B.RAMAN
These are comments sent by me on a draft paper prepared by a US think-tank----B.Raman
a). India has terrorism of various hues----separatist, ethnic, ideological (Maoist), and jihadi (indigenous as well as originating from Pakistan and Bangladesh). Till 2007, only the jihadi terrorists originating from the Pakistan-Afghanistan region had shown a worrisome interest in using the Internet for operational purposes---- such as propaganda, communications,motivation, training, data-mining and disruption. The interest of other terrorist groups in the Internet remained confined to propaganda and psy-war and communications. They did not show any interest in the use of the Internet for disruptionn purposes..
(b). Jihadi terrorists operating in the Pakistan-Afghanistan region, including Al Qaeda, have been exhibiting an increasing mastery of the use of the Internet for propaganda, communications, motivation, recruitment and training, but one has not seen any confirmed instance of their using or attempting to use the Internet for disruption purposes.
(c).Neither Pakistan nor Afghanistan has a large reservoir of IT-savvy anti-Western Muslims. India has a reservoir, but it cannot as yet be described as large. So too, the Pakistani and Indian Muslim diaspora in the West. Al Qaeda and pro-Al Qaeda organisations are focussing on them for the recruitment of their future IT warriors. The Indian Mujahideen has come to notice for recruiting at least three , but they were used for primitive purposes such as sending claims of responsibility without being traced back.
(d). Indian Muslims are technically less qualified than the rest of the population, but better educated and qualified than the Muslims in most of the Islamic world. They have the same access to IT education as a person of any other religion and the same job opportunity. As Al Qaeda and pro-Al Qaeda organisations start looking for recruits with a capability for disruption, they are likely to depend increasingly on the IT-savvy Muslims of India and the Indian and Pakistani Muslim diaspopra in the West.
(e). How to disrupt their efforts at such recruitment? That is a question, which would the need the attention of the intelligence agencies of India and the West.
(f). All Islamic fundamentalist organisations----including the Taliban---- have realised the importance of IT.The curricula of most madrasas exclude physical sciences, western philosophy, logic, etc, but include training in the use of computers, which are seen as an asset for waging a jihad. In the 1990s, I had contributed to the quarterly journal of the United Service Institution of India, based in New Delhi,two articles on likely future threats from "microchip moles" and the computer as a "weapon of mass disruption." These threats have not yet materialised, but it is only a question of time before they do. A weapon of mass destruction requires qualified manpower, financial resources and a place to test away from the attention of the intelligence agencies. A weapon of mass disruption requires only qualified manpower and limited financial resources. This is a weapon which can be launched from anywhere. In most cases, the intelligence agencies will become aware of one's capability in the field only after one has used it and not before.
(g). State-spnsored cyber war, that is, the use of lone wolf cyber warriors by States for achieving their intelligence-collection and disruption objectives, is a threat, which is already staring us in the face. Deniability is strong in the case of state-sponsored cyber warriors. Protective technology has to keep ahead of technology, which lends itself to disruptive uses. Is it doing so? (1-2-09)
Saturday, January 31, 2009
Friday, January 30, 2009
LTTE'S BITTER ATTACK ON THE GOVT. OF INDIA & THE CONGRESS PARTY
B.RAMAN
In the wake of the visit of our Foreign Minister, Shri Pranab Mukherjee, to Colombo for talks with the Sri Lankan President, Mr.Mahinda Rajapaksa, the Tamilnet, the web site in the English language associated with the Liberation Tigers of Tamil Eelam (LTTE), has disseminated on January 30,2009, an article attributed to "a political analyst in Vanni", which has accused "the present Indian Establishment run by Sonia Congress of waging its own proxy war in the island of Sri Lanka, concurrent to Colombo's war against Tamil Nationalism."
2. The article, which evidently represents the views of the LTTE leadership, warns the "Indian Establishment" as follows: "In its frustration arising from its incapability of achieving anything positive, India is not only heading for maintaining perpetual trouble in Sri Lanka, but also is inviting turmoil to a part of its own country." It also says: "The net result of the Indian game, without enjoying any popular support from any quarter concerned, can only be autocratic and will prove to be devastating to the entire island. Repercussions arising from resentment, coupled with re-emergence of a dormant LTTE, will only see a raging political inferno and bloodbath. This time the war is not going to be confined to the island of Sri Lanka, but will be fought involving Tamil Nadu too."
3. It further says: "It ( the Indian Establishment) also doesn’t want to see Tamil nationalism or an independent Tamil nation state in the island, but it is accountable to the people of Tamil Nadu. Public opinion is important to continue the ‘dynasty’ in the throne of Delhi. Above all it has to maintain ‘checks and balances’ with Colombo. What it is desperately attempting now is re-organization of its own quislings among Eezham Tamils with promises of arranging political solution, aiming to replace LTTE leadership. But the important qualification to become a quisling, as specified by the Indian recruiting agents, is to drop the Tamil national aspiration. Soon one may find a set of propped up leaders, camouflaged initiatives in the diaspora and international conferences in New Delhi. But, for everything, the war has to be over soon at least with the semblance of conclusiveness. If it doesn’t end soon, indications are there that the Indian establishment may even physically try a hand at it, as time is running out for it with elections around the corner in April.Already there are reports of the physical presence of Indian soldiers in the war front and recent Indian supplies of tanks and aircraft to Colombo’s arsenal. Whatever India may do to Sri Lanka to win the war against Tamils, it is never going to get the reward of popular support to any of its aims from the Sinhala masses. The popularity of the ruling Indian Establishment is at its lowest ebb in Tamil Nadu. Its name has become repulsive to Eezham Tamils. Having all these discredits on its side, what really India can achieve in bringing out an acceptable political solution is anybody’s guess. The present Indian Establishment is simply incapable of doing anything constructively new, other than destroying Tamil safeguards."
( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: seventyone2@gmail.com )
In the wake of the visit of our Foreign Minister, Shri Pranab Mukherjee, to Colombo for talks with the Sri Lankan President, Mr.Mahinda Rajapaksa, the Tamilnet, the web site in the English language associated with the Liberation Tigers of Tamil Eelam (LTTE), has disseminated on January 30,2009, an article attributed to "a political analyst in Vanni", which has accused "the present Indian Establishment run by Sonia Congress of waging its own proxy war in the island of Sri Lanka, concurrent to Colombo's war against Tamil Nationalism."
2. The article, which evidently represents the views of the LTTE leadership, warns the "Indian Establishment" as follows: "In its frustration arising from its incapability of achieving anything positive, India is not only heading for maintaining perpetual trouble in Sri Lanka, but also is inviting turmoil to a part of its own country." It also says: "The net result of the Indian game, without enjoying any popular support from any quarter concerned, can only be autocratic and will prove to be devastating to the entire island. Repercussions arising from resentment, coupled with re-emergence of a dormant LTTE, will only see a raging political inferno and bloodbath. This time the war is not going to be confined to the island of Sri Lanka, but will be fought involving Tamil Nadu too."
3. It further says: "It ( the Indian Establishment) also doesn’t want to see Tamil nationalism or an independent Tamil nation state in the island, but it is accountable to the people of Tamil Nadu. Public opinion is important to continue the ‘dynasty’ in the throne of Delhi. Above all it has to maintain ‘checks and balances’ with Colombo. What it is desperately attempting now is re-organization of its own quislings among Eezham Tamils with promises of arranging political solution, aiming to replace LTTE leadership. But the important qualification to become a quisling, as specified by the Indian recruiting agents, is to drop the Tamil national aspiration. Soon one may find a set of propped up leaders, camouflaged initiatives in the diaspora and international conferences in New Delhi. But, for everything, the war has to be over soon at least with the semblance of conclusiveness. If it doesn’t end soon, indications are there that the Indian establishment may even physically try a hand at it, as time is running out for it with elections around the corner in April.Already there are reports of the physical presence of Indian soldiers in the war front and recent Indian supplies of tanks and aircraft to Colombo’s arsenal. Whatever India may do to Sri Lanka to win the war against Tamils, it is never going to get the reward of popular support to any of its aims from the Sinhala masses. The popularity of the ruling Indian Establishment is at its lowest ebb in Tamil Nadu. Its name has become repulsive to Eezham Tamils. Having all these discredits on its side, what really India can achieve in bringing out an acceptable political solution is anybody’s guess. The present Indian Establishment is simply incapable of doing anything constructively new, other than destroying Tamil safeguards."
( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: seventyone2@gmail.com )
Thursday, January 29, 2009
TIME FOR SRI LANKAN TAMIL DIASPORA TO SPEAK OUT
B.RAMAN
"An organisation headed by a leader, who understands only terrorism, is unlikely to rehabilitate itself in the eyes of the internationalcommunity. Prabakaran is a liability for the LTTE and the Sri Lankan Tamils in the post-9/11 world. The time has come for the LTTE leadersand the Sri Lankan Tamils---including their overseas diaspora--- to do an introspection on their future course of action. If they have topreserve the gains made by thousands of their cadres since 1983, they have to find a new leadership. Prabakaran is no longer the man ofthe future. He is passe. He has become a liability for the Tamil cause. The sooner the Sri Lankan Tamils realise it, the better for them."
---------- Extract from my article of January 22,2007, titled LTTE AVOIDS BATTLE OF ATTRITION IN THE EAST available athttp://www.southasiaanalysis.org/papers22/paper2105.html
------------------------------------------------------
The reports regarding the desperate plight of about 1,50,000 Sri Lankan Tamils caught up between an advancing Sri Lankan Army and aretreating Liberation Tigers of Tamil Eelam (LTTE) in the Wanni area of northern Sri Lanka are confusing.
2. Many have reportedly died and many, including many children, have been injured in the exchange of artillery fire between the two sides.In a situation like this, it is impossible to establish whose artillery killed whom. All one can say is that innocent civilians are paying a heavyprice for the heavy exchange of artillery.
3. The Sri Lankan Army is disinclined to agree to a ceasefire to let the civilians be evacuated by the International Committee of the RedCross (ICRC) lest the LTTE take advantage of it to regroup. The LTTE is disinclined to let the civilians move to the safety zones set up by theGovernment lest this facilitate the advance of the Army.
4. The international community, including the Government of India, are unable to effectively bring pressure on both sides to help out thecivilians. The Sri Lankan Army has estimated that it is only a few weeks away from totally eliminating the capability of the LTTE forconventional fighting and it is determined to achieve that objective even at the risk of some collateral damage to the civilians. The LTTE isafraid that if it lets the civilians go, it will have a face-to-face confrontation with the Army in which it is unlikely to do well.
5. Prabakaran, who is believed to be still commanding the retreating LTTE fighters, does not seem to realise that the chances of the LTTEstaging a spectacular come-back as it did in the 1990s and recaptured Kilinochchi and Mulaithivu are remote. The loss of control overterritory in the Northern Province is not so devastaing for him as the loss of control over the Tamil population in the Eastern Province. In thepast, many of the conventional fighters of the LTTE came from the Eastern Province and many of the terrorists from the Northern Province.It is no longer possible for him to get new recruits from the Eastern Province. The recent fighting in the North has indicated that the LTTE'sshortages in arm and ammunition and explosives are much more serious than originally estimated. With the rapidly decreasing possibility offinding replacement of human and material resources, his chances of staging a come-back conventionally are much less than what theywere in the 1990s.
6. The terrorist wing of the LTTE also seems to be facing severe problems due to a shortage of explosive material, a drop in volunteers forsuicide terrorism and the lack of time and space in the midst of a furious conventional war to motivate and train new volunteers and mountoperations.
7. The use of the civilians to avert an impending final defeat on the ground should be condemned by all the political parties in Tamil Nadu,by the Government of India and the international community. Prabakaran has been living in a world of illusions just as Hitler was in the final days of the defeat of the Nazi Army before he and his mistress committed suicide in a Berlin bunker to avoid being captured by theadvancing Soviet Army. Till he decided to kill himself, Hitler was fondly hoping that a reversal of fortunes was still possible.So too,Prabakaran seems to be having a fond hope that he and his men can stage a come-back even at this stage.
8. It is time for the Sri Lankan Tamil diaspora to assert itself and call upon the LTTE cadres to overthrow Prabakaran and other leaders,arrest them, hand them over to the Sri Lankan authorities and proclaim a unilateral ceasefire. It is time for the diaspora to come to termswith the reality and act before more civilians are killed.If they fail to do so and continue to encourage Prabakaran in his irrational illusions,history will judge them harshly. ( 29-1-09)
(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For TopicalStudies, Chennai. E-mail: seventyone2@gmail.com )
"An organisation headed by a leader, who understands only terrorism, is unlikely to rehabilitate itself in the eyes of the internationalcommunity. Prabakaran is a liability for the LTTE and the Sri Lankan Tamils in the post-9/11 world. The time has come for the LTTE leadersand the Sri Lankan Tamils---including their overseas diaspora--- to do an introspection on their future course of action. If they have topreserve the gains made by thousands of their cadres since 1983, they have to find a new leadership. Prabakaran is no longer the man ofthe future. He is passe. He has become a liability for the Tamil cause. The sooner the Sri Lankan Tamils realise it, the better for them."
---------- Extract from my article of January 22,2007, titled LTTE AVOIDS BATTLE OF ATTRITION IN THE EAST available athttp://www.southasiaanalysis.org/papers22/paper2105.html
------------------------------------------------------
The reports regarding the desperate plight of about 1,50,000 Sri Lankan Tamils caught up between an advancing Sri Lankan Army and aretreating Liberation Tigers of Tamil Eelam (LTTE) in the Wanni area of northern Sri Lanka are confusing.
2. Many have reportedly died and many, including many children, have been injured in the exchange of artillery fire between the two sides.In a situation like this, it is impossible to establish whose artillery killed whom. All one can say is that innocent civilians are paying a heavyprice for the heavy exchange of artillery.
3. The Sri Lankan Army is disinclined to agree to a ceasefire to let the civilians be evacuated by the International Committee of the RedCross (ICRC) lest the LTTE take advantage of it to regroup. The LTTE is disinclined to let the civilians move to the safety zones set up by theGovernment lest this facilitate the advance of the Army.
4. The international community, including the Government of India, are unable to effectively bring pressure on both sides to help out thecivilians. The Sri Lankan Army has estimated that it is only a few weeks away from totally eliminating the capability of the LTTE forconventional fighting and it is determined to achieve that objective even at the risk of some collateral damage to the civilians. The LTTE isafraid that if it lets the civilians go, it will have a face-to-face confrontation with the Army in which it is unlikely to do well.
5. Prabakaran, who is believed to be still commanding the retreating LTTE fighters, does not seem to realise that the chances of the LTTEstaging a spectacular come-back as it did in the 1990s and recaptured Kilinochchi and Mulaithivu are remote. The loss of control overterritory in the Northern Province is not so devastaing for him as the loss of control over the Tamil population in the Eastern Province. In thepast, many of the conventional fighters of the LTTE came from the Eastern Province and many of the terrorists from the Northern Province.It is no longer possible for him to get new recruits from the Eastern Province. The recent fighting in the North has indicated that the LTTE'sshortages in arm and ammunition and explosives are much more serious than originally estimated. With the rapidly decreasing possibility offinding replacement of human and material resources, his chances of staging a come-back conventionally are much less than what theywere in the 1990s.
6. The terrorist wing of the LTTE also seems to be facing severe problems due to a shortage of explosive material, a drop in volunteers forsuicide terrorism and the lack of time and space in the midst of a furious conventional war to motivate and train new volunteers and mountoperations.
7. The use of the civilians to avert an impending final defeat on the ground should be condemned by all the political parties in Tamil Nadu,by the Government of India and the international community. Prabakaran has been living in a world of illusions just as Hitler was in the final days of the defeat of the Nazi Army before he and his mistress committed suicide in a Berlin bunker to avoid being captured by theadvancing Soviet Army. Till he decided to kill himself, Hitler was fondly hoping that a reversal of fortunes was still possible.So too,Prabakaran seems to be having a fond hope that he and his men can stage a come-back even at this stage.
8. It is time for the Sri Lankan Tamil diaspora to assert itself and call upon the LTTE cadres to overthrow Prabakaran and other leaders,arrest them, hand them over to the Sri Lankan authorities and proclaim a unilateral ceasefire. It is time for the diaspora to come to termswith the reality and act before more civilians are killed.If they fail to do so and continue to encourage Prabakaran in his irrational illusions,history will judge them harshly. ( 29-1-09)
(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For TopicalStudies, Chennai. E-mail: seventyone2@gmail.com )
Tuesday, January 27, 2009
THE INVISIBLE HYPHENS IN OBAMA'S POLICY-MAKING
B.RAMAN
President Barack Obama has been in office hardly for a week now. It will be too early to expect a comprehensive security strategy in thePakistan-Afghanistan region to emerge from his administration. All one can say is that an exercise to evolve a strategy, which will beconsiderably different from that followed by George Bush, has been undertaken at various levels in the White House itself, in the NationalSecurity Council, in the State Department and in the Pentagon and that some Pakistani analysts such as Ahmed Rashid, the well-knownAfghan expert, are playing an active behind-the-scene role in this exercise There has been no involvement of any Indian analyst----eitherIndia or US based--- in this exercise. As a result, non-American inputs for this exercise have been coming largely from Pakistan.
2. On the basis of the initial comments of Obama himself, Vice-President Joe Biden, Richard Holbrooke, the newly-appointed SpecialRepresentative for Afghanistan and Pakistan, and others, one could already make a reasonable assessment that certain aspects of thepolicy followed by the Bush Administration are unlikely to change and that certain other aspects are likely to change.
3. What are the aspects that are unlikely to change?
The US commitment to the war against the remnants of Al Qaeda operating from sanctuaries in the Pakistani territory till Al Qaeda ceases to be a threat to the security of the US homeland and US interests abroad. This commitment is expected to be reinforced with the induction of more US troops (an estimate given is about 30,000) into Afghanistan. The US is prepared to face the risk of increased American fatalities resulting from this surge.
The primacy given by the Bush administration to the military option will stay.Holbrooke has been quoted as saying on January 25,2009: " We plan to work closely with General Petraeus, Centcom, Admiral Mullen, and the Joint Chiefs of Staff, General McKiernan and the command in Afghanistan, to create a more coherent programme.”
The rules of engagement against suspected terrorists operating from the Pakistani territory as formulated by the Bush Administration will be adhered to. These rules provided for unilateral Predator (unmanned aircraft) strikes against suspected terrorist hide-outs in the Federally-Administered Tribal Areas (FATA) of Pakistan without prior intimation to Pakistan lest the information leak out. Such strikes in the North-West Frontier Province (NWFP) will be more an exception than the rule and will be avoided in Balochistan where the command and contreol of the Afghan Neo Taliban, headed by its Amir Mulla Mohammad Omar, is allegedly based. There has already been at least one--possibly two--- Predator strikes in Pakistani territory after Obama assumed office. The Bush policy of avoiding ground strikes in Pakistani territory unless there is specific intelligence about the presence of high-value targets such as Osama bin Laden himself and his No.2 Ayman al-Zawahiri will continue.
4. What are the aspects that could change as a result of the on-going exercise?
A greater priority to non-military aid to Pakistan than to military aid as was the case under Bush.
Linking all aid----whether military or non-military---- to Pakistan's performance in acting against Al Qaeda and the Taliban sanctuaries in Pakistani territory. In an article, which appeared in the "Foreign Affairs" magazine last year, Holbrooke said that the Obama Administration would face many tough challenges with regard to the war in Afghanistan and global peace, but the toughest was the insurgent sanctuaries in the tribal areas of Pakistan. There will, however, be no such linkage with the Pakistani action against anti-India terrorist sanctuaries such as those of the Lashkar-e-Toiba (LET, which was involved in the terrorist attack in Mumbai from November 26 to 29,2008. The pressure on Pakistan in respect of Al Qaeda and the Taliban will be diplomatic as well as punitive. There will be no punitive element in respect of the anti-India terrorist infrastructure.
A greater attention to the political dimensions of the security strategy than was given under the Bush Administration. While continuing to say that the US wants to strengthen democracy and improve governance in both Pakistan and Afgfhanistan, but has no interest in specific personalities, the Obama Administration will work discreetly to strengthen the position of Asif Ali Zardari in Pakistan and to have Hamid Karzai eased out-----if possible, before the Afghan Presidential elections due in October,2009, or at least during the elections. Obama's advisers are evidently worried that if Zardari is discredited and falls, his replacement may be either the army or Nawaz Sharif of the Pakistan Muslim League, who has been strongly critical of the US policies in the region. Obama and his advisers do not feel comfortable with either.Disappointment with the alleged unsatisfactory record of Karzai----without, however, namimg him--- whether in improving governance or security is evident in all statements on Afghanistan emanating from Obama and his entourage.
Giving a more strategic dimension to the war against Al Qaeda and the Taliban than was done under the Bush Administration. It is in the context of this strategtic dimension that one has been seeing repeatedly comments from Obama and others about the need for a regional approach----whether in relation to the restoration of normalcy in Afghanistan or the fight against jihadi terrorism emanating from the Pakistani territory.
5. India comes into their policy calculations with regard to this regional approach. Pakistani analysts such as Ahmed Rashid have been ableto sell the idea to the advisers of Obama that a regional approach to the question of restoration of normalcy In Afghanistan would have toaddress the concerns of the Pakistani military-intelligence establishment over what they view as the increasing Indian presence inAfghanistan. This presence is viewed by the military-intelligence establishment as detrimental to Pakistan's historic interests in Afghanistanand its internal security, particularly in Balochistan. Till 2004, the Bush Administration was attentive to Pakistani concerns and sought todiscourage an increase in the Indian presence in Afghanistan. Its policy changed thereafter due to the belief that greater interactionsbetween India and Afghanistan could contribute to the strengthening of democracy and governance in Afghanistan.
6. Similarly, analysts such as Ahmed Rashid have been able to convince Obama and his advisers that without a more active role by the US infacilitating a search for a solution to the Kashmir issue, there will be no incentive for Pakistan to act sincerely and effectively against theterrorist infrastructure in Pakistani territory. The Bush Administratiion was disinclined to follow an activist policy on Kashmir and acceptedIndia's stand that it was a bilteral issue between India and Pakistan in which others should have no role. Obama and his advisers areprepared to revisit this policy, if not immediately, at a later date.
7. In response to Indian sensitivities, the announcement regarding the appointment of Holbrooke and his terms of reference have avoidedany reference to India or Kashmir. Despite this, it was clear from the confident remarks of Ahmed Rashid in his interview to Karan Thapartelecast by the CNBC-TV 18 TV channel on January 27,2009,that while Kashmir may not figures in his terms of reference just now, thequestion of addressing Pakistani concerns over India's relations with Afghanistan would be very much part of his agenda even though notopenly so stated. According to Ahmed Rashid, for this purpose Holbrooke will have to interact with India. There are wheels within wheelsand invisible hyphens within hyphens in the whole exercise relating to Obama's policy making on the security strategy in this region and theexpected role of Holbrooke in it.
8. It is important for India to make it clear to the Obama Administration at an appropriate stage that any departures from the past USpolicies on these two issues will have a negative impact on the growing strategic relationship between India and the US. A frank and firmexpression of the Indian views on this subject and a strict adherence to those views in our policy-making will be necessary not on the basisof what interested analysts such as Ahmed Rashid have been saying, but in response to any discreet pressures from the ObamaAdministration. (28-1-09)
(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For TopicalStudies, Chennai. E-mail: seventyone2@gmail.com )
President Barack Obama has been in office hardly for a week now. It will be too early to expect a comprehensive security strategy in thePakistan-Afghanistan region to emerge from his administration. All one can say is that an exercise to evolve a strategy, which will beconsiderably different from that followed by George Bush, has been undertaken at various levels in the White House itself, in the NationalSecurity Council, in the State Department and in the Pentagon and that some Pakistani analysts such as Ahmed Rashid, the well-knownAfghan expert, are playing an active behind-the-scene role in this exercise There has been no involvement of any Indian analyst----eitherIndia or US based--- in this exercise. As a result, non-American inputs for this exercise have been coming largely from Pakistan.
2. On the basis of the initial comments of Obama himself, Vice-President Joe Biden, Richard Holbrooke, the newly-appointed SpecialRepresentative for Afghanistan and Pakistan, and others, one could already make a reasonable assessment that certain aspects of thepolicy followed by the Bush Administration are unlikely to change and that certain other aspects are likely to change.
3. What are the aspects that are unlikely to change?
The US commitment to the war against the remnants of Al Qaeda operating from sanctuaries in the Pakistani territory till Al Qaeda ceases to be a threat to the security of the US homeland and US interests abroad. This commitment is expected to be reinforced with the induction of more US troops (an estimate given is about 30,000) into Afghanistan. The US is prepared to face the risk of increased American fatalities resulting from this surge.
The primacy given by the Bush administration to the military option will stay.Holbrooke has been quoted as saying on January 25,2009: " We plan to work closely with General Petraeus, Centcom, Admiral Mullen, and the Joint Chiefs of Staff, General McKiernan and the command in Afghanistan, to create a more coherent programme.”
The rules of engagement against suspected terrorists operating from the Pakistani territory as formulated by the Bush Administration will be adhered to. These rules provided for unilateral Predator (unmanned aircraft) strikes against suspected terrorist hide-outs in the Federally-Administered Tribal Areas (FATA) of Pakistan without prior intimation to Pakistan lest the information leak out. Such strikes in the North-West Frontier Province (NWFP) will be more an exception than the rule and will be avoided in Balochistan where the command and contreol of the Afghan Neo Taliban, headed by its Amir Mulla Mohammad Omar, is allegedly based. There has already been at least one--possibly two--- Predator strikes in Pakistani territory after Obama assumed office. The Bush policy of avoiding ground strikes in Pakistani territory unless there is specific intelligence about the presence of high-value targets such as Osama bin Laden himself and his No.2 Ayman al-Zawahiri will continue.
4. What are the aspects that could change as a result of the on-going exercise?
A greater priority to non-military aid to Pakistan than to military aid as was the case under Bush.
Linking all aid----whether military or non-military---- to Pakistan's performance in acting against Al Qaeda and the Taliban sanctuaries in Pakistani territory. In an article, which appeared in the "Foreign Affairs" magazine last year, Holbrooke said that the Obama Administration would face many tough challenges with regard to the war in Afghanistan and global peace, but the toughest was the insurgent sanctuaries in the tribal areas of Pakistan. There will, however, be no such linkage with the Pakistani action against anti-India terrorist sanctuaries such as those of the Lashkar-e-Toiba (LET, which was involved in the terrorist attack in Mumbai from November 26 to 29,2008. The pressure on Pakistan in respect of Al Qaeda and the Taliban will be diplomatic as well as punitive. There will be no punitive element in respect of the anti-India terrorist infrastructure.
A greater attention to the political dimensions of the security strategy than was given under the Bush Administration. While continuing to say that the US wants to strengthen democracy and improve governance in both Pakistan and Afgfhanistan, but has no interest in specific personalities, the Obama Administration will work discreetly to strengthen the position of Asif Ali Zardari in Pakistan and to have Hamid Karzai eased out-----if possible, before the Afghan Presidential elections due in October,2009, or at least during the elections. Obama's advisers are evidently worried that if Zardari is discredited and falls, his replacement may be either the army or Nawaz Sharif of the Pakistan Muslim League, who has been strongly critical of the US policies in the region. Obama and his advisers do not feel comfortable with either.Disappointment with the alleged unsatisfactory record of Karzai----without, however, namimg him--- whether in improving governance or security is evident in all statements on Afghanistan emanating from Obama and his entourage.
Giving a more strategic dimension to the war against Al Qaeda and the Taliban than was done under the Bush Administration. It is in the context of this strategtic dimension that one has been seeing repeatedly comments from Obama and others about the need for a regional approach----whether in relation to the restoration of normalcy in Afghanistan or the fight against jihadi terrorism emanating from the Pakistani territory.
5. India comes into their policy calculations with regard to this regional approach. Pakistani analysts such as Ahmed Rashid have been ableto sell the idea to the advisers of Obama that a regional approach to the question of restoration of normalcy In Afghanistan would have toaddress the concerns of the Pakistani military-intelligence establishment over what they view as the increasing Indian presence inAfghanistan. This presence is viewed by the military-intelligence establishment as detrimental to Pakistan's historic interests in Afghanistanand its internal security, particularly in Balochistan. Till 2004, the Bush Administration was attentive to Pakistani concerns and sought todiscourage an increase in the Indian presence in Afghanistan. Its policy changed thereafter due to the belief that greater interactionsbetween India and Afghanistan could contribute to the strengthening of democracy and governance in Afghanistan.
6. Similarly, analysts such as Ahmed Rashid have been able to convince Obama and his advisers that without a more active role by the US infacilitating a search for a solution to the Kashmir issue, there will be no incentive for Pakistan to act sincerely and effectively against theterrorist infrastructure in Pakistani territory. The Bush Administratiion was disinclined to follow an activist policy on Kashmir and acceptedIndia's stand that it was a bilteral issue between India and Pakistan in which others should have no role. Obama and his advisers areprepared to revisit this policy, if not immediately, at a later date.
7. In response to Indian sensitivities, the announcement regarding the appointment of Holbrooke and his terms of reference have avoidedany reference to India or Kashmir. Despite this, it was clear from the confident remarks of Ahmed Rashid in his interview to Karan Thapartelecast by the CNBC-TV 18 TV channel on January 27,2009,that while Kashmir may not figures in his terms of reference just now, thequestion of addressing Pakistani concerns over India's relations with Afghanistan would be very much part of his agenda even though notopenly so stated. According to Ahmed Rashid, for this purpose Holbrooke will have to interact with India. There are wheels within wheelsand invisible hyphens within hyphens in the whole exercise relating to Obama's policy making on the security strategy in this region and theexpected role of Holbrooke in it.
8. It is important for India to make it clear to the Obama Administration at an appropriate stage that any departures from the past USpolicies on these two issues will have a negative impact on the growing strategic relationship between India and the US. A frank and firmexpression of the Indian views on this subject and a strict adherence to those views in our policy-making will be necessary not on the basisof what interested analysts such as Ahmed Rashid have been saying, but in response to any discreet pressures from the ObamaAdministration. (28-1-09)
(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For TopicalStudies, Chennai. E-mail: seventyone2@gmail.com )
Monday, January 26, 2009
INDO-PAKISTAN RELATIONS AFTER 26/11
B.RAMAN
(Written exclusively for the journal of the Elcano Institute of Madrid at their request. Cannot be reproduced until their journal carries it )
THEME: Prospects for Indo-Pakistan relations after the terrorist attack in Mumbai from November 26 to 29,2008.
SUMMARY: The terrorist attack in Mumbai from November 26 to 29,2008, has caused renewed tensions in Indo-Pakistan relations. While fears of a military confrontation have subsided, the bilateral dialogue on various political and economic issues is in a state of suspension. A return to the pre-November 26 civility in bilateral relations and a resumption of the dialogue could be delayed by the temporary absence of India’s Prime Minister, Dr.Manmohan Singh, from his duties due to a cardiac surgery and the forthcoming elections to the Lok Sabha, the lower House of the Indian Parliament, which have to be held by April,2009. If there is another terrorist attack from Pakistani territory, the possibility of India exercising a military strike against the terrorist infrastructure in Pakistani territory will increase. The revival of the unwise talk in the West about a linkage between terrorism against India and Kashmir has created a dangerous impression in the minds of the Pakistani military leadership that the use of terrorism has started paying results. This impression could come in the way of Pakistan sincerely acting against the terrorists. Therein lies the danger of a future military conflict between the two countries on the issue of terrorism. If that happens, the West will be largely to blame for creating such an impression in the minds of the Pakistani military and intelligence establishment.
ANALYSIS: 138 Indian nationals and 25 foreigners----nine of them Jewish persons from Israel and the US---- were killed when 10 Pakistani nationals belonging to a Pakistani jihadi organization called the Lashkar-e-Toiba (Army of the Pure) , who had clandestinely traveled by sea from Karachi without being intercepted by the Indian Navy and Coast Guard, landed in Mumbai, split into four groups and spread death and destruction in the sea front area of Mumbai for about 60 hours from the night of November 26,2008, till the morning of November 29, 2008.
Five of the fatalities were caused by explosives and the remaining 158 by hand-held weapons (assault rifles and hand-grenades). This was the third act of mass casualty terrorism with fatalities of over 150 in the Indian territory outside Jammu and Kashmir (J&K) since jihadi terrorism made its appearance in India in 1989. All the three were committed in Mumbai, which is the financial capital of India. It is also the corporate capital of India with many of the Indian and foreign corporate houses having their headquarters in Mumbai. In the first act in March,1993, a group of Indian Muslims trained and armed by Pakistan’s Inter-Services Intelligence (ISI) carried out a series of timed explosions against a number of economic targets and killed 257 civilians. In the second incident in July,2006, 181 commuters and others were killed when a mixed group of Indian and Pakistani Muslims trained and armed by the LET in Pakistani territory carried out a series of explosions in suburban trains.
The November 26, 2008, attack differed from the earlier mass casualty attacks in some important aspects. Firstly, 158 out of the 163 fatalities were caused by hand-held weapons. Explosives played a minor role in the attack. Secondly, the terrorists attacked a mix of targets---- ordinary people in public places such as a railway terminus, a hospital, a restaurant, a café etc and the affluent social and business elite ---Indians as well as foreigners--- in two principal hotels of Mumbai , namely, the Taj Mahal and the Oberoi/Trident hotels and in a Jewish religious-cum-cultural centre located in a building called the Nariman House. Thirdly, they killed a selected group of foreigners---- nine from Israel and 12 from the US and other Western countries who had contributed troops to the NATO contingent in Afghanistan. The other four were from South-East Asian countries. Fourthly, it was not a classical case of hostage-taking. They were not interested in using the hostages for achieving any demands. Their interest was in a prolonged armed confrontation with the security forces, which would get them publicity. Fifthly, all the 10 perpetrators were Pakistanis specially recruited and trained by the LET in camps in Pakistani territory. Sixthly, it was a case of suicidal terrorism similar to what one had witnessed during the terrorist attack on the Indian Parliament on December 13,2001. Nine of the terrorists died in the confrontation with the security forces. One ----Ajmal Amir Kasab---was caught alive.
The terrorists had a mix of motives. They wanted to weaken the credibility of the Indian counter-terrorism machinery in the eyes of the Indian public as well as the foreigners. They wanted to shake the confidence of the foreign business community in the ability of the Indian State to protect the lives and property of foreign business people and thereby retard the rise of India as a major economic power. They wanted to punish Israel and the US for their developing strategic relations with India. They wanted to retaliate against Western nations contributing troops to the NATO contingent in Afghanistan. Neither the Kashmir issue nor the grievances of the Indian Muslims against the Government of India had motivated the terrorist strike as it had in the earlier two instances of mass casualty terrorism, in which the anger of sections of the Indian Muslim youth against the Government of India for various reasons was the dominant motive.
The successful terrorist strike was a major political embarrassment for the Government of India. It came after four other major terrorist strikes with timed explosions in public places, which had taken place during 2008 in Jaipur (May,2008), Bangalore (July,2008), Ahmedabad (July,2008) and Delhi (September,2008). The perpetrators in these four attacks were young Indian Muslims, who projected themselves as belonging to an organization called the Indian Mujahideen. They denied they had any links either with Pakistan’s ISI or with any of the jihadi organizations based in Pakistan. Many of those involved in the explosions had studied in secular educational institutions. Three of them were experts in information technology, with one of them occupying a well-paid position in the Indian office of an American IT company. These explosions caused considerable anger against the Government of India for following what was perceived as a soft counter-terrorism strategy marked by a reluctance to act against Muslims involved in terrorism because of what is called in India as the “vote bank politics”. There are over 160 million Muslims in India and their votes are important in certain States----particularly in North India.
It was alleged that electoral calculations came in the way of the Government of India following a stronger policy towards jihadi terrorism by giving the police the additional powers that they needed and setting up a central agency for a co-ordinated investigation of terrorist attacks. However, these explosions did not cause any undue public anger against Pakistan because there was no involvement of any Pakistani national and there was no reason to suspect the involvement of the ISI.
As against this, the Mumbai terrorist attack of 26/11 caused an outburst of public anger against the Government of India as well as against Pakistan. The public anger against the Government of India was because of its failure to revamp the counter-terrorism machinery. There was a colossal failure of physical and coastal security in Mumbai despite the reports received from the Indian and American intelligence in September,2008, about the plans of the LET to launch a sea-borne terrorist attack on some hotels on the Mumbai sea front. The Taj Mahal Hotel was specifically mentioned in these reports as one of the likely targets of the terrorists. The public anger against the Government of India was also due to its perceived failure to put a stop to the ISI’s use of terrorism as a weapon against India for achieving Pakistan’s strategic objectives.
Pakistan’s strategic objectives have been three in number. Firstly, to change the status quo in J&K and force the Government of India to reach a compromise with Pakistan which will concede at least part of the territory to Pakistan. Secondly, to hinder the emergence of India as a major power of the Asian region on par with China. This is an objective which Pakistan and China share. Thirdly, to disrupt the growing strategic relationship of India with the US and Israel. While China has no reasons to be worried over India’s relations with Israel, it is concerned over the growing military--military co-operation between India and the US-----particularly over the co-operation between the two navies and their joint exercises in the Indian Ocean and the Bay of Bengal. It suspects that this Indo-US co-operation is directed at containing the Chinese naval power.
The public anger against the Government of India and Pakistan after the Mumbai attack was unprecedented. One had not seen such anger even after the attempted terrorist attack on the Indian Parliament House in New Delhi on December 13,2001 by some terrorists belonging to the LET and another Pakistani jihadi terrorist organization called the Jaish-e-Mohammad (JEM). This unprecedented public anger was due to the fact that the terrorists of the LET targeted at Mumbai the cream of the cream of India’s business and social elite. In the past, large sections of this elite used to exercise restraint on Government’s policies towards Pakistan and advocated confidence-building measures and more people-to-people contacts. They were outraged that despite their past benign role towards Pakistan, they should have been targeted and attacked by the terrorists.
Mumbai contributes a substantial share of the tax revenue of the Government of India. It also contributes a substantial portion of the advertisement revenue of the Indian media, particularly the privately-owned electronic media. Influential sections of the media were in the forefront of those demanding immediate action to empower the intelligence agencies and the police to deal more effectively with jihadi terrorism and to counter Pakistan’s continued use of terrorism against India. Many so-called doves of the past became hawks with regard to Pakistan post-26/11.
Faced with this unprecedented anger, the Government of India could not but act. Shivraj Patil, who was the Minister in charge of the Home Ministry, which is responsible, inter alia, for counter-terrorism, resigned in response to public demands for action against him. Legislation was passed post-hate by the Parliament with the support of most political parties to give additional powers to the Police and to create a national investigation agency. Other action was initiated by P.Chidambaram, the new Home Minister, to revamp the counter-terrorism machinery. The Navy and the Coast Guard were ordered to strengthen coastal security in the waters to the West of India which had remained relatively neglected till recently because of the Indian Navy’s over-focus on the waters to the East of India because of the China factor and the opportunity it provided for power-projection in the friendly South-East Asian region.
In response to the demand not only from large sections of the public but also from influential sections of the media for action against Pakistan, the Government adopted a nuanced policy. While dangling the Damocle’s sword of military strikes against the anti-India terrorist infrastructure in Pakistani territory through repeated statements by Pranab Mukherjee, India’s Minister for External Affairs, that “all options are open”, it avoided the actual mobilization of the armed forces on the ground and their deployment on the border with Pakistan as the predecessor Government of Atal Behari Vajpayee had done in 2002 after the attempted attack on the Indian Parliament. It froze the bilateral dialogue process on various issues, including Kashmir, without officially abandoning it, thereby keeping open the possibility of reviving it at a later date if Pakistan satisfied India’s demands. It stepped up diplomatic pressure on Pakistan----directly as well as through the US and other Western supporters of Pakistan--- to act as demanded by India.
India’s demands have been three in number. First, the arrest and handing over to India of the Pakistan-based operatives of the LET who have been named by the lone terrorist survivor as the brains behind the terrorist attack. Second, the dismantling of the anti-India terrorist infrastructure of the LET and other Pakistani jihadi organizations in Pakistani territory. Third, it also revived a long-pending demand for the arrest and handing over of 20 other suspects---- Indians as well as Pakistanis, Muslims as well as Sikhs---- wanted for prosecution in India on charges of terrorism.
Since the Mumbai attack lasted about 60 hours and targeted not only Indian nationals, but also nationals of Israel, the US, the UK, France, Germany, Italy, Canada and Australia , the intelligence agencies of Israel, the US and the UK had also been closely monitoring the conversations of the terrorists over mobile phone with their headquarters in Pakistan. Moreover, even before 26/11, the US intelligence, at the same time as the Indian intelligence, had collected advance intelligence about the plans of the Pakistan-based LET to launch a sea-borne attack on some hotels in Mumbai. Thus, all these intelligence agencies independently of their Indian counterparts had collected intelligence which convinced them that the attack was made by 10 Pakistani terrorists of the LET, who had traveled to Mumbai by sea. They also had a lot of intelligence in their archives, which showed that the ISI had been using since 1993 the LET against India. However, they were not prepared to accept the Indian allegation that the 26/11 attack was masterminded by the ISI. They continue to insist that they have seen no evidence to show that the ISI was behind the attack, as alleged by India.
The Western approach has been to continue exercising pressure on Pakistan to arrest those involved in Pakistani territory and either hand them over to India or prosecute them before a Pakistani court and to dismantle the anti-India terrorist infrastructure. Initially, Pakistan totally denied the involvement of any Pakistani national or organization. Now, under sustained US pressure, it has admitted that the terrorist caught alive by the Mumbai police is a Pakistani national. It has set up a team of three senior officers of its Federal Investigation Agency to enquire into Indian allegations of the involvement of the LET and has promised to prosecute before its courts anyone found involved. How sincerely it will carry out this promise remains to be seen.
In response to a post-26/11 resolution of the UN Security Council’s Anti-Terrorism committee declaring the Jamaat-ud-Dawa (JUD), the Pakistan-based political wing of the LET, and some of its leaders as involved in terrorism, it has placed the leaders under house arrest and has claimed to have closed down some of their training camps and taken over the management of the madrasas and medical centres run by the JUD at its headquarters at Muridke, near Lahore. How far this is true remains to be seen.
China’s attitude in respect of Pakistani use of terrorism against India has always been marked by double standards. It has consistently refused to admit that there has been any terrorism in J&K. It shares Pakistan’s description of the terrorism in J&K as a freedom struggle. It does accept that some jihadi groups have been indulging in acts of terrorism in Indian territory outside J&K. At the same time, it is not prepared to accept that Pakistan-based organizations are involved in these acts.
The resolution for declaring the JUD as a terrorist organization and some of its leaders as international terrorists was repeatedly coming up before the committee of the UNSC since April, 2006. The resolution on this subject failed to obtain a consensus thrice due to opposition from China, which accepted the Pakistani claim that the JUD was a charitable and not a terrorist organization. Only after 26/11, it joined the consensus in declaring the JUD as a terrorist organization. That too only after Pakistan had told Beijing that it would have no objection to the resolution being passed. But, even now, China has not come out in support of the Indian demand for action against the Pakistani nationals involved in 26/11 and dismantling the anti-India terrorist infrastructure.
The uncertainty and concern over the possible Chinese attitude in the event of India launching military strikes against the terrorist infrastructure in Pakistani territory is one of the factors coming in the way of a military strike by India. China has a long-pending claim to the Tawang area of Arunachal Pradesh in India’s North-East adjoining the Tibetan border. The border negotiations between the two countries have not made any progress because of the Chinese refusal to give up their claim to the Tawang Tract. There is reason to fear that if India is engaged in a military conflict with Pakistan, the Chinese might take advantage of it to occupy Tawang.
Immediately after the 26/11 attack, the West was totally behind India. Pakistan stood isolated. But, through skilful diplomacy, it has managed to come out of this isolation by projecting itself as willing to undertake a thorough investigation of the Indian allegations and prosecute those found guilty and by once again selling to the West its idea that any enduring end to terrorism will not be possible without addressing the Kashmir issue.
Even before 26/11, President Barack Obama and his advisers were expressing the view that the Kashmir question has to be addressed as part of a regional approach to the threat from jihadi terrorism in the Pakistan-Afghanistan region. During his recent visit to India and Pakistan in the middle of January, David Miliband, the British Foreign Secretary, spoke of the linkage between Kashmir and the activities of the LET. India has indignantly denied any such linkage and pointed out that the terrorists, who attacked Mumbai, had nothing to do with Kashmir. Their objectives were more global than sub-continental and directed against Israel, the US and the rest of the West.
CONCLUSION: Prime Minister Manmohan Singh has skillfully handled the wave of public anger against his own Government for inaction and against Pakistan for using terrorism against India. He has undertaken measures for strengthening the counter-terrorism machinery, which he had been avoiding till now out of electoral considerations. He and his new Home Minister P.Chidambaram have been projecting these measures as directed against terrorism and not against the Muslim community. In response to the public clamour for action against Pakistan, his Government through Pranab Mukherjee, his Minister for External Affairs, has mounted a diplomatic drive to force Pakistan to act against those involved in planning and carrying out the attack and against their terrorist infrastructure. While proclaiming that his Government was prepared to consider any option if Pakistan does not act, he has avoided the military option. He has not allowed the public clamour for a military strike against Pakistan to hustle him into taking the military option. While freezing the bilateral dialogue process, he has avoided a rupture of the normal diplomatic and economic relations with Pakistan. He was admitted into hospital on January 23,2009, for undergoing a cardiac surgery. The surgery, which has been successful, will keep him out of action for about two to three weeks. No major development in Indo-Pakistan relations is expected during this period.
After he resumes normal duties, he is expected to be preoccupied with the forthcoming elections to the Parliament. He would not like to give the opposition parties an opportunity to project him as weak in dealing with Pakistan. He is, therefore, expected to continue his present policy of a dialogue freeze and stepped up political and diplomatic pressure on Pakistan to make it act against the terrorists. If the coalition led by his Congress (I) returns to power and if there is no more major act of terrorism from Pakistani territory, one could see the beginning of a thaw after the elections. However, if the opposition coalition led by the hardline Bharatiya Janata Party returns to power, one could find the present tensions escalating further and the possibility of a military strike against the terrorist infrastructure in the Pakistani territory increasing. The public clamour for action against Pakistan has subsided. It could revive if Pakistan fails to act against the terrorists. If there is another major attack from Pakistani territory, renewed public pressure might leave the Government with no other option but to act against Pakistan----whichever party may be in power.
The revival of the unwise talk in the West about a linkage between terrorism against India and Kashmir has created a dangerous impression in the minds of the Pakistani military leadership and the ISI that the use of terrorism has started paying results. This impression could come in the way of Pakistan sincerely acting against the terrorists. Therein lies the danger of a future military conflict between the two countries on the issue of terrorism. If that happens, the West will be largely to blame for creating such an impression in the minds of the Pakistani military and intelligence establishment. (3500 words)
( The writer had served in the Research and Analysis Wing (R&AW), India’s external intelligence Agency, since 1968 and had headed its counter-terrorism division for six years before retiring in August,1994. He was a member of the National Security Advisory Board (NSAB) of the Government of India from 2000 to 2002. E-mail: seventyone2@gmail.com )
(Written exclusively for the journal of the Elcano Institute of Madrid at their request. Cannot be reproduced until their journal carries it )
THEME: Prospects for Indo-Pakistan relations after the terrorist attack in Mumbai from November 26 to 29,2008.
SUMMARY: The terrorist attack in Mumbai from November 26 to 29,2008, has caused renewed tensions in Indo-Pakistan relations. While fears of a military confrontation have subsided, the bilateral dialogue on various political and economic issues is in a state of suspension. A return to the pre-November 26 civility in bilateral relations and a resumption of the dialogue could be delayed by the temporary absence of India’s Prime Minister, Dr.Manmohan Singh, from his duties due to a cardiac surgery and the forthcoming elections to the Lok Sabha, the lower House of the Indian Parliament, which have to be held by April,2009. If there is another terrorist attack from Pakistani territory, the possibility of India exercising a military strike against the terrorist infrastructure in Pakistani territory will increase. The revival of the unwise talk in the West about a linkage between terrorism against India and Kashmir has created a dangerous impression in the minds of the Pakistani military leadership that the use of terrorism has started paying results. This impression could come in the way of Pakistan sincerely acting against the terrorists. Therein lies the danger of a future military conflict between the two countries on the issue of terrorism. If that happens, the West will be largely to blame for creating such an impression in the minds of the Pakistani military and intelligence establishment.
ANALYSIS: 138 Indian nationals and 25 foreigners----nine of them Jewish persons from Israel and the US---- were killed when 10 Pakistani nationals belonging to a Pakistani jihadi organization called the Lashkar-e-Toiba (Army of the Pure) , who had clandestinely traveled by sea from Karachi without being intercepted by the Indian Navy and Coast Guard, landed in Mumbai, split into four groups and spread death and destruction in the sea front area of Mumbai for about 60 hours from the night of November 26,2008, till the morning of November 29, 2008.
Five of the fatalities were caused by explosives and the remaining 158 by hand-held weapons (assault rifles and hand-grenades). This was the third act of mass casualty terrorism with fatalities of over 150 in the Indian territory outside Jammu and Kashmir (J&K) since jihadi terrorism made its appearance in India in 1989. All the three were committed in Mumbai, which is the financial capital of India. It is also the corporate capital of India with many of the Indian and foreign corporate houses having their headquarters in Mumbai. In the first act in March,1993, a group of Indian Muslims trained and armed by Pakistan’s Inter-Services Intelligence (ISI) carried out a series of timed explosions against a number of economic targets and killed 257 civilians. In the second incident in July,2006, 181 commuters and others were killed when a mixed group of Indian and Pakistani Muslims trained and armed by the LET in Pakistani territory carried out a series of explosions in suburban trains.
The November 26, 2008, attack differed from the earlier mass casualty attacks in some important aspects. Firstly, 158 out of the 163 fatalities were caused by hand-held weapons. Explosives played a minor role in the attack. Secondly, the terrorists attacked a mix of targets---- ordinary people in public places such as a railway terminus, a hospital, a restaurant, a café etc and the affluent social and business elite ---Indians as well as foreigners--- in two principal hotels of Mumbai , namely, the Taj Mahal and the Oberoi/Trident hotels and in a Jewish religious-cum-cultural centre located in a building called the Nariman House. Thirdly, they killed a selected group of foreigners---- nine from Israel and 12 from the US and other Western countries who had contributed troops to the NATO contingent in Afghanistan. The other four were from South-East Asian countries. Fourthly, it was not a classical case of hostage-taking. They were not interested in using the hostages for achieving any demands. Their interest was in a prolonged armed confrontation with the security forces, which would get them publicity. Fifthly, all the 10 perpetrators were Pakistanis specially recruited and trained by the LET in camps in Pakistani territory. Sixthly, it was a case of suicidal terrorism similar to what one had witnessed during the terrorist attack on the Indian Parliament on December 13,2001. Nine of the terrorists died in the confrontation with the security forces. One ----Ajmal Amir Kasab---was caught alive.
The terrorists had a mix of motives. They wanted to weaken the credibility of the Indian counter-terrorism machinery in the eyes of the Indian public as well as the foreigners. They wanted to shake the confidence of the foreign business community in the ability of the Indian State to protect the lives and property of foreign business people and thereby retard the rise of India as a major economic power. They wanted to punish Israel and the US for their developing strategic relations with India. They wanted to retaliate against Western nations contributing troops to the NATO contingent in Afghanistan. Neither the Kashmir issue nor the grievances of the Indian Muslims against the Government of India had motivated the terrorist strike as it had in the earlier two instances of mass casualty terrorism, in which the anger of sections of the Indian Muslim youth against the Government of India for various reasons was the dominant motive.
The successful terrorist strike was a major political embarrassment for the Government of India. It came after four other major terrorist strikes with timed explosions in public places, which had taken place during 2008 in Jaipur (May,2008), Bangalore (July,2008), Ahmedabad (July,2008) and Delhi (September,2008). The perpetrators in these four attacks were young Indian Muslims, who projected themselves as belonging to an organization called the Indian Mujahideen. They denied they had any links either with Pakistan’s ISI or with any of the jihadi organizations based in Pakistan. Many of those involved in the explosions had studied in secular educational institutions. Three of them were experts in information technology, with one of them occupying a well-paid position in the Indian office of an American IT company. These explosions caused considerable anger against the Government of India for following what was perceived as a soft counter-terrorism strategy marked by a reluctance to act against Muslims involved in terrorism because of what is called in India as the “vote bank politics”. There are over 160 million Muslims in India and their votes are important in certain States----particularly in North India.
It was alleged that electoral calculations came in the way of the Government of India following a stronger policy towards jihadi terrorism by giving the police the additional powers that they needed and setting up a central agency for a co-ordinated investigation of terrorist attacks. However, these explosions did not cause any undue public anger against Pakistan because there was no involvement of any Pakistani national and there was no reason to suspect the involvement of the ISI.
As against this, the Mumbai terrorist attack of 26/11 caused an outburst of public anger against the Government of India as well as against Pakistan. The public anger against the Government of India was because of its failure to revamp the counter-terrorism machinery. There was a colossal failure of physical and coastal security in Mumbai despite the reports received from the Indian and American intelligence in September,2008, about the plans of the LET to launch a sea-borne terrorist attack on some hotels on the Mumbai sea front. The Taj Mahal Hotel was specifically mentioned in these reports as one of the likely targets of the terrorists. The public anger against the Government of India was also due to its perceived failure to put a stop to the ISI’s use of terrorism as a weapon against India for achieving Pakistan’s strategic objectives.
Pakistan’s strategic objectives have been three in number. Firstly, to change the status quo in J&K and force the Government of India to reach a compromise with Pakistan which will concede at least part of the territory to Pakistan. Secondly, to hinder the emergence of India as a major power of the Asian region on par with China. This is an objective which Pakistan and China share. Thirdly, to disrupt the growing strategic relationship of India with the US and Israel. While China has no reasons to be worried over India’s relations with Israel, it is concerned over the growing military--military co-operation between India and the US-----particularly over the co-operation between the two navies and their joint exercises in the Indian Ocean and the Bay of Bengal. It suspects that this Indo-US co-operation is directed at containing the Chinese naval power.
The public anger against the Government of India and Pakistan after the Mumbai attack was unprecedented. One had not seen such anger even after the attempted terrorist attack on the Indian Parliament House in New Delhi on December 13,2001 by some terrorists belonging to the LET and another Pakistani jihadi terrorist organization called the Jaish-e-Mohammad (JEM). This unprecedented public anger was due to the fact that the terrorists of the LET targeted at Mumbai the cream of the cream of India’s business and social elite. In the past, large sections of this elite used to exercise restraint on Government’s policies towards Pakistan and advocated confidence-building measures and more people-to-people contacts. They were outraged that despite their past benign role towards Pakistan, they should have been targeted and attacked by the terrorists.
Mumbai contributes a substantial share of the tax revenue of the Government of India. It also contributes a substantial portion of the advertisement revenue of the Indian media, particularly the privately-owned electronic media. Influential sections of the media were in the forefront of those demanding immediate action to empower the intelligence agencies and the police to deal more effectively with jihadi terrorism and to counter Pakistan’s continued use of terrorism against India. Many so-called doves of the past became hawks with regard to Pakistan post-26/11.
Faced with this unprecedented anger, the Government of India could not but act. Shivraj Patil, who was the Minister in charge of the Home Ministry, which is responsible, inter alia, for counter-terrorism, resigned in response to public demands for action against him. Legislation was passed post-hate by the Parliament with the support of most political parties to give additional powers to the Police and to create a national investigation agency. Other action was initiated by P.Chidambaram, the new Home Minister, to revamp the counter-terrorism machinery. The Navy and the Coast Guard were ordered to strengthen coastal security in the waters to the West of India which had remained relatively neglected till recently because of the Indian Navy’s over-focus on the waters to the East of India because of the China factor and the opportunity it provided for power-projection in the friendly South-East Asian region.
In response to the demand not only from large sections of the public but also from influential sections of the media for action against Pakistan, the Government adopted a nuanced policy. While dangling the Damocle’s sword of military strikes against the anti-India terrorist infrastructure in Pakistani territory through repeated statements by Pranab Mukherjee, India’s Minister for External Affairs, that “all options are open”, it avoided the actual mobilization of the armed forces on the ground and their deployment on the border with Pakistan as the predecessor Government of Atal Behari Vajpayee had done in 2002 after the attempted attack on the Indian Parliament. It froze the bilateral dialogue process on various issues, including Kashmir, without officially abandoning it, thereby keeping open the possibility of reviving it at a later date if Pakistan satisfied India’s demands. It stepped up diplomatic pressure on Pakistan----directly as well as through the US and other Western supporters of Pakistan--- to act as demanded by India.
India’s demands have been three in number. First, the arrest and handing over to India of the Pakistan-based operatives of the LET who have been named by the lone terrorist survivor as the brains behind the terrorist attack. Second, the dismantling of the anti-India terrorist infrastructure of the LET and other Pakistani jihadi organizations in Pakistani territory. Third, it also revived a long-pending demand for the arrest and handing over of 20 other suspects---- Indians as well as Pakistanis, Muslims as well as Sikhs---- wanted for prosecution in India on charges of terrorism.
Since the Mumbai attack lasted about 60 hours and targeted not only Indian nationals, but also nationals of Israel, the US, the UK, France, Germany, Italy, Canada and Australia , the intelligence agencies of Israel, the US and the UK had also been closely monitoring the conversations of the terrorists over mobile phone with their headquarters in Pakistan. Moreover, even before 26/11, the US intelligence, at the same time as the Indian intelligence, had collected advance intelligence about the plans of the Pakistan-based LET to launch a sea-borne attack on some hotels in Mumbai. Thus, all these intelligence agencies independently of their Indian counterparts had collected intelligence which convinced them that the attack was made by 10 Pakistani terrorists of the LET, who had traveled to Mumbai by sea. They also had a lot of intelligence in their archives, which showed that the ISI had been using since 1993 the LET against India. However, they were not prepared to accept the Indian allegation that the 26/11 attack was masterminded by the ISI. They continue to insist that they have seen no evidence to show that the ISI was behind the attack, as alleged by India.
The Western approach has been to continue exercising pressure on Pakistan to arrest those involved in Pakistani territory and either hand them over to India or prosecute them before a Pakistani court and to dismantle the anti-India terrorist infrastructure. Initially, Pakistan totally denied the involvement of any Pakistani national or organization. Now, under sustained US pressure, it has admitted that the terrorist caught alive by the Mumbai police is a Pakistani national. It has set up a team of three senior officers of its Federal Investigation Agency to enquire into Indian allegations of the involvement of the LET and has promised to prosecute before its courts anyone found involved. How sincerely it will carry out this promise remains to be seen.
In response to a post-26/11 resolution of the UN Security Council’s Anti-Terrorism committee declaring the Jamaat-ud-Dawa (JUD), the Pakistan-based political wing of the LET, and some of its leaders as involved in terrorism, it has placed the leaders under house arrest and has claimed to have closed down some of their training camps and taken over the management of the madrasas and medical centres run by the JUD at its headquarters at Muridke, near Lahore. How far this is true remains to be seen.
China’s attitude in respect of Pakistani use of terrorism against India has always been marked by double standards. It has consistently refused to admit that there has been any terrorism in J&K. It shares Pakistan’s description of the terrorism in J&K as a freedom struggle. It does accept that some jihadi groups have been indulging in acts of terrorism in Indian territory outside J&K. At the same time, it is not prepared to accept that Pakistan-based organizations are involved in these acts.
The resolution for declaring the JUD as a terrorist organization and some of its leaders as international terrorists was repeatedly coming up before the committee of the UNSC since April, 2006. The resolution on this subject failed to obtain a consensus thrice due to opposition from China, which accepted the Pakistani claim that the JUD was a charitable and not a terrorist organization. Only after 26/11, it joined the consensus in declaring the JUD as a terrorist organization. That too only after Pakistan had told Beijing that it would have no objection to the resolution being passed. But, even now, China has not come out in support of the Indian demand for action against the Pakistani nationals involved in 26/11 and dismantling the anti-India terrorist infrastructure.
The uncertainty and concern over the possible Chinese attitude in the event of India launching military strikes against the terrorist infrastructure in Pakistani territory is one of the factors coming in the way of a military strike by India. China has a long-pending claim to the Tawang area of Arunachal Pradesh in India’s North-East adjoining the Tibetan border. The border negotiations between the two countries have not made any progress because of the Chinese refusal to give up their claim to the Tawang Tract. There is reason to fear that if India is engaged in a military conflict with Pakistan, the Chinese might take advantage of it to occupy Tawang.
Immediately after the 26/11 attack, the West was totally behind India. Pakistan stood isolated. But, through skilful diplomacy, it has managed to come out of this isolation by projecting itself as willing to undertake a thorough investigation of the Indian allegations and prosecute those found guilty and by once again selling to the West its idea that any enduring end to terrorism will not be possible without addressing the Kashmir issue.
Even before 26/11, President Barack Obama and his advisers were expressing the view that the Kashmir question has to be addressed as part of a regional approach to the threat from jihadi terrorism in the Pakistan-Afghanistan region. During his recent visit to India and Pakistan in the middle of January, David Miliband, the British Foreign Secretary, spoke of the linkage between Kashmir and the activities of the LET. India has indignantly denied any such linkage and pointed out that the terrorists, who attacked Mumbai, had nothing to do with Kashmir. Their objectives were more global than sub-continental and directed against Israel, the US and the rest of the West.
CONCLUSION: Prime Minister Manmohan Singh has skillfully handled the wave of public anger against his own Government for inaction and against Pakistan for using terrorism against India. He has undertaken measures for strengthening the counter-terrorism machinery, which he had been avoiding till now out of electoral considerations. He and his new Home Minister P.Chidambaram have been projecting these measures as directed against terrorism and not against the Muslim community. In response to the public clamour for action against Pakistan, his Government through Pranab Mukherjee, his Minister for External Affairs, has mounted a diplomatic drive to force Pakistan to act against those involved in planning and carrying out the attack and against their terrorist infrastructure. While proclaiming that his Government was prepared to consider any option if Pakistan does not act, he has avoided the military option. He has not allowed the public clamour for a military strike against Pakistan to hustle him into taking the military option. While freezing the bilateral dialogue process, he has avoided a rupture of the normal diplomatic and economic relations with Pakistan. He was admitted into hospital on January 23,2009, for undergoing a cardiac surgery. The surgery, which has been successful, will keep him out of action for about two to three weeks. No major development in Indo-Pakistan relations is expected during this period.
After he resumes normal duties, he is expected to be preoccupied with the forthcoming elections to the Parliament. He would not like to give the opposition parties an opportunity to project him as weak in dealing with Pakistan. He is, therefore, expected to continue his present policy of a dialogue freeze and stepped up political and diplomatic pressure on Pakistan to make it act against the terrorists. If the coalition led by his Congress (I) returns to power and if there is no more major act of terrorism from Pakistani territory, one could see the beginning of a thaw after the elections. However, if the opposition coalition led by the hardline Bharatiya Janata Party returns to power, one could find the present tensions escalating further and the possibility of a military strike against the terrorist infrastructure in the Pakistani territory increasing. The public clamour for action against Pakistan has subsided. It could revive if Pakistan fails to act against the terrorists. If there is another major attack from Pakistani territory, renewed public pressure might leave the Government with no other option but to act against Pakistan----whichever party may be in power.
The revival of the unwise talk in the West about a linkage between terrorism against India and Kashmir has created a dangerous impression in the minds of the Pakistani military leadership and the ISI that the use of terrorism has started paying results. This impression could come in the way of Pakistan sincerely acting against the terrorists. Therein lies the danger of a future military conflict between the two countries on the issue of terrorism. If that happens, the West will be largely to blame for creating such an impression in the minds of the Pakistani military and intelligence establishment. (3500 words)
( The writer had served in the Research and Analysis Wing (R&AW), India’s external intelligence Agency, since 1968 and had headed its counter-terrorism division for six years before retiring in August,1994. He was a member of the National Security Advisory Board (NSAB) of the Government of India from 2000 to 2002. E-mail: seventyone2@gmail.com )
Thursday, January 22, 2009
OBAMA'S COUNTER-TERRORISM STRATEGY
B.RAMAN
The counter-terrorism strategy of President Barack Obama will be different from that followed by his predecessor George Bush. The initial emphasis will be on removing the distortions which had crept into the strategy under Bush in the hope that this would create some goodwill for the US in the Islamic world and using the goodwill thus hopefully generated for enlisting the support of the Muslims in the campaign against Al Qaeda.
2. These distortions were in the form of ethically questionable deviations from the traditional US counter-terrorism practices. Examples of such deviations: Treating the terrorist suspects as prisoners of war and keeping them in an army-controlled detention centre in Guantanamo Bay in Cuba and subjecting them to trial by a military tribunal instead of by normal courts; renditions, which are nothing but avoiding the due process of the law by taking the suspects for interrogation to co-operating third countries over which the US judiciary will not have any jurisdiction; and tolerance of practices bordering on torture during the interrogation.
3. By issuing an order on the very first day in office suspending the trial before the military tribunal for 120 days, Obama has made clear his determination to do away with these deviations and make US counter-terrorism practices once again acceptable to the civil society as a whole---- in the US itself as well as in the rest of the world.
4. Dick Cheney, Bush's Vice-President, and some professionals of the US intelligence community had convinced Bush that without such deviations it would be difficult to prevail over a dreaded terrorist organisation such as Al Qaeda. Obama, who does not buy such arguments, expects that there would be opposition from these professionals to his attempts to do away with these deviations. That is why he has chosen for the post of the Director of the Central Intelligence Agency Leon Panetta , who is not an intelligence professional, but who is believed to agree with Obama that such deviations have done more harm than good to the fight against Al Qaeda and hence need to be abolished. A professional as the head of the CIA might have dragged his feet in implementing the ideas of Obama. In some instances in the past too, when there were allegations of unethical practices by the CIA, US Presidents had brought outsiders to head it to put an end to such practices.
5. Implementing Obama’s ideas with regard to the Guantanamo Bay detention centre is not going to be easy. Only a small number of the nearly 300 detenus there have specific cases going against them. There should be no problem in transferring their cases to normal courts and shifting them to jails in the US. But, the majority of the inmates of the detention centre are preventive detenus, who are suspected to be associated with Al Qaeda, but against whom there is not sufficient evidence for prosecution. What to do with them since it may not be possible to transfer them to jails in the US? If they are handed over to the countries to which they belong and if those countries release them, they might once again join Al Qaeda with renewed anger against the US for keeping them in the detention centre. Some of the detenus----such as the around 15 Uighurs---- are from countries such as China, which might execute them. Winding up the detention centre without adding to the strength of Al Qaeda and without creating new groups of anger against the US is going to be a tricky task.
6. Will the abolition of such practices help Obama in winning the support of the Muslims for the campaign against Al Qaeda? Doubtful. The anger of the Muslims against the US is not only due to such practices, but also due to the indiscriminate use of air strikes in counter-terrorism operations in Iraq as well as in the Pakistan-Afghanistan region. These air strikes have allegedly been causing a large number of civilian casualties. In the Federally-Administered Tribal Areas (FATA) of Pakistan, the Bush Administration was constrained to increase the number of air strikes by unmanned Predator aircraft of the CIA on suspected Al Qaeda hide-outs because of the unwillingness or inability or both of the Pakistan Army to act on the ground against these hide-outs.
7. Under the Bush Administration, the number of such air strikes increased dramatically from 10 in 2006 and 2007 combined to over 30 in 2008. Only eight of these strikes were successful in killing Al Qaeda and Taliban operatives. Over 22 strikes proved to have been based on incorrect intelligence and resulted in many civilian casualties. The accuracy rate of the US intelligence is not more than one-third of the reports disseminated.
8. Obama, who was critical of the deviations in the treatment of detained terrorist suspects, was not critical of the use of air strikes. In fact, he has promised a more robust and proactive campaign against Al Qaeda than was, according to him, followed under Bush in order to wipe out the surviving leaders of Al Qaeda operating from sanctuaries in the Pakistani territory. Rules of engagement authorizing air and ground strikes against Al Qada hide-outs in the Pakistani territory are favoured not only by the CIA, but also by the US Armed Forces. Thus, Obama cannot but continue the policy of stepped-up air strikes followed by Bush. His ability to do so without adding to the civilian casualties will depend on an improvement in the quality of the intelligence flow. Will the posting of an outsider and a non-professional as the chief of the CIA help in improving the quality of intelligence? If it does not, the goodwill which Obama might earn by abolishing the deviations might be wiped out by the anger over continuing civilian casualties due to inaccurate intelligence.
9. Obama’s objective is to delink Iraq from the war against Al Qaeda and the Taliban, divert more forces to Afghanistan and concentrate on the fight against them. His ability to divert forces from Iraq to Afghanistan would depend on the present low level of activity by Al Qaeda in Iraq continuing, thereby enabling the US to thin out its presence in Iraq. The low level of activity of Al Qaeda in Iraq is partly due to the parting of the ways between it and the secular Iraqi resistance fighters and the crushing of Al Qaeda in Saudi Arabia by the Saudi authorities. Wahabised Saudis constituted a large component of Al Qaeda in Iraq. A decrease in the flow of Saudis has contributed to the weakening of Al Qaeda in Iraq.
10. Will Al Qaeda consider it to be in the interest of the global jihad being waged by it to let the US shift many of its troops to Afghanistan for crushing the Taliban or will it try to step up its activities in the Sunni areas of Iraq in order to frustrate the plans of Obama to shift troops to Afghanistan? To be able to do so, it will need a fresh flow of Arab volunteers. The widespread anger in the Arab world over the Israeli military strikes in Gaza, the perceived US support for Israel in the UN Security Council and the alleged silence of Obama on the issue could help Al Qaeda in its recruitment of new volunteers for keeping the fighting going in Iraq. If it happens, Obama may not be able to delink Iraq from the ongoing war against Al Qaeda and the Taliban.
11. Al Qaeda and its Arab supporters do not view Obama as a man of change. They see him as no different from Bush and other American leaders so far as support for Israel is concerned. They do not expect any dramatic change in the US attitude towards Israel under him. If they have to hurt Israel, they have to hurt the US. So they think and so they will try to do.
12. How successful will Obama’s counter-terrorism strategy will be will depend not only on how Obama views the war against Al Qaeda. It will also depend on how Al Qaeda views its jihad against the US. Despite the weakening of its position in Iraq and despite its inability to organize any major terrorist strike outside Pakistan and Algeria since the London and Bali blasts of 2005, Al Qaeda does not think it is losing its global jihad against the US and Israel.
13. It may not have had any spectacular gain on the ground since 2005, but it has convinced itself that the economic difficulties faced by the US are only partly due to the mismanagement of the economy by the Bush Administration. In its view----as seen from its recent messages---- the global jihad as waged under its leadership has also contributed to the economic difficulties of the US by forcing it to spend more and more on the war against it. It thinks it is in the interest of the global jihad to force the US to spend more and more thereby aggravating its economic difficulties. For that, the US will have to be kept preoccupied in Afghanistan as well as Iraq. It has been trying to take advantage of the Arab anger over the Israeli military strikes in Gaza to step up its recruitment and increase its activities in Iraq.
14. The weakest point of the still-evolving counter-terrorism strategy of Obama---- as it was with the strategy of Bush---- is its inability to think of a coherent and compelling response to Pakistan’s complicity, if not collusion, with Al Qaeda, the Taliban and the various other pro-Al Qaeda jihadi terrorist groups operating from Pakistani territory. The present Government of President Asif Ali Zirdari---like its predecessor Government of Pervez Musharraf--- is skillfully exploiting the US fears of a jihadi deluge without Pakistan’s co-operation for following a policy of seeming co-operation with the US and covert complicity with the terrorists. Like Bush, Obama too seems reluctant to confront Pakistan with punitive action if it fails to co-operate. Unless and until Pakistan knows that it will suffer if it does not change its present devious policy, things are not going to change. (22-1-09)
(The writer is Additional Secretary (retd), Cabinet secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: seventyone2@gmail.com )
The counter-terrorism strategy of President Barack Obama will be different from that followed by his predecessor George Bush. The initial emphasis will be on removing the distortions which had crept into the strategy under Bush in the hope that this would create some goodwill for the US in the Islamic world and using the goodwill thus hopefully generated for enlisting the support of the Muslims in the campaign against Al Qaeda.
2. These distortions were in the form of ethically questionable deviations from the traditional US counter-terrorism practices. Examples of such deviations: Treating the terrorist suspects as prisoners of war and keeping them in an army-controlled detention centre in Guantanamo Bay in Cuba and subjecting them to trial by a military tribunal instead of by normal courts; renditions, which are nothing but avoiding the due process of the law by taking the suspects for interrogation to co-operating third countries over which the US judiciary will not have any jurisdiction; and tolerance of practices bordering on torture during the interrogation.
3. By issuing an order on the very first day in office suspending the trial before the military tribunal for 120 days, Obama has made clear his determination to do away with these deviations and make US counter-terrorism practices once again acceptable to the civil society as a whole---- in the US itself as well as in the rest of the world.
4. Dick Cheney, Bush's Vice-President, and some professionals of the US intelligence community had convinced Bush that without such deviations it would be difficult to prevail over a dreaded terrorist organisation such as Al Qaeda. Obama, who does not buy such arguments, expects that there would be opposition from these professionals to his attempts to do away with these deviations. That is why he has chosen for the post of the Director of the Central Intelligence Agency Leon Panetta , who is not an intelligence professional, but who is believed to agree with Obama that such deviations have done more harm than good to the fight against Al Qaeda and hence need to be abolished. A professional as the head of the CIA might have dragged his feet in implementing the ideas of Obama. In some instances in the past too, when there were allegations of unethical practices by the CIA, US Presidents had brought outsiders to head it to put an end to such practices.
5. Implementing Obama’s ideas with regard to the Guantanamo Bay detention centre is not going to be easy. Only a small number of the nearly 300 detenus there have specific cases going against them. There should be no problem in transferring their cases to normal courts and shifting them to jails in the US. But, the majority of the inmates of the detention centre are preventive detenus, who are suspected to be associated with Al Qaeda, but against whom there is not sufficient evidence for prosecution. What to do with them since it may not be possible to transfer them to jails in the US? If they are handed over to the countries to which they belong and if those countries release them, they might once again join Al Qaeda with renewed anger against the US for keeping them in the detention centre. Some of the detenus----such as the around 15 Uighurs---- are from countries such as China, which might execute them. Winding up the detention centre without adding to the strength of Al Qaeda and without creating new groups of anger against the US is going to be a tricky task.
6. Will the abolition of such practices help Obama in winning the support of the Muslims for the campaign against Al Qaeda? Doubtful. The anger of the Muslims against the US is not only due to such practices, but also due to the indiscriminate use of air strikes in counter-terrorism operations in Iraq as well as in the Pakistan-Afghanistan region. These air strikes have allegedly been causing a large number of civilian casualties. In the Federally-Administered Tribal Areas (FATA) of Pakistan, the Bush Administration was constrained to increase the number of air strikes by unmanned Predator aircraft of the CIA on suspected Al Qaeda hide-outs because of the unwillingness or inability or both of the Pakistan Army to act on the ground against these hide-outs.
7. Under the Bush Administration, the number of such air strikes increased dramatically from 10 in 2006 and 2007 combined to over 30 in 2008. Only eight of these strikes were successful in killing Al Qaeda and Taliban operatives. Over 22 strikes proved to have been based on incorrect intelligence and resulted in many civilian casualties. The accuracy rate of the US intelligence is not more than one-third of the reports disseminated.
8. Obama, who was critical of the deviations in the treatment of detained terrorist suspects, was not critical of the use of air strikes. In fact, he has promised a more robust and proactive campaign against Al Qaeda than was, according to him, followed under Bush in order to wipe out the surviving leaders of Al Qaeda operating from sanctuaries in the Pakistani territory. Rules of engagement authorizing air and ground strikes against Al Qada hide-outs in the Pakistani territory are favoured not only by the CIA, but also by the US Armed Forces. Thus, Obama cannot but continue the policy of stepped-up air strikes followed by Bush. His ability to do so without adding to the civilian casualties will depend on an improvement in the quality of the intelligence flow. Will the posting of an outsider and a non-professional as the chief of the CIA help in improving the quality of intelligence? If it does not, the goodwill which Obama might earn by abolishing the deviations might be wiped out by the anger over continuing civilian casualties due to inaccurate intelligence.
9. Obama’s objective is to delink Iraq from the war against Al Qaeda and the Taliban, divert more forces to Afghanistan and concentrate on the fight against them. His ability to divert forces from Iraq to Afghanistan would depend on the present low level of activity by Al Qaeda in Iraq continuing, thereby enabling the US to thin out its presence in Iraq. The low level of activity of Al Qaeda in Iraq is partly due to the parting of the ways between it and the secular Iraqi resistance fighters and the crushing of Al Qaeda in Saudi Arabia by the Saudi authorities. Wahabised Saudis constituted a large component of Al Qaeda in Iraq. A decrease in the flow of Saudis has contributed to the weakening of Al Qaeda in Iraq.
10. Will Al Qaeda consider it to be in the interest of the global jihad being waged by it to let the US shift many of its troops to Afghanistan for crushing the Taliban or will it try to step up its activities in the Sunni areas of Iraq in order to frustrate the plans of Obama to shift troops to Afghanistan? To be able to do so, it will need a fresh flow of Arab volunteers. The widespread anger in the Arab world over the Israeli military strikes in Gaza, the perceived US support for Israel in the UN Security Council and the alleged silence of Obama on the issue could help Al Qaeda in its recruitment of new volunteers for keeping the fighting going in Iraq. If it happens, Obama may not be able to delink Iraq from the ongoing war against Al Qaeda and the Taliban.
11. Al Qaeda and its Arab supporters do not view Obama as a man of change. They see him as no different from Bush and other American leaders so far as support for Israel is concerned. They do not expect any dramatic change in the US attitude towards Israel under him. If they have to hurt Israel, they have to hurt the US. So they think and so they will try to do.
12. How successful will Obama’s counter-terrorism strategy will be will depend not only on how Obama views the war against Al Qaeda. It will also depend on how Al Qaeda views its jihad against the US. Despite the weakening of its position in Iraq and despite its inability to organize any major terrorist strike outside Pakistan and Algeria since the London and Bali blasts of 2005, Al Qaeda does not think it is losing its global jihad against the US and Israel.
13. It may not have had any spectacular gain on the ground since 2005, but it has convinced itself that the economic difficulties faced by the US are only partly due to the mismanagement of the economy by the Bush Administration. In its view----as seen from its recent messages---- the global jihad as waged under its leadership has also contributed to the economic difficulties of the US by forcing it to spend more and more on the war against it. It thinks it is in the interest of the global jihad to force the US to spend more and more thereby aggravating its economic difficulties. For that, the US will have to be kept preoccupied in Afghanistan as well as Iraq. It has been trying to take advantage of the Arab anger over the Israeli military strikes in Gaza to step up its recruitment and increase its activities in Iraq.
14. The weakest point of the still-evolving counter-terrorism strategy of Obama---- as it was with the strategy of Bush---- is its inability to think of a coherent and compelling response to Pakistan’s complicity, if not collusion, with Al Qaeda, the Taliban and the various other pro-Al Qaeda jihadi terrorist groups operating from Pakistani territory. The present Government of President Asif Ali Zirdari---like its predecessor Government of Pervez Musharraf--- is skillfully exploiting the US fears of a jihadi deluge without Pakistan’s co-operation for following a policy of seeming co-operation with the US and covert complicity with the terrorists. Like Bush, Obama too seems reluctant to confront Pakistan with punitive action if it fails to co-operate. Unless and until Pakistan knows that it will suffer if it does not change its present devious policy, things are not going to change. (22-1-09)
(The writer is Additional Secretary (retd), Cabinet secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. E-mail: seventyone2@gmail.com )
Wednesday, January 21, 2009
CHINESE ECONOMY MONITOR---NOTE NO.5
By B.Raman
(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 "Chinese Economy Monitor" based on open information. This is the fifth in the series)
ASSESSMENT
Fear of social conflicts due to large-scale unemployment among the post-1980 young generation continues to haunt the Chinese authorities. The large number of young people thrown out of jobs as a result of the economic slow-down and the consequent closure of many factories for want of export orders will be joined during the first six months of 2009 by millions of young people coming out of universities and looking for non-existent jobs. June will see the 20th anniversary of the Tienanmen Square student violence of 1989 and its brutal suppression by the Chinese security forces. If the employment situation does not improve by then, there could be a social explosion involving the young unemployed. A large number of older people have also lost their jobs not only in coastal China, but also in Central and Western China, but they are used to hardships and hold the Communist Party in some esteem for what it had done to the people since the economic reforms were introduced in 1978. The younger generation, with no past memories of hardships, is passing through a spell of hardship for the first time in their lives and they may not understand the difficulties of the party and the Government in the same way as the older generation. This is a fear that is haunting the Chinese Communist Party and Government. President Hu Jintao and Prime Minister Wen Jiabo have been touring different Chinese provinces affected by the economic slow-down in order to explain the actions taken by the Government to alleviate the difficulties of the people and to appeal for patience. Till now, their appeals have been heard. Will they continue to be heard in the months to come? It needs to be emphasized that the Chinese economy has been doing better than the economies of many other countries, including India. The difficulties have arisen from the drop in the growth rate from above 10 per cent for a number of years, which created a large number of jobs in the consumer industries, to around eight per cent, which has made many jobs superfluous. The situation has been aggravated by the dependence on exports, particularly to the US, to sustain the 10 per cent plus growth rate. The decline in export orders has led to the closure of a large number of small and medium scale enterprises.
ECONOMIC INDICATORS
2.Economic indicators for China as its economy slows down:
By the end of November,2008, China’s tax revenue declined by three per cent as compared to 2007 as against an increase of 32 per cent in 2007 as compared to 2006.
China’s foreign exchange reserves were estimated to have increased during 2008 by US $ 177 billion only as against an increase of US $ 415 billion in 2007.
The monthly rate of foreign direct investment flows has declined by more than one-third since the summer of 2008.
The combination of a crash in the real estate market and a two-thirds fall in the Chinese stock markets has resulted in many foreign and overseas Chinese investors taking money quietly out of the country despite stringent currency controls.
China’s average monthly trade surplus, which used to amount to US $ 50 billion during the first half of 2008, came down to US $ 40.1 billion in November,2008, and is expected to decrease further to US $ 30 billion.
To meet the needs of the US $ 600 billion stimulus package launched by the Government, the Chinese purchase of US Treasury bonds is expected to come down. By the end of October, China had invested US $ 652.9 billion in US Treasury bonds as compared to US $ 585.5 billion by Japan.
------“ The International Herala Trbune” of January 8,2009.
MANUFACTURING SECTOR CONTINUES TO CONTRACT
3.China’s manufacturing sector contracted for the third month in a row in December,2008, but the pace of deterioration slowed as output and new orders improved slightly, according to an official survey. The official Purchasing Manager’s Index or PMI rose to 41.2 in December from the record low of 38.8 in November, 2008. Readings over 50 indicate an expansion of activity, while those below 50 suggest a deterioration. “This month’s PMI shows that the Chinese economy continues to lose momentum, but there are signs of it hovering around a bottom,” said Zhang Liqun, a Government economist. “ As the adjustment in stocks of goods starts to taper off and macro-economic policies start to show results, the slow-down in growth will probably become less pronounced in the future.” Xinhua reported that China’s foreign trade rose by 18 per cent in 2008, but did not give the figures for December, which would give a clearer picture of the health of the economy. Total trade is expected to have reached US $ 2.55 trillion, Xinhua said, citing the Chinese Customs. It said that the trade surplus for 2008 should be about US $ 290 billion. That would be a new annual record, up 10 per cent from a surplus of US $ 262.2 billion in 2007.
-----Reuters dispatch of January 4,2009.
FEAR OF MASS INCIDENTS
4.“ Without doubt, now we are entering a peak period for mass incidents. This year, Chinese society may face even more conflicts and clashes that will test even more the governing abilities of all levels of the party and the Government. But the biggest threats to China’s social fabric will come from graduating university students facing a shrinking job market and diminished incomes and from a tide of migrant workers, who have lost their jobs as export-driven factories have closed down. Coastal provinces that have provided millions of lowly paid workers with jobs have reported a leap in the number returning to their villages without work. An estimated 10 million rural migrant workers have lost their jobs. Many of them were born after 1980 and lack the endurance for hardship which their elders had. According to one survey, 80 per cent of them would stay back in cities even without jobs. If there is a large number of unemployed migrant workers who cannot find work for six months or longer milling around in cities with no income, the problem will be even more serious. Protests are increasingly politicized, making it harder for officials to douse them by force or cash hand-outs. Social conflicts have already formed a certain social mass base so that as soon as there is an appropriate fuse, it always swiftly explodes and clashes escalate quickly.”
---- Extract from an article with interviews carried by the “Liaowang” (“Outlook”) magazine circulated by the Xinhua news agency as carried by the “The Straits Times” of January 7,2009, of Singapore.
“ DECEMBER BETTER THAN EXPECTED”
5.During a tour of the export-oriented industries in the Jiangsu province on January 10 and 11,2009, Prime Minister Wen Jiabao was reported to have made the following points:
"Our aim is to be the first to recover from the financial crisis. We must have faith and determination."
The Government will put forward a series of new measures before the annual session of the National People's Congress that begins on March 5, 2009.
Policymakers have used proactive fiscal and moderately loose monetary policies to maintain the economy's momentum. Plus, the Government is drafting another policy package to help nine key industrial sectors hit hard by the global economic downturn.
The National Development and Reform Commission, the country's top planning body, is likely to announce a detailed policy for the auto sector soon. The policy will offer measures like tax and credit incentives to increase the sale of vehicles.
The Government would expedite the investment of 600 billion yuan ($88 billion) in six major projects, approved in the country's master plan for scientific and technological development over medium and long terms. He did not give details of the six projects but the master plan, released in 2006, included 16 scientific and technological schemes that were expected to be completed by 2020. Among them the development of the indigenously built jumbo passenger aircraft and the manned space program.
China’s economy has been losing steam over the past six months because the global economic downturn has dealt a blow to its exports sector. Exports dropped in November, 2008, the first time in seven years, and the industrial output growth fell to 5.4 percent, the lowest in 10 months. But "our measures have already taken effect", Wen said. According to him, the December data were "better than expected", but he did not give details.
Some economic indicators such as corporate revenue and electricity use have already begun to rebound. According to the China Electricity Council, an industry association, the country's use of electricity rose to 273.7 billion KWh in December, up 6.8 per cent from the previous month. In October, the use of electricity, largely considered an indicator of the country's economic activities, dropped about 4 per cent year-on-year - the first time in a decade.
---“China Daily News” of January 12,2009.
TIDE MAY TURN POSITIVE AFTER FIRST QUARTER OF 2009
6.The $586-billion fiscal stimulus package, announced on November 9, 2008, is expected to help the economy rebound during 2009, economists with the Standard Chartered Bank have said in a research note on the global economic outlook. They remained upbeat over the country's long-term growth prospects, too, despite the current slowdown. Yi Gang, Vice-Governor of China’s central bank, said at a seminar on January 11,2009, that the country's economic growth would pick up between the second and the third quarters because local enterprises were likely to have reduced their inventories substantially by then.
---“China Daily News” of January 12,2009
CONCERNS OVER CENTRAL & WESTERN CHINA
7.Du Wing, Vice-Minister in charge of the National Development and Reform Commission (NDRC), has warned that compared with the coastal regions, China's less-developed Central and Western regions are likely to suffer more due to the global economic slowdown. According to him, the fledgling nature of the industrial structures in Central and Western China, the sharp decline in the prices of the raw materials exported from these regions and a weaker capability to handle risks and social conflicts were worrisome factors. This is the first time the Government has made public such a regional risk assessment, which has been put on the web site of the NDRC. Contrary to conventional thinking that the coastal regions in East China would be the worst hit by the global economic slow-down which has already led to a closure of many of its export-oriented factories, Du believes that the financial crisis will have a deeper impact on the less-developed Central and Western regions in the longer term, though it is not yet visible. Du gave three reasons for his pessimistic assessment. Firstly, the economies in Central and Western China are largely small in scale and are resource intensive. They will be slow to adapt to the changes brought along by the financial crisis. Secondly, the dependence of these regions on the export of raw materials, whose prices are declining sharply in the international market. Thirdly, the weaker economy in the Central and Western regions will not be able to provide enough job opportunities for migrant workers returning home from the closed manufacturing factories in East China. This could give rise to social conflicts. The Central and the Western
regions are China’s major labor exporters. He called for a higher allocation to these regions from the stimulus package announced by the Government.
---“China Daily News” of November 26,2008
RECESSION IN HONG KONG
8.Donald Tsang, the Chief Executive of the Hong Kong Special Administrative Region, told a meeting on the Hong Kong economy on January 19,2009, that Hong Kong’s economy, already in recession, probably contracted again in the fourth quarter of 2008 and was expected to continue shrinking in the next six months. According to him, whether the local economy recovered thereafter would depend on the effectiveness of the various Government measures around the world. He said: "We have a long and difficult road ahead of us in terms of economic recovery." Hong Kong's economy slid into recession in 2008 for the first time in five years as it contracted in the third quarter.
Gross domestic product fell by 0.5 per cent in the July-September quarter on a seasonally adjusted basis, marking the second consecutive quarter of contraction after the economy shrank 1.4 per cent in the second quarter. His negative outlook was reinforced by new figures released the same day showing that the territory's unemployment rate rose to 4.1 per cent in the
October-December period, up from 3.8 percent during the September-November period, according to Hong Kong's Census and Statistics Department. Sectors suffering the brunt of job losses were decoration and maintenance, restaurants, import or export trades, transport and manufacturing. The unemployment rate is at its highest since the May-July period in 2007. Tsang said that the Government would help create more than 60,000 new jobs this year, mostly by fast-tracking infrastructure projects, to cope with the downturn. With local consumption declining sharply, Hong Kong's economy could contract at the rate of 3 per cent for all of 2009, investment bank Goldman Sachs said in research note on January 19,2009. Meanwhile, the unemployment rate could jump to 6.5 per cent by 2010 as companies focused on finance and business, trade services, and retail cut back. “These three main engines driving the labor market boom in the past few years ... are coming to a halt," Goldman said.
---- “China Daily News” of January 20,2009.
SINO-INDIAN TRADE A BRIGHT SPOT
9. The continuously increasing Sino-Indian trade was a bright spot in an otherwise negative economic picture during 2008. The impact of the global melt-down has not yet affected this trade. According to the statistics of the Chinese Customs for 2008,
China's trade with India, its 10th trade partner, reached US $ 51.78 billion in 2008, up 34 per cent year-on-year, as against the target of US $ 60 billion by 2010 fixed by the two countries during the visit of Prime Minister Manmohan Singh to China in early 2008. Chinese exports to India mainly consisted of telecommunication equipment, electric equipment, organic chemicals and other light industrial products. Some large Chinese firms have made direct investments in India. The Tata Consultancy Service (TCS), India's software
company, has started a joint venture in China with Microsoft and three Chinese entities. Due to India's increasingly widening trade deficit with China, Sino-India trade friction is unavoidable. In the last quarter of 2008, India filed almost the same number of anti-dumping cases against China as it did in the whole of 2007. Besides, India has been imposing high tariffs against Chinese commodities. India is unlikely or not ready to accept China's long-standing demand to accord it market economy status . Due to the deterioration in the world economic situation, trade protectionism in India has increased. At the same time, despite such issues, it should also be acknowledged that the economic and trade cooperation potential between the two countries has not yet been tapped to the full. So long as China and India can cope with problems in their cooperation appropriately and overcome barriers in their trade and investment, they will be able to create an even better economic and trade environment for the trade and business circles of both nations and attain new, higher levels in bilateral economic and trade cooperation.
---- From an article by reporter Wang Lei in the “People’s Daily” of January 19,2009.
2009 THE MOST DIFFICULT YEAR SINCE 2000
10.Addressing the second plenary meeting of the State Council on January 19,2009, Chinese Premier Wen Jiabao called for more steps in the first quarter of this year to reverse the trend of economic slowdown as soon as possible and realize a good start for the whole of 2009. He said that last year was an unusual year for the country, especially the second half of 2008 when the Government unveiled a series of measures to counter the negative impact of the global financial crisis. He added: "These measures have been proved prompt, correct and effective. This year is the most difficult year for China's economic development so far this century," he said. He further added that efforts should be made to enhance the implementation of the Government's economic stimulus package and measures announced to boost the country's major industries. According to him, the Government has already announced boosting measures for the steel and auto industries, and is planning similar measures for eight other major industries. He called for more efforts on agricultural production during the winter and the coming spring, and said favorable policies for farmers should be firmly implemented. Enterprises should be encouraged to intensify internal management, reduce operating cost, expand markets and stabilize employment, he said, and small and medium-sized enterprises should be given more support. Work should be done to ensure service and commodity supply during the upcoming Spring Festival as well as boost consumption in both rural and urban regions, he said. The Government should work to maintain stable growth in trade, Wen said, underlining the need to expand emerging markets and improve the quality of exported goods. He also stressed the need to ensure the country's financial stability and safety. The Government should properly deal with changes brought about by the global financial crisis and maintain sound operation of the banking sector. He urged public servants at all levels to attach great importance to boosting employment, help people who had difficulties in life, and ensure production safety and social stability.
---- Xinhua news agency of January 20,2009.
FALL IN FOREIGN EXCHANGE RESERVES
11." China’s forex reserves have fallen for the first time since December 2003," Cai Qiusheng, an official at the capital account management department under the State Administration of Foreign Exchange, was quoted as saying. The foreign exchange reserves had topped US$ 1.9 trillion at the end of September, according to central bank figures. However, Cai did not give the figures for the subsequent months apart from stating that they had fallen.
----- Agence France Press of December 22,2008.
“ WORSE THAN EXPECTED RISKS”
12.While reporting to the National People's Congress Standing Committee on the state of the economy on December 24,2008, Zhang Ping, Minister in charge of the National Development and Reform Commission (NDRC), said that the global financial crisis would make it difficult for the country to achieve its economic targets for 2006-10, which were set when the world economy had a positive outlook. He said that the global economic downturn posed a "serious challenge" to the country, especially its efforts to realize the social and economic goals set in the 11th Five-Year (2006-10) Plan. In 2006-07, the economy grew at an average rate of 11.8 per cent, but it slowed down to 9.9 per cent in the first three quarters of 2008.From July to September, 2008 it grew by only 9 per cent. Zhang said that the country faced "worse-than-expected" risks of an economic slowdown because of the global downturn, and it was "still very hard" to say when the worst would be over. Since global economic woes had taken a heavy toll on the country, the Government has lowered its annual economic growth for 2009 to 8 per cent.
----“China Daily News” of December 25,2008.
OIL CONSUMPTION DOWN
13.According to the China Customs figures, China imported 164.5 million tons of crude oil by the end of November, 2008, up 9.5 per cent year-on-year. The growth rate during the first 10 months of 2008 stood at 10.6 per cent. However, China imported only 13.36 million tons of crude oil in November, 2008, down 1.86 per cent year-on-year. And compared with October, the
Imports decreased by 17.3 per cent. The trend, according to analysts, is likely to continue into the middle of 2009.Guo Haitao, Assistant Director at the Research Center for Energy Strategy, said ample crude oil reserves and sluggish oil consumption were responsible for the sluggish imports in spite of the decreasing crude prices. He said: "China's oil demand is still on the downward cycle, and the first two quarters of 2009 are the hardest time. This is because oil demand reflects economic performance." According to the China Association of Oil and Chemical Industry, the growth rate of China's oil consumption slowed from 6.1 per cent for January-October,2008, to 5.8 per cent for January-November over the previous year. Official statistics showed China processed 27.27 million tons of crude oil in November,2008, down 2.3 per cent from the previous year. Energy analysts with CBI, a Beijing-based market research agency, said industrial diesel demand nationwide was down 20 per cent to 30 per cent during 2008 due to the closure of many factories.
--------“ China Daily News” of December 25,2008.
WEN’S APPEAL TO STUDENTS
14.During an inspection tour of South-west China's Chongqing Municipality from December 21 to 22, 2008, Premier Wen Jiabao said: "Next year, it is an important target to stop the declining trend of economic growth and it is a must to focus on increasing domestic demands so as to promote economic growth.” He expressed serious concern over the negative impact of the global financial crisis on the city's automobile industry. The car sales have been declining since November, 2008. The decline is expected to continue during the first quarter of 2009. Wen said that the difficulties faced by the country's automobile industry would be temporary because "China has a huge market." He visited a communal social security centre to discuss about the difficulties of low-income families. He told the officials of the Centre: "The more financially challenged the people are, the greater the attention we should pay to them." He also visited the homes of pensioners and assured them that the Government would increase their pension and the subsidy for low-income families. He paid an unscheduled visit to a local university and appealed to the students to maintain their morale in these difficult months.
------Xinhua news agency despatch of December 23,2008.
15.President Hu Jintao visited the factories in the north-eastern Liaoning province from December 12 to 14,2008. Many of China’s heavy industries such as those producing iron and steel and aluminium are located in this province. He told the local officials: "Our top economic target next year is to maintain a stable and healthy growth. We should be clear about the serious challenges and difficulties from home and abroad but also realize the great opportunities and favorable conditions in it." He stressed the importance of maintaining social stability when the economic development was facing problems. While the local iron and steel and textile industries have been affected by declining overseas orders, the aluminium industry has not been affected. The Shenyang Yuanda Aluminium Industry Engineering Co. Ltd, registered a revenue increase of 72 per cent in the first ten months of 2008 and the value of overseas orders increased by 1.5 times. Hu told the officials of the factory: "This was very rare and commendable in a shrinking international market. I hope you continue the strategy to win clients through quality products." Addressing the staff of a local employment service centre. Hu said: "Next year's employment market will be very serious, affected by the international financial crisis.” He also visited the houses of some pensioners to enquire about their difficulties.
----- Xinhua news agency despatch of December 15,2008.
(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: seventyone2@gmail.com )
(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 "Chinese Economy Monitor" based on open information. This is the fifth in the series)
ASSESSMENT
Fear of social conflicts due to large-scale unemployment among the post-1980 young generation continues to haunt the Chinese authorities. The large number of young people thrown out of jobs as a result of the economic slow-down and the consequent closure of many factories for want of export orders will be joined during the first six months of 2009 by millions of young people coming out of universities and looking for non-existent jobs. June will see the 20th anniversary of the Tienanmen Square student violence of 1989 and its brutal suppression by the Chinese security forces. If the employment situation does not improve by then, there could be a social explosion involving the young unemployed. A large number of older people have also lost their jobs not only in coastal China, but also in Central and Western China, but they are used to hardships and hold the Communist Party in some esteem for what it had done to the people since the economic reforms were introduced in 1978. The younger generation, with no past memories of hardships, is passing through a spell of hardship for the first time in their lives and they may not understand the difficulties of the party and the Government in the same way as the older generation. This is a fear that is haunting the Chinese Communist Party and Government. President Hu Jintao and Prime Minister Wen Jiabo have been touring different Chinese provinces affected by the economic slow-down in order to explain the actions taken by the Government to alleviate the difficulties of the people and to appeal for patience. Till now, their appeals have been heard. Will they continue to be heard in the months to come? It needs to be emphasized that the Chinese economy has been doing better than the economies of many other countries, including India. The difficulties have arisen from the drop in the growth rate from above 10 per cent for a number of years, which created a large number of jobs in the consumer industries, to around eight per cent, which has made many jobs superfluous. The situation has been aggravated by the dependence on exports, particularly to the US, to sustain the 10 per cent plus growth rate. The decline in export orders has led to the closure of a large number of small and medium scale enterprises.
ECONOMIC INDICATORS
2.Economic indicators for China as its economy slows down:
By the end of November,2008, China’s tax revenue declined by three per cent as compared to 2007 as against an increase of 32 per cent in 2007 as compared to 2006.
China’s foreign exchange reserves were estimated to have increased during 2008 by US $ 177 billion only as against an increase of US $ 415 billion in 2007.
The monthly rate of foreign direct investment flows has declined by more than one-third since the summer of 2008.
The combination of a crash in the real estate market and a two-thirds fall in the Chinese stock markets has resulted in many foreign and overseas Chinese investors taking money quietly out of the country despite stringent currency controls.
China’s average monthly trade surplus, which used to amount to US $ 50 billion during the first half of 2008, came down to US $ 40.1 billion in November,2008, and is expected to decrease further to US $ 30 billion.
To meet the needs of the US $ 600 billion stimulus package launched by the Government, the Chinese purchase of US Treasury bonds is expected to come down. By the end of October, China had invested US $ 652.9 billion in US Treasury bonds as compared to US $ 585.5 billion by Japan.
------“ The International Herala Trbune” of January 8,2009.
MANUFACTURING SECTOR CONTINUES TO CONTRACT
3.China’s manufacturing sector contracted for the third month in a row in December,2008, but the pace of deterioration slowed as output and new orders improved slightly, according to an official survey. The official Purchasing Manager’s Index or PMI rose to 41.2 in December from the record low of 38.8 in November, 2008. Readings over 50 indicate an expansion of activity, while those below 50 suggest a deterioration. “This month’s PMI shows that the Chinese economy continues to lose momentum, but there are signs of it hovering around a bottom,” said Zhang Liqun, a Government economist. “ As the adjustment in stocks of goods starts to taper off and macro-economic policies start to show results, the slow-down in growth will probably become less pronounced in the future.” Xinhua reported that China’s foreign trade rose by 18 per cent in 2008, but did not give the figures for December, which would give a clearer picture of the health of the economy. Total trade is expected to have reached US $ 2.55 trillion, Xinhua said, citing the Chinese Customs. It said that the trade surplus for 2008 should be about US $ 290 billion. That would be a new annual record, up 10 per cent from a surplus of US $ 262.2 billion in 2007.
-----Reuters dispatch of January 4,2009.
FEAR OF MASS INCIDENTS
4.“ Without doubt, now we are entering a peak period for mass incidents. This year, Chinese society may face even more conflicts and clashes that will test even more the governing abilities of all levels of the party and the Government. But the biggest threats to China’s social fabric will come from graduating university students facing a shrinking job market and diminished incomes and from a tide of migrant workers, who have lost their jobs as export-driven factories have closed down. Coastal provinces that have provided millions of lowly paid workers with jobs have reported a leap in the number returning to their villages without work. An estimated 10 million rural migrant workers have lost their jobs. Many of them were born after 1980 and lack the endurance for hardship which their elders had. According to one survey, 80 per cent of them would stay back in cities even without jobs. If there is a large number of unemployed migrant workers who cannot find work for six months or longer milling around in cities with no income, the problem will be even more serious. Protests are increasingly politicized, making it harder for officials to douse them by force or cash hand-outs. Social conflicts have already formed a certain social mass base so that as soon as there is an appropriate fuse, it always swiftly explodes and clashes escalate quickly.”
---- Extract from an article with interviews carried by the “Liaowang” (“Outlook”) magazine circulated by the Xinhua news agency as carried by the “The Straits Times” of January 7,2009, of Singapore.
“ DECEMBER BETTER THAN EXPECTED”
5.During a tour of the export-oriented industries in the Jiangsu province on January 10 and 11,2009, Prime Minister Wen Jiabao was reported to have made the following points:
"Our aim is to be the first to recover from the financial crisis. We must have faith and determination."
The Government will put forward a series of new measures before the annual session of the National People's Congress that begins on March 5, 2009.
Policymakers have used proactive fiscal and moderately loose monetary policies to maintain the economy's momentum. Plus, the Government is drafting another policy package to help nine key industrial sectors hit hard by the global economic downturn.
The National Development and Reform Commission, the country's top planning body, is likely to announce a detailed policy for the auto sector soon. The policy will offer measures like tax and credit incentives to increase the sale of vehicles.
The Government would expedite the investment of 600 billion yuan ($88 billion) in six major projects, approved in the country's master plan for scientific and technological development over medium and long terms. He did not give details of the six projects but the master plan, released in 2006, included 16 scientific and technological schemes that were expected to be completed by 2020. Among them the development of the indigenously built jumbo passenger aircraft and the manned space program.
China’s economy has been losing steam over the past six months because the global economic downturn has dealt a blow to its exports sector. Exports dropped in November, 2008, the first time in seven years, and the industrial output growth fell to 5.4 percent, the lowest in 10 months. But "our measures have already taken effect", Wen said. According to him, the December data were "better than expected", but he did not give details.
Some economic indicators such as corporate revenue and electricity use have already begun to rebound. According to the China Electricity Council, an industry association, the country's use of electricity rose to 273.7 billion KWh in December, up 6.8 per cent from the previous month. In October, the use of electricity, largely considered an indicator of the country's economic activities, dropped about 4 per cent year-on-year - the first time in a decade.
---“China Daily News” of January 12,2009.
TIDE MAY TURN POSITIVE AFTER FIRST QUARTER OF 2009
6.The $586-billion fiscal stimulus package, announced on November 9, 2008, is expected to help the economy rebound during 2009, economists with the Standard Chartered Bank have said in a research note on the global economic outlook. They remained upbeat over the country's long-term growth prospects, too, despite the current slowdown. Yi Gang, Vice-Governor of China’s central bank, said at a seminar on January 11,2009, that the country's economic growth would pick up between the second and the third quarters because local enterprises were likely to have reduced their inventories substantially by then.
---“China Daily News” of January 12,2009
CONCERNS OVER CENTRAL & WESTERN CHINA
7.Du Wing, Vice-Minister in charge of the National Development and Reform Commission (NDRC), has warned that compared with the coastal regions, China's less-developed Central and Western regions are likely to suffer more due to the global economic slowdown. According to him, the fledgling nature of the industrial structures in Central and Western China, the sharp decline in the prices of the raw materials exported from these regions and a weaker capability to handle risks and social conflicts were worrisome factors. This is the first time the Government has made public such a regional risk assessment, which has been put on the web site of the NDRC. Contrary to conventional thinking that the coastal regions in East China would be the worst hit by the global economic slow-down which has already led to a closure of many of its export-oriented factories, Du believes that the financial crisis will have a deeper impact on the less-developed Central and Western regions in the longer term, though it is not yet visible. Du gave three reasons for his pessimistic assessment. Firstly, the economies in Central and Western China are largely small in scale and are resource intensive. They will be slow to adapt to the changes brought along by the financial crisis. Secondly, the dependence of these regions on the export of raw materials, whose prices are declining sharply in the international market. Thirdly, the weaker economy in the Central and Western regions will not be able to provide enough job opportunities for migrant workers returning home from the closed manufacturing factories in East China. This could give rise to social conflicts. The Central and the Western
regions are China’s major labor exporters. He called for a higher allocation to these regions from the stimulus package announced by the Government.
---“China Daily News” of November 26,2008
RECESSION IN HONG KONG
8.Donald Tsang, the Chief Executive of the Hong Kong Special Administrative Region, told a meeting on the Hong Kong economy on January 19,2009, that Hong Kong’s economy, already in recession, probably contracted again in the fourth quarter of 2008 and was expected to continue shrinking in the next six months. According to him, whether the local economy recovered thereafter would depend on the effectiveness of the various Government measures around the world. He said: "We have a long and difficult road ahead of us in terms of economic recovery." Hong Kong's economy slid into recession in 2008 for the first time in five years as it contracted in the third quarter.
Gross domestic product fell by 0.5 per cent in the July-September quarter on a seasonally adjusted basis, marking the second consecutive quarter of contraction after the economy shrank 1.4 per cent in the second quarter. His negative outlook was reinforced by new figures released the same day showing that the territory's unemployment rate rose to 4.1 per cent in the
October-December period, up from 3.8 percent during the September-November period, according to Hong Kong's Census and Statistics Department. Sectors suffering the brunt of job losses were decoration and maintenance, restaurants, import or export trades, transport and manufacturing. The unemployment rate is at its highest since the May-July period in 2007. Tsang said that the Government would help create more than 60,000 new jobs this year, mostly by fast-tracking infrastructure projects, to cope with the downturn. With local consumption declining sharply, Hong Kong's economy could contract at the rate of 3 per cent for all of 2009, investment bank Goldman Sachs said in research note on January 19,2009. Meanwhile, the unemployment rate could jump to 6.5 per cent by 2010 as companies focused on finance and business, trade services, and retail cut back. “These three main engines driving the labor market boom in the past few years ... are coming to a halt," Goldman said.
---- “China Daily News” of January 20,2009.
SINO-INDIAN TRADE A BRIGHT SPOT
9. The continuously increasing Sino-Indian trade was a bright spot in an otherwise negative economic picture during 2008. The impact of the global melt-down has not yet affected this trade. According to the statistics of the Chinese Customs for 2008,
China's trade with India, its 10th trade partner, reached US $ 51.78 billion in 2008, up 34 per cent year-on-year, as against the target of US $ 60 billion by 2010 fixed by the two countries during the visit of Prime Minister Manmohan Singh to China in early 2008. Chinese exports to India mainly consisted of telecommunication equipment, electric equipment, organic chemicals and other light industrial products. Some large Chinese firms have made direct investments in India. The Tata Consultancy Service (TCS), India's software
company, has started a joint venture in China with Microsoft and three Chinese entities. Due to India's increasingly widening trade deficit with China, Sino-India trade friction is unavoidable. In the last quarter of 2008, India filed almost the same number of anti-dumping cases against China as it did in the whole of 2007. Besides, India has been imposing high tariffs against Chinese commodities. India is unlikely or not ready to accept China's long-standing demand to accord it market economy status . Due to the deterioration in the world economic situation, trade protectionism in India has increased. At the same time, despite such issues, it should also be acknowledged that the economic and trade cooperation potential between the two countries has not yet been tapped to the full. So long as China and India can cope with problems in their cooperation appropriately and overcome barriers in their trade and investment, they will be able to create an even better economic and trade environment for the trade and business circles of both nations and attain new, higher levels in bilateral economic and trade cooperation.
---- From an article by reporter Wang Lei in the “People’s Daily” of January 19,2009.
2009 THE MOST DIFFICULT YEAR SINCE 2000
10.Addressing the second plenary meeting of the State Council on January 19,2009, Chinese Premier Wen Jiabao called for more steps in the first quarter of this year to reverse the trend of economic slowdown as soon as possible and realize a good start for the whole of 2009. He said that last year was an unusual year for the country, especially the second half of 2008 when the Government unveiled a series of measures to counter the negative impact of the global financial crisis. He added: "These measures have been proved prompt, correct and effective. This year is the most difficult year for China's economic development so far this century," he said. He further added that efforts should be made to enhance the implementation of the Government's economic stimulus package and measures announced to boost the country's major industries. According to him, the Government has already announced boosting measures for the steel and auto industries, and is planning similar measures for eight other major industries. He called for more efforts on agricultural production during the winter and the coming spring, and said favorable policies for farmers should be firmly implemented. Enterprises should be encouraged to intensify internal management, reduce operating cost, expand markets and stabilize employment, he said, and small and medium-sized enterprises should be given more support. Work should be done to ensure service and commodity supply during the upcoming Spring Festival as well as boost consumption in both rural and urban regions, he said. The Government should work to maintain stable growth in trade, Wen said, underlining the need to expand emerging markets and improve the quality of exported goods. He also stressed the need to ensure the country's financial stability and safety. The Government should properly deal with changes brought about by the global financial crisis and maintain sound operation of the banking sector. He urged public servants at all levels to attach great importance to boosting employment, help people who had difficulties in life, and ensure production safety and social stability.
---- Xinhua news agency of January 20,2009.
FALL IN FOREIGN EXCHANGE RESERVES
11." China’s forex reserves have fallen for the first time since December 2003," Cai Qiusheng, an official at the capital account management department under the State Administration of Foreign Exchange, was quoted as saying. The foreign exchange reserves had topped US$ 1.9 trillion at the end of September, according to central bank figures. However, Cai did not give the figures for the subsequent months apart from stating that they had fallen.
----- Agence France Press of December 22,2008.
“ WORSE THAN EXPECTED RISKS”
12.While reporting to the National People's Congress Standing Committee on the state of the economy on December 24,2008, Zhang Ping, Minister in charge of the National Development and Reform Commission (NDRC), said that the global financial crisis would make it difficult for the country to achieve its economic targets for 2006-10, which were set when the world economy had a positive outlook. He said that the global economic downturn posed a "serious challenge" to the country, especially its efforts to realize the social and economic goals set in the 11th Five-Year (2006-10) Plan. In 2006-07, the economy grew at an average rate of 11.8 per cent, but it slowed down to 9.9 per cent in the first three quarters of 2008.From July to September, 2008 it grew by only 9 per cent. Zhang said that the country faced "worse-than-expected" risks of an economic slowdown because of the global downturn, and it was "still very hard" to say when the worst would be over. Since global economic woes had taken a heavy toll on the country, the Government has lowered its annual economic growth for 2009 to 8 per cent.
----“China Daily News” of December 25,2008.
OIL CONSUMPTION DOWN
13.According to the China Customs figures, China imported 164.5 million tons of crude oil by the end of November, 2008, up 9.5 per cent year-on-year. The growth rate during the first 10 months of 2008 stood at 10.6 per cent. However, China imported only 13.36 million tons of crude oil in November, 2008, down 1.86 per cent year-on-year. And compared with October, the
Imports decreased by 17.3 per cent. The trend, according to analysts, is likely to continue into the middle of 2009.Guo Haitao, Assistant Director at the Research Center for Energy Strategy, said ample crude oil reserves and sluggish oil consumption were responsible for the sluggish imports in spite of the decreasing crude prices. He said: "China's oil demand is still on the downward cycle, and the first two quarters of 2009 are the hardest time. This is because oil demand reflects economic performance." According to the China Association of Oil and Chemical Industry, the growth rate of China's oil consumption slowed from 6.1 per cent for January-October,2008, to 5.8 per cent for January-November over the previous year. Official statistics showed China processed 27.27 million tons of crude oil in November,2008, down 2.3 per cent from the previous year. Energy analysts with CBI, a Beijing-based market research agency, said industrial diesel demand nationwide was down 20 per cent to 30 per cent during 2008 due to the closure of many factories.
--------“ China Daily News” of December 25,2008.
WEN’S APPEAL TO STUDENTS
14.During an inspection tour of South-west China's Chongqing Municipality from December 21 to 22, 2008, Premier Wen Jiabao said: "Next year, it is an important target to stop the declining trend of economic growth and it is a must to focus on increasing domestic demands so as to promote economic growth.” He expressed serious concern over the negative impact of the global financial crisis on the city's automobile industry. The car sales have been declining since November, 2008. The decline is expected to continue during the first quarter of 2009. Wen said that the difficulties faced by the country's automobile industry would be temporary because "China has a huge market." He visited a communal social security centre to discuss about the difficulties of low-income families. He told the officials of the Centre: "The more financially challenged the people are, the greater the attention we should pay to them." He also visited the homes of pensioners and assured them that the Government would increase their pension and the subsidy for low-income families. He paid an unscheduled visit to a local university and appealed to the students to maintain their morale in these difficult months.
------Xinhua news agency despatch of December 23,2008.
15.President Hu Jintao visited the factories in the north-eastern Liaoning province from December 12 to 14,2008. Many of China’s heavy industries such as those producing iron and steel and aluminium are located in this province. He told the local officials: "Our top economic target next year is to maintain a stable and healthy growth. We should be clear about the serious challenges and difficulties from home and abroad but also realize the great opportunities and favorable conditions in it." He stressed the importance of maintaining social stability when the economic development was facing problems. While the local iron and steel and textile industries have been affected by declining overseas orders, the aluminium industry has not been affected. The Shenyang Yuanda Aluminium Industry Engineering Co. Ltd, registered a revenue increase of 72 per cent in the first ten months of 2008 and the value of overseas orders increased by 1.5 times. Hu told the officials of the factory: "This was very rare and commendable in a shrinking international market. I hope you continue the strategy to win clients through quality products." Addressing the staff of a local employment service centre. Hu said: "Next year's employment market will be very serious, affected by the international financial crisis.” He also visited the houses of some pensioners to enquire about their difficulties.
----- Xinhua news agency despatch of December 15,2008.
(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: seventyone2@gmail.com )
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