend more. This pressure will translate to significantly higher fiscal expenditures for local governments, which are responsible for almost 90 percent of total government spending, and in turn will necessitate significant expansion of local governments' ability to raise capital by means other than land sales.

All of this will take place against a backdrop of massive and, except for the past two decades in China, unprecedented urbanization. Urban growth will not be primarily in the major cities with the greatest concentrations of wealth and greatest capacity to raise capital through municipal bonds or hefty taxes on high value-added manufacturing and high-end services industries. Rather, it will be borne by the small- and medium-sized satellite cities or even very small rural townships. Most of these cities and towns are in the interior and separated by distance and often unforgiving geography from overseas markets. Their prospects as manufacturing hubs are questionable at best, and their avenues for raising capital, whether through taxes or bond sales, are more limited.

Known Unknowns

A number of variables will further shape this process. Some, such as the progress and direction of agricultural modernization, could aggravate the challenges and constraints facing China's plan to urbanize small- and medium-sized cities. For example, if the Chinese government's vision for agricultural modernization involves clearing large tracts of land for use in industrial-scale agriculture in existing agricultural basins, the local governments that absorb the farming populations could find themselves caring for the parents and children of migrant laborers previously left behind to tend the now-defunct family farm. (With the exception of Jiangsu, the provinces with the top five dependent-to-working population ratios are inland.) Urbanization that results in the transfer of unproductive demographic groups to small- and medium-sized cities will only add to those local governments' financial, fiscal and social burdens.

Other factors could mitigate the financial and fiscal constraints on local governments in small- and medium-sized cities. A notable example is rural land reform, which aims to strengthen rural land ownership rights, thus giving rural landholders means to generate capital while giving local governments a new market with which to trade and generate revenues. However, rural land reform faces numerous complications, not least of which is the potential tension between expanding rural land markets and the government's imperative to maintain a base level of arable land. How exactly rural land reform plays out in context of broader urbanization and agricultural modernization efforts without infringing on Beijing's goals for either is unclear.

There is the more distant problem that rapid urbanization over the next 15 years will most likely exacerbate current demographic trends. As more people move from the countryside to cities, China's fertility rate will likely decline further, leaving future generations of Chinese urbanites even more constrained in their efforts to care for elderly and child populations and remain active consumers than those coming of age in the 2020s.

Finally, there is the question of how the Chinese government will manage the social stresses created by decades of uneven demographic growth between male and female populations driven at least in part by the one-child policy in its early years. In the next decade, this imbalance will come to a head as tens of millions of Chinese men, especially from rural regions where male children have traditionally been prized above female, come of age with little to no prospect for finding partners and forming families. This demographic will be of particular concern for Beijing as the low value-added manufacturing and construction industries best suited to absorb it decline further.

Read more: Urbanization and Demographics Could Skew China's Economic Rebalancing | Stratfor 
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Rawalpindi’s ongoing Puppet Show in Islamabad

In my recent article  (URL above) on the ongoing turmoil in Pakistan, I had stated that in 'the Book' based polity of Islam, the lines between the Mir and the Pir ,the temporal ruler and spiritual ruler still remain blurred ,contested and changing ,with examples of Pakistan, Turkey, Egypt. Hopefully this tussle will keep on going peacefully and a balance /separation between the military and civilian leadership would be achieved one day .Finally with overall control of the popularly elected representative and accountable civilian administration. This tug of war will take its time depending on the history of the state before Islam was imposed by force, by persuasion or by other means. Saudi Arabia from which Islam emerged might have been Jahiliya, but Egypt, Anatolia aka Turkey and the subcontinent had ancient and flourishing civilisations before the arrival of Islam. Saudi Arabia's billions of petrodollars are keeping the Ummah and Muslim nations away from modern, representative, responsive and accountable governments.
As for the role of military in Egypt, Turkey and Pakistan, I began my career as assistant press attaché in Cairo in early 1960s spent 10 years in Turkey .An Indian diplomat cannot escape Pakistan, its politics and its anti-Indian profession in any capital .Since Cairo I have maintained close interaction with media throughout my postings abroad and in India. I have a fear idea of the noble profession of journalism, which has changed and deteriorated, especially in the last few decades because of overwhelming influence of American and European corporate money and consequently of their counterparts and ruling establishments in most countries forced to follow neoliberal capitalism.
Since retiring in 1996 from Ankara, as an independent journalist I have written scores of print articles on international affairs in top newspapers of India, Dubai, Lebanon, Turkey and elsewhere. And since 2002 many hundreds of articles and blogs .I have expressed many times my poor opinion of Indian media, especially the so-called national TV channels with their obsession with trivialities, celebrities and sports. Among anchors Karan Thapar is OK but he should stop scowling, angry and inquisitorial .Hindu remains the best newspaper.
I have great respect for many journalists in Turkey and Pakistan, where they have been hounded by ruling establishments, whether military or civilian and many are in jail. Salim Shazad, to whom I corresponded, was tortured and killed by ISI; others are regularly hounded. We had a few such brave journalists like Kuldip Nayar and Arun Shourie during the Indira Gandhi imposed emergency in 1975 – 77.
Pakistan's democracy;

Throughout the Cold War, the so-called democracy in Pakistan was basically a Western media myth to put its ally on a par with India, which was on the opposite side. Utterances by Pakistan prime ministers against India made good copy in Western media. Barring perhaps Zulfiqar Ali Bhutto (1972-77), after the military had been totally discredited in 1971 following the liberation of Bangladesh, the Pakistan armed forces have been de jure or de facto rulers of the country. In the 11 years between General Zia's death in 1988 and Musharraf's takeover, Benazir Bhutto and Sharif were eased in and out of power whenever they tried to interfere with the military's autonomy, or their control of nuclear arms, or the policy on Kashmir and foreign affairs.  Constantly squabbling with each other, they nevertheless amassed huge fortunes by corrupt means.  Bhuttos, specially Zulfiqar Ali, and Nawaz Sharif had the opportunity and political support to lay the foundations for democracy, but instead they chose despotic ways to steamroller the institutions that provided the checks and balances in the state. This highlights the inability of Pakistan in general to accept the give and take of a democratic system and administration.  

For all the good copy that Benazir Bhutto provided the Western media, she was perhaps one of the most incompetent administrators in Pakistan's history, with her husband, "Mr 10 percent" Ali Zardari; making it worse (he even became the president and completed his term). She played a seminal role in 1996 in promoting the stranglehold in Pakistan of the Jamaat-i-Islami and other fundamentalist groups.  They remain deeply entrenched in the Pakistan armed forces, the ISI and the establishment, with the potential for full-fledged implosion.

In any case, unlike India, in 1947 Pakistan began with weak grassroots political organizations, with the British-era civil servants strengthening the bureaucracy's control over the polity and decision-making in the country. Subsequently, the bureaucracy called for the military's help, but soon the tail was wagging the dog.  In the first seven years of Pakistan's existence, nine provincial governments were dismissed.  From 1951 to 1958 there was only one army commander in chief, two governor generals, but seven prime ministers.

While the politicians had wanted to further strengthen relations with the British, the erstwhile rulers, General Ayub Khan -encouraged by the US military - formed closer cooperation with the Pentagon.  And in 1958 the military took over power, with Ayub Khan exiling the governor general, Iskender Mirza, to London. A mere colonel at partition in 1947, with experience mostly of staff jobs, Ayub Khan became a general after only four years.  Later, he promoted himself to field marshal.  He eased out officers who did not fit into the Anglo-Saxon scheme of using Pakistan's strategic position against the evolving Cold War confrontation with the communist bloc.  

General Zia ul-Haq, meanwhile, was a cunning schemer, veritably a mullah in uniform who, while posted in Amman, helped plan the military operation, which expelled Yasser Arafat and the Palestine Liberation Organization from Jordan in the 1970s.  But he is more remembered for having prayed at all the mosques of Amman, if not in the whole of Jordan.  He seduced the north Indian media with lavish praise and chicken and tikka kebabs meals.  He planned Operation Topaz, which in 1989 fueled insurgency in Kashmir, while hoodwinking Indians with his goodwill visits to promote cricket contacts between the countries. His Islamisation of the country made the situation for women and minorities untenable, while the judicial killing of Zulfikar Ali Bhutto in 1977 turned General Zia into a pariah.  But the 1979 Soviet invasion of Afghanistan made him a US darling, restoring and fatally strengthening the Pakistan military's links with the Pentagon. This made the Pakistani military and the ISI's hold pervasive, omnipotent, omniscient and ominous in Pakistan.

I reproduce below two excellent and interesting articles by Pakistani scholar-journalists on the current events orchestrated from Rawalpindi military headquarters and the state which was midwifed  by the United Kingdom to protect its and later Western oil interests in Middle East and to counter India .Pakistan has never come out of the Western grip and Saudi influence with its petrodollars . As a result majority of the people have suffered, only the military, landed feudal and upstart rich like Nawaz Sharif have flourished.
.K.Gajendra Singh 4 September, 2014.Delhi
Rise of the mob
Written by Khaled Ahmed | September 4, 2014 12:09 am
Imran Khan broke into the Red Zone and took his party up to the front of parliament house in Islamabad on August 19, saying that if Prime Minister Nawaz Sharif didn't resign he would take his several thousand followers to the prime minister's house and drag him out "by his neck". His agitation was hinged on the accusation that the 2013 elections, which brought Sharif's party to power, had been rigged.
First he had wanted the tainted constituencies investigated; now he wanted the prime minister to go. He also knew that Sharif had fallen out with the army. He charged him with endless corruption, claiming that politicians had taken a sum of $200 billion out of the country. The Old Testament came to the rescue.
Imran Khan and Tahirul Qadri lead an attack against representative democracy.
Imran Khan said, "We will free Pakistan of pharaohs". The Dawn wrote: "The image of a righteous Prophet Moses (Musa) dethroning a wicked firaun (pharaoh) has often been employed before. It was perfectly effective during Iran's Islamic Revolution. A poster of Ayatollah Khomeini, in the role of Musa dethroning Mohammad Reza, the last shah of Iran, cast in the role of pharaoh. Hosni Mubarak, the erstwhile strongman of Egypt, was also termed by his opponents as a modern pharaoh."
Tahirul Qadri, leading another mob assaulting Islamabad, was more detailed, given his religious scholarship. He quoted the Quran in Arabic and then translated the divine message as ordering the two prophet-brothers, Aaron (Haroon) and Moses, to attack the palace of the Egyptian pharaoh. Strictly separated so far, the two cult leaders had brooked no dilution of their charisma. Now they became "brothers" challenging Nawaz Sharif, the pharaoh of Pakistan. Qadri, nursing an old feud with him, knew Sharif had fallen out with the army. Khan was more amateurish in his scriptural expertise. He quoted Ali, the fourth caliph, on corrupt Muslim states that collapse and honest infidel ones that don't. People could collar the third caliph, Usman, in the street and question his acquisition of a new shirt when the common man went without one. The ideal (city) state was an Athens of Islam, with utopian "participatory democracy" in place, "justice coming to their doorstep".
Khan carelessly said he was influenced by "Mahatma Gandhi", but a more canny Qadri stayed clear of such references. Instead of the shower of praise he had expected, Khan got a heavy dose of textbook nationalism by the media, which looks at Gandhi as the villain who dared oppose Jinnah, the father of the nation. Qadri was ideologically correct and stayed away from Khan's next "extra-Islamic" reference to civil disobedience too. The irony was that, whereas Khan's party had been represented in parliament, Qadri was an outsider to democracy, a scholar with a cult following who had "written a thousand books".
Both avoided the intellectual fallout of this reference by claiming that democracy had been overthrown by Sharif's corrupt conduct. But the pharaonic palace they were attacking was democracy and the constitution was against them. Rejecting all overtures for "consultation" on "electoral reform", which was Khan's main plank of agitation, the great cricketer signalled war.
The Independence March and Revolution March both rejected the courts of law and their interpretation of the agitation as an illegitimate act. Qadri used political science in his rhetoric but was probably sure that his obsolete reference to "direct" and "participatory" democracy would not be challenged by a population steeped in the already "participatory" city-state utopia of Islam. What man has achieved in the 20th century is democracy that lasts, an order secure against mob attacks. "Direct" Athens was superseded by "indirect" Rome, and Europe today harks back to the "direct democracy" of the city-state of Athens only when it holds referendums, and suffers because of them. Pakistan too has rued all the referendums it has held so far. Today, people choose their representatives and send them to parliament to enact laws on their behalf. If you don't like them, defeat them in the next election but till then, hold your peace.
Former World Bank economist Deepak Lal writes in his book, In Praise of Empires: Globalisation and Order (2004): "The underlying theory behind the NGOs' claims, and the source of their popular appeal, is the wholly illiberal theory of participatory democracy. The Western notion of a liberal democracy is based on representative democracy. From the founding fathers of the American republic to liberal thinkers like Immanuel Kant, direct or participatory democracy on the model of the Greek city-states has been held to be deeply illiberal. Subject to populist pressures and the changing passions of the majority, it can oppress minorities. Greater popular participation does not necessarily subserve liberty. The great liberal thinkers have therefore been keen to have indirect representative democracy hedged by various checks and balances which could prevent the majority from oppressing the minority."
In India too, there are charismatic NGO-type leaders like Anna Hazare and Arundhati Roy who challenge corruption and other evils of the country's democracy. But Hazare's appeal lay in his power to endure self-mortificatory starvation, not in threatening the prime minister with physical manhandling, like Khan, or giving "advice" to his disciples to kill the prime minister, like Qadri. The Lok Sabha caved to Anna Hazare's campaign and passed the anti-corruption Lokpal Bill in December 2013. In Islamabad, parliament is willing to legislate electoral reform but Khan wouldn't hear of it, saying nothing short of dismissal of Sharif would do — after which "I will do ehtesab (accountability)", which everyone in the street knows will be an act of considerable brutality, in the Muslim tradition.
In India, Gandhi's movement of civil disobedience is part of its nationalism. "Participatory democracy" also crops up when Indians feel politicians have distanced themselves from the masses too much. Manish Sisodia, once a close aide of Team Hazare, put his finger on the factor that the movement relied on: "If people actually understood that the country's democracy had lost its participatory nature and had turned authoritarian, then they would once again associate themselves with the issues that the team was raising".
The economist, who sees the germ of the "welfare state" and its infamous budget deficits in "participatory" democracy, gets predictably jittery. He knows that the early clauses of the constitution, pledging equality and security of livelihood to all, are only hortatory in nature and the state merely needs to "aspire" to them. It appears that when fathers of a constitution sit down to write it, they consign the "hot air" of their misplaced early enthusiasm to these articles. But if you are a Muslim trying to avoid the obsolete caliphate of history by grabbing its utopia through "welfare", you are defying the global consensus.
Qadri and his Awami Tehreek want to revive the 40 "rights"-related opening articles of the constitution. Khan too refers to a falahi (welfare) state in his speeches as his answer to the difficult questions about how a terror-stricken state can survive. Both share the funding-through-charity organisational background exempting them from taxation. Khan is clearly "confiscatory" in his welfare pledge — like Zulfikar Ali Bhutto in the 1970s — while Qadri only hints at it.
Most non-authoritarian Muslim states are either unstable or coming apart in the face of violence. Anna Hazare wanted to die; Muslim challengers want to kill.
The writer is consulting editor, 'Newsweek Pakistan'

"Colors of Kurdistan" Art Exhibit

Kurdistan Regional Government - USA
4 September 2014

Greetings from the KRG-US. 

"Colors of Kurdistan" has opened at Foundry Gallery in Washington, D.C.!  The art exhibit features two prominent Kurdish artists: Ramzi Ghotbaldin and Sardar Kestay.  The exhibit will be open through September 28th, but please be sure to stop by the opening reception on Friday, September 5th from 6-8 pm to enjoy refreshments and meet the artists.  At the reception, KRG staff will graciously accept monetary donations for the humanitarian crisis in Kurdistan. 100% of the donations will go directly to the governorates providing life-saving relief to the over 1 million refugees and internally displaced persons in the Region.  
Please see the attached invitation for details.  We hope to see you there!
Kurdistan Regional Government - USA

Reception Invitation 
Join us at the opening reception and meet the artists 
Friday September 5, 6-8 pm
The Foundry Gallery 
1314 18th Street, NW
Washington, D.C. 20036
*Refreshments will be served* 

September 02, 2014

Maoist War Against India: Time for United & Strong Response

Ajit Doval, KC - Former Director, VIF

The May 25th extremist attack by Maoists in Chhattisgarh was one of the depredations that hit India. But, more tragic is what follows – delayed tactical response, leadership confusion and helplessness, scripted statements carrying no conviction and even ministers looking for opportunities to derive political mileage. In the world of security what happens is important, but what decides the end game is how the governments respond to them. While the former is not always and fully in their control, the latter is a matter of their conscious choice. The tragedy of what they fail to protect and prevent is compounded by the wrong or inadequate response that guarantees perpetual failures.

There is a predictable pattern of discourse that follows major attacks. Political statements and counter statements, Centre versus State blame game, accusations of intelligence and security failure, all relevant, but leading nowhere. There is no clear and unequivocal message to the perpetrators, enunciation of a new national policy and strategy, initiatives towards capacity building and pressing into action innovative tactical plans.

Prevention of this obfuscated discourse necessitates clarity on the fundamentals. Left wing extremists are enemies of the nation – their ideology, political goals, trans-national linkages, strategic plans all make it amply clear. Their history of siding with the Chinese during the 1962 war, supporting Pakistan Army's genocide in East Pakistan and dubbing Indian intervention as imperialist, aligning with Kashmiri separatists and supporting North-East insurgents leave no doubt about their intentions. Their putting in place an 18,000 plus guerrilla force, nearly 16,000 sophisticated arms, weapon procuring and manufacturing infrastructure, fund raising abilities and an effective propaganda apparatus clearly indicate their burgeoning capacities. Misled by the rhetoric of them being social activists or crusaders for the poor, we should not underestimate their intentions and capabilities. There is no room to treat them anything other than being enemies of the state who have to be fought, vanquished and neutralised.

The second point that obfuscates the discourse is its political dimension. The message that goes out to the Naxalites is that the government is confused and weak, dishonest and insincere, lacks the gumption to take the battle to its logical end, and wilts under the pressure of media, local level political workers, extremist linked NGOs, etc. The political cross-fire between the Centre and the States only gladdens their hearts. There is a need to make the message to the extremists loud and clear that the state will use all its power to protect its sovereign rights. In the instant case, the Congress leaders were wrong in trying to give it a political colour and advance possible conspiracy theories. There is no ambiguity whatsoever about the role and responsibility of the Centre and the States. Article 355 of the Constitution unequivocally affirms that "It shall be the duty of the Union to protect every State against external aggression and internal disturbance". Left Wing Extremism (LWE) is no more a "public order" issue, and falls well within the innermost circle of what Justice Hidayatullah calls "three concentric circles" of threats. In the judgement in Ram Manohar Lohia vs. State of Bihar (1965), the Supreme Court asserted that when a threat transcends limits of public order and threatens internal security, the overriding responsibility lies with the Union government. However, to make it happen, the Prime Minister needs to be strong to have his writ run both at the Centre and in the States.

The next requirement is strong laws with an efficient criminal administration system to administer them. The threats, internal or external, that threaten the unity, integrity and sovereignty of India, require a different jurisprudence than ordinary criminal laws and must empower the state to deter and neutralise the enemies. The front organisations, masquerading as NGOs and think tanks, who skilfully assist the extremists in exploiting discontent and subvert them to take recourse to the gun must be made accountable. Those who provide them intellectual and ideological space by projecting them as social revolutionaries are as guilty as the gullible people who take to arms. It is also necessary that the justice system functions with speed, fairness, transparency and honesty. To bring down the crisis of legitimacy, any illegal police action or efforts to frame the innocents should be dealt with an iron hand.
The state police forces, due to their superior knowledge of terrain, language and customs of the local people. are best suited for counter-LWE operations. There is an urgent need to increase their strength, provide them better leadership, training, weapons and equipment. It is pertinent to note that Naxalism has assumed deep roots in States where the number of policemen available per one lakh population is amongst the lowest and much below the national average of 135. This situation should be corrected immediately and minimum of 200 policemen per lakh population must be made available to the Naxal affected states. Not just quantity, but quality equally matters. What India requires is, as the Padmanabhaiah Committee advocated, a "highly motivated, professionally-skilled, infrastructurally self-sufficient and sophisticatedly trained police force."

The availability of real-time actionable intelligence is critical for launching surgical operations against the Naxal leadership and guerilla armies. For this the operational capabilities of state intelligence, right up to the police station levels must be bolstered for undertaking tactical operations. A good intelligence often has made the difference between victory and defeat, and life and death. We have to develop a totally different set of capabilities to cater to our rapidly changing intelligence requirements. This needs to be done at several levels—from our training modules to doctrines to equipment. This transformation has to be across the spectrum of our intelligence capabilities and operations. Concerted efforts to choke Maoists' sources of finance and channels of procuring weapons also deserve high priority.

The war is difficult but winnable. The need is for capacity building both at the Central and State levels and right leadership to convert plans into realities on the ground. They have started the war; it will be finished by us.

Is Pakistan On Way from Failing to Failed State? 

Sushant Sareen, Senior Fellow, VIF

A theatre of the absurd is on display in Islamabad with the street-fighters of Imran Khan and Tahirul Qadri breaching the barricades to storm the Parliament and lay siege to the Prime Minister's House. The denouement of this clear collapse of state authority in the face of a marauding mob is not yet clear. What is clear is that democracy has been grievously damaged, the civilian government has been reduced to a mockery and the political and administrative system has been brought to the verge of a meltdown. The question is no longer about whether or not Nawaz Sharif survives, but of what sort of a caricature he will be reduced to if he survives and what will replace him if he doesn't survive. Even more important will be the impact of the political implosion underway on the security, stability and economic viability of Pakistan.

To be fair to Nawaz Sharif, neither Imran Khan nor Tahirul Qadri have a real case against him. Nor for that matter do they have a cogent and coherent plan on how to run Pakistan, if indeed they manage to force Nawaz Sharif out of office and take over power. Sloganeering is one thing, fixing a broken down country like Pakistan quite another. Given the brainlessness, belligerence and anarchic demagoguery on display, both Imran Khan and Qadri don't inspire any confidence whatsoever that they are up to the job. Their main demand for now is to see the back of Nawaz Sharif. Chances are that if they achieve what they want, it will be a pyrrhic victory, one in which they will also be left out in the cold.

The single most dangerous trend that both these people have unleashed is that they have crafted a new template on how to make and break governments in Pakistan. Anyone who can now manage to gather a committed crowd of 10-20 thousand can hold a government hostage and even pull it down by causing chaos and anarchy in the seat of government. What Imran Khan and Qadri have done today, some other political party or even religious party can do tomorrow, making governance by a political government next to impossible. To an extent, this template of political terrorism or mobocracy has been on display in other parts of the world – Egypt (Tehrir Square), Ukraine, Georgia etc. come to mind. Even in India, the AAP tried something similar when they decided to besiege the PM House some months back. The AAP's antics on Raj Path on the eve of the Republic Day parade were also somewhat similar to what Khan and Qadri have done in Islamabad. But while India's mature polity snuffed out the AAP's anarchist approach to politics, Pakistan is being put through a political churning that could easily escalate into a political implosion which at the very least will deal a body blow to the fledgling democracy in that country.

What is most shocking is how things have reached such a pass in just over an year since Nawaz Sharif won a resounding verdict in the 2013 General Elections. Although Imran Khan's main grouse against Nawaz Sharif is that he stole the election – Khan has deluded himself into believing that he had won the elections – the fact remains that it was by and large a clean election and Nawaz Sharif was always the front runner. In other words, Imran has absolutely no case as far as the elections go. Imran Khan's screaming and shouting over the elections hasn't received much traction except among his die-hard supporters. While there is some merit in some of the criticisms (coming from Imran Khan's foul-mouth, these are more invectives than criticisms) that Imran has made of the Sharif brothers – their style of governance, the rampant nepotism, allegations of deal making on mega projects etc. – there wasn't anything like a mass upsurge against the Sharifs. In the one year and more that he has been in office, Nawaz Sharif hasn't exactly worked any miracles in terms of putting the economy back on the rails, ending the crippling power shortages, creating jobs, reining in prices or any of the other tall promises he had made during the election campaign.

Although there was disillusionment with the Nawaz Sharif government, there was no simmering anger waiting to burst that Imran Khan and Qadri have harnessed. It is not as though the scenes being witnessed in Islamabad had been playing out in other cities and towns around the country and it all snowballed into a massive protest in the capital. If anything, except for a few well attended rallies held by Imran Khan in a couple of cities during the build-up to his Azadi march, there were practically no signs of such protest at the mass level. By all accounts then, this is a manufactured protest aimed at putting pressure on Nawaz Sharif to either quit or else accept subordination to the military establishment on issues ranging from defence and security to foreign and economic policy. In other words, the military wanted to restore the dyarchial system in which it called the shots on all matters of state and the civilians were allowed to run municipal functions. Nawaz Sharif, however, was quite ready to play ball and enjoy powers of the chairman of a municipal corporation with the rank of Prime Minister. Imran Khan and Qadri thus became instruments in the hands of the army to fix Nawaz Sharif.
However, as things developed, it wasn't long before the army too lost control of the plot. It is one thing to manipulate politics through court intrigues and quite a different ball game to manipulate things through street protests. The former can be controlled; the latter have a nasty habit of going out of control because of the sheer number of moving pieces involved. This is precisely what seems to have happened in the current case. Imran Khan and Qadri ratcheted up the rhetoric to a point where they left no wriggle room for themselves to retreat. Backing down from the demand of the resignation of the Sharifs – the other five demands relating to electoral reforms, audit of elections etc. had been conceded – would have meant the end of their politics. Even the army seemed to be unable to make them back off. The grapevine is that when the duo decided to storm the barricades on the night of August 30, they were given a wink and a nod by the military which probably came to the conclusion that the only way they could retain some control over their instruments was by unleashing them.

On its part, the government seemed all at sea on how to handle the protests in Islamabad. Everything it tried – cajoling Imran Khan by initiating the process of electoral reforms, trying to drive a wedge between Khan and Qadri by treating them differently, trying to scare off the protestors by handling control of vital installations in Islamabad to the army, trying to block the path of the protestors resorting to placing of containers all across the province and making preventive arrests, giving in by and by to the demands of both Qadri and Khan – failed. Initially, they used the traditional methods – tax notices, anti-encroachment drives, arrests – to browbeat Qadri into submission. But this backfired when the police resorted to firing to quell a violent mob protesting against an attempt to demolish illegal structures around Qadri's Lahore HQs. 14 people died and nearly 100 were injured. To compound the disaster, the political government in Punjab washed its hands off the affair and put the blame on the policemen. This demoralised the police, something that proved expensive when the push came to shove in Islamabad. Despite anything between 30-40,000 policemen in Islamabad, a crowd of around 15-25000 was able to overwhelm them! This in itself is an unmitigated disaster and signalled the complete collapse of government authority.

Already on the back-foot because of the Lahore firing, the government forbid the police from using firearms to control the crowd. Part of the reason for this was that the government had come to the conclusion that the only way Khan and Qadri would succeed in their objective of ousting the government was through the cynical exploitation of the politics of dead bodies. In other words, if some 20, 30 or 50 people were killed in police firing, it would cause such a furore that the military would step in, or else there would be widespread revulsion against the government which would make its survival untenable and impossible. This situation the government wished to avoid at all costs. The very fact that the military has been watching the unfolding drama from the side-lines seems to vindicate the government's thinking. Given the scenes of anarchy and chaos in the heart of Islamabad, it was widely expected that the military could step in. That it didn't for more than 24 hours could be either because it is waiting for the bodies, or else because the military suddenly realises that it too is caught in a terrible bind and has become a victim of the conspiracy of circumstances which are now beyond anyone's control. In either case, it means that while the military retains the ability of destabilising a political government, it isn't very confident about its own power or political capital to displace, replace or take place of a legitimate political government.

With matters reaching a head, there are now no easy answers for any of the players, even less so because constitutionally there is absolutely no way to get rid of Nawaz Sharif unless he himself decides to throw in the towel, something that he has flatly refused so far. Some analysts are of the view that the FIR filed in the Lahore firing case against the Sharif brothers might come in handy to force them out of office. Asides of the fact that merely being named in an FIR doesn't mean a thing, there is also the issue of the constitutional maintainability of an FIR against a sitting chief minister and Prime Minister for some action he may have taken in the discharge of his duties. If such a precedent was set, then it would make any sort of governance impossible because tomorrow a chief minister or prime minister can be booked for any and every act of any government servant, regardless of whether or not he sanctioned that act.

As things stand, therefore, there are broadly four possible outcomes of the present fracas. The most likely is that the storm will blow over but will have left Nawaz Sharif so weak that he will be reduced to the Mayor of Islamabad and the army will call the shots on all issues of any importance. The second most likely scenario is that the army forces Nawaz Sharif out of office either by mutilating the constitution (the Pakistani genius for this is unlimited) or by violating it. This would however mean that the army will have to run the country directly. It may appoint some proxies (technocrats) for some time and promise fresh elections, but no one can say with certainty when or if these elections will be held because once it takes over, the army will also once again try to clean the Augean stables, a mission which will take a few years at the very minimum.

The third possibility, one which is very slim, almost non-existent, is that Nawaz Sharif survives and instead of becoming weaker actually becomes stronger by taking advantage of the domestic and international complications and compulsions that follow if the military overthrew a legitimate government. In other words, once the limits of how far the military can go against the civilian government are established, Nawaz Sharif could use the space available to recover lost ground. The final possibility is also very slim but also very scary from Pakistan's perspective. The protests could spiral out of control and spread to other parts of the country with all sorts of forces and characters exploiting the situation for their own benefit. This would make the country ungovernable and cause a political implosion that is beyond the control of anyone in Pakistan. This is the doomsday scenario in which Pakistan graduates from a failing to a failed state. Regardless of the scenario that unfolds, one thing is certain. Pakistan is likely to be in the throes of prolonged political instability.

Japan’s white paper on defence: An overview

Naval Jagota

September 01, 2014
Japan released its annual white paper on defence on August 5, 2014. The document attempts to shift Japan's approach from being predominantly China-oriented towards a broader role in enhancing regional stability. The 2014 white paper evaluates Japan's strategic thoughts and takes stock of its military activities in the Asian region along with other military forces, both regional and extra regional. The white paper also highlights Japan's alliance relationship and brings out the internal structural changes to address future challenges in the region.

The security concerns of Japan, as detailed in the paper, "has become increasingly severe, being encompassed by various challenges and destabilizing factors, which are becoming more tangible and acute" as well as "Opaque and uncertain factors such as issues

of territorial rights and reunification remain in the vicinity". The "grey zone", as it is referred to, emphasises on the adverse geopolitical and military developments originating from North Korea and PRC (Peoples Republic of China). The "grey zone" indicates an appreciation of increased challenges in tackling and resolving territory, sovereignty and maritime economic interests in the region with the US as the countervailing force. The white paper acknowledges the emergence of a multipolar world through economic development and political influence of China, Russia, India and some other countries.

The dominant challenges for Japan remain North Korea and PRC. North Korea's shake-up in the military leadership indicates consolidation of power of Chairman Kim Jong-un and a muscular external policy. The white paper expresses concerns on the launching of multiple ballistic missiles in March, June, and July 2014 towards the Sea of Japan along with the possibility, for the first time, that the North Koreans may have "achieved the miniaturization of nuclear weapons and acquired nuclear warheads" since its nuclear test in February 2013. Statements against Japan in March and April 2013 that it is within the range of North Korean missiles find a prominent mention.

The white paper assessment of China highlights Japan's concerns on its increasing defence budget, strengthening its "asymmetrical military capabilities", not clearly stating the purposes and goals of the military build up, transparency concerning its decision making process on military and security matters and rapidly expanding and intensification of its activities in the maritime and aerial domains in the East China Sea and the South China Sea. China's "coercive measures" to change the "status quo" of the disputed islands (Senkaku/Diaoyu islands) and the nine dash line are mentioned with deep concern. The white paper details the number of incidents in the maritime and aerial domain over the preceding year and Japan's response to it, thus indicating an increase in its military response.  

The white paper, not surprisingly, emphasises on Japan's relationship with the US. It underlines the security arrangements with the US as a cornerstone in Japan's security outlook, its global and regional foreign policy formulations and as well contributing towards "peace and stability in the Asia-Pacific region". The US relationship is described as a pragmatic one in which Japan acknowledges the challenges as well as the limitations that its ally, the US, is undergoing both domestically and internationally. Given the constraints in the relationship, Japan is now investing materially and politically to the alliance and hoping to raise it to a new level. The white Paper finds frequent references and reiterations to the 1960 Japan-US security treaty and its validity to the Senkaku islands along with the rebalance to Asia. The white paper describes in detail the ongoing and expected redistribution of US military assets as well as the role of these assets.

Reflecting inwards, the white paper highlights the internal changes in the strategic decision making architecture in order to synchronise and seamlessly address the external security environment. During the period of the report, important changes have occurred in the strategic affairs decision making. The first such being to establish the National Security Council (NSC) in December 2013, which functions as the 'control tower" for foreign and defence policy. The NSC in turn deliberated and approved the National Security Strategy; Japan's first-ever document defining a basic policy on national security in December 2013. The other two documents approved by the NSC were the National Defence Program Guidelines (NDPG) and the Medium Term Defence Program (MTDP), thus streamlining Japan's current and future requirements. Another important step was the Japanese cabinet decision (July 1, 2014) on the interpretation of article 9 of the constitution which now interprets an attack on a country that is in "close relationship" with Japan as an attack on its people's right to life, liberty and pursuit of happiness. As a case of "self defence", military resources thus can be used. An important follow up to this was the cabinet decision on "Development of Seamless Security Legislation to Ensure Japan's Survival and Protect its People". This decision is to legislate ways and means of employing the SDF (Self Defence Force) and under what circumstances.

The white paper brings out in no uncertain terms the intentions of the Japanese Prime Minister Abe. While centring on the Japan-US alliance, he would equally like to promote a broad-based trilateral cooperation between Japan, US and the ROK; Japan, US and Australia; and Japan, the US and India. 

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

India’s Revised Defence FDI Policy

Laxman K Behera

September 01, 2014
On 26th August, the government formally notified the revised defence FDI policy, which was first announced in the defence and finance minister's budget speech in July. Coming with immediate effect, the revised policy increases the benchmark FDI cap from 26 per cent to a composite level of 49 per cent under the normal approval route with a further provision that FDI beyond 49 per cent (26 per cent under previous policy) could be allowed if such investment results in access to 'modern and state-of-the-art technology'. Apart from increasing the FDI cap, the revised policy also deals with numerous other aspects. The commentary examines the key provisions of the revised FDI policy and the likely impact on flow of foreign funds to Indian defence industry.

With increase in the FDI cap, the government has also made a change in the kind of foreign investments permitted in Indian defence industry. It is to be noted that under the earlier policy, the foreign portfolio investment in Indian defence industry was either banned, or capped at an arbitrary level for certain companies, causing a lot of dissatisfaction among several listed Indian companies which had pleaded their genuine helplessness in controlling such investments given their nature of flow. The revised policy takes cognisance of this problem and allows all kinds of foreign investments within a composite cap of 49 per cent. These investment include besides Foreign Direct Investment (FDI), Foreign Institutional Investment (FIIs), Foreign Portfolio Investment (FPIs), and investments by Non Resident Indians (NRI), Foreign Venture Capital Investors (FVCI) and Qualified Foreign Investors (QFI). However except for FDI, all other foreign investments which are considered 'hot money' are capped at a maximum 24 per cent. This is to ensure that such money does not influence the key decision making power of the company as stipulated in the Indian Companies Act.

It is also to be noted as per the revised policy, the portfolio investment is permitted through automatic route, meaning that no prior government approval is required for such inflow of funds. But for the non-portfolio investment, the government has retained its right to decide on each proposal.  For up to 49 per cent, the approval body is the Foreign Investment Promotion Board (FIPB) constituted in the Department of Economic Affairs of the Ministry of Finance. However, if the total investment within the limit of 49 per cent exceeds Rs. 1200 crore, it would be approved by the Cabinet Committee on Economic Affairs (CCEA).  FDI beyond 49 per cent - a possibility which the revised policy does not lose sight of – is to be approved by the Cabinet Committee on Security (CCS), provided such investment leads to India's access to modern and state-of-the art technology. However, like the previous policy, the revised policy is also silent as to what is modern and state of the technology.

Apart from increasing the FDI cap, the government has also made a subtle change in the provision of ownership and control of the joint ventures (JVs) to be set up through the revised FDP cap. The change is brought by omitting the term 'defence' from the paragraph 4.1.3(v)(d) of the extant Consolidated FDI Policy that requires, for the purpose of ownership and control of JVs in defence and information and broadcasting (I&B) sectors, a minimum 51 per cent equity stake by the single largest resident Indian shareholder. It is to be noted that such condition was a nightmare for many companies – especially those listed in the stock exchanges - which despite having a control of the management of their entities did not have 51 per cent equity on their own. However, to fulfil the earlier requirement they had to go through a lengthy legal process of getting other Indian stakeholders to act as a single unit. The revised policy frees them from the unnecessary burden and allows them to attract FDI as long as they control the management of the company

Apart from the above, the revised policy has also made number of other changes. The membership of the FDI licensing committee has been enlarged to include the Ministry of External Affairs (MEA). The MEA's membership seems to be an attempt to obtain inputs, from the security point of view, on the true intention of external investors. To safeguard against the leakage of sensitive information, the revised policy makes a new provision that the Chief Security Officer of the JVs, irrespective of the FDI limit, must be a resident Indian. Making a departure from the previous policy – under which permission for FDI (of any limit) could be sought by either Indian company or its foreign collaborator – the revised policy stipulates that permission for FDI up to 49 per cent must be sought by Indian partner only. However FDI beyond 49 per cent, both the Indian partner and its foreign collaborator are allowed to apply.

Having made all the above mentioned changes in the defence FDI policy, the big question now arises as to what would be likely impact on the flow of foreign funds to Indian arms industry. From the foreign companies' point of view, the increase in the benchmark FDI cap to 49 per cent does not still give them management control of JVs, which is key to transfer proprietary technology. This is also the main reason why the previous policy did not succeed in attracting big investment. The foreign companies would also be appalled for getting no clarity on what constitutes modern and state of art technology based on which the CCS would take decision for allowing FDI beyond 49 per cent. These two factors are likely to weigh heavily on foreign companies' decision to make big investment in Indian defence sector. This is however not to indicate that investment scenario post revised FDI policy would remain as subdued as it was earlier. On its part, the government is quite confident that the revised policy would be successful. Such is the confidence that it has removed the earlier provision of mandatory 3-year lock-in period for any inward investment before it can be transferred. The confidence seems to be rooted in government's policy shift towards indigenisation. With the Defence Procurement Procedure 2013 (DPP 2013) prioritising domestic procurement over direct import, the foreign companies have very little choice other than partnering Indian companies for doing defence business India. In other words, the compelling factor would ensure that Indian companies can attract foreign investment without giving management control to the overseas collaborators. However, the extent to which the Indian companies can succeed depends on the government's willingness to stick to its articulated policy on indigenisation.   

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

September 01, 2014

I am a PhD too

Kirti Dua

I booked my railway ticket in IIIrd AC of Hemkunt Express for my journey from Jammu to Ludhiana. On the day of the journey, I boarded the train and kept my suitcase underneath my lower berth. On the opposite lower berth a middle-aged lady was lying.

A gentleman boarded the train, and after having a glance at the berth, told the lady that it was his seat. The lady replied that the TTE had allotted this seat along with four other seats to her family members. The man got annoyed and told the lady in a little loud voice that he had a proper reservation for the seat. He was well-educated and a PhD, neither the TTE nor that lady could befool him.

In the meantime, her husband came and after a careful examination of the ticket of the gentleman, told him to go to IInd AC compartment as his reservation was for that class. The husband of the lady then said that a PhD did not guarantee wisdom and common sense; one had to be careful and alert. After listening to all this conversation, I said to myself that 'I am a PhD too, but I am not like that'.

After some time, one couple in their late sixties arrived in the same coupe. They had their seat reservation for the middle and upper berth on my side. They kept their suitcase underneath my berth. Soon after the train chugged off the railway station, we had a good discussion on various aspects. From the discussion, I came to know that the couple was going to Haridwar on some family function and they had the plans to return the same evening by Hemkunt Express.

Then we opened our packed dinner and shared it with each other as a goodwill gesture. Soon after the dinner, the middle berths opened, lights of the coupe were switched off and all slipped into their berths for the night. The train reached Ludhiana at midnight and everybody else in the coupe was sleeping. To avoid inconvenience to others in the coupe, I took out my suitcase gently from underneath the berth without switching on the lights, got down the train, took an auto and reached home. The next morning when I opened the suitcase, there were suits, saris etc in it. Then I realised that my suitcase had got exchanged with someone else's of the same colour, size and shape.

I recalled that when the elderly couple had boarded the train, they had pushed my suitcase forward to fit in their suitcase and that resulted in this mix-up. From a diary in the suitcase, I found a phone number of their son in Delhi. I called him and explained the whole episode. After contacting his parents at Haridwar, he gave me the details of their return journey on Hemkunt Express.

Within 24 hours, I was again at Ludhiana station at midnight and after sincere apologies from my side, we exchanged our black suitcases. It appeared like a scene from a film in which two smugglers exchanged their stuff. The person told me that they really had a tough time because his wife had to attend that function in the same suit she was wearing as her suitcase was exchanged. I was feeling sorry for the couple and at the same time wondering if it was just a coincidence or my PhD too had a role in it.

Dialogue not an end in itself

Hazards of a poorly planned engagement with Pakistan

G Parthasarathy

A diplomatic engagement with a neighbour having territorial ambitions has to be carefully calibrated and executed. Apart from realistically assessing the balance of military and economic power, one has also to carefully assess the neighbour's internal political imperatives and the readiness of its leadership to live at peace, without resort to terrorism. Sadly, there are vociferous sections in India which believe that dialogue with Pakistan is an end in itself, without carefully considering what the available options are. Moreover, has continuing dialogue produced better results than no dialogue at all?

Imran Khan supporters at a rally in Islamabad. The demonstrations led by Imran Khan and Tahir-ul-Qadri enjoy the backing of the military establishment
Imran Khan supporters at a rally in Islamabad. The demonstrations led by Imran Khan and Tahir-ul-Qadri enjoy the backing of the military establishment

Pakistan lost its eastern half, 13,000 sq km of its territory in the west, one half of its navy, one-fourth of its air force and army, with India holding 90,368 prisoners of war, in the 1971 Bangladesh conflict. In negotiations in Simla with Zulfiqar Ali Bhutto, India's most hard-headed Prime Minister was persuaded by some of her key officials that Bhutto would be devastated politically if he went back empty handed from Simla. While returning the 90,368 PoWs was inevitable, what was surprising was the decision to withdraw from 13,000 sq km of Pakistan territory captured by us on the basis of a mere verbal assurance from Bhutto that he would, in due course, settle the Kashmir issue on the basis of the territorial status quo.

Bhutto had no intention of abiding by his verbal commitment. Just over a decade later, Pakistan commenced promoting a communal divide in Punjab. This was followed by the arming and training of disaffected Kashmiri youth to promote an armed insurgency in J&K. Pakistan also sought to exploit "fault lines" in India's body politic. The Mumbai bomb blasts in 1993, where 250 Indians perished, were planned and executed by the ISI. The perpetrator of these blasts, Dawood Ibrahim, resides comfortably in Karachi. He even ventures abroad on a Pakistani passport. ISI-sponsored terrorism grew rapidly alongside continuing "dialogue" with Pakistan.

The bilateral dialogue was called off by Prime Minister Benazir Bhutto in 1994 when she found that efforts to coerce India on J&K had not worked. Unlike in the past, Kashmiri youths were becoming increasingly wary of crossing the LoC. What followed was the induction of Pakistani nationals from the ISI-backed terrorist outfits like Jaish e Mohammed, Harkat ul Mujahideen and Lashkar e Taiba. This shift in Pakistani strategies from support for a "freedom struggle" of Kashmiris to a jihad by terrorists occurred, not because of any "composite dialogue," but because of ground realities. Moreover, it was during this period that, thanks to imaginative political initiatives and effective policing, Pakistan-backed militancy in Punjab ended. Terrorists from Babbar Khalsa and the ISYF, however, still live across our borders.

Prime Minister Inder Gujral initiated discussions with Nawaz Sharif on a "Composite Dialogue Process," in which the centrality of terrorism was not emphasised. Terrorism was merely put on the same pedestal as drug smuggling! The first round of this dialogue was held in 1998, after the nuclear tests. Determined to ensure that India was seen as sincere in its quest for peace, Mr. Vajpayee visited Lahore, only to find that rather than promoting peace, the resumption of the dialogue was accompanied by Pakistani intrusions, leading to the Kargil conflict, amidst dire Pakistani threats of nuclear escalation. President Musharraf's subsequent visit to Agra was followed by the attack on India's Parliament in December 2001. Structured dialogue alone was clearly no recipe for peace and good neighbourly relations.

The military standoff after the Parliament attack and the post 9/11 American invasion of Afghanistan, forced General Musharraf to think afresh. He proposed a ceasefire across the LoC and promised that "territory under Pakistan's control" would not be used for terrorism against India. While Musharraf abided by his commitments, where the UPA government went horribly wrong was in presuming that a weak democratic government led by Mr. Asif Ali Zardari, a well-meaning Sindhi Shia, would be able to rein in the jihadi propensities of Gen Ashfaq Kayani, a hard line Islamist. New Delhi underestimated the significance of the deadly ISI-sponsored attack on our Embassy in Kabul in August 2008. What inevitably followed was the terror strike of 26/11 in Mumbai. The public outcry that followed the disastrous summit diplomacy in Sharm-el Sheikh forced the UPA government to tread warily thereafter.

Given what followed the 2008 terrorist attack on our Embassy in Kabul, New Delhi should not underestimate the significance of the attack on our consulate in Herat, just on the eve of Prime Minister Nawaz Sharif's visit to Delhi. The recent demonstrations led by Imran Khan and Tahir-ul-Qadri clearly enjoy the behind-the-scenes backing of the Pakistani military establishment. The army has indicated that it will assist Nawaz Sharif. But in return for this support it has demanded that Sharif "must share more space with the army". To expect that in these circumstances, Nawaz Sharif can deliver India's concerns on terrorism, or promote trade and energy cooperation significantly will be wishful thinking. The tough stance that India has taken on the links of the Pakistan establishment with Hurriyat at least conveys that it is not going to be "business as usual" with Pakistan, especially if it continues with ceasefire violations, while abetting terrorism in India and threatening our diplomatic missions and nationals in Afghanistan.

In her meticulously researched book "The Pakistan Army's Ways of War" American academic Christine Faire notes that in order to deal with Pakistani army policies which undermine US interests and seek to destabilise India, the US should consider means to "contain the threats that emanate from Pakistan, if not Pakistan itself". This is the first time a reputed American academic has spoken of the need to "contain" Pakistan. Clearly, this cannot be done by merely chanting the mantra of "uninterrupted and uninterruptable dialogue" with Pakistan. While a measured engagement with whoever rules Pakistan is necessary, it has to be complemented with measures to tighten internal security, enhance our military capabilities and raise the costs for Pakistan, if it pursues its present efforts to "weaken India from within". 

Obama’s another pause on Syrian front

Saturday, 30 August 2014 | S Rajagopalan | in Oped

A year after shelving plan to airstrike Assad forces, the US faces a similar predicament in Syria after declaring to 'do what is necessary' against the Islamic State in the wake of the gruesome killing of James Foley

Exactly a year ago, President Barack Obama was bracing for a military strike against Syria as America's long-time bete noire Bashar al-Assad crossed the "red line" with his alleged use of chemical weapons. However, after all the sabre-rattling for nearly a fortnight, Mr Obama reversed course when confronted by unexpectedly massive domestic headwinds, both on Capitol Hill and elsewhere, with his camp-followers not relishing the sight of an "anti-war President" launching his own war. Much to his relief, Russia, using its clout with Assad, came up with a diplomatic proposal for international control of Syria's chemical weapons, and Mr Obama lost little time to hit the pause/eject button.

A year later, Mr Obama faces a similar predicament in Syria, the only difference being the target this time is not President Assad, who is still sitting pretty, but a ruthless outfit which has been battling for his ouster — the Islamic State in Iraq and Syria (ISIS). As a prelude to possibly taking the battle to ISIS' safe havens in Syria, Mr Obama ordered surveillance flights over Syria earlier this week to gather the requisite intelligence. That came on the heels of the ISIS' cold-blooded execution of American journalist James Foley and posting its savagery online. If the dispatch of spy planes and comments by some top aides triggered speculation of imminent military action, Mr Obama took everyone by surprise by hitting the brakes on Thursday, saying he has no strategy as yet.

For the time being anyway, Mr Obama appears to have beaten yet another hasty retreat on the Syrian front, just days after one of his top aides asserted that the United States would "do what is necessary" against the Islamic State militants in Syria in the wake of the gruesome killing of Foley. "If you come against Americans, we are going to come after you," Deputy National Security Adviser Benjamin Rhodes had declared, adding: "We're actively considering what's going to be necessary to deal with that threat and we're not going to be restricted by borders."

In contrast to the strongly-worded statements by his aides earlier on, Mr Obama is now offering a more sober assessment. As he puts it, "Rooting out a cancer like ISIL (official acronym for the ISIS) will not be quick or easy, but I'm confident that we can and we will." Far from pushing ahead with a unilateral strike, he now speaks of the need for a long-term strategy to deal with the ISIS for which he would be sending his Secretary of State John Kerry to the region to build a coalition of "strong regional partners". For now, the US proposes to confine itself to continuing with the airstrikes against the ISIS within Iraq.

Mr Obama's pause on the Syrian front, pending finalisation of a regional strategy and putting together a coalition of willing, came about just as clutches of lawmakers, both Democratic and Republican, began to demand that the President seek Congressional authorisation before expanding the military offensive against  the ISIS from Iraq to Syria. It also came on a day when The New York Times cautioned editorially: "There are too many unanswered questions to make that decision now and there has been far too little public discussion for Mr Obama to expect Americans to rally behind what could be another costly military commitment."

There has also been a steady commentary in the American media that the one man who would benefit the utmost from a US crackdown on the ISIS in Syria would be none else than Mr Assad. "It is not the case that the enemy of my enemy is my friend," commented Mr Rhodes. And when the question was put to Mr Obama himself at the White House presser, he said dismissively: "I don't think this is a situation where we have to choose between Assad or the kinds of people who carry on the incredible violence that we've been seeing there. We will continue to support a moderate opposition inside of Syria in part because we have to give people inside of Syria a choice other than ISIL or Assad."

In its anxiety to distance itself from the narrative of unwittingly helping Mr Assad, the Obama administration has, in recent days, dismissed the Syrian warning that the United States cannot act unilaterally, but only with its approval and cooperation. "Any breach of Syrian sovereignty by any side constitutes an act of aggression," asserted the country's Foreign Minister Walid al-Moualem, only to be countered by the State Department, with spokesperson Jen Psaki retorting: "We're not going to ask for permission from the Syrian regime."

If some lawmakers are relieved that President Obama is not plunging the military into Syria, there are others, predominantly on the Republican side, who are inclined to support an offensive against the ISIS. That includes Senate Minority Leader Mitch McConnell, who wants the president to work with America's allies and develop a strategy. Reacting to the Obama announcement, he commented: "Don't forget, the threat from ISIL is real and it's growing — and it is time for President Obama to exercise some leadership in launching a response."

The broad view among experts and military advisers is that the Islamic State militancy cannot be defeated without going after the group inside Syria. US Chairman of the Joint Chiefs of Staff General Martin Dempsey believes the Islamic State, right now a region threat, would soon be posing a threat to both America and Europe. He believes that the ISIS must be pressured both in Iraq and in Syria.

Ryan Crocker, a former US Ambassador to Syria and Iraq, is a strong proponent of expanding the offensive to Syria. "The rise of the ISIS presents the gravest threat to United States national security since 9/11," he wrote in the NYT, warning Americans: "This Al Qaeda mutant is far better armed, equipped and financed than the original. Unlike any variant of Al Qaeda since 9/11, it controls significant territory where, secure from attack, it has the space and time to plan its next set of operations. Anyone who believes the US is not on that list is delusional."

(The writer is Washington correspondent, The Pioneer)


 - India is itself partly responsible for the Hurriyat blowback
Kanwal Sibal


Pakistan created an abnormal situation by asking its high commissioner to meet the Hurriyat leaders despite the Indian foreign secretary's "advice" against such a move. Advice like this is not given normally to a foreign envoy unless an issue of high political sensitivity to the host government is involved. But, if given, the expectation is that it will be accepted. A foreign envoy has to maintain a functional relationship with his host government that can be seriously impaired if a confrontational choice is made. After all, the advice to the high commissioner was against meeting a category of Indian citizens on Indian soil — a request that did not abridge his country's sovereignty on its own territory. So, it is aberrant of the Pakistani Foreign Office spokesperson to raise the issue of Pakistan's "sovereignty" in this context.

Pakistan cannot argue that it has a sovereign right to override India's sovereignty on Indian soil, and therefore its envoy can act as he chooses in the exercise of that sovereignty. Pakistan considers Jammu and Kashmir as "disputed" territory and does not recognize India's sovereignty over it. Following this logic, the high commissioner could insist on going to Srinagar and meet the Hurriyat there without the permission of the government. He had the option of protesting against the Indian "advice", drawing attention to the occurrence of such meetings earlier and the political debit for Pakistan in case he failed to meet the Hurriyat before the foreign-secretary-level talks. He could have made his protest public, but he was diplomatically obliged to respect the political advice of the Foreign Office. By failing to adopt this sensible course, the Pakistan high commissioner has grossly violated diplomatic norms. Worse, he escalated matters and graduated from rejecting the Indian advice to showing contempt for it by having a second round of meetings with the separatists. He then decided to be triply offensive by declaring to the press that what he did was helpful to "peace".

Such conduct cannot be overlooked. It is one thing to cancel the foreign-secretary-level talks, but it is another to specifically deal with the violation of diplomatic norms by the Pakistan high commissioner and lay down the rules for the future applicable to other embassies in India too, whose meetings with Hurriyat leaders give the latter political relevance and stature. It is normal for foreign diplomats to meet Opposition leaders, but not secessionists. The fact that the government itself may open channels to them is not a reason for foreign missions to do so. The government does not interfere in its own internal affairs by negotiating with insurgents or separatists, representatives of foreign countries do so by engaging them. A good case, therefore, exists for expelling the Pakistan high commissioner, or, at least, placing curbs on the functioning of the mission. The government may not want to go beyond the cancellation of foreign-secretary-level talks at this stage to avoid being accused of over-reacting — a charge already being levied against the government by those in India who refuse to give up hope of befriending Pakistan through forbearance and generosity. It may not also want to prematurely bury Narendra Modi's ambition to strengthen ties with neighbours and reinvigorate SAARC.

We are ourselves responsible, in part, for the blowback on the Hurriyat issue. The rationale of allowing Pakistanis to hobnob with the secessionists under the nose of our government has not been clear. To believe that this would assist in finding a peaceful solution to the Kashmir issue would have been quixotic. Surely, when Pakistanis talk to the Hurriyat, it is not to encourage them to politically reconcile with Delhi, cease their disruptive activities, participate in the elections to establish their political credentials and seek redress for their grievances through the democratic process. The secessionists no doubt give to the Pakistanis self-serving versions of internal developments in J&K, get closed-door instructions on political strategies to pursue to keep the Valley on the boil, and, no doubt, tie up arrangements for fund transfers. We generously facilitate contacts between ISI operatives in the Pakistani mission and their tools in the Valley.

If there is an obscure purpose in allowing this interaction between Pakistanis bent on making mischief in Kashmir and the Hurriyat equally committed to this goal, is there evidence of that objective being met all these years? The Hurriyat continues to foment anti-Indian sentiments in the Valley and pursue its communal agenda. If keeping these elements in play prevents more radical elements from taking over, and, in that sense, they are a lesser evil to be tolerated, then this strategy has failed.

The Pakistani argument that there was nothing objectionable in the high commissioner entertaining the Hurriyat leadership because such meetings have occurred regularly in the past and India has tolerated them is specious. It is true that India has made only weak noises of disapproval when such meetings have occurred earlier, or even scoffed at them as if they were inconsequential. The Hurriyat, we claimed, had little political standing, with their writ not going beyond their immediate parishes. We even let their leaders travel to Pakistan and to conferences of the Organization of Islamic Cooperation with insouciance.

If this was a show of confidence that the internal situation in J&K was completely under our control and the busybody Hurriyat was a minor nuisance, then we were ignoring ground realities — not so much as regards the Hurriyat, but the perturbing change in the religious tenor of the Valley away from Sufism to more radical Sunni ideologies linked to Saudi Arabia. In any case, we are not obliged to perpetuate past errors. Pakistan's contacts with the Hurriyat are not covered by common law, in that as this practice has continued for years it has become a right. It is entirely up to us to decide when we decide not to overlook contacts between an external enemy and an internal one.

Those in India who have criticized the government's decision to cancel foreign-secretary-level talks as an over-reaction to a trivial issue ignore some vital aspects. If meetings with the Hurriyat are so unimportant intrinsically because this group is a declining force, then why should meeting them be so important for the Pakistanis, to the point that meeting them is considered more crucial than having a dialogue with India? The Hurriyat contests India's sovereignty over J&K and wants a solution in consultation with the wishes of the people in accordance with UN resolutions — a traditional Pakistani position now being more forcefully re-asserted by Nawaz Sharif.

By allowing the Kashmiri separatists to meet the Pakistani leaders in New Delhi, we acknowledge that Pakistan has a legitimate political role in the Valley, conceding, in the process, extra-territorial rights to Pakistan in J&K. We also help boost Pakistan's propaganda about resistance to Indian rule in Kashmir embodied by the Hurriyat, undermining, as a consequence, the government and mainstream parties in Kashmir, who are made to appear lacking in popular legitimacy despite periodic elections. That a country deeply involved in terrorism in J&K is also allowed to have political consultations with a section of the Kashmiris is difficult to understand. It is good that this ridiculous state of affairs is sought to be ended now.

The author is former foreign secretary of India