INTERNATIONAL TERRORISM MONITOR----PAPER NO. 594
B.RAMAN
It is too early to assess definitively the failed attempt by a person of Nigerian origin to create an explosion on board a North-west Airlines flight (Airbus 330 with 278 passengers) from Amsterdam to Detroit as it was about to land in Detroit on Christmas Day on December 25,2009.
2.The attack seems to have failed due to the mal-functioning of what was intended by the suspect to be an explosive mixture and the prompt intervention of fellow-passengers, who managed to overpower the suspect after he had unsuccessfully tried to cause a detonation. While official sources in the US have characterised the incident as an attempted terrorist attack, the US Attorney-General has not yet done so.
3. A tentative assessment on the basis of available details would indicate that this could be an attempt by Al Qaeda to cause an explosion on board an aircraft by concealing a powder in the groin of a passenger posing as a diabetic patient and injecting a chemical trigger carried without being detected by the security inside an insulin injection tube.
4. Two serious breaches of security have come to notice: Failure to detect a person with a previous suspicious background as a terrorist despite the fact that his name figured in databases of terrorist suspects and failure to detect the concealment of a suspicious-looking powder in the groin of the suspect. The attempted use of medicines such as insulin for concealing chemical triggers, if corroborated, shows the continuing evolution of the modus operandi tried/used by the terrorists to escape detection.
5.The available details of the incident from open sources are given below:
(a). Identity of the suspect: A senior law enforcement source speaking to CBS News has identified the suspect as Nigerian national Umar Farouk Abdulmutallab, 23. ABC News named the suspect as Abdul Farouk Abdulmutallab, 23, who was said to be an engineering student at the University College of London.
(b). His background: US media reported that the passenger told investigators he was affiliated with Al Qaeda. CNN and other broadcast channels said the man told investigators he had acquired the explosive device in Yemen, along with instructions as to when it should be used. Peter King, a Republican Party member of the House of Representatives Homeland Security Committee, told Fox News that the suspect "definitely has terror connections". "My understanding is ... that he does have Al-Qaeda connections, certainly extremist terrorist connections, and his name popped up pretty quickly" in a search of intelligence databases. The CBS News reported that the suspect was on a U.S. government watch list of people with suspected terrorist ties. It said that a senior administration official declined to elaborate on how a man on a U.S. terrorist watch list was able to board the airline
( c ): Where did he get into the flight. At Amsterdam’s Schiphol airport. According to “The Sun”,the man, who flew from Nigeria to Amsterdam and then Detroit, was taken into custody at the Detroit airport.
(d). What kind of explosive or incendiary device he carried and how did he conceal it?: According to the Associated Press, one of the U.S. intelligence officials said the explosive device was a mix of powder and liquid. It failed when the passenger tried to detonate it. It added that a law enforcement source said the explosives may have been strapped to the man's body but investigators weren't immediately certain, partly because of the struggle with other passengers. According to the Agence France Presse, the explosive, which was apparently carried onto the flight from its originating airport in Amsterdam, was originally believed to be a small firecracker, but a US official said the device was "more complicated than gunpowder firecracker" and caught fire as the man tried to set it off. According to a report on the ABC television network, the suspect told the authorities he had had explosive powder taped to his leg and used a syringe of chemicals to mix with the powder that was to cause explosion. Another US intelligence official quoted by AP said an explosive device had been used consisting of a "mix of powder and liquid". The CBS reported that the explosive material was apparently taped to the man's leg and lit the lower part of his body. He was immediately subdued and restrained and was later transported to a hospital unit. He reportedly told US investigators that he picked up the explosive material in Yemen and was instructed to set it off on board an airplane. Those claims could not immediately be verified. One law enforcement source said the man claimed to have been instructed by Al Qaeda to detonate the plane over U.S. soil. A high-ranking law enforcement official told CBS News that the suspect apparently used a syringe to inject a chemical into a powder located near his groin, a technique not seen in previous attempted attacks. It's possible, the source said, that this incident was a test of whether the materials could pass screening and how effective they might be at causing damage. (26-12-09)
( 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 )
Friday, December 25, 2009
Thursday, December 24, 2009
CHINA'S COUSIN-COUSIN RELATIONS WITH MYANMAR
B.RAMAN
Chinese Vice President Xi Jinping visited Myanmar on December 19 and 20,2009, during the course of a four-nation tour covering Japan, South Korea, Myanmar and Cambodia. He went to Cambodia from Myanmar. Xi, who undertook the visit at the invitation of Vice Senior-General Maung Aye, Vice-Chairman of the State Peace and Development Council (SPDC), called on SPDC Chairman Senior-General Than Shwe in Nay Pyi Taw.
2.Xi is believed to be in the run to succeed President Hu Jintao, when he completes his tenure. His visit to Myanmar was significant for three reasons.
3.Firstly, through the importance accorded to the visit, the Myanmar military junta sought to reassure Beijing that despite recent moves for increased contacts between the junta and the Obama administration, the junta continued to give priority to Myanmar’s relations with China. Improved relations with the US will not be at the expense of the relations with China. Xi as well as his Myanmar hosts described the relations between the two countries as “baobo relationship”, which has been interpreted by local analysts as cousin-cousin relationship. The next door cousin is more important than the distant US---that was the message of the Junta to the Obama Administration.
4.Secondly, China reiterated its determination to go ahead with the construction of the parallel oil and gas pipelines between the Arakan area of Myanmar and Yunnan despite opposition from the local residents and insecurity along the route of the pipelines. China has accorded greater priority to the Arakan-Yunnan pipeline than to the Gwadar-Xinjiang pipeline proposed by the Pakistan Government. The Chinese Government has greater confidence in the ability of the Myanmar Army to ensure the security of the parallel pipelines passing through Myanmar territory than in the ability of the Pakistan Government to ensure the security of any pipeline passing through Pakistani territory. Moreover, with the recent commissioning of the first stage of the pipeline connecting Xinjiang with the Central Asian Republics, the need for a Gwadar-Xinjiang pipeline is not that urgent. Whereas the Arakan-Yunnan pipelines will have the dual purpose of transporting oil brought by Chinese tankers from West Asia and Africa thereby reducing the present Chinese dependence on the Malacca Strait and transporting the gas procured locally in Arakan by Chinese companies, any pipeline from Gwadar will have to be exclusively for transporting oil/gas from West Asia. Pakistan does not have any oil or gas to sell to China.
5.Thirdly, the visit underlined the concerns of Beijing over the anti-Chinese riots in the Kokang area of the Shan State in August,2009, when thousands of Chinese traders, who had illegally settled down in the Kokang area, had to flee to Yunnan following attacks on them. The attacks on the “Chinese cousins” ---- and the action of the Myanmar Army in closing its eyes to these attacks----were a rude shock to Beijing.
6. In an editorial published on December 22,2009, the Government-owned “ New Light of Myanmar” said that Xi’s visit strengthened the mutual friendship and the bilateral cooperation between the two countries. It added: “The peoples of the two countries have mutual respect and deep friendship as they have been dealing with each other like brothers for a long time. With reciprocal goodwill visits by the leaders of the two nations, bilateral relations and cooperation are thriving.”
7.It was stated by official spokesmen that Xi discussed with Maung Aye matters relating to the further improvement of bilateral relations and cooperation in the agriculture, transport, energy, electricity and communications sectors. The two countries signed five agreements on the development of trade, economy, the transport infrastructure, technological cooperation and purchase of machinery; seven financial agreements, three agreements on hydroelectric power; and one agreement on the energy sector and the oil and natural gas pipelines.
8. Among the MoUs signed during the visit was an agreement to allow the China National Petroleum Corporation (CNPC) exclusive rights to build and operate a Myanmar-China Crude Oil Pipeline. According to a press release issued by the CNPC on December 21, the agreement grants the CNPC rights relating to tax concessions, transport of crude oil through Myanmar, customs clearance and road operations.
9.The press release added: “The agreement also stipulates that the Myanmar Government shall ensure the company's ownership and exclusionary (exclusive?) right to the pipeline and guarantee the safety of the pipeline.”
10.The pipeline will be constructed and run by a subsidiary of the the CNPC called the South-East Asia Crude Oil Pipeline Ltd. Earlier in June, 2009, the CNPC and the Myanmar Government had signed an MOU, agreeing that the CNPC would be responsible for the design, construction, and operation of the pipeline.
11.The CNPC started building a crude oil port on October 31 as part of the 771-kilometre pipeline project, which will start from the Maday Island in the Arakan state on the western coast of Myanmar and run through the Arakan State, the Magway division, the Mandalay division and the Shan State, and will finally enter Ruili in China’s Yunnan Province. Some reports have estimated the length of the pipeline as 1100 kms. This probably includes its length from Ruili to Kunming too.
12.The natural gas pipeline is proposed to be extended from Ruili to Kunming and then to the Guizhou province and the Guangxi Zhuang Autonomous Region, covering a total distance of 2806 kms.
13. Earlier, in March 2009, the two Governments had signed an agreement which provided for the construction of a parallel oil-gas pipelines starting from the Kyaukpru port in the Arakan State. The construction is scheduled to be completed by 2013. According to the March,2009, agreement, a gas collection terminal and a port for oil tankers will be constructed on the Maday Island.
14. The Chinese state-owned CNPC will hold a 50.9-percent share in partnership with the Myanmar Oil and Gas Enterprise (MOGE) in the company which will construct and run the pipelines. The project is expected to yield $29 billion over 30 years to the Myanmar military junta. Initially, the gas to be transported by the gas pipeline will be bought from the Shwe Gas consortium, which has already struck gas in the blocks for exploration allotted to it by the Myanmar Government, but it hopes to supplement it with gas found by Chinese companies in the blocks allotted to them by the Myanmar Government.
15.The Daewoo International from South Korea, holds 51 percent of the shares in the Shwe Gas Consortium, the Oil and Natural Gas Corporation (ONGC) of India 17 percent and the Gas Authority of India Limited (GAIL), 8.5 percent.
16. This will be the third oil/gas pipeline being developed by China---the other two being the oil and gas pipelines from the Central Asian Republics the first stage of which was recently commissioned by President Hu Jintao and the proposed Sino-Russian oil pipeline. Pakistan is interested in making the Chinese agree to the construction of a gas pipeline from Gwadar to Xinjiang. Talks in this regard between the two countries are still in the preliminary stage. Bejing has so far not shown much enthusiasm for this project due to the deteriorating security situation in Balochistan.
17. The importance of maintaining peace and stability in the areas near the Sino-Myanmar border was repeatedly emphasized by the leaders of the two countries during their interactions. The junta sought to reassure the visiting Chinese leader of its sincerity and determination in this regard. Beijing’s suspicion that despite the repeatedly professed friendship of the junta for China, Myanmar Army units were complicit in the attacks on the Chinese in the Kokang area remains strong.
18. According to a statement posted on the web site of the Chinese Foreign Ministry on December 21,2009, Than Shwe assured Xi that Myanmar will work with China to preserve peace and stability in the border areas. He reportedly added that he understood that China and Myanmar shared a long border and maintaining peace and stability on the border was extremely important to both the countries.
19. China’s State-owned Xinhua news agency reported that Xi said China wanted stability on the Sino-Myanmar border. He reportedly said: “China believes the Myanmar side would settle the relevant problems through peaceful ways such as dialogues and consultation so as to guarantee the stability in its border area with China.”
20. The Xinhua reported that Than Shwe assured Xi that his Government would continue to work with Beijing to ensure peace and development in the border areas. It would demonstrate good neighborly friendship and cooperation, he said.
21. Interestingly, the Myanmar-Government owned “The New Light of Myanmar” remained silent on these exchanges between Than Shwe and Xi. It merely said that the two leaders exchanged views on “matters to which two neighboring countries should pay serious attention.”
22. The August attacks on the illegal Chinese traders in the Kokang capital Laogai were triggered off by the refusal of anti-junta Kokang ethnic groups such as the United Wa State Army to disband themselves and join a border force formed by the Myanmar Army unless some of their conditions regarding the command and control of the proposed border force were met. The Myanmar Army seems to have suspected that these groups were being instigated by the illegal Chinese settlers from Yunnan living in the Kokang area not to accept the order of the Army. These dissident groups continue to defy the Army which has given them time till December 31,2009, to disband themselves and join the border force of the Army. It is not clear whether Xi pressed Than Shwe to withdraw this order and, if so, whether Than Shwe agreed to it. If the junta insists on enforcing its order after January 1, one could expect more violence. The fact that the Chinese are going ahead with the construction of the pipelines without worrying about the disturbed situation in the Shan State gives rise to the suspicion that some kind of an assurance might have been conveyed to Xi in this regard by Than Shwe. A possible face-saving for both will be to keep the order in force, but not to enforce it.
23. Lt-Gen Ai Husheng of the Chinese Chengdu Military Region that oversees Sino-Myanmar border security paid a six-day visit to Myanmar from December 5 to 10,2009, and met, among others, Maj-Gen Kyaw Phyoe, of the Triangle Region Command, Lt-Gen Min Aung Hlaing, Commander of Shan and Kayah states, and Maj-Gen Aung Than Tut, of the Northeastern Region Command. (25-12-09)
( 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 )
Chinese Vice President Xi Jinping visited Myanmar on December 19 and 20,2009, during the course of a four-nation tour covering Japan, South Korea, Myanmar and Cambodia. He went to Cambodia from Myanmar. Xi, who undertook the visit at the invitation of Vice Senior-General Maung Aye, Vice-Chairman of the State Peace and Development Council (SPDC), called on SPDC Chairman Senior-General Than Shwe in Nay Pyi Taw.
2.Xi is believed to be in the run to succeed President Hu Jintao, when he completes his tenure. His visit to Myanmar was significant for three reasons.
3.Firstly, through the importance accorded to the visit, the Myanmar military junta sought to reassure Beijing that despite recent moves for increased contacts between the junta and the Obama administration, the junta continued to give priority to Myanmar’s relations with China. Improved relations with the US will not be at the expense of the relations with China. Xi as well as his Myanmar hosts described the relations between the two countries as “baobo relationship”, which has been interpreted by local analysts as cousin-cousin relationship. The next door cousin is more important than the distant US---that was the message of the Junta to the Obama Administration.
4.Secondly, China reiterated its determination to go ahead with the construction of the parallel oil and gas pipelines between the Arakan area of Myanmar and Yunnan despite opposition from the local residents and insecurity along the route of the pipelines. China has accorded greater priority to the Arakan-Yunnan pipeline than to the Gwadar-Xinjiang pipeline proposed by the Pakistan Government. The Chinese Government has greater confidence in the ability of the Myanmar Army to ensure the security of the parallel pipelines passing through Myanmar territory than in the ability of the Pakistan Government to ensure the security of any pipeline passing through Pakistani territory. Moreover, with the recent commissioning of the first stage of the pipeline connecting Xinjiang with the Central Asian Republics, the need for a Gwadar-Xinjiang pipeline is not that urgent. Whereas the Arakan-Yunnan pipelines will have the dual purpose of transporting oil brought by Chinese tankers from West Asia and Africa thereby reducing the present Chinese dependence on the Malacca Strait and transporting the gas procured locally in Arakan by Chinese companies, any pipeline from Gwadar will have to be exclusively for transporting oil/gas from West Asia. Pakistan does not have any oil or gas to sell to China.
5.Thirdly, the visit underlined the concerns of Beijing over the anti-Chinese riots in the Kokang area of the Shan State in August,2009, when thousands of Chinese traders, who had illegally settled down in the Kokang area, had to flee to Yunnan following attacks on them. The attacks on the “Chinese cousins” ---- and the action of the Myanmar Army in closing its eyes to these attacks----were a rude shock to Beijing.
6. In an editorial published on December 22,2009, the Government-owned “ New Light of Myanmar” said that Xi’s visit strengthened the mutual friendship and the bilateral cooperation between the two countries. It added: “The peoples of the two countries have mutual respect and deep friendship as they have been dealing with each other like brothers for a long time. With reciprocal goodwill visits by the leaders of the two nations, bilateral relations and cooperation are thriving.”
7.It was stated by official spokesmen that Xi discussed with Maung Aye matters relating to the further improvement of bilateral relations and cooperation in the agriculture, transport, energy, electricity and communications sectors. The two countries signed five agreements on the development of trade, economy, the transport infrastructure, technological cooperation and purchase of machinery; seven financial agreements, three agreements on hydroelectric power; and one agreement on the energy sector and the oil and natural gas pipelines.
8. Among the MoUs signed during the visit was an agreement to allow the China National Petroleum Corporation (CNPC) exclusive rights to build and operate a Myanmar-China Crude Oil Pipeline. According to a press release issued by the CNPC on December 21, the agreement grants the CNPC rights relating to tax concessions, transport of crude oil through Myanmar, customs clearance and road operations.
9.The press release added: “The agreement also stipulates that the Myanmar Government shall ensure the company's ownership and exclusionary (exclusive?) right to the pipeline and guarantee the safety of the pipeline.”
10.The pipeline will be constructed and run by a subsidiary of the the CNPC called the South-East Asia Crude Oil Pipeline Ltd. Earlier in June, 2009, the CNPC and the Myanmar Government had signed an MOU, agreeing that the CNPC would be responsible for the design, construction, and operation of the pipeline.
11.The CNPC started building a crude oil port on October 31 as part of the 771-kilometre pipeline project, which will start from the Maday Island in the Arakan state on the western coast of Myanmar and run through the Arakan State, the Magway division, the Mandalay division and the Shan State, and will finally enter Ruili in China’s Yunnan Province. Some reports have estimated the length of the pipeline as 1100 kms. This probably includes its length from Ruili to Kunming too.
12.The natural gas pipeline is proposed to be extended from Ruili to Kunming and then to the Guizhou province and the Guangxi Zhuang Autonomous Region, covering a total distance of 2806 kms.
13. Earlier, in March 2009, the two Governments had signed an agreement which provided for the construction of a parallel oil-gas pipelines starting from the Kyaukpru port in the Arakan State. The construction is scheduled to be completed by 2013. According to the March,2009, agreement, a gas collection terminal and a port for oil tankers will be constructed on the Maday Island.
14. The Chinese state-owned CNPC will hold a 50.9-percent share in partnership with the Myanmar Oil and Gas Enterprise (MOGE) in the company which will construct and run the pipelines. The project is expected to yield $29 billion over 30 years to the Myanmar military junta. Initially, the gas to be transported by the gas pipeline will be bought from the Shwe Gas consortium, which has already struck gas in the blocks for exploration allotted to it by the Myanmar Government, but it hopes to supplement it with gas found by Chinese companies in the blocks allotted to them by the Myanmar Government.
15.The Daewoo International from South Korea, holds 51 percent of the shares in the Shwe Gas Consortium, the Oil and Natural Gas Corporation (ONGC) of India 17 percent and the Gas Authority of India Limited (GAIL), 8.5 percent.
16. This will be the third oil/gas pipeline being developed by China---the other two being the oil and gas pipelines from the Central Asian Republics the first stage of which was recently commissioned by President Hu Jintao and the proposed Sino-Russian oil pipeline. Pakistan is interested in making the Chinese agree to the construction of a gas pipeline from Gwadar to Xinjiang. Talks in this regard between the two countries are still in the preliminary stage. Bejing has so far not shown much enthusiasm for this project due to the deteriorating security situation in Balochistan.
17. The importance of maintaining peace and stability in the areas near the Sino-Myanmar border was repeatedly emphasized by the leaders of the two countries during their interactions. The junta sought to reassure the visiting Chinese leader of its sincerity and determination in this regard. Beijing’s suspicion that despite the repeatedly professed friendship of the junta for China, Myanmar Army units were complicit in the attacks on the Chinese in the Kokang area remains strong.
18. According to a statement posted on the web site of the Chinese Foreign Ministry on December 21,2009, Than Shwe assured Xi that Myanmar will work with China to preserve peace and stability in the border areas. He reportedly added that he understood that China and Myanmar shared a long border and maintaining peace and stability on the border was extremely important to both the countries.
19. China’s State-owned Xinhua news agency reported that Xi said China wanted stability on the Sino-Myanmar border. He reportedly said: “China believes the Myanmar side would settle the relevant problems through peaceful ways such as dialogues and consultation so as to guarantee the stability in its border area with China.”
20. The Xinhua reported that Than Shwe assured Xi that his Government would continue to work with Beijing to ensure peace and development in the border areas. It would demonstrate good neighborly friendship and cooperation, he said.
21. Interestingly, the Myanmar-Government owned “The New Light of Myanmar” remained silent on these exchanges between Than Shwe and Xi. It merely said that the two leaders exchanged views on “matters to which two neighboring countries should pay serious attention.”
22. The August attacks on the illegal Chinese traders in the Kokang capital Laogai were triggered off by the refusal of anti-junta Kokang ethnic groups such as the United Wa State Army to disband themselves and join a border force formed by the Myanmar Army unless some of their conditions regarding the command and control of the proposed border force were met. The Myanmar Army seems to have suspected that these groups were being instigated by the illegal Chinese settlers from Yunnan living in the Kokang area not to accept the order of the Army. These dissident groups continue to defy the Army which has given them time till December 31,2009, to disband themselves and join the border force of the Army. It is not clear whether Xi pressed Than Shwe to withdraw this order and, if so, whether Than Shwe agreed to it. If the junta insists on enforcing its order after January 1, one could expect more violence. The fact that the Chinese are going ahead with the construction of the pipelines without worrying about the disturbed situation in the Shan State gives rise to the suspicion that some kind of an assurance might have been conveyed to Xi in this regard by Than Shwe. A possible face-saving for both will be to keep the order in force, but not to enforce it.
23. Lt-Gen Ai Husheng of the Chinese Chengdu Military Region that oversees Sino-Myanmar border security paid a six-day visit to Myanmar from December 5 to 10,2009, and met, among others, Maj-Gen Kyaw Phyoe, of the Triangle Region Command, Lt-Gen Min Aung Hlaing, Commander of Shan and Kayah states, and Maj-Gen Aung Than Tut, of the Northeastern Region Command. (25-12-09)
( 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 )
Wednesday, December 23, 2009
THE INTERNAL SECURITY CZAR
B.RAMAN
Delivering the 22nd Intelligence Bureau Centenary Endowment Lecture at New Delhi on December 23,2009, P.Chidambaram, the Minister for Home Affairs, who inter alia is responsible for dealing with indigenous as well as externally-sponsored threats to internal security, outlined a series of measures for revamping our internal security architecture. These measures, if implemented as outlined by him, would make the Home Minister the internal security Czar of the country.
2.The concerns nursed by Indira Gandhi and other senior members of her Cabinet such as Jagjivan Ram over the inadvisability of an over-powerful Home Ministry led to a series of actions by Indira Gandhi, Rajiv Gandhi and Narasimha Rao to create a decentralised structure for internal security. Indira Gandhi used the criticism from the defence forces regarding the inadequate performance of the IB during the 1965 Indo-Pak war and the 1966 revolt in Mizoram to set in motion a series of measures to decentralise the architecture and strengthen the primacy of the Prime Minister in supervising and co-ordinating the functioning of different wings of this architecture through the mechanism of the Cabinet Secretariat headed by the Cabinet Secretary functioning directly under the Prime Minister.
3. Among the various decentralised wings, which came into being since 1968 and were placed under the Cabinet Secretariat were the newly-formed (in 1968) Research & Analysis Wing (R&AW), the Directorate-General of Security (DGS) and the Aviation Research Centre simultaneously removed from the control of the IB, and the newly-created National Security Guards (NSGs) and the Special Protection Group (SPG), which is responsible for the protection of the incumbent and past Prime Ministers and their families. Even before 1968, the Joint Intelligence Committee (JIC) was under the over-all control of the Prime Minister who exercised his or her supervision over it through the Cabinet Secretary.
4. The tenure of the National Democratic Alliance Government under A.B.Vajpayee
(1998-2004) saw new additions to this architecture in the form of the revived post of National Security Adviser (NSA), the National Security Council Secretariat (NSCS) and the National Technical Research Organisation. The NSCS was made part of the Prime Minister’s office and placed directly under the NSA.
5. In pursuance of the recommendations made by the various Task Forces set up by the NDA Government for revamping the national security capabilities after the Kargil conflict of 1999, the NSA was entrusted with the over-all responsibility for operational supervision of national security management and intelligence co-ordination, with the Cabinet Secretary’s responsibility confined to administrative co-ordination and management. The fact that both the NSA and the CS functioned directly under the Prime Minister facilitated the two working in close co-ordination with each other and there were no conflicts of jurisdiction and responsibilities between the NSA and the CS.
6. The country’s national security architecture---whether relating to internal or external security--- cannot remain static. It has to constantly evolve in keeping with the evolving threats to national security. All past changes in the national security architecture since 1968 were preceded by a detailed study of the changes required and their discussion in the Cabinet Committee on Security as well as in public to the extent possible in order to evolve an administrative, political and national consensus on the proposed changes.
7. The leadership and initiative for policy decisions to introduce the changes came from the Prime Minister of the day, who also articulated the need for and the importance of the proposed changes. The latest changes proposed by Chidambaram were not preceded by a similar detailed examination. The role and views of the Prime Minister and other senior Ministers of the Cabinet in respect of the proposed changes remain obscure. These changes, if and when implemented, could lead to a strengthening of the role and the status of the Home Minister in respect of internal security management and a corresponding dilution of the role of the Prime Minister, his NSA, the PM’s Office and the Cabinet Secretariat. Is this desirable?
8. The three major changes proposed by the Home Minister relate to making the Home Ministry exclusively responsible for the professional management of internal security similar to the Department of Homeland Security in the US, the creation in the Home Ministry by 2010-end of a National Counter-Terrorism Centre (NCTC) similar to the NCTC of the US and the revamping of the immigration control apparatus whose inefficiency was exploited by David Coleman Headley alias Daood Gilani and Tahawwur Hussain Rana of the Chicago cell of the Lashkar-e-Toiba (LET) for frequent clandestine visits to India to prepare the ground for the 26/11 terrorist strikes. These changes have been advocated by many security experts of the country, including this writer, since 2004 when the US homeland security architecture was revamped in pursuance of the recommendations of the National Commission which enquired into the failures that facilitated the 9/11 terrorist strikes and the discussions on its report in the Congress.
9. These changes are welcome, but the ideas behind them are not new. What is new is the political will shown by Chidambaram to accept the desirability of these changes and the need to introduce them. Chidambaram needs to be complimented for this.
10 However, what should be of concern is the manner in which he proposes to introduce these changes. After reading the reports on his address as published in the media, one cannot but nurse an apprehension that the manner in which he intends to implement them could result in an over-centralised and over-powerful Home Ministry with the role of the Minister in charge strengthened at the expense of that of the Prime Minister.
11. References have been made to the post-9/11 changes in the US, but attention has not been drawn to the fact that in introducing the changes in the US over-centralisation has been avoided. The NCTC in the US functions under the Director National Intelligence, who reports directly to the President and takes orders from him and not from the Secretary for Homeland Security. The independence of the Federal Bureau of Investigation (FBI) as the leading investigation agency in terrorism-related cases has been maintained. The Secretary for Homeland Security has no control over it. The responsibilities of the Director of the Central Intelligence Agency relating to counter-terrorism outside the homeland and covert operations against terrorists in foreign territory have been maintained. He reports to the Director National Intelligence, who, in turn, reports to the President and not to the Secretary for Homeland Security. The National Security Agency and other technical intelligence agencies, in the exercise of their functions relating to counter terrorism, continue to report to the Defence Secretary and the Director National Intelligence and not to the Secretary for Homeland Security.
12. While the Secretary For Homeland Security is the overlord of physical security measures and follow-up action on intelligence reports, his powers have not been expanded at the expense of other agencies of the Government, which play an important role in respect of counter-terrorism.
13. What Chidambaram seems to want is that all agencies of the Government of India, except the SPG, which have counter-terrorism capabilities, should function directly under the Home Minister and take orders from him. Is this desirable? Will it improve counter-terrorism?
14. Another worrisome aspect of Chidambaram’s address is that it makes no distinction between terrorism as a threat and terrorism as a phenomenon, between indigenous terrorism by our nationals and externally-sponsored terrorism by foreign nationals, between operational and political management of terrorism and between the use of hard and soft power in dealing with terrorism. It tends to treat all terrorists as one and the same though he does talk of a nuanced approach.
15. While the changes proposed by Chidambaram in the internal security set-up should be welcomed, the questions as to how to implement them, how to avoid over-centralisation and how to ensure that while strengthening the counter-terrorism capabilities of the intelligence agencies, we do not weaken their capabilities relating to China and Pakistan should be examined by a group consisting of the Finance, Home, Defence and External Affairs Ministers and its recommendations discussed in the Parliament. ( 24-12-09)
( 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 )
ANNEXURE I
( Extracts from my article of December 1,2008, titled “After Mumbai: Points For Action” available at http://www.southasiaanalysis.org/papers30/paper2949.html )
POINT 17: Set up a National Counter-Terrorism Centre (NCTC) under the National Security Adviser (NSA) to ensure joint operational action in all terrorism-related matters. It can be patterned after a similar institution set up in the US under Director, National Intelligence after 9/11. The National Commission set up by the US Congress to enquire into the 9/11 terrorist strikes had expressed the view that better co-ordination among the various agencies will not be enough and that what was required was a joint action command similar to the Joint Chiefs of Staff in the Armed Forces. Its tasks should be to monitor intelligence collection by various agencies, avoid duplication of efforts and resources, integrate the intelligence flowing from different agencies and foreign agencies, analyse and assess the integrated intelligence and monitor follow-up action by the Police, the Federal Bureau of Investigation and other concerned agencies. Every agency is equally and jointly involved and responsible for the entire counter-terrorism process starting from collection to action on the intelligence collected. If such a system had existed, post-Mumbai complaints such as those of the Intelligence Bureau (IB) and the Research and Analysis Wing (R&AW) that the advisories issued by them on the possibility of a sea-borne attack by the Lashkar-e-Toiba (LET) on Mumbai were not acted upon by the Mumbai Police would not have arisen because the IB and the R&AW would have been as responsible for follow-up action as the Mumbai Police.
POINT 18: The practice of the privileged direct access to the Prime Minister by the chiefs of the IB and the R&AW, which came into force under Jawaharlal Nehru and Indira Gandhi, should be vigorously enforced. This privileged direct access is utilised by the intelligence chiefs to bring their concerns over national security and over inaction by the agencies responsible for follow-up on their reports to the personal notice of the Prime Minister and seek his intervention. If the intelligence chiefs had brought to the notice of the Prime Minister the alleged inaction of the Mumbai Police on their reports, he might have intervened and issued the required political directive to the Chief Minister of Maharashtra.
POINT 19: Either create a separate Ministry of Internal Security or strengthen the role of the existing Department of Internal Security in the Union Ministry of Home Affairs and make it responsible for dealing with internal security operationally under the over-all supervision of the Minister for Home Affairs.
ANNEXURE II
(Extracts from Chidambaram’s address as reported by “The Hindu” online on December 23,2009)
Proposing a "bold, thorough and radical restructuring" of the security architecture at the national level, Union Minister P. Chidambaram on Wednesday suggested bifurcation of the Home Ministry, saying subjects not directly related to internal security should be dealt with by a separate Ministry or should be brought under a separate department in the Home Ministry itself and dealt with by a Minister independently.
"The Home Minister should devote the whole of his/her time and energy to matters relating to security," Mr. Chidambaram said. In his view, given the imperatives and the challenges of the times, a division of the current functions of the Ministry of Home Affairs "is unavoidable".
In order to counter, prevent, contain and also respond to a terrorist attack should one take place, India must set up the National Counter Terrorism Centre (NCTC) by the end of 2010, he said while delivering the 22nd Intelligence Bureau Centenary Endowment lecture here.
In his 40-minute address, he touched upon the situation post 26/11 terror strikes, the state of India’s police and outlined the tasks that lay ahead to ward off crisis like the hijack of IC-814 or another catastrophe like Mumbai terror attacks.
Referring to the proposed NCTC, Mr. Chidambaram said: "Such an organisation does not exist today and it has to be created from the scratch. I am told that the United States was able to do it within 36 months of September 11, 2001. India cannot afford to wait for 36 months. India must decide now to go forward and India must succeed in setting up the NCTC by the end of 2010."
He said that the NCTC must have a broad mandate to deal with all kinds of terrorist violence directed against the country and the people.
"While the nature of the response to different kinds of terror would indeed be different and nuanced, NCTC's mandate should be to respond to violence unleashed by any group – be it an insurgent group in the North East or the CPI (Maoist) in the heartland of India or any group of religious fanatics anywhere in India acting on their own or in concert with terrorists outside India."
He said: "NCTC would, therefore, have to perform functions relating to intelligence, investigation and operations. All intelligence agencies would therefore have to be represented in the NCTC. But I am clear in my mind that, without 'operations', NCTC and the security architecture that is needed will be incomplete. It is the proposed 'operations' wing of the NCTC that will give an edge - now absent - to our plans to counter terrorism."
Turning to the functions of the MHA, Mr. Chidambaram said the Ministry now performed a number of functions that have no direct relation to internal security which include a division dealing with freedom fighters though it does not have even a desk for dealing exclusively with forensic science.
"There are other divisions or desks that deal with Centre-State relations, State Legislation, Human Rights, Union Territories, Disaster Management, Census etc. These are undoubtedly important functions and deserve close attention. However, internal security is an equally, if not more, important function that deserves the highest attention," he said.
Venturing after a year in office to outline the new architecture for India’s security, Mr. Chidambaram identified two enemies of change. "The first is 'routine'. Routine is the enemy of innovation. Because we are immersed in routine tasks, we neglect the need for change and innovation. The second enemy is 'complacency'," he told top police and intelligence officials that included National Security Advisor M. K. Narayanan, Home Secretary G.K. Pillai, Director IB Rajiv Mathur and others.
Striking a note of caution, Mr. Chidambaram said there was no time to be lost in making a thorough and radical departure from the present structure. "If, as a nation, we must defend ourselves in the present day and prepare for the future, it is imperative that we put in place a new architecture for India’s security," he said.
He also announced commencement of two more projects early next year: business porcess re-engineering of the Foreigners Division at a cost of Rs. 20 crore and the more ambitious Mission Mode Project on Immigration, Visa and Foreigners' Registration and Tracking with the objective of creating a secure and integrated service delivery framework for facilitating legitimate travellers and strengthening security.
Mr. Chidambaram said that the positioning of Research and Analysis Wing, Aviation Research centre and the CBI would have to be re-examined and a way would have to be found to place them under the oversight of NCTC to the extent that they deal with terrorism.
The Home Minister said the new organisation could be led by a police officer or a military officer who must be one who has impeccable professional credentials and the capacity to oversee intelligence, investigation and operations.
While the head of the NCTC will be the single person accountable to the country on all matters relating to internal security, the organisation would be at the command and control of Ministry of Home Affairs, he said.
Delivering the 22nd Intelligence Bureau Centenary Endowment Lecture at New Delhi on December 23,2009, P.Chidambaram, the Minister for Home Affairs, who inter alia is responsible for dealing with indigenous as well as externally-sponsored threats to internal security, outlined a series of measures for revamping our internal security architecture. These measures, if implemented as outlined by him, would make the Home Minister the internal security Czar of the country.
2.The concerns nursed by Indira Gandhi and other senior members of her Cabinet such as Jagjivan Ram over the inadvisability of an over-powerful Home Ministry led to a series of actions by Indira Gandhi, Rajiv Gandhi and Narasimha Rao to create a decentralised structure for internal security. Indira Gandhi used the criticism from the defence forces regarding the inadequate performance of the IB during the 1965 Indo-Pak war and the 1966 revolt in Mizoram to set in motion a series of measures to decentralise the architecture and strengthen the primacy of the Prime Minister in supervising and co-ordinating the functioning of different wings of this architecture through the mechanism of the Cabinet Secretariat headed by the Cabinet Secretary functioning directly under the Prime Minister.
3. Among the various decentralised wings, which came into being since 1968 and were placed under the Cabinet Secretariat were the newly-formed (in 1968) Research & Analysis Wing (R&AW), the Directorate-General of Security (DGS) and the Aviation Research Centre simultaneously removed from the control of the IB, and the newly-created National Security Guards (NSGs) and the Special Protection Group (SPG), which is responsible for the protection of the incumbent and past Prime Ministers and their families. Even before 1968, the Joint Intelligence Committee (JIC) was under the over-all control of the Prime Minister who exercised his or her supervision over it through the Cabinet Secretary.
4. The tenure of the National Democratic Alliance Government under A.B.Vajpayee
(1998-2004) saw new additions to this architecture in the form of the revived post of National Security Adviser (NSA), the National Security Council Secretariat (NSCS) and the National Technical Research Organisation. The NSCS was made part of the Prime Minister’s office and placed directly under the NSA.
5. In pursuance of the recommendations made by the various Task Forces set up by the NDA Government for revamping the national security capabilities after the Kargil conflict of 1999, the NSA was entrusted with the over-all responsibility for operational supervision of national security management and intelligence co-ordination, with the Cabinet Secretary’s responsibility confined to administrative co-ordination and management. The fact that both the NSA and the CS functioned directly under the Prime Minister facilitated the two working in close co-ordination with each other and there were no conflicts of jurisdiction and responsibilities between the NSA and the CS.
6. The country’s national security architecture---whether relating to internal or external security--- cannot remain static. It has to constantly evolve in keeping with the evolving threats to national security. All past changes in the national security architecture since 1968 were preceded by a detailed study of the changes required and their discussion in the Cabinet Committee on Security as well as in public to the extent possible in order to evolve an administrative, political and national consensus on the proposed changes.
7. The leadership and initiative for policy decisions to introduce the changes came from the Prime Minister of the day, who also articulated the need for and the importance of the proposed changes. The latest changes proposed by Chidambaram were not preceded by a similar detailed examination. The role and views of the Prime Minister and other senior Ministers of the Cabinet in respect of the proposed changes remain obscure. These changes, if and when implemented, could lead to a strengthening of the role and the status of the Home Minister in respect of internal security management and a corresponding dilution of the role of the Prime Minister, his NSA, the PM’s Office and the Cabinet Secretariat. Is this desirable?
8. The three major changes proposed by the Home Minister relate to making the Home Ministry exclusively responsible for the professional management of internal security similar to the Department of Homeland Security in the US, the creation in the Home Ministry by 2010-end of a National Counter-Terrorism Centre (NCTC) similar to the NCTC of the US and the revamping of the immigration control apparatus whose inefficiency was exploited by David Coleman Headley alias Daood Gilani and Tahawwur Hussain Rana of the Chicago cell of the Lashkar-e-Toiba (LET) for frequent clandestine visits to India to prepare the ground for the 26/11 terrorist strikes. These changes have been advocated by many security experts of the country, including this writer, since 2004 when the US homeland security architecture was revamped in pursuance of the recommendations of the National Commission which enquired into the failures that facilitated the 9/11 terrorist strikes and the discussions on its report in the Congress.
9. These changes are welcome, but the ideas behind them are not new. What is new is the political will shown by Chidambaram to accept the desirability of these changes and the need to introduce them. Chidambaram needs to be complimented for this.
10 However, what should be of concern is the manner in which he proposes to introduce these changes. After reading the reports on his address as published in the media, one cannot but nurse an apprehension that the manner in which he intends to implement them could result in an over-centralised and over-powerful Home Ministry with the role of the Minister in charge strengthened at the expense of that of the Prime Minister.
11. References have been made to the post-9/11 changes in the US, but attention has not been drawn to the fact that in introducing the changes in the US over-centralisation has been avoided. The NCTC in the US functions under the Director National Intelligence, who reports directly to the President and takes orders from him and not from the Secretary for Homeland Security. The independence of the Federal Bureau of Investigation (FBI) as the leading investigation agency in terrorism-related cases has been maintained. The Secretary for Homeland Security has no control over it. The responsibilities of the Director of the Central Intelligence Agency relating to counter-terrorism outside the homeland and covert operations against terrorists in foreign territory have been maintained. He reports to the Director National Intelligence, who, in turn, reports to the President and not to the Secretary for Homeland Security. The National Security Agency and other technical intelligence agencies, in the exercise of their functions relating to counter terrorism, continue to report to the Defence Secretary and the Director National Intelligence and not to the Secretary for Homeland Security.
12. While the Secretary For Homeland Security is the overlord of physical security measures and follow-up action on intelligence reports, his powers have not been expanded at the expense of other agencies of the Government, which play an important role in respect of counter-terrorism.
13. What Chidambaram seems to want is that all agencies of the Government of India, except the SPG, which have counter-terrorism capabilities, should function directly under the Home Minister and take orders from him. Is this desirable? Will it improve counter-terrorism?
14. Another worrisome aspect of Chidambaram’s address is that it makes no distinction between terrorism as a threat and terrorism as a phenomenon, between indigenous terrorism by our nationals and externally-sponsored terrorism by foreign nationals, between operational and political management of terrorism and between the use of hard and soft power in dealing with terrorism. It tends to treat all terrorists as one and the same though he does talk of a nuanced approach.
15. While the changes proposed by Chidambaram in the internal security set-up should be welcomed, the questions as to how to implement them, how to avoid over-centralisation and how to ensure that while strengthening the counter-terrorism capabilities of the intelligence agencies, we do not weaken their capabilities relating to China and Pakistan should be examined by a group consisting of the Finance, Home, Defence and External Affairs Ministers and its recommendations discussed in the Parliament. ( 24-12-09)
( 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 )
ANNEXURE I
( Extracts from my article of December 1,2008, titled “After Mumbai: Points For Action” available at http://www.southasiaanalysis.org/papers30/paper2949.html )
POINT 17: Set up a National Counter-Terrorism Centre (NCTC) under the National Security Adviser (NSA) to ensure joint operational action in all terrorism-related matters. It can be patterned after a similar institution set up in the US under Director, National Intelligence after 9/11. The National Commission set up by the US Congress to enquire into the 9/11 terrorist strikes had expressed the view that better co-ordination among the various agencies will not be enough and that what was required was a joint action command similar to the Joint Chiefs of Staff in the Armed Forces. Its tasks should be to monitor intelligence collection by various agencies, avoid duplication of efforts and resources, integrate the intelligence flowing from different agencies and foreign agencies, analyse and assess the integrated intelligence and monitor follow-up action by the Police, the Federal Bureau of Investigation and other concerned agencies. Every agency is equally and jointly involved and responsible for the entire counter-terrorism process starting from collection to action on the intelligence collected. If such a system had existed, post-Mumbai complaints such as those of the Intelligence Bureau (IB) and the Research and Analysis Wing (R&AW) that the advisories issued by them on the possibility of a sea-borne attack by the Lashkar-e-Toiba (LET) on Mumbai were not acted upon by the Mumbai Police would not have arisen because the IB and the R&AW would have been as responsible for follow-up action as the Mumbai Police.
POINT 18: The practice of the privileged direct access to the Prime Minister by the chiefs of the IB and the R&AW, which came into force under Jawaharlal Nehru and Indira Gandhi, should be vigorously enforced. This privileged direct access is utilised by the intelligence chiefs to bring their concerns over national security and over inaction by the agencies responsible for follow-up on their reports to the personal notice of the Prime Minister and seek his intervention. If the intelligence chiefs had brought to the notice of the Prime Minister the alleged inaction of the Mumbai Police on their reports, he might have intervened and issued the required political directive to the Chief Minister of Maharashtra.
POINT 19: Either create a separate Ministry of Internal Security or strengthen the role of the existing Department of Internal Security in the Union Ministry of Home Affairs and make it responsible for dealing with internal security operationally under the over-all supervision of the Minister for Home Affairs.
ANNEXURE II
(Extracts from Chidambaram’s address as reported by “The Hindu” online on December 23,2009)
Proposing a "bold, thorough and radical restructuring" of the security architecture at the national level, Union Minister P. Chidambaram on Wednesday suggested bifurcation of the Home Ministry, saying subjects not directly related to internal security should be dealt with by a separate Ministry or should be brought under a separate department in the Home Ministry itself and dealt with by a Minister independently.
"The Home Minister should devote the whole of his/her time and energy to matters relating to security," Mr. Chidambaram said. In his view, given the imperatives and the challenges of the times, a division of the current functions of the Ministry of Home Affairs "is unavoidable".
In order to counter, prevent, contain and also respond to a terrorist attack should one take place, India must set up the National Counter Terrorism Centre (NCTC) by the end of 2010, he said while delivering the 22nd Intelligence Bureau Centenary Endowment lecture here.
In his 40-minute address, he touched upon the situation post 26/11 terror strikes, the state of India’s police and outlined the tasks that lay ahead to ward off crisis like the hijack of IC-814 or another catastrophe like Mumbai terror attacks.
Referring to the proposed NCTC, Mr. Chidambaram said: "Such an organisation does not exist today and it has to be created from the scratch. I am told that the United States was able to do it within 36 months of September 11, 2001. India cannot afford to wait for 36 months. India must decide now to go forward and India must succeed in setting up the NCTC by the end of 2010."
He said that the NCTC must have a broad mandate to deal with all kinds of terrorist violence directed against the country and the people.
"While the nature of the response to different kinds of terror would indeed be different and nuanced, NCTC's mandate should be to respond to violence unleashed by any group – be it an insurgent group in the North East or the CPI (Maoist) in the heartland of India or any group of religious fanatics anywhere in India acting on their own or in concert with terrorists outside India."
He said: "NCTC would, therefore, have to perform functions relating to intelligence, investigation and operations. All intelligence agencies would therefore have to be represented in the NCTC. But I am clear in my mind that, without 'operations', NCTC and the security architecture that is needed will be incomplete. It is the proposed 'operations' wing of the NCTC that will give an edge - now absent - to our plans to counter terrorism."
Turning to the functions of the MHA, Mr. Chidambaram said the Ministry now performed a number of functions that have no direct relation to internal security which include a division dealing with freedom fighters though it does not have even a desk for dealing exclusively with forensic science.
"There are other divisions or desks that deal with Centre-State relations, State Legislation, Human Rights, Union Territories, Disaster Management, Census etc. These are undoubtedly important functions and deserve close attention. However, internal security is an equally, if not more, important function that deserves the highest attention," he said.
Venturing after a year in office to outline the new architecture for India’s security, Mr. Chidambaram identified two enemies of change. "The first is 'routine'. Routine is the enemy of innovation. Because we are immersed in routine tasks, we neglect the need for change and innovation. The second enemy is 'complacency'," he told top police and intelligence officials that included National Security Advisor M. K. Narayanan, Home Secretary G.K. Pillai, Director IB Rajiv Mathur and others.
Striking a note of caution, Mr. Chidambaram said there was no time to be lost in making a thorough and radical departure from the present structure. "If, as a nation, we must defend ourselves in the present day and prepare for the future, it is imperative that we put in place a new architecture for India’s security," he said.
He also announced commencement of two more projects early next year: business porcess re-engineering of the Foreigners Division at a cost of Rs. 20 crore and the more ambitious Mission Mode Project on Immigration, Visa and Foreigners' Registration and Tracking with the objective of creating a secure and integrated service delivery framework for facilitating legitimate travellers and strengthening security.
Mr. Chidambaram said that the positioning of Research and Analysis Wing, Aviation Research centre and the CBI would have to be re-examined and a way would have to be found to place them under the oversight of NCTC to the extent that they deal with terrorism.
The Home Minister said the new organisation could be led by a police officer or a military officer who must be one who has impeccable professional credentials and the capacity to oversee intelligence, investigation and operations.
While the head of the NCTC will be the single person accountable to the country on all matters relating to internal security, the organisation would be at the command and control of Ministry of Home Affairs, he said.
Tuesday, December 22, 2009
NEED TO FOCUS MORE ON RANA
INTERNATIONAL TERRORISM MONITOR---PAPER NO. 593
B.RAMAN
David Coleman Headley originally known as Daood Gilani and Tahawwur Hussain Rana, members of the Chicago cell of the Lashkar-e-Toiba (LET), operated in concert from Chicago. They were in personal, telephonic and E-mail contact with each other. They even took a drive in a car together on September 7,2009, when they discussed their future operational plans in India and Denmark at the instance of the LET and the 313 Brigade headed by Ilyas Kashmiri .The LET had four future targets in India----the Somnath temple, the National Defence College in New Delhi, and the film world and the Shiv Sena office in Mumbai. The 313 Brigade's target was the Copenhagen office of the Danish newspaper, which published some cartoons of Prophet Mohammad in 2005.
2. Headley undertook his two visits to Denmark and five pre-26/11 visits to India posing as a representative of an immigration consultancy service, which Rana ran from Chicago. He had kept Rana informed of his posing as the representative of the consultancy service and asked him, after a visit to Denmark, to corroborate the statements made by him to his interlocutors in Denmark regarding his links with Rana's service. The fact that Rana agrred to this shows his concurrence to Headley using the cover of being a representative of his service for his operational visits to Denmark and India to collect pre-attack information. Rana booked the air tickets for Headley for his two visits to Denmark.
3. There is so far no information or evidence to indicate that Headley and Rana travelled to India together or were in India at the same time and were in touch with each other during their stay in India. According to Indian media reports, during a visit to Kerala, Rana had published an advertisement in a local newspaper offering the services of his company for intending Indian applicants for a US visa. Neither Headley nor Rana would seem to have indicated in any way that the immigration consultancy service in Chicago for which they claimed to be working was one and the same.
4.According to the FBI's first affidavit against Rana,on or about September 25, 2009, Rana spoke by telephone with the Consul General at the Pakistani Consulate-General in Chicago in an effort to obtain a 5-year visa for Headley to travel to Pakistan. It was clear from email traffic unrelated to terrorist plotting that the Consul- General knew Rana and Headley personally as all three attended the same high school. However, the Consul General knew Headley as Gilani. He was not aware that Gilani, his old schoolmate, had become Headley since February,2006.In seeking a visa for Headley, Rana stated that he wished to obtain the visa for a white American named Headley who did not have any Pakistani background at all. When the Consul-General suggested that Rana send this white American to the consulate, Rana explained that he had sent his friend elsewhere to take care of some unspecified business so that someone else would visit the consulate. The FBI told the court in the affidavit that "It is clear from the foregoing conversation that Rana was attempting to deceive the Consul- General into granting a visa for Headley without the Consul- General knowing for whom the visa would be issued. "
5. One does not know whether the Consul-General agreed to this intriguing request of Rana. Even if he had done so, he would have noticed from the photograph in the passport of Headley that he was the same as Gilani-----unless Headley had changed his physical appearance when he took the new passport . Did Headley look different from Gilani?
6.The sister of Rahul Bhatt, the film actor, whom Headley had befriended in Mumbai, had said in an interview that the Headley whom he knew was different from the Headley whose picture was being shown on the TV. Rahul had been quoted as saying that the Headley whom he knew sported a pigtail.
7.According to the second report against Rana filed by the FBI in the court, he was in India in the third week of November, 2008. He flew from Mumbai to Dubai on a flight of the Emirates Airlines on November 21,2008. He flew from Dubai to China by the same Airlines on November , 24,2008, and from there returned to Chicago via Seoul on November 26,2008, by the Asiana Airlines.
8. There is no reason to believe that Headley was in India during this period. The last of his five pre-26/11 visits to India was in July,2008. It is not clear when did Rana arrive in India in November,2008, which places he visited and whom he met.It is also not clear which city he visited in China, what was the purpose of his visit to China and why his visit to China was so short.
9. Rana had admitted to the FBI that during his vist to Dubai from November 21 to 24, 2008, he met Maj. (retd) Abdur Rehman Hashim Syed alias Pasha who was in touch with Ilyas Kashmiri on behalf of Headley and that he came to know from Pasha about the impending terrorist attacks by the LET in Mumbai. Rana has sought to convey an impression that his visit (or visits?) to India had nothing to do with the 26/11 attacks and that he came to know of the planned attacks only from Pasha in Dubai a few days before the attacks.
10.At the same time, it is clear from the papers filed by the FBI in the court that Rana personally knew both the handling officers of Headley in Pakistan---- Maj (retd) Abdur Rehman of the 313 Brigade and an unidentified office-bearer of the LET. It is also clear that Rana was fully aware at least on September 7,2009, if not earlier, of the LET's plans for future attacks on four targets in India.
12. Both Headley and Rana are equally important for the the Indian and US investigators to reconstruct the 26/11 terrorist strikes in Mumbai, to identify the entire network set up by them in India and the US and neutralise the members of the network still remaining undetected and to unearth the future plans of the LET and the 313 Brigade. The National Investigation Agency of India and the FBI should set up a joint team of senior officers to monitor the investigation being made in the two countries and get a complete picture of the conspiracy.
13. While one can understand the reluctance of the FBI to give access to Indian investigators to Headley , who is an American national and an informant of the US Drug Enforcement Administration (DEA), they should have no such hesitation in the case of Rana, who is a Canadian national and against whom there is no suspicion of his working for any US agency. We should, therefore, press our request for access to Rana.
14. The official and media focus in India and the US has been mostly on Headley.The required attention is not being given to investigating the role of Rana. The NIA should get from the FBI authentic pictures of Headley as Headley and as Gilani and of Rana, disseminate them widely through the print and electronic media and request those who had met and interacted with them under whatever name to contact the NIA.( 23-12-09)
( 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 )
B.RAMAN
David Coleman Headley originally known as Daood Gilani and Tahawwur Hussain Rana, members of the Chicago cell of the Lashkar-e-Toiba (LET), operated in concert from Chicago. They were in personal, telephonic and E-mail contact with each other. They even took a drive in a car together on September 7,2009, when they discussed their future operational plans in India and Denmark at the instance of the LET and the 313 Brigade headed by Ilyas Kashmiri .The LET had four future targets in India----the Somnath temple, the National Defence College in New Delhi, and the film world and the Shiv Sena office in Mumbai. The 313 Brigade's target was the Copenhagen office of the Danish newspaper, which published some cartoons of Prophet Mohammad in 2005.
2. Headley undertook his two visits to Denmark and five pre-26/11 visits to India posing as a representative of an immigration consultancy service, which Rana ran from Chicago. He had kept Rana informed of his posing as the representative of the consultancy service and asked him, after a visit to Denmark, to corroborate the statements made by him to his interlocutors in Denmark regarding his links with Rana's service. The fact that Rana agrred to this shows his concurrence to Headley using the cover of being a representative of his service for his operational visits to Denmark and India to collect pre-attack information. Rana booked the air tickets for Headley for his two visits to Denmark.
3. There is so far no information or evidence to indicate that Headley and Rana travelled to India together or were in India at the same time and were in touch with each other during their stay in India. According to Indian media reports, during a visit to Kerala, Rana had published an advertisement in a local newspaper offering the services of his company for intending Indian applicants for a US visa. Neither Headley nor Rana would seem to have indicated in any way that the immigration consultancy service in Chicago for which they claimed to be working was one and the same.
4.According to the FBI's first affidavit against Rana,on or about September 25, 2009, Rana spoke by telephone with the Consul General at the Pakistani Consulate-General in Chicago in an effort to obtain a 5-year visa for Headley to travel to Pakistan. It was clear from email traffic unrelated to terrorist plotting that the Consul- General knew Rana and Headley personally as all three attended the same high school. However, the Consul General knew Headley as Gilani. He was not aware that Gilani, his old schoolmate, had become Headley since February,2006.In seeking a visa for Headley, Rana stated that he wished to obtain the visa for a white American named Headley who did not have any Pakistani background at all. When the Consul-General suggested that Rana send this white American to the consulate, Rana explained that he had sent his friend elsewhere to take care of some unspecified business so that someone else would visit the consulate. The FBI told the court in the affidavit that "It is clear from the foregoing conversation that Rana was attempting to deceive the Consul- General into granting a visa for Headley without the Consul- General knowing for whom the visa would be issued. "
5. One does not know whether the Consul-General agreed to this intriguing request of Rana. Even if he had done so, he would have noticed from the photograph in the passport of Headley that he was the same as Gilani-----unless Headley had changed his physical appearance when he took the new passport . Did Headley look different from Gilani?
6.The sister of Rahul Bhatt, the film actor, whom Headley had befriended in Mumbai, had said in an interview that the Headley whom he knew was different from the Headley whose picture was being shown on the TV. Rahul had been quoted as saying that the Headley whom he knew sported a pigtail.
7.According to the second report against Rana filed by the FBI in the court, he was in India in the third week of November, 2008. He flew from Mumbai to Dubai on a flight of the Emirates Airlines on November 21,2008. He flew from Dubai to China by the same Airlines on November , 24,2008, and from there returned to Chicago via Seoul on November 26,2008, by the Asiana Airlines.
8. There is no reason to believe that Headley was in India during this period. The last of his five pre-26/11 visits to India was in July,2008. It is not clear when did Rana arrive in India in November,2008, which places he visited and whom he met.It is also not clear which city he visited in China, what was the purpose of his visit to China and why his visit to China was so short.
9. Rana had admitted to the FBI that during his vist to Dubai from November 21 to 24, 2008, he met Maj. (retd) Abdur Rehman Hashim Syed alias Pasha who was in touch with Ilyas Kashmiri on behalf of Headley and that he came to know from Pasha about the impending terrorist attacks by the LET in Mumbai. Rana has sought to convey an impression that his visit (or visits?) to India had nothing to do with the 26/11 attacks and that he came to know of the planned attacks only from Pasha in Dubai a few days before the attacks.
10.At the same time, it is clear from the papers filed by the FBI in the court that Rana personally knew both the handling officers of Headley in Pakistan---- Maj (retd) Abdur Rehman of the 313 Brigade and an unidentified office-bearer of the LET. It is also clear that Rana was fully aware at least on September 7,2009, if not earlier, of the LET's plans for future attacks on four targets in India.
12. Both Headley and Rana are equally important for the the Indian and US investigators to reconstruct the 26/11 terrorist strikes in Mumbai, to identify the entire network set up by them in India and the US and neutralise the members of the network still remaining undetected and to unearth the future plans of the LET and the 313 Brigade. The National Investigation Agency of India and the FBI should set up a joint team of senior officers to monitor the investigation being made in the two countries and get a complete picture of the conspiracy.
13. While one can understand the reluctance of the FBI to give access to Indian investigators to Headley , who is an American national and an informant of the US Drug Enforcement Administration (DEA), they should have no such hesitation in the case of Rana, who is a Canadian national and against whom there is no suspicion of his working for any US agency. We should, therefore, press our request for access to Rana.
14. The official and media focus in India and the US has been mostly on Headley.The required attention is not being given to investigating the role of Rana. The NIA should get from the FBI authentic pictures of Headley as Headley and as Gilani and of Rana, disseminate them widely through the print and electronic media and request those who had met and interacted with them under whatever name to contact the NIA.( 23-12-09)
( 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 )
Sunday, December 20, 2009
HEADLEY'S CASE: IMPACT ON INDO-US INTELLIGENCE CO-OPERATION
B.RAMAN
Periodic misunderstandings and mutual bitterness in the relations between co-operating intelligence agencies are part of the game of intelligence.
2.The CIA's penetration of the Chennai office of the Research & Analysis Wing in the 1980s to collect intelligence about India's role in Sri Lanka, its penetration of the Intelligence Bureau in the 1990s to collect intelligence about its counter-intelligence set-up,its post-2001 penetration of the R&AW through Maj.Rabinder Singh, who was helped by the CIA to flee to the US to avoid being arrested and interrogated by the Indian counter-intelligence, and its post-2004 penetration of the National Security Council Secretariat (NSCS) through the mechanism of the Indo-US Cyber Security Forum created feelings of bad blood and bitterness in the relations between the intelligence communities of the two countries, but this did not last long. The intelligence communities of the two countries realised the importance of not allowing such instances of perceived betrayal of confidence to affect their long-term relationship, which has served the two countries well in the past and which would be necessary in the future if they have to strengthen their strategic relationship.
3. A permanent itch for penetration is ingrained in an intelligence professional. He or she keeps looking out all the time for opportunities for penetration. It is immaterial whether the set-up to be penetrated is that of a friend or a foe. The important question is whether the penetration would produce valuable intelligence and whether the resulting intelligence is of such value as to warrant risk-taking to the extent of temporary misunderstandings with the country whose set-up is penetrated.
4. Past instances of misunderstandings and unhappiness in counter-terrorism co-operation between the intelligence communities of India and the US date from the days of Khalistani terrorism in Punjab, the Mumbai blasts of March,1993 and the outbreak of Pakistan-sponsored terrorism in Jammu & Kashmir in 1989. The Indian intelligence community always felt and continues to feel that in matters relating to the complicity of the State of Pakistan in acts of terrorism in India, the co-operation of the US intelligence left much to be desired. This position shows no signs of changing even after the 26/11 terrorist strikes in Mumbai in which for the first time Pakistan-sponsored terrorists killed not only 141 Indian nationals, but also 25 foreigners---six of them US nationals and six others Jewish either with Israeli nationality or with dual Israeli-US nationality.
5. Despite this, there has been a qualitative change in the Indo-US co-operation in counter-terrorism since 9/11. This change has been particularly noticeable in four matters. Firstly, the US has recognised that some of the terrorist organisations operating in India such as the Lashkar-e-Toiba (LET) are largely, if not wholly, Pakistani organisations and not Kashmiri organisations as claimed by Pakistan. Secondly, examples of advance sharing of preventive intelligence are increasing. An example was the reported alerts from the US intelligence in September,2008, about the plans of the LET for a sea-borne attack on some hotels in Mumbai. Thirdly, there is a greater readiness on the part of the US to place its forensic resources at the disposal of the Indian investigators to facillitate their investigation into acts of terrorism. This was clearly seen after the 26/11 attacks. Fourthly, there is a greater willingness on the part of the Federal Bureau of Investigation (FBI) to assist the Indian investigators in the prosecution of the terrorists. Before 26/11, the FBI was reluctant to allow its experts to testify before Indian courts. After 26/11, it allowed its experts to testify in Indian courts through video-conferencing.
6. At a time when the co-operation was developing in a positive and mutually beneficial direction, some suspicion has crept in the relations between the intelligence communities of the two countries following the discovery of the Chicago cell of the LET consisting of David Coleman Headley alias Daood Gilani and Tahawwur Hussain Rana and their arrest by the FBI. Even if it is true----one will never be able to find that out definitively--- that Headley was a penetration agent of the US intelligence to monitor the activities of the LET, the Indian intelligence should have no grouse against its US counterpart on that account. Since the US agencies fear that any future terrorist attack in the US homeland would originate either from Pakistan or from the Pakistani diaspora abroad, their efforts to penetrate organisations in Pakistan or of Pakistani origin in order to collect preventive intelligence not only about terrorists but also their links with the narcotics world are understandable. Placed in a similar situation, that is what the Indian intelligence would be doing.
7. After 9/11, there has been considerable criticism of intelligence agencies all over the world---including in India and the US---for their inadequacies in the field of human intelligence (HUMINT).The only effective way of improving the collection of HUMINT is through more and better penetration operations.
8. In the case of the Headley operation, there have been failures on the part of the intelligence communities of both the countries. In the US, the failure is one of effective supervision. It was an operation which has created an embarrassment for the US because the US agencies failed to factor into their tradecraft the danger of the LET playing Headley back on the US and using him for its operations in India and the West.
9. One would find it difficult to accept that the US agencies were aware of the entire conspiracy relating to 26/11 through Headley, but shared the information only selectively with the Indian intelligence. The allegation that has been made in India is that the US intelligence shared with India only those portions of the intelligence which would not have endangered their penetration operation and refrained from sharing those portions which could have endangered it. Theoretically, this is possible, but really not. The US agencies would have been anxious to protect the lives of their nationals and those of Israel and NATO countries. They would not have consciously sacrificed their lives in order to safeguard their links with Headley. Due to the poor control exercised by the US handling officers over Headley, he was more loyal to the LET than to the US agency handling him and was not telling everything to his US handling officers.
10. In the case of the Indian agencies and the Ministry of External Affairs, the failures have been relating to the apparently inefficient scrutiny of his visa application by the Indian Consulate-General in Chicago and the failure of the Indian intelligence and investigative agencies and the airport immigration to suspect even once his bona fides. According to the FBI, after each of his five visits to India, Headley went to Pakistan to hand over to the LET the video-recordings made by him in India. It is amazing that none of the Indian officials noticed his frequent toing and froing between India and Pakistan and questioned him on that.
11. There are only three ways of explaining this.
Either, the Indian immigration at the airport was negligent in the scrutiny of his passport;
or he was using two passports----his old pre-2006 passport as Gilani for his travels to Pakistan and his new passport as Headley for his travels to India;
Or, the ISI was helping the LET by allowing him to enter and exit from Pakistan without any entry in his passport.
12. The present misunderstanding between the intelligence professionals of the two countries has arisen from the alleged reluctance of the FBI to give independent access to Headley to Indian investigators for interrogation and from the feeling right or wrong that that the FBI has not been as forthcoming as it ought to have been and has not shared with the indian investigators all the information that needed to be shared.
13. Continued breast-beating by the Indian professionals about the perceived reluctance of the FBI to co-operate fully is not going to help matters. There are two aspects to the L-affaire Headley. The first relates to the reconstruction of the 26/11 attacks. The second relates to the prevention of future attacks.
14. Indian and US professionals must remember that Headley may be only the tip of the LET iceberg in the US as well as India.It is in the common interest of the two countries to identify his network of contacts and sleeper cells, if any, in the two countries. It is significant and worrying that neither the FBI in the US nor the Central Investigation Agency in India has so far been able to identify and arrest any other contact of Headley in their respective countries except Rana of Chicago. This gives rise to a strong suspicion that while he has been taliking freely to the FBI about the past, he has not been forthcoming about the future and about the identities of LET cells in the US and India, which could organise future attacks.
15. This is an area where the intelligence professionals of the two countries can and ought to co-operate despite the Indian unhappiness about the past. The Indian unhappiness about the past is legitimate and understandable, but this should not be allowed to come in the way of joint efforts to prevent future attacks. ( 21-12-09)
( 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)
Periodic misunderstandings and mutual bitterness in the relations between co-operating intelligence agencies are part of the game of intelligence.
2.The CIA's penetration of the Chennai office of the Research & Analysis Wing in the 1980s to collect intelligence about India's role in Sri Lanka, its penetration of the Intelligence Bureau in the 1990s to collect intelligence about its counter-intelligence set-up,its post-2001 penetration of the R&AW through Maj.Rabinder Singh, who was helped by the CIA to flee to the US to avoid being arrested and interrogated by the Indian counter-intelligence, and its post-2004 penetration of the National Security Council Secretariat (NSCS) through the mechanism of the Indo-US Cyber Security Forum created feelings of bad blood and bitterness in the relations between the intelligence communities of the two countries, but this did not last long. The intelligence communities of the two countries realised the importance of not allowing such instances of perceived betrayal of confidence to affect their long-term relationship, which has served the two countries well in the past and which would be necessary in the future if they have to strengthen their strategic relationship.
3. A permanent itch for penetration is ingrained in an intelligence professional. He or she keeps looking out all the time for opportunities for penetration. It is immaterial whether the set-up to be penetrated is that of a friend or a foe. The important question is whether the penetration would produce valuable intelligence and whether the resulting intelligence is of such value as to warrant risk-taking to the extent of temporary misunderstandings with the country whose set-up is penetrated.
4. Past instances of misunderstandings and unhappiness in counter-terrorism co-operation between the intelligence communities of India and the US date from the days of Khalistani terrorism in Punjab, the Mumbai blasts of March,1993 and the outbreak of Pakistan-sponsored terrorism in Jammu & Kashmir in 1989. The Indian intelligence community always felt and continues to feel that in matters relating to the complicity of the State of Pakistan in acts of terrorism in India, the co-operation of the US intelligence left much to be desired. This position shows no signs of changing even after the 26/11 terrorist strikes in Mumbai in which for the first time Pakistan-sponsored terrorists killed not only 141 Indian nationals, but also 25 foreigners---six of them US nationals and six others Jewish either with Israeli nationality or with dual Israeli-US nationality.
5. Despite this, there has been a qualitative change in the Indo-US co-operation in counter-terrorism since 9/11. This change has been particularly noticeable in four matters. Firstly, the US has recognised that some of the terrorist organisations operating in India such as the Lashkar-e-Toiba (LET) are largely, if not wholly, Pakistani organisations and not Kashmiri organisations as claimed by Pakistan. Secondly, examples of advance sharing of preventive intelligence are increasing. An example was the reported alerts from the US intelligence in September,2008, about the plans of the LET for a sea-borne attack on some hotels in Mumbai. Thirdly, there is a greater readiness on the part of the US to place its forensic resources at the disposal of the Indian investigators to facillitate their investigation into acts of terrorism. This was clearly seen after the 26/11 attacks. Fourthly, there is a greater willingness on the part of the Federal Bureau of Investigation (FBI) to assist the Indian investigators in the prosecution of the terrorists. Before 26/11, the FBI was reluctant to allow its experts to testify before Indian courts. After 26/11, it allowed its experts to testify in Indian courts through video-conferencing.
6. At a time when the co-operation was developing in a positive and mutually beneficial direction, some suspicion has crept in the relations between the intelligence communities of the two countries following the discovery of the Chicago cell of the LET consisting of David Coleman Headley alias Daood Gilani and Tahawwur Hussain Rana and their arrest by the FBI. Even if it is true----one will never be able to find that out definitively--- that Headley was a penetration agent of the US intelligence to monitor the activities of the LET, the Indian intelligence should have no grouse against its US counterpart on that account. Since the US agencies fear that any future terrorist attack in the US homeland would originate either from Pakistan or from the Pakistani diaspora abroad, their efforts to penetrate organisations in Pakistan or of Pakistani origin in order to collect preventive intelligence not only about terrorists but also their links with the narcotics world are understandable. Placed in a similar situation, that is what the Indian intelligence would be doing.
7. After 9/11, there has been considerable criticism of intelligence agencies all over the world---including in India and the US---for their inadequacies in the field of human intelligence (HUMINT).The only effective way of improving the collection of HUMINT is through more and better penetration operations.
8. In the case of the Headley operation, there have been failures on the part of the intelligence communities of both the countries. In the US, the failure is one of effective supervision. It was an operation which has created an embarrassment for the US because the US agencies failed to factor into their tradecraft the danger of the LET playing Headley back on the US and using him for its operations in India and the West.
9. One would find it difficult to accept that the US agencies were aware of the entire conspiracy relating to 26/11 through Headley, but shared the information only selectively with the Indian intelligence. The allegation that has been made in India is that the US intelligence shared with India only those portions of the intelligence which would not have endangered their penetration operation and refrained from sharing those portions which could have endangered it. Theoretically, this is possible, but really not. The US agencies would have been anxious to protect the lives of their nationals and those of Israel and NATO countries. They would not have consciously sacrificed their lives in order to safeguard their links with Headley. Due to the poor control exercised by the US handling officers over Headley, he was more loyal to the LET than to the US agency handling him and was not telling everything to his US handling officers.
10. In the case of the Indian agencies and the Ministry of External Affairs, the failures have been relating to the apparently inefficient scrutiny of his visa application by the Indian Consulate-General in Chicago and the failure of the Indian intelligence and investigative agencies and the airport immigration to suspect even once his bona fides. According to the FBI, after each of his five visits to India, Headley went to Pakistan to hand over to the LET the video-recordings made by him in India. It is amazing that none of the Indian officials noticed his frequent toing and froing between India and Pakistan and questioned him on that.
11. There are only three ways of explaining this.
Either, the Indian immigration at the airport was negligent in the scrutiny of his passport;
or he was using two passports----his old pre-2006 passport as Gilani for his travels to Pakistan and his new passport as Headley for his travels to India;
Or, the ISI was helping the LET by allowing him to enter and exit from Pakistan without any entry in his passport.
12. The present misunderstanding between the intelligence professionals of the two countries has arisen from the alleged reluctance of the FBI to give independent access to Headley to Indian investigators for interrogation and from the feeling right or wrong that that the FBI has not been as forthcoming as it ought to have been and has not shared with the indian investigators all the information that needed to be shared.
13. Continued breast-beating by the Indian professionals about the perceived reluctance of the FBI to co-operate fully is not going to help matters. There are two aspects to the L-affaire Headley. The first relates to the reconstruction of the 26/11 attacks. The second relates to the prevention of future attacks.
14. Indian and US professionals must remember that Headley may be only the tip of the LET iceberg in the US as well as India.It is in the common interest of the two countries to identify his network of contacts and sleeper cells, if any, in the two countries. It is significant and worrying that neither the FBI in the US nor the Central Investigation Agency in India has so far been able to identify and arrest any other contact of Headley in their respective countries except Rana of Chicago. This gives rise to a strong suspicion that while he has been taliking freely to the FBI about the past, he has not been forthcoming about the future and about the identities of LET cells in the US and India, which could organise future attacks.
15. This is an area where the intelligence professionals of the two countries can and ought to co-operate despite the Indian unhappiness about the past. The Indian unhappiness about the past is legitimate and understandable, but this should not be allowed to come in the way of joint efforts to prevent future attacks. ( 21-12-09)
( 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)
HEADLEY'S CASE: INDIA AS A SOFT STATE
B.RAMAN
In protecting its national interests and national security, India is perceived as a soft state not only by large sections of its population, but also by intelligence and security professionals in many countries of the world. Many Governmental and non-Governmental professionals in different countries of the world strongly believe that India has not been able to deal effectively with the problem of terrorism of foreign origin because of the lack of security consciousness in large sections of our administration and political class and the permissive nature of our administration. Terrorists such as David Coleman Headley, mafia leaders such as Dawood Ibrahim and intelligence agencies such as Pakistan's Inter-Services Intelligence (ISI) are aware of this and take full advantage of it.
2. During the investigation into the Mumbai blasts of March,1993, orchestrated by the ISI with the help of Dawood Ibrahim, it came to notice through intercepted telephone conversations that the members of Dawood's gang used to get logistics help for their stay during their visits to Delhi through the Personal Assistant to a senior member of the Cabinet of Narasimha Rao, the then Prime Minister. This PA had helped an associate of Dawood stay in the New Delhi guest house of a public sector corporation.
3. Another glaring example of the way we function in national security related matters relates to the air dropping of arms and ammunition to some extremists or terrorists by an aircraft piloted by a British pilot in December,1995, in the Purulia area. The moment this pilot was approached by the unidentified extremists for his help in the air drop, he immediately informed the British Defence Ministry through the headquarters of the Royal Air Force. After consulting the Indian authorities, the British asked the pilot to keep passing on information about the air drop to enable the Indian authorities to lay a trap. He reportedly did, but the Indian authorities botched up the operation so badly that the air drop could not be prevented. The extremists managed to collect the air-dropped arms and ammunition and disappear. Till today, we have not been able to identify them though the crew of the aircraft were arrested and prosecuted.
4. The Headley case is yet another glaring example of the permissive nature of our Administration. It will only confirm the already widely prevalent impression in the professional world that India is a soft state. The massacre of 166 persons--- 141 of them Indian citizens--- by the 10 terrorists of the Lashkar-e-Toiba (LET) between 26 and 29 November of 2008 was the culmination of a conspiracy, which had two places of origin---- the Pakistan end from where the actual executioners were selected, trained and launched and the Chicago end from where the collection of all pre-attack information which made the terrorist attack possible was orchestrated by Headley, an American citizen of Pakistani origin, who used to live and work in Philadelphia as a Muslim under his original name of Daood Gilani and shifted to Chicago and started living there under the changed Christian-sounding name of David Coleman Headley.He shifted from Philadelphia to Chicago in February,2006, after getting his name changed before a Philadelphia court and applied in the Indian Consulate in Chicago for a visa on June 30,2006.
5. When a person changes his name and applies for a new passport, his new passport is supposed to carry an endorsement to the effect that "this person previously travelled under the name with the passport No ". If the Indian Consulate-General in Chicago had carefully scrutinised his passport and his visa application as they were supposed to under the rules, they might have noticed the following things: Firstly, he had changed his residence from Philadelphia to Chicago just before applying for an Indian visa. Secondly, he had changed his name and obtained a new passport just before applying for an Indian visa. Thirdly, his father was a Muslim with a Muslim-sounding name even though the visa applicant himself had a Christian-sounding name.
6. This should have immediately resulted in a personal interview with the applicant in order to question him on these points. We know how many of the applicants for foreign visas before missions in India are called for a personal interview and grilled because of suspicious circumstances coming to notice during the scrutiny of their passports.
7. Anyone who changes his name in order to obtain a new passport is immediately viewed as a suspect by the consular and immigration authorities of all countries of the world. Hard States , which give no quarters to terrorist suspects, have two specific columns in their papers which are to be filled by the applicants: Question No.1: Have you ever travelled by another passport? If so, give particulars. Question No.2: Have you ever travelled under a different name? If so, give particulars. The moment the answers to these questions create any suspicion he has to face an interview.
8. It is immaterial whether Headley is a Pakistani citizen or an American citizen born in Pakistan or an American citizen born in the US. The most incriminating evidence at the very starting point of this conspiracy is the fact that he changed his name in order to conceal his Muslim background. This could have been found out only in Chicago, the starting point of his journey, and not in India after his arrival.
9. Even if he is an American citizen born in the US that should not prevent us from questioning him. We saw the way Shah Rukh Khan, the film actor, was questioned for nearly an hour by the US immigration. The fact that he is an honoured Indian citizen and that the US has close relations with India did not inhibit them from questioning him.
10.All applicants for visas---tourist or business--- are required to submit certain documentation along with their passport. These include a to and fro air ticket, particulars of the cities he intended visiting and the places where he will be staying and a letter of sponsorship from someone in India knowing him---whether he be a friend or a relative or a corporate house. Without this documentation, no visa can be given unless the applicant is personally known to the Consul-General and he is in a position to vouch for his reliability.
11. The scrutiny of the additional documentation is more strict when the applicant applies for a business visa.
12. The Chicago end of the conspiracy, which led to the massacre of 166 persons by the terrorists, started on the day Headley walked into the Consulate-General with a changed name to conceal his Muslim identity and a new passport with which he had not travelled anywhere before and applied for a business visa. All the papers relating to his visa become important material evidence to reconstruct this conspiracy. The moment the FBI informed the Government of India about the arrest of Headley and his travels in October the MEA should have asked the Consulate-General to put all his papers in a sealed cover and send them to Delhi for scrutiny by the investigating agency. It is surprising this was not done for nearly two months.
13. We are now given an unconvincing story about the difficulties of retrieving applications from the archives of Indian missions abroad. I had worked as a visa officer abroad for eight years. It should not take more than a few minutes to take out the papers and send them to Delhi. You take out the visa register, find out the number under which the visa was issued to him and take out the application and other papers with the help of that number.
14. Apart from investigating the circumstances under which the visa application of Headley was processed, the relatives of those killed by the terrorists should consider suing the MEA for acts of alleged negligence which enabled Headley to come to India and set in motion the conspiracy. It was reported that after the 1988 Lockerbie tragedy, in which a Pan-Am aircraft was blown up by the terrorists over Europe, relatives of some of those killed sued the State Department for perceived acts of omission and commission, which resulted in the deaths of their relatives. This had a salutary effect.
15. It is time for us to have such victim activism in India. ( 20-12-09)
( 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 )
In protecting its national interests and national security, India is perceived as a soft state not only by large sections of its population, but also by intelligence and security professionals in many countries of the world. Many Governmental and non-Governmental professionals in different countries of the world strongly believe that India has not been able to deal effectively with the problem of terrorism of foreign origin because of the lack of security consciousness in large sections of our administration and political class and the permissive nature of our administration. Terrorists such as David Coleman Headley, mafia leaders such as Dawood Ibrahim and intelligence agencies such as Pakistan's Inter-Services Intelligence (ISI) are aware of this and take full advantage of it.
2. During the investigation into the Mumbai blasts of March,1993, orchestrated by the ISI with the help of Dawood Ibrahim, it came to notice through intercepted telephone conversations that the members of Dawood's gang used to get logistics help for their stay during their visits to Delhi through the Personal Assistant to a senior member of the Cabinet of Narasimha Rao, the then Prime Minister. This PA had helped an associate of Dawood stay in the New Delhi guest house of a public sector corporation.
3. Another glaring example of the way we function in national security related matters relates to the air dropping of arms and ammunition to some extremists or terrorists by an aircraft piloted by a British pilot in December,1995, in the Purulia area. The moment this pilot was approached by the unidentified extremists for his help in the air drop, he immediately informed the British Defence Ministry through the headquarters of the Royal Air Force. After consulting the Indian authorities, the British asked the pilot to keep passing on information about the air drop to enable the Indian authorities to lay a trap. He reportedly did, but the Indian authorities botched up the operation so badly that the air drop could not be prevented. The extremists managed to collect the air-dropped arms and ammunition and disappear. Till today, we have not been able to identify them though the crew of the aircraft were arrested and prosecuted.
4. The Headley case is yet another glaring example of the permissive nature of our Administration. It will only confirm the already widely prevalent impression in the professional world that India is a soft state. The massacre of 166 persons--- 141 of them Indian citizens--- by the 10 terrorists of the Lashkar-e-Toiba (LET) between 26 and 29 November of 2008 was the culmination of a conspiracy, which had two places of origin---- the Pakistan end from where the actual executioners were selected, trained and launched and the Chicago end from where the collection of all pre-attack information which made the terrorist attack possible was orchestrated by Headley, an American citizen of Pakistani origin, who used to live and work in Philadelphia as a Muslim under his original name of Daood Gilani and shifted to Chicago and started living there under the changed Christian-sounding name of David Coleman Headley.He shifted from Philadelphia to Chicago in February,2006, after getting his name changed before a Philadelphia court and applied in the Indian Consulate in Chicago for a visa on June 30,2006.
5. When a person changes his name and applies for a new passport, his new passport is supposed to carry an endorsement to the effect that "this person previously travelled under the name with the passport No ". If the Indian Consulate-General in Chicago had carefully scrutinised his passport and his visa application as they were supposed to under the rules, they might have noticed the following things: Firstly, he had changed his residence from Philadelphia to Chicago just before applying for an Indian visa. Secondly, he had changed his name and obtained a new passport just before applying for an Indian visa. Thirdly, his father was a Muslim with a Muslim-sounding name even though the visa applicant himself had a Christian-sounding name.
6. This should have immediately resulted in a personal interview with the applicant in order to question him on these points. We know how many of the applicants for foreign visas before missions in India are called for a personal interview and grilled because of suspicious circumstances coming to notice during the scrutiny of their passports.
7. Anyone who changes his name in order to obtain a new passport is immediately viewed as a suspect by the consular and immigration authorities of all countries of the world. Hard States , which give no quarters to terrorist suspects, have two specific columns in their papers which are to be filled by the applicants: Question No.1: Have you ever travelled by another passport? If so, give particulars. Question No.2: Have you ever travelled under a different name? If so, give particulars. The moment the answers to these questions create any suspicion he has to face an interview.
8. It is immaterial whether Headley is a Pakistani citizen or an American citizen born in Pakistan or an American citizen born in the US. The most incriminating evidence at the very starting point of this conspiracy is the fact that he changed his name in order to conceal his Muslim background. This could have been found out only in Chicago, the starting point of his journey, and not in India after his arrival.
9. Even if he is an American citizen born in the US that should not prevent us from questioning him. We saw the way Shah Rukh Khan, the film actor, was questioned for nearly an hour by the US immigration. The fact that he is an honoured Indian citizen and that the US has close relations with India did not inhibit them from questioning him.
10.All applicants for visas---tourist or business--- are required to submit certain documentation along with their passport. These include a to and fro air ticket, particulars of the cities he intended visiting and the places where he will be staying and a letter of sponsorship from someone in India knowing him---whether he be a friend or a relative or a corporate house. Without this documentation, no visa can be given unless the applicant is personally known to the Consul-General and he is in a position to vouch for his reliability.
11. The scrutiny of the additional documentation is more strict when the applicant applies for a business visa.
12. The Chicago end of the conspiracy, which led to the massacre of 166 persons by the terrorists, started on the day Headley walked into the Consulate-General with a changed name to conceal his Muslim identity and a new passport with which he had not travelled anywhere before and applied for a business visa. All the papers relating to his visa become important material evidence to reconstruct this conspiracy. The moment the FBI informed the Government of India about the arrest of Headley and his travels in October the MEA should have asked the Consulate-General to put all his papers in a sealed cover and send them to Delhi for scrutiny by the investigating agency. It is surprising this was not done for nearly two months.
13. We are now given an unconvincing story about the difficulties of retrieving applications from the archives of Indian missions abroad. I had worked as a visa officer abroad for eight years. It should not take more than a few minutes to take out the papers and send them to Delhi. You take out the visa register, find out the number under which the visa was issued to him and take out the application and other papers with the help of that number.
14. Apart from investigating the circumstances under which the visa application of Headley was processed, the relatives of those killed by the terrorists should consider suing the MEA for acts of alleged negligence which enabled Headley to come to India and set in motion the conspiracy. It was reported that after the 1988 Lockerbie tragedy, in which a Pan-Am aircraft was blown up by the terrorists over Europe, relatives of some of those killed sued the State Department for perceived acts of omission and commission, which resulted in the deaths of their relatives. This had a salutary effect.
15. It is time for us to have such victim activism in India. ( 20-12-09)
( 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 )
Saturday, December 19, 2009
Chinese Economy Monitor--- Note No 9: REAL ESTATE TIGER & HIDDEN CREDITS ICEBERG
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 ninth in the series)
MY ASSESSMENT
If official Chinese statistics are to be believed, the Chinese economy is showing signs of coming out of the down-turn into which it has got consequent upon the global economic meltdown of 2008 and 2009. The Chinese authorities believe that the worst in the export sector will be over in 2010 and the unemployment situation which they faced consequent upon the closure of a large number of export-dependent industries, has been satisfactorily managed. New jobs are once again being created by boosting the domestic demand through the Government’s stimulus package and many of those who lost their jobs due to the decline in exports have managed to find new jobs. The widely-predicted social tensions due to the loss of millions of jobs have been belied. The Chinese people have taken in their stride the economic difficulties of the last two years. A lot of credit should go to President Hu Jintao and Prime Minister Wen Jiabo for explaining the economic difficulties to the people through frequent touring in the affected parts of the country and the measures taken by the Government for alleviating the problems of the people. The warnings of Cassandras about a looming social explosion in China due to the economic difficulties have proved incorrect. At the same time, objective analysts---- Chinese as well as foreigners---- continue to be concerned over the inherent strength of the economy and over what they see as the lack of transparency in certain economic matters, which the Chinese authorities see as sensitive. One area of concern is the real estate sector. Many fear that there is a bubble developing which may result in an unpredicted explosion. The difficulties increasingly faced by the people in buying houses could result in large-scale social tensions. In a surprisingly forthright article on the subject, the “Global Times” of the party-owned “People’s Daily” group drew attention to the looming danger of a real estate bubble. How sensitive this subject has become for the Government would be evident from the fact that the Government allegedly ordered the discontinuance of a series of TV reportage on this subject, which was attracting a large number of viewers. Not many observers are convinced by the claims of the Government about the health of the Chinese banking sector. They suspect that there is an iceberg of hidden credits against which the economy might collide one day. Another example of disbelief in the Government claims relates to the automobile sector. The Government claims that there has been a dramatic increase in the domestic purchase of automobiles thereby reducing the dependence of the sector on exports. There is no reason to doubt the official statistics about the surge in the domestic sales of cars. These figures are corroborated by industry sources. But the skepticism arises from the fact that the increase in the domestic sales of automobiles has not been accompanied by a noticeable increase in the domestic consumption of petrol and diesel.
REAL ESTATE NERVOUSNESS
2.Mainland stocks fell for a fourth day on December 18,2009, the longest losing streak since August, due to concerns that the Government might step up measures to curb property speculation and new share sales will divert funds from existing equities. The Poly Real Estate Group Co slumped for a ninth day after the Government increased down payments on land purchases. The China Life Insurance Co, the nation's biggest insurer, dropped 2.6 percent to a two-month low. Initial public offerings on the ChiNext board have drawn almost 900 billion yuan in subscriptions, the China Securities Journal said on December 18."It looks like the Government is using new share sales as a way to avoid an asset bubble on the stock market," said Zhang Xiuqi, a Shanghai-based strategist at the China International Fund Management Co, which oversees about $10.2 billion. "The crackdown on the property industry is tougher than was previously expected." The Shanghai Composite Index fell 65.19, or 2.1 percent, to 3,113.89 at the close, the lowest since November 27. It dropped by 4.1 percent this week, a second weekly loss. The CSI 300 Index declined by 2.5 percent to 3,391.74. The Shanghai gauge had jumped by 71 percent this year as Government spending and a credit boom helped the nation's economic growth recover from its steepest slump in more than a decade. The Poly Real Estate, China's second-largest developer by market value, fell 7.5 percent to 21.88 yuan, capping a nine-day, 16 percent slump. Gemdale Corp, the fourth largest, lost 7.8 percent to 13.20 yuan. The Shanghai Shimao Co, a property developer controlled by billionaire Xu Rongmao, declined by 4.8 percent to 15.77 yuan. The Government set the down payment requirement for land purchases to at least 50 percent of the total price. The new down payment level is an increase from earlier levels, said Zhou Hu, a real estate analyst at Bohai Securities Co in Beijing. An index tracking 33 property stocks traded on the Shanghai Composite tumbled 5.4 percent , its biggest loss since Aug 31. Property stocks have slumped after the government said it would target "excessive" growth in property prices in some cities. That follows the Cabinet's statement last week that it will re-impose a sales tax on homes sold within five years, after cutting the period to two years in January. The country's property and stock markets are a "bubble" that will burst when inflation accelerates in 2011, former Morgan Stanley chief Asian economist Andy Xie said.
---“China Daily” of December 19,2009
HIDDEN CREDIT RISKS
3.Financial stocks also declined after the Fitch Ratings said Chinese banks' capital strength is likely to be more "strained" than it appears as lenders increasingly use off- balance sheet transactions to free up room for further loan growth. The growing amount of unreported loan transactions, including re-packaging loans into wealth management products to sell to investors and the outright sale of loans to other financial institutions, represent a "growing pool of hidden credit risk" and may lead to downward revisions for some Chinese banks in 2010 and 2011, Fitch said in its latest report.
---“China Daily” of December 19,2009.
RIDING THE REAL ESTATE TIGER
4.In an article on the concerns over the state of the real estate market published on December 16,2009, the “Global Times” of the “People’s Daily” group wrote as follows: “With house prices skyrocketing in China's cities, urban residents are finding themselves stripped of purchasing power, causing concern of social unrest and prompting government measures to rein in prices, curb speculation and demand the construction of more low-cost homes. He Keng, an official with the Financial and Economic Committee of the National People's Congress, complained about the growing housing bubble in a CCTV interview over the weekend. "If even a vice minister-level official like me can't afford a decent home, it will be a huge problem for most ordinary people," he said. For the majority of the wage-earning public, the soaring prices have taken the dream of buying their own home further out of reach. It also explains why a TV series called "Snail House," which reflects people's difficulty in affording a house, has been an instant hit. It has also become controversial, as it was called to a halt after only 10 episodes broadcast by Beijing-based BTV, reportedly due to pressure from real estate developers. Noticing the smoldering public discontent, the central and local governments have been cautiously making small moves, trying to prevent the danger of an outpouring of anger that may jolt society as a whole. Shanghai Mayor Han Zheng said last week that house prices in the municipality are rising too fast and could eventually harm the interests of the Shanghai people. In southern China, the Guangzhou government has planned to release 80 square kilometers of land onto the market in order to curb soaring prices, local media reported Monday. An executive meeting of the State Council, chaired by Premier Wen Jiabao, announced on Monday that the central government would rein in the overheated momentum of housing prices by increasing the supply of low-cost homes, curbing speculation and strengthening the supervision of the real estate market. The stock market in Shanghai and Shenzhen saw real estate-related stocks falling across the board, some down 6-8 percent at closing Tuesday. Nanfang Daily reported Tuesday that major institutional investors dumped a net 2.9 billion yuan ($424.6 million) worth of real estate stocks on the yuan-denominated A-share market last week, representing over 11 percent of the net fund outflow of the entire market, the highest among all the sectors. However, analysts are not optimistic about the Government's determination to take steps to control housing prices, saying that the Government is at a dilemma in the face of growing social discontent and a recovering economy boosted largely by the real estate market and related industries. "The Government is riding on a tiger," a People's Daily senior editor, who asked to remain anonymous, told the Global Times. "It's dangerous to keep on riding, and even more risky to get off." "Restraining home prices from soaring too quickly in recent months is the government's intention," Chen Guoqiang, director of the real estate research center at Peking University, said yesterday. "But the government doesn't want the commercial real estate sector to fluctuate too much in 2010 because it needs to keep the real estate market booming to ensure the country's economy runs well," he said. Tian Yun, vice president of the China Macro Economics Institute, said, "the latest measures will be ineffective." "The current high prices are pushed by joint efforts by the central government and local governments," he explained. "State-owned enterprises have become the hands that are pushing the high prices, and local governments depend on high property prices to assure local expenditure," he said. Developers also prefer not to develop low-price housing, and how the government will execute its relevant policies remains a question, Yang said. Yi Xianrong, a researcher at the Chinese Academy of Social Sciences, confirmed Tuesday that tightening credit lines would be the most effective way to curb the housing market, because the soaring home prices at present are caused by lax credit policies. Experts said the State Council's action guidelines announced Monday show its intent to restrict the credit policies for mortgage loans so as to curb speculation. "From what the guidelines indicate, the buyers who want to buy their second or third houses need to pay a down payment of no less than 40 percent of the total value," Chen Guoqiang said yesterday. "This means that profiting from fast re-sales will be under control." The Central Government also announced on December 9 that people must now keep their houses for five years before they can resell them, a change from the previous minimum of two years. Zhong Wei, director of the Financial Research Center at Beijing Normal University, said the growth of the real estate market is expected to slow down next year, with total sales of 3.3 trillion yuan, compared with this year's 3.6 trillion.”
-----“ Global Times” of December 16,2009
NEW JOBS
5.China created 9.4 million new jobs in urban areas in the first ten months, the Ministry of Human Resource and Social Security said on December 12. The number represented 104 percent of the whole year target for 2009, the Ministry said. Around 4.4 million laid-off workers were re-employed in the January-October period, or 88 percent of the 5-million goal for the whole year.
----- Xinhua News Agency of December 12,2009.
FOREIGN TRADE LOOKS UP
6.China's foreign trade is projected to grow 15 percent next year, according to a report released by the China Institute for WTO Studies on December 18. The report forecasts imports to increase by 15 percent and exports up 13 percent. With the external demand improving and the global economic recovery gaining momentum, "the declining trend of China's exports would come to an end next year," the report says.The Government stimulus package would boost imports through enhancing domestic demand, while the growing competitiveness of Chinese enterprises in the international market would increase exports, said Zhang Hanlin, head of the institute based in the University of International Business and Economics. Net exports would contribute 0.3 percent to China's GDP growth next year, said Zhang, compared with a minus 4.4 percent this year as predicted by the World Bank in a recent report.
---- Xinhua News Agency of December 18,2009.
PROTECTIONISM AGAINST CHINA
7.In the first 11 months this year, China's imports and exports totaled US$1.96 trillion, down 17.5 percent compared with the corresponding period last year, according to the General Administration of Customs. Exports dropped 1.2 percent year on year in November, but were up 2.6 percent from October, the fifth consecutive monthly increase. And imports rose 26.7 percent from year on year. However, the China Institute for WTO Studies report also warns of rising protectionism against Chinese products in 2010. Faced with worsening unemployment situation and shrinking market share, some countries tended to make China a scapegoat, said Zhang. "China will suffer from more trade frictions in the years to come." The report says, in the first nine months this year, 19 countries have launched 88 trade remedy investigations against China, involving 10 billion dollars, a year-on-year rise of 125 percent. China suffered 14 trade remedy investigations from the United States, involving US$5.84 billion, or 639 percent more than that of the corresponding period last year. Some countries might resort to new remedy measures which are often in disguised forms but with more destructive effects, Zhang said. ------ Xinhua News Agency of December 18,2009
TRADE IMPROVES IN NOVEMBER
8.China's imports and exports rose 9.8 percent in November year on year, ending a 12-month decline, to stand at 208.2 billion U.S. dollars, the General Administration of Customs announced on December 11. The trade surplus was 177.96 billion dollars in the January-November period, down 30.6 percent from a year earlier. Exports stood at 113.65 billion dollars in November, down 1.2 percent from a year earlier, but were up 2.6 percent from October for the fifth consecutive monthly increase. Imports rose 26.7 percent in November to 94.6 billion dollars. From January to November, the country's imports and exports totaled 1.96 trillion dollars, down 17.5 percent compared with the corresponding period last year. Imports for the first 11 months were 893.02 billion dollars, down 15.8 percent year on year; exports dropped 18.8 percent to 1.07 trillion dollars. The EU remained China's biggest trading partner, though bilateral trade declined 17 percent to 326.27 billion dollars in value in the first 11 months; the United States was second with trade at 266.54 billion dollars, down 13.4 percent; Japan followed with trade down 17.4 percent to 203.33 billion dollars. ----- Xinhua News Agency of December 11,2009
INDUSTRIAL OUTPUT UP
9.China's industrial output growth accelerated to 19.2 percent in November year on year, following a 16.1-percent increase in October, data from the National Bureau of Statistics showed on December 11. The figure increased 10.3 percent year on year over first 11 months this year, 0.9 percentage points higher than that of the first 10 months, said the NBS. Production of heavy industries was up 22.2 percent in November, and that for the light industries rose 12.6 percent. China's continued economic growth had brought the acceleration in industrial growth, said Sheng Laiyun, a spokesman with NBS. He also attributed the rapid growth to the sharp industrial decline in the corresponding period last year. In November 2008, China's industrial output growth slowed to 5.4 percent year on year. ---Xinhua News Agency of December 11,2009.
RETAIL SALES UP---DRAMATIC SURGE IN DOMESTIC AUTO SALES
10.China's retail sales rose 15.8 percent year on year to 1.13 trillion yuan (166 billion U.S. dollars) in November, the National Bureau of Statistics (NBS) announced on December 11. The rise was 5 percentage points lower than that of a year earlier. It was also down 0.4 percentage points from that in October, the NBS data showed. In the first 11 months, total retail sales topped 11.27 trillion yuan, up 15.3 percent year on year. The rate was 6.6 percentage points down from that of the corresponding period last year, but unchanged from the first 10 months this year. In November, urban retail sales rose 16.5 percent year on year to 760.6 billion yuan, while those in counties and sub-county areas were up 14.4 percent to 373.3 billion yuan. Retail sales grew 14.5 percent year on year for grain and edible oils in November, 24.9 percent for household electric appliances, and 61.5 percent for autos. To stimulate domestic consumption, the government put into place a series of measures, including tax cuts for auto and property purchases and introduced subsidies for home appliances in rural areas. In November, auto sales reached 1.34 million units, bringing the total sales from January to November to 12.23 million, up 42.39 percent year on year, according to the China Association of Automobile Manufacturers. -----Xinhua News Agency of December 11,2009
FIRST PHASE OF CENTRAL ASIAN GAS PIPELINE COMMISSIONED
11.President Hu Jintao commissioned on December 14,2009,a landmark pipeline to transport Turkmen natural gas to China.Hu, together with Gurbanguly Berdymukhamedov, President of Turkmenistan, Islam Karimov, President of Uzbekistan, and Nursultan Nazarbayev, President of Kazakhstan, turned a symbolic wheel at a refinery in Samandepe in Turkmenistan's vast Karakum desert during a ceremony that opened the pipeline to start the first gas supply flowing. The 7,000-kilometer gas pipeline first runs for 1,800 kilometers in Central Asia – snaking through Turkmenistan, Uzbekistan and Kazakhstan – before linking up with a further 5,000-plus kilometers of pipeline in China's far-west Xinjiang region. The China National Petroleum Corp will eventually import up to 40 billion cubic meters of gas a year through the pipeline when it reaches full capacity in 2012-2013.
---- “Global Times” of December 15,2009.
12.The China-Central Asia natural gas pipeline starts from the border between Turkmenistan and Uzbekistan, runs through Uzbekistan and Kazakhstan, and finally ends at Horgos City in China. It is a double-line pipeline, including line A and line B. Line A passing through the Central Asian States has a length of 1,833 kilometers. It was tested and put into operation at the beginning of December 2009. According to the project's construction plans, both lines will be completed and begin transporting natural gas in 2010. After the natural gas imported from Turkmenistan reaches China, the gas will be transported to other provinces and cities including Shanghai and Guangzhou through the Line B pipeline of the west-east natural gas transportation project. This pipeline is 4,978 kilometers long, and is designed with an annual gas transportation capacity of 30 billion cubic meters. The connection between the two pipelines can guarantee China a sufficient and steady natural gas supply. When interviewed by Chinese media, Turkmenistan President Gurbanguly Berdymukhamedov said that Turkmenistan will offer China 40 billion cubic meters of natural gas annually for the next 30 years. The China-Central Asia natural gas pipeline and the No. 2 pipeline play important roles in optimizing the energy structure and improving the environment. It is predicted that after the No. 2 pipeline is completed and put into operation, the proportion of the natural gas consumption to primary energy consumption will rise by 1 to 2 percentage points. Compared to coal consumption, the annual 30 billion cubic meters of natural gas consumption can reduce carbon dioxide emissions by 130 million tons per year. "China can become a steady purchaser of Central Asia's oil and natural gas resources," Xia Yishan, an energy issue expert at the China Institute of International Studies believes, "As China's economy develops and the Chinese people's environmental protection sense rises, China's demand on clean energy will increase sharply." Pan Guang, Director of the SCO (Shanghai Cooperation Organisation ) Research Center under the Shanghai Academy of Social Sciences, believes that China's huge foreign exchange purchasing capacity and advantageous geographical position are extremely attractive to Central Asia’s natural gas exporting countries.
----“ People’s Daily Online” of December 15,2009.
CHINESE OIL COMPANY’S INTEREST IN KURDISH REGION CREATES PROBLEMS WITH BAGHDAD
13 . Sinopec Group, China's second largest oil company, said on November 23,2009, that it remained active in its efforts to bid for oilfields in Iraq despite being rebuffed in the second round of bidding. "Sinopec is still in talks with the Iraqi Government over the bid," said a source from Sinopec who declined to be named. Sinopec's offer to pay participation fees to bid for oilfields on offer in Iraq's second bidding round was rebuffed by the Iraqi Government due to Sinopec's existing deals with the Kurdish regional government, Reuters reported. In June, Sinopec agreed to buy Swiss oil explorer Addax Petroleum Corp for $7.3 billion, which had signed deals with the Kurdish authorities in northern Iraq. The source from Sinopec said the contract with Addax was not likely to affect Sinopec's other businesses in Iraq, based, as it was, on an evaluation it did before purchasing the Swiss oil company. Baghdad's refusal, however, indicated that the Addax deal clearly had a negative impact on Sinopec's effort to further tap oil reserves in Iraq. "Sinopec asked to pay the participation fee to get the data package but we refused due to the deals they have with the Kurdish regional government," Reuters quoted Sabah Abdul Kadhim, head of the legal and commercial section of the Petroleum Contracts and Licensing Directorate, as saying. "Our position is clear. We will not deal with any oil companies that sign contracts with the Kurdish authorities without the approval of the central government," Kadhim was quoted as saying. Analysts said the failure of Sinopec in its bidding effort indicates that it is still not easy for Chinese oil producers to acquire overseas oil assets when deals are intertwined with sensitive political issues. "Oil, unlike many other resources, is closely linked with national interests and political issues," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University. "It is still not easy for Chinese oil companies to tap overseas oil reserves when resources become intertwined with political interests," he said. Lin, however, noted that Sinopec was not likely to give up easily and was expected to continue in its efforts to bid for Iraqi oilfields to expand its upstream oil asset overseas.-----“China Daily” of November 24,2009
OVERSEAS OIL PRODUCTION OF SINOPEC UP
14.Overseas crude oil output for Sinopec would touch 17 million tonnes in its total output of 60 million tonnes for this year. The acquisition of Addax Petroleum Corp this year has boosted the company's overseas oil production to a large extent, company spokesman Huang Wensheng was quoted by the China Daily as saying. The company pumped 9.01 million tonnes crude oil last year from its 35 overseas projects in Africa, South America, the Middle East and Russia, according to Huang. The refiner wrapped up the 7.3 billion U.S. dollars purchase of the Geneva-based Addax Petroleum Corp. in August, gaining reserves in Iraq's Kurdistan and West Africa. ------ Xinhua news agency of December 12,2009
CHINA GOES AHEAD WITH MYANMAR-YUNNAN PIPELINE DESPITE LOCAL OPPOSITION
15.A delegation of the China National Petroleum Corporation arrived in Rangoon on October 29 to discuss the gas pipeline project, which is to link western Burma’s coastal area to China’s Yunnan province and the recent spate of protests against it. The delegation was to hold talks with the Myanmar authorities about technical issues regarding the controversial project, which began in mid-September amid criticism by human rights groups. The 980-kilometre pipeline is part of a 30-year natural gas purchase and sale deal CNPC sealed in December , 2008, with a consortium of the Myanma Oil and Gas Enterprise, South Korea’s Daewoo International, ONGC Videsh Limited and Gail (India) Limited. The strategically important pipeline, which will transmit oil and natural gas from Africa and the Middle East, will shorten the transportation distance, and will pass through the Arakan (Rakhine) State, the Magwe division, the Mandalay division and Yunnan in China. Currently it is transported by tankers through the Malacca strait to China. The consortium found commercially viable gas deposits in A-1 and A-3 offshore blocks in Myanmar, which is also known as the Shwe gas project. ------Myanmar political exiles
20-12-09
( 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 ninth in the series)
MY ASSESSMENT
If official Chinese statistics are to be believed, the Chinese economy is showing signs of coming out of the down-turn into which it has got consequent upon the global economic meltdown of 2008 and 2009. The Chinese authorities believe that the worst in the export sector will be over in 2010 and the unemployment situation which they faced consequent upon the closure of a large number of export-dependent industries, has been satisfactorily managed. New jobs are once again being created by boosting the domestic demand through the Government’s stimulus package and many of those who lost their jobs due to the decline in exports have managed to find new jobs. The widely-predicted social tensions due to the loss of millions of jobs have been belied. The Chinese people have taken in their stride the economic difficulties of the last two years. A lot of credit should go to President Hu Jintao and Prime Minister Wen Jiabo for explaining the economic difficulties to the people through frequent touring in the affected parts of the country and the measures taken by the Government for alleviating the problems of the people. The warnings of Cassandras about a looming social explosion in China due to the economic difficulties have proved incorrect. At the same time, objective analysts---- Chinese as well as foreigners---- continue to be concerned over the inherent strength of the economy and over what they see as the lack of transparency in certain economic matters, which the Chinese authorities see as sensitive. One area of concern is the real estate sector. Many fear that there is a bubble developing which may result in an unpredicted explosion. The difficulties increasingly faced by the people in buying houses could result in large-scale social tensions. In a surprisingly forthright article on the subject, the “Global Times” of the party-owned “People’s Daily” group drew attention to the looming danger of a real estate bubble. How sensitive this subject has become for the Government would be evident from the fact that the Government allegedly ordered the discontinuance of a series of TV reportage on this subject, which was attracting a large number of viewers. Not many observers are convinced by the claims of the Government about the health of the Chinese banking sector. They suspect that there is an iceberg of hidden credits against which the economy might collide one day. Another example of disbelief in the Government claims relates to the automobile sector. The Government claims that there has been a dramatic increase in the domestic purchase of automobiles thereby reducing the dependence of the sector on exports. There is no reason to doubt the official statistics about the surge in the domestic sales of cars. These figures are corroborated by industry sources. But the skepticism arises from the fact that the increase in the domestic sales of automobiles has not been accompanied by a noticeable increase in the domestic consumption of petrol and diesel.
REAL ESTATE NERVOUSNESS
2.Mainland stocks fell for a fourth day on December 18,2009, the longest losing streak since August, due to concerns that the Government might step up measures to curb property speculation and new share sales will divert funds from existing equities. The Poly Real Estate Group Co slumped for a ninth day after the Government increased down payments on land purchases. The China Life Insurance Co, the nation's biggest insurer, dropped 2.6 percent to a two-month low. Initial public offerings on the ChiNext board have drawn almost 900 billion yuan in subscriptions, the China Securities Journal said on December 18."It looks like the Government is using new share sales as a way to avoid an asset bubble on the stock market," said Zhang Xiuqi, a Shanghai-based strategist at the China International Fund Management Co, which oversees about $10.2 billion. "The crackdown on the property industry is tougher than was previously expected." The Shanghai Composite Index fell 65.19, or 2.1 percent, to 3,113.89 at the close, the lowest since November 27. It dropped by 4.1 percent this week, a second weekly loss. The CSI 300 Index declined by 2.5 percent to 3,391.74. The Shanghai gauge had jumped by 71 percent this year as Government spending and a credit boom helped the nation's economic growth recover from its steepest slump in more than a decade. The Poly Real Estate, China's second-largest developer by market value, fell 7.5 percent to 21.88 yuan, capping a nine-day, 16 percent slump. Gemdale Corp, the fourth largest, lost 7.8 percent to 13.20 yuan. The Shanghai Shimao Co, a property developer controlled by billionaire Xu Rongmao, declined by 4.8 percent to 15.77 yuan. The Government set the down payment requirement for land purchases to at least 50 percent of the total price. The new down payment level is an increase from earlier levels, said Zhou Hu, a real estate analyst at Bohai Securities Co in Beijing. An index tracking 33 property stocks traded on the Shanghai Composite tumbled 5.4 percent , its biggest loss since Aug 31. Property stocks have slumped after the government said it would target "excessive" growth in property prices in some cities. That follows the Cabinet's statement last week that it will re-impose a sales tax on homes sold within five years, after cutting the period to two years in January. The country's property and stock markets are a "bubble" that will burst when inflation accelerates in 2011, former Morgan Stanley chief Asian economist Andy Xie said.
---“China Daily” of December 19,2009
HIDDEN CREDIT RISKS
3.Financial stocks also declined after the Fitch Ratings said Chinese banks' capital strength is likely to be more "strained" than it appears as lenders increasingly use off- balance sheet transactions to free up room for further loan growth. The growing amount of unreported loan transactions, including re-packaging loans into wealth management products to sell to investors and the outright sale of loans to other financial institutions, represent a "growing pool of hidden credit risk" and may lead to downward revisions for some Chinese banks in 2010 and 2011, Fitch said in its latest report.
---“China Daily” of December 19,2009.
RIDING THE REAL ESTATE TIGER
4.In an article on the concerns over the state of the real estate market published on December 16,2009, the “Global Times” of the “People’s Daily” group wrote as follows: “With house prices skyrocketing in China's cities, urban residents are finding themselves stripped of purchasing power, causing concern of social unrest and prompting government measures to rein in prices, curb speculation and demand the construction of more low-cost homes. He Keng, an official with the Financial and Economic Committee of the National People's Congress, complained about the growing housing bubble in a CCTV interview over the weekend. "If even a vice minister-level official like me can't afford a decent home, it will be a huge problem for most ordinary people," he said. For the majority of the wage-earning public, the soaring prices have taken the dream of buying their own home further out of reach. It also explains why a TV series called "Snail House," which reflects people's difficulty in affording a house, has been an instant hit. It has also become controversial, as it was called to a halt after only 10 episodes broadcast by Beijing-based BTV, reportedly due to pressure from real estate developers. Noticing the smoldering public discontent, the central and local governments have been cautiously making small moves, trying to prevent the danger of an outpouring of anger that may jolt society as a whole. Shanghai Mayor Han Zheng said last week that house prices in the municipality are rising too fast and could eventually harm the interests of the Shanghai people. In southern China, the Guangzhou government has planned to release 80 square kilometers of land onto the market in order to curb soaring prices, local media reported Monday. An executive meeting of the State Council, chaired by Premier Wen Jiabao, announced on Monday that the central government would rein in the overheated momentum of housing prices by increasing the supply of low-cost homes, curbing speculation and strengthening the supervision of the real estate market. The stock market in Shanghai and Shenzhen saw real estate-related stocks falling across the board, some down 6-8 percent at closing Tuesday. Nanfang Daily reported Tuesday that major institutional investors dumped a net 2.9 billion yuan ($424.6 million) worth of real estate stocks on the yuan-denominated A-share market last week, representing over 11 percent of the net fund outflow of the entire market, the highest among all the sectors. However, analysts are not optimistic about the Government's determination to take steps to control housing prices, saying that the Government is at a dilemma in the face of growing social discontent and a recovering economy boosted largely by the real estate market and related industries. "The Government is riding on a tiger," a People's Daily senior editor, who asked to remain anonymous, told the Global Times. "It's dangerous to keep on riding, and even more risky to get off." "Restraining home prices from soaring too quickly in recent months is the government's intention," Chen Guoqiang, director of the real estate research center at Peking University, said yesterday. "But the government doesn't want the commercial real estate sector to fluctuate too much in 2010 because it needs to keep the real estate market booming to ensure the country's economy runs well," he said. Tian Yun, vice president of the China Macro Economics Institute, said, "the latest measures will be ineffective." "The current high prices are pushed by joint efforts by the central government and local governments," he explained. "State-owned enterprises have become the hands that are pushing the high prices, and local governments depend on high property prices to assure local expenditure," he said. Developers also prefer not to develop low-price housing, and how the government will execute its relevant policies remains a question, Yang said. Yi Xianrong, a researcher at the Chinese Academy of Social Sciences, confirmed Tuesday that tightening credit lines would be the most effective way to curb the housing market, because the soaring home prices at present are caused by lax credit policies. Experts said the State Council's action guidelines announced Monday show its intent to restrict the credit policies for mortgage loans so as to curb speculation. "From what the guidelines indicate, the buyers who want to buy their second or third houses need to pay a down payment of no less than 40 percent of the total value," Chen Guoqiang said yesterday. "This means that profiting from fast re-sales will be under control." The Central Government also announced on December 9 that people must now keep their houses for five years before they can resell them, a change from the previous minimum of two years. Zhong Wei, director of the Financial Research Center at Beijing Normal University, said the growth of the real estate market is expected to slow down next year, with total sales of 3.3 trillion yuan, compared with this year's 3.6 trillion.”
-----“ Global Times” of December 16,2009
NEW JOBS
5.China created 9.4 million new jobs in urban areas in the first ten months, the Ministry of Human Resource and Social Security said on December 12. The number represented 104 percent of the whole year target for 2009, the Ministry said. Around 4.4 million laid-off workers were re-employed in the January-October period, or 88 percent of the 5-million goal for the whole year.
----- Xinhua News Agency of December 12,2009.
FOREIGN TRADE LOOKS UP
6.China's foreign trade is projected to grow 15 percent next year, according to a report released by the China Institute for WTO Studies on December 18. The report forecasts imports to increase by 15 percent and exports up 13 percent. With the external demand improving and the global economic recovery gaining momentum, "the declining trend of China's exports would come to an end next year," the report says.The Government stimulus package would boost imports through enhancing domestic demand, while the growing competitiveness of Chinese enterprises in the international market would increase exports, said Zhang Hanlin, head of the institute based in the University of International Business and Economics. Net exports would contribute 0.3 percent to China's GDP growth next year, said Zhang, compared with a minus 4.4 percent this year as predicted by the World Bank in a recent report.
---- Xinhua News Agency of December 18,2009.
PROTECTIONISM AGAINST CHINA
7.In the first 11 months this year, China's imports and exports totaled US$1.96 trillion, down 17.5 percent compared with the corresponding period last year, according to the General Administration of Customs. Exports dropped 1.2 percent year on year in November, but were up 2.6 percent from October, the fifth consecutive monthly increase. And imports rose 26.7 percent from year on year. However, the China Institute for WTO Studies report also warns of rising protectionism against Chinese products in 2010. Faced with worsening unemployment situation and shrinking market share, some countries tended to make China a scapegoat, said Zhang. "China will suffer from more trade frictions in the years to come." The report says, in the first nine months this year, 19 countries have launched 88 trade remedy investigations against China, involving 10 billion dollars, a year-on-year rise of 125 percent. China suffered 14 trade remedy investigations from the United States, involving US$5.84 billion, or 639 percent more than that of the corresponding period last year. Some countries might resort to new remedy measures which are often in disguised forms but with more destructive effects, Zhang said. ------ Xinhua News Agency of December 18,2009
TRADE IMPROVES IN NOVEMBER
8.China's imports and exports rose 9.8 percent in November year on year, ending a 12-month decline, to stand at 208.2 billion U.S. dollars, the General Administration of Customs announced on December 11. The trade surplus was 177.96 billion dollars in the January-November period, down 30.6 percent from a year earlier. Exports stood at 113.65 billion dollars in November, down 1.2 percent from a year earlier, but were up 2.6 percent from October for the fifth consecutive monthly increase. Imports rose 26.7 percent in November to 94.6 billion dollars. From January to November, the country's imports and exports totaled 1.96 trillion dollars, down 17.5 percent compared with the corresponding period last year. Imports for the first 11 months were 893.02 billion dollars, down 15.8 percent year on year; exports dropped 18.8 percent to 1.07 trillion dollars. The EU remained China's biggest trading partner, though bilateral trade declined 17 percent to 326.27 billion dollars in value in the first 11 months; the United States was second with trade at 266.54 billion dollars, down 13.4 percent; Japan followed with trade down 17.4 percent to 203.33 billion dollars. ----- Xinhua News Agency of December 11,2009
INDUSTRIAL OUTPUT UP
9.China's industrial output growth accelerated to 19.2 percent in November year on year, following a 16.1-percent increase in October, data from the National Bureau of Statistics showed on December 11. The figure increased 10.3 percent year on year over first 11 months this year, 0.9 percentage points higher than that of the first 10 months, said the NBS. Production of heavy industries was up 22.2 percent in November, and that for the light industries rose 12.6 percent. China's continued economic growth had brought the acceleration in industrial growth, said Sheng Laiyun, a spokesman with NBS. He also attributed the rapid growth to the sharp industrial decline in the corresponding period last year. In November 2008, China's industrial output growth slowed to 5.4 percent year on year. ---Xinhua News Agency of December 11,2009.
RETAIL SALES UP---DRAMATIC SURGE IN DOMESTIC AUTO SALES
10.China's retail sales rose 15.8 percent year on year to 1.13 trillion yuan (166 billion U.S. dollars) in November, the National Bureau of Statistics (NBS) announced on December 11. The rise was 5 percentage points lower than that of a year earlier. It was also down 0.4 percentage points from that in October, the NBS data showed. In the first 11 months, total retail sales topped 11.27 trillion yuan, up 15.3 percent year on year. The rate was 6.6 percentage points down from that of the corresponding period last year, but unchanged from the first 10 months this year. In November, urban retail sales rose 16.5 percent year on year to 760.6 billion yuan, while those in counties and sub-county areas were up 14.4 percent to 373.3 billion yuan. Retail sales grew 14.5 percent year on year for grain and edible oils in November, 24.9 percent for household electric appliances, and 61.5 percent for autos. To stimulate domestic consumption, the government put into place a series of measures, including tax cuts for auto and property purchases and introduced subsidies for home appliances in rural areas. In November, auto sales reached 1.34 million units, bringing the total sales from January to November to 12.23 million, up 42.39 percent year on year, according to the China Association of Automobile Manufacturers. -----Xinhua News Agency of December 11,2009
FIRST PHASE OF CENTRAL ASIAN GAS PIPELINE COMMISSIONED
11.President Hu Jintao commissioned on December 14,2009,a landmark pipeline to transport Turkmen natural gas to China.Hu, together with Gurbanguly Berdymukhamedov, President of Turkmenistan, Islam Karimov, President of Uzbekistan, and Nursultan Nazarbayev, President of Kazakhstan, turned a symbolic wheel at a refinery in Samandepe in Turkmenistan's vast Karakum desert during a ceremony that opened the pipeline to start the first gas supply flowing. The 7,000-kilometer gas pipeline first runs for 1,800 kilometers in Central Asia – snaking through Turkmenistan, Uzbekistan and Kazakhstan – before linking up with a further 5,000-plus kilometers of pipeline in China's far-west Xinjiang region. The China National Petroleum Corp will eventually import up to 40 billion cubic meters of gas a year through the pipeline when it reaches full capacity in 2012-2013.
---- “Global Times” of December 15,2009.
12.The China-Central Asia natural gas pipeline starts from the border between Turkmenistan and Uzbekistan, runs through Uzbekistan and Kazakhstan, and finally ends at Horgos City in China. It is a double-line pipeline, including line A and line B. Line A passing through the Central Asian States has a length of 1,833 kilometers. It was tested and put into operation at the beginning of December 2009. According to the project's construction plans, both lines will be completed and begin transporting natural gas in 2010. After the natural gas imported from Turkmenistan reaches China, the gas will be transported to other provinces and cities including Shanghai and Guangzhou through the Line B pipeline of the west-east natural gas transportation project. This pipeline is 4,978 kilometers long, and is designed with an annual gas transportation capacity of 30 billion cubic meters. The connection between the two pipelines can guarantee China a sufficient and steady natural gas supply. When interviewed by Chinese media, Turkmenistan President Gurbanguly Berdymukhamedov said that Turkmenistan will offer China 40 billion cubic meters of natural gas annually for the next 30 years. The China-Central Asia natural gas pipeline and the No. 2 pipeline play important roles in optimizing the energy structure and improving the environment. It is predicted that after the No. 2 pipeline is completed and put into operation, the proportion of the natural gas consumption to primary energy consumption will rise by 1 to 2 percentage points. Compared to coal consumption, the annual 30 billion cubic meters of natural gas consumption can reduce carbon dioxide emissions by 130 million tons per year. "China can become a steady purchaser of Central Asia's oil and natural gas resources," Xia Yishan, an energy issue expert at the China Institute of International Studies believes, "As China's economy develops and the Chinese people's environmental protection sense rises, China's demand on clean energy will increase sharply." Pan Guang, Director of the SCO (Shanghai Cooperation Organisation ) Research Center under the Shanghai Academy of Social Sciences, believes that China's huge foreign exchange purchasing capacity and advantageous geographical position are extremely attractive to Central Asia’s natural gas exporting countries.
----“ People’s Daily Online” of December 15,2009.
CHINESE OIL COMPANY’S INTEREST IN KURDISH REGION CREATES PROBLEMS WITH BAGHDAD
13 . Sinopec Group, China's second largest oil company, said on November 23,2009, that it remained active in its efforts to bid for oilfields in Iraq despite being rebuffed in the second round of bidding. "Sinopec is still in talks with the Iraqi Government over the bid," said a source from Sinopec who declined to be named. Sinopec's offer to pay participation fees to bid for oilfields on offer in Iraq's second bidding round was rebuffed by the Iraqi Government due to Sinopec's existing deals with the Kurdish regional government, Reuters reported. In June, Sinopec agreed to buy Swiss oil explorer Addax Petroleum Corp for $7.3 billion, which had signed deals with the Kurdish authorities in northern Iraq. The source from Sinopec said the contract with Addax was not likely to affect Sinopec's other businesses in Iraq, based, as it was, on an evaluation it did before purchasing the Swiss oil company. Baghdad's refusal, however, indicated that the Addax deal clearly had a negative impact on Sinopec's effort to further tap oil reserves in Iraq. "Sinopec asked to pay the participation fee to get the data package but we refused due to the deals they have with the Kurdish regional government," Reuters quoted Sabah Abdul Kadhim, head of the legal and commercial section of the Petroleum Contracts and Licensing Directorate, as saying. "Our position is clear. We will not deal with any oil companies that sign contracts with the Kurdish authorities without the approval of the central government," Kadhim was quoted as saying. Analysts said the failure of Sinopec in its bidding effort indicates that it is still not easy for Chinese oil producers to acquire overseas oil assets when deals are intertwined with sensitive political issues. "Oil, unlike many other resources, is closely linked with national interests and political issues," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University. "It is still not easy for Chinese oil companies to tap overseas oil reserves when resources become intertwined with political interests," he said. Lin, however, noted that Sinopec was not likely to give up easily and was expected to continue in its efforts to bid for Iraqi oilfields to expand its upstream oil asset overseas.-----“China Daily” of November 24,2009
OVERSEAS OIL PRODUCTION OF SINOPEC UP
14.Overseas crude oil output for Sinopec would touch 17 million tonnes in its total output of 60 million tonnes for this year. The acquisition of Addax Petroleum Corp this year has boosted the company's overseas oil production to a large extent, company spokesman Huang Wensheng was quoted by the China Daily as saying. The company pumped 9.01 million tonnes crude oil last year from its 35 overseas projects in Africa, South America, the Middle East and Russia, according to Huang. The refiner wrapped up the 7.3 billion U.S. dollars purchase of the Geneva-based Addax Petroleum Corp. in August, gaining reserves in Iraq's Kurdistan and West Africa. ------ Xinhua news agency of December 12,2009
CHINA GOES AHEAD WITH MYANMAR-YUNNAN PIPELINE DESPITE LOCAL OPPOSITION
15.A delegation of the China National Petroleum Corporation arrived in Rangoon on October 29 to discuss the gas pipeline project, which is to link western Burma’s coastal area to China’s Yunnan province and the recent spate of protests against it. The delegation was to hold talks with the Myanmar authorities about technical issues regarding the controversial project, which began in mid-September amid criticism by human rights groups. The 980-kilometre pipeline is part of a 30-year natural gas purchase and sale deal CNPC sealed in December , 2008, with a consortium of the Myanma Oil and Gas Enterprise, South Korea’s Daewoo International, ONGC Videsh Limited and Gail (India) Limited. The strategically important pipeline, which will transmit oil and natural gas from Africa and the Middle East, will shorten the transportation distance, and will pass through the Arakan (Rakhine) State, the Magwe division, the Mandalay division and Yunnan in China. Currently it is transported by tankers through the Malacca strait to China. The consortium found commercially viable gas deposits in A-1 and A-3 offshore blocks in Myanmar, which is also known as the Shwe gas project. ------Myanmar political exiles
20-12-09
( 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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