4 October 2013

India’s Wealthy Must Open Their Gates and Fight Chaos

By Ravi Venkatesan 
Oct 3, 2013 

Lately India has been in the news for all the wrong reasons. Its once tigerish economy is growing at its slowest rate in more than a decade. Newspapers are filled with ever more depressing stories of rape, official plunder and gut-wrenching poverty. To an outsider the headlines can seem surreal: Last week the cabinet actually voted to allow convicted criminals to serve in Parliament and state legislatures, before being forced to back down.

Indians -- who know that almost a third of the members of the lower house of Parliament face criminal charges -- can be jaded about such things. But this kind of official brazenness can hardly inspire confidence in companies looking to invest in India, which has long touted the rule of law as its one crucial advantage over China.

And what about affluent Indians, who unlike foreign companies have a big stake in their country and society? Can they really continue to ignore the chaos and dysfunction that surrounds them, the broken infrastructure and equally threadbare laws? Can they thrive indefinitely in a country where most people exist on less than $2 a day, where half the homes lack toilets and three-quarters of the population doesn’t have access to safe drinking water?
Broken Country

There is no question that India has great potential. Having built successful operations for more than one multinational in my homeland, I know it’s quite possible to navigate India’s chaos and build profitable businesses here. Indeed chaos -- which is really shorthand for corruption, poor governance, uncertainty and volatility -- is a defining feature not just of India but also of many emerging markets. Global companies that learn to conquer it here will be well-prepared to succeed elsewhere.

But without a semblance of governance and the rule of law, India’s rise is hardly inevitable. Demographics and talent -- the lodestones of India advocates -- don’t automatically outweigh criminality, corruption and self-interest.

The culprits for this mess seem obvious: greedy politicians, corrupt bureaucrats and the greasy oligarchs who flatter and fund them. Many middle-class Indians blame democracy itself, which gives the vote to the unwashed and easily bought masses. Increasingly, though, I wonder if the problem isn’t us: educated, relatively wealthy, urban Indians.

Millions of creative and resilient citizens have done well by finding ways around India’s chaos rather than challenging it. We send our children to private schools and abroad rather than to government schools. We patronize world-class private hospitals instead of the public health-care system. We live behind the walls of gated communities, supplied by individual wells and powered by diesel generators.

Indeed, we take pride in our ability to succeed despite the government. The less influence the state has in our lives, the better: We don’t vote (turnout in elite areas is 35 percent or less) or pay taxes (less than 3 percent of Indians actually do). We shudder at the thought of entering government or politics.

Our disengagement has made the erosion of India’s public institutions possible. Now the fragile layer of insulation we’ve wrapped around ourselves is also eroding. Even the affluent and influential can no longer escape the extortion and lawlessness that the less lucky have always faced. I’ve been trying to build a house in Bangalore for more than two years, and have been stymied at every turn by rapacious demands for bribes. One friend’s home has been illegally occupied by a real-estate developer with political connections; the legal process to evict him has stalled because the judge hasn’t showed up for a year.

*** Address the World Like Reagan

October 3, 2013


President Ronald Reagan's speeches regarding the Soviet Union were stark and clear. He declared the Soviet empire "evil," and demanded that Soviet leader Mikhail Gorbachev "tear down" the Berlin Wall. Given that that the Soviet empire in one form or another had been in existence for more than six decades at the time of Reagan's speeches, one could argue that his rhetoric was extreme. For in international affairs, with longevity usually comes legitimacy. But because his speeches were simple, they carried the benefit of being impossible to misinterpret. And because they were impossible to misinterpret, the Washington bureaucracy -- State Department and otherwise -- could find no subtleties inside his speeches that they could willfully twist to serve their own varied agendas. Thus, a rarity occurred in Washington: The administration down to the lowest level often spoke in one voice. And because it spoke in one voice, the effect of Reagan's foreign policy was magnified -- and was, therefore, a factor in the collapse of the Soviet empire that began only a year after Reagan left office.

Of course, most administrations in recent American history do not meet the rhetorical standard of the Reagan White House's stringent chain-of-command approach. But they came close. George H.W. Bush's secretary of state, James Baker III, was a model of tight-lipped control and restraint in his public utterances. Listening to Baker you knew that there was little distance between the State Department and the White House. And while the elder Bush's Defense Department under Dick Cheney and his undersecretary for policy, Paul Wolfowitz, was more hawkish than Baker's team at State, the distance between the two was still reasonably measured. The elder Bush ran a disciplined operation. And the rhetoric demonstrated that.

Of course under the younger Bush, the rhetorical distance between Defense Secretary Donald Rumsfeld and Secretary of State Colin Powell was vast, reflecting the utter lack of coherence in George W. Bush's foreign policy team. Bush had one saving grace, though. He did speak with clarity and his words often enough matched his actions, for better or for worse.

Under President Bill Clinton there were certain rhetorical tensions. Defense Secretary William Cohen was more reticent about intervention in the Balkans than Secretary of State Madeleine Albright. But the two did not clash and overall worked well together. Albright warned Serbian strongman Slobodan Milosevic again and again to stop grossly violating the human rights of ethnic Albanians in Kosovo without taking action, so much so that she was criticized in the media for undermining the credibility of the United States. And yet, Albright eventually did convince the administration to act, backing up her words. The NATO-led war against Serbian transgressions in Kosovo in the spring of 1999 soon enough vindicated Albright's rhetoric.

By any of the above standards of rhetoric, President Barack Obama and Secretary of State John Kerry have fallen short. Obama threatened to act militarily against Syrian President Bashar al Assad if the latter deployed chemical weapons against civilians, thus declaring a red line. When al Assad actually killed a substantial number of civilians with such weapons, Obama moved warships close to the Syrian coast and Kerry delivered a Sturm und Drang speech packed with illustrative detail about the chemical attack. It was the kind of speech you give hours before a significant number of American ground troops or a substantial volley of missiles is about to descend upon Syria. None did. Nor was a plane or a missile launched. Then Obama quickly backtracked, saying he needed congressional approval before taking action, even though he clearly didn't. White House and State Department rhetoric had thus ascended the heights of indiscipline. To be sure, the Russian diplomatic intervention arrived only as it began to become clear that Obama and his top diplomat were never altogether serious in the first place about what they had, in fact, declared in public.

China's Ambitions in Xinjiang and Central Asia: Part 2

Stratfor
October 1, 2013 

Editor's Note: This is a three-part series on China's evolving strategic interests in Central Asia and in its own far northwest, the Xinjiang Uighur Autonomous Region. Part 2 examines how Beijing is looking to Xinjiang and Central Asia for natural gas, oil, coal and other industrial inputs to help fuel future inland development in China. Read more in Part 1 and Part 3

For centuries, geography and an abundance of domestic resources limited China's need to seek material inputs and project power far beyond its borders. Over the past two decades, however, this dynamic began to break down as China's demand for energy and raw materials outstripped its existing production capacity. As a result, Chinese manufacturers, real estate developers and other businesses found themselves sourcing an increasing share of their energy supplies from overseas, dramatically expanding the Chinese economy's exposure to political and economic forces far beyond the government's control. China has never been more vulnerable -- economically, socially and politically -- to supply disruptions overseas.

At the same time, China's supply-demand imbalance has compelled radical changes in the geography and logistics of domestic Chinese resource industries. Most notable has been the rapid migration of energy and raw materials production bases from China's populous core provinces to underdeveloped,sparsely populated "buffer zones" as output from older coal and oil deposits stagnated or declined.
Xinjiang's Energy Promise

In many respects, Xinjiang represents the far frontier of this process. The Chinese government and outside observers alike have touted Xinjiang as the next Inner Mongolia -- a reference to that region'sunprecedented coal output growth between 2004 and 2012. Xinjiang is indeed blessed with some of the world's largest untapped reserves of thermal coal, and its coal output could reach 750 million metric tons by 2020 (up from 141 million metric tons in 2012). But compared with well-developed coalfields in western Inner Mongolia and northern Shaanxi province, much of Xinjiang's reserves remain untapped and understudied.

Prior to the mid-2000s, the logistical challenges of transporting coal from Xinjiang to coastal consumer bases overwhelmed whatever strategic or political rationale there might have been for its development. Now, stagnant and declining output in many parts of northern China, the prospect of rising coal demand from industrializing inland provinces, and Xinjiang's low production costs have tipped the balance in the region's favor.

Over the next five years, the Chinese government plans to invest some $196 billion on expanding power generation and ultra-high voltage transmissions lines linking Xinjiang coalfields to inland consumer bases. Xinjiang will also figure prominently in Beijing's planned $392 billion rail expansion over the next five years, especially as the government's focus shifts from high-speed rail to national freight transport networks.

Another Kargil in Keran Sector ?

03 Oct , 2013


You don’t require a genius to tell you that the serious intrusion in Keran Sector that has been ongoing since 23rd September, even before the terrorist attacks on Hira Nagar Police Station and an Army unit in Samba on 26th September, was deliberately down played to facilitate the Prime Minister meeting his Paki counterpart in US. It is only a day back when ‘Headline Today’ alleged one of our villages in Keran Sector having been heavily infested (the news included conversation with locals) by Pakistani infiltrators that the news about major infiltration by Pakistani military special troops and heavy ongoing fighting has emerged.

Can the government explain to the public why this subterfuge? What has the Prime Minister achieved by meeting Nawaz Sharif beyond confirming he is made of putty? Did the coterie of the Foreign Minister and the NSA convince him that he would be given preference over President Putin being nominated for the Nobel Peace Prize? Does the government realize the consequences of these actions; encouraging Pakistani military, J&K separatists and terrorists operating within J&K with or without political support? Does it require another terrorist attack on Parliament or political assassination to understand that what is happening in Keren Sector today is but the trailer of what is going to happen next year when Americans quit Afghanistan?


What has the Prime Minister achieved by meeting Nawaz Sharif beyond confirming he is made of putty?

Nawaz Sharif is no dehati (village) woman who is bending backwards to the Pakistani military. He has done so since years including during his previous tenures consistently and has displayed his crookedness to both Prime Minister’s Gujral and Vajpayee. Yet, despite upping the ante through terror attacks, cross border raids, beheadings and ceasefire violations, those insisting on hugging them only prove they are sold out. He has the foxiness of extracting more Sharm-el-Shiekhs before our NSA can say Jack Robinson. Why do you think he is permitting funding millions to terrorist organizations from his constituency and not making the slightest move against anti-India terrorists and their infrastructure aside from boasting of a new counter terrorism policy that is full of holes. Leave aside recent actions, following record of Pakistan can only be ignored by fools:

Breeding terrorism in India – Need more proof than David Headley and now Tunda?

Infiltrating terrorists in Jammu & Kashmir.

Creating an armed terrorist architecture pan-India since early 1990’s.

Engineering endless terrorist attacks / acts in Delhi, Pune, Mumbai, Gujarat, other parts of India including IC-814 hijack, attack on Parliament, 26/11 Mumbai terrorist attack etc.

Refusing to act against Pakistani perpetrators of 26/11.

Nurturing, patronizing and masterminding LeT acts against India.

Using the Haqqani network to target Indians and Indian interests in Afghanistan.

Pumping drugs and fake currency (minted in Pakistani government facilities) into India.

Open rallies in Pakistan professing balkanization of India, collection of funds and recruitment for jihad against India under the very nose of the administration and with open support of military veterans in connivance the ISI and military.

Refusal to acknowledge continuation of the ‘Karachi Project’ and other Pakistani complicity as disclosed by Abu Jundal.

Virus arracks on Indian networks.

Cut in Non-plan Expenditure and Impact on Defence Budget

IDSA COMMENT

October 3, 2013

On September 18, 2013, austerity measures were announced by the Department of Expenditure (DoE) to contain the non-developmental expenditure so that additional resources could be released for the unnamed priority schemes. These measures include a 10 per cent cut in the non-plan expenditure (excluding certain segments thereof).

It is not the first time that such a cut has been imposed. A cut of 5 per cent was imposed in 2006-07 and again in 2007-08. This was doubled to 10 per cent in 2008-09. Since then non-plan expenditure has been subjected to a cut of 10 per cent in 2009-10, 2012-13, and now during the current financial year. The regularity with which the cut is being imposed on the allocations points to a serious flaw in the process of budget formulation. It is hard not to draw the inference that the assessment of government’s receipts during those years was so unrealistic that it became clear within the first few months of the relevant years that the expenditure authorized by the parliament through the budgetary process would not be sustainable.

It makes little sense to go through the laborious budgetary process if it is known, even while the detailed demands for grants are being discussed by the standing committees of the parliament, that the expenditure for which parliamentary approval is being sought might be, in all probability, beyond the means of the government. It is not as if year after year there was an unexpected turn of events in the first couple of months after the budget was approved, making it necessary to announce austerity measures.

It will be more prudent to make budgetary allocations that are affordable rather than curtailing the allocations soon after these are made, throwing all expenditure plans out of gear. This might imply lesser allocation for defence – as for other sectors – and sharper criticism by the powerful strategic community about the inadequacy of the defence budget but such criticism is bound to be made anyway whenever the budget is subjected to a cut.

Be that as it may, the DoE instructions require every ministry and department to cut the non-plan expenditure have spared the interest payment, payment of debt, defence capital, salaries, pension and the grants to the states by 10 per cent. The defence establishment has not concerned with payment of interest and release of grants to the states. The defence pension budget is not a part of the defence budget, as we know it, and the capital budget has been exempted, which implies that the capital acquisitions will not be affected by the cut. (This, however, does not mean that the Ministry of Finance will not mop up any funds at a later stage which, in its opinion, the MoD will not be able to spend by 31st March 2014.) Consequently, the axe will inevitably fall on the revenue budget.

Within the revenue segment also, the cut will affect only the other-than-salary segment. But this is unlikely to be of any comfort to the managers of the defence budget as absorbing this cut could pose a serious challenge. Take, for example, Indian Army’s net revenue allocation of INR 81,833.93 (including the charged expenditure) for the current year. The allocation for pay, allowances and wages, scattered under various minor budget heads, collectively account for as much as INR 57,422.55 crore of this allocation. This leaves a balance of INR 24,411.38 crore for all other activities. This will be subject to the 10 per cent cut, which works out to INR 2,441 crore.

It is difficult to visualize how this will be done. The other-than-salary budget heads include transportation, stores, works and the other expenditure. The net allocation under the transportation budget head is marginally lower than the actual expenditure of 2011-12 and the revised estimates (RE) for 2012-13. This effectively rules out the possibility of any further reduction from this budget head.

What the great-grandson didn’t learn

By Vidya Subrahmaniam

The Hindu AGREEMENT WITHIN DIFFERENCES: Nehru (right) and Patel differed with the utmost respect for each other, and concurred and united with the utmost respect. Photo: Gandhi Smriti

Should Rahul Gandhi read the correspondence between Nehru and Patel, he would know that differences can be expressed with greater finesse than what he has shown us

The walloping Rahul Gandhi gave the Manmohan Singh government on the ordinance to protect convicted lawmakers has expectedly led to shock-and-awe in Congress and government circles.

Rahul has a way of springing surprises but the angry-young man-act executed in full public view crossed the boundaries not just of decency but the rules by which the Cabinet system of government runs.

Mercifully, the United Progressive Alliance government did not treat Rahul’s “nonsense” diktat as an announcement in itself. It undid the ordinance by due process — by having the Union Cabinet reconsider and withdraw a decision taken by the Union Cabinet.

The most striking thing about Rahul’s theatrics was his vocabulary which did not go beyond “rubbish” and “nonsense.” Of course, anyone hearing him at the Press Club of India, which was the chosen venue for the mutiny, would have got the drift — that he was lamenting the loss of principles in current-day politics. Noble thought, but can principles be restored by disobeying the principles of governance?

Partition

If Rahul had gone to his own library, he might have chanced upon a volume containing letters exchanged between Jawaharlal Nehru and Sardar Patel. If he read the correspondence, he might know from whom he has inherited his temper and a somewhat irksome tendency to be self-righteous: his great-grandfather. But he is also likely to know he has missed out on many of Nehru’s great qualities. His towering intellect and the scholarship he brought to any discussion. The elegance and beauty of his writing. And the most relevant attribute in the current context: the civility with which he treated his colleagues. Nehru differed strongly with Patel but held him in deep affection and respect, and when needed, readily admitted that he was in the wrong.

Nehru and Patel clashed rather fiercely on the functions of the Prime Minister and his position within the Cabinet (Nehru-Patel; edited by Neerja Singh, 2010). Nehru argued that the Prime Minister should “have full freedom to act when and how he chooses” and if he was restrained from doing so, he would be reduced to a “figurehead.” Patel’s counterview was that a Prime Minister acting this way would be a “virtual dictator.”

The differences arose following Nehru’s decision to send his emissary, H.V.R. Iyengar, to Ajmer with the brief to report back to him on the adverse situation faced by Muslims in the disturbed aftermath of Partition. The time was December 1947-January 1948 and Nehru and Patel furiously corresponded on the propriety of Iyengar intervening in a matter that Patel said fell in his domain. Exception to Iyengar’s visit was also taken by Ajmer’s Chief Commissioner, Shankar Prasad, who in a letter to Patel’s private secretary, V. Shankar, argued that the visit had “weakened my position, bred public distrust and aroused bitter partisan comment.”

Delivering us from surveillance

By Arun Mohan Sukumar



New Delhi can pursue a series of small, simple measures to help check NSA’s snooping without seriously affecting India-U.S. ties

Prime Minister Manmohan Singh’s reluctance to raise the slightest murmur of protest against the U.S. National Security Agency’s (NSA) spying excesses during his American trip leaves us with one question: will NSA surveillance continue unabated? India has displayed a stunning lack of political will to even broach the issue with Washington D.C. Perhaps, this was inevitable: a Prime Minister humiliated at home by his own party can hardly be expected to sour the one foreign policy achievement that defines his legacy. Dr. Singh was busy ensuring the India-U.S. nuclear deal is operationalised before he demits office to worry about concerns that actually affect the lives and businesses of Indians.

Consensus

This is unfortunate because NSA surveillance is an area where rare consensus has emerged among the BRICS countries. At the U.N. General Assembly session in New York last week, BRICS Foreign Ministers “expressed concern” at the “unauthorised interception of communication and data,” without calling out the NSA in specific. But there exist no international regulations to protect civilians from such surveillance because the U.S., the United Kingdom and Israel in particular are opposed to any cybersecurity treaty. In 2010, Russia — backed by Brazil and China — tabled a draft convention on cybercrimes at the U.N., only to be shot down by the West. The Russian proposal specifically targeted intrusive technology and cyber attacks — the sort of stuff the NSA is adept at. But the U.S. successfully spun the narrative around to suggest autocratic countries like Russia and China wanted to clamp down on the Internet. A year later, The New York Times would reveal the U.S. and Israel had used precisely this technology to infect nuclear reactors in Iran with the Stuxnet virus.

The U.S. used the same pretext last December in Dubai when the U.N. deliberated an international communications treaty under the auspices of the International Telecommunication Union (ITU). The Obama administration, however, refused to sign the International Telecom Regulations and asserted that cybersecurity be kept out of the treaty’s mandate. It insisted the Internet be unregulated to leave it “free and open.” Months later, leaked NSA documents courtesy Edward Snowden would reveal how the U.S. arm-twisted telecom companies and Internet service providers for confidential user data. Had the U.S. signed on to the ITRs, the NSA’s PRISM programme would have amounted to a gross breach of its treaty obligations.

At the ITU negotiations, India chose regrettably to side with the U.S. This July, The Hindu disclosed how India’s Central Monitoring System (CMS) intercepts private communication in the same vein as the NSA. Given that India and the U.S. signed a Memorandum of Understanding in 2011 to share “cybersecurity information and expertise,” it would not be surprising to learn that much of the CMS’ capabilities stem from our cooperation with the U.S.

Holding back

There are then three plausible reasons behind India’s refusal to take up the NSA revelations with the U.S. One, Prime Minister Singh does not wish to sully the piece de resistance in his foreign policy tab. Two, New Delhi worries about a potential blowback in ties especially on technology transfer, private investment and defence cooperation. Third, the government needs to sustain its own monitoring and intercepting of communication, for which it needs U.S. assistance.

The upside of the falling rupee

By Neelkanth 
Oct 04 2013


How India is using the opportunities in a weak currency, in terms of import substitution and a spurt in exports.

A weak currency helps growth, and is in many ways equivalent to monetary easing. One recalls the fear of currency wars not long back: it seemed as if the developed countries were in a game of competitive currency devaluation in their desperation to get their economic vitality back. This view took a backseat when the reverse started to happen, and the currencies of developing economies went into a free-fall. In India, the precipitous decline of the rupee between May and August created panic, very similar to a run on a bank. But now that some stability has returned, we can evaluate the beneficial impact on the economy.

The opportunities clearly lie in import substitution and exports as local manufacturing costs fall with the rupee's decline. To understand the substitution argument better, Credit Suisse research divided India's import basket into four categories based on the reason for

importation: unavailability, incapability, lack of capacity and lack of cost competitiveness. Of these, Indian manufacturers were able to benefit from the weak currency only in the "lack of cost competitiveness" category.

Unfortunately for India, the first three categories accounted for more than 85 per cent of imports last year. Imports of goods that the country just does not have, such as crude oil, gold, coking coal, copper and potassium fertiliser, were almost two-thirds of India's import basket. Another 12 per cent were imports of goods that India cannot make, including cellphones, computers, aircraft and high-end cars. These categories of imports would only fall with a decline in prices, when local demand weakened, or regulators imposed restrictions (as they have done with gold). Due to lack of capacity, for example, in some types of chemicals, steel or automotive parts, were 12 per cent of the import basket. In some of these categories, such as steel, capacity growth is picking up, and substitution is happening, though at a slow pace.

The lack of cost competitiveness group was only 13 per cent of total imports last year, but at about $42 billion, it was not a small amount in absolute terms. Among other things, it included low-tech consumer appliances, some types of capital goods and pharmaceutical ingredients. Some of these sectors have already started to see substitution.

A much larger opportunity lies in exports: the higher the proportion of rupee-based costs for an exporter, the larger the advantage of a weak currency. For example, a copper smelter that imports copper concentrate and exports copper would not gain much, as it has 98 per cent of its costs in US dollars. On the other hand, as almost two-thirds of the costs in two-wheeler manufacturing are denominated in rupees, two-wheeler exports get a boost.

In fact, there are some exciting changes afoot in the automotive sector. Indian two-wheeler manufacturers are making deep inroads into the growing markets of Africa and Latin America. The currency of course helps, but they have also improved productivity substantially. It is remarkable that despite sharp increases in the prices of metals, rubber and labour over the last two decades, the rupee price of a motorcycle is pretty much what it was when I became capable of riding one in the mid-1990s, and yet the mileage, design and power are better than before.

Small-car manufacturing is a classic example of demand creating supply. Now that domestic car demand has reached a level that makes the market attractive for global automakers, most foreign brands have entered India. But with high imported content, the rupee's weakness makes it difficult for them to compete against well-entrenched manufacturers that have high levels of indigenisation. The new entrants cannot indigenise more until they get sufficient scale locally: a chicken and egg situation. The solution is exports: an increasing number of car makers are making India a small-car export hub. A fifth of all small cars manufactured are already exported, and this proportion is likely to rise sharply in the coming years.

Take IT services: the salaries of entry-level Infosys engineers have been unchanged for six years. In US dollar terms, they are back to 2005 levels! There has been a sharp surge in the supply of engineers as intake capacity in colleges has more than doubled over the last six years. Some question the quality of this expanded cohort, but such cynicism ignores the fact that if quality was inversely proportional to the quantity of graduating engineers, it would have been falling steadily for two decades! The volume growth in IT may not just happen with Indian companies, but also with global firms increasing the size of their India operations.

Peace Process: Pakistan will have to walk the talk

October 3, 2013


Long before Prime Minister Manmohan Singh met his Pakistani counterpart on the sidelines of the UN General Assembly a vigorous debate had started in India on whether or not India should re-engage with Pakistan. Queering the pitch was the fact that not only had India not received any satisfaction on the issue of cross border terrorism (the arrests of people like Abu Jundal, Abdul Karim Tunda and Yasin Bhatkal and the disclosures made by them during interrogation only added to the sense of disquiet over Pakistani perfidy on the issue of terrorism), but also the renewed hostility along the Line of Control where the ceasefire agreement of 2003 was being violated by the military-militant alliance in Pakistan. In such a situation, any show of manufactured bonhomie with Pakistan would not just be a political suicide for the government in Delhi, but also send wrong signals to the security forces in India as well as to the hostile elements in Pakistan.

While business as usual with Pakistan was no longer a sellable proposition in India, there was nevertheless a case that could be made for using the meeting with Prime Minister Nawaz Sharif as an opportunity to make the Pakistanis aware of the red-lines that they needed to respect. The problem was that apprehensions were being expressed in India that given Manmohan Singh’s soft approach towards Pakistan and his keenness to make a breakthrough in relations with Pakistan (which some people claim he wants to leave as his legacy), he would refrain from plain speaking with his Pakistani counterpart. That these apprehensions proved false was clear from the position taken by India, not just in the meeting between Manmohan Singh and US President Obama and in his speech to the UN General Assembly, but also in his meeting with Nawaz Sharif.

In a sense, Nawaz Sharif himself created a situation in which the Indian side was left with no choice but to toughen its stand. Raking up the UN resolutions on Jammu and Kashmir (and in the process contradicting his oft stated desire to resurrect the Lahore process that was started between him and the then Indian Prime Minister, Atal Behari Vajpayee) Sharif muddied the waters. Manmohan Singh responded firmly, first in his meeting with Obama where he called Pakistan an epicentre of terrorism, and then in his UN speech where he not only demanded the end to cross border terrorism from Pakistan but also strongly reiterated that J&K was an integral part of India and there could be no compromise on India’s territorial unity and integrity. Having clearly laid down his position, Manmohan Singh went into talks with Sharif, where for the first time in his interactions with Pakistanis, he effectively put forward the Indian viewpoint, a radical shift from the pusillanimous approach that until now had characterised his governments approach to Pakistan.

While the Prime Minister sent a clear message of the things that Pakistan needed to do, the Indian External Affairs Minister Salman Khurshid also did some plain speak. In an interview to Voice of America, he made it quite clear that actions and not words will henceforth be the standpoint for judging Pakistan's seriousness in improving relations with India. The fictitious distinction between non-state actors and state actors was been done away with by Salman Khurshid. He said that regardless of whether the terrorists were state actors, or non-state actors or even quasi-state actors, if they operated from Pakistani soil or any territory under Pakistan's occupation, then it was the responsibility of the Pakistani state to take action against them; and if the Pakistani state is unable to do so, then it could ask India to help in taking action against such groups.

While on the face of it, there isn’t any major take-away; in reality some significant new grounds were broken. For one, certain ground rules and red lines appear to have been laid down. Pakistan’s traditional tactic of entering into negotiations with India with two guns, one pointed at India’s head and the other at its own head, is no longer acceptable. In the past, if the gun pointed at India’s head didn't work (i.e. India refused to be coerced by the export of jihadist terrorists), then Pakistan brought the other gun which was pointed at its own head (i.e. made a pitch for concessions on the grounds that its own survival was threatened by the Islamic extremists and without any gesture from India, the Mullahs would take-over power in Pakistan). Second, India made it abundantly clear that both these guns will have to be off the table. In other words, there can be no progress in the dialogue process in a climate of coercion and cessation of terrorism has to be the starting point for any engagement process. Third, and this is perhaps the single most important take-away, Pakistan has agreed to respect the sanctity of the Line of Control and will work with India to put in place mechanisms that will ensure ‘peace and tranquillity’ along the LoC. The future of the peace process has now been linked to restoration of the ceasefire on the LoC and an end to not just cross-border raids but also infiltration of jihadist terrorists on to the Indian side.

Why is India under Attack?



Why is India under unremitting attack from Pakistan? In its answer lies the solution to proxy war being waged by Pakistan. It is not just ‘territory’; the honest answer would contain some ‘non-territorial’ reasons, politically dreadful and explosive.

On the morning of 26 September, terrorists attacked an armoured unit in Samba. The Second-in-Command (2IC) Lt Col Bikramjeet Singh was killed and the Commanding Officer Colonel Avin Uthaiya received bullet injuries. There was another attack on a police station at Kathua. At least twelve people were killed and four injured in the twin terror attacks. The usual suspect is the Lashkar-e-Taiba (LeT), rather its latest ruse, Shohada Brigade. These attacks occurred near the International Boundary (IB), which is not a disputed area. Simultaneously, from across the Line of Control (LoC), there was brazen infiltration bid in the Keran Sector by at least 30 Pakistan based militants of which the Indian Army eliminated a dozen.

An Act of War!

The attack thus emanating from Pakistan’s soil addressed both the LoC and the IB. The simultaneity and the coordination of the attacks separated by hundreds of kilometers could not have taken place without the orchestration of the Pakistani dispensation. This constitutes an act of war!

The attack on the armoured unit is a perfect paradigm of “proxy war”. An armoured unit equipped with 45 tanks packs enormous amount of firepower. It just took three militants to neutralise it, not on physical but strategic terms and unambiguously demonstrated that a sleazy adversary can paralyse conventional military superiority with cowardly reliance on irregular warfare as a matter of strategic faith. Proxy war or sub-conventional war affords deniability to the perpetrator. Diplomatic visits and engagements serve tools for deniability and diplomatic reprieve to the perpetrator to perpetuate and calibrate ‘proxy war’. Pakistan has mastered this art and India has allowed itself to be a confounded victim. The cycle of terror and talks hence continues unabated. The media discourse on the attack unfortunately dwelt neither on the strategic enormity of the attacks across the IB and LoC, nor on the sacrifices made by our security personnel. It chose to focus on ‘whether PM Manmohan Singh would or should meet his Pakistan counterpart Nawaz Sharif’! The meeting was merely taking place on the sidelines of the UN General Assembly. Yet the pretense was maintained that the talks were an end in itself and great dexterity was shown to distinguish between ‘Nawaz Sharif’, the secular political and democratic ‘face of Pakistan’, and the military-intelligence establishment. Nawaz Sharif was propped up as the face of peace and the attacks were construed as attempts to derail the ‘peace process’.

Negligible Peace Constituency

Nothing could be farther from the truth. There is an insignificant peace constituency left in Pakistan. The support provided by the terror outfit ‘Lashkar-e-Jhangvi’ (LeJ) to Nawaz Sharif in the recent elections is common knowledge. It is also documented that Nawaz Sharif’s brother Shahbaz Sharif, the Chief Minister of Punjab, has provided Rs.61 million to Hafiz Saeed in the current fiscal. The Punjab Government also provided Rs.350 million grant-in-aid to ‘Markaz-e-Taiba’ of Hafiz Saeed’s Jamaat-ul-Dawa (JuD) for setting-up ‘Knowledge Park’. The JuD centre, which was located at Murdike on outskirts of Lahore, was taken over by the Punjab government shortly after UN Security Council designated JuD a front of the LeT in the wake of Mumbai attacks. In fact, the police in Punjab let all the LeT leaders escape arrest and only a year later the Shahbaz government approved a grant of one million US dollars to LeT.

India’s Child Soldiers: Reality Check

By Pratibha Singh


I joined the military dalam when I was 13 or 14 years old. I was studying in an ashram school (government run residential school) in eighth standard, when Naxalites came to my hostel. I did not want to go. They said I could study until the 10th standard, but I should go with them. We got training, learnt about landmines and a little karate. (Finally) I had an opportunity to run away… One year after I ran away, both my younger brothers (age 8 and 12) were killed (by the Naxalites in retaliation). They beat my mother and broke her arm. They burned our house and took all our things. (Former Child Dalam member, December 2007)[1]

The police asked me also to become an SPO( special police officer) but I refused because I did not want to become an SPO and commit heinous crimes. I did not want to shoot and kill people. They do not ask anyone how old they are. Even 14 year olds can become SPOs if the police want them to become SPOs. (Poosam Kanya(pseudonym), former resident of Errabore Camp, December 2007)[2]

The above two statements exemplify the horror of exposing children to conflict. They find themselves sandwiched between the violence perpetrated by armed opposition groups and the State armed forces. The Government of India is a signatory to the optional protocol on the Involvement of children in armed conflict[3], which was further ratified on 30th November, 2005.

According to Asian Centre for Human Rights, there are 3000 child soldiers (including State forces and armed opposition groups) in India (as of March 2013), 500 in the State of Jammu and Kashmir and Northeast India; 2500 in the left wing extremism affected areas. These figures form only the tip of the iceberg. The periodic report submitted by the Government of India (prepared by Ministry of Women and Child Development) in 2011 on the Involvement of Children in Armed Conflict to the Convention on the Rights of Child has not only denied the existence of child soldiers in India but also misrepresented facts regarding sub conventional conflict taking place in various parts of the country. The report states “Even though India does not face armed conflict, there are legislative provisions that prevent involvement of children in armed conflict and provide care and protection to children affected by armed conflict”[4]. UN Committee on the Child of rights is scheduled to consider it during its 66th pre-sessional working group to be held in Geneva from 7-11 October, 2013.

This denial has not only distorted facts but also justified or rather absolved rampant recruitment of child soldiers in the armed opposition groups who are increasingly becoming an internal security threat. While terrorist organisations in India have an unprecedented number of child soldiers in their ranks, there are reports of the state police forces too, having recruited people below the age of 18 years. As per unconfirmed reports, the Chhattisgarh police has recruited approximately 300 “Bal Rakshaks” seven of whom are posted with 4th battalion (engaged in counter insurgency) of Chhattisgarh Police at Mana in Raipur. These reports still need to be verified.

Considering there is a large number of children in the armed conflict of left wing extremism, which has caused an irreparable damage to their lives, it becomes imperative to analyse what drives so many children to pick up arms. Recently, Muppalla Laxmana Rao aka Ganapathi in a 7000 words letter to party members has admitted having crisis within the party due to lack of leaders not only at the top but also in party ranks. Lack of volunteers for the cause is perhaps driving the Maoist leadership to recruit child soldiers. This is clearly visible in the exceptional number of women and children in the naxal cadres. Around 40 to 60 percent of naxal cadres now comprise of women.

Contemporary Ladakh: Facebook, Twitter & the Social Transformation in Kargil

Fighting Terrorism: Pakistan’s New Policy


Over the last decade, the deteriorating internal security environment has gradually morphed into Pakistan’s foremost national security threat. The inability of the Pakistan army to meet internal security challenges effectively is a particularly worrying factor. Fissiparous tendencies in Balochistan and the restive Gilgit-Baltistan Northern Areas are a perpetual security nightmare. Karachi remains a tinderbox that is ready to explode. The Al Qaeda has gradually made inroads into Pakistani terrorist organisations like the Lashkar-e-Toiba (LeT), the Jaish-e-Mohammad (JeM), Harkat-ul-Jihad Al-Islami (HuJI), Tehreek-e-Nafaz-e-Shariat-e-Mohammadi (TNSM) and the Lashkar-e-Jhangvi (LeJ). The Tehreek-e-Taliban Pakistan (TTP) has consolidated its position in North Waziristan and appears capable of breaking out of its stronghold to neighbouring areas. The Nawaz Sharif government has now announced a new counter-terrorism policy.

The Pakistan army has been facing many difficulties in conducting effective counter-insurgency operations even though it has deployed more than 150,000 soldiers in the Khyber-Pakhtoonkhwa and FATA, and has suffered over 15,700 casualties, including over 5,000 dead since 2008. Total casualties including civilians number almost 50,000 since 2001. Special Forces units of the Pakistan army, the elite SSG, are also directly engaged in fighting the militants. The army is unwilling to conduct high-intensity counter-insurgency operations due to apprehensions that fighting fellow Muslims would be demotivating in the long run. Many soldiers, including officers, are known to have refused to fight fellow Muslims. Several cases of fratricide have been reported. Questions are now being raised about the army’s lack of professionalism in counter-insurgency operations and its withering internal cohesion.

The Pakistan army has been forced by the Tehrik-e-Taliban Pakistan (TTP), headed for many years by the late Baitullah Mehsud, to wage a three-front "war": against the TTP and the Islamic Movement of Uzbekistan (IMU) in South Waziristan; against the anti-Shia Lashkar-e-Jhangvi (LeJ) in the sensitive Darra Adam Khel-Kohat area of Khyber-Pakhtoonkhwa and the Shia-dominated Kurram Agency of FATA; and, against the Tehrik-e-Nifaz-Shariat-e-Mohammadi (TNSM), headed by Maulana Fazlullah, and the Jaish-e-Mohammad (JeM) in the Swat Valley of the NWFP. The TTP’s cadre base is over 20,000 tribesmen and Mehsud commands about 5,000 fighters. Mangal Bagh Afridi leads Lashkar-e-Islam (LI), a militant group that has refrained from joining the TTP and is independently active up to the outskirts of Peshawar. Meanwhile, radical extremism is gaining ground in Pakistan and the scourge of creeping Talibanisation has reached southern Punjab.

Though it has flirted with peace deals with the militants, the army finds it impossible to meet the demands of the TTP and the TNSM. Demands have included the suspension of all military operations in the tribal areas; the withdrawal of army posts from the FATA; the release of all tribals arrested under the Anti-Terrorism Act; the release of Maulana Abdul Aziz Ghazi and tribal students arrested during the commando action in the Lal Masjid of Islamabad in July 2007; and, enforcement of the Sharia in the tribal areas.

Hurt by a series of Taliban successes in “liberating” tribal areas and under pressure from the Americans to deliver in the “war on terror”, in the initial stages the Pakistan army employed massive firepower to stem the rot. Helicopter gunships and heavy artillery were freely used to destroy suspected terrorist hideouts. This heavy-handed firepower-based approach without simultaneous infantry operations failed to dislodge the militants but caused large-scale collateral damage and served to alienate the tribal population even further. Major reverses led to panic reactions including the hurried negotiation of “peace accords” that were invariably broken by the militants.

Senior Pakistani Taliban Commander Takes Credit for Killing Pakistani Army general

October 3, 2013


Long War Journal

October 1, 2013

Mullah Fazlullah, a senior leader in the Movement of the Taliban in Pakistan, has claimed credit for the assassination of a senior Pakistani Army general in a roadside bombing in the northwestern district of Dir last month. Fazlullah appeared in an official Taliban video, which also showed footage of the attack on the general’s vehicle.

The videotape was released on Sept. 29 on the Facebook page of Umar Media, the official propaganda arm of the Movement of the Taliban in Pakistan, and was obtained and translated by the SITE Intelligence Group. The video features an interview with Fazlullah and details the Sept. 15 IED attack that killed Major General Sanaullah Niazi, the commander of Pakistani Army troops in Swat, along with a lieutenant colonel who commanded the 33 Baloch Regiment, and a soldier. The Long War Journal noted on the day of the attack that Fazlullah had very likely orchestrated it.

A Taliban video crew captured the IED blast that killed the Pakistani Army general. A military vehicle is seen traveling along a road on the side of a mountain when it is hit with a massive blast. The vehicle explodes and then careens down the mountainside.

Fazlullah, who leads the Taliban in Swat and the greater Malakand Division, an administrative area in northwestern Pakistan, is then interviewed and discusses the killing of Niazi as well as the prospects for peace with the Pakistani government. He says the Pakistani general was killed to avenge the death of Sheikh Waliullah Kabalgrami, Fazlullah’s mentor and a leader in the Tehrik-e-Nifaz-e-Shariat-e-Mohammed [TNSM or the Movement for the Enforcement of Mohammed’s Law], a Taliban group in northwestern Pakistan. Kabalgrami died in custody after being rounded up by Pakistani security forces during an operation in the northwest to free Swat that began in 2009.

Fazlullah also notes that his forces killed another Pakistani general, and that their ultimate target is General Ashfaq Kayani, Pakistan’s Chief of Army Staff, the top military commander in the country.

"Last year, we hit Major General Javed Iqbal in a helicopter," he says, according to SITE. "Even today, this army is unable to understand how we targeted Javed Iqbal in the helicopter. This attack was launched to avenge the killing of our respected teacher Maulana Waliullah Kabalgrami.”

In Northern China, Killer Hornets on the Swarm

By Elleka Watts
October 3, 2013

Some Thursday China links:

Various state and foreign media outlets have been reporting about northern China’s hornet problem. Since July, more than 1,600 people have been victims of hornet attacks, and 41 people have died from them. Of those attacked, 206 are still hospitalized and being treated for their condition, and 37 of those hospitalized are in critical condition, as the BBC reports. Environmentalists blame the hornet problem on rapid urbanization, which is encouraging the destruction of hornet habitats in once previously undisturbed areas.

Also from the BBC, fleeing house arrest in China and escaping to the U.S. for refuge, Chen Guangcheng, one of China’s better known political dissidents, will join the Witherspoon Institute as a distinguished fellow. The conservative organization is known for its work on promoting democracy, liberal education and republican government; however it is opposed to same-sex marriage and abortion.

In addition to offering Mr. Chen a position, the Witherspoon Institute will also provide him with financial support. Luis Tellze, president of the institute, told Reuters in an interview cited in the article, "We are taking the responsibility for the financial side and a home really where he can do his work."

In other U.S.-China news, Chinese tourists and tourism agencies have been dismayed by America’s government shutdown, as WantChinaTimes reports. Because of the shutdown, 401 national parks, the Smithsonian’s 19 museums and galleries, and D.C.’s National Zoo have all been closed – affecting the travel plans and itineraries for many traveling around the country on vacation at this time.

*** China's Ambitions in Xinjiang and Central Asia: Part 1

September 30, 2013

Stratfor

Editor's Note: This is a three-part series on China's evolving strategic interests in Central Asia and in its own far northwest, the Xinjiang Uighur Autonomous Region. Part 1 looks at Xinjiang's history as a "buffer region" protecting China's core and linking it to Eurasia. This installment also examines recent efforts by Beijing to adapt the region's legacies to new uses. Read more in Part 2 and Part 3.

In mid-September Chinese President Xi Jinping rounded out a 10-day tour of Central Asia that included state visits to Turkmenistan, Kazakhstan, Uzbekistan and Kyrgyzstan, as well the G-20 summit in St. Petersburg and the Shanghai Cooperation Organization summit in Bishkek. At each stop, the new president made hearty pledges of financial support and calls for further diplomatic, security and energy cooperation. In Turkmenistan, Xi inaugurated a natural gas field. In Kazakhstan, he agreed to invest $30 billion in energy and transportation projects. In Uzbekistan and Kyrgyzstan, he made similar promises to increase investment and cooperation in the coming years.

Xi's tour can be examined as part of China's struggle to reduce its exposure to security risks and supply disruptions off its coast by developing new overland transport routes for goods, energy and other natural resources. China's eastern seaboard, and the maritime realm beyond it, have dominated Chinese political, economic and military planning in recent decades, and in many ways it will continue to do so for the foreseeable future. The coast will remain central to China's role in the global economy, facilitating the flow of Chinese goods to overseas markets, as well as the imports of seaborne energy and raw materials relied upon heavily by coastal provinces to feed their oversized manufacturing bases.

In recent years, however, anxiety within the Chinese Communist Party over the security implications of the country's dependence on coastal trade has taken many forms. China's aggressive efforts to modernize its navy and expand energy, resource and infrastructure projects overseas are perhaps its most visible attempts to cope with the geopolitical implications of its economic and energy needs. Xi's tour, along with several other recent events, has highlighted China's enduring need to focus on westward development as well.
Establishing a 'New Border'

Geographically, China consists of three shelves that radiate up and outward from east to west like the steps of an amphitheater. The first and second shelves essentially hover over the Han core, where more than 90 percent of China's roughly 1.3 billion people live. Surrounded by plateaus, mountains, deserts and steppe, the core historically has been vulnerable to attack -- whether from Mongolian horsemen riding down through the Central Eurasian plains, the Manchu descending from Eastern Siberia or the Japanese (in 1592 and again during World War II) through the Korean Peninsula and Manchuria.

Suu Kyi Lectures Singapore on Materialism

By Mong Palatino
October 3, 2013


Singapore received a stinging, albeit friendly criticism from Nobel Peace Laureate and Myanmar opposition leader Aung San Suu Kyi, who reminded one of the world’s richest countries that there are greater goals to achieve in life than wealth.

Suu Kyi attended a leadership summit in Singapore where she discussed, among other things, the reforms her party is envisioning for Myanmar. But during the press forum Suu Kyi spoke her mind on Singapore’s impressive economic growth. 

“One gets used to thinking of Singapore as a financial, a commercial city, where people are more intent on business and money than human relations,” said Suu Kyi in her opening remarks. “But I have to say that I was pleasantly surprised that there is a lot of human warmth going around this place.”

She was cautious in praising the efficiency of Singaporean institutions. For instance, she described Singapore’s education system as “workforce oriented.”

Suu Kyi added: “That made me think. What is work all about? What are human beings for? What are human lives about?”

She wanted Myanmar to “learn” from the Singapore model instead of “recreating” it. She said, “I want to learn a lot from the standards that Singapore has been able to achieve but I wonder whether we want something more for our country.”

Suu Kyi also urged Singapore to learn from the experience of Myanmar: “So I think perhaps Singapore could learn from us, a more relaxed way of life, perhaps warmer and closer relationships.” 

Can the US Solve Japan’s Energy Crisis?

By Gabe Collins
October 03, 2013


Importing natural gas from the U.S. could give Japan the energy security it seeks.

Japan first imported U.S. liquefied natural gas (“LNG”) from the Kenai facility in Alaska in 1969. Kenai is now mothballed and Alaska officials have asked ConocoPhillips to consider resuming exports. But the real story comes from the second-largest U.S. state: Texas, as well as its neighbor Louisiana. In both states, LNG facilities that were originally slated to bring gas into the U.S., but lost that opportunity after the shale revolution dramatically increased U.S. natural gas output, now seek a new lease on life as LNG export stations. Cheniere, Sempra LNG and Freeport LNG aim to bring their plants on the Texas and Louisiana coasts into commercial production starting 2016/2017, and could eventually export more than 40 million tonnes of LNG annually, making the U.S. one of the world’s largest suppliers of the fuel.

Japan’s Energy Dilemma

These new LNG supplies are music to the ears of Japanese power plant operators as the country continues to struggle with radiation leaks and other problems at the Fukushima power plant damaged by the March 2011 tsunami. As of September 15, 2013 Japan had shut down its entire nuclear reactor fleet, which formerly produced 30 percent of the country’s electricity. LNG demand has risen substantially as a result. Now, Japanese power companies must sometimes pay as much as $20 per million BTU for LNG imports – around twice the cost of delivering gas from the U.S. Gulf Coast – because there are no other energy sources large enough to quickly replace lost nuclear power.

Japan has enough coal-fired power generation capacity to power more than 6 million homes during peak summer demand, but there won’t be any more large coal plants coming online until 2023 and the country must also power a massive industrial and commercial sector and keep electricity prices low enough for Japanese businesses to stay competitive in the global market. This leaves expanding gas-fired generation capacity and burning more LNG as the only viable large-scale options to keep the lights on and the economy humming.

Indeed, Japanese power companies are on pace to consume around 90 million tonnes of LNG in 2013, which will likely account for approximately one third of global demand. To help secure LNG for this massive market, Japanese investors are scouring the globe. They are even looking at projects such as Novatek’s Yamal LNG development in northern Russia, despite the fact that when pack ice closes the Northern Russian sea route to LNG tankers, Yamal lies more than 25,000 km by sea from Japan. Japan’s leaders clearly realize that energy security comes in part from diversity of supply. But Japanese buyers also prefer to obtain LNG supplies from a stable region without pirates or terrorists, one where Japanese investors can buy gas reserves in the ground, and where LNG purchases will deepen already tight strategic and economic bonds with a vital ally.

This brings us from Tokyo to Texas and the Gulf of Mexico. The U.S. offers Japan a stable LNG source with a much more secure physical, economic and political environment than any other Asia-focused global LNG exporter. American LNG supply potential grows out of a number of geological, geographic and legal/regulatory advantages.