Wednesday, October 29, 2008



The world has seen made-in-the-Internet scholars, made-in-the-Internet stock-brokers, made-in-the-Internet lovers and even made-in-the-Internet terrorists.

If Senator Barrack Obama is elected the President of the United States on November 4, the US and the rest of the world will be seeing for the first time a made-in-the-Internet President.

The way his advisers and entourage have effectively used the Internet to make him known to the people, to collect funds for him and to project him as a right-thinking person, who will take the US into a brave new world, will form the theme of many likely best-sellers if he wins the elections, as he seems destined to do.

Large sections of the American people are in a state of guilt----- over having suppressed the Blacks for so many years, over having supported President Bush and his Neo Conservatives in their Iraq adventure under the pretext of removing non-existent weapons of mass destruction, and over so many other perceived wrongs of the Bush Administration.

What better way of ridding themselves of their gnawing sense of guilt than to vote for a candidate, who is an Afro-American and who promises to rid the US of the legacies of the Bush administration. Just by casting their vote for him on November 4, they would in one stroke be able to get rid of all their guilt feelings and start a new life as Americans. So they think. As they stand before the voting machine, it will be their hour of the confessional ---- that they were wrong in having supported Bush.

His advisers and entourage have skillfully exploited the widely prevalent mood of guilt in the US to project him as a transformational figure (to quote Colin Powell) the like of which comes but rarely. Vote for Obama and vote for all that that is good and great in the US.

The liberals---- in the civil society, in the media, among the opinion-makers--- have made Obama seem a cult figure. For them, it will be blasphemous to ask questions about his past, to find out who he really is.

Had a white been the Democratic candidate like Senator John McCain, the Republican candidate, they would not have had the least qualms in researching into his past and in dissecting every inch of him.

How can one do it for a transformational, cult figure? Cult figures have to be accepted as such without questions. How can one do that for a Black, who is on the threshold of history by being the first Black to become the President of the US? To question his past and his credentials would be racist. So the American voters have been told.

Can anyone in the US or in the rest of the world assert that he knows Obama well ---- his past and his present and what he will be in future? Future is the child of the past.

Obama is a mix of two vintages. The old pre-2006 vintage and the new post-2006 one. All his admirers know Obama of the new vintage. How many know Obama of the old vintage?

Very few. There is no desire to find out either.

Obama of the new vintage has nothing but the highest words of praise for India and Indians. He wants to continue with Bush’s policy of promoting a strategic relationship with India.

What about Obama of the old vintage? Cautious and reserved in exuding any warmth for India and the Indians lest his Pakistani friends and constituents misunderstand.

It is said that as a student he had more Pakistani friends than Indians. He felt more comfortable in the company of the Pakistanis than Indians. It was his choice and nobody could grudge it.

It was at the invitation of one of his Pakistani friends that he visited Islamabad, Karachi and Hyderabad (Sind) in the 1980s. Nobody can hold that against him.

As an Indian, one will be but human if one felt troubled that he did not disclose this till he became the Presidential candidate. He disclosed this----as if in passing--- when it was alleged that he did not understand the Islamic world and its divisions. He mentioned his visit to Pakistan to show that he knew about the divisions in Islam, about the Shia-Sunni differences.

Why did he keep mum on his visit to Pakistan till this question was raised? Has he disclosed all the details regarding his Pakistan visit? Was it as innocuous as made out by him----to respond to the invitation of a Pakistani friend or was there something more to it?

One would have expected the US journalists to have gone into this, to have quizzed him on it. But, they didn’t.

As I read about Obama’s visit to Pakistan in the 1980s, I could not help thinking of dozens of things. Of the Afghan jihad against communism. Of the fascination of many Afro-Americans for the jihad. Of the visits of a stream of Afro-Americans to Pakistan to feel the greatness of the jihad. Of their fascination for Abdullah Azzam, who came to Pakistan in the 1980s and started teaching in the International Islamic University in Islamabad. Of the fascination of some Afro-Americans for him. Of the frequent visits of Cat Stevens, the pop singer, to Pakistan and of his fascination for Islam and the on-going jihad. Of his conversion to Islam.

One might think that I am morbid in entertaining such thoughts and questions in my mind. But morbidity is understandable when one has a feeling that one has not been told the whole story, but only a part of it.

It is the right of the Americans to decide who should be their President. It is my right to worry about the implications of their decision for the rest of the world, including India. (29-10-08)

(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: )

Tuesday, October 28, 2008



Despite the strong statements made by Senator Barrack Obama, the Democratic Presidential candidate, expressing his determination to go after Osama bin Laden and other Al Qaeda leaders even to the extent of sending American troops into Pakistani territory if precise intelligence on the location of OBL is available, jihadi and other fundamentalist organisations in Pakistan believe it would be better for the members of the Pakistani diaspora in the US to vote for Obama. They feel that he will make a break from what they regard as the anti-Muslim policies followed by the Bush Administration. They apprehend that if Senator McCain wins he will follow the Bush policies without any major change.

2. The Shias of Pakistan too want the members of their sect in the US to vote for Obama since his attitude towards Iran is seen by them as less hostile than that of Bush and McCain.

3. In a despatch from Washington published by the "Daily Times" of Lahore on October 28,2008, Khalid Hasan, its Washington Correspondent, reported as follows: " About 90 per cent of American Muslims are expected to vote for Barack Obama on November 4, according to a key Muslim community leader, who wished to remain anonymous since any open or overt expression of support from a Muslim group for Obama is likely to hurt rather than help his bid for the White House. Leading Muslim organisations and groups have been requested by Obama’s people not to declare their support to the Democratic candidate openly as they fear it will be used to decry the Senator as a ‘crypto Muslim’ or ‘jihahidi manqué,’ so much paranoia about Islam and Muslims has been spread by neocon supporters of John McCain and certain radical, ultra conservative church and evangelical groups. According to Agha Saeed of the American Muslim Taskforce on Universal Rights and Elections, “Our goal is to maximise Muslim voter turnout, support candidates who support civil liberties, world peace, universal healthcare, better education, a fair immigration policy and social justice. Even if better candidates were to win on November 4, it will take a long and determined effort to help restore America’s promise, ideals and principles.” The American Muslim Taskforce is planning to release a Muslim-American voter survey in the next few days. "

4. Pro-Al Qaeda Arab elements, however, believe that McCain's victory would be better in the over-all interest of the global jihad against the so-called Crusaders. They are calculating that by persisting with the policies of the Bush administration he could aggravate the economic mess in the US and other Western countries and this would help the cause of the global jihad against the so-called crusaders. They are describing the economic difficulties of the US as a punishment meted out by Allah in reprisal for the US actions in Iraq and Afghanistan and project the crisis in the Wall Street and other stock markets of the West as Allah's third front to help the Muslims. It remains to be seen what position, if any, Al Qaeda officially takes.(28-10-08)

(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai,. E-mail: )




It is just one week before the US Presidential elections. We all know all that we want to know about the two candidates Senators JohnMcCain of the Republican Party and Senator Barrack Obama of the Democratic Party. We also know what the American people think of themand their ideas for the future through the public opinion polls which, without an exception, predict voter approval for Obama and hisideas----whether relating to the economy, the so-called war against terrorism or Iran's nuclear programme.

2.But there is still a missing gap in our knowledge---what Osama bin Laden and his Al Qaeda think of the two candidates and their proposedpolicies. On the eve of the Presidential elections of 2004 (on October29,2004), Osama entered the pre-poll scene in the US with a videomessage to the American people, which poured scorn over American claims regarding the war. Commenting on his message, I wrote: "As the date of the polls approached, there was feverish speculation as to whether Bush, helped by President Pervez Musharraf of Pakistan,would produce OBL before the American people like a magician producing a rabbit out of his hat and thereby make Kerry look silly and wina thumping victory. Instead of Bush producing OBL and embarrassing Kerry, it is OBL's spin-masters who have produced him before thevoters, making Bush, Kerry and everybody else in the US look silly and confused." (

3. Is OBL planning a similar entry into the poll scene before the Americans vote? It will be out of keeping with him if he does not. Watch outduring the days to come. Will he pour scorn over McCain and Bush just as Al Qaeda web sites are already doing? What will he say about thestatements of Obama about his determination to hunt for OBL, even if he has to send the US troops into Pakistani territory to catchhim---provided he has precise intelligence? Will he talk of what the jihadis in Pakistan and Afghanistan describe as the newly opened thirdfront in the war---- in the Wall Street?

4. Or will the expected message fail to materialise? If it fails to come, that will be more significant than his message if it does come. Failureto materialise would mean that there is something wrong somewhere in the Pashtun belt from where OBL is stated to be operating. The US and the Asif Ali Zardari Government in Pakistan----while pretending to criticise in open each other's counter-terrorism policies---- have beensecretly co-operating and co-ordinating their operations even more closely than was the case under Pervez Musharraf---- the US from the airthrough repeated air strikes by pilotless drones in the two Waziristans and through aerial surveillance and the Pakistan Army and theFrontier Corps on the ground in the Bajaur Agency and the Swat Valley.

5. It is apparent that the stepped up operations both by the Americans and the Pakistanis are not unrelated to the Presidential polls. If theAmericans can get a high-value target such as OBL or his No.2 Ayman al-Zawahiri before the polls, it will not only redound to the credit ofBush before he leaves office, but could also benefit McCain, who is desperately trying to avert a seeming rout in the elections.

6. Al Qaeda's foreign volunteers are on the run from village to village, from mosque to mosque and from madrasa to madrasa to protectthemselves from the air strikes of the US and Pakistan. The war against terrorism has seen intense air strikes in Afghan territory from thebeginning. Since Zardari's meeting with Bush in New York in September, it has been seeing an intense wave of air strikes in Pakistaniterritory. US planes have been flying across Pakistani air space over the tribal belt as if they are flying in US air space without worryingabout the proforma criticism from Pakistani leaders and officials and repeatedly attacking suspected Al Qaeda hide-outs. They have killedmany, but not the ones that matter.

7. What stands between the US and OBL or Zawahiri is just luck and a little bit of advance intelligence. Both have eluded the US so far. Forair strikes, the US has to be lucky only once. OBL and Zawahiri have to be lucky every time.
8. OBL must be constantly moving to deny that one stroke of luck to the US. How serious is the ground position for him? One will get ananswer either way---whether his pre-poll message materialises or does not. (28-10-08)

(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For TopicalStudies, Chennai. E-mail: )

Monday, October 27, 2008


By R. Upadhyay (From

(The writer is an eminent authority on Islam and Islamic fundamentalism, with insights born out of long years of dealing with the subject)

Facing the challenge of aggressive Muslim invaders since their first invasion in 712 A.D. and intervention in governance of the sub-continent from 1194 which spread for a period of over a millennium, Indian people are put on trial at every stage. Whether it was the soft attitude of Prithviraj Chouhan towards Mohammad Ghori or the alliance of Rana Sangram Singh with Babar the founder of Moghul dynasty against Ibrahim Lodi or the negotiation the Congress leaders had with Mohammad Ali Jinnah, Indians were always at receiving end. Although, they defied their civilisational extinction with valiant and ceaseless resistance against the alien tyranny and proved the song of Allama Iqbal -“Kuchh Baat hai ki hasti mitati nahin Hamaa” (There is something distinct in us which defied our extinction -correct, they ignored the second part of the above song -“Sadiyon raha hai dushman daure zaman hamaara” (For centuries we are facing our enemies) and therefore, the challenge remained.

Historically, so long the Arabian Indians or ‘Al-Arbi-al-Hind’ as the Indian Mujahideens call themselves - ruled this country; they had no problem with Hindu majority. However, after the failed Sepoy Mutiny in 1857 followed by firm grip of British rule when their former subjects took it as a change from one alien ruler to another, they launched sustained movements like Deoband, Aligarh, Nadwa, Ahl-e-Hadith, Jamaat-e-Ulema-Hind, Tabliq Jamaat and Jamaa-e-Islami not only to restore Islamic power by re-organising their foot soldiers but also to save the community from the democratic rule under the political supremacy of the religious majority. Yusuf Abbasi, a Muslim scholar in his book entitled ‘Muslim Politics and Leadership in South Asian Sub-continent’ perhaps rightly observed – ‘The Hindus looked upon the British rule as deliverance from Muslim yoke, and considered English education as a blessing, the Muslims in their eagerness to preserve their religion and religious views rejected English education”.

Accordingly, the descendents of Arabian Indians mobilized their foot soldiers and partitioned the sub-continent into ‘Muslim India’ and ‘Hindu India’. However, even after the end of British rule and establishment of secular democracy their restive psyche remained a perpetual problem of this country. “

Democracy is a concept completely alien to the Muslim psyche to the extent that there is no equivalent terminology for it in Arabic or other languages spoken by Muslims (Understanding Mohammad – A psychobiography of Allah’ Prophet by Ali Sina, a Canadian Muslim of Iranian descent). After partition, people of Arab descent staying back in democratic and secular India identified themselves as Muslim Indians instead of as Indian Muslims and gradually converted the Muslim masses into a never ending demanding community. Thus, by reviving their communal politics and making it an unending reality with the support of vote-baiting political hawks, they have again pushed back the country in a socio-political environment of British India. Since the closing decade of last century when the coalition government at the centre was confused in handling the problem of jihadi Islamists they re-visited the century old history of Aligarh and Deoband leaders who had a secret understanding against the Indian National Congress, which they had termed as a party for Hindu revivalism.
Their aggravating unrest after Batala House encounter in Delhi on September 19 during which two suspected terrorists were killed and two Muslim students of Jamia Milia arrested on their suspected involvement in Delhi blast on September 13 reminds the people of the Islamists’ rage in the closing decades of nineteenth century, when prominent Islamists like Mawlawi Abu Sayed Mohammed Hussain (d.1919) of Ahl-i-Hadith and Mirza Gulam Ahmad (1839-1908), founder of Ahmadia sect – both belonging to Batala in Gurdaspur district of Punjab state had launched violent movements against Hindu renaissance led by Arya Samaj. Drawing inspiration from the puritan and military zeal of Sayyid Ahmad Shahid who had launched jihad against the non-Islamic Sikh rule of Ranjit Singh, they had given a call for communal unity of the Muslims.

Today, alarmed with the recent exposure of the net work of SIMI and its new incarnation Indian Mujahideen and the spate of arrests of Muslim youths in recent months on their suspected involvement in terror blasts the ‘Muslim Indians’ have invented a self perceived theory that innocent Muslims are victimised by the police to malign Islam. Accordingly, they have been exchanging notes in defence of terror suspects, holding meetings, visiting Batala House in Jamia Nagar, Delhi and Azamgarh and launching campaign not only to prove the innocence of terror accused but also mobilized their foot soldiers against the alleged conspiracy in blaming and targeting the entire community after every terror blast.

In view of their sustained campaign, the Muslims across the country are found convinced that their community members killed in the police operation and arrested were not terrorists. They have gone to the extent of suspecting the death of Mohan Sharma by the bullet fired by his own colleague either deliberately or by accident. When the whole country applauded the Police Inspector Mohan Sharma for his martyrdom in this encounter and Government too recognised it, Indian people barring Islamists and those pretending to be ‘secularists’ are left wondering about the scheme of defending the terror accused.

The Shahi Imam of Jama Masjid, Delhi Syed Ahamed Buqari wrote letters to various Muslim leaders across the country regarding the “bomb blasts, blame game, illegal arrests, torture of Muslim youths” and called for suggestions to fight back this issue concerning Muslims of India. He has alleged that “The highly discriminatory actions of State police forces and central intelligence agencies have let loose a reign of terror to which Central government has turned a blind eye. This is a matter of serious concern for the entire Millat. If we don't unite by closing our ranks to meet this challenge, history will never forgive us. I suggest that all Muslim organisations and leaders must unite immediately by creating one single platform for voicing our concerns and registering protests. For this purpose it is necessary to summon an urgent meeting of all Muslim organisations and leaders at the earliest” (A translated extracts from the original letter written in Urdu which is available in internet).

He also led a march against the Batala House encounter and subsequently called a meeting of All India Religious and Political Leaders of the community on 14th October 2008 at Jame Masjid and condenm the alleged fake encounters and arrests of Muslims Youths. The meeting was attended by prominent personalities like Moulana Khaled Qazipuri C/O Moulana Rabe Hassan Nadvi President All India Muslim Personal Law Board., Zafer Yaab Jeelani (Adv), Moulana Margoobur Rehman (Darul oloom, Deoband), Moulana Syed Arshad Madani President Jamaiat –e- Ulema –e- Hind, Amjed Ullah Khan Leader Majlish Bachao Tahreek (MBT) Andhra Pradesh, Maulana Anees Rahmaan, Imarat –e- Sharia, Bihar, Moulana Wali Rahmani ,Munger,Bihar, Qari Amirullah ,Bhopal and Moulana Mohd Shafiq Qasmi Kolkatta,West Bengal. Leaders like Mujtaba Farooque of Jamaat-e-Islami Hind and Maulana Abdul Hamid Nomani of Jamaat-e-Ulema-e-Hind are blaming the government as well as media. Similarly, another group of Muslim leaders while setting up an ad hoc Coordination Committee of Indian Muslims also expressed their concern against the police actions in Batala House encounter and issued a press statement to mobilize the Muslim masses. Instead of discussing the remedial measures to tame the home grown Islamist terrorists they demanded stringent action including ban on Hindu organizations like VHP and Bajrang Dal . The signatories of the statement are: Mujtaba Farooq, Convenor, Coordination Committee & Secretary, Jamaat-e Islami Hind, Dr Zafarul-Islam Khan, President, All India Muslim Majlis-e Mushawarat, Ml. Abdul Hameed Nomani, Acting General Secretary, Jamiat Ulama-I- Hind, Ml. Abdul Wahab Khilji, Asstt General Secretary, All India Milli Council, Ml. Mahmoodul Hasan, President, Jamiat Ahl-e Hadees, Delhi Pradesh, Dr Taslim Rahmani, President, Muslim Political Council, Ml. Zeeshan Hidayati, Chairman, Majlis-e Fikr-o Amal, Irfanullah Khan, Chairman Jamia Nagar Coordination Committee, Ml. Jalal Haidar Naqvi, Secretary, Majlis-e Ulama-e Islam, Gopal Rai, Convenor, Teesra Swandheemta Andolan, and Bhai Tej Singh, President, Ambedkar Samaj Party.
Surprisingly, instead of allowing the dusty storm of restive Muslim minds to settle, Jamia Milia Islamia Vice Chancellor Mashirul Hasan a widely acclaimed campaigner of ‘moderate and tolerant Islam’ through his scholarly writings against the intolerant Islamists also joined the issue by offering to provide legal assistance to the two arrested students of the university and added fuel to the fire. Being an accomplished historian he is fully aware of the politics of communal polarization between the Hindus and the Muslims which took a front seat after the collapse of Muslim rule in the country and turned even a secular intellectual like Mohammad Ali Jinnah into a most communal leader of Indian sub-continent.

However, he led a street march in support of the Islamists which has no bearing on academic issues and made his liberalism questionable in the mind of intelligentsia. On what assumption he placed himself at the centre of a public debate on a communally hot issue may be best known to him but didn’t he anticipate that his action will subsume the acclaimed secular character of Jamia Milia? He might have a point to prove the possibility of the accused being innocent but the way issue is debated in and around the university, it has made the situation from bad to worse. His action has not only challenged the criminal justice system of the country but also created a controversy over the constitutionally framed public policy, university code and communal integrity in the country.

After creating the storm engulfing the country, the university’s Academic Council also issued an ‘open letter’ defending its ‘modern, liberal and non-denominational’ character. The letter while highlighting the names of a number of ‘secular’ leaders behind the foundation of this institution also claims “we were in the forefront of the national movement wholeheartedly, and opposed the pernicious two-nation theory.”

Whether Jamia Milia was in forefront or rear front of the national movement is not an issue of present debate. The issue is - what prompted this central funded educational institution to provide legal support to arrested terror suspects in Delhi blast case and to join with the Islamists on the issue of terrorism? As a ‘forefront participant’ of the national movement, the academics of the university were supposed to instill confidence among the restive Muslims of the country in general and Jamia Nagar in particular in the legal system of the country. Since the university played the same politics as Aligarh had played during pre-partition Pakistan Movement people of the country has no reason to disbelieve that both the universalities are birds of the same feathers.

The whole episode is apparently a reminder to the Muslim unrest during the first decade of twentieth century. On 1st October 1906 a 35-member delegation of Muslim Indians, which included nobles, aristocracies, legal professionals and other elite section in the community mostly associated with the Aligarh movement gathered at Simla under the leadership of Aga Khan and presented an address to Lord Minto. They demanded proportionate representation of Muslims in government jobs, appointment of Muslim judges in High Courts and members in Viceroy’s council, etc. However, after failing to obtain any positive commitment from the Viceroy, they organized the All India Mohammedan Educational Conference at Dacca (27-30 December 1906) which worked as a catalyst for foundation of All India Muslim League which subsequently succeeded in partition of the sub-continent on the basis of religion.
Calling for introspection and self-assessment some of the community leaders have expressed full faith in the security establishment and have favoured co-operation to the police in nabbing terror suspects. Salim Khan, a cinema-script writer and father of actor Salman Khan has even sent a sealed envelop containing condolence message with a cheque of an undisclosed amount to the family of police inspector Sharma. Arif Mohammad Khan, a hero of Shahbano case has suggested fighting the terrorists ideologically. He said, “Terrorism itself can be fought only by challenging it on the level of ideology and thought. It cannot be curbed only by police action” (Pioneer dated 11 October, 2008). Quoting a number of verses from Quran, he has tried to counter the terrorists’ concept of Quran. However, his voice to challenge the Islamist terrorists ideologically will hardly convince the controller of the foot soldiers in the community as they are not prepared to be quiet till the country comes under Islamic rule. Ironically, liberal theologian like Maulana Wahiduddin Khan an internationally known Islamic scholar who is known for his commitment to a complete ideology of peace and quiet competent to challenge the Islamists was not invited to the meeting organized by the Coordination Committee of Indian Muslims.

The combined politics of the ‘Muslim Indians’ and their priestly class have all along been the historical reality of the sub-continent. Conforming a saying - “wheresoever the carcass, there the Vultures will be gathered together”, the Muslim vote baiting political hawks behaving like street urchins spitting at Sun also joined the issue and supported the demand of the Muslims for judicial enquiry against the encounter. Their presumption on the innocence of the arrested terror accused from Jamia Milia without any supportive evidence suggest that the oft repeated Muslim communal politics in secular India by a combined force of Left-Castiest-Islamist alliance has once again become active to disturb the social harmony in the country. Instead of fighting the menace of terrorism they are flowing sympathy for the terror accused. Such negative sparks ignited by them will only make the situation from bad to worse.
It is widely believed that the terrorists involved in the recent blasts across the country belong to one or another Islamist groups with an objective to restore the institution of Caliphate. The success of home the grown jihadists claiming themselves ‘Indian Mujahideens’in attracting some of the well-educated Muslims towards their cause has not only pushed the community into the similar predicament as prevailed after collapse of Muslim power, increased the sense of alienation among them which has a deep impact on their increasing communalized psyche.

The most unfortunate part of the scenario is the role of a significant section of ‘secular’ Indians particularly intelligentsia, journalists, writers and politicians like Amar Singh , Lalu Yadav, Ram Bilas Paswan, Mulayam Singh Yadav and Arundhati Roy whose tendency to run down the image of the country has not only adversely affected the consciousness of saner section of people but has also led to aggravate the communalized psyche of Indian society as a whole. The prevailing Muslim unrest is therefore, a dangerous sign as far as the internal security of the country is concerned. If the people of the country in general and ruling class in particular are not taking lessons from the historical wrongs committed by Indians who brought defeat and dishonour to the nation either to save their throne or skin or self-seeking political interest we are bound to fail.

(The author can be reached at e-mail

Sunday, October 26, 2008



In pursuance of my article titled "Kilinochchi: The Spectre of Stalingrad", I have been in receipt of many messages---- some complimentingme for drawing attention to the Battle of Stalingrad and others pointing out previous references to it by some LTTE cadres. I do not claimany credit for originality. For some months now, there have been reports from West Europe claiming that pro-LTTE elements in the SriLankan Tamil diaspora have been buying up all the books on the Battle of Stalingrad available in the local bookshops. This reminded one ofa pre-1994 report from the British and others that pro-LTTE Tamils in their countries were spending a lot of money buying up books on flyingand aircraft maintenance and that Flying Clubs in the UK and Switzerland had reported that some Sri Lankan Tamils were learning flying. Inrecent months, some persons , who have been following the fighting in the Northern Province of Sri Lanka closely, have been referring toKilinochchi as a "Stalingrad in the Making", the well-known Indian news web site, had also referred to the Stalingrad precedent ina report on the reactions in Tamil Nadu. The question is not whether Kilinochchi would turn out to be a Stalingrad-in-the-making. Mostprobably not. The question is how the LTTE's mind works and how it tries to draw lessons from history. It is surprising that the Sri Lankanauthorities, despite their having an inflated Deputy High Commission in Chennai---- which one fears meets the intelligence requirements ofSri Lanka as well as Pakistan---were not aware of the perceptions in Tamil Nadu. (26-10-08)

(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute for Topical Studies,Chennai. E-mail: )


AQ Khan asks rulers not to take people for a ride
From "News" of Pakistan, dated, October 26, 2008
New desk
RAWALPINDI: Nuclear scientist Dr Abdul Qadeer Khan has advised all the government functionaries, including the president, prime minister and ministers to refrain from making false statements adding being highly educated, the people of the country are not blind, deaf and foolish.

In a despatch received here Saturday evening, Dr AQ Khan, the founder of Pakistan’s nuclear programme, said: “You have seen the end of Musharraf and Q League. Impossible becomes possible here very soon.”

Referring to signing of an agreement with China recently for setting up of two nuclear reactors, Dr Khan described it as commendable and said the two reactors would produce 650 megawatts of electricity. But, he said, Foreign Minister Shah Mahmood Qureshi mentioned the setting up of the two reactors as it would help Pakistan overcome its total power shortage and this thing is far from reality.

The incarcerated Dr Khan said the country is facing shortage of power by thousands of megawatts and the industry and agriculture sectors have been hit badly. He said any expert must tell the foreign minister that a period of eight to 10 years as well as an amount of $2 billion would be needed to install the two reactors that would generate only 650MW of electricity. He said this could not meet the power shortage in any way.

Recalling an instance when the then chairman Pakistan Atomic Energy Commission (PAEC) had announced in 1980 that one nuclear reactor would be installed every year and 20 of them would be installed by 2000, Dr Khan said this kind of misstatement and fraud with the rulers as well as people was unbecoming. He said when some people deceive the rulers, the experts must unmask their lies.

Citing an example, Dr Khan recalled that some people had made late Benazir Bhutto believe during her first stint in office that had the nuclear reprocessing plant been installed, thousands of megawatts of electricity could have been generated. He said that a prominent scientist of the PAEC, Dr Hasnain, who was then serving as director general of the Institute of Electronics, had issued a press statement contradicting statement of Ms Bhutto and that the reprocessing plant could not generate electricity. He said that the rivals got Dr Hasnain suspended but soon some of his sympathises told Ms Bhutto that whatever Dr Hasnain had stated was correct and he had stated this with good intention. Dr Hasnain was immediately reinstated, he said.

Saying that Raja Pervez Ashraf daily solves electricity problems through statements and loadshedding, Dr Khan pointed out that Balochistan was producing gas and residents of Karachi, Lahore and Peshawar were benefiting from it but it was only during General Ziaul Haq’s era that Quetta was supplied gas. He said power shortage in Balochistan could be overcome by installing big gas-fuelled power plants in major cities. He said the Frontier province, where major chunk of hydel power is generated, should be provided electricity on priority basis.

Pointing out that the young generation was not fully aware of the Independence Movement, Islamic history and world history, Dr Khan lamented that modus operandi of Adolph Hitler and Goebbels of continuously telling lies has taken roots in the country. He said that everyone sees the politicians making false statements with a smile on their faces. “They do not get ashamed of telling lies but we do while listening to them,” he said.

Referring to the unfulfilled promises of the president, the prime minister, information minister and law minister regarding reinstatement of deposed judges, Dr Khan said Farzana Raja and Fouzia Wahab were in the forefront to defend the then president and prime minister. He said Farzana Raja has got an office with the status of a federal minister while certainly Fouzia Wahab would too succeed in achievement of her objective. He ridiculed the stance of Fouzia Wahab while defending non-restoration of the deposed judges in a television talk show wherein she stated that let bygone be bygone and said that it tantamount to killing somebody and asking his heirs not to pursue what had happened.

Mentioning his reservations regarding the performance of the Higher Education Commission (HEC) and rejoinder to his statement in this regard, Dr Khan said he respects Dr Attaur Rahman wholeheartedly and know Dr Atta and his family very closely. He said that nobody could question the academic capabilities of Dr Atta or doubt his good intentions and honesty but what he left behind as performance as the HEC chairman is not worth a pride. He said a joint secretary of the Education Ministry used to send hundreds of people abroad for higher education and if funds are provided, anybody could do this job. He said that what to talk of 47 universities, had Dr Atta set up four quality technical universities — one each in the four provincial capitals — it would have been a great service to the nation. “However, if Dr (Attaur Rahman) Sahib was hurt by my criticism, I apologise for that. I respect him wholeheartedly,” Dr Khan concluded.

About the training of Pakistani troops by Americans, Dr Khan said if such training was unavoidable, a few Vietnamese military officers should have been invited for the job.

Asking whether they did not defeat two major powers — France and the US — Dr Khan said that they are straightforward people and their remunerations could be paid by only writing off a small loan. He said that whenever Pakistani armed forces got suitable leadership and were clearly told about the objectives, they did never disappoint the nation and crushed the enemy.

Friday, October 24, 2008



( What will be the impact of the global financial and economic melt-down on the Chinese economy? This question should be of interest to the
other countries of the South and the South-East Asian region. If the Chinese economy is badly affected, they too are likely to feel the negative consequences of the down-turn in the Chinese economy. Keeping this in view, we have been brInging out a periodic "ChineseEconomy Monitor" based on open information. This is the second in the series---B.Raman)


At the start of the Asia-Europe Meeting (ASEM) Summit in Beijing on October 24,2008, President Hu Jintao of China said: "The fundamentalsof the Chinese economy have not changed. However, the global financial crisis has noticeably increased the uncertainties and factors forinstability in China's economic development.We are now confronted with many difficulties and challenges in our economicendeavours.China must first and foremost run its own affairs well. In the light of the changing domestic and international financial situation,we will make our macroeconomic regulatory measures more proactive, focused and effective and make timely adjustments to ourpolicies.We will vigorously expand domestic demand, especially consumer demand, maintain economic financial stability and the stability ofcapital markets, and continue to promote sound and fast economic and social development."

2.President Hu was reported to have told his Indonesian counterpart during a bilateral meeting on October 23,2008, that the currentfinancial turmoil was "grim.," "The current world economic situation is grim and complicated.The emerging markets and developingcountries are confronted with financial risks, weak foreign demand and mounting inflation," Hu was quoted as saying.
---Source AFP


3.South Korea, China, Japan and the 10 members of the Association of Southeast Asian Nations (ASEAN), agreed in the margins of theASEM summit on October 24,2008,to create a US$80-billion fund to fight the global economic crisis.The agreement is the first majorcoordinated regional action since the financial turmoil reached full force last month. In announcing the new Asian monetary fund, aspokesman for South Korean President Lee Myung-Bak said the 13 leaders had pledged to work even more closely on economic matters."(They) agreed on the need to strengthen regional cooperation and policy coordination in the face of the global financial crisis," thespokesman said in a statement. The US$80-billion fund would be created by the end of June next year, and be accompanied by anindependent regional financial market surveillance organisation, according to the spokesman. The "ASEAN Plus Three" fund wouldsupersede the Chiang Mai Initiative, which came into being in 2000 in the wake of the 1997/98 East Asian financial crisis to ease mainlybilateral currency swaps. Asian governments had till now mostly limited their intervention to cutting interest rates, guaranteeing bankdeposits and injecting money into the credit markets - without the kind of coordinated action taken by Europe. The initial agreement calledfor South Korea, Japan and China to provide 80 per cent or US$64 billion, with ASEAN members providing the remaining US$16 billion.
-----Source AFP

4.At least 2.7 million factory workers in southern China could lose their jobs as the global economic crisis hits the demand for electronics,toys and clothes, according to industry estimates. Nine thousand of the 45,000 factories in the cities of Guangzhou, Dongguan, andShenzhen are expected to close before the Chinese New Year in late January, the Dongguan City Association of Enterprises with ForeignInvestment estimates. By then, the association expects overseas demand for products from the three manufacturing hubs to have shrunkby 30 per cent, as the knock-on effects of the US housing market collapse and credit crunch filter down to Chinese workers. "I am afraid it isnot going to look good on the Chinese government if the decline of the export-led industries and the unemployment problem continue toworsen," Eddie Leung, the association's President told AFP. Leung, also a member of the Chinese Manufacturers' Association, said theestimate of 2.7 million job losses was conservative, given that many of the larger factories in Guangdong province employ thousands ofworkers. Clement Chan, Chairman of the Federation of Hong Kong Industries, said a quarter of the 70,000 Hong Kong-owned companies insouthern China, 17,500 businesses, could go to the wall by the end of January. Describing the likelihood as a "worst case scenario," hesaid Hong Kong firms in the region employed a total of 10 million workers, but did not want to speculate on the extent of possible job losses.While small and medium-sized factories are especially prone, the threat of lay offs looms just as large over the region's manufacturinggiants, further squeezed by the appreciation of the yuan. Harry To's Mansfield Manufacturing is a classic example of the spectacular growthin China's industrial heartland over the last three decades. To started a metal business from a small room in Hong Kong in 1975. In 1991, hejoined hundreds of other Hong Kong entrepreneurs moving their production across the border into China to take advantage of cheap labourand land. He now employs 8,500 workers in 11 factories in China and Europe. His six factories in Dongguan cover 140,000 square metres. To's company, which is now a subsidiary of Singapore-listed InnoTek Ltd. supplies metal components for cars, plasma televisions, printersand other electrical appliances to Japanese brands including Canon, Toshiba, Epson, Minolta and Fuji-Xerox. Business for the company,among the largest in its field in China, has grown by 40 per cent annually in recent years, but with credit being harder to come by, nomanufacturer is safe, he said. "With banks being so tight on their lending policies now, bringing down a factory overnight has now becomevery easy." All his expansion plans have had to be put on hold. "Some of our long-time Japanese and European clients have asked us to stopproducing for them in the next two to three weeks," he said. "They said they did not want to have too much stock piled up in theirwarehouse as demand continues to dwindle." To recently started building a new 70,000 square metre factory in Dongguan and was planningto hire 2,000 more workers later this year. But now, all work on the unfinished factory has stopped until more orders roll in. "No one wouldexpand their business when the prospects for the entire manufacturing industry look so grim," he said. Instead of hiring more workers, To islooking at cutting 1,000 employees across his operations. But far from being downhearted, he is shifting part of the company's export-ledproduction to developing energy-saving electrical appliances for the domestic market, which he sees as weathering the current financialturmoil. "In the long run, I am confident that mainland Chinese consumers' purchasing power will keep rising as their Western counterpartscontinue to lose out."
----Source AFP


5.According to the National Development and Reform Commission, the export delivery value of the Chinese textile industry totaled 435.2billion yuan ($63.56 billion) in the first seven months of this year, up 7.9 per cent year-on-year, but the growth rate was eight percentagepoints lower than the previous year. Industry experts attributed the decline to the appreciation of the yuan and the weakening demand ofmajor consumption countries.Garment exports to the United States, one of the major importers of Chinese garments, increased by only sixper cent in June. The downtrend of Chinese textile exports is expected to last in the short run. Whether it recovers or not would depend onthe trend of the appreciation of the yuan and the US consumption demand. The Ministry of Finance has increased tax rebate rates on sometextile and clothing exports from 11 per cent to 13 per cent from August 1.
----- Shanghai Security News as quoted in the China Daily News

6.The Chinese Government has intervened vigorously in the real estate market to prevent a possible collapse. Real estate contributes to 10per cent of China's GDP. According to Frank Gong, the analyst of JP Morgan, China's aggressive moves to boost its ailing real estate marketprovide a glimpse of its unrivalled position in coping with the global financial turmoi.The Government announced measures to head off aproperty market crash late October 22,2008, after figures released this week showed third quarter domestic product growth slowed to nineper cent, the lowest since mid-2003. "This is big news and the actions came sooner than expected probably because the third-quartergrowth was worse than expected and the slowdown has proven sharper than the Government expected," Frank Gong said. With highliquidity, 1.9 trillion-dollar foreign exchange reserves and a stable currency, China has the most flexibility in the world to fend off the impactof the global financial crisis, Gong wrote in a research note. Propping up the property market, which accounts for 10 per cent of China'sgross domestic product, was crucial, analysts agreed. "The direction of the residential property market will determine the direction of theChinese economy over the next 18 months," according to Credit Suisse analyst Dong Tao."The new measures reflect the rising anxietyabout growth risks," Dong said. Those measures include lifting the stamp tax on property purchases and value-added tax of land on propertysales as of November, the finance ministry said. The People's Bank of China said minimum deposits and mortgage rates for first-time homebuyers would be slashed starting next week. The "unambiguous all-out support from both central and local level" Governments wassurprising in "both timing and magnitude", Nicole Wong, a Hong Kong-based property analyst with CLSA Research, said. This week'seconomic data provided the most powerful indication yet that even China's so-far invincible economy was not insulated from the globaldownturn, especially as fears of recession grow in the United States and Europe – key markets for Chinese manufactured goods. Since thefigures were released, China has wasted no time in responding to protect housing and exports, key components of its economy thatappeared vulnerable. The property policy decision was announced a day after Beijing said it would increase export tariff rebates on morethan 3,000 items, or a quarter of taxable goods, to shore up its exports. ---Source AFP


7.Beijing is tightening supervision over Chinese financial companies by requiring monthly reports on their foreign currency exposure toensure stability amid the global turmoil.. The new rules, which take effect this month, apply to both domestic and overseas branches ofChinese financial institutions.The State Administration of Foreign Exchange will require reports on foreign exchange assets and liabilitiesfrom institutions including banks, insurers, brokerages and fund management firms as well as the national pension fund and the sovereignwealth fund.Some Chinese financial institutions are feared to have incurred "huge losses" in their foreign exchange assets amid the globalcredit crisis.
---- Shanghai Security News


8.My comments: The Chinese economy is not yet as vulnerable as the Indian economy. The increased vulnerability of the Indian economy isdue to the large flow of foreign money into the stock markets, which are now being withdrawn. The dramatic collapse of the stock marketand the sensational publicity which it receives in the media have a greater psychological impact on public mood.The Chinese exposure tothe vagaries of investors in the stock markets is much less as compared to India. The predominance of investment flows into themanufacturing industries in China and not into the stock markets gives its economy a larger safety net than in the case of India. However,an advantage in the case of India is that the Indian manufacturing industries had paid more attention to the domestic market than theChinese manufacturing industries, which have been flourishing largely on exports to the US and Europe. The decline in export orders couldprove more damaging to the Chinese economy than to the Indian economy because of the failure of the Chinese industries to develop thedomestic market. Industries largely dependent on domestic demand are generally more stable in times of crisis than industries whichbecome over-dependent on the foreign markets. This is the lesson, which the Chinese are learning the hard way. Unfortunately, the Indian ITcompanies and other businesses in the services sector have developed a large dependence on Western orders. They could suffer more thantheir Chinese counterparts as orders from Western financial and other business houses for IT services shrink.In India, the GDP growth ratewas steady,but not spectacular. In China, it was spectauclar for years continuously at more than 10 per cent per annum. As the GDP growthrate and the export growth rate come down to single digits in China, the extra labour employed all these years to sustain the double digitgrowth rate will become redundant adding to the number of jobless. Reports from different sources in Guangdong and Fujian indicate that asa result of the downturn, many Hong Kong and Taiwanese--run businesses have not paid the salaries of their workers for about threemonths and that they may not be able to settle their back wages while retrenching them. This could cause social instability. The crisis hascome at a time when China is confronted with the task of finding alternate jobs for thousands of workers who were brought into Beijing forwork connected with the Olympics in the construction and the hotel sectors. They are now without jobs, with no prospect of getting one inthe near future. (24-10-08)

(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. He is also associated with the Chennai Centre For China Studies. E-mail: )

Thursday, October 23, 2008




"Some sections of the Muslim community suspected that this attack ----like the other attacks targeting members of their community--- musthave been the responsibility of Hindu extremist elements. There was no basis for their suspicions, but they persist. The only way ofremoving their suspicions is through a thorough investigation and the definitive identification of all those involved. The many missing linksin the investigation of this strike as well as in the terrorist attack on the Mumbai suburban trains should be a cause for concern. Targetedattacks on innocent Muslims by Al Qaeda and other jihadi organizations is nothing new. Such attacks take place often in Iraq, Afghanistanand Pakistan. But, in those countries, the attacks on Muslim civilians are generally due to one of two factors. Either the targeted Muslimsbelonged to a rival sect (Sunni vs Shia or Deobandi vs Barelvi) or rival organization or were perceived as collaborators of the Governmentand hence apostates. None of these factors applied in the case of the Muslims----Indians and Pakistanis--- who were traveling by theSamjotha Express. The conventional wisdom was that the Muslims were now being deliberately targeted by the jihadi organizations in orderto provoke them against the Government and the Hindus. I do not subscribe to this wisdom. It is important to keep an open mind whileinvestigating these targeted attacks on Indian Muslims and one should not jump to the conclusion that the LET or the HUJI must have beeninvolved. We owe it to our Muslims, most of whom have kept away from Al Qaeda and other pan-Islamic organizations, to see that thesecases of targeted attacks on Muslims are thoroughly investigated instead of coming to a facile conclusion that jihadi organizations must bebehind them. "-----My comments on the terrorist strike in the Samjotha Express in my book "Terrorism---Yesterday, Today & Tomorrow"published in June,2008, by the Lancer Publishers of New Delhi ( )

"While there are grounds for suspecting that the blast of Delhi and those of Agartala might have been carried out by the IM ( IndianMujahideen) and its associates from the Lashkar-e-Toiba (LET) in Delhi and the Harkat-ul-Jihad-al-Islami (HUJI) of Bangladesh in Agartala,the blasts in Modasa and Malegaon seem to stand apart. Though the Gujarat Police are reported to have detained some members of theStudents' Islamic Movement of India (SIMI) during their investigation of the Modasa blast, the Modasa and Malegaon blasts do not carry anyunique signature. More evidence will be required before one could analyse as to who might have been responsible. "----From my article ofOctober 2,2008, titled "Mushrooming Terrorism: Now Agartala" at

In the last three years, we have had at least seven terrorist strikes in different parts of the country in which the perpetrators seemed tohave targeted innocent Muslim civilians. Those seemed to be not indiscriminate attacks on all civilians, but targeted attacks on Muslims.There were two such incidents in Malegaon in Maharashtra and one each in New Delhi, Hyderabad, in the Ajmer Sharif in Rajasthan, in theSamjotha Express to Pakistan and in Modasa in Gujarat.

2. On the basis of the available reports, I had myself stated after five of these strikes---- but not after the Malegaon and Modasa incidents ofSeptember 29,2008--- that they seemed to have been carried out by terrorists belonging to jihadi terrorist organisations. I had also referredto instances of jihadi terrorists deliberately targeting innocent Muslims in many countries in pursuit of their agenda.

3. Some months after the Ajmer Sharif incident, a young Muslim officer of the Indian Police Service (IPS) had met me privately andexpressed his doubts as to whether Muslims would have been involved in these incidents. He strongly believed that no Muslim howeverextremist he might be and to whichever jihadi organisation he belonged would have planted a bomb in or near the Ajmer Sharif.

4.I did not feel convinced, but felt somewhat troubled by what he said. I felt that as a senior (though now retired) officer of the IPS, I owed itto him and other young Muslim officers of the IPS to take note of what he said and re-open my mind. It was in pursuance of this that I madethe above-mentioned observations in my book.

5. Who carried out the pre-September 29,2008, terrorist strikes, which seemed to have mainly targeted innocent Muslims? Where they theacts of the usual jihadi organisations or are they the precursor to acts of reprisal terrorism against members of the Muslim community bysome irrational elements in the Hindu community? These questions, which were already being raised by sections of the public----Muslims aswell as non-Muslims--- even before September 29, have re-surfaced following the publication or dissemination by some sections of the mediaof reports claiming that the Anti-Terrorism Cell (ATS) of the Mumbai Police have detained three Hindus in connection with their investigationinto the recent Malegon blasts. The ATS itself has neither officially denied nor confirmed these reports.

6. The matter is in the initial stages of the investigation. To instil confidence in our Muslim community, the ATS should see that theinvestigation against these Hindus and any others associated with them is carried out thoroughly irrespective of their organisationalaffiliation. Religion is not a mitigating factor in deciding on the culpability of a person suspected of involvement in a criminal act. If they areproved to have participated in the acts of terrorism in Malegain and Modesa, the fact that they are Hindus would not make them any theless criminal or terrorist.

7.Indian criminal laws----the Indian Penal Code, the Indian Evidence Act and the Criminal Procedure Code--- do not talk of the majority or theminorities or even of Indian citizens or foreigners. Their provisions apply to anyone who commits an offence in Indian territory---whether heor she is an Indian national or a foreigner, whatever be his or her religion, language or ethnicity. The arrested persons must be investigatedand proceeded against without worrying about their background or organisational affiliation.

8. Do these arrests strengthen the case for a ban on the Bajrang Dal or any other organisation to which they might have belonged? Or dothey at least call for a characterisation of such orgainsations----even if they be of Hindus---as terrorist organisations? To characterise anorganisation as a terrorist organisation and to take legal action against it ----and not merely against its members---- two types of evidenceare required. Firstly, that its constitution or manifesto advocates the resort to violence amounting to terrorism for achieving its objective.Secondly, that it has been involved in repeated acts of pre-meditated violene which amount to terrorism. One has to wait and see whethersuch evidence surfaces during the investigation. ( 24-10-08)

(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India,New Delhi, and, presently, Director, Institute For Topical Studies,Chennai. E-mail: )

Wednesday, October 22, 2008



( What will be the impact of the global financial and economic melt-down on the Chinese economy? This question should be of interest to the other countries of the South and the South-East Asian region. If the Chinese economy is badly affected, they too are likely to feel the negative consequences of the down-turn in the Chinese economy. Keeping this in view, we intend brInging out a periodic "Chinese EconomyMonitor" based on open information. Here goes the first Monitor in the series---B.Raman)


The Securities and Futures Commission (SFC) of Hong Kong announced on October 22,2008, that it has undertaken an enquiry into the affairs of the Citic Pacific, the Hong Kong listed branch of the China International Trust and Investment Corporation, following a report submitted by the Citic Pacific to the Hong Kong Stock Exchange on October 20, allegedly admitting that two of its senior executives had entered into unauthorised foreign exchange forward contracts in Euros and Australian dollars, which have already resulted in a loss of US $104 million, with a possibility of further losses, which could run up to another US $ 200 million. Among those reportedly facing enquiry are a Finance Director of the Company and the daughter of the Chairman of the company, who occupied a senior position in the company. It has been reported that pending the enquiry she has already been demoted. Albert Ho, a member of the Hong Kong Legislative Assembly, has accused the company of concealing this information from the investors. The Citic Pacific has reportedly admitted that it became aware ofthis unauthorised transaction on September 7. According to Ho, the company did not mention this in a circular issued by it to the investors on September 12. The prices of the shares of the company fell by 55 per cent on October 21 and by another 10 per cent on October 22.----Source Agence France Presse (AFP).


2.Another toy factory in China catering to the US market went bankrupt on October 22 and closed down its production, rendering 900 workers jobless. The toy factory is called the Chong Yik Toy company. It is owned by a Hong Kong businessman and is based in Shenzhen in the Guangdong province. Some of the workers have alleged that they were not paid their salaries for the last four months. Some payments were made to them by the company as well as the local Chinese authorities at the time of the termination of their services. Last week, the Hong Kong listed Smart Union Toys factory in Dongguan in the Guangdong province closed down after terminating the services of 7000 workers. According to the Xinhua news agency, in the first seven months of this year, 3631 small scale enterprises producing toys mainly for the US market have closed down due to a decline in the demand for China-made toys from the US. These enterprises, which have closed down, constituted 52.7 per cent of all toy-making companies in China--- Source "South China Morning Post" and AFP.


3.After the aviation industry, the shipping industry is facing a crisis due to a decrease in demand for cargo space.Share prices of some major shipping companies, which haul bulk freight such as iron ore, coal and grains, have fallen by 50-70 per cent in the past fewmonths."The global economic slowdown will push some shipping lines into bankruptcy," Marc Faber, a famed investor and editor of the"Gloom Boom & Doom" report, told AFP. Standard & Poor's also said this week that the Asian shipping market has suffered double-digit declines on the US-Asia route in June and July, as well as being hit with higher operating costs. There are reports of idle vessels being putto anchor, and question marks over the many orders for new ships that were placed in brighter times, years ahead of expected completion dates. "Pain levels could be high for companies that agreed to pay 2007 top-dollar prices for dry bulk ships, or who agreed to pay highlong-term charters," said an article in the Far Eastern Economic Review this month. Container shipping was hit first earlier this year as demand for Asian-made goods in the US and Europe dropped off.In a chain reaction, Asian factories manufacturing electronics and consumer items for the US and European markets began lowering output, and the need for raw materials has declined. Container shippers, bulk operators and port authorities across the region are reporting slowdowns. Malaysia's Port Klang said it had been hit by a decline in cargo handling since the start of October, due to a retail downturn and lower vehicle sales in the US and Europe. The Shanghai International Port has said that growth in cargo traffic dropped sharply to 9.9 per cent in the first half of 2008 on the "increasingly grave global economy and trade situation". "Faced with the severe economic situation at home and abroad, the port industry has met with the most complicated operation environment in recent years," it said. Hong Kong, which is sensitive to any drop in demand for toys, gadgets and clothes made in the factory-belt of China's southern Guangdong province, said that after an increase of 6.7 per cent in container traffic in August, growth dropped suddenly in September to just 1.2 per cent. "Given the global gloomy economic outlook, Hong Kong is expected to face a much tougher export trade environment," said Hong Kong Container Terminal Operators Association chairman Alan Lee. In Taiwan's seven harbours, volumes fell 2.23 per cent in the nine months to September, and in southern Kaohsiung city, business was down 1.76 per cent. "We are seeing a rapid decline in the volume of exports," an official with the Japanese Shipowners' Association said of the decline in demand. Shipping rates have been falling to levels s not seen since the Asian financial crisis in 1997-1998.A so-called capesize vessel, most commonly used to carry coal and iron ore, now costs under US $11,000 a day to hire, about half the charge in May. Container shipping lines have said they expect cargo demand on the US-Asia route to fall by as much as eight per cent in 2008. "It's a safe statement that no carrier is operating profitably in the eastbound transpacific market today," said Ron Widdows, chairman of the Transpacific Stabilisation Agreement - a forum of major shipping lines. However, the group said vessels are still running at 90 per cent capacity as firms cut costs by consolidating routes and returning chartered vessels, and take advantage of the downturn to lay up ships for repairs.Widdows said the industry was confident that government efforts to unclog global finance would be effective, restoring confidence and paving the way for a shipping recovery in late 2009.---- Source AFP


4. Shanghai's port, one of the world's busiest, has cut its container traffic target for the year by five per cent, blaming the global financial crisis and an economic slowdown.The Shanghai International Port Group's handling volume is expected to reach 28.5 million twenty-foot equivalent units (TEU), less than its earlier target of 30 million TEU.Lower trade volume due to the weakening global economy, slowing domestic growth and natural disasters in China this year have affected the port's container operations.China's economy expanded by nine per cent in the third quarter, the lowest level in about five years as the global credit crisis put a dent in its booming economy.The port operator's container throughput rose 10.4 per cent from a year earlier to 13.82 million TEU in the first half, sharply slower than the growth in 2007, when throughput jumped 20.4 per cent to 26.2 million TEU.In the first nine months of 2008, container processing in Chinese ports rose 14.9 per cent to 94.5 million TEU, 2.2 per cent lower than the first half, according to Ministry of Transport figures.--- Source "Shanghai Securities News" and AFP.


5.Japan, China and South Korea will set up an Asian watchdog body to monitor the health of financial institutions in a bid to counter global economic chaos.They hope to have the first meeting in Tokyo next month and also invite other Asian nations including the 10 members ofthe Association of Southeast Asian Nations (ASEAN).It would serve as a regional version of the Financial Stability Forum, a panel that advises the Group of Seven major economies and exchanges information among them.Japan also hopes the meeting would discuss enhancing controls on the financial system.The move came as US and European leaders called for an emergency summit in November to discuss ways to restore the battered global financial sector. Japanese Prime Minister Taro Aso is also sounding out whether the South Korean and Chinese leaders can travel to Japan by the end of the year for an inaugural three-way economic summit. Japanese Government officials declined to comment on the reports. ---Source "Yomiuri Shimbun" and the Kyodo news agency.


6.China will exempt property transactions from stamp tax and value-added tax from November 1 to boost the ailing real estate market, state media reported on October 22, citing the Finance Ministry.


My comment: The down-turn in the Chinese economy is likely to affect Sino-Indian bilateral trade which has galloped to a record US $ 30billion and could affect Indian iron ore producers. Iron ore constitutes about 55 per cent of Indian exports to China. With the Olympics over and with the sluggish real estate market and a suspension of the construction of new factories, the demand for steel in China could come down.(22-10-08)
( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. He is also associated with the Chennai Centre For China Studies. E-mail: )

Tuesday, October 21, 2008




The Sri Lankan Army advancing towards Kilinochchi in the Northern Province, where the headquarters of the Liberation Tigers of TamilEelam (LTTE) used to be located, and the LTTE cadres deployed for slowing down the advance have been engaged in a do or die battlesince October 17,2008.

2. While claiming that it continues to maintain its advance despite bad weather, the Sri Lankan Army has admitted that it has alreadysuffered 33 fatalities in the latest phase of the battle that started on October 17 and has been brought to a temporary halt due to rains. In anattempt to explain the slowing down of the operations, the Sri Lankan Army has accused the LTTE of using poisonous gas against thetroops.

3. President Mahinda Rajapaksa has also indirectly admitted the slowing down of the operations. The "Daily News" of Sri Lanka has quotedhim as saying at a function of the National Research Council at Colombo on October 20,2008, as follows: "The battle against terrorism whichwe could convincingly win within a few days, is nevertheless prolonged due to the grave concern and the optimum caution exercised by thehighly disciplined Armed Forces who are fighting under severe constraints, to cause no harm or loss to innocent, civilian human life."

4. Thus, while the Army has attributed the slowing down to the alleged use of poisonous gas by the LTTE, the President has attributed it tothe Army's anxiety to avoid civilian casualties.

5. Intriguingly for the last one week, the pro-LTTE web site, which used to give battle front news in the past, has notdone so. One would have expected it to highlight the Army's admission of having sustained 33 fatalities. It has not done so. For more than aweek now, the Tamilnet has been giving mostly political news regarding developments in Tamil Nadu in support of the Sri Lankan Tamilcause and activities of the Sri Lankan Tamil diaspora abroad. If at all it gives operational news, it is generally about the Eastern Province.

6. While, a pro-LTTE Tamil web site, continues to give battlefield news, Tamilnet has not been doing so. The only newsabout the latest round of fighting is to be found in the web site of Puthinam, which claims that the LTTE inflicted heavy casualties on theadvancing army.

7. Why the silence of Tamilnet? One has to look for an answer to this question as the fighting continues. (21-10-08)

(The writer is Additional Secretary (retired), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For TopicalStudies, Chennai. E-mail: )

Monday, October 20, 2008




The Battle of Stalingrad is considered the bloodiest battle with the largest battlefield casualties in the history of conventional warfare.Under a carefully worked out plan, the Soviet Army inveigled an advancing and over-confident Nazi Army into Stalingrad and then inflictedsevere casualties on the Nazi Army. Many of those Nazi soldiers whom the Soviet Army could not kill were killed by "Gen.Winter". The entireSixth Army of the Nazis was trapped by the Soviet troops with the help of "Gen.Winter" and destroyed.

2. As the battle began on July 17,1942, the Nazi Disinformation machine worked overtime to tell an unsuspecting German people that the fallof Stalingrad and the collapse of the Soviet Army were imminent. The German people waited with bated breath for the news of thefall."Within two days", they were told. Two days became two weeks. Two weeks became two months. Two months became seven months.The battle ended disastrously for the Nazis on February 2, 1943. This marked the beginning of the end of the Nazi dreams in the SecondWorld War.

3. Is one seeing a mini version of Stalingrad in the battle for Kilinochchi, the current headqurters of the Liberation Tigers of Tamil Eelam(LTTE)? It is difficult to say on the basis of the scanty information available from the battle front. From even this scanty information, twothings are clear: Firstly, the Sri Lankan Army, which senses victory against the LTTE, has been doing well, but not as well as it claims to be.Secondly, the LTTE has been doing badly, but not as badly as projected to be by the disinformation machine of the Sri Lankan Army . TheLTTE has shown that there is still a lot of fight left in it---- and a lot of intelligence and innovative thinking.

4. But intelligence and innovatrive thinking alone cannot win wars without resources and the wherewithal. The LTTE is deficient on bothcounts. But it has shown itself to be as resilient as the Taliban in Afghanistan and as fiercely-motivated. In 2003, the Americans thought andclaimed that they had finished the Taliban once and for all. Their facile assumptions proved to be wrong. The Taliban came back----as if ithas risen from its much-proclaimed grave--- and has been moving forward relentlessly. Neither air strikes by the most powerful Air Force inthe world nor heavy artillery strikes by the most powerful Army in the world have been able to stop its advance.Reluctantly, senior NATOmilitary commanders in Afghanistasn have started admitting that the war against the Taliban is unwinnable and that one has to search for apolitical solution with neither victory nor defeat for either side. It has not only become unwinnable unless the Taliban commits some serioustactical mistakes, but is also likely to become increasingly unaffordable thanks to the financial and economic melt-down in the US and therest of the world.

5. The LTTE is calculating that if it can keep fighting against the Sri Lankan Army for some more months, a prolonged war against the LTTEcould become as unwinnable and as unaffordable for the rulers of Sri Lanka as a prolonged war against the Taliban for the NATO powers.The rulers of Sri Lanka are living in a fool's paradise if they think that China and Pakistan would come to their rescue if the Government ofIndia stops assisting them under pressure from public opinion in Tamil Nadu. The Pakistani economy is on the verge of a collapse. Even theChinese were reluctant to help out their time-tested friend as they call Pakistan, as President Asif Ali Zardari found to his dismay when hevisited China recently. The Pakistan Army is reeling under one set-back after another inflicted on it by the Taliban. To think that thePakistan Army would rush to Sri Lanka to spite India would be the height of stupidity.

6. The Chinese, who are increasingly worried over the impact of the recession in the US on their manufacturing industries, which are heavilydependent on the US market, are hugging tight their foreign exchange holdings. They were reluctant to make any definitive commitment of help to Zardari. They are even showing a decline of interest in further developing the Gwadar port project. In a world besetwith the most serious economic crisis it has known since the Great Depression of the 1930s, everybody, including China, is interested insaving every dollar and cent he can. Nobody wants a foreign adventure, which might drain off their depleting resources. If the Sri LankanArmy thinks that China would try to rush in if India stops helping, it is in for a disappointment.

7. The LTTE is calculating that if it can keep fighting against the Sri Lankan Army for some more weeks, "Gen.Monsoon" and"Gen.Recession" could put an end to the pipedreams of the Sri Lankan Army of a definitive victory over the LTTE.

8. Will its calculations prove right or will they be belied? Whatever happens, one thing seems likely---- there is going to be no definitivevictory or no definitive defeat for either side in the on-going war.

9. Annexed is an AFP despatch on the present ground situation in the Kilinochchi area.( 20-10-08)

(The writer is Additional Secretary (retired), Cabinet Secretariat, Govt. of India, New Delhi. and, presently, Director, Institute For TopicalStudies, Chennai. He is also associated with the Chennai Centre for China Studies. E-mail: )


Tigers blunt Sri Lanka's drive to capture powerbase

COLOMBO, Oct 20, 2008 (AFP) - Dogged resistance by Tamil Tiger guerrillas appears to have held up a Sri Lankan military offensive in thenorth aimed at smashing the rebels' de facto state, analysts and military sources say.

A bullish government earlier this month said it was poised to capture the Tigers' Kilinochchi powerbase, 330 kilometres (206 miles) north ofColombo.

That drive, however, could take longer than anticipated with the separatist Tigers digging in, an army stretching to defend territory alreadyseized, and poor weather hampering operations, the sources say.

Security forces had banked on a quick fall of Kilinochchi, the Liberation Tigers of Tamil Eelam's (LTTE's) political capital.

In early October the army said it was within two kilometres, but since then there has been little forward movement and monsoon rains havealso slowed the troops' advance.

The increased resistance in recent weeks is in sharp contrast to an earlier LTTE fallback that enabled troops to move rapidly into rebelterritory.

'Troops operating in the south of Kilinochchi are making progress, though they have not shown a rapid progress within the past few days,'said defence analyst Ranil Wijayapala in the state-run Daily News.

He blamed adverse weather, with heavy rains currently lashing the north.
Military sources said increased air attacks have failed to soften up Tiger defences for ground troops to smash through, while the army isstretched.

'With the rapid advance last month, the military is also forced to tie down a lot of soldiers to protect areas newly captured from the Tigers,' amilitary officer who declined to be named said.

'The Tigers won't be able to hold Kilinochchi for too long, but they can delay the fall,' the officer said.

Aid sources who have had rare access to the region say the guerrillas have moved civilians out of Kilinochchi and appeared to be digging inby building new bunkers.

Losing Kilinochchi would be a major blow to the Tigers, who set up the town as capital of their mini-state after taking the area fromgovernment forces 10 years ago.

Sri Lanka's military moved to take the town after their success in driving the Tigers from their eastern strongholds in July last year. Themilitary has been keen to replicate that success in the north.

Previous attempts to take Kilinochchi using large columns of troops failed because Tigers deployed suicide bombers against them,persuading the military to switch to more effective smaller units of special forces.

'The success this time is due to the use of small groups across a broad front,' retired brigadier general Vipul Boteju said.

The military says it has killed about 7,500 Tigers since the start of this year, when the government pulled out of a moribund truce arrangedand put in place by Norwegian peace brokers.

But there is also a heavy cost for the military, reflecting the bitterness of the conflict.

Figures tabled in parliament show 1,099 soldiers were killed in the first nine months of 2008, with September seeing the highest number offatalities -- 200 killed and 997 wounded.

Almost 7,000 soldiers were wounded in the first nine months of the year and 396 civilians were killed.

The guerrillas have not released their casualty estimates but say they are putting up stiff resistance.

The government's 2009 defence budget suggests it is braced for a drawn-out military campaign. Colombo allocated a record 177 billionrupees (1.6 billion dollars) for defence in 2009, up from 166 billion rupees in 2008.

But the Tamil Tigers, who took up arms in 1972 for a separatist homeland, have shown in the past they can turn the tables on the military.

Barely six months after government troops captured the Jaffna peninsula in 1995, the Tigers over-ran a military base in the northeast, killingmore than 1,200 soldiers.

The guerrillas also reversed military gains of the previous 19 months in a matter of five days in November 1999, dislodging the military froma key base at the entrance to the Jaffna peninsula.

Saturday, October 18, 2008




"Maritime counter-terrorism has received considerable attention in India, but till now the focus has naturally and mostly been on maritimecounter-terrorism and security in the waters off Sri Lanka and in the Malacca Strait. There has been inadequate attention to terrorist threatsof a strategic nature from the seas to the west of India---- whether from the Gulf, the Arabian Sea, the Strait of Hormuz or the Mediterranean. Over 80 per cent of the terrorist organisations with a capability for maritime terrorism operate in the areas and seas to the West of India.Over 90 per cent of successful maritime terrorism strikes have taken place in the areas and seas to the West of India. Israel has been thelargest single victim of maritime terrorism in the Mediterrannean, with nearly 60 strikes by organisations such as the Hamas, the Hizbollah,the Popular Front for the Liberation of Palestine (PFLP) etc. The only two successful strikes and one unsuccessful attempt by Al Qaeda wereoff Aden. Almost our entire energy supplies come from this area. The security of the Malacca Strait has limited relevance for our energysecurity, whereas our entire energy security depends on maritime security in the areas to the West of India. One would have, therefore,expected that the concentration of our maritime counter-terrorism efforts would have been on building a database of capabilities, threatsand risks from the areas and seas to the West of India, adopting a vigorous proactive policy of co-operation with the navies of this regionand developing preventive and termination capabilities, which would have relevance in the areas to the West of India. Unfortunately, this isnot so.The Americans do not want our Navy playing any proactive role in maritime security in the waters to the West of India lest it causeany undue concern in the minds of Pakistan. They, therefore, try to keep our Navy confined to the East and the Malacca Strait. We seem tobe happy to go along with this role. This has to change. It is high time the Indian Navy starts paying more attention to threats of maritimeterrorism that could arise from the West. Presently, the deployment of a large number of naval ships belonging to the US-led coalition hasthwarted any other serious incident of maritime terrorism after the suspected Al Qaeda attack on Limburg in October, 2002 and the attackson oil terminals in Iraq post-April, 2003. We should not leave the protection of our shipping and our energy supplies totally in the hands of theUS-led coalition. We should develop our own capabilities and networking with the countries of the region."
---Extract from my article dated December 28,2005, titled MARITIME COUNTER-TERRORISM: NEED TO LOOK WEST at

"The Malacca Strait is not India's life-line. It is the life-line of China and the ASEAN countries. Our presence in the Malacca Strait tickles ourego and gives us a feeling of being a great power, but it does not help in protecting the lives and property of our citizens and our maritimetrade. The major threats to our maritime security are from the seas to the West of us and not to the East of us. Ninety per cent of our foreigntrade in terms of volume and 77 per cent in terms of value and practically all our energy imports pass through the seas to the West of us.There are more Indian and foreign ships with Indian crew in the seas to the West of us than to the East of us. We should reduce our overpre-occupation with the security of the Malacca Strait and devote more attention to our maritime security in the seas to the West of us."

2. This has been a point repeatedly stressed by me in my presentations on maritime security since 2004. I always found myself in a minorityof one. This was so even in a seminar on South-East Asia held at Vizag earlier this year.

3. After a recent increase in the incidents of piracy off the Somali coast and the hijacking of ships with Indian crew by the pirates, theGovernment of India has at long last been forced to take action to fill up the gaps in our maritime security in the seas to the West of us. Onewould have seen on the CNN-IBN news channel two days ago dramatic scenes of the relatives of the crew of a hijacked ship accusing theGovernment of India of inaction in the face of the threats to the lives of their relatives. Of what consolation to them that our naval ships hadin the past rescued some Japanese and Indonesian seamen in the seas to the East of us when we are not able to fulfill the obligation ofprotecting our mercantile seamen in the seas to the west of us? Today, the danger has arisen in a dramatic manner from pirates. Tomorrow,it could be from Al Qaeda or pro-Al Qaeda terrorist groups.

4.On August 15,2008, Somalian pirates hijacked a Japanese-owned merchant vessel MV Stolt Valor with 18 Indians among the 22 sailorson board. Since then, the 18 Indian crew members are being held hostage at a Somalian port and the shipping company is holdingnegotiations with the pirates for their release. India is not the only country to suffer due to the activities of the pirates in this area. Shipscarrying foodgrains and medicines for the starving people of Somalia have also been the targets of attacks by the pirates.

5. In a recent interview, Josette Sheeran, Executive Director of the UN World Food Programme, said: "Time is running out for Somalia. Asmany as three million people — one-third of the country — live under threat of starvation. Their lifeline is the sea, from which food, medicalsupplies, and other aid arrives. And there lies the problem. Heavily armed bands of modern-day pirates in speedboats are terrorising ships inSomalia’s coastal waters. So far this year they have raided more than 50 vessels, stealing cargos and hijacking ships, from private yachts tooil tankers, and extorting some $100 million a year in ransom. Just a few weeks ago, a Ukrainian freighter carrying heavy weaponry,including tanks, was hijacked. A Greek petrochemical carrier was seized, and another attacked, as was an Iranian oil tanker. These piratescurrently hold more than a dozen ships hostage in Somali ports. Ships laden with tens of thousands of tons of maize, sorghum, split peas,and cooking oil from the United Nations World Food Programme and other international aid organisations must navigate these dangerouswaters. Keeping Somalia’s sea-borne supply line open is imperative. It carries 90 per cent of the humanitarian assistance delivered by theWFP, which in turn supplies nearly 90 per cent of the aid that feeds so many Somalis.These pirate terrorists are not particularly powerful.Estimates put their number at around 1,200. But they are growing increasingly brazen, all the more so when not confronted. Since November 2007, following a series of pirate raids, Canada, the Netherlands, Denmark, and France deployed naval frigates to escortWFP aid ships safely into harbour. Under their protection, not a single ship has come under attack, ensuring the uninterrupted flow ofassistance. Yet despite that clear success, the future is uncertain. The Canadian naval mission ends in late October, and no country hasstepped forward to replace it. Without naval escorts, food aid will not get to Somalia. The WFP has stockpiled sufficient supplies to keeprelief flowing for some days. But once those warehouses are empty, the country and its people will be on their own. I am optimistic thatsome nation will come to the rescue — but we must not risk this happening too late, or not at all. Beyond that, we need a long-term plan. Weat the United Nations are duty-bound to do what compassion and human decency demand of us. Is the world really going to stand by andwatch more children die of starvation? Somalia’s political future is uncertain at best. Yet we need to set to work on a plan for deploying aviable multinational force to help secure peace there, or at the very least sustain its people. There is a clear way to begin. The first step isfor some country or countries to volunteer the naval force needed to preserve Somalia’s humanitarian lifeline. The next is to develop acomprehensive strategy, in conjunction with the UN Security Council, to eliminate piracy in Somali waters. "

6.According to news agency reports, Somali pirates have seized more than 30 ships this year and attacked many more. Most attacks havebeen in the Gulf of Aden between Yemen and north Somalia, a major global sea artery used by about 20,000 vessels a year heading to andfrom Suez, including Gulf oil shipments. The most dramatic incident has been the hijacking of an Ukrainian ship MV Faina carrying 33 tanksbound for an unidentified destination. The Kenyan and Ukrainian authorities have claimed that these tanks are meant for Kenya, but theAmericans seem to suspect that the ship was carrying these tanks for the autonomous government of South Sudan, in possiblecontravention of a UN arms embargo.The pirates ,estimated to be 50 in number, are reportedly demanding a ransom of US $ 20 million forreleasing the ship with its cargo and crew. An American and a Russian naval ships have reached the area, but have refrained fromintervening so far---- probably due to some unconfirmed reports that the ship was also carrying some chemicals.

7.A spokesman for the US Navy's 5th Fleet, Lt Nathan Christensen, has been quoted by news agencies as saying that the USS Howard waswithin 8km (5 miles) of the Ukrainian vessel, but refused to say whether they were preparing to attack the pirates. He said the ship's cargoof battle tanks made it a particularly worrying situation. "We're concerned that this might end up in the wrong hands, such as terrorists orviolent extremists," he said.

8. In the wake of these developments, the Government of India announced on October 16,2008,the deployment with immediate effect of an Indian naval warship with helicopters and marine commandoes on board in the Gulf of Aden to carry out anti-piracy patrols on the routeusually followed by Indian commercial vessels between Salalah ( Oman) and Aden (Yemen). A Government spokesperson said: " Thepresence of the Indian Navy warship in this area will be significant as the Gulf of Aden is a major strategic choke point in the Indian Oceanregion and provides access to the Suez Canal through which a sizable portion of India's trade flows. This anti-piracy patrol will be carriedout in co-ordination with the Directorate-General of Shipping , who will keep Indian flagship vessels informed in case they want to travel inthe Indian Ocean along with the Indian Navy ship. The presence of the Indian Navy in the area will help to protect our seaborne trade andinstil confidence in our seafaring community as well as function as a deterrent for pirates."

9. This statement and other clarifications by the Government spokespersons have highlighted the following:

This is a permanent measure to protect vessels with Indian flags and Indian crew carrying goods for India.

It is not a one-shot measure triggered off by the hijacking of a Japanese ship with Indian crew.

The deployment of more ships for the anti-piracy patrol is not ruled out.

The deployment is not a prelude to intervention by the Indian ship to rescue the Indian crew.

10. While this welcome action will to some extent take care of the protection of Indian commercial ships transiting this area, it does notaddress the problem of controlling and eradicating piracy in this area. India alone will not be able to address this menace. It will have to actjointly with the navies of the US, the United Arab Emirates and other Gulf countries and possibly, one day, even Pakistan. This requirescareful study. There is a need for more and sustained joint anti-piracy patrolling and exercises in this area. (18-10-08)

( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: )

Friday, October 17, 2008


President Asif Ali Zardari of Pakistan, who paid a bilateral visit to China from October 14 to 17,2008, was to return to Pakistan on October17 and go back to Beijing on October 23 to attend the summit of the Asia-Europe Meeting (ASEM) being held in Beijing on October 24 and25,2008. It remains to be seen whether he goes back himself as originally scheduled or deputes Prime Minister Yousef Raza Gilani to attendit.

2. Coinciding with his visit, one of the Chinese engineers kidnapped by the Swat branch of the Tehrik-e-Taliban Pakistan (TTP) on August29,2008, reportedly managed to escape from custody and was picked up by a helicopter of the Pakistan Army before the TTP couldre-capture him. However, the other engineer, who also managed to escape, was reportedly re-captured by the TTP before he could bepicked up by the Pakistan Army.

3. This kidnapping incident, coming in the wake of three other incidents directed against Chinese nationals in Pakistan last year, is learnt tohave figured prominently in the one-to-one discussions of Zardari with important Chinese investors and businessmen during which heinvited them to invest more in Pakistan. Among those who called on him were Ma Zhigeng, Chairman of the NORINCO, Zhang Liansheng,Chairman of the Poly Technologies, Liu Minkang, Chairman, Chinese Banking and Regulatory Authority, and Fan Jixiang, President of the Sinohydro.

4.In an interview to the "People's Daily", Zardari claimed that the Chinese business executives, who met him, had expressed no securityconcerns about Pakistan. “I met with heads of many companies and 99.9 per cent told me how secure they were feeling,” he said. He addedthat though Pakistan had some problems, the Government was giving full attention to address the situation. He also said that he wastrying to convince everyone that terrorism was a regional as well as an international problem and that the international community shouldcome forward as Pakistan could not fight it alone. “We are looking towards the world for cooperation in curbing this menace.”

5. Jin Zheping, the Deputy General Manager of the China International Water and Electricity Corporation (CWE), is reported to have assuredZardari that the CWE would invest $1.7 billion for generating low-cost hydel electricity in Pakistan. A memorandum of understanding hasalready been signed for CWE assistance to one hydel project (the Bhasa dam) and CWE assistance for another (the Kohala dam) is undernegotiation.

6. The visit also saw the announcement of Chinese assistance for launching a telecommunication satellite, named PakSat-1R, for Pakistanin 2011. The assistance will be provided by the China Great Wall Industry Corporation (CGWIC).

7. Among important Chinese leaders whom Zardari met were President Hu Jintao, Prime Minister Wen Jiabao, Jia Qinglin, Chairman of theChinese People’s Political Consultative Conference, and Wu Bannguo, Chairman of the National People's Congress. While the atmosphere ofthe visit and meetings had the usual warmth and friendliness marking China-Pakistan bilateral exchanges, in terms of concrete outcome thevisit was not quite satisfactory from the Pakistani point of view.

8. Zardari was expecting three concrete results relating to an immediate Chinese credit to enable Pakistan meet its payment difficulties andavoid default of its international obligations due early next year, a Chinese initiative to get for Pakistan a waiver of the restrictions onnuclear trade from the Nuclear Suppliers' Group (NSG) similar to the initiative taken by the US to get a waiver for India and a firm declarationof Chinese interest in the three pending proposals for a petrochemical complex in Gwadar and a railway line and a gas pipeline connectingGwadar with the Xinjiang region of China.

9. Briefing the media after Zardari's meeting with Wen Jiabao on October 16, Qin Gang, a spokesperson of the Chinese Foreign Office, said:"As a long friend of Pakistan, China understands it is facing some financial difficulties.We’re ready to support and help Pakistan within ourcapability.” But he did not mention any specific figure of the credit which China would be prepared to extend. China had agreed to provide$500 million in a concessional loan to help Pakistan meet its balance of payment needs in April last.

10.Before Zardari's arrival in Beijing, Masood Khan, Pakistan's Ambassador to China, had claimed that an agreement on civilian nuclearco-operation with China could be reached during the visit. No such agreement figures in the list of agreements signed by the two countriesduring the visit as released by the Xinhua, the Chinese New Agency. (Annexure).

11. It is, however, learnt from reliable sources that while the Chinese reiterated their commitment in principle made to Pervez Musharraf tosupply two more nuclear power stations (Chashmas III and IV ), they avoided any commitment on Pakistan's request for a Chinese initiative to get an NSG waiver. Without such a waiver, Chashmas III and IV would remain non-starters. In view of the expected US opposition to anywaiver till Pakistan allows the International Atomic Energy Agency (IAEA) to have Dr.A.Q.Khan, the Pakistani nuclear scientist, interrogatedby an independent team of investigators on his non-proliferation activities, China is not confident of a waiver in favour of Pakistan till theA.Q. Khan issue is resolved. It reportedly does not want to take any initiative in this matter lest it face an embarrassment if its proposal isrejected by the NSG. The present Government in Pakistan, like the previous Government of Musharraf, is opposed to any IAEA interrogationof Khan. The Chinese are also not very keen on that since Khan knows a lot not only about the proliferation activities of Pakistan, but also ofChina.

12. Farhan Bokhari, the Islamabad correspondent of the CBS News of the US, has reported as follows: "China has privately agreed to followa "step-by-step" approach to fulfilling Pakistan’s aspiration for an expanded nuclear energy program, rather than sign an ambitious civilnuclear program of the kind recently struck between the U.S. and India, senior Pakistani and Western officials said on Thursday (October16). Private discussions are believed to have been held on expanded nuclear cooperation between Pakistan’s president Asif Ali Zardari andChinese leaders during Zardari’s four-day visit to China.A senior Pakistani government official, familiar with discussions between Zardari andChinese officials, claimed Thursday that China had agreed to “consider further nuclear power reactors to fulfill our needs. The relationship(on the nuclear issue) remains intact”. Speaking to CBS News on condition of anonymity, the official added, “there is now a completeunderstanding on our future cooperation”. However, a second Pakistani official who spoke to CBS News on condition of anonymity saidChina is eager to avoid a direct confrontation with the West on its nuclear energy cooperation with Pakistan. “China is not seeking ahead-on clash with anyone. It wants to broaden its relations with Pakistan but without the risk of a stiff U.S. reaction,” said the official. U.S. reluctance to offer a civil nuclear power agreement to Pakistan stems mainly from revelations in 2004 that Abdul Qadeer Khan, thefounder of Pakistan’s nuclear weapons program, traded nuclear secrets and technology with Iran, Libya and North Korea. Khan hasremained effectively under house arrest since then. Requests from the Western officials, notably the U.S., to interview Khan have all beendenied by the Pakistani government."

13. There was no reference to the pending Gwadar proposals during the visit. The bilateral trade between the two countries touched US$7billion last year ($ 30 billion between India and China). It was agreed that the two countries would try to increase it to US$15 billion by2011.(18-10-08)

(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For TopicalStudies, Chennai. He is also associated with the Chennai Centre For China Studies. E-mail: )


Text of Pakistan-China joint statement

The following is the text of the joint statement between China and Pakistan issued on October 16, 2008, after the end of the formal talksbetween the leaders of the two countries.

“On the invitation of President Hu Jintao, President Asif Ali Zardari paid a state visit to China on 14-17 October 2008.

President Hu Jintao held talks with President Zardari. Wu Bangguo, Chairman of the Standing Committee of the National People’s Congress,Wen Jiabao, Premier of the State Council, and Jia Qinglin, Chairman of the Chinese People’s Political Consultative Conference, met Zardari respectively.

Talks between the two presidents and Zardari’s meetings with other Chinese state leaders were characterized by traditional warmth,friendship and mutual understanding. The two leaders reached broad agreement on strengthening China-Pakistan strategic partnership of co-operation and on international and regional issues of mutual interest under the new circumstances. The Pakistani president also heldwide-ranging discussions with the leaders of Chinese corporations and financials institutions.

The leaders of the two countries reviewed with satisfaction the growth of China-Pakistan relations over the past 57 years since the twocountries established diplomatic ties. They agreed that the friendship between China and Pakistan has withstood the test of time andpractice, notwithstanding changes in the international, regional and domestic environments.

The all-weather friendship and all-round cooperation have become the distinctive features of China-Pakistan relations.

Both sides agreed that it is essential that the two sides make continuous efforts to strengthen good neighbourly relations and friendship,develop mutually beneficial cooperation and deepen strategic partnership of co-operation between China and Pakistan which serves thefundamental interests of the two peoples and contributes to peace and development in the region.

Both sides agreed that the Treaty of Friendship, Co-operation and Good-neighbourly Relations between the People’s Republic of China andthe Islamic Republic of Pakistan (Treaty) signed in April 2005 is of great historic and immediate significance, laying a solid legal foundationfor the long-term, stable and healthy growth of China-Pakistan relations. Both sides decided to abide by the policies and principlesenshrined in the Treaty, earnestly implement the bilateral legal documents signed since the two countries established diplomatic ties andfurther intensify cooperation in the areas of economy, defence, science and technology, people to people contact, thus constantlyadvancing the China-Pakistan strategic partnership of co-operation.

China stressed that Pakistan is China’s good neighbour, close friend, dear brother and trusted partner. China will continue to viewChina-Pakistan relations from a strategic and long-term perspective, and make joint efforts with Pakistan to lift China-Pakistan Strategicpartnership of co-operation to a new high.

Pakistan stressed that Pakistan-China relationship is the cornerstone of its foreign policy, and friendship with China represents the commondesire of all Pakistani people. Pakistan appreciated the strong support and assistance provided by the Government and people of China toPakistan in its economic development. Pakistan remained committed to continuing its policy of friendship towards China and makingunremitting efforts to promote the healthy and steady growth of relations between the two countries.

Pakistan unequivocally upholds the one-China policy and considers Taiwan as an inseparable part of the People’s Republic of China andsupports all efforts made by the Chinese government to realize national reunification.

China appreciated Pakistan’s long-term and staunch support to China on issues concerning China’s sovereignty and territorial integrity,reaffirmed its support for Pakistan’s effort to uphold its sovereignty, independence and territorial integrity, and appreciated Pakistan’simportant role in promoting regional peace, stability and security and strengthening international counter-terrorism efforts.

Both sides opposed to all forms of terrorism, extremism and separatism, resolved to co-operate with each other to fight theabove-mentioned three forces. China conveyed its complete support to Pakistan’s commitment and efforts to fight terrorism andappreciated the sacrifices made by the government and people of Pakistan in this regard.

The two sides agreed that economic co-operation is an important part in the strategic partnership between the two countries. The twocountries enjoy great economic complementarity and should fully tap the potential and comprehensively deepen mutually beneficial co-operation in the economic field.

Both sides agreed to fast track the implementation of the Five Year Development Programme on Economic Co-operation and make full useof the Free Trade Agreement in Goods and Investment and Pakistan-China Joint Investment Company. In this regard, they agreed toconvene a meeting of Pakistan-China Economic Co-operation Group under the Five Year Development Programme on Economic Co-operationat an early date. They also agreed to hold the next meeting of the Joint Economic Commission at the convenience of both countries.

Both sides agreed to enhance co-operation to further develop and boost Pakistan’s Mineral and Energy sectors as well as broaden financialand banking sector co-operation. They also agreed to further enhance ‘connectivity’ by developing new communication links including fibreoptic links. They agreed to explore the concept of Integrated Border Management, overland trade and development of trans-bordereconomic zones.

Both sides agreed to maintain communication and co-ordination on major international and regional issues to safeguard their commoninterests. Both sides agreed to continue to co-operate closely on issues such as the reform of the United Nations, climate change andenergy and food security to promote world peace and development.

Zardari offered congratulations to the Chinese government and people on the successful hosting of the Beijing Olympic Games and thesuccessful completion of Shenzhou VII’s mission. Hu Jintao congratulated Zardari on his election as the president of Pakistan and thankedPakistan for its valuable assistance in the wake of the devastating earthquake in Wenchuan, China. He also appreciated Pakistan’s supportto ensure the success of the Beijing Olympics and Paralympics Games. Pakistan applauded the outstanding achievements China has madein the 30 years of reform and opening-up and believes that China’s development will contribute to world peace and prosperity.

Zardari invited Hu Jintao to visit Pakistan once again at his convenience. Chinese president thanked Pakistani president for his kind invitation.

Both sides signed the following agreements and memoranda of understandings (MoUs) during the visit:
1. Agreement on economic and technical co-operation between the Government of the Islamic Republic of Pakistan and the Government ofthe People’s Republic of China.

2. Amending protocol to free trade agreement between the Government of the People’s Republic of China and the Government of the IslamicRepublic of Pakistan.

3. Framework Agreement on co-operation in the field of minerals between the national development and reforms committee of the People’sRepublic of China and the Ministry of Petroleum and Natural Resources of Pakistan.

4. MoU on co-operation between the Ministry of Land Resources of the People’s Republic of China and the Ministry of Petroleum and NaturalResources of Pakistan.

5. Agreement on environmental protection co-operation between the Ministry of Environmental Protection of the People’s Republic of Chinaand the Ministry of Environment of Pakistan.

6. Framework agreement for co-operation in the field of radio and television between the state administration of radio, film and television,Government of the People’s Republic of China and the Ministry of Information and Broadcasting, Government of the Islamic Republic ofPakistan.

7. Paksat-1R satellite procurement contract by and between China Great Wall Industry Corporation (CGWIC) and Pakistan Space and UpperAtmosphere Research Commission (SUPARCO).

8. MoU on scientific collaboration in agricultural research and technical co-operation between Chinese Academy of Agricultural Sciencesand Agricultural Research Council of Pakistan.

9. Agreement on properties exchange between the Ministry of Foreign Affairs of the People’s Republic of China and the Ministry of ForeignAffairs of the Islamic Republic of Pakistan.

10. Co-operation agreement between Beijing Museum of Natural History of the People’s Republic of China and the Museum of Natural Historyof the Islamic Republic of Pakistan.

11. MoU on co-operation between the cricket association of the People’s Republic of China and the Cricket Board of the Islamic Republic ofPakistan.

12. MoU regarding the project of x-ray container and vehicle inspection system between NUCTECH Company Limited, Tsinghua University,the Ministry of Education of the Peoples Republic of China and the Ministry of Interior of the Islamic Republic of Pakistan.