12 December 2013

Less equal

December 27, 2013 
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Shanker Chakravarty Members of the Indian Ex Servicemen Movement with their medals which they returned to the President in protest against the government's "apathetic attitude".

The Central government has for decades denied defence personnel their due in pension and rank pay in spite of several court judgments directing it to do so. 

THE Indian Constitution grants every citizen equality before the law and prohibits discrimination on grounds of caste, class, community or creed. It holds true for public employment as well. But the government seems to think otherwise, even after being hammered by a series of judgments by various High Courts, administrative tribunals and the Supreme Court. It has not only refused to follow court orders on the pension of ex-servicemen but has also denied thousands of them their rank pay, granted to them by the Fourth Central Pay Commission, though the Supreme Court had ordered it to pay up. The apex court has now issued contempt notices to four senior Secretary-level officers.Pension blues

The most shocking case of discrimination is the government’s refusal to grant ex-servicemen their pension benefits if they have been re-employed. An ex-serviceman retiring before the superannuation age of 60 can get re-employed in civilian jobs but his salary after re-employment is calculated after deducting his pension. If his pension increases subsequently after a revision, as a result of pay commission recommendations, the government deducts the enhanced pension from his salary.

This happened to ex-servicemen after the Fourth Pay Commission in 1986 announced substantial increases in the pensions of ex-servicemen. When the government started deducting the increased pension from their salary, many re-employed ex-servicemen approached the Supreme Court (Vasudevan Pillay & others). On December 8, 1994, the apex court held that the “decision to reduce enhanced pension from the pay of those ex-servicemen who were holding civil post on 1.1.1986, following their re-employment, is unconstitutional.” The Government of India filed a special leave petition (SLP) against it, which was rejected by the Supreme Court and it ordered the government to pay the dues to ex-servicemen.

Following this order, the government stopped this practice, only to start it again from December 3, 1997, after the Fifth Pay Commission in 1996. The matter was taken to the Delhi High Court, which, in its order dated August 9, 2004, ruled that the deduction was illegal and quashed the Department of Personnel and Training (DoPT) order in this regard. The court stated that its order was to be complied with in all future cases as well.

** Study: Two Billion Could Starve in Event of 'Limited' Nuclear War

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Dec. 10, 2013
By Douglas P. Guarino

The Atomic Bomb Dome is seen in silhouette during sunset over the Peace Memorial Park in Hiroshima on Aug. 5, the eve of the 68th anniversary of the U.S. atomic bombing of the Japanese city. A new report warns that a "limited" nuclear conflict using 100 times the atomic firepower of the attack on Hiroshima could cause worldwide famine (Toru Yamanaka/AFP/Getty Images).

WASHINGTON -- A hypothetical nuclear war in South Asia could trigger worldwide famine and “probably cause the end modern industrial civilization as we know it,” the lead author of a new report tells Global Security Newswire.

Published by the watchdog group Physicians for Social Responsibility, the report, titled "Nuclear Famine: Two Billion People at Risk," updates prior studies on the potential impacts that a "limited" nuclear war between India and Pakistan could have on the global climate, and consequently on food supplies.

The prior research, published in 2012, predicted that corn and soybean production in the United States would decline 10 percent on average for 10 years. It also projected a decline in Chinese middle-season rice production -- on average by 21 percent during the first four years and on average 10 percent in the following six.

At the time, Physicians for Social Responsibility said these effects could "put more than one billion people at risk of starvation." The new forecast released on Tuesday indicates the number of people at risk of starvation would actually be double that figure, the group says.

The fresh analysis includes a study completed this fall showing there could be even larger drops in Chinese winter wheat production. These crops could decline by 50 percent during the first year and by more than 30 percent over 10 years.

Increasing prices would exacerbate the shortage of available food, according to the report, which goes on to call for the elimination of nuclear weapons "as quickly as possible."

"Significant, sustained agricultural shortfalls over an extended period would almost certainly lead to panic and hoarding on an international scale as food exporting nations suspended exports in order to assure adequate food supplies for their own populations," the report says. "This turmoil in the agricultural markets would further reduce accessible food."

Nuclear Weapons and Deterrence

November 18, 2013 ISSSP Reflections
ISSSP Reflections No. 8, November 18, 2013
Authors: Arun Vishwanathan, S. Chandrashekar and Rajaram Nagappa
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In an article in the FAS Strategic Security Blog, Dr. Hans M. Kristensen has quoted various statements by scientists of the Indian Defence Research and Development Organisation (DRDO) related to modernisation of India’s missile program to arrive at the conclusion that the development and deployment of longer range missiles with multiple warheads and quick-launch capability would “indicate that India is gradually designing its way out of its so-called minimum deterrence doctrine towards a more capable nuclear posture.”

Though the arguments advanced in the paper appear logical and persuasive, they remain anchored in the Cold War logic. The two-party logic cannot be applied to understand the complex dynamic that underpins the relationship between the Sino-Pak alliance and India. Such a caricature of the more complex dynamic tends to misrepresent the realities of the relationship between these countries.

It is fairly obvious to anyone familiar with the terrain of nuclear weapons, delivery vehicles and the weaponisation of space that it is the dynamics of competition between the US and China that acts as the trigger for many of the current happenings in Asia including South Asia. The US as the dominant power in the world is determined to preserve its preeminent status for as long as possible. It will do so irrespective of the reactions that such actions would evoke across the world. China in the pursuit of its own national interest will also act in ways to counteract and moderate the US power, especially with regard to fighting a conventional war over Taiwan.

Pakistan – in conjunction with its all-weather friend China – is using the threat of escalation of all problems with India to a nuclear war. By doing so, it is trying simultaneously to nullify India’s superior strength and weaken her internally by using state sponsored terrorism as a weapon of war by other means. Nuclear weapons including battlefield nuclear weapons are a part of its strategy to prevent any type of Indian military intervention to any act of overt and covert aggression that Pakistan may impose on India.

India, which has fought a border war with China and numerous wars/conflict with China’s ally and partner Pakistan, has had to respond in suitable ways to ensure that her own national interests are protected. The paper, by shifting the onus of responsibility for all these happenings on to Indian shoulders chooses very conveniently to ignore these fundamental drivers for the current state of affairs.

India far behind China’s combat power, will take 15 yrs to bridge gap

December 12, 2013 
Rahul Singh , Hindustan Times

India is years behind the Chinese military with the Communist neighbour currently outnumbering the country’s combat power by a 3:1 ratio, a defence ministry document has revealed. India hopes to bridge the gap in the next 15 years by improving its fighting capacity with new stealth jets, aircraft carriers, nuclear-powered submarines, warships and land-based strike formations.

The document, accessed by Hindustan Times, predicts the picture will change by the end of the 14th Plan period (2022-27), with India narrowing the gap in combat power with China to a “desirable ratio” of 1.5:1. 
The dynamics of combat power encompass elements such as a military’s firepower, mobility, logistic capability, manpower and sustainability — factors that ultimately determine the outcome of a war.

Strategic affairs expert air vice Marshal Kapil Kak (retd) said the “desirable combat ratio” appeared to be achievable. 

Steps taken by India to counter China’s military build-up have led to a marginal improvement in the relative-force ratio, the document shows. 

The setting up of two new infantry divisions in 2010 in the northeast has lowered China’s combat advantage to a “2.7:1 ratio”. Odds, however, are still stacked against the army. 

“In a land battle, an army can only defend against an attacking force three times its strength,” a former chief said. 

The raising of a new mountain strike corps — with 85,000 soldiers — to defend Arunachal Pradesh is expected to further reduce the Chinese military advantage to a ratio of 2.1:1 by end of the 13th Plan Period (2022). 

The new strike formation will give the army the capability to mount offensive action into the Tibet Autonomous Region. 

Experts warn China is expected to step up efforts to transform its military to retain an edge over India. China’s official defence budget for 2013-14 stands at Rs. 5,94,000 crore, compared to India’s Rs. 2,03,672 crore. 

However, China’s actual military spending may be higher, with experts suspecting dramatic under reporting of its defence expenditure.

© Copyright © 2013 HT Media Limited. All Rights Reserved.

Tragedy of the Land Without a Strategy

Book review (belatedly reproduced here):

Jaswant Singh, India at Risk: Mistakes, Misconceptions and Misadventures of Security Policy [New Delhi: Rainlight-Rupa, 2013], 292 pages
Published in ‘India Today’, November 11, 2013
“What is history?”, asked Edward Hallet Carr, the English historian in 1961, triggering a debate that still resonates in academic circles between the relativists who believe that all history is virtually fabrication and the empiricists who think there are irrefutable facts to contend with. Siding with the latter, Carr held that there’s such a thing as “objective historical truth”, which view was charged with imposing a narrative. With competing histories, however, “narrational imposition” belongs to those who are first out with an authoritative take.

This bit of historiography came to mind as I read the latest offering by Jaswant Singh, undoubtedly the most cerebral of our political leaders, as did a conversation I had with him soon after the May 2004 elections. Jaswant told me then that he and Strobe Tâlbott, former US Deputy Secretary of State, would be collaborating on a book on the “strategic dialogue” they had conducted over several years. I urged him not to wait for Talbott, a professional writer who can turn out a book in a trice, but to publish his account as “first draft of history” as quickly as possible. That way, I said, his would be the dominant discourse that Talbott and anybody else would have to react and respond to. Jaswant put store by Talbott’s promise; Talbott meanwhile produced his book – Engaging India: Diplomacy, Democracy, And the Bomb by September of that year, in which account Jaswant comes out sounding smug and foppish.

As regards his interaction with Talbott, Jaswant says un-illuminatingly in the “Epilogue” that he was “disconcerted” by the American’s emphasis on non-proliferation rather than the mechanics of forging good relations. But Washington had made clear its intention to cap India’s weapons capability below the credible thermonuclear level in the immediate aftermath of the 1998 tests. Hence, Jaswant’s perplexity with the “altered order of … prioritization” suggests Washington had accepted New Delhi’s framework only to initiate the dialogue. In the absence of details, such as the discussions on the negotiation strategy and tactics within the Ministry for External Affairs (MEA) he headed and between him and the National Security Adviser Brajesh Mishra, especially on the fallback positions, the question arises: Why was the dialogue persisted with when Talbott had upended the agreed agenda in the initial stages itself?

India’s civil-military dysfunction

9 December 2013 

Various Indian newspapers have reported that Indian Defence Miniser AK Anthony has written to all the country's political parties requesting their opinions on the creation of a long-mooted Chief of Defence Staff (CDS) post for the armed forces. 

This might appear to be an arcane point of military reform. In any case, nothing will be done until next year's election, and the idea of 'consulting' other parties has been a way to kick the can down the road. But the question of whether India needs a CDS touches on some of the most important questions of civilian control over one of Asia's most powerful militaries at precisely the moment when India's civil-military relations are fraught with difficulty.

Historically, India has had one of the most civilian-dominated armed forces of any democratic nation. India's first prime minister, Jawaharlal Nehru, viewed the military as a colonial instrument and disliked what he described as its culture of violence and obedience. In the 1950s, periodic coup rumours were worsened by next-door Pakistan's army takeovers. 

These fears lingered long after Indian democracy firmed up. 

Stephen Cohen, an authority on the Indian military, has written that 'senior intelligence officers indicate that they have detected at least three major coup attempts by Indian generals', most recently in the late 1980s. Cohen points out that 'there is no credible evidence of such plots, but insecure politicians and bureaucrats, many of whom have a stereotyped image of the military, listen to these warnings'. I've heard several Indian generals complain about the lengths to which India's domestic intelligence service, the Intelligence Bureau, will go to keep tabs on what officers are up to. 

Last year, during a period in which then army chief VK Singh was locked in an administrative dispute with the Defence Ministry over his age of retirement, those insecurities re-emerged after reports of curious troop movements towards Delhi, prompting the brief activation of contingency plans for mutinies. The military, in turn, resented what they dismissed as 'this phobia or paranoid feeling...utilised by various other groups, to keep the armed forces slightly away' from policy making. On top of all this, members of the armed forces are furious about what they see as eroding pay, pension, and status in comparison to their civilian counterparts. 

Dangers of the zero option

Posted online: Thu Dec 12 2013
Rick ‘Ozzie’ Nelson 

With no security agreement, instability in Afghanistan could spread across the region. 

Last month, the United States and Afghanistan appeared to be on the verge of concluding a bilateral security agreement (BSA) that would facilitate the withdrawal of US troops from Afghanistan by 2015, while enabling a small contingent of US military forces to remain in the country to assist the Afghan National Security Forces (ANSF). However, Afghanistan President Hamid Karzai — set to visit India this week — has jeopardised the plan by refusing to sign the agreement until after the Afghan presidential elections in April 2014 and by asking for additional concessions from the US. The US has reportedly expressed the hope that India will persuade Afghanistan to sign the BSA. 

Under the terms of the BSA — which was nearly finalised in November during US Secretary of State John Kerry’s trip to Kabul — the US would gradually withdraw almost all of its troops from Afghanistan by 2015, but would keep a limited number of military personnel till 2024 to train, equip and assist the ANSF. The Afghan government would provide legal protection for the US forces. This would facilitate a gradual and controlled transition of power to the ANSF, which would take on an increasingly independent role in military, security, and counter-terrorism operations. 

Without a signed BSA, however, the US would lack the security and legal guarantees that would allow for a continued US military presence and the Obama administration will be forced to remove all US forces from Afghanistan — which has been dubbed the “zero option”. 

While markedly improved, the ANSF still lacks the capability to maintain security without international assistance. In 2013, it received $5.1 billion in training and equipment from the US. Although international military organisations like Nato and other countries, such as South Korea, also provide support to the ANSF, it is doubtful that they could match the level of American support and would probably leave Afghanistan. Should this occur, it would be extremely difficult for the ANSF to keep up the necessary pressure on the Taliban or even maintain security in general. This would result in rising levels of violence, which would almost certainly reduce the Afghan government’s already limited ability to maintain its legitimacy beyond Kabul. In the long term, the combination of violence and lawlessness could result in another civil war with its effect spilling into neighbouring countries. 

Increased instability would also jeopardise Afghanistan’s social and economic development. Since 2001, Afghanistan’s GDP has grown nearly 10 per cent annually. But its economy is dependent on international assistance and the presence of coalition forces. The withdrawal of most coalition forces in 2014 will certainly dampen economic growth, but the removal of nearly all of them under the “zero option” would compound Afghanistan’s economic woes. A deteriorating security situation could also cause international aid organisations, who have helped distribute more than $60 billion in international assistance since 2002 and improved Afghans’ access to basic services such as electricity and healthcare, to withdraw their workers and, potentially, funding. 

Eroding security is likely to lead to a cascading decrease in the quality of life for many Afghans, largely because of a decay in social services. For instance, the government would find it difficult to maintain programmes that support agricultural workers. Should these workers become further disenfranchised, it could provide the Taliban or other extremist elements with a substantial recruiting pool. Basic services such as education and fundamental rights such as equality would be dramatically curtailed or eliminated if the Taliban recovers and re-establishes areas of dominance. 

Leadership Changes in Pakistan: Portents for the Future

Issue Courtesy: CLAWS | Date : 11 Dec , 2013 

General Raheel Sharif

Pakistan’s Army Chief, General Ashfaq Pervez Kayani finally demitted office on 28 November 2013, ending weeks of speculation. General Raheel Sharif has replaced him, marking an important change inPakistan’s hierarchical structure. Raheel Sharif was third in line in seniority and was not expected to assume the top post. Known as a simple career officer, he commanded the 11 Infantry Division in Lahoreand was later posted as Commandant, Pakistan Military Academy Kakul. On promotion, he commanded the Gujranwala Corps and later took over as Inspector General Weapons, Training and Evaluation; a post, which many assumed, was a retiring slot. His promotion surprised many in Pakistan as some believe that even his earlier elevation to three star rank was fortuitous.

…Nawaz was comfortable with Kayani and was keen to give him another extension but resistance from the military hierarchy forced him to abandon such an option.

What tipped the scales for him was perhaps his closeness to Lieutenant General (retired) Abdul Qadir Baloch, a close confidante of PM Nawaz Sharif. That, and his low profile, could have made the difference. Having been bitten twice earlier by Chiefs he had appointed during previous terms in office, Nawaz Sharif would have been wary of an ambitious man as Chief. The Prime Minister however, is not related to the Army Chief, though they share the same surname. Some reports suggest that Nawaz was comfortable with Kayani and was keen to give him another extension but resistance from the military hierarchy forced him to abandon such an option. Raheel is expected to follow an approach similar to his predecessor, which too could have weighed in his favour.

The new chief’s foremost test would be combatting internal conflict within Pakistan. Here, he confronts a major challenge in both the Western provinces adjoining Afghanistan. In particular, he faces serious opposition from the Tehrik-e-Taliban Pakistan (TTP), a confederation of local militant groups whose leadership too has changed following the killing of their erstwhile leader Hakimullah Mehsud in a US drone strike in FATA. The Nawaz Sharif government was in the process of initiating peace talks with Hakimullah when the US drones removed him from the scene, putting paid to whatever chances there were of such talks fructifying. In a paradoxical reversal of role, Hakimullah, the erstwhile most dreaded terrorist in Pakistan, was suddenly eulogised as a man of peace after his killing, despite the fact that he was the most wanted terrorist on the list of the Pakistani security establishment. In a further travesty of common sense, the ameer of the Jammat Ulema-e-Islami (JUI)[1], Munawar Hassan declared Hakimullah a martyr. His statement was supported by Maulana Fazlur Rehman, Chief of the Jamiat Ulema-e-Islam-Fazl (JUI-F) who went ahead and said that anyone killed by theUnited States, even if it is a dog is a martyr. This has understandably annoyed the Army, many of whose soldiers have died fighting the Taliban.

Revolution in retreat


The promise of a New Nepal seems to be on the retreat, with the Maoists losing people’s goodwill and squandering an opportunity to create a more democratic nation under a new Constitution. 

THE REPUBLIC OF NEPAL IS HEADING towards a pattern of producing electoral surprises. Elections to the first Constituent Assembly (CA-I) in 2008 gave an unexpected victory to the United Communist Party of Nepal (Maoist), which was yet to fully adapt itself to democratic politics and newly aspired republican ethos. The November 19 elections to the second Constituent Assembly (CA-II), as the first failed to finalise the Constitution, threw up three surprises—an unprecedented voter turnout, a surprise drubbing of the Maoists who led the movement for republicanism and for building a “New Nepal”; and the revival of the monarchist forces led by the Rashtriya Prajatantra Party of Nepal (RPP-N).

The voting percentage, according to the latest Nepal Election Commission estimates, is above 77 per cent, which is an all-time high for the country, notably higher from its initial estimate of 70 per cent. This was made possible by the managers of the electoral process and the voters who defied the calls for boycott of the elections and threats of violence issued by the breakaway Maoist group led by Mohan Baidya. The splinter group, having failed to force the rest of the political parties to agree to a postponement of the elections, not only boycotted the elections but also decided to actively disrupt them, promising to ensure less than 50 per cent voter turnout. The impressive turnout was a strong message from the Nepalis that they wanted institutionalisation and stability of democracy and reconstruction and development after 10 years of insurgency and seven years of political uncertainty and confusion.

In this context, the electoral surge of the RPP-N, representing discarded feudal values and standing for the revival of the monarchy, was a surprise. This was possible because Nepal follows the system of proportional representation where against 240 directly elected seats, 335 are filled by proportional representation in a 601-member House (the rest are nominated). Although the RPP-N has failed to win any seat under the first-past-the-post (FPTP) system, it has garnered more than 7 per cent of the votes to claim 23 seats in CA-II. In CA-I, it had four seats. The RPP-N has taken advantage of the people’s frustration with the established political parties for failing to write the Constitution under CA-I. It also exploited people’s religious sentiments by campaigning against the secular identity of a republican Nepal and sought the revival of a Hindu state. The RPP-N chose the cow as its electoral symbol in order to appeal to the religious sentiments of Nepal’s majority Hindu voters.

The ‘Asia Rebalance’ in disarray

December 12, 2013
Narayan Lakshman 

A gesture of good faith towards Tehran’s re-engagement with the West might have been for Mr. Obama to ease up on the oil sanctions, perhaps permit friends of Iran such as India, who depended significantly on crude imports, to resume limited trading 

The U.S. President is whipping up the holiday sentiment with some beltway bonhomie, pardoning Popcorn the national Thanksgiving turkey, then joining his fellow Americans in some patriotic discount-shopping during the Christmas and New Year festivities. 

Yet, Barack Obama must have no doubt that recent weeks have left his administration with little cheer on one of Washington’s top foreign policy priorities — the “Asia Rebalance.” 

November turned out to be more punishing than thanks-worthy in this regard, with a bitter blend of cynicism and uncertainty tainting the vector of surprise developments in the Asia region, including the nuclear deal with Iran, the security agreement endorsed in Afghanistan and the precipitous game of “chicken” in the East China Sea. 

The momentous news of the P5+1 group of nations reaching an agreement with Tehran on limiting its uranium enrichment and permitting site inspections at nuclear facilities should have come as no surprise after the election of the moderate Hassan Rouhani to the presidential seat in June this year. 

It was concomitantly revealed that U.S. Deputy Secretary of State William Burns held secret talks with his Iranian interlocutors throughout the détente period. 

Triumphalism over good faith

Yet, the western allies appeared to revert to a triumphalist rhetoric that suggested that the crippling sanctions that they imposed were solely responsible for the turnaround, no thanks at all to Tehran’s new regime for taking a courageous step towards the negotiating table. 

A gesture of good faith towards Tehran’s forward-looking re-engagement with the West on the nuclear crisis, despite Israel’s sustained, warmongering bluster, might have been for Mr. Obama to ease up on the oil sanctions, perhaps permit friends of Iran such as India, who depended significantly on crude imports, to resume limited trading. 

Contrarily, days after the resumption of talks with Mr. Rouhani’s administration was announced, U.S. Secretary of State John Kerry cautioned that the Joint Action Plan agreed upon by the P5+1 nations and Iran did not offer relief from sanctions with respect to most purchases of Iranian crude by existing or new customers, and “we will continue to aggressively enforce our sanctions over the next six months.” 

Standing firm on a sea of troubles

Peter Hartcher
Sydney Morning Herald political and international edito
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What's it like for the Japanese navy on patrol around the hotly contested islands, I asked the commander when he had a moment of respite on Sydney Harbour recently?

Was the Chinese navy a constant presence as it asserted Beijing's ownership of the desolate islands, which Japanese call the Senkaku islands and the Chinese call the Daioyu, or was it a more relaxed affair? Captain Yoshihiro Goka, commander of the group of Japanese destroyers known as escort division three, suddenly grew very serious. "It is difficult," he replied.

And then, without any further prompting from me, he added, with considerable emphasis: "But, if it is necessary, we will do it."

The "it", of course, is to go to war with China. That is the logical outcome of the continuous escalation that the two greatest Asian powers have been locked in for 15 months. Frontline commanders like Goka are braced for the real possibility that the dispute over the tiny group of islands will escalate all the way to conflict. There is no obvious circuit-breaker in view.

Since his remark in October, the struggle for primacy over the islands has escalated dramatically. Two weeks ago, China made its dramatic claim to airspace rights over the contested islands.

Its unilateral declaration of an Air Defence Identification Zone (ADIZ) over the disputed islands overlapped with the existing zones of Japan, South Korea and Taiwan. These three, plus the US and Australia, have refused to recognise China's claim.

Since then, three further events have ratcheted the tension further. First, the air forces of the US, Japan and South Korea have all flouted China's authority by flying through its newly declared ADIZ without giving the prior notice that Beijing demands.

Second, Japan's parliament passed a resolution on Friday demanding Beijing cancel its declaration. Third, on the weekend South Korea expanded its ADIZ to further push into China's claimed zone.

"The most pressing problem is the increased risk of accidents, or even the deliberate use of force, between military aircraft in the ADIZ," says the International Crisis Group.

But what about the protocols for any incidents or accidents? The US and the Soviet Union had systems in place to prevent an accidental friction or moment of hotheadedness from escalating into unintended war. Wouldn't they kick in?

Can China escape its demographic bind?

Economics, Politics and Public Policy in East Asia and the Pacific December 10th, 2013
Author: Paul French, Shanghai
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Auguste Comte, the father of sociology, famously said that ‘demographics is destiny’. China now has an ageing population. The National Bureau of Statistics estimates that by 2015 there will be some 200 million Chinese people over 60, increasing to 300 million by 2030, and perhaps as many as 480 million by 2050. Average life expectancy is now 73 for men and 79 for women, up by more than 12 years since 1970.

The twin phenomena of enhanced longevity and the One-Child Policy, introduced in 1978, mean that China has seen the most rapid move from demographic ‘sweetspot’ to an ageing society. These days, discussions on how China will manage this transition are often referred to as the ‘will China get rich before it gets old?’ debate.

Here, China will inevitably see its economy challenged in two ways: a decline in the working population and a rise in fiscal deficits linked to increased government spending to cope with the ageing population. Healthcare spending, pensions, social welfare and long-term care will all be additional costs to China’s social system. They come at a time when China’s urban social welfare system, in terms of pensions, healthcare and labour-force reform (employer-funded retirement programs, mandatory retirement ages and so on), are still in a process of change.

Chinese people will face increased healthcare costs as they get older, meaning that they will increasingly need to make out-of-pocket spending from their pensions, to draw down on their life savings, or sell their homes in order to pay for expensive treatments for long-term, incurable illnesses that are gradually less likely to be covered by current healthcare insurance schemes. In addition to this, they will also be an ongoing financial burden on their families.

The general lack of appropriate state healthcare, despite reforms, means that many Chinese adults have to save heavily and plan financially to create their own safety net to deal with possible illness as they get older. This contributes to the large amounts of consumer cash locked up in savings accounts and out of the consumer economy. Chinese savers already suffer from ‘financial repression’. Low or non-existent interest rates, combined with a limited range of personal financial products available, mean that saving is a never-ending process for most Chinese and that, consequently, a secure retirement fund is difficult to achieve.

This is exacerbated by mandatory retirement ages that are low by international standards. Currently the retirement age to receive a pension is 60 for men and 50 for women. Beijing is considering raising these limits to create work for younger people but the concomitant strain on the pensions system is a concern. Worries over, for instance, ending work at 50 but not receiving a pension until the age of are 65, and therefore having to self-fund the 15 years in between, have alarmed many older people (and their children) on internet discussion forums.

China’s ADIZ: A Case of an Overreach?

December 10, 2013 

When China announced on 23 November 2013 the establishment of an ‘Air Defence Identification Zone’ [ADIZ] in the East China Sea area and included the disputed Diaoyu/Senkaku islands in the zone; it was clear that the main target of this exercise was Japan. What China has initiated is not something that is unique, for there about 20 countries, including the US and Japan, that have also in the past unilaterally set up similar zones. Unlike elsewhere the Chinese and Japanese zones do have over-lapping areas and therefore the potential for a confrontation exists. However as far as international law is concerned this concept is barely recognized. Since this zone has been established in the air space adjacent to Chinese territorial air space what is its legitimacy in international law? 

Normally under international law, a country’s sovereign airspace extends to the outer limits of its territorial waters; that is 12 nautical miles from its coastline. Most countries require all foreign military aircraft to obtain permission to enter their airspace and reserve the right to take military action that includes shooting them down, in case there is no compliance. As both China and Japan claim the Senkaku/Diaoyu islands in the East China Sea as part of their territory they also claim sovereign airspace above the islands and over waters extending 12 nautical miles around them. Logically therefore as far as the rest of the zone is concerned it is international air space. 

Apart from sovereignty over a 12 mile territorial limit there is also the concept of the Exclusive Economic Zone [EEZ]. According to the UN Convention on the Law of the Sea [UNCLOS], each signatory state can claim an EEZ that gives it special rights to exploit marine resources up to 200 nautical miles from its coastline. When EEZs overlap, states are supposed to negotiate an agreed boundary. Most states allow freedom of passage for foreign vessels through their EEZ to proceed unhindered. However, some states disagree on whether non-aggressive foreign military operations – such as reconnaissance patrols — should be allowed in their EEZ. China often intercepts and tracks foreign military planes over its EEZ, but usually does not take any military action. 

It is obvious therefore that an ADIZ has no basis in international law, nor is it administered by any international organization. So definitions and rules vary between different countries. That Japan has decided to approach the International Civil Aviation Organization [ICAO] will perhaps be a test case. Normally ADIZs are established beyond a country’s airspace to give its armed forces time to respond to potentially hostile incoming aircraft. Many states require foreign military aircraft to identify themselves, but will not intercept nor repel them or force them to land unless they consider them a distinct threat. The US says that in its ADIZ it requires pre-notification procedures only if foreign aircraft intend to enter its sovereign airspace. China has made no such stipulations so far. If China decides to follow the US practice, that itself might lead to a lessening of tension with Japan. 

The US has taken no position on the merits of the case involving the Sino-Japanese dispute over the Diaoyu/Senkaku islands; although it has made clear that the US-Japan Security Treaty covers the islands and that it considers them to be under Japanese administration. The US even dispatched unarmed B-52 bombers to fly into the Chinese ADIZ, without informing the Chinese authorities, to demonstrate its position as a faithful ally in Japanese eyes. And yet on the other hand keeping in mind the visit of Vice-President Biden to China, where it needs Chinese help to free a US citizen held by the North Koreans and to keep in check North Korean nuclear ambitions, the US allowed major American airlines such as United, American and Delta to notify Chinese authorities of their flight plans when traveling through the Chinese declared Air Defense Identification Zone (ADIZ). Apart from Japanese airlines, about 55 airlines from 19 countries have followed the US example. Although the US government also stated in the advisory issued to its airlines that this does not mean it accepts China's newly established zone, there is no doubt that this is a significant softened gesture to China. Therefore has China succeeded in causing fissures in US-Japanese relations? 

Look beyond Iran

December 27, 2013
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 Crude oil is priced using a market-based formula in which the price of a certain variety of crude oil is set as a differential to a certa... »

With the geopolitical situation dictating the flow of crude oil, import-dependent India has to diversify its sourcing of crude. 

Iran is India’s friend, and geographical proximity makes it easier to source crude oil from that country. But Western economic sanctions on Iran have exposed India’s fault line—excessive dependence on any one region or country for crude oil supplies.

Those within the government and outside believe that there is an urgent need to have alternative sources of crude oil. If China can do so, why cannot India?

In fact, diversification of the source of crude was raised in the Parliamentary Standing Committee on Petroleum and Natural Gas (2012-13) report, “Long-Term Purchase Policy and Strategic Storage of Crude Oil”. It said, “Concerted efforts should be made by the Ministry for Petroleum and Natural Gas and the public sector undertakings to minimise dependence on any single country or region to ensure that [the] country’s crude oil supplies do not get adversely affected in case of geopolitical problems in any region….”Import dependence

India meets 80 per cent of its crude oil requirements through imports and is heavily dependent on West Asia for its supplies. In fiscal 2012-13, 79 per cent of the total crude oil imports came from West Asia. During this period, India imported crude oil worth more than Rs.6.7 lakh crore.

Industry observers point out that political unrest in any of the producing regions can cause supply disruptions. Considering the turmoil in West Asia and North Africa in the past three years, it has become imperative to reduce reliance on West Asian oil.

Iran advantage

Dilip Khanna, partner, oil and gas practice, Ernst & Young, says, “Iran has been offering favourable trade terms to India [given the historical trade relationship], which includes allowing Indian refiners to pay in Indian rupees for crude oil and extending 90-day interest-free credit.” The recent exchange rate volatility had resulted in savings of $2 a barrel for Indian refiners on processing Iranian crude, he said. However this benefit may end when banking restrictions on Iran are lifted. Improved refining

Diversification is the key for higher-complexity refineries, which can make better refining margins by processing heavy, sour crude oil sourced from countries such as Venezuela and Canada.

India has 22 refineries—17 under the public sector, two under the joint sector and three under the private sector. Its refining capacity has leapfrogged from a modest 62 million tonnes a year in 1998 to about 215 million tonnes now. By the end of the 12th Plan (2017), the total refining capacity is expected to touch around 271.2 million tonnes and is expected to go up to 332.9 million tonnes during the 13th Plan.

Should India-Japan Ties Worry China?

US Rebalancing to the Asia-Pacific: Implications for West Asia


December 11, 2013
States adopt postures and pursue policies in response to the global situation. As the global situation evolves, so do the strategic choices of the states. During the Cold War, the United States was completely focussed on the Soviet Union and constantly striving to contain – and if possible, to roll back - the Soviet presence from the Third World. The best and the brightest in the American academia studied the Soviet Union and the Kremlinologists occupied the best births among policy wonks. 

The decline of Marxism and the disintegration of the Soviet Union changed all that. The ideologues of Marxism shifted their sights to the new ideology of Islam. Initially, the emergence of independent states in Central Asia and the Caucasus received its share of international attention. The US interest in the large quantities of oil and gas and US concerns over nuclear proliferation and re-emergence of Islam dominated its foreign policy calculus. Very soon thereafter, West Asia acquired the status of the most crucial region. After the nine-eleven, the “Global War on Terrorism” led the US into long-drawn-out wars on Afghanistan and Iraq. In the process its military reach extended and deepened throughout West Asia and beyond. 

It is China that now occupies the epicentre of US worldview. In 2011, the Obama administration made a series of pronouncements on a pivot to Asia-Pacific, identifying it as a priority region. The US would deploy greater naval assets, create new military capabilities and prepare to engage in a newly formulated “Air Sea Battle” in the region. The first demonstrative act of the pivot was the US-Japan announcement of the Dynamic Defence Force in October 2011 that would lead to a broadened military alliance. 

A year after the initial pronouncements on pivot, the policy was rechristened “rebalancing”. It down played the military aspects of the pivot, emphasized economic cooperation and called for closer engagement with China. A Trans-Pacific Partnership (TTP) between the US and some twelve states in the region would create a free trade area. Simultaneously, the US would enhance its economic assistance and deepen its diplomatic involvement. Consequently, the attitude to China has moved from tacit confrontation to cautious accommodation. 

The twenty-first century is widely expected to be the Asian Century. The economic growth in Asia is expected to outpace the West by a wide margin. At the same time, the Asia-Pacific hosts a number of formidable problems - some long-standing and some of recent origin. The legal and political status of Taiwan is fraught with the potential of conflict. A defiant North Korea has acquired nuclear and ballistic missile capabilities. South China Sea has become a jumble of contesting territorial claims by China, Taiwan, Vietnam, Philippines, Brunei, Malaysia and Indonesia. The islands in the East China Sea are disputed among China, Japan, South Korea and Taiwan. The recent Chinese announcement of an Air Defence Identification Zone over the East China Sea and the unhindered exploratory flights of two American B-52 bombers right through it may yet lead to an ugly situation in future. 

French bid to disarm African militias a challenge

December 12, 2013

In just the last three years in Africa, French forces pummelled Muhammad Qadhafi’s troops, helped topple Ivory Coast’s holdout ex-president and ousted al-Qaeda-linked militants from the rocky Malian desert. Now, in Central African Republic, French troops are facing a more complex and dangerous mission — disarming militias awash in automatic weapons in cities and towns, where would-be fighters are tough to distinguish from civilians and sectarian tensions are running high. 

A former colonial power, France has 1,600 troops in Central African Republic after beefing up its military presence last week in response to a U.N. resolution authorising outside force. Muslim leaders question whether the French are also forcing Christian militiamen who fled into the bush after attacking the capital to hand over their weapons. To give up knives would leave Muslims defenceless during a future attack, they say, placing little faith in the French to protect them. 

The capital, Bangui, remained on edge Wednesday, but with French troops patrolling, some families ventured out to bury their dead. 

The perils of the French mission were starkly exposed this week when two French soldiers were killed in a nighttime foot patrol in the capital. 

French President Francois Hollande, who initially said the mission would take six months, said on Wednesday that a beefed-up French deployment would last “until the African force takes over.” 

Printable version | Dec 12, 2013 10:56:15 AM | http://www.thehindu.com/opinion/op-ed/french-bid-to-disarm-african-militias-a-challenge/article5448853.ece 

Shale as saviour?

Production of shale gas and oil has risen significantly in the U.S., but betting on it to deliver the long-awaited recovery would mean ignoring the environmental damage and the cost-benefit mismatch.

AS the world looks for every sign of robust recovery from a five-year-long recession, investment in and production of shale gas and oil in the United States is being touted as the stimulus that would prove saviour. The financial sector, too, is looking to this real resource for a much-needed boost. For example, Stephen Pagliuca, managing director of the private equity giant Bain Capital LLC, is reported to have said that in the face of threats such as rising interest rates and a large government debt burden, “the salvation of the United States is the big oil and gas boom going on right now”, which he expects will “last a long time”.

The production of shale oil and gas, which was long considered too difficult or too expensive to recover from the rock formations in which they are embedded, has registered a significant rise since 2000. Over a decade ending 2010, shale gas production increased 12-fold to account for a quarter of total U.S. gas production. In a short span of time between 2007 and 2011, shale gas production rose from 1.3 trillion cubic feet to 8 trillion cubic feet. According to projections, that growth is likely to be sustained and even accelerate.

Rising production of oil and gas in the U.S. is reducing that country’s dependence on oil imports. Net imports of oil as a share of domestic consumption have fallen from 60 per cent in 2006 to 45 per cent in 2011. According to the Economic Information Administration (EIA), October 2013 was the first month in 18 years when U.S. crude oil production exceeded imports, with crude oil imports being at their lowest since February 1991. In 2012, the U.S. was a net exporter of liquid fuels and other petroleum and a marginal importer of natural gas. Underlying all of this is the shale and tight oil and gas boom.

Hydrocarbons like oil and gas are formed from organic matter such as dead animals and plants that escape being eaten by scavengers or being oxidised to form water and carbon dioxide and are carried to and sink to the bottom of sea to be converted into “source rock”. As the accumulating sediment subsides below the earth’s crust it becomes a sedimentary basin superimposed by rock formations, which is then, over millions of years, converted into oil or gas at different depths.

The petroleum industry extracts these resources by drilling through the rock formations to the relevant basin from where the oil and gas is released through porous and permeable rocks based on the pressure that has hitherto held them down. But not always is the rock formation, beneath which or in which the oil and gas rest or are embedded, porous and permeable. There are reserves of oil and gas that have over the ages accumulated in rock formations that are not porous and permeable, but are “tight” and, therefore, difficult and costly to retrieve. But developments in technology that combine “hydraulic fracturing” (fracking) and horizontal drilling (which involves drilling down and then turning the drill horizontally to penetrate the rock formation that is to be fractured) have reduced the cost of accessing oil and gas trapped in shale rock formations. High oil prices have helped make the whole process commercially viable.

The problem is that the process of reaching and extracting oil and gas trapped in shale rock formations impacts heavily on the environment. The technology involves combining millions of gallons of water, sand and toxic chemicals and pumping the mixture at high pressure down and then horizontally through the well to reach and fracture the relevant rock layer. The fissures that are created in the shale formation in which the gas is trapped are kept open by the sand so that the gas flows into the well to be retrieved.

There are many outcomes associated with this process. The first is the depletion of water resources, given the exchange of water for gas. The industry and its lobbyists claim that the water used can be retrieved and recycled so that there is no repeated draw on the world’s already scarce water resources. The second is that the toxic chemicals used in fracking can, and have been known to, seep into ground water aquifers, contaminating the clean water that needs to be accessed for drinking and other purposes. Third, the process of fracturing the shale rock formations are known to set off tremors and small earthquakes, which can in earthquake-prone zones have more damaging effects. These should be enough to induce caution when exploiting the opportunity that fracking seems to offer. Not surprisingly, some States in the U.S. and a number of countries have put fracking on hold.

How NSA Uses Cell Phones to Track Target Movements and Activities

  1. December 10, 2013

    New documents show how the NSA infers relationships based on mobile location data

    Ashkan Soltani and Barton Gellman

    Washington Post

    December 10, 2013

    Everyone who carries a cellphone generates a trail of electronic breadcrumbs that records everywhere they go. Those breadcrumbs reveal a wealth of information about who we are, where we live, who our friends are and much more. And as we reported last week, the National Security Agency is collecting location information in bulk — 5 billion records per day worldwide — and using sophisticated algorithms to assist with U.S. intelligence-gathering operations.

    How do they do it? And what can they learn from location data? The latest documents show the extent of the location-tracking program we first reported last week. Read on to learn more about what the documents show.

    What’s the big deal? Information about where people go and when seems pretty innocuous.

    The NSA doesn’t just have the technical capabilities to collect location-based data in bulk. A 24-page NSA white paper shows that the agency has a powerful suite of algorithms, or data sorting tools, that allow it to learn a great deal about how people live their lives.

    Those tools allow the agency to perform analytics on a global scale, examining data collected about potentially everyone’s movements in order to flag new surveillance targets.

    For example, one NSA program, code-named Fast Follower, was developed to allow the NSA to identify who might have been assigned to tail American case officers at stations overseas. By correlating an officer’s cellphone signals to those of foreign nationals in the same city, the NSA is able to figure out whether anyone is moving in tandem with the U.S. officer.

    What kind of information is the NSA collecting?

    Mobile devices reveal their locations in multiple ways.

    When mobile devices are turned on and begin searching for cellular signals, they reveal their locations to any radio receivers nearby. As cellphones connect to cellular networks, they immediately register their locations to one or more databases maintained by telephone providers and clearing houses in order to allow calls to be made and received. These databases are known as Home Location Registers and Visitor Location Registers.

    Registration messages often include a device’s ‘coarse’ location, at the level of a city or country, or a ‘finer’ position based on distance from a cellular tower (based on their VLRs). Most mobile operators also track phones precisely by triangulating their distance from multiple towers, for example to provide location-based emergency services.

    Many mobile devices and smartphones also use WiFi and GPS signals to fix their locations. These signals also reveal their location in a variety of ways including leaked location information from their IP address, mobile apps and built-in location based services. To help the NSA pinpoint the exact location of surveillance targets, a program called HAPPYFOOT intercepts traffic generated by mobile apps that send a smartphone’s location to advertising networks.

There Are No Innocents Here: An Evaluation of U.S. and Chinese Spying

December 11, 2013
Reflections on U.S. Economic Espionage, Post-Snowden
Jack Goldsmith
December 11, 2013

Cheng Li’s and Ryan McElveen’s good post over the weekend (via Daniel Byman) sparked the following reflections on U.S. economic espionage, post-Snowden.  Li and McElveen nicely summarize U.S.-Chinese relations concerning cybersecurity in the run-up to and aftermath of the Snowden revelations.  The post is especially helpful on how the Snowden revelations have hurt some U.S. business interests in China – a point underscored by recent U.S. IT firms’ demands for “global government surveillance reform.”

I have some quibbles Li’s and McElveen’s conclusions, however, which are as follows:
As 2013 comes to a close, it is now well documented and well-known that both the United States and China engage in extensive espionage efforts for national security interests.  But China’s espionage efforts are different in one key respect: China conducts surveillance on U.S. commercial entities, while the United States focuses on government targets. Although the U.S. government classifies its surveillance and does not share business secrets with U.S. companies, Chinese spies readily hand over proprietary information from U.S. firms to Chinese firms, breaching intellectual property rights and stealing the fruits of research and development on which American companies have spent billions of dollars.
To address these concerns, the United States must clearly indicate that its primary concern is China’s commercial cyber espionage, and that its goal is to protect future U.S. innovation. This is a goal to which both the U.S. and her allies can commit. By working to forge an agreement with China on the enforcement of intellectual property rights protections, the U.S. will finally be able to move out of the shadow of Edward Snowden.  Even then, U.S. technology companies must prepare for their new reality—a greatly reduced share of the Chinese market wherein the enforcement of IPR will only soften their downfall.
First, it is misleading to say that “China conducts surveillance on U.S. commercial entities, while the United States focuses on government targets.”  The distinction between “government” and “commercial” entities in China is not a clear one.  But in any event, if the suggestion is that the USG does not generally collect against foreign firms, it is wrong.  As I noted before the Snowden revelations:
In a 1991 essay (behind paywall), former CIA Director Stansfield Turner noted that “as we increase emphasis on securing economic intelligence, … we will have to spy on the more developed countries—our allies and friends with whom we compete economically.”  Former CIA Director James Woolsey said in 2000 that the United States “steal[s] secrets with espionage, with communications, with reconnaissance satellites” from “foreign corporations and foreign government’s assistance to them in the economic area,” in three “main [i.e. probably not exclusive] areas”: (1) to understand how sanctions regimes are operating; (2) to monitor dangerous dual-use technologies in private hands; and (3) to learn about bribery practices.  With regard to (3) the 1996 Aspin-Brown Report suggested that the USG spies on foreign firms to “identify[] situations abroad where U.S. commercial firms are being placed at a competitive disadvantage as a result of unscrupulous actions, e.g. bribery and ‘kickbacks.’”