US-PAK RELATIONS IN CURRENT SCENARIO

EVER since the USA attacked and killed Osama bin Laden in his hideout in Abbottabad, US-Pak relations have been constantly deteriorating. While the USA was elated by the stunning coup it had pulled off, Pakistan could only seethe with resentment, having been exposed before the world for its double dealing no less than for the fragility of its defences. Its angry response was orchestrated by the army chief himself ~ significantly, not by the civilian leaders ~ and it has dwelt on the deliberate violation of Pakistan’s sovereign space, which is presented as a great affront to national sentiment.
That the fugitive found refuge on Pakistani soil has not served to moderate Pakistani indignation though this is the glaring fact that registers most strongly everywhere else. Now that no further concealment of the facts is possible, the Pak authorities are engaged in trying to control and shape the consequences. Repeated angry sallies against the US in Pakistan have kept the pot boiling and have raised tensions between the two sides. Nor has the USA failed to hit back, and it has struck at Pakistan’s most vulnerable point, its depleted finances.
Major cuts in US support for the Pak army have been announced, and while Pakistan has tried to maintain an unruffled façade, it can scarcely hope to find any ready alternative source of financial support. It has resorted to threats to end its troop deployment along the Afghan border, something for which US financial support has been provided for many years. In this fashion, bickering and threats have replaced the cooperation that both the countries have repeatedly described as essential to the long- term outcome in Afghanistan, where trouble continues to rage unabated. 
While these differences simmer, an unending series of lethal incidents against targets in Pakistan has been engineered by Al Qaida and its sympathizers to show their anger at the hunting down of  Bin Laden. The military establishment, especially the naval component in Karachi, has been a particular objective. Terrorist groups have been able to strike against well guarded facilities, inflicting great damage and raising fresh questions about the proficiency of the armed forces. And escalating casualties among civilians caught in the crossfire have further affected public morale ~ indeed, the uncertainties are such that many have felt compelled to change their pattern of life and keep away from potentially risky public places. In these circumstances, the latent hostility towards the USA that has been visible in Pakistan even at the best of times has become greatly aggravated.
For further complication, this is the time when US withdrawal from Afghanistan is set to commence. Already there is a change of the top US commander, and one of the provincial administrations has been handed over to full Afghan control; more will follow. How far these developments will affect the situation in the ‘Af-Pak’ region is a major current concern. For all their disputation, neither the USA nor Pakistan can afford a decisive breach in their relations, so there is a series of high level consultations between them to see how best they can jointly cope. It has been announced that a few score CIA officers who were rendered hors de combat owing to Pakistan’s refusal to give them visas will now be allowed to take up their duties. So the push and shove continues, a few grudging gestures doing little to disguise the prevailing ill will.
Neither side has yet made any significant move to put their differences behind them as they face up to the uncertainties that loom ahead. The USA has been unrepentant about its intrusion into Pakistani space, and has considered that the goal fully justified the means employed ~ indeed, far from assuaging Pakistani anger, the highest US officials have periodically spoken of their readiness to strike again if similar circumstances are found to exist. So much repair work remains to be done.
Rebuffed by the USA, Pakistan has turned to its ‘all weather friend’ China. As it is, in recent months, even before the Bin Laden episode, there has been a considerable stepping up of joint activity between the two in Pakistan’s border areas. Partly this is fortuitous: floods and landslides in the mountains have played havoc with the connecting road that China had built several years ago, and Pakistan has had to turn again to China to repair what it considers to be its strategic lifeline to that country. A work brigade organized on military lines remains engaged on this task. Senior figures from Pakistan have visited China, presumably to coordinate views and actions on the fallout from the Bin Laden affair. Unlike many others, China has not been censorious about the fugitive being found in Pakistan. But neither has it moved to fill the gap created by the partial withdrawal of US support. Optimistic Pakistanis may have hoped for a large compensatory commitment but China has not rushed in to help, and it may have reason to consider very carefully before becoming more fully engaged in the tangled affairs of South Asia. Thus Pakistan may be obliged to return to fashioning some sort of working arrangement with the USA, however galling this may seem in the present circumstances. 
Where does India stand in the midst of these events? It cannot but take into account that despite all the tribulations it faces within its borders and on its western frontier, Pakistan has retained in full measure its strategic distrust of India. The dangers Pakistan sees from India outweigh in its strategic thinking all the problems on other fronts. Such beliefs reflect entrenched convictions that are difficult to dislodge, even though they have little to do with current realities. The fact is that India does not today represent, if it ever did, the existential threat to its neighbour that some of them fear. It should also be recognized that there are numerous Pakistanis who seek a new, less contentious basis of relationship with India. Most strikingly, at apex level, Dr Manmohan Singh and Gen Musharraf came close to a broad general agreement on bilateral relations through the back channel talks they had orchestrated. This is fundamental and India needs to persist, as indeed it is trying to do, in conveying its basic desire for peaceful and cooperative relations. 
In the current disturbed conditions in South Asia, this may be difficult to achieve but the small, incremental measures envisaged in the ongoing ‘composite dialogue’ could well prove insufficient. What is needed if South Asia is to be effectively stabilized and secured from the buffeting that assails it is a genuine sea change in mutual perception, backed by effective and credible measures. This is a task for statesmen who can overcome the familiar restraints, and it must be hoped that South Asia’s leaders will rise to the challenge.

Global Economic Crisis and China

THOUGH different, the Greek and the United States public debt crises threaten a return to the Great Recession of 2008. The world is, therefore, savouring the reprieve provided by their temporary resolution. But before that ephemeral benefit could be enjoyed comes news of a potential new global economic threat from an unsuspected source: China.

Its source lies in the boom in China's property market over the past few years, which gathered substantial momentum in the wake of the huge post-crisis stimulus provided by the government to the economy. A significant share of that stimulus has been diverted to projects that increased the demand for real estate, and price increases have been so large that the spiral is now being identified as a bubble.

Moreover, that bubble, some observers expect, is likely to burst in the near future for three important reasons, among others. The first is that the huge, speculative investments made in this sector, especially in housing, to cash in on the price spiral has resulted in excess supply in many markets, with housing properties lying unsold and unoccupied.

The second is that even as the problem of oversupply was beginning to be sensed in some quarters, the government strengthened its efforts to rein in the housing boom, partly to dampen speculation and prevent a bubble. This was in part because the grossly unaffordable housing in the cities was making the government unpopular.

The government was also responding to evidence that its huge stimulus package aimed at moderating the effects of the global crisis was resulting in inflation in the prices of real estate. In addition, the housing and infrastructure boom was contributing to commodity price inflation. To address these issues, it sought to persuade banks to demand larger down payments from clients, increase mortgage rates, and restrict lending for multiple housing investments.

Finally, there is the possibility that many who borrowed to finance their housing and real estate purchases may find it difficult to service their debt, since interest rates are being raised to cool an overheated economy. This could increase defaults and foreclosures, bring more housing property to the market, and limit additional demand.

Put together, these developments are expected to result in a supply-demand imbalance that would reduce house price inflation and even trigger a fall in housing prices. That, in turn, is expected to prick the speculative bubble, leading to a bust in the form of a downward spiral of real estate transactions and real estate prices. The argument seems to be that since government intervention is occurring a bit too late, it is contributing to the onset of a crisis rather than stalling the forces responsible for the build-up to the crisis.

Since the prolonged property boom in China had generated a fair share of sceptics who were expecting a bust, this kind of speculation has found much favour. It gained immediacy recently when housing price indices based on prices in 70 cities rose by just 0.2 per cent month-to-month in May and a lower 0.1 per cent in June. On an annualised basis, housing price inflation at 4.2 per cent was, in June, significantly below the 6.4 per cent inflation in consumer prices. The boom was indeed showing signs of tapering off. Was this the prelude to a slump? As if to answer yes, in April, the rating agency Moody's downgraded China's property sector from stable to negative. This reflected the mood among investors and also served as a signal to the more nervous among them.

All this has proved enough for a growing sense of fear about China being the next epicentre of a crisis. A collapse of the property boom in China would have major repercussions domestically. To start with, it could dramatically slow growth, since the expansion of gross domestic product (GDP) in China is driven substantially by investment, and investment is driven largely by construction, especially of housing and infrastructure.

The real estate market is also a major source of revenue financing state expenditures at the provincial level. The sale of land to developers is a major source of revenue for provincial governments, which then put the money to finance prestigious infrastructure projects aimed at attracting investments and winning political attention. If the housing boom trips, so will a lot of this infrastructure spending.

Also, a substantial amount of this state spending is financed by credit from the banking system, which tends to view the real estate owned by local governments as the implicit collateral that warrants huge lending. There has been much concern in recent times about the volume and quality of lending by the banks. The first official overall estimate of local government debt in China has placed it at 10,700 billion renminbis ($1,650 billion), or close to 30 per cent of GDP. Clearly, banks lending to local governments have believed that these governments will not default because they have enough resources such as land to pay off the banks when faced with a crunch. The confidence in such judgments seems to be weakening, which is evident from some investors moving out stocks from Chinese banks that are not doing too well.

Fears about bank fragility also come from the direct exposure of the banks to the housing market and to real estate developers. Such exposure has been estimated at 20 per cent of bank advances. If this market sours, the hit on banks, transmitted through provincial governments, will only be compounding a significant level of direct damage. However remote that possibility, the rating agency Fitch has decided to save itself from possible ignominy by warning Chinese banks of asset quality risk and by declaring that there is a more than reasonable chance of a banking crisis by 2013.

Despite all this, China fears are by no means dominating the headlines. There is much happening elsewhere, in the U.S. and Europe, to keep financial news enthusiasts preoccupied. Further, there are other factors indicating that China may not be anywhere near the brink of an economic precipice. Stress tests, though unreliable even in the best of times, have indicated that banks can easily handle a property market downturn. The average Chinese household is not overly indebted, with the ratio of household debt to disposable income placed at less than 50 per cent.

Subsidised houses

Moreover, house ownership even in urban, let alone rural, China, is not very high relative to the population of households. Urbanisation is set to accelerate, with 300 million expected to move to the cities over the next 20 years. With incomes rising and the government encouraging private ownership of housing, demand is likely to be sustained, even if not just for luxury housing, which is the market that is possibly losing some of its steam. Finally, housing construction is unlikely to slow down because of the government's decision to make the provision of subsidised housing one of its instruments to address the growing inequality in the Chinese economy. The state plans to deliver 36 million subsidised houses over the next five years. If it goes even a part of the way on delivering on that promise, the construction boom would continue.

All this said, the fear of a housing and real estate downturn in China is understandable. These sectors directly and through the contribution they have made to China's growth have also partly helped prop up the global economy. They are the sectors that draw huge quantities of steel, cement, household fittings and accessories, the direct and indirect demand benefits of which flow to the world market. China is not just an exporter, but an importer as well. So everybody is interested in a stable China. Fortunately for the world, the state is still a major player in China. And the signs are that it is responding to the danger in more ways than one.

Global Economic Crisis and INDIA

Can India escape the consequences of a transatlantic economic slowdown? While global commodity prices may soften and offer some comfort, international trade may be hurt. For much of the last year, exports were hurtling along at more than 30 per cent year-on-year, buoyed by new markets in Africa and Latin America. Exports for the financial year 2010-11 were a record $245 billion, while imports were of the order of $350 billion. Importantly, exports grew faster than imports, leading to a lower trade deficit than in the previous year. However, the recent statement by Union Commerce Secretary Rahul Khullar indicating a slowdown in exports during the July-September quarter is sobering. The projected decline is owing to a combination of a statistical base effect (it is virtually impossible to grow at 30 per cent year-on-year indefinitely) and the lack of depth in the new export geographies. The US, Eurozone and Japan still account for about 40 per cent of India’s exports and it is hard to see demand picking up there in the foreseeable future, which means export growth will be muted at best. The fall in commodity prices, mainly oil, certainly provides respite, but the demand for oil has traditionally been highly price-elastic. If a fall in price leads to a spike in consumption, it would not do much to lower the import bill.

While still healthy, the consumption story has weakened in recent months, as the sharp fall in automobile and white goods purchases shows. It could be reasonably expected that consumer sentiment will increasingly err on the side of caution should the economic slowdown persist. There are limits to how much rural India can compensate for a downturn in urban consumption, given that the average urban wage is more than three times higher. Constricted fiscal space precludes a sharp increase in government spending, especially with inflation spiralling out of control.

ndia will, thus, have to invest itself out of trouble! The share of gross fixed capital formation to gross domestic product has fallen by about five percentage points from the peak of 37 per cent in 2006-07. Much of this drop can be explained by far lower levels of private sector participation in capital formation. While the ongoing increase in interest rates has a lot to do with it, subdued future expectations are probably a bigger reason. The government has to do all it takes to reverse this sentiment at home. The frustrating tardiness in introducing meaningful reforms in areas as vital as land acquisition and labour markets is not helping. To its credit, the Union government has revived public investment, particularly in agriculture, which had been registering a secular decline since the mid-1980s. Improving the climate for investment at home would relieve the external stress to some extent. The revival of investment to pre-crisis levels should not be viewed as a temporary defensive measure, but as laying the foundation for sustainable high growth. If crisis provides opportunity, this is it. India should utilise it to the fullest.

Lessons from the London riots

These are scary moments for even the most intrepid Londoner. Beneath a façade of courage and equanimity, and a belief that things have returned to normal, there is a film of fear that will take a long time to evaporate. This is especially so because a convoy of armoured police vehicles still whizzes past your neighbourhood at frequent intervals with a screaming siren that makes you nervous. A pack of hoodlums have held London to ransom and inflicted inestimable damage to property as well as to community emotions. This is something that is difficult to repair quickly by even the most effective of governments. The fact that the unrest quickly spread to other cities — Birmingham, Liverpool, Manchester and Bristol — was proof enough that this was no mere London aberration, as was originally perceived, and that there were national connections for a cause that was easy to identify but difficult to describe. If economic deprivation alone explained the outburst, how do you account for the participation in the looting of shops by those who had a steady job — a chef and a school teacher, for instance — and a stake in the social order? Also, although the role of the non-white population in the riots was undisputed, the presence of a substantial number of whites confounded even the smartest of sociologists who have been on television trying to analyse the events.

The riots were a poor advertisement for a city that is feverishly preparing for the world's largest sporting event next year. There are already misgivings about the capacity of London's transport system to carry at least a million additional passengers a day for the three weeks that the Olympics will bring in, both immediately before and after the massive event. An added dimension now is the state of fitness of the law-enforcement agencies to cope with the demands of the occasion. It is not terrorism of the July 7, 2005 variety alone that one will have to factor in. The ability of young thugs — there are thousands scattered all over England — to disrupt life at will, is an additional dimension that was not in the reckoning until last week. This may be viewed as an exaggerated fear on the part of a cynic. It would be ingenuous, however, to dismiss it as paranoia. Such casualness could prove fatal to the image of a nation that is most hospitable and benign to the rest of the world. Prime Minister David Cameron's eloquent words, since he returned from his aborted holiday abroad, offer hopes that his government is determined to do all it can to set things right in time for the extravaganza.

Focus on the Met

Discussion across the country now centres on the first response — or the lack of it — from the Metropolitan Police. It has been squarely accused of handling the hooliganism softly right from the start. The Met's explanation: any use of force against the looters would have exacerbated the situation. This was possibly under the mistaken assessment that this was an essentially isolated London phenomenon that could be swiftly contained. It proved to be grossly flawed, resulting in a huge loss of property to shopkeepers with only very modest means, who stand devastated and ruined. Worse was the mowing down of three young Muslims in Birmingham by a hoodlum driving a car. Their sin was one of trying to protect their business establishments and their neighbourhood from vandalism. Two of them were brothers. The composure and nobility of their grieving father in pleading for restraint while reacting to the savagery were touching. This again confirms that crime and thuggery can bring out contrasting emotions, the best and the worst.

Police's dilemma

Two aspects of the riots need some reflection on the part of criminal justice policymakers. Maintaining order is not a mere police problem. Although this is an accepted proposition, when it comes to the crunch, the police alone are left to hold the baby. Secondly, the executive and the judiciary need to keep in mind that while they are well within their charter to punish an errant cop who violates human rights, they should take care to ensure that such well-deserved penal moves do not send the wrong message to the entire police force that firm, bona fide action is hazardous and is actually fraught with possible risks to careers. Judicial outbursts against ‘encounter deaths' in our country are an example. They instil fear in the minds of even straightforward policemen, who may feel that their strong-arm methods to contain mob fury or mindless terrorism could invite judicial ire and arbitrary sentences. There is a strong perception that Met officers chose to ignore looting and vandalism taking place in their presence only because of the several lawsuits pending against some officers for years. It is easy to be critical of such apathy. But the underlying misgivings within the police, a crucial arm of the executive, are hard to dismiss as an excuse for inaction.

Mr. Cameron has spoken of the need for some “robust policing.” I presume this means proactive policing that not only explores preventive measures but also dictates intervention when a crime is committed right before your eyes. It was appalling to watch the Met policemen standing by and not doing anything at all when looters — predominantly teenagers to start with, and young adults joining the fun later — were helping themselves to goodies that included liquor, jewellery, designer clothes and electronic gadgets. This indigenous culture of measured and patient policing is no doubt admirable under normal circumstances. But whether it is valid for the current times is highly debatable. This is especially in the context of the huge public criticism among many devastated Londoners that the police have failed to protect them. Deputy Prime Minister Nick Clegg and Mayor Boris Johnson were subjected to some uncomfortable questioning on this when they went into the streets a few days after the lawlessness started.

Watershed

The London riots could be a watershed in the history of the Met. A new strategy of aggressive policing is now well merited. It is needed not only because of the new dimension of the proclivity of some youth to take the law into their own hands. It is also demanded by a wounded public in England that has for long been used to only minor strains of public violence and has submitted itself to cautious policing, which now seems suitable only for an earlier time. It will be amusing for an average Indian police officer to know that policymakers in London are still mulling over tactics like the use of the rubber bullet and the water cannon by the police to handle public disorder. Neither of the devices is known to cause death or serious injury.

It is my strong perception that the U.K. society has moved far from the halcyon days when an unarmed Bobby could hold his own against the largest of mobs. The imposition of curfew or the use of the army to quell the riots has been mentioned in whispers only in the past few days. The time is not far when the police in the whole of the country will necessarily have to attune themselves to a modified style, with the accent on instant use of force to disable a misbehaving gang. An unequivocal decision endorsing the new tactics by the Home Office in London brooks no delay. A police force which does not deter the law-breaker, without diluting the respect and wholehearted support of those who adhere to the law, is not worth its salt.

The whole world must have watched the evocative television images of the dismaying events of the past few days in England, especially London and Birmingham. They ought to leave an indelible impression and generate new ideas on policing. There is a constant reference to the use of modern technology by the thugs who went on the rampage, particularly in London. The initial days were dominated by teenagers moving swiftly from place to place. The slightly older ones jumped into the fray only thereafter. It is almost confirmed that they were communicating with one another through cell phones, confounding the police. The popular toy in their hands was the BlackBerry. It is said that the phone's Instant Messenger Service (BBMS), in particular, came in very handy for the hoodlums. This is a hard fact, and any criticism that this theory only romanticises a despicable activity is ill-founded. That BBMS provides both security and confidentiality to the underworld is now undisputed. Those — including me — who had misgivings over the unrelenting stand of the Union Home Ministry vis-à-visResearch in Motion, the makers of BlackBerry, now stand corrected. Police officers the world over need to be wary of this destructive tool, which has proved to be lethal in the hands of the unscrupulous. Let us not throw the baby out with the bathwater by indiscriminately banning BlackBerry, a great vehicle of swift communication. It must, however, be ensured that the BlackBerry and similar devices do not offer a cheap and convenient gadget which aids the criminal in his diabolic designs. This is a challenge to police officers as well as intelligence agencies across the globe.

European disunion

One of the mantras of the era of globalisation has been that while all economics is global, all politics is local. The problem for the member countries of the European Union (EU) is that they have yet to find a regional solution to this conundrum. Caught between the global implications of the national and regional economic plans that have so far come up to deal with the Eurozone’s debt crisis and local politics that hold back governments from administering the bitter medicine of fiscal adjustment, EU has failed to come up with a regional solution to its economic and financial crises. It is, therefore, not surprising that German Chancellor Angela Merkel and French President Nicolas Sarkozy have once again failed to come up with an acceptable region-wide solution to the problems of Portugal, Italy, Greece and Spain (PIGS). Consequently, the euro has taken a hit, many European banks have come under increased pressure and the markets are in a tizzy.

Even the talk of a financial transaction tax – the much reviled Tobin Tax on capital flows – has put the markets in a spin. But Europe has few options left. The chancellor and the president could not reach an agreement on increasing the size of the bailout fund and continue to resist the idea of a euro-area bond. The problem with the proposed euro-area bond solution is that it will expose EU’s stronger economies to risks that they have avoided so far. Instead of helping the PIGS sail, the euro-area bond may sink the big three — Germany, France and the Netherlands. But that is a risk that EU’s big powers have to take if they wish to save the euro and the Union. While the proponents of euro-area bonds argue that they would restore stability by stopping speculative attacks on the debt of individual euro member states, the critics in Germany and France worry about the higher cost of borrowing they would have to budget for. Resistance to euro-area bonds is strongest in Germany, where Ms Merkel has been unable to secure political support in favour of stronger expression of solidarity with the rest of Europe.It is now clearer than ever that EU cannot remain stuck where it has been for sometime now — between the economics of globalisation and regional integration and the politics of local and national interest. EU must either break up or patch up. It has to graduate to a new stage of fiscal federalism for the euro and the Union to survive. The problem for Europe is that it has no political leader who can stand up and say this and mobilise widespread support. The idea of European unity has remained stuck at the popular level of free travel, common currency, a single market and a common talk shop called the European Parliament. One of the basic duties of a parliament is to collect taxes and authorise the government to spend. Till EU takes this next step to fiscal federalism, it will remain exposed to the threat of dissolution owing to the debt, currency and payments crises

THE key geo-strategic challenges in South Asia

 THE key geo-strategic challenges in South Asia emanate from the ongoing conflict in Afghanistan and on the Af-Pak border; unresolved territorial disputes between India and China, and India and Pakistan; and the almost unbridled march of radical extremism that is sweeping across the strategic landscape. In May 1998, India and Pakistan had crossed the nuclear Rubicon and declared themselves states armed with nuclear weapons. Though there has been little nuclear sabre-rattling, tensions are inherent in the possession of nuclear weapons by neighbours with a long history of conflict. While the probability of conventional conflict on the Indian subcontinent remains low, its possibility cannot be altogether ruled out. Therefore, there is an inescapable requirement for defence planners to analyse future threats and challenges carefully and build the required military capacities to defeat these if push comes to shove.
In view of India’s unresolved territorial disputes with China and Pakistan in the mountainous Himalayan region, there is a very high probability that the next major land conflict on the Indian subcontinent will again break out in the mountains. As it is not in India’s interest to enlarge a conflict with Pakistan to the plains sector south of the river Ravi due to the possibility of escalation to nuclear exchanges, there is a fairly high probability that the next conflict, having broken out in the mountains, will remain confined to mountainous terrain. While the three Strike Corps are necessary for conventional deterrence and have served their purpose well, it is in India’s interest to enhance its military capability to fight and win future wars in the mountains.
A strategic defensive posture runs the risk of losing some territory to the adversary if capabilities do not exist to be able to launch a deep ingress to stabilise the situation. The first requirement is to upgrade India’s military strategy of dissuasion against China to that of genuine conventional and nuclear deterrence and vigorous border management during peace-time. Genuine deterrence can come only from the ability to take the fight deep into the adversary’s territory through the launching of major offensive operations. To achieve this objective, it is necessary to raise and position one mountain Strike Corps each in J&K for offensive operations against China and Pakistan and in the Northeast for operations against China. In addition, as a Strike Corps can be employed only in one particular sector and cannot be easily redeployed in the mountains, it is necessary to give the defensive (holding) corps limited capability to launch offensive operations with integral resources.
In the modern era, military strategists have invariably preferred Liddell Hart’s strategy of the indirect approach through a deep manoeuvre, rather than the heavy attrition that used to be routine on the battlefields of World War I to achieve a favourable decision. It is necessary to recognise that in the Indian context, manoeuvre is extremely limited in the mountains and India’s capability for vertical envelopment is rather low. In the plains too India’s Strike Corps cannot execute deep manoeuvres due to the risk of Pakistan’s nuclear red lines being threatened early during a campaign. As firepower is the other side of the coin, it is inescapably necessary to substantially upgrade capabilities of the armed forces to inflict punishment and indeed achieve victory through the orchestration of overwhelming firepower. Unless firepower capabilities are upgraded by an order of magnitude, India will have to be content with a stalemate.
The firepower capabilities that must be enhanced include conventionally-armed SRBMs to attack high-value targets in depth. Air-to-ground and helicopter-to-ground attack capabilities need to be modernised, particularly those enabling deep ground penetration and accurate night strikes. In fact, the Indian Air Force should aim to dominate the air space and FGA strikes must paralyse the adversary’s ability to conduct cohesive ground operations. Artillery rockets, guns and mortars must also be modernised. Lighter and more mobile equipment is required so that these can be rapidly moved and deployed in neighbouring sectors. India’s holdings of precision-guided munitions (PGMs) continue to be low. In recent conflicts like the war in Iraq in 2003 and the ongoing Afghan conflict, PGMs have formed almost 80 per cent of the total ammunition used. Indian PGM holdings must go up progressively to at least 20 to 30 per cent in order to achieve high levels of operational efficiencies. India’s defence planners must recognise that it is firepower asymmetries that will help to achieve military decisions and ultimately break the adversary’s will to fight.
Capabilities for heliborne assault, vertical envelopment and amphibious operations are inadequate for both conventional conflict and dealing effectively with contingencies that might arise while discharging India’s emerging regional responsibilities. Two rapid reaction-cum-air assault divisions (with an amphibious brigade each) need to be raised by the end of the 13th Defence Plan — by 2017-22. The expenditure on these divisions will be highly capital-intensive and will be subject to the defence budget being gradually raised to first 2.5 per cent and then 3 per cent of India’s GDP.
A seamless intelligence-cum-targeting network must be established to fully synergise the strike capabilities of air and ground forces in real time. A good early warning network will enable the Army to reduce the number of troops that are permanently deployed for border management and will add to the reserves available for offensive operations. Infrastructural developments along the northern borders have failed to keep pace with the Army’s ability to fight forward and must be speeded up.
During the long history of post-Independence conflicts with India’s neighbours and prolonged deployment for internal security, the Indian Army and its sister Services have held the nation together. Dark clouds can once again be seen on the horizon, but the efforts being made to weather the gathering storm are inadequate. The government must immediately initiate steps to build the capacities that are necessary for defeating future threats and challenges. It must take the opposition parties into confidence as a bipartisan approach must be followed in dealing with major national security issues. In fact, there is a requirement to establish a permanent National Security Commission mandated by an Act of Parliament to oversee the development of military and non-military capacities for national security.

European Union Summit

Major decisions on economic policy, immigration, relations with North African countries and Croatian membership were taken during the EU Summit, held June23-24, 2011 in Brussels.

EU leaders agreed to expand measures to coordinate economic reforms and spending policies. They endorsed the Commission guidelines on measures which each EU country should take to stimulate economic growth, create jobs and keep public finances under control.

The decision closed the first “European semester”, a six-month process during which EU governments consult each other as they formulate spending plans and economic policies.

Governments must now take the guidelines into account when drafting their budgets and making reforms for 2012.

EU leaders also agreed to changes increasing the effectiveness of a temporary fund providing financial help to euro zone countries in difficulty. It will be replaced by a permanent €500bn fund in 2013.

They encouraged Greece’s Parliament to pass laws on a fiscal strategy and privatisation. The reforms will allow euro zone countries and the International Monetary Fund to provide more support under a new rescue package.

Euro zone leaders agreed that the private sector should provide some of the additional funding. They reaffirmed their commitment to do “whatever is necessary” to ensure the financial stability of the single currency.

Member governments asked the Commission for ideas on strengthening cooperation among the countries in the EU’s border-free area. The measures should allow countries to coordinate their responses to exceptional circumstances, such as sudden inflows of asylum seekers. Leaders called for proposals on common asylum procedures to be agreed by 2012.

The summit also called for Croatia's membership negotiations to be concluded by the end of June 2011. They hope to sign a treaty with the country, allowing Croatia to join the EU on  July 1, 2013.

UK 'S CONTROVERSIAL NEWSPAPER

A tabloid that failed to live up to its creed, “Our motto is the truth, our practice is fearless advocacy of the truth”, has been shut down by its owner in an effort to contain damage to his media empire. It had history —168 years of it; readership of 7.4 million which made it the biggest-selling English-language Sunday newspaper in the world, and was the first British newspaper acquired by the media mogul Rupert Murdoch in 1969. The paper’s old formula of sensationalism and sex, which had earned it a certain reputation for scurrilousness, had a new patron in Murdoch and the tabloid attracted more and more readers, and thus circulation figures soared.

Instead of reporting scandals, The News of the World itself has been the focus of a growing scandal, as it faces an investigation into phone hacking of individuals, perhaps thousands of them, allegedly conducted at the paper’s behest, through a private investigator. The hacking of voicemail messages of murder victims and their families, and the relatives of London 7/7 London bombings have particularly angered the British public. The newspaper has apologised for intercepting voicemails between 2004 and 2006, but its executives and editors are facing a fresh investigation. Even as the paper is shuttered, the investigation goes on, and the political fallout is likely to impact the Murdoch media empire that controls 37 per cent of Britain’s newspaper circulation. It is increasingly clear that senior executives lost perspective and instead of looking for truth, became purveyors of information that would make headlines, without giving much thought to human emotions and values.
The conduct of executives at The News of the World brings into sharp focus the pitfalls of not paying enough attention to means and bothering only about the ends. While Britain will continue to debate the controversial decision to shut down the paper and the transgressions of its staff, some of whom have been arrested, the fall of this tabloid is a cautionary tale for all those who stray from journalistic norms and practices and seek sensationalism over substance.

BEGINNING OF NEW CHAPTER IN THAILAND'S POLITICS

THAILAND’S just concluded elections have led to an interesting development. Prime Minister Abhisit Vejjajiva’s Democratic Party has been ousted from power through the battle of the ballot despite the powerful military and the monarchy being its backers. The people’s mandate has gone in favour of the opposition Pheu Thai Party, whose 44-year-old woman leader, Ms Yingluck Shinawatra, has taken oath as the country’s new Prime Minister. Her party won 263 seats in a 500-strong Lower House of parliament, the House of Representatives. That she is the sister of former Prime Minister Thaksin Shinawatra, who was toppled in a military coup in 2006 and then convicted in a corruption case and sentenced to a jail term, did not deter people from casting their vote in support of her party. Mr Thaksin Shinawatra has been living in self-imposed exile in Dubai since then.

Ms Yingluck Shinawatra could easily form her party’s government as it won a clear majority in parliament. But she has decided to go in for a coalition with the help of a few like-minded parties. She says she has preferred the path of national reconciliation, required in view of last year’s disturbances in which 90 people lost their lives with the ordinary Thais expressing their disenchantment against the ruling dispensation in a strong manner. The voters’ disapproval of the nexus between the Democratic Party, the military and the Thai King can be seen in the election results too.
The military may look for an opportunity to intervene again if Ms Yingluck Shinawatra does not play her cards tactfully. She has been described as a proxy for her brother, whose return to Thailand may be facilitated by the new government. Nothing should be done by ignoring the country’s justice system. It would be better if Mr Thaksin himself remains away from Thailand for some time and plays the role of a mentor from where he is — in Dubai. Even if he is back to Bangkok, he should keep himself away from the corridors of power so that the military does not find a pretext to destabilise the Yingluck government.

SOUTH SUDAN: A NEW BORN STATE

 As South Sudan prepares to declare independence on July 9, the capital city of the world’s newest nation is busy dressing up for a three-day celebration.
Workers armed with brooms made of reeds wage a losing battle against the dust that coats everything in this city. The new nation’s flags festoon the streets. And banners emblazoned with congratulatory messages decorate the city’s streets, many of them little more than rutty mud tracks.
A digital clock in the middle of a traffic circle in downtown Juba counts down the hours to independence. "Free at last!" it flashed. "Welcome to Africa's country No. 54."
Security is a major concern in this post-conflict nation in which rebels are still fighting in nine of the 10 states. Officials have begun confiscating illegal weapons from residents, many of whom are former rebels who fought the northern Sudanese army.
Southern officials and Western organisations accuse the government of Sudanese President Omar al-Bashir of arming some of the rebels. Some acknowledge that tribal rivalry and disenchantment with the government is also a factor. Southern Sudan’s Internal Affairs Minister Maj Gen Gier Chuang Aluong told journalists that the "enemies" of the state were working to destabilise the south. "They want to portray South Sudan as a failed state even before take-off," he said.
Southerners voted overwhelmingly in a referendum in January to secede from the north. But there are many post-referendum issues that still need to be worked out between north and south Sudan.
When Sudan Prez will meet his detractors Prominent among them are the fate of the oil-rich region of Abyei that straddles the internal border and is claimed by both sides, and the sharing of oil revenue. Most of the oil fields are located in the south, however, the pipelines that pump the oil to the Red Sea port of Port Sudan are all located in the north. Officials from the north and the south are engaged in intense discussions in the Ethiopian capital Addis Ababa to resolve these outstanding issues. However, southern officials told The Tribune a solution before July 9 is unlikely.
“These post-referendum issues will become post-independence issues,” Barnaba Marial Benjamin, South Sudan’s Minister of Information, said in an interview.
Acknowledging the tremendous challenges faced by the new country, he said: “South Sudan is bigger than Kenya, Uganda, Rwanda and Burundi combined. It has been destroyed over 50 years of war and so it is a real ground zero, and to have a ground zero of this size means that there are many challenges in infrastructure and development.”
Two decades of north-south civil war that ended with the Comprehensive Peace Agreement of 2005 left at least two million people dead.
On Wednesday night, the legislative assembly approved a transitional constitution after a marathon debate that wrapped up just shy of midnight. Government critics, including some in the ruling Sudan People's Liberation Movement (SPLM), have expressed concern about the disproportionate powers vested in the office of the president. Vice-President Riek Machar has been a leading critic in particular citing the authority given to the President to dismiss state governors at whim. Others criticise the power to appoint 66 members of the president's choosing to the legislative body, which is already dominated by the SPLM. To some, the inclusion of these powers are ominous portents of one-party dominance on a continent that is no stranger to strongmen.
Despite these concerns, Southern Sudanese are in a mood to celebrate. At midnight on Friday, as the date switches over to July 9, the joyous sounds of church bells, drum beats and ululating women will resound across Juba.

HOW TO WIN IN AFGANISTAN

MOST experts on Afghanistan are convinced that former US President George Bush’s strategy of using the military to establish peace in that strife-torn country has proved to be a failure. The various Taliban factions, the real source of trouble in Afghanistan, remain as potent a force as they were ever. Even the country’s capital, Kabul, is not out of bounds for them.
Nine Taliban suicide bombers, believed to be men of the Haqqani faction, attacked Kabul’s Intercontinental Hotel, popular with Westerners, on Wednesday in a daring manner. It is a different matter that they were soon killed by NATO forces. Yet 11 civilians and two policemen lost their lives. NATO’s intervention came because the authorities were not confident of the Afghan security forces successfully handling the situation.
The Taliban factions continue to control large parts of Afghanistan despite the US-led multinational forces remaining there in large numbers. The extremists have not been defeated militarily and there is no hope of their getting vanquished in this manner in the future. The sceptics should revise their opinion now when one of the most respected experts on Afghanistan, Sir Sherard Cowper-Coles, Britain’s former Ambassador in Kabul, has expressed the view that it is not possible to achieve “the wider strategic goal of stabilising Afghanistan to the point where the Afghan authorities can secure and govern the country with only money and advise from outside”. Almost similar observations were made by senior military leaders of the US after President Barack Obama occupied the White House. Thus, the Obama strategy of withdrawal from Afghanistan is based on sound logic: Why waste your resources when the goal is not achievable militarily?
The best way out of the Afghan imbroglio is to bring the Taliban to the negotiating table. This is what is being done in the case of what are described as the “good Taliban”. Keeping in view the emerging reality, India will have to review its strategy so that the enormous investments it has made in various sectors in Afghanistan do not go waste. Most Taliban factions are anti-India, but those who may join the government in Kabul as part of a future arrangement may change their thinking. They are basically power-hungry and may not behave the way they did in the late nineties when they ruled Afghanistan.

COST OF US WAR IN AFGHANISTAN

When President Barack Obama cited cost as a reason to bring troops home from Afghanistan, he referred to a $1 trillion price tag for America’s wars.
Staggering as it is, that figure grossly underestimates the total cost of wars in Iraq, Afghanistan and Pakistan to the US Treasury and ignores more imposing costs yet to come, according to a study released today.
The final bill will run at least $3.7 trillion and could reach as high as $4.4 trillion, according to the research project “Costs of War” by Brown University’s Watson Institute for International Studies.
In the 10 years since US troops went into Afghanistan to root out the Al-Qaida leaders behind the September 11, 2001, attacks, spending on the conflicts totalled $2.3 trillion to $2.7 trillion.
Those numbers will continue to soar when considering often overlooked costs such as long-term obligations to wounded veterans and projected war spending from 2012 through 2020. The estimates do not include at least $1 trillion more in interest payments coming due and many billions more in expenses that cannot be counted, according to the study.
In human terms, 224,000 to 258,000 people have died directly from warfare, including 125,000 civilians in Iraq. Many more have died indirectly, from the loss of clean drinking water, healthcare, and nutrition. An additional 365,000 have been wounded and 7.8 million people, equal to the combined population of Connecticut and Kentucky, have been displaced.
“Costs of War” brought together more than 20 academics to uncover the expense of war in lives and dollars, a daunting task given the inconsistent recording of lives lost and what the report called opaque and sloppy accounting by the US Congress and the Pentagon.
The report underlines the extent to which war will continue to stretch the US federal budget, which is already on an unsustainable course due to an aging American population and skyrocketing healthcare costs.
It also raises the question of what the United States gained from its multitrillion-dollar investment. “I hope that when we look back, whenever this ends, something very good has come out of it,” Senator Bob Corker, a Republican from Tennessee, told Reuters in Washington.
In one sense, the report measures the cost of 9/11, the American shorthand for the events of September 11, 2001. Nineteen hijackers plus other Al-Qaida plotters spent an estimated $400,000 to $500,000 on the plane attacks that killed 2,995 persons and caused $50 billion to $100 billion in economic damages.
What followed were three wars in which $50 billion amounts to a rounding error. For every person killed on September 11, another 73 have been killed since.
Was it worth it? That is a question many people want answered, said Catherine Lutz, head of the anthropology department at Brown and co-director of the study. “We decided we needed to do this kind of rigorous assessment of what it cost to make those choices to go to war,” she said. “Politicians, we assumed, were not going to do that kind of assessment.”
The report arrives as Congress debates how to cut a US deficit projected at $1.4 trillion this year, roughly a 10th of which can be attributed to direct war spending. What did the United States gain for its trillions?

“Online Blue Army”,

 Chinese military has set up “Online Blue Army”, a dedicated web network aimed to beef up internet security of its defence installations from cyber attacks.
The “Online Blue Army” is based on the needs of the People’s Liberation Army (PLA) and enforcing the ability of Internet security protection is an important issue in its military training programme, Chinese Defence Ministry spokesman Geng Yansheng said.
Geng’s comments came in response to questions if the “Online Blue Army” is China’s Internet squad aimed at carrying out attacks on other countries’ Internet systems, state run Peoples Daily reported. Geng said his country will not carry out cyber wars.
The PLA Daily had reported PLA’s Guangzhou command had invested tens of millions of yuan in building the specialised Internet squad.
Geng said Internet security has become an international concern which affects not only the society but the military sector, adding that China, armed with comparatively lax online security protection is among the victims of Internet attacks.
The Daily said internationally, online military units have long been established. The US destroyed Iraq’s air defence system using PC viruses during the Gulf War in 1991. Thereafter, the online army of the US also played major roles in the wars in Kosovo and Iraq.