NEW HORIZONS · 2019-12-02 · collapse of the Indian economy under Manmohan, combined with the PM's suc-cess in continuously holding on to the PM's job longer than any other incumbent

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COVER STORY

NEW HORIZONS In the process of rebuilding, Iraq is a land

of immense potential

NEW HORIZONSIn the process of rebuilding, Iraq is a land

of immense potential

O P I N I O N E X P R E S S 03September 2013

Dr Manmohan Singh economic wisdom is under sever criticism. The criticsare focused on defeating his over dependence on US and world bank, mak-ing India a colony of this group. Interestingly during World War-II, the lead-

ers of India's freedom movement adopteda policy of non-alignment between theAllies and the Axis, the single biggest fac-tor in the post-1942 ("Quit IndiaDeclaration"). Manmohan Singh is there-fore in exalted company when he takesdecisions that are less than optimal fromthe viewpoint of India's national interest.One of the most significant has been hisrepeated rejection of offers by Iran to enterinto long-term contracts for the supply ofoil to India at concessional prices. Had thisoffer been accepted, with its corollary of the medium of exchanging being not dol-lars but rupees, the Indian currency would not have entered into the free fall thatManmohan Singh's dogged dedication to following the dictates of Washington hascaused. In fact, it was PV Narsimha Rao brilliant political acumen and economicforesight that guided the process of liberalisation post 1991, Dr Manmohan Singhwas never a political leader with courage and conviction to carry out structuralchange in the system. he is over rated economist and under rated political.

Those credulous enough to believe in the US dollar have paid a huge financialprice for their trust, and yet are in no hurry to move away from a currency that ishugely overvalued in terms of the huge debt that the US has. While the previousNDA government headed by A B Vajpayee was also influenced by the dollar, it canbe said that Manmohan Singh and his team have been dominated by the dollar.From the start, the PM and his economic team have concentrated on multiplyingthe benefits earned by those who ran away from the rupee and clung on to thedollar. Thus, those in India who trusted the rupee have been losers on a cata-strophic scale, while those who shared Manmohan Singh's affinity for the dollarhave prospered. Those making dollar deposits in the Indian banking system getreturns of 20% and more in dollars, while those unwise enough to have placedtheir confidence in the rupee have seen the real value of their capital fall sharply.

This year itself, the rupee has lost nearly 40% of its inherent value through thefall in the value of the rupee (by 25% this year alone) and relentless inflation. Hadthe Prime Minister been less deferential towards the US dollar, he would havetaken advantage of BRICS by spearheading a move to get these five countries(Brazil, Russia, India, China and South Africa) to use their own currencies whiletrading. The PM's bending over backwards, forwards and sideways to please theUS has been noticed in Teheran, as it has in most other capitals of the world. Thecollapse of the Indian economy under Manmohan, combined with the PM's suc-cess in continuously holding on to the PM's job longer than any other incumbentsave Jawaharlal Nehru, shows that Patel was spot on target. It is high time ofCongress party to retire Dr Manmohan Singh because his advantage of honestywill not sell in 2014. The series of major scams, internal unrest, repeated borderinvasion from all corners and now the economic melt down has proved that DrMMS is surely not in command. The Congress party need fresh face with visionand political conviction to lead the country. Surely, party is having several betteralternates to ageing Dr Singh for a credible replacement.

Prashant Tewari

RNI UP-ENG70032/92, Vol 21, No 9

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Congress must correctleadership issue

to save India

04 O P I N I O N E X P R E S SSeptember 2013

CURRENCY SELL-OFF: TRAGEDY INTHREE ACTS

SEPTEMBER 2013

COVER STORY

P 28THE FIVE POLICY MISSTEPS THAT HAVELED INDIA TO ECONOMIC CRISISP 33STATE OF NATIONAL SECURITY SINCE INDEPENDENCE P 36WORLD LEARNS TO MANAGE WITHOUT THE USP 42

SINGH LAW WINS DOMESTIC TORTS LAWSUITP 48

NEW SHINING RUSSIAP 46

JASSI SIDHU IS BACKHIPSHAKER P 50

INDIA'S 'CRAZE FOR FOREIGN' MUST END P 22

THE LAND OF IMMENSE POTENTIAL

P 6-21

RUPEE ON VENTILATOR -S GURUMURTHY

P 25

GLOBAL SOLUTIONSNEED OF THE HOUR

INTELLECTUAL ARMOF THE GOVERNMENTOF THE REPUBLICOF IRAQ


OECEL News Bureau

The much-hyped 200th Test is noteven on master blaster SachinTendulkar's mind. He said that he

was not thinking about reaching themilestone even as there was specula-tion that he may retire after playing thatmatch.

"I like to take one step at a time. Ihave been playing for the last 23 yearsand I have never thought of all this(reaching milestones). I don't like takingthings for granted. When I reach therethen we can talk about it," Tendulkarsaid.

Tendulkar was expected to play his200th Test match in South Africa butBCCI has proposed to host a two-matchseries against West Indies so that hecould play the milestone match beforethe home fans in India.

It has also been speculated thatTendulkar, who has already quit ODIand T20 formats in international crick-et, will bid adieu to the game with thatmatch, which may be arranged atMumbai's Wankhede stadium, hishome ground.

At its recent Working Committeemeeting, BCCI revealed that it wasplanning to host West Indies before theSouth Africa tour.

In an incredible 24-year internation-al career, Tendulkar became the high-est run getter (15837 runs at an aver-age of 53.86) with a record 51 cen-turies in world cricket.

He had announced his retirementfrom ODIs late last year, having played463 games, amassing a record 18,426runs, including 49 centuries at an aver-age of 44.83.

One of the finest exponents of thegame, Tendulkar is revered by billionsof fans as "God of cricket" but theMumbaikar said he is just a cricketerwho "make mistakes" unlike thealmighty.

"Mein Bhagwan nahi hoon, I justplay cricket, ooper wale ki blessingshain, ab tak jo bhi meri life mein aayauska shukriya. We all make mistakes,agar mein mistakes na karta toh kabhiout hi nahi hota. I just play my game,"

Tendulkar said.Asked how he prepares ahead of a

match, Tendulkar said, "I prepare a bitbefore my match, in general life mentalpreparation is required."

Asked how he managed to hold peo-ple's trust for so long, when the game ismired in so many controversies,Tendulkar said he has kept his life sim-ple. "Since my school, we had simplecelebrations, whenever I achieved any-thing, Mithai was offered to God, mybrother always said let people talkabout the match and you move forward.I have a balanced lifestyle," he said.

Tendulkar went through a toughphase when his father Ramesh sudden-

ly passed away in 1999 when he wasplaying in the World Cup in England. ButTendulkar hardly got any time to mournthe loss as he flew back and cracked140 against Kenya to inspire India to avictory, just three days later.

"I do miss my father, I lost my fatherin 1999, it's been long time now, somany things have happened since thenand I miss him. But I have some won-derful moments and I cherish.

There are times when I rewind, Iremember him but some things can't bechanged," he said.Asked about hisdream car, Tendulkar said, "When I wasyoung my dream car was a Maruti 800at that time."

200th Test not on themaster's mind


COVER STORY

The Prime Minister of Iraq is Iraq'shead of government. PrimeMinister was originally an appoint-

ed office, subsidiary to the head ofstate, and the nominal leader of theIraqi parliament. Under the newlyadopted constitution the Prime Ministeris to be the country's active executiveauthority. Nouri al-Maliki (formerlyJawad al-Maliki) was selected to bePrime Minister on 21 April 2006.

The federal government of Iraq isdefined under the current Constitutionas an Islamic, democratic, federal par-liamentary republic.[2] The federal gov-ernment is composed of the executive,legislative, and judicial branches, aswell as numerous independent com-missionFederalism Law

Article 114 of the Constitution ofIraq provided that no new region maybe created before the Iraqi NationalAssembly has passed a law which pro-vides the procedures for forming theregion. A law was passed in October2006 after an agreement was reachedwith the Iraqi Accord Front to form theconstitutional review committee and todefer implementation of the law for 18months. Legislators from the IraqiAccord Front, Sadrist Movement andIslamic Virtue Party all opposed the bill.

THE LAND OF IMMENSE POTENTIAL

The federal government ofIraq is defined under thecurrent Constitution as anIslamic, democratic, federalparliamentary republic.[2]The federal government iscomposed of the executive,legislative, and judicialbranches, as well asnumerous independentcommission Sheikh Jamal Abdulmahda Ali Albatikh, His Title is the minister of Tribes and

member of the parliament of Almaleeki Government in Iraq


Creating a new regionUnder the Federalism Law a region

can be created out of one or more exist-ing governorates or two or more existingregions. A governorate can also join anexisting region to create a new region.There is no limit to the number of gov-ernorates that can form a region, unlikethe Transitional Administrative Law ofthe Iraqi Interim Government which lim-ited it to three.

A new region can be proposed byone third or more of the council mem-bers in each affected governorate plus500 voters or by one tenth or more vot-ers in each affected governorate. A ref-erendum must then be held withinthree months, which requires a simplemajority in favor to pass.

In the event of competing proposals,the multiple proposals are put to a bal-lot and the proposal with the most sup-porters is put to the referendum.

In the event of an affirmative refer-endum a Transitional LegislativeAssembly is elected for one year, whichhas the task of writing a constitution forthe Region, which is then put to a refer-endum requiring a simple majority topass.

The President, Prime Minister andMinisters of the region are elected bysimple majority, in contrast to the IraqiNational Assembly which requires twothirds support.Executive branch

The executive branch is composedof the President and the Council ofMinisters.President

Main article: President of IraqThe President of the Republic is the

head of state and "safeguards the com-mitment to the Constitution and thepreservation of Iraq's independence,sovereignty, unity, the security of its ter-ritories in accordance with the provi-sions of the Constitution." ThePresident is elected by the Council ofRepresentatives by a two-thirds majori-ty, and is limited to two four-year terms.The President ratifies treaties and lawspassed by the Council ofRepresentatives, issues pardons on therecommendation of the Prime Minister,and performs the "duty of the HigherCommand of the armed forces for cere-monial and honorary purposes."

There also exists a Vice Presidentwhich shall assume the office of the

President in case of his absence orremoval.Council of Ministers

Main articles: Prime Minister of Iraqand Council of Ministers of Iraq

The Council of Ministers is com-posed of the Prime Minister as head ofgovernment and his cabinet. ThePresident of Iraq names the nominee ofthe Council of Representatives blocwith the largest number to form theCabinet. The Prime Minister is thedirect executive authority responsiblefor the general policy of the State andthe commander-in-chief of the armedforces, directs the Council of Ministers,and presides over its meetings and hasthe right to dismiss the Ministers on theconsent of the Council ofRepresentatives.

The cabinet is responsible for over-seeing their respective ministries, pro-posing laws, preparing the budget,negotiating and signing internationalagreements and treaties, and appoint-ing undersecretaries, ambassadors,the Chief of Staff of the Armed Forcesand his assistants, DivisionCommanders or higher, the Director ofthe National Intelligence Service, andheads of security institutions.

List of ministriesMinistry of Human RightsMinistry of DefenseMinistry of Displacement & migrationMinistry of ElectricityMinistry of AgricultureMinistry of Finance

A new region can be proposed by one third or more of thecouncil members in each affected governorate plus 500voters or by one tenth or more voters in each affectedgovernorate. A referendum must then be held within threemonths, which requires a simple majority in favor to pass.


Ministry of JusticeMinistry of Science & TechnologyMinistry of Housing & ConstructionMinistry of CultureMinistry of CommunicationsMinistry of EducationMinistry of Industry & MineralsMinistry of InteriorMinistry of Labor & Social AffairsMinistry of OilMinistry of PlanningMinistry of TradeMinistry of Municipalities & Public

WorksMinistry of TransportationMinistry of Water ResourcesMinistry of Youth & Sports

Legislative branchThe legislative branch is composed

of the Council of Representatives and aFederation Council. As of August 2012,the Federation Council had not yetcome into existence.

Council of RepresentativesMain article: Council of

Representatives of IraqThe Council of Representatives is

the main elected body of Iraq. TheConstitution defines the "number ofmembers at a ratio of one representa-tive per 100,000 Iraqi persons repre-senting the entire Iraqi people." Themembers are elected for terms of 4years.

The council elects the President ofIraq; approves the appointment of themembers of the Federal Court ofCassation, the Chief Public Prosecutor,

and the President of Judicial OversightCommission on proposal by the HigherJuridical Council; and approves theappointment of the Army Chief of Staff,his assistants and those of the rank ofdivision commanders and above, andthe director of the intelligence service,on proposal by the Cabinet.Federation Council

Main article: Federation Council ofIraq

The Federation Council will be com-posed of representatives from theregions and the governorates that arenot organized in a region. The council is

The Council of Representatives is the main elected body ofIraq. The Constitution defines the "number of members at aratio of one representative per 100,000 Iraqi personsrepresenting the entire Iraqi people." The members areelected for terms of 4 years.


to be regulated by law by the Council ofRepresentatives. As of August 2012,the Federation Council had not yetcome into existence.Judicial branch

The federal judiciary is composed ofthe Higher Judicial Council, theSupreme Court, the Court of Cassation,the Public Prosecution Department, theJudiciary Oversight Commission, andother federal courts that are regulatedby law. One such court is the CentralCriminal Court.Higher Judicial Council

Main article: Higher Judicial Councilof Iraq

The Higher Judicial Council man-ages and supervises the affairs of thefederal judiciary. It oversees the affairsof the various judicial committees,nominates the Chief Justice and mem-bers of the Court of Cassation, the ChiefPublic Prosecutor, and the Chief Justiceof the Judiciary Oversight Commission,and drafts the budget of the judiciary.In 2013, the Council of Representativespassed the Iraqi Federal Court Act,which forbids the Chief Justice of theSupreme Court from also being thehead of the Judicial Council, andreplaced him with the Chief Justice ofthe Court of Cassation.Supreme Court

Main article: Supreme Court of IraqThe Supreme Court is an independ-

ent judicial body that interprets the con-stitution and determines the constitu-

tionality of laws and regulations. It actsas a final court of appeals, settles dis-putes amongst or between the federalgovernment and the regions and gover-norates, municipalities, and localadministrations, and settles accusa-tions directed against the President,the Prime Minister and the Ministers. Italso ratifies the final results of the gen-eral elections for the Council ofRepresentatives. Prime Minister of Iraq calls onPresident

Mr. Nouri Kamil al-Maliki, PrimeMinister of Iraq called on the Presidentof India, Shri Pranab Mukherjee atRashtrapati Bhavan today (August 23,2013).

The President said India cherishesits cordial and friendly relations withIraq. The two countries have historicalties starting from the greatMesopotamian civilization and thou-sands of Indians undertake annual pil-grimage to the Holy Shrines of Najafand Karbala. With the emergence of

democracy in Iraq, relations betweenthe two countries are entering a newphase.

The President said Iraq has becomeIndia's second largest crude oil suppli-er. This is a mutually beneficial partner-ship. India desires to elevate the rela-tionship from a buyer-seller into abroad-based one with equity partner-ship in oil production, joint ventures inoil exploration, petrochemical complex-es, fertilizer plants etc. He said the dif-ferent MoUs to be signed during IraqiPM's visit would establish the institu-tional framework to enhance co-opera-tion between the two countries.

The President said India has been acommitted partner in Iraq's progressand development and will remain so asIraq undertakes its reconstruction andrebuilding efforts. India remains com-mitted to assist Iraq in the process ofrebuilding its infrastructure and institu-tions. Indian entrepreneurs and Indianindustries are eager to engage withIraq.

The Higher Judicial Council manages and supervises theaffairs of the federal judiciary. It oversees the affairs of thevarious judicial committees, nominates the Chief Justiceand members of the Court of Cassation, the Chief PublicProsecutor, and the Chief Justice of the Judiciary OversightCommission, and drafts the budget of the judiciary.


The Iraqi Prime Minister warmlyreciprocated the President's words andsaid India and Iraq were two friendlycountries seeking to strengthen theirrelations and maintain a high level ofcontacts. He said India and Iraq com-plement each other. India needs energywhile Iraq needs investment to gener-ate employment. He said India's experi-ence in democracy has been applaud-ed throughout the world and there ismuch that Iraq can learn from theIndian experience.Indian PM Speech to welcome Iraq PM

Relations between India and Iraqrest on a strong foundation. Our histori-cally close links of commerce, cultureand spiritualism are complemented bya fund of goodwill between our two peo-ple. This alone ensures that ours willalways remain a close bond. Iraq haslong been one of our most importantpartners in West Asia. As it recovers

from recent conflict, it is also emergingas our second largest source of oil,accounting for over 12% of our importslast year. The present visit of PrimeMinister Maliki is aimed at impartingnew dynamism to our relations andtheir broad-based development.

Prime Minister Maliki and I haveagreed that our energy trading relation-ship should be turned into a strategicpartnership, including through jointventures in oil exploration, petrochemi-cal complexes and fertilizer plants. TheInter-Governmental Memorandum of

Understanding on Cooperation in thefield of Energy will provide a very strongframework to further diversify our coop-eration in this sector and we look for-ward to concrete progress in the nearfuture.

We also agreed to expand and diver-sify our economic cooperation, which,as our Joint Commission recently identi-fied, would cover areas such as agricul-ture, water resource management,pharmaceuticals, health care, informa-tion technology, infrastructure, low costhousing and trade.

Relations between India and Iraq rest on a strongfoundation. Our historically close links of commerce, cultureand spiritualism are complemented by a fund of goodwillbetween our two people. This alone ensures that ours willalways remain a close bond. Iraq has long been one of ourmost important partners in West Asia.

O P I N I O N E X P R E S S September 2013 11

Iraq was the largest project exportdestination for Indian companiesbefore the Gulf War. I underlined toPrime Minister Maliki the strong inter-est of Indian companies to participatein Iraq's reconstruction efforts and itsambitious plans to expand and upgradeits infrastructure.

India has also been active in the areaof capacity building in Iraq, including inhigher education and health care. I havereiterated our offer of support for rebuild-ing and upgrading institutions in Iraq.

Today, we have decided to add anew dimension to this relationship byagreeing to share our expertise andknowledge in the field of agricultureand water management.

Prime Minister Maliki and I also hada productive exchange of views on inter-national developments, especially inWest Asia and North Africa. Peace, secu-rity and stability in this region are vital toboth our countries. As democratic andpluralistic societies, India and Iraq facesimilar threats from radicalism and ter-rorism. India believes that a strong, sta-ble, peaceful, united and democraticIraq is in the interest of regional andglobal peace and security. We haveagreed to hold regular dialogue on thesedevelopments through Foreign OfficeConsultations. We also agreed to furtherstrengthen our counter-terrorism andintelligence cooperation.

I look forward to working with PrimeMinister Maliki to further expand and

deepen our very special bilateral rela-tions.

Iraq PM speech to welcome Indianinvestment in Iraq

Iraqi Prime Minister Nouri al Malikion Saturday urged the Indian privatesector to work together with their Iraqicounterparts to help in the reconstruc-tion of the West Asian country, andpromised to make available mecha-nisms for Indian companies to find theinvestment and business climatesecure and conducive to earning profit.

Citing the long relationship betweenIndia and Iraq, Maliki, who's in India ona three-day official visit, said Indiancompanies were extremely committedand would do justice to his country'sinvitation to them.

Speaking at an interactive sessionwith business leaders at a forum organ-ized by Indian industry bodies, Malikiassured them they would not face anyadministrative issues.

Opportunities existed in energy, oilexploration and production, refineries,petrochemicals and fertilizers, he said.Iraq is India's second largest oil suppli-er after Saudi Arabia. India becamemore dependent on Iraqi oil recentlyafter it cut supplies from the sanctions-hit Iran.

Maliki added Iraq needed a hugenumber of low-cost houses to compen-sate for the destruction suffered as aresult of the wars it had faced. TheAmerican-led war of 2003 saw massivedestruction of infrastructure andhuman life in Iraq, which was followedby widespread insurgency.

There was also an urgent need toinvest in electricity. Although the Iraqigovernment had started to build elec-tricity plants, whatever electricity it wasgenerating was being consumed byrapid development. The Iraq prime min-ister invited Indian industry to investand manage electricity plants directlythrough agreements with his govern-ment.

Iraq also needed reconstruction ofits airports, railways and harbors', saidMaliki. He called upon India to invest inhis country's transportation needs.Health and education were other sec-tors where private investment was invit-ed. He further hoped Indian bankswould open branches to facilitate thetransfer of finances that were neededfor Iraq's reconstruction.

By OECEL Bureau @ Dubai

India has also been active inthe area of capacity buildingin Iraq, including in highereducation and health care. Ihave reiterated our offer ofsupport for rebuilding andupgrading institutions inIraq.


Joint statement of MEA India on IraqPM visit to India

1. At the invitation of H.E. Dr.Manmohan Singh, Prime Minister of theRepublic of India, H.E. Nouri Al-Maliki,Prime Minister of the Republic of Iraqpaid his first State visit to India from 22-25 August 2013. Prime Minister Malikiwas accompanied by a high-level dele-gation comprising ministers, senior offi-cials and business leaders. PrimeMinister Maliki was accorded a ceremo-nial welcome in the forecourt of theRashtrapati Bhavan on 23 August.During his official engagements in NewDelhi, Prime Minister Maliki helddetailed bilateral consultations withPrime Minister Dr. Manmohan Singh.He also called on the President of theRepublic of India, Hon'ble Shri PranabMukherjee and the Vice President ofIndia, Hon'ble Shri Hamid Ansari. PrimeMinister Maliki met the Leader of theopposition, Smt. Sushma Swaraj andMinister of External Affairs Hon'ble ShriSalman Khurshid. He attended a busi-ness luncheon meeting jointly organ-ized by the three business chambers,FICCI, CII and ASSOCHAM. In addition toNew Delhi, Prime Minister Maliki andhis delegation will also be visiting Agraand Mumbai.

2. The two Prime Ministers held wide-ranging discussions in a sincere, cordialand friendly atmosphere. Theyexchanged views on bilateral, regionaland multilateral issues of mutual inter-est and reached a broad consensus.The discussions enabled better under-standing and appreciation of eachother's concerns and perspectives andhelped in forging closer understandingat the highest political level.

3. Areas of cooperation: The two sidesexpressed satisfaction at the recenthigh-level political exchanges andagreed to further strengthen the bilat-eral relations through regularexchanges at political, business andpeople-to-people levels. In this context,both leaders welcomed the construc-tive outcome of the 17th JointCommission Meeting recently held on7-8 July, 2013 in Baghdad, which hasbeen an effective institutional mecha-nism to discuss the entire gamut of thebilateral ties.

4. The two leaders reiterated the neces-sity to build a forward-looking relation-ship by deepening the bilateral engage-ment and better leveraging existingcomplementarities between the two

countries in key areas of mutual inter-est, earlier identified in the JCM, includ-ing among others energy security; agri-culture and food security; waterresource management; education;infrastructure development; pharma-ceuticals and Medicare; informationtechnology and low-cost housing. Thetwo sides reached a common under-standing to further diversify the tradebasket.

5. Energy sector: Expressing satisfac-tion at the rapidly growing bilateraltrade in the oil and energy sector, withIraq becoming India's second largestsupplier of crude oil, the two sidesagreed to focus on enhancing coopera-tion in energy security, in particular,through joint efforts to develop capaci-ties to maximize the utilization of ener-gy resources, through joint ventures inoil exploration, petrochemical complex-es and fertilizer plants. The two sidesexpressed happiness at the signing ofan important MOU in the energy sectorto further deepen the existing coopera-tion.

6. Revalidation of the contract forBlock-8: Both sides noted with satisfac-tion that OVL and Petroleum Contractsand Licensing Directorate (PCLD) haveinitiated negotiations and expected thatthey conclude negotiations for Block-8contract.

7. Middle Furat group of fields: TheIndian side welcomed the Iraqi side'soffer, made during the latest JointCommission meeting, of three new oilblocks in the undeveloped Middle FuratOil Field viz. Kifil, West Kifil, and Merjanon nomination basis to Indian publicsector oil companies. The Indian sideagreed to study and submit a proposalto PCLD for discussions/negotiations.

8. Nasiriya Integrated Project: TheIndian side thanked the Iraq side forprequalifying the Indian companiessuch as ONGC Videsh Limited, MRPLand Reliance for participation in the

Nasiriya Project Bid Round and forfavourable consideration of Indian com-panies. At the request of the Indianside, the Iraqi side agreed to considerthe pre-qualification of Indian OilCorporation Ltd for downstream project.

9. Iraqi Investment in Indian Refinery:The Indian side welcomed the Iraqiside's expression of interest in investingin the upcoming 15mmt oil refinery atParadip in India as indicated during the17th Joint Commission meeting. Thetwo sides decided to work together toarrive at a mutually beneficial model forsuch investment.

10. Fertilizer Plants: In the field of fer-tilizers, the two sides agreed to activelyexplore the possibilities of establishinga urea plant and phosphate fertilizerunits by utilising natural gas resourcesfrom Iraq as joint ventures in Iraq.

11. Long-term crude supply agree-ment and better credit term for sup-ply: The Indian side proposed long-termagreement (10 years) to meet theincreased crude oil demand in the newrefineries. The Iraqi side assured tomeet the Indian demands. The Indianside requested better terms, includingabolition of LC and increase in interestfree credit period from 30 days to 60days. The Iraqi side will consider afterconsulting authorities.

12. Steel sector: The two sides agreedto enhance cooperation in steel sector,including through joint ventures to setup steel plant in Iraq or in India for pro-duction of steel pipes with the purposeof transporting oil in Iraq. The Indianside invited Iraq to invest in an upcom-ing steel project of Rahstriya IspatNigam Limited.

13. Power sector: Recognising theexisting capabilities of BHEL in manu-facturing gas turbine units, the Iraqiside agreed to include BHEL as a quali-fied Equipment Manufacturer for itspower sector.

The two Prime Ministers held wide-ranging discussions in asincere, cordial and friendly atmosphere. They exchangedviews on bilateral, regional and multilateral issues ofmutual interest and reached a broad consensus. Thediscussions enabled better understanding and appreciationof each other's concerns and perspectives and helped inforging closer understanding at the highest political level.


14. Railway sector: The Iraqi side wel-comed the expression of interest byIRCON in turnkey execution of railwayprojects in Iraq including civil and trackworks, electrification, signalling, settingup of workshops/production units forrolling stock and its supply.

15. Low-cost housing sector: Keepingin view the demand for low-cost hous-ing in Iraq, both sides agreed to explorethe possibilities of involvement of reput-ed Indian public and private sectorcompanies in the low-cost housing sec-tor in Iraq.

16. Agriculture sector: Both sidesagreed to cooperate in agricultural edu-cation and research activities throughsigning of an appropriate institutionalframework MOU for mutual benefit.

17. The two sides expressed satisfac-tion at the successful conclusion of anMOU on water resource management toenhance the bilateral cooperation inthis critical area for Iraq. The MOU pro-vides for collaboration and sharing ofexperience and expertise between thetwo sides.

18. Medicare and health sector:Keeping in view the increasing numberof Iraqi nationals visiting India formedicare, the two sides agreed toenhance cooperation in the health sec-tor, including exchange of health per-sonnel, medical personnel, nursing per-sonnel, training, participation in confer-ences in both countries and coopera-tion in pharmaceuticals.

19. Education sector: Recognizing thatthe number of Iraqi students studying inIndia has grown considerably over thepast few years, with over 10,000 cur-rently studying in India, the two sidesidentified education as a key area ofmutual interest and further collabora-tion. The authorities concerned willwork out necessary modalities in thisregard.

20. Reconstruction activities in Iraq:Extending support to the Government ofIraq in its ongoing rebuilding and recon-struction efforts, Prime Minister DrManmohan Singh renewed India's com-mitment to participate constructively inthis process through the involvement ofIndian companies in infrastructure proj-ects.

21. Terrorism: The two leaders con-demned the phenomenon of terrorism

and extremism, affirming that it threat-ened all societies and was not linked toany race, colour or belief. The interna-tional community must, therefore, res-olutely combat terrorism. The two sidesfurther agreed to cooperate on counter-terrorism.

22. Recognising that the two countriesface similar challenges being pluralisticsocieties, the two leaders noted that tol-erance, religious harmony and brother-

hood, irrespective of faith or ethnicbackground, were part of the principles,ethos and values of the two countries.India reiterated its commitment to sup-porting the emergence of a stable,peaceful, united and democratic Iraq.

23. Regional and International issues:The two sides discussed several region-al and international issues, includingthe security situation in West Asia,Middle East and South Asia. There wasconvergence of views on the subject.

24. Afghanistan: The two sides agreedthat the Afghanistan issue concernedregional security and stability. They reit-erated their support for an "Afghan-led,Afghan-owned" reconciliation processand their commitment to working withregional countries and the internationalcommunity to help Afghanistan achieveits objective of peace, stability, inde-pendence and development at an earlydate.

25. Syria: The two leaders called uponall sides in Syria to abjure violence andresolve all issues peacefully throughdialogue taking into account the aspira-tions of the people of Syria. Both lead-ers agreed that any external militaryintervention in Syria's internal affairsshould be excluded.

26. UN Reforms: Both leaders empha-sized the importance of an effectivemultilateral system, centred on a UnitedNations reflective of contemporary real-ities, as a key factor in tackling globalchallenges. In this context, theystressed upon the urgent need to pur-sue reforms of the United Nations,including of the Security Councilthrough an expansion in both cate-gories of its membership, to make itmore representative, credible andeffective. Prime Minister Maliki reiterat-ed his country's support for India's can-didature for the permanent member-ship of the United Nations SecurityCouncil.

27. Expressing his happiness to visitIndia, Prime Minister Maliki thankedPrime Minister Dr. Manmohan Singh forthe warm and gracious hospitalityextended to him and the members ofhis delegation during their stay. He invit-ed Prime Minister Dr Manmohan Singhto visit Iraq at a mutually convenienttime. Prime Minister Dr ManmohanSingh gladly accepted the invitation.The dates of the visit will be worked outthrough diplomatic channels.

Recognising that the twocountries face similarchallenges being pluralisticsocieties, the two leadersnoted that tolerance,religious harmony andbrotherhood, irrespective offaith or ethnic background,were part of the principles,ethos and values of the twocountries. India reiteratedits commitment tosupporting the emergence ofa stable, peaceful, unitedand democratic Iraq.


Dr Mohiba Khalil

Is it an economic crisis? The mostimportant problems in the time welive in are the InternationalRevolutions Crisis.

The International Scene, Which thatthreatens the international communityand economic growth all over the world-for example but not limited to, the envi-ronmental crisis as outlined in the uni-versal observance, the food crisis andthe crisis looming on the horizon; watercrisis and the international security cri-sis, which includes issues of nuclearproliferation, the horrors of humanrights andacts of terrorism.

What is the most interesting anddeserves a common reaction in anincreasing way to these crises by peo-ple all over the world as described inseeking to separate, resort and retail.

Is it the people's independence thatwill carry them more control over theirown destiny? What are the risks towhich they belong? Regardless ofwhether the freedomship sailed orsank.

Is it self-rule that we are looking atand why? What motivates peoples forindependence? What are the condi-tions of life we are following?

In all cases are presented in three oftwo main topics.The first topic, whicharises from which I call the people's dis-

GLOBAL SOLUTIONSNEED OF THE HOUR

Humanism needs global solutions for the problems in the con-flict era by using humane values and standards for the states

which opposes the thought in science and humanity

What is the most interestingand deserves a commonreaction in an increasingway to these crises by peopleall over the world asdescribed in seeking toseparate, resort and retail.


content.In these areas; the rich peoplewho are relatively wealthy compared tothe rest of the neighboring countries.And who see themselves as a working-class in terms of wealth, hard work andbeing used to support the poor and theyhate to ask them to pay more taxes, togive up revenues from their naturalresources and to carry a large share ofthe debt of major countries to whichthey belong to.

The second topic is based on astrong desire to make decisions on mat-ters of fundamental policy by the peo-ple who are closest to and most affect-ed by the decisions, and not by the farinstitution's that seen as a far regionfrom the needs related to the group ofpeople that tend to apply a uniform pol-icy for everyone without taking signifi-cant differences in mind.

One can see what seems to liedeeply of this legitimate and real desireon a part of people everywhere. It ispossible to say that it is reasonable inthe formulation of its own destiny.Thisis a topic of our time as set out in manycountries participating in what becameknown as The Arab Spring.The logicalquestion to ask then is: Are the non-

centralcases ablessing? When this isdone,can you communicate with thegrassroots, and therefore repressiveand unfair?The next question is: Howcan we formulate a government systemthat allows people to consult their legit-imate needs while working towards uni-fication at the same time?Because weare facing a real danger in our rush

The second topic is based on a strong desire to makedecisions on matters of fundamental policy by the peoplewho are closest to and most affected by the decisions, andnot by the far institution's that seen as a far region from theneeds related to the group of people that tend to apply auniform policy for everyone without taking significantdifferences in mind.


toward fragmentation as a panaceaconsidered to resolve all the difficulties,we will blow series of reactions ofincreasing fragmentation into smallerand smaller parts without a well-designed link between the parts.Howmuch fragmentationis enough? Howsmall must the units be for people tofeel safe and feel that they have a rightin their own destiny? One can see that,if the situation left unchecked, thisprocess could easily turn into a flood ofgreater and greater ofrebellion and bul-lying.

It was born and fed by fear. In aworld where interdependence is a fixedreality and this will only lead to conflict

and despair.When we take this theory and ana-

lyze it. Isn't the fact that our Arab tribalmilitias and multiple denominations thebarbarians and sects Brotherhoodnumerous multi currents are workingon, that makes me wonder about theapproach we follow in Arab countries,Where is the communicative approachwith different groups in the modernConstitution? Where are the Arab stan-dards and values? Have we forgottenthat we are in every Arabian house,grew up on forgiveness, giving, generos-ity, hospitality and caring of our familymembers.

What is the solution?Shall we raise

armies in face of each other and makekilling permitted? Do we remember thehistory and the glory of our ancestorswho built the developed Arab communi-ty which has left its impact inourbelovedPalestine and true-Andalusia? Whereare theintegrationand the Arab existence?Do we allowSwitzerland the Western, to be the sta-tus of the ancient Arab wealth as it wasmentioned by the Historical Legend, ourGreat Humane Father Sheikh Zayed binSultan Al Nahyan? Shall we rebelagainst the welfare between the citi-zens of the beloved Emirates?No, andabsolutely not. The lands belong to itsowners. Yes, that's right.

How can we consolidate thenational vision and our love for theArab nation in its integration and itssocial forms that only havethe Arabflag, banner, Arab values and stan-dards?

Where is the social maturity thatwas led by the social tribal system ofthe clan, the tribe, the state, thetown, the state and the nation, is itnot the next step of our social devel-opment to the great Arab nationwhich embraces everybody in agreater loyalty that is quietly in accor-dance with less loyalty to a nationalcountry? Such federal nation may be

When we take this theoryand analyze it. Isn't the factthat our Arab tribal militiasand multiple denominationsthe barbarians and sectsBrotherhood numerous multicurrents are working on, thatmakes me wonder about theapproach we follow in Arabcountries, Where is thecommunicative approachwith different groups in themodern Constitution? Whereare the Arab standards andvalues? Have we forgottenthat we are in every Arabianhouse, grew up onforgiveness, giving,generosity, hospitality andcaring of our familymembers.


and should be designed to meet thelegitimate needs of the individual pop-ulation and granting them self-ruleabout various issues that arouse aspecial concern for them with ensur-ing all the good for them through thecondition that they should have somepart in the decision- making for thefederal nation. Such latter rightsshould reasonably include the right ofthe individual country to wage waragainst each other, and reliance on acentralized army to serve wholly inkeeping peace, and the right to man-age the important natural resources ,including energy resources for thebenefit of all the peoples of the worldand consequently to get rid of conflictand inequality in getting energysources and the right of the humanbeing to life in dignity and to use thenatural resources in the commercialexchange for all the civilized countriesof the world.

Hence, we are in need to a modelor chart to guide us how to conduct

such a vital and daring experiment, forthis matter necessitates the study ofthe American Federal System, as eachAmerican says I am American, buteach Arab does not say I am Arab butI am Shami (meaning Syrian), I amLebanese, despite that we all shareone culture that we have inheritedfrom our ancestors the pharaohs orBedouins whose theories of civiliza-tions have been established in the

sound Arab Thinking, which seem tobe relatively successful in achievingbalance between the needs of thegroup and the needs of the individualsand implanting the principle of unionin our various deeds , regardless thediversity in the religion which is fol-lowed by one person or another, andshall we organize humanitarian cam-paigns after each catastrophe or in aRamadan night or in Al Adha Feast.

Hence, we are in need to a model or chart to guide us how toconduct such a vital and daring experiment, for this matternecessitates the study of the American Federal System, aseach American says I am American, but each Arab does notsay I am Arab but I am Shami (meaning Syrian), I amLebanese, despite that we all share one culture that wehave inherited from our ancestors the pharaohs or Bedouinswhose theories of civilizations have been established in thesound Arab.


Is it global tyranny of the forceunity and what shall we do when thenation and Islam become threatened,and the human sacrifice is huge whilewe can overcome all this the existingArab individualism with the unity ofthe Arab values and standards.

This evening the InternationalAtomic Energy Agency(IAEA) hasannounced saying that it had againfailed and it seems that Iran is imped-ing the international efforts that aim atgetting a reduction of Iran's nuclearactivities and to ultimately decide if thestate is trying to build nuclear weaponsor as it alleged repeatedly that itsnuclear progamme aims only at meet-ing the peaceful energy needs of itspopulation and giving satisfactoryanswer for the questions that arerepeatedly asked by the InternationalNuclear Energy inspectors. Should thecountry went on behaving in a provoca-tive way that does not satisfy thedemands of the international communi-ty through giving a deaf ear, then therisk of the occurrence of a comprehen-sive fire in the Middle East and the con-tinuation of the escalation until wereach the non-return point, which is warin the Middle East which nobody willhave the ability to stop. Is this the resultthat we really want? If it is not so, we

should immediately go away from thiscourse and search for another alterna-tive which is safer and more rational.

Let us search for our traditions andrespect them and seek for a collectiveArab security which gives each child ofour children the safety that Allah hasgranted and secure our children a pros-perous future; What is the reason forbrutality and where are the safety andsecurity which we are looking for, is it inthe international resolutions or in ourglorious history and the credibility of his-tory? And how can we restore security inthe Arab Countries? We have to promoteour values and standards in an individ-ual and collective way with respect to

the various and different religions andsects of the persons. The events inLibya, the Occupied Palestine, Yemenand the fearful development in Egyptwhich has continued in deteriorationafter the people have demanded for wel-fare which is their right, and they werefaced with brutal crackdown on peace-ful protesters on the hands of the police,the army and the unorganized units ofthugs, the thing that led to chaos, masskilling,arbitrary arrests, detention,tor-ture of prisoners and threatening. Up tillthe Arab Countries stand paralyzedwhat to do. Where is the community thatbrightens in the prosperity and glory ofour ancestors?

Let us search for our traditions and respect them and seekfor a collective Arab security which gives each child of ourchildren the safety that Allah has granted and secure ourchildren a prosperous future; What is the reason forbrutality and where are the safety and security which we arelooking for, is it in the international resolutions or in ourglorious history and the credibility of history? And how canwe restore security in the Arab Countries? We have topromote our values and standards in an individual andcollective way with respect to the various and differentreligions and sects of the persons.


Opinion Express Bureau

Iraqi government and with supportfrom the Arab Thinking Bank and withthe assistance Palestinian Origin

Doctor& researcher, the poetessMuhibah Khalil, , University Lecturerand honorary member of EuropeanThinking Bank, who made a visit by aninvitation of the Iraqi government andshe had conducted studies & research-es about topics related national, social,wellbeing and economic Security of thesister country Iraq, in coordination withHis Highness Sheikh Jamal Al Bateekhin general and with international con-cerns related to security. They workedon a special program for providingsocial services with scientific activitiesin a large extent with the preparation ofresearch and conducting lectures, sem-inars and conferences on subjectsrelated to the agenda of research activ-ities to help the professional develop-

ment of Iraqi citizens through trainingprograms. Sheikh Jamal Al Bateekh willsupport the progress in the decisionand he will submit to the Iraqi govern-ment through the preparation ofreports about the best mixture of poli-cies and providing qualitative researchto decision-makers with a guarding eyeon the Iraqi people and their future.

The subject of the economy, whichwe are talking about today, is in fact thecreation of modern populace that hasbecome very complicated in compari-son with the previous conditions, whichis the aim of this covenant in our sociallife; it is necessary on the bath toprogress to refer to the specificity ofthis economic and social thought in themanner as it always had a prosperouseconomy, but wasn't distributed in asocial way.

In a rapidly changing world, with theprospects and challenges of expandingthe scope of human activity in all new

turns, perception of the wise leadershipof the Unified Iraq State, the establish-ment of an advanced and independentresearch, which will not only be awarewith new developments in the political,economic and social human efforts, butalso in the formulation of the mostappropriate responses and strategiesto save the community and to keep inline with the progress in the race forgrowth.

The objective of this vision that thePrime Minister and Sheikh Jamal AlBateekh are the leading institution,which has a deep thinking in settingnew social standards of excellence andthe required expertise in economic life,for example: renewed economic struc-ture in a modern meaning and with aresult sensed by the citizens in a widerange of care, trade exchange and cap-ital building and merger between itsdeveloped facilities taking into consid-eration the background of this country

INTELLECTUAL ARM OF THEGOVERNMENT OF THE

REPUBLIC OF IRAQ


and the revival of socioeconomic con-cept in dealing with other countries andhuman needs which will be rapidlychanged after the decision, the newgenerations will be proud of Iraqbecause of changing Iraq into anEconomic, Cultural, Social andIndustrial Centre. This change is impor-tant in fact for the Iraqi government andthis change will take a lot of discus-sions and specification for the impres-sion and wonderful and real fact forIraqi people, who have the right to livein dignity and security, and to give upthe old links and be provided fully withmodern thinking for a classy economiclife.

European Union Countries had fol-lowed this policy with their people for adeveloped society and to create a socialenvironment. For the stability of the sis-ter country Iraq, the application of it,the decision vision is strong and takinginto account our Logo is having aware-ness among intellectual islands andbehavioral aspects in a prosperous eco-nomic life while there is no contradic-tion in providing social freedom andsafety that was made for Iraq to be inthe course of activity development andin the mutual relations with the Iraqi

people as a whole.Iraq has entered in the global econ-

omy and development without contra-diction with a better social developmentin the human values. Can we connectbetween the human values with thecurrency? ; While it's known that theproportion of the rich people or theworld that live in welfare is no morethan 10 percent of the global communi-ty.

It is necessary to think about thesethings, especially in a world whosestreets are yelling for the economic andpolitical affiliation, such as old-ageinsurance, childhood and giving theright for development its time, and notbeing indifferent and existing religiouswars that are giving a negative impactof the economy and political develop-ment.

Now, it has become evident for youhow a person should think twice todayin these questions, especially that theyouth run after for years, you will findone who has the opportunity to play apart in the formation of the near future.

In the heart of the task and withrationality in dealing with tissues of vitalurgent importance now and in thefuture, it also put in consideration the

strict belief in the victory of the Iraqipeople. In addition to that the mainresearches set involve a cadre of well-educated national citizens in order toget the typical benefit from a pro-gramme that is specially designed forthis purpose. The devotion and dutyfeeling are the things that distinguishthese professionals, which is strikinglyin their development and it implantedthe spirit of initiative and courage,which will light the way to a betterfuture.

The role of the centre in transferringquality planning to the government topresent governing with internationalstandards to its people in accordancewith the same, "As it is not isolated fromsuch developments, it sought to adoptnecessary measures to cope with therequirements of evolution that hasbeen proven in the recent years that itis one of the most effective measures inthe country in monitoring internationalevents."

Dr. Muhibah Khalil is working hardin pursuing, analyzing and investigatinglocal, regional and international devel-opments on a scientific and systematicbasis organizing the event that directthe decision makingprocess with coop-


eration with Sheikh Jamal Al Bateekhand the Iraqi government which camefrom the inspiration of this processthrough proper and inclusive guidanceand the unlimited support from the gov-ernment of the Republic of Iraq and thiswill grow on the need to enhance thethinking skills of the citizens and help-ing them to develop their capabilities toachieve progress in the modern world.

Through various concrete achieve-ments, they have proven their ability toovercome challenges and obstacles, inaddition to academic excellence notonly in the Arab world but also all overthe world.

Consequently, we still need to con-tinue our support to the IraqiGovernment in the course of enhancingthe scientific and intellectual traditionswhich lay the basis for building modernsocieties which look for following thecourse of speedy development andprogress.

Thinking and intellectual insight arethe way for developing policies thatmake it possible to fulfill the "variousachievements and contributions andsupport the taking care of the honestpeople and continuous support which ispraise worthy of Sheikh Jamal AlBateekh and the sister IraqiGovernment to Dr. Muhibah Khalil andin supporting and taking care of her var-ious activities and close monitoring ofsuch activities with great interest andenrichment of course with the properguidance, and enhancing her activitiesand achievements, God Willing, and

this support will help in enforcing herperformance towards the fulfillment ofexcellence and wise leadership, whichis anticipated to make the informationtechnology and communications sectorthe fifth pillar of Economy. A lot of com-panies have presented their expressopinions about the solutions and pro-grammes that enhance the mutual rela-tions between the state and India ininformation technology and communi-cations sector (e.g. Opinion ExpressGroup, Pantel Technology), these com-panies have provided Dr. MuhibahKhalil with technological solutions inthe field of information technology andcommunications which may coverhealth care services and vital identifica-tion card system, and small loans sys-tem for less cash in the society and thenational security services and nationalidentity cards and similar capabilities.This will lead to improve the relation-ships between the two friend countries- and according to Dr. Muhibah Khalil -convert the country towards the field ofknowledge. The vision of Sheikh JamalAl Bateekh and Mr. Prashant Teuaray isthat they strongly feel that the informa-tion technology and communicationssector may be used as a fuel for thehuge growth of economy. The technolo-gy of Pantel with the partnership ofConsortium that wishes to coordinate tofacilitate the following reference toachieve these objectives:

1) Excellent infrastructure forinformation technology and communi-cations sector

2) Good infrastructure to facili-tate good quality of living.

3) Provision of skilled humanresources for all the classes of technol-ogy information professions.

4) Effective cost of operations. 5) The policy of easiness of the

organizational and institutional frame. This aims at setting a pioneer model

of constructive interaction between theleadership and the people as well as itgives our wise leaders utmost priority tothe interests of the citizen and theydon't save any effort in providing themwith a dignified life, and similarly ourleaders are highly appreciated by thecitizens who are ready to play any effec-tive role in the national developmentand strengthening the position of thestate among the other nations and theclose interaction between the wiseleadership and the people, which is areal reflection to the policy of opennesswhich is based upon keenness to knowthe needs of the citizens and on the fol-lowing:

"A special interest is being given bythe Prime Minister of Iraq and SheikhJamal Al Bateekh to secure and providedignified life to the citizens, who areconsidered to be the real treasure ofthis nation." "The wise leadership of thecountry believes strongly in that thehuman resources are the most valuablewhich contributes actively and positive-ly in the process of development and isa means to national progress and pros-perity". "We are keen to communicatewith people and keen to provide betterservices for both the country and thecitizens which is the core of the visionof our wise leadership to nationaldevelopment through human resourceswhich is the main drive for developmentand the most valuable assets in thecountry. This explains well the keen-ness of our wise leadership in listeningto citizens and exerting efforts toenhance their welfare in fields such asmodern education, comprehensivehealth care and social services in orderto provide the people with dignified life.This is one feature of the concrete fea-tures of the phase of empowermentwhich was launched "to provide anappropriate environment to empowerthe citizens in order to participate intheir social and political life."

During their meeting the tribal citi-zens have expressed their gratitude,satisfaction and loyalty and there havebeen similar mutual treatment of inti-macy and appreciation between theleadership and the people for security,stability and prosperity.


INDIA'S 'CRAZE FORFOREIGN' MUST END

Raghuram Rajanhas been con-

spicuous only inbeing part of ateam that has

crash-landed aonce soaring

economy.


Raghuram Rajan is greeted at hisoffice in New Delhi after he wasappointed as the next governor of theRBI on Tuesday. PTI

It would take extreme effort forRaghuram Rajan to do a worse job ofensuring economic growth than hisimmediate predecessor DuvvuriSubbarao, who will leave behind a bank-ing and industrial wasteland by the timehis extended term concludes in a fewweeks' time. Given that he has been aloyal chela of the economic adviser tothe Prime Minister, C. Rangarajan, itwould be understandable if he were toexpect to be given the PadmaVibhushan at the next investiture cere-mony. Odder choices have been known

to occur, no doubt inspired by the NobelPeace Prize awarded to Henry Kissingeror the European Union. More apt thansimply a national award would be thegifting of a ministerial-level commissionchairmanship to Subbarao. This bodycould be given the task of boosting eco-nomic growth in India. Given the skill ofSubbarao in ensuring the opposite, allthat would be needed to speed upgrowth in the country would be to imple-ment the polar opposite of the commit-tee's recommendations.

Except to the "experts" at theReserve Bank of India (RBI) and at theMinistry of Finance, there is no mysteryabout why the Indian rupee has beendiving in recent months. All that the

Except to the "experts" atthe Reserve Bank of India(RBI) and at the Ministry ofFinance, there is no mysteryabout why the Indian rupeehas been diving in recentmonths. All that themandarins have to do is togo to - for example -Singapore and get hold ofsome of the brochures beingput out by banks there toattract NRI dollar deposits.These explicitly promise anannual return of about 20%in dollars for any moneyinvested. Indeed, it wouldmake sense for an NRI totake a loan from a Singaporebank and place the loan asan NRI deposit, takingadvantage of the more than5% spread between the costof the loan and the intereston the deposit.


mandarins have to do is to go to - forexample - Singapore and get hold ofsome of the brochures being put out bybanks there to attract NRI dollardeposits. These explicitly promise anannual return of about 20% in dollarsfor any money invested. Indeed, it wouldmake sense for an NRI to take a loanfrom a Singapore bank and place theloan as an NRI deposit, taking advan-tage of the more than 5% spreadbetween the cost of the loan and theinterest on the deposit.

The (already high) assured return of20% is subject to the rupee falling toabout Rs 72 to the US dollar, but themore adventurous investors can get ahigher return by accepting a higher risk.The number of "get rich quick" NRIdeposit schemes based on the absurd-ly generous incentives given by theManmohan Singh government to suchinvestors has multiplied, with banksadvertising such offers and even pro-voking lawsuits on the part of thoseangry at being denied access to theIndia Gravy Train because they are notNRIs. However, despite the severalheady mentions given to individualssuch as Raghuram Rajan (who, thusfar, has been conspicuous only in beingpart of a team that has crash-landed aonce soaring economy), the geniuses inMint Road and North Block seem

unable to comprehend the correlationbetween the high returns given to thosemaking dollar deposits in Indian banksand the fall of the rupee.

Any hawala operator can tell themhow those holding huge hoards of cash- mostly politicians and officials - areflocking to hawala operators in order toexchange their hoards into dollars. Thisis then sent to destinations such asSingapore or Dubai, where otherwiseunemployed relatives are packed off asNRIs. These are then supplied with dol-lars which can be placed in NRIdeposits, although in many cases,these big depositors have no knownsource of income except remittancesfrom mysterious channels. It hasbecome such a nightmare to operate inIndia, and so easy to make money outof the system if one is an NRI, thatthere has been a huge increase in this

category, several of whom have madelarge NRI deposits to get the massivedollar denominated returns that suchdeposits bring. This is in contrast to thedomestic investor, who gets a pittance,that too in a depreciating rupee that isplunging towards the Rs 100 to a USdollar mark, thanks to the PM's hand-picked economic team.

It is this legal and illegal conversionof rupees into dollars that is the primarycause of the falling value of the rupee,not the esoteric reasons being trottedout by a section of pink press commen-tators who are PROs for the IMF and theWorld Bank. Unless this unhealthy con-centration of effort on getting short-termfunds through the NRI route getreplaced with schemes for an amnestyfor foreign funds held abroad and invest-ment in physical assets rather than inhot money destinations. RaghuramRajan, with his attention fixed to theneeds of those influential in Chicagorather than Kolkata, is unlikely to makea positive difference to an economywhich has been almost destroyedthanks to giving foreign money and for-eign capital way, way more value thanthe rupee and domestic investors.Hopefully, this "Craze for Foreign" (asV.S. Naipaul once put it) of the Indianpolicymaker will cease before thestreets of India erupt in fury.

Any hawala operator can tellthem how those holdinghuge hoards of cash - mostlypoliticians and officials - areflocking to hawala operatorsin order to exchange theirhoards into dollars.


S Gurumurthy

After watching the relentless fall ofthe Indian rupee for 18 monthswith saintly restraint, Finance

Minister P Chidambaram declared onAugust 12 that he would cut the CurrentAccount Deficit (CAD) - the excess outgoover receipts of foreign exchange - andstabilise the rupee. In January 2012,Indians could buy one US dollar by pay-ing Rs 45. But, by August 12, theyneeded to pay more, Rs 61 for a dollar,the dollar rising by over 35 percentsince January 2012, mirroring an equalfall in the rupee value.

This is the direct outcome of the bur-geoning CAD since 2004-2005. OnAugust 12, Chidambaram announced"measures" to reduce the CAD andarrest the rupee slide. But, within 36hours, on August 14, the rupee fell fur-ther, to `61.50 per dollar.

This forced the Reserve Bank torestrict investments and remittancesabroad to reduce the dollar's flow out ofIndia. Even that did not work. It is Rs 62to a dollar now. Even as the rupee wascrashing, in January, The Economistmagazine [2.1.2013] reported that thereal value of the rupee, namely its pur-chasing power, equated a dollar to justRs 19.75 - a third of the market value ofthe dollar today.

The Economist said the rupee is themost undervalued currency in the worldmarket. Why does the already-underval-ued, high real-value rupee keep losingvalue? Who is responsible for it?Chidambaram himself had acknowl-edged that the NDA had left behind ahealthy economy.

In his budget speech (July 2004)Chidambaram said: "The economic fun-damentals appear strong" and "the bal-ance of payments robust". From"robust" balance of payments, thenation is today in a balance of pay-ments crisis reminding the country ofthe dark days of 1991.

How did the UPA manage to messup the prosperous economy it hadinherited in 2004?Galloping CAD

A quick look at some simple factswill bring out the drastic change for theworse after the UPA came to power in

2004, which turned disastrous for thecountry after the UPA was voted back in2009. Take the recent history of theCAD. The country incurred a CAD of $35billion in 10 years from 1991 to 2001.But, under the NDA regime, it posted asubstantial current account surplus -yes, surplus - of $22 billion for the firsttime since 1978. After the currentaccount surplus of the NDA days, nineof years of the UPA regime sawunprecedented CADs of $339 billion,when Chidambaram [5 1/2 years] and

Pranab Mukherjee [3 1/2 years] stew-arded the national economy. See thetransition from surplus into deficitsunder their economic leadership. Whilethe NDA handed to the UPA a currentaccount surplus of $13.5 billion in2003-2004, the UPA quickly turned itinto a CAD of $2.7 billion (2004-5) andtrebled it to $10 billion each in the sec-ond and third years and thereafter mul-tiplied it to $16 billion (4th year) $28billion [5th] $38 billion (6th) $48 billion(7th), $78 billion (8th) and $89 billion(9th). The government repeatedly saidoil prices and high gold imports are theculprits for the relentless CAD. Is the

RUPEE ON VENTILATOR Reckless imports put rupee on ventilator

The Economist said therupee is the mostundervalued currency in theworld market. Why does thealready-undervalued, highreal-value rupee keep losingvalue? Who is responsiblefor it? Chidambaram himselfhad acknowledged that theNDA had left behind ahealthy economy.


story of oil and gold as culprits true? Orthe complete truth?Reckless Imports Destroy Production

A closer look at the import datareveals a shockingly different picture.

Unnoticed (or suppressed?) in populardiscourse, capital goods import sky-rocketed under the UPA rule. The capi-tal goods import during the NDA periodaveraged about $10 billion a year. But

in 2004-2005, the very first year of theUPA, it leaped to $25.5 billion and thenrelentlessly rose year after thus: to $38billion in the second year, $47 billion(3rd), $70 billion (4 th), $72 billion(5th), $66 billion (6th), $79 billion(7th), $99 billion (8th) and $91.5 billion(9th), aggregating to $587 billion innine years.

Import of capital goods is a sign ofvibrant economy. And in theory it gener-ates higher national production. But,see what happens. The Index ofIndustrial Production (IIP) annually aver-aged 11.5 percent during the first fouryears of UPA rule. But in the next fiveyears the annual average IIP camedown to less than 5 percent - finally to apeanut of 2.9 percent for 2012-2013.Far from rising with the import of capitalgoods, the IIP growth has fallen from11.5 percent in the first four years to 5percent in the latter five years, a fall ofover 56 percent. In contrast, it was inthe latter five-year period the capitalgoods import was $407 billion (79 per-cent) out of the $587 billion for theUPA's entire nine years, the average inthe first four years being $45 billionand the later five years was $80 billion.A Rise of 78 Per Cent

Is it not shocking that when the cap-ital goods import rises by 79 percent,the national production falls by 56 per-cent. The 2008 meltdown cannot becited as an alibi for the decline in theIIP. Because the GDP has risen from 6.7percent in 2008-2009 to 8.6 percent in2009-2010 and to 9.3 percent in 2010-

Import of capital goods is a sign of vibrant economy. And intheory it generates higher national production. But, seewhat happens. The Index of Industrial Production (IIP)annually averaged 11.5 percent during the first four years ofUPA rule. But in the next five years the annual average IIPcame down to less than 5 percent - finally to a peanut of 2.9percent for 2012-2013.


2011. Also, an economic slowdownaffects investment first and productionlater.

Production falls after investmentcontracts. But here investment (readcapital goods import) has risen by twothirds but production has fallen by half.Why this conundrum? The reason forthe fall in national production in the lat-ter five years itself is the rise in imports.The domestic capital goods industryslowed down and later declinedbecause of the import of capital goods.Even as the GDP rose to 8.6 percent in2009-2010, the IIP rise of 5.3 percentdid not keep pace with it. Later theindex of domestic capital goods produc-tion fell - yes actually fell - by 4 percentin 2011-2012 and 5.7 percent in 2012-2013. More, in the last three years to2012-2013, the production of interme-diate goods hardly grew. If capital goodsimport under the UPA hit the capitalgoods industry like a tsunami, foreign-manufactured goods flooded the Indianmarket.

The average annual import of manu-factured goods during 2001-2004 (theNDA period) was just $600 million. Butfrom 2004-2005 to 2012-2013, the

average soared to $5.5 billion, by 8times. The nominal national GDP grewby 3.2 times in this period, by just athird of the growth of manufactured

goods imports. The 9-year UPA regimesaw manufactured goods imports of$50 billion against just $2.3 billion dur-ing the NDA regime. Obviously, the cap-ital goods import did not add to, butactually destroyed, national production,ably aided by import of manufacturedgoods.CAD Kills GDP Growth

It is basic economics that trade sur-plus adds to national wealth (GDP) andtrade deficit cuts into it. So, the CAD,which is the trade deficit, brings downthe nominal GDP by a like amount.Calculations show that the CADs havebrought down the real GDP by 0.8 per-cent in 2007-2008, by 1.5 percent(2008-2009) by 2.1 percent (2009-2010) by 1.4 percent(2010-2011) by2.6 percent (2011-12) and by 3.9 per-cent (2012-13). If the CADs wereremoved, theoretically, the real GDP ofIndia would have been 10.8 percent(not 9.3 percent) in 2007-2008, 8.2percent (not 6.7 percent) in 2008-2009, 10.7 percent (not 8.6 percent) in2001-2011, 8.8 percent (not 6.2 per-cent) in 2011-2012, and 8.9 percent(not 5 percent) in 2012-2013. True, oiland gold too have eaten into the forex

The average annual importof manufactured goodsduring 2001-2004 (the NDAperiod) was just $600million. But from 2004-2005to 2012-2013, the averagesoared to $5.5 billion, by 8times. The nominal nationalGDP grew by 3.2 times inthis period, by just a third ofthe growth of manufacturedgoods imports. The 9-yearUPA regime sawmanufactured goods importsof $50 billion against just$2.3 billion during the NDAregime.


holdings. But there is a fundamentaldifference between them and capitalgoods. Indians buy a quarter to a thirdof the global supply of gold, which is notproduced in India. Domestic oil produc-tion is just a quarter of national needs,necessitating the import of the balancethree-fourths. But most imported capi-tal goods, which are actually producedin India, has displaced domestic pro-duction of capital goods and broughtdown the GDP.

Oil and Gold as AlibisAnd see how the oil and gold story is

not true or is true only partly. The grossvalue of gold, silver and precious stonesimport of $402 billion during the UPA'snine years looks huge. But if the exportof jewellery and precious stones of$251 billion is set off, the net deficit is$161 billion in nine years. Likewise, thepetroleum imports of $804 billion innine years look gargantuan. But, if theexport of petroleum products ($279 bil-lion) is set off, the net import is down to$515 billion. It is less than the capitalgoods import of $587 billion. In the lastfive years, the net petroleum import isworth $360 billion, but the capitalgoods import is worth $407 billion.Does it need a seer to say that the realculprit is the reckless capital goodsimport and that it has killed the rupeethrough the CAD and hit domestic pro-duction and GDP? Just see one falloutof rupee depreciation. A calculationshows that for every additional rupeepaid to buy dollars for oil imports, theadditional oil bill for India is `9,500crore. In today's rupee value, the extraannual petrol bill will be `1,60,000crore. But the CAD is only part one ofthe story of destruction. Await furthertestimony on the decade-long destruc-tion.

S Gurumurthy is a well-kknown commentator on political and

economic issues.

And see how the oil and goldstory is not true or is trueonly partly. The gross value ofgold, silver and preciousstones import of $402 billionduring the UPA's nine yearslooks huge. But if the exportof jewellery and preciousstones of $251 billion is setoff, the net deficit is $161billion in nine years.


Victor Mallet

India, 1991. Thailand and east Asia,1997. Russia, 1998. LehmanBrothers, 2008. The eurozone from

2009. And now, perhaps, India and theemerging markets all over again.

Each financial crisis manifests itselfin new places and different forms. Backin 2010, José Sócrates, who was strug-gling as Portugal's prime minister toavert a humiliating internationalbailout, ruefully explained how he hadjust learned to use his mobile tele-phone for instant updates on Europeansovereign bond yields. It did him nogood. Six months later he was gone andPortugal was asking for help from theInternational Monetary Fund.

This year it is the turn of Indian min-

isters and central bankers to stareglumly at the screens of theirBlackBerrys and iPhones, althoughtheir preoccupation is the rate of therupee against the dollar.

India's currency plumbed succes-

sive record lows this week as investorsdecided en masse to withdraw moneyfrom emerging markets, especiallythose such as India with high currentaccount deficits that are dependent onthose same investors for funds. Blackhumour pervaded Twitter in India as therupee passed the milestone of Rs65 tothe dollar: "The rupee at 65 - time toretire".

The trigger for market mayhem inMumbai, Bangkok and Jakarta was therealisation that the Federal Reservemight - really, truly - soon begin to"taper" its generous, post-Lehmanquantitative easingprogramme of bond-buying. That implies a stronger USeconomy, rising US interest rates and apreference among investors for USassets over high-risk emerging markets

Currency sell-off:Tragedy in three acts

Emerging market darlings have lost their lustre as investorsponder life without US quantitative easing

Droopy rupee: India's currency plumbed record lows this week as investors withdrew money from emerging markets

This year it is the turn ofIndian ministers and centralbankers to stare glumly atthe screens of theirBlackBerrys and iPhones,although theirpreoccupation is the rate ofthe rupee against the dollar.


in Asia or Latin America.The fuse igniting each financial

explosion is inevitably different from theone before. Yet the underlying problemsover the years are strikingly similar.

So are the principal phases - includ-ing the hubris and the nemesis - of theeconomic tragedies they endure. Noone who has examined the history ofthe nations that fell victim to previousfinancial crises should be shocked bythe way the markets are treating Indiaor Brazil today.

First comes complacency, usuallygenerated by years of high economicgrowth and the feeling that the coun-try's success must be the result of thevalues, foresight and deft policy makingof those in power and the increasingsophistication of those they govern.Sceptics who warn of impending doomare dismissed as "Cassandras" by thosewho forget not only their own fragilitiesbut also the whole point about theTrojan prophetess: it was not that shewas wrong about the future, it was thatshe was fated never to be believed.

So high was confidence only a fewmonths ago in India - as in Thailand inthe early 1990s - that economists pre-dicted that the local currency wouldrise, not fall, against the dollar.

Indian gross domestic productgrowth had topped 10 per cent a year in2010, and the overcrowded nation of1.3bn was deemed to be profiting froma "demographic dividend" of tens of mil-lions of young men and women enteringthe workforce. The Indian elephant wasdestined to overtake the Chinese drag-

on in terms of GDP growth as well aspopulation size.

Deeply ingrained in the Indian sys-tem, says Pratap Bhanu Mehta, head of

the Centre for Policy Research in NewDelhi, was an "intellectual belief thatthere was some kind of force of naturepropelling us to 9 per cent growth ...almost of a sense of entitlement thatled us to misread history".

In the same way, the heady successof the southeast Asian tigers in theearly 1990s had been attributed to"Asian values", a delusional and nowdiscredited school of thought thatexempted its believers from the normalrules of economics and history becauseof their superior work ethic and collec-tive spirit of endeavour.

The truth is more banal: the realcause of the expansion that precedesthe typical financial crisis is usually aflood of cheap (or relatively cheap)credit, often from abroad.

Thai companies in the 1990s bor-

FREE FALLGurumurthy noted with satisfaction that The Economist said the rupee

was the most undervalued currency in the world market. If so, why the currency sell-off, devaluing the Rupee to unprecedented

levels? Remember how the rift between Kamaraj and Indira Gandhiwidened as Kamaraj opposed devaluation because he "saw it as under-mining the policy of national self-reliance."

Is there an opposition in the country to raise this issue of devaluationand ask the SoniaG regime to quit?

Charade games have become a Parliamentary pastime. Policy-makershave become actors of charade games in and out of Parliament.

Is it possible to restore a semblance of economic reasoning in this Statethough something is very rotten in the state run by SoniaG?

—Kalyanaraman

Deeply ingrained in theIndian system, says PratapBhanu Mehta, head of theCentre for Policy Research inNew Delhi, was an"intellectual belief thatthere was some kind of forceof nature propelling us to 9per cent growth ... almost ofa sense of entitlement thatled us to misread history".


rowed dollars short-term at low rates ofinterest and made long-term invest-ments in property, industry and infra-structure at home, where they expectedhigh returns in Thai baht, a currencythat had long been held steady againstthe dollar.

The same happened in Spain andPortugal in the 2000s, although thelow-interest loans that fuelled theunsustainable property boom weremostly north-to-south transfers withinthe eurozone and therefore in the samecurrency as the expected returns.Indeed, the euro was labelled "a deadly

painkiller" because the use of a com-mon currency hid the dangerous finan-cial imbalances emerging in southernEurope and Ireland.

Phase Two of a financial crisis is thedownfall itself. It is the moment wheneveryone realises the emperor is naked;to put it another way, the tide of easymoney recedes for some reason, andsuddenly the current account deficits,the poverty of investment returns andthe fragility of indebted corporationsand the banks that lent to them areexposed to view.

That is what has started happening

over the past two weeks as investorstake stock of the Fed's likely "tapering".And the fate of India - the rupee is oneof the "Fragile Five", according toMorgan Stanley, with the others beingthe currencies of Brazil, Indonesia,South Africa and Turkey - is particularlyinstructive.

It is not that all of India's economicfundamentals are bad. As PalaniappanChidambaram, finance minister, saidon Thursday, the public debt burdenhas actually fallen in the past six yearsto less than 70 per cent of GDP - butthen the same was true of Spain as it

Prime Ministers Tenure Rs devaluation against $

Jawahar Lal Nehru 1947-1964 1-4.76

Lal Bahadur Shastri 1964-1966 4.76-6.35

Indira Gandhi 1966-1977 6.35-8.73

Morarji Desai 1977-1979 8.73-9.12

Indira Gandhi 1980-1984 7.86-11.36

Rajiv Gandhi 1984-1989 11.36-16.22

VP Singh 1989-1990 16.22-17.50

PV Narsimha Rao 1991-1996 22.74-35.43

HD Devegowda 1996-1997 35.43-36.31

IK Gujral 1997-1998 36.31-41.25

AB Vaijpayee 1998-2004 41.25-45.31

Manmohan Singh 2004-Aug 22, 2013 45.31-65.56


entered its own grave economic crisis in2009.

Like Spain, India has toleratedslack lending practices by quasi-offi-cial banks to finance the huge proper-ty and infrastructure projects oftycoons who may struggle to repaytheir loans.

Ominously, bad and restructuredloans have more than doubled atIndian state banks in the past fouryears, reaching an alarming 11.7 percent of total assets. According toCredit Suisse, combined gross debtsat 10 of India's biggest industrial con-glomerates have risen 15 per cent inthe past year to reach $102bn.

For those who take the long view, amore serious failing is that India hasmanifestly missed the kind of eco-nomic opportunity that comes alongonly once in an age.

Instead of welcoming investmentwith open arms and replacing Chinaas the principal source of the world'smanufactured goods, India underSonia Gandhi and the Congress party,long suspicious of business, hasopted to enlarge the world's biggestwelfare state, subsidising everythingfrom rice, fertiliser and cooking gas tohousing and rural employment.

Former fans of her prime minister,Manmohan Singh - who as finance

minister liberalised the economy,ended the corrupt "licence Raj" andextracted India from a severe balanceof payments crisis with the help of anIMF loan - could only shake theirheads when he boasted last weekthat no fewer than 810m Indianswould be entitled to subsidised foodunder a new Food Security Bill.

The bill is a transparent attempt byCongress to improve its popularityahead of the next general election,but the government's critics are horri-fied at the idea of offering Indiansmore handouts rather than creatingthe conditions that would give themjobs and allow them to buy their own.The resulting strain on the budgetmay also worsen the risk of "stagfla-tion", a toxic mixture of economicstagnation and high inflation.

India's annual growth rate hasalready halved in three years to about5 per cent and could fall furthertowards the 3 per cent "Hindu rate ofgrowth" for which the country wasmocked in the 1980s.

If currency declines and balance-of-payments difficulties develop into afull-blown financial crisis in the com-ing months, India will be propelledunwillingly into the third and finalphase of the trauma.

Phase Three is when ministers and

central bank governors survey thewreckage of a once-vibrant economyand try to work out how to rebuild it.

It is traditional for those govern-ments that survive, and for the onesreplacing those that do not, toannounce several false dawns and tosee "green shoots" that turn out to beillusory.

It is hard when times are bad toimpose financial discipline that wouldhave been easier to apply before.Indian policy makers are already tornbetween the need to lower interestrates to boost growth and the necessi-ty of raising them to protect the rupeeand tackle inflation - the same kind oftension between austerity and easymoney that has afflicted developedeconomies since 2008.

India's underlying economy is nev-ertheless sound and its banks aresafe, say Mr Chidambaram and othersenior officials. There is therefore noneed to contemplate asking for helpfrom the IMF or anyone else.

Mr Sócrates said much the samein Lisbon three years ago. "Portugaldoesn't need any help," he said, almost leaping from his chair."We only need the understanding ofthe markets." The markets did notunderstand, and Portugal did needthe help.


Shankar Acharya

Yes, we are in an economic crisis,albeit in its early stages. How elsewould you describe a situation

where economic growth has collapsed,industrial output has stagnated for twoyears, jobs are being shed, consumerinflation is close to 10 per cent, the cur-rent account deficit (CAD) in the bal-ance of payments is nearly five per centof GDP at last count, investment is flee-ing abroad, external debt maturing inthe current fiscal year exceeds $170billion and the rupee is touching new

lows (or highs against the dollar!) eachweek? It was all avoidable, if our policy-makers had been more competent andeffective (and less venal, some mightadd). There was plenty of warning com-mentary by independent analysts (thiscolumnist included) over the past fiveyears as each major policy misstep wastaken. For the record and for future les-son-drawing, it is useful to briefly out-line the five biggest economic policymistakes (out of a long list), aside fromthe pervasive nine-year long drought ofproductivity-enhancing economicreforms.

The fiscal blowout of 2008-09

In the six years to 2007-08 the com-bined (Centre and states) fiscal deficithad been brought down from nearly 10per cent of GDP to four per cent. Thisremarkable fiscal consolidation wassquandered in the single, pre-electionof year of 2008-09 when the combineddeficit (inclusive of off-Budget items)leapt to over 10 per cent of GDP. Thecentral government budget deficit tar-get of 2.5 per cent of GDP, presented bythe current finance minister in February

The five policy missteps that haveled India to economic crisis


2008, was massively overshot in thecourse of the year to yield an outcomeof 8.2 per cent of GDP (including off-Budget items), easily the biggest over-shooting in India's history. Althoughlater rationalised as "fiscal stimulus" tocounteract the global crisis, in fact, thegreat bulk of the overshooting occurredbefore the Lehman crisis of September2008, mainly in the form of pay increas-es, subsidy hikes and NREGA rollout.

This unprecedented splurge of fiscalprofligacy may indeed have cushionedthe fallout from the global crisis for ayear or two. But the composition of thehuge expenditure hikes (mainly govern-ment pay, subsidies and entitlementprogrammes) made subsequent retrac-tion politically difficult. As a result, thepersisting high fiscal deficits since 2008have fuelled the long bout of inflation,kept interest rates high, reduced publicsavings and fed the rising CAD.

Exchange rate mismanage-ment since 2009

Although senior government spokes-men tend to project India's externaldeficit pressures as a recent problem,in fact, the CAD has been consistentlyabove the prime minister's "safe bench-mark" of 2.5 per cent of GDP since2009-10. That means we are in the fifthyear of a dangerously high CAD. A sig-nificant contributory factor has beenthe authorities' (government plus RBI)shift since spring 2009 to a relatively"hands off" policy towards the rupee'sexchange rate. So, when capital inflowsrecovered since 2009, the rupee wasallowed to appreciate sharply in 2009and 2010, despite a clearly rising CAD.As some of us pointed out then, theauthorities should have instead fol-lowed the well-tested, pre-2008 policyof limiting appreciation and building

reserves through dollar purchases bythe RBI. The failure to do this led to anovervalued rupee, which weakenedIndia's international competiveness andhelped fuel the pattern of rising externaldeficits that now haunt the economy.

The supply shocks of 2010-12

These were multiple, all reflectingpolicy and governance weaknesses.They include the sudden and damaging

This unprecedented splurge of fiscal profligacy may indeedhave cushioned the fallout from the global crisis for a yearor two. But the composition of the huge expenditure hikes(mainly government pay, subsidies and entitlementprogrammes) made subsequent retraction politicallydifficult. As a result, the persisting high fiscal deficits since2008 have fuelled the long bout of inflation, kept interestrates high, reduced public savings and fed the rising CAD.


tightening of environmental regulationsin 2010; the eruption of serious scamsin 2G telecom spectrum allocation,coal-block allocations and various landscams (all with roots in earlier years)and their debilitating aftermaths in theimpacted sectors; the sweeping judicialrestraints on iron ore mining inKarnataka and Goa; the fiasco of miss-ing coal and gas supply for many thou-sand megawatts of freshly completedpower projects; the anti-investment taxmeasures of the 2012 Budget; and thegeneralised "policy paralysis" in regardto activation, completion and clear-ances of major projects. All these sup-ply problems reduced production,investment and growth and some alsodirectly hurt the external balance, as inthe case of coal and iron ore.

While each of these supply-sideproblems had distinct characteristicsand policy histories, together they con-stituted a major (and persisting) supplyshock to the Indian economy.

The neglect of manufacturing

In marked contrast to the greatmajority of emerging nations, the shareof manufacturing in GDP has stagnatedat around 15-17 per cent for decades inIndia. While the problem is long-stand-ing, the failure to enhance the shareduring the past decade was a signifi-cant contributory factor in the currenteconomic crisis. In the high growth peri-

od, 2003-11, services (including con-struction) accounted for well over 70per cent of all growth, while industry(essentially manufacturing and mining)accounted for less than 20 per cent.This lopsided pattern could not sustainhigh growth for long, and hasn't onceservices expansion started to flag. Themajor policy impediments to industrialgrowth have been unreformed rigiditiesin the labour market, growing impedi-ments to land acquisition and the con-tinuing weaknesses in infrastructure,especially power, roads, railways andports. Slow industrial growth has led tolimited growth of jobs for low-skilledlabour and a steady widening of themerchandise trade deficit, which, inturn, widened the CAD.

Faulty monetary policies ofJuly 2013

As everyone knows, between the15th and the 23rd of July, the RBIannounced draconian (if somewhatopaque) monetary measures, whicheffectively increased the short-term pol-icy rates by 300 basis points andsharply reduced liquidity. The measureswere taken ostensibly to defend thefalling rupee by restricting "specula-tion". The diagnosis was fundamentallyincorrect. The rupee was not weakeningdue to short-run "speculation" butbecause of a persisting high CAD,mounting short-term, external debt obli-gations and changes in the global envi-

ronment for capital flows.So the cure had little connection

with the disease. As predicted, themeasures did not solve the rupee'sweakness; the rupee was trading at alower value by end July compared toJuly 14. Instead, these measures signif-icantly increased interest rates acrossthe entire term structure, curtailedcredit growth for productive purposes,made government borrowing more diffi-cult and costly, weakened the health ofbanks (especially government banks)and, above all, further damped the out-look for recovery in output and invest-ment. In the process, the policy stepsmay have inadvertently increased theincentives for withdrawal of equityinvestments by FIIs in the Indian stockmarket, thus adding to the rupee'sweakness. Though described as "tem-porary", there is little prospect of rever-sal. The damage has been done andwill continue.

Even a quick perusal of the abovelist of major policy errors suggests thatit will take of lot of time and work torepair the damage to the economy;even more if further unsound policiesare adopted, such as tighter importrestrictions. So, the outlook for therupee remains: Volatile with a down-ward bias.

The writer is honorary professor atIcrier and former chief economic advis-

er to the government of India.Views expressed are personal


Col R Hariharan

[This background note on the stateof national security since independencewas prepared for two TV interviews onAugust 15 and 16, 2013.]

Overview on national securi-ty since 1947

Indian armed forces were guardiansof British colonial rule before independ-ence. They have now distinguishedthemselves as the defenders of inde-pendent India by shedding their bloodon more than one occasion. This hasnot been an easy process. It meantmoving away from the Commander-in-Chief system of the British to Chiefs ofstaff for each of the three services. Italso meant downgrading the status ofService Chiefs in the government hier-archy; C-in-C was next only to the

Viceroy in Colonial India. The Chief ofArmy Staff (COAS) is now on par withthe Chairman of the Union PublicService Commission. But the armedforces have reconciled to this realizingthat elected government is supreme ina democracy.

But this is having its impact on thedecision making process on nationalsecurity and management of strategic

defence. We see the anachronism ofDefence Secretary - a bureaucrat - lead-ing a delegation of three chiefs for hold-ing a strategic dialogue with China.Chiefs of armed forces who had accessto the Prime Minister in Pandit Nehru'stimes have access only to the DefenceMinister. Security chiefs are merely onlistening watch in the decision makingprocess after they have had their say

State of national securitysince independence National security after 66 years of independence

As a result, inability to take timely and informed decisionson vital matters affecting national security has become thehallmark of our strategic defence management. This has notonly affected timely procurement of weapons andequipment but lead to corruption by vested interests of awide variety including politics, business interests andbureaucracy.


with the defence minister.As a result, inability to take timely

and informed decisions on vital mat-ters affecting national security hasbecome the hallmark of our strategicdefence management. This has notonly affected timely procurement ofweapons and equipment but lead tocorruption by vested interests of a widevariety including politics, business inter-ests and bureaucracy.

Enormous delays are dogging thedevelopment of indigenous capacitiesfor manufacture of warships, sub-marines, combat aircraft and evensmall arms and artillery guns becausewe continue to worship the holy cowcalled public sector abetted by privatebusiness and political interests.Grandiose plans take decades to makesnail-like progress to see them through.

For instance the Defence Ministerlaunched the first Indian built aircraftcarrier three days back. This is no doubta laudable achievement. But the pro-posal to build it was lying with thebureaucracy for over a decade, accord-ing to former Naval Chief Admiral ArunPrakash. The decision was taken onlyafter it was decided to buy "Admiral

Enormous delays aredogging thedevelopment ofindigenous capacitiesfor manufacture ofwarships, submarines,combat aircraft andeven small arms andartillery guns becausewe continue toworship the holy cowcalled public sectorabetted by privatebusiness and political interests.Grandiose plans take decades to make snail-likeprogress to see themthrough.


Gorshkov", the half built Soviet carrier. We are one of the three Asian pow-

ers boasting of nuclear capability whichis a testimony to our defence researchcapability. Unlike Pakistan, in our coun-try there are a lot of grey areas in thechain of command for decision for mak-ing on use and safeguarding of nuclearweapons during peace and war. Formerservice chiefs and K Subrahmanyamcommittee appointed in the wake ofKargil war have pointed this out. But sofar the neither the nation nor its parlia-ment has been taken into confidenceby the government on this subject.

Despite all this we have creditable

achievements. We have made bigstrides in developing our missile capa-bility; we have just launched a nuclearsubmarine made in India and our ship-

yards are producing warships though ata slow pace. After sleeping for decadeswe seem to have woken up to the needfor timely procurement and manufac-ture of state of the art weapons andsystems.

China's growing influence inneighbouring countries

China has emerged as global eco-nomic power, while India continues tobe a regional one. China has gained alot of advantage due to changes in thedynamics of global security environ-ment and economic liberalisation Butas a result of the economic downturnin the U.S. and European UnionChina's export-based economy hasalso suffered, although it continuesto clock the highest growth rateamong other growth economies.

Despite all this we have creditable achievements. We havemade big strides in developing our missile capability; wehave just launched a nuclear submarine made in India andour shipyards are producing warships though at a slow pace.After sleeping for decades we seem to have woken up to theneed for timely procurement and manufacture of state ofthe art weapons and systems.


South Asian countries' under-exploit-ed markets offer an attractive greenfield option for Chinese products andinvestments. So China has enteredSouth Asia in a big way. CheapChinese goods have flooded marketsin India, Nepal, Bangladesh, and SriLanka. Chinese companies areinvolved in major infrastructure andpower projects in most of the SouthAsian countries.

China's multi-faceted entry inSouth Asia is a matter of concern forIndia as it is eroding our influence inthe neighbouring countries. This willhave far reaching effects on our tradeand economy, and impact our strate-gic security relations with our closeneighbours like Nepal, Bhutan,Bangladesh and Sri Lanka. China'sstrategic partnership with Pakistanwill be further strengthened and wewill have to factor it in our threat per-ceptions.

However, for the time being bothIndia and China appear to be keen onbuilding a peaceful relationshipalthough the Chinese pinpricks alongthe border continues.

However, for the time being both India and China appear tobe keen on building a peaceful relationship although theChinese pinpricks along the border continues.


Capability to defend against China

India and China have three con-tentious issues that hold the potentialto explode into an armed confrontation.These are historical issues relating toChina's dispute over India's traditionalborder with Tibet, China's occupation ofIndian territory in Ladakh and China'ssuspicions about India's intentions ingiving refuge to Tibetan spiritual leaderDalai Lama and nearly two lakh Tibetanrefugees who aspire for an independentTibet. These disputes are unlikely to beresolved in the next decade or more.

Areas of potential conflict with Chinaare in the Aksai Chin region in Ladakhin the proximity of Daulat Beg Oldi nearSiachen, and the Tawang region inArunachal Pradesh, where Chinese feelthey have stronger claims. Of course asChinese do not recognize the McMahon Line as the border in theNortheast, a few passes along theHimalayan border could also faceChinese threat.

The usual question is how can Indiadefend itself against PLA - China's armyof over 2.25 million - the world's biggestmilitary force. PLA is becoming verypowerful as it is rapidly modernizing notonly the army, navy, air force and strate-gic nuclear missile force but also itsweapon systems, cyberwarfare andcommand and control set up. They havebetter lift capability to move troops andare carrying out training in joint opera-tions which used to be their weakspot.China's research has progressed well ina number of defence related areas likesatellite based reconnaissance andcommunication. All these make PLA aformidable foe to any nation, let alone

India.More than all this, it is backed by

China's huge international diplomatic,economic and political clout. But PLA'sresponsibilities are equally big; it hasdefend 9.6 million sq km of territory ofthe second biggest country in the worldand guard its 22,117 km long land bor-ders with 14 countries. It also has inter-nal security responsibilities.Considering this, Indian security forceswould not face the entire forces of PLA.However, unlike our tardy approach tobuilding strategic infrastructure alongthe border, Chinese have constructedroads and airfields close to our borders;this gives them greater ability to movetroops faster and in huge numbers.

Our army is roughly half the size ofPLA. They are well trained and theirweapons despite the deficiencies arecapable of defending our territory fromaggressors. Our air force is fairly mod-ern; though smaller in size it is profes-sionally very competent. Our air liftcapability is moderate. But our infra-structure to move troops is abysmal asit is insufficient to meet even the nor-mal day to day requirements of the peo-ple. This remains our strategic weak-ness.

Considering this, our communica-tion centres would become chokepoints in times of war for the enemy tobottle up and incapacitate our troops.This would reduce our military capabili-ty to a defensive war, even if tacticalrequirements dictate an offensive toreduce pressure on one front. AndChina's superior capability in hackingand cyber warfare could cripple ourcommand and communication system.We have only taken the first steps to

address this growing threat.PLA operating in tandem with

Pakistan army would be the biggestchallenge as it would augment thethreat while dividing our strength. Thisis an altogether different scenario.

China's weakest link is its navywhich is rapidly acquiring new platformsand capabilities. Its superiority in sub-marines is neutralized by the limitedexperience of the navy in carrying outfleet operations well outside its shores.Conscious of this PLA navy (PLAN) isincreasingly refining its skils and is nowregularly operating a large number ofwarships in anti piracy duties offSomalia and Gulf coasts.

This does not mean a war withChina is imminent. But local confronta-tions should not be discounted.Conventional wars of long duration areno more cost effective and the net-worked world's political and economicenvironments are unlikely to sustain it.Chinese perhaps realize this and arefocusing on winning local wars in hi-tech environment.

On India's loss of influencewith its neighbours

It would be incorrect to say India haslost its influence with the neighbouringcountries. It still remains the biggestand strongest economic power in SouthAsia. It has a lot of international cloutand its economic power is growing. Asone of the three nuclear powers of Asiait will have a say in any strategic dis-

The usual question is howcan India defend itselfagainst PLA - China's armyof over 2.25 million - theworld's biggest militaryforce. PLA is becoming verypowerful as it is rapidlymodernizing not only thearmy, navy, air force andstrategic nuclear missileforce but also its weaponsystems, cyberwarfare andcommand and control setup. They have better liftcapability to move troopsand are carrying out trainingin joint operations whichused to be their weakspot.


pensation worked out by other big pow-ers like China and the U.S.

At the same time, it is true that Indiahas lost some of its overwhelming influ-ence in countries like Sri Lanka, Nepal,Maldives and Bangladesh. Each ofthese countries have their own internalpolitical problems affecting their exter-nal perceptions particularly relating toIndia, which as a huge neighborunnerves them at times. The entry ofChinese in this region has broadenedtheir options on handling India's domi-nance.

India has been responding to thischallenge as and when the situationarises. This reactive response has beenproducing band-aid solutions for issuesthat require a strategic vision. This iswhere the Chinese excel.

Indian leadership has continued tobe indecisive and often its actions con-tradict each other. This has created animage of the nation lacking self confi-dence in dealing with other countries.This has been compounded by theinability of our leadership to createtransparent process and communicatewith the public. People are betterinformed and their expectations fromthe elected government are higher thanever before; unfortunately the govern-ment does not seem to have realizedthe need for real time public communi-cation. It is taking baby steps which areneither adequate nor attractive.

Thoughts on improvingnational security

1. Building a responsive national

decision making and implementing sys-tem to respond in real time to needs ofnational security is the number one pri-ority. This can be only done by nationalleadership which seems to be lost whiledealing with critical national securityissues.

2. Security chiefs should be part ofthe national security planning and deci-sion making systems with service offi-cers manning the defence ministryalongside bureaucrats. This wouldpave way for greater accountability.

3. Unless national security formspart of the political agenda of partiesit will not happen. Now it is limited tocomments against China andPakistan. Political class seems to havemore confidence in bureaucracy indealing with matters of defence, thanthe services. This results in chaos dueto lack of understanding and prioritiz-ing while handling defence issues.They need to shed this colonial bag-gage as armed forces have repeatedlyproved their loyalty to the country andthe colour.

4. Though defence R and D hassome great achievements to its creditthere is need for greater accountabilityand timely completion of projects.Research developments are not ade-quate as they have to be translatedinto operational models and producedwithin a reasonable time frame. This iscosting us dearly.

5. India is one of the largestimporters of weapons. This dependen-cy on external sources for even basicweapons is is a potential threat to

national security. This is laughable in acountry which has demonstratedachievements in manufacture of air-craft, ships, tanks and other hi-techsystems. This was mainly due to politi-cal pressure to entrust it exclusively topublic sector. Even imports areentrusted to them. This has resulted incolossal cost, delays, corruption andobsolescence. The Tatra vehicle scamis a very good example of this. The cri-teria should be timely delivery andappropriate technology and perform-ance and not private or public sector.

6. Government has shown insensi-tivity and casualness in handling paypackages and pension settlement ofarmed forces personnel. This hasadded to the lack of credibility armedforces personnel existing due to poorgovernance. Their families at homehave a lot of problems and civil admin-istration is not as sensitive to it as theyused to be in British days. There is aneed to handle defence personnel-related matters without tardiness anddelay. Even court judgements in favourof war wounded are routinely contest-ed at present. Armed forces on theirpart need to shed their elitism andcantonment mindset and inter-actmore with ordinary people.

(Col. R Hariharan, a retired MilitaryIntelligence specialist on South Asia is

associated with the South AsiaAnalysis Group and the Chennai

Centre for China Studies. E- mail:[email protected] Blog: www.colhariha-

ran.org)


David P. Goldman

The giant sucking sound you here, Isaid on August 15 on CNBC's TheKudlow Report, is the implosion of

America's influence in the Middle East.Vladimir Putin's August 17 offer ofRussian military assistanceto theEgyptian army after US PresidentBarack Obama cancelled joint exerciseswith the Egyptians denotes a post-Cold-War low point in America's standing.Along with Russia, Saudi Arabia andChina are collaborating to contain thedamage left by American blundering.They have being doing this quietly formore than a year.

The pipe-dream has popped ofEgyptian democracy led by a MuslimBrotherhood weaned from its wickedpast, but official Washington has notwoken up. Egypt was on the verge ofstarvation when military pushed outMohammed Morsi. Most of theEgyptian poor had been living on noth-ing but state-subsidized bread formonths, and even bread supplies were

at risk. The military brought in US$12billion of aid from the Gulf States,enough to avert a humanitarian catas-trophe. That's the reality. It's the onething that Russia, Saudi Arabia and

Israel agree about.America's whimsical attitude

towards Egypt is not a blunder butrather a catastrophic institutional fail-ure. President Obama has surroundedhimself with a camarilla, with SusanRice as National Security Advisor,flanked by Valerie Jarrett, the Iranian-born public housing millionaire.Compared to Obama's team, ZbigniewBrzezinski was an intellectual colossusat Jimmy Carter's NSC. These are ama-teurs, and it is anyone's guess whatthey will do from one day to the next.

By default, Republican policy isdefined by Senator John McCain, whomthe head of Egypt's ruling NationalSalvation Party dismissed as a "senileold man" after the senator's last visit toCairo. McCain's belief in Egyptiandemocracy is echoed by a few high-pro-file Republican pundits, for example,Reuel Marc Gerecht, Robert Kagan, andMax Boot. Most of the Republican for-eign policy community disagrees, by myinformal poll. Former defense secretaryDonald Rumsfeld blasted Obama for

World learns to managewithout the US

The pipe-dream has poppedof Egyptian democracy led bya Muslim Brotherhoodweaned from its wickedpast, but official Washingtonhas not woken up. Egypt wason the verge of starvationwhen military pushed outMohammed Morsi. Most ofthe Egyptian poor had beenliving on nothing but state-subsidized bread for months,and even bread supplieswere at risk.


undermining the Egyptian military'sability to keep order, but his statementwent unreported by major media.

It doesn't matter what theRepublican experts think. Few electedRepublicans will challenge McCain,because the voters are sick of hearingabout Egypt and don't trustRepublicans after the debacles in Iraqand Afghanistan.

Neither party has an institutionalcapacity for intelligent deliberationabout American interests. Among theveterans of the Reagan and Bushadministrations, there are many whounderstand clearly what is afoot in theworld, but the Republican Party is inca-pable of acting on their advice. That iswhy the institutional failure is so pro-found. Republican legislators live in ter-ror of a primary challenge from isola-tionists like Senator Rand Paul (R-KY),and will defer to the QuixotesqueMcCain.

Other regional and world powers willdo their best to contain the mess.

Russia and Saudi Arabia might bethe unlikeliest of partners, but theyhave a profound common interest incontaining jihadist radicalism in generaland the Muslim Brotherhood in particu-lar. Both countries backed Egypt's mili-tary unequivocally. Russia Today report-ed August 7 that "Saudi Arabia has

reportedly offered to buy arms worth upto $15 billion from Russia, and provideda raft of economic and political conces-sions to the Kremlin - all in a bid to

weaken Moscow's endorsement ofSyrian President Bashar Assad."

No such thing will happen, to besure. But the Russians and Saudis

Neither party has an institutional capacity for intelligentdeliberation about American interests. Among the veteransof the Reagan and Bush administrations, there are manywho understand clearly what is afoot in the world, but theRepublican Party is incapable of acting on their advice.


probably will collaborate to prune theSyrian opposition of fanatics whothreaten the Saudi regime as well asRussian security interests in theCaucasus. Chechnyan fighters - alongwith jihadists from around the world -are active in Syria, which has become apetrie dish for Islamic radicalism on parwith Afghanistan during the 1970s.

The Saudis, meanwhile, haveinstalled Chinese missiles aimed atIran. There are unverifiable reports thatSaudi Arabia already has deployednuclear weapons sourced fromPakistan. The veracity of the reports isof small relevance; if the Saudis do nothave such weapons now, they willacquire them if and when Iran suc-ceeds in building nuclear weapons.What seems clear is that Riyadh is rely-ing not on Washington but on Beijing forthe capacity to deliver nuclearweapons. China has a profound interestin Saudi security. It is the largestimporter of Saudi oil. America mightwean itself of dependence on importedoil some time during the next decade,but China will need the Persian Gulf forthe indefinite future.

A Russian-Chinese-Saudi condo-minium of interests has been in prepa-

ration for more than a year. On July 30,2012, I wrote (for the GatestoneInstitute):

The fact is that the MuslimBrotherhood and its various offshootsrepresent a threat to everyone in theregion:

The Saudi monarchy fears that theBrotherhood will overthrow it (not anidle threat, since the Brotherhood does-n't look like a bad choice for Saudis whoaren't one of the few thousand benefici-aries of the royal family's largesse;

The Russians fear that Islamic radi-calism will get out of control in theCaucasus and perhaps elsewhere as

Russia evolves into a Muslim-majoritycountry;

The Chinese fear the Uyghurs, aTurkic Muslim people who comprisehalf the population of China's westernXinjiang province.

But the Obama administration (andestablishment Republicans like JohnMcCain) insist that America must sup-port democratically elected Islamistgovernments. That is deeply misguided.The Muslim Brotherhood is about asdemocratic as the Nazi Party, whichalso won a plebiscite confirming AdolfHitler as leader of Germany. Tribal coun-tries with high illiteracy rates are not a

The Saudis, meanwhile, have installed Chinese missilesaimed at Iran. There are unverifiable reports that SaudiArabia already has deployed nuclear weapons sourced fromPakistan. The veracity of the reports is of small relevance; ifthe Saudis do not have such weapons now, they will acquirethem if and when Iran succeeds in building nuclearweapons. What seems clear is that Riyadh is relying not onWashington but on Beijing for the capacity to deliver nuclearweapons. China has a profound interest in Saudi security.


benchmark for democratic deci-sion-making ... As long as theUnited States declares its supportfor the humbug of Muslim democ-racy in Egypt and Syria, the rest ofthe world will treat us as haplesslunatics and go about the businessof securing their own interests with-out us.

The Turks, to be sure, will com-plain about the fate of theirfriends in the MuslimBrotherhood, but there is littlethey can do. The Saudis financemost of their enormous currentaccount deficit, and the Russiansprovide most of their energy.

Apart from the Egyptianevents, American analysts havemisread the world picture thor-oughly.

On the American right, theconsensus view for years heldthat Russia would implode eco-nomically and demographically.Russia's total fertility rate, though,has risen from a calamitously lowpoint of less than 1.2 live birthsper female in 1990 to about 1.7in 2012, midway betweenEurope's 1.5 and America's 1.9.There is insufficient evidence toevaluate the trend, but it sug-gests that it is misguided to writeRussia off for the time being. Notlong ago, I heard the Russianchess champion and democracyadvocate Gary Kasparov tell aRepublican audience that Russiawould go bankrupt if oil fell below$80 a barrel - an arithmeticallynonsensical argument, but onethe audience wanted to hear. Likeit or not, Russia won't go away.

American analysts viewRussia's problems with Muslims in theCaucasus with a degree ofSchadenfreude. During the 1980s theReagan administration supportedjihadists in Afghanistan against theRussians because the Soviet Union wasthe greater evil. Today's Russia is nofriend of the United States, to be sure,but Islamist terrorism is today's greaterevil, and the United States would bewell advised to follow the Saudi exam-ple and make common cause withRussia against Islamism.

In the case of China, the consensushas been that the Chinese economywould slow sharply this year, causingpolitical problems. China's June tradedata suggest quite the opposite: asurge in imports (including a 26% year-on-year increase in iron ore and a 20%

increase in oil) indicate that China isstill growing comfortably in excess of7% a year. China's transition from anexport model driven by cheap labor to ahigh-value-added manufacturing andservice economy remains an enormouschallenge, perhaps the biggest chal-lenge in economic history, but there isno evidence to date that China is failing.Like it or not, China will continue to setthe pace for world economic growth.

America, if it chose to exercise itspower and cultivate its innate capabili-ties, still is capable of overshadowingthe contenders. But it has not chosen todo so, and the reins have slipped out ofWashington's hands. Americans willhear about important developments inthe future if and when other countrieschoose to make them public. Readers

should be warned thatthose of us with reasonablygood track records won't doas well in the future.

My track record in gener-al has been good. I warnedin 2003 that the George WBush administration'sattempts to build nations inIraq and Afghanistan wouldhave a tragic outcome. Andin early 2006, I wrote: "Likeor not, the US will get chaos,and cannot do anything toforestall it."

In February 2011, I saidthat we did now knowwhether then-beleagueredpresident Hosni Mubarakof Egypt "will be replacedby an Islamist, democratic,or authoritarian state.What is certain is that it willbe a failed state." And inMarch 2011, I added aboutSyria, "We do not knowwhat kind of state will fol-low Basher Assad. We onlyknow that it will be a failedstate."

In April 2011, I declaredIsrael to be "the winner inthe Arab revolts" because"the most likely outcome[in the Arab world] is a pro-longed period of instability,in which two sides thathave nothing to gain fromcompromise and every-thing to lose from defeat -the dispossessed poor andthe entrenched elite - fightit out in the streets. LikeYemen and Libya, Syria willprove impossible to stabi-

lize; whether Egypt's military can pre-vent a descent into similar chaosremains doubtful."

In January 2012, I announced a"recall notice for the Turkish model",adding, "Among all the dumb thingssaid about the so-called Arab Springlast year, perhaps the dumbest wasthe idea that the new democracies ofthe Arab world might follow the Turkishmodel."

Now the dogs of war are loose andwill choose their own direction. Youdon't need foreign policy analysts anymore. You can hear the dogs bark ifyou open the window.

Mr. Goldman, president ofMacrostrategy LLC, is a fellow at theMiddle East Forum and the LondonCenter for Policy Research.

In February 2011, I said that we did nowknow whether then-beleaguered presidentHosni Mubarak of Egypt "will be replacedby an Islamist, democratic, orauthoritarian state. What is certain is thatit will be a failed state." And in March2011, I added about Syria, "We do notknow what kind of state will follow BasherAssad. We only know that it will be a failedstate."


Prashant Tewari from Moscow

It is amazing to witness the changethat former Soviet Union has experi-enced in its new avatar of Russia. In

just a decade, the entire system haschanged. The governance, economy,life style & culture have comprehensive-ly altered in a new Russia.

Opinion Express team visited Russiato experience the remarkable changeand everybody was amazed to witnessthe transformation of staunch commu-nist country in a capitalist avatar.Moscow is buzzing world class city withbooming growth, focus on trade & com-merce is enormous. The new rich classare flaunting wealth, mega housingcomplexes are mushrooming, five starhotels are visible on every corner of theroads, expensive cars are show casedby locals with pride, western influencein dressing with world's most expensivebrands is a common sight. There is justno trace of communism any where inthe country.

The change must have a driver,

surely the man in charge of Russiasince last decade must take credit ofthe transformation. Vladimir Putin is aremarkable yet underrated world leaderin global arena. He has ruled Russiawith iron hand, brought remarkablechanges in the system, influenced theworld order and scripted history of mod-ern Russia. Post destruction of erst-

while Soviet Union, many countrieswithin CIS that includes Russia wasfighting the economic tsunami. Offcourse, Boris Yeltsin proved disasterbut his decision to bring Putin to main-stream proved a master stroke for thecountry. Vladimir Putin marched aheadwith strength to consolidate his undis-puted leadership within Russia and one

New shining Russia


of the most powerful leader of recenttimes.

But the India Russia relations havesurely scaled down from the peak ofSoviet Union days. The G2G relationsare exceptional but B2B & P2P rela-tions are gradually going down. TheInternational trade has forced India toally with USA & block hence depend-ence on Russia is now restricted todefence sector. But the trade potentialbetween Russia & India is drasticallyunder utilised, the respective govern-ments have not focused on this vitalissue too. The business groups, lobbyisthave not worked extensively on improv-ing trade & commerce between bothcountries. The obsession for US ledbusinesses have shifted the focus fromRussia, similarly new generation ofRussia is far too obsessed with westernculture. The Pizza Hut, KFC,Macdonalds, Adidas, Mercedes, BMWare chased by present generation inRussia. The era of Raj Kapoor, Hindifilms is almost over. So we have to plan

the entire strategy to consolidate mutu-al relations with a new approach.

Opinion Express Chief EditorPrashant Tewari visited Indian Embassyin Moscow to meet Mr Ajey Malhotra,Indian Ambassador to Russia to explorethe official version on the subject.Hon'ble Ambassador was confident thatthe relations between both countrieswill flourish and leadership of the twocountries can script a new world order.Ambassador is confident of G2G rela-tions though he diplomatically admittedthat B2B relations minus defence dealsmust be improved to enhance P2P rela-tions. Indian companies are puttinginvestment in oil & gas sector, mining toexplore mega business opportunities inRussia. Ambassador is looking to con-solidate commerce department in theembassy to facilitate bilateral tradeopportunities between two countries.The embassy has set up links with locallobbyist to push for next generationtrade reforms. To his credit,Ambassador Malhotra brought visa

reforms to push for better P2P connec-tivity wherein the VISA granting time isreduced from 21 days to 3 days.

Opinion Express team met severalprominent political leaders, businessleaders, media people, trade centre,Chamber of commerce delegation tosensitise about the policy making groupof Russia. The concept of BRIC nations,emerging economies, developing world,bilateral relations between India &Russia were discussed in length andfinally Opinion Express Group havedecided to put a dedicated bureau inRussia to streamline flow of informationto keep people in India updated on thelatest developments in CIS countries.

Opinion Express Chief EditorPrashant Tewari visitedIndian Embassy in Moscowto meet Mr Ajey Malhotra,Indian Ambassador toRussia to explore the officialversion on the subject.Hon'ble Ambassador wasconfident that the relationsbetween both countries willflourish and leadership ofthe two countries can scripta new world order.Ambassador is confident ofG2G relations though hediplomatically admitted thatB2B relations minus defencedeals must be improved toenhance P2P relations.


PRINCETON : After a short term mar-riage of brutal abuse, involving Assault,Battery, Intentional Infliction ofEmotional Distress, Civil Conspiracy,Conversion and Theft, the plaintiff, ayoung Indian woman who came to theUnited States on an H4(Dependent)Visa immediately followingan arranged marriage with her husbandin India, filed a Complaint with theMiddlesex County, New Jersey SuperiorCourt for divorce and domestic torts.The defendants were her husband,father-in-law, and mother-in-law, andshe won a significant 3-pronged JuryVerdict of more than six figures and wasawarded more money than her officialdemand. Her attorney, Seema M. Singh,a well-known New Jersey consumeradvocate, founder of the AsianWomen's Safety Net (a 501 (c)(3)organization advocating for women vic-tims of domestic violence) and humanrights activist, grew up in India andknew quite well the traditional anddeadly roots of the conflict that createdsuch a catastrophic set of circum-stances for her client.

SINGH LAW WINS DOMESTICTORTS LAWSUIT

WinsSix-Figure Jury Verdict for Wife afterShocking Life ofExtreme Cruelty and Dowry AbuseBy Husband and In-laws

"One thing that issometimes forgotten in thequest to address humanrights abuses- fromvotingrights infractions to unlawfuldetention of prisoners, thereare always individual victimsinvolved and legislationalone will seldom correct theinjustice," says SeemaSingh. "With every litigation,we look for more thansymbolic justice. We seekcompensation to beimmediate and meaningful."


"One thing that is sometimes forgot-ten in the quest to address humanrights abuses- fromvoting rights infrac-tions to unlawful detention of prisoners,there are always individual victimsinvolved and legislation alone will sel-dom correct the injustice," says SeemaSingh. "With every litigation, we look formore than symbolic justice. We seekcompensation to be immediate andmeaningful."

The abuses suffered by this plaintiffat the hands of her husband and in-laws were immediate upon boardingthe plane, and unfortunately, typical oftorture inflicted on Indian newlywedbridesdue to the impact of customsinvolving dowries, which were bannedin India in 1961. A dowry, brought bythe bride's parents to the husband and

his parents, is often considered a nec-essary component of the marriage con-tract. Too often, the law is still ignored,and a groom's family remains involvedin the dowry practice and its abuses.

Unfortunately, dowry deaths are themost extreme punishment and it is cal-culated that "Indian dowry deaths"occur every 90 minutes. This fact illus-trateswhy this domestic violence mustbe met with immediate remedies forthose who experience even modestforms of harassment.Apart from thisultimate price of death, there are harshconditions created for the bride if thebride's family refuses to pay-starving,frequent beatings, being 'jailed' insidethe home or being denied all contactwith her birth family.All of these condi-tions happened to the plaintiff while

imprisoned in her home. Essentially,the plaintiff was treated like an inden-tured servant and she lost almost 2/3of her body weight. She was forced toput up with her new husband's extra-marital affair with an old girlfriend; themother-in-law's consistently aggressiveand incessant demands for a largerdowry and refusal to allow her to pursuefurther studies and to maintain inti-mate relations with her husband; andkeeping her a prisoner in the home.Ultimately, the plaintiff was beingabused by all 3 defendants whoengaged in a pattern of physical, verbaland mental torture towards her.

Finally, she escaped with the one-way-ticketto India her husband had pur-chased for her previously as a threat tosend her away if she did not complywith his and his mother's wishes. Aftera period of healing herself physically,when Plaintiff returned to the UnitedStates to seek justice, she tapped intothe resources offered by the AsianWomen's Safety Net ( www.asianwom-enssafetynet.com ) and engaged SinghLaw (www.ssinghlaw.com ) to representher case. Over the course of 18months, Singh Law employed variouslegal tools to vigorously represent theirclient.

"This victory sends a compellingmessage that the law will be respectedin U.S. courts," says Seema Singh. "Ihope women and their families fromIndia will hear that the best of our cus-toms and traditions can be celebrated,but these outdated and abusive prac-tices will not be tolerated. They have achoice."

The plaintiffwas awarded a JuryVerdict/Judgment againsther husbandand mother-in-law for assault, batteryand intentional inflection of emotionaldistress. She was also awarded anadditional Jury Verdict/ Judgmentagainst her mother-in-law and father-in-law for theft andconversion. The divorceis now final.

Full details of the coverage of thiscase can be reviewed on the AmericanLawyer's Media (www.alm.com ) VerdictSearch (www.verdictsearch.com ) andLexis Nexis.

Seema Singh, General Counsel andexperienced Attorney, based in theU.S., with extensive experience guidingcorporations operating domesticallyand internationally. Singh brings abreadth of experience to successfullymeetthe full range of challenges facingher clients in life and business. Lawoffices in New Jersey and New York.www.SSinghLaw.com

The abuses suffered by this plaintiff at the hands of herhusband and in-laws were immediate upon boarding theplane, and unfortunately, typical of torture inflicted onIndian newlywed bridesdue to the impact of customsinvolving dowries, which were banned in India in 1961. Adowry, brought by the bride's parents to the husband andhis parents, is often considered a necessary component ofthe marriage contract. Too often, the law is still ignored,and a groom's family remains involved in the dowry practiceand its abuses.


Not many artists make music thatcrosses generations...not manyartists have successful careers

that span almost 2 decades...not manyartists are born & raised in the unitedkingdom, yet listened to across theentire world...then again not manyartists can be the ambassador of UKBhangra music Jassi Sidhu.

More then 2 years after his lastrelease Jassi Sidhu is back with hisbrand new single 'Hipshaker'.

After the success of his 2011 album'singing between the lines' Jassiembarked a non- stop touring schedulewhich saw him perform in countries asfar & wide as Africa, USA, Canada, HongKong, Malaysia, India, Australia as wellas the UK. He also ventured back intothe world of bollywood&hollywood witha feature in the 2011 international filmbreakaway (Speedy Singhs).

Now 2013 see's the most recogniza-ble voice of his generation come backwith a new sound & vibe for 'Hipshaker'.

Featuring the co-production skills oflong time friend and internationalsuperstar DJBupsSaggu& the rap debutof Canadian Youtube sensation &comedienne Superwomen the songpromises to enthrall the masses world-wide.

'Hipshhaker' is traditional with atwist...traditional punjabi lyrics, modern

day electronica beats, a fresh newfemale rap artist with her own uniquestyle & of course the unmistakablevoice of Jassi Sidhu.

The big budget video for the songdirected by renowned actorAmeetChana (Bend it like Bekham)&featuring international model & actressJasmine Jardot (Jab TakHaiJaan) raisesthe bar for UK productions with its eyecatching look, feel &picturisation.

After 17 years at the top of theBhangra industry, Jassi Sidhu's fanshave come to expect quality over quan-tity & once again with 'Hipshaker' he

lives up these expectations & deliverslike only he can.

As the summer of 2013 comes to anend Jassi Sidhu's 'Hipshaker' guaran-tees to keep temperature's soaring ondance floors across the globe.

HIPSHAKER IS RELEASED WORLD-WIDE ON ITUNES ON 29/08/2013 BYVANJHALI RECORDS

PROMO LINK:http://www.youtube.com/watch?v=IUNAYhAj1ag

www.jassisidhu.com | www.face-book.com/jassisidhupage | www.twit-ter.com/jassisidhu

JASSI SIDHU IS BACKHIPSHAKER

Documents

NEW HORIZONS · 2019-12-02 · collapse of the Indian economy under Manmohan, combined with the PM's suc-cess in continuously holding on to the PM's job longer than any other incumbent