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Archive for November 2010

Govt taps about 5,000 people’s phones on average

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NEW DELHI: Telephone calls of about 5,000 people are being recorded by central security agencies daily as part of security and preventive measures.

Government sources said on an average telephones of about 5,000 people are being kept under surveillance by intelligence agencies suspecting their linkages with terror activities, hawala operators and members of banned organisations.

Telephones of a number of people involved in various economic offences are also being monitored.

Sources said that conversations of terrorists and insurgent outfits in Jammu and Kashmir, Northeast and the banned CPI (Maoist) are mostly under the scanner of intelligence agencies.

“A lot of times the phone tapping is done for only sixty days. But when it involves persons who are facing any criminal case or are under the scanner of investigating agencies, their phones are kept under surveillance for a longer period,” a senior Home Ministry official said.

As per official procedures, the phone tapping by intelligence agencies is done with the consent of the Union Home Secretary . The government can authorise tapping for 60 days which can be extended again as per needs.

The sources said that emails are also being monitored by government agencies after getting the consent of the service providers.

Sources said that tapping of telephone conversations of leading corporate lobbyist Niira Radia, whose name has cropped up in the 2G Spectrum row , with several influential persons were authorised by the government.

Decision Time

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This week in Islamabad, the Government of Pakistan and the international community came together for the first meeting of the Pakistan Development Forum in two years. Just over three months since Pakistan’s devastating monsoon floods, it was a chance for the Government of Pakistan and the international community to take stock of the challenges facing Pakistan. And to set the direction for both Pakistan’s government and the international community in helping Pakistan overcome those challenges and reach its full economic potential.

Britain’s Secretary of State for International Development, Andrew Mitchell took part in the Forum in Islamabad. It was his third visit to Pakistan since Britain’s new coalition government took office six months ago, and his fourth visit this year. Britain has been speedy and generous in its support for Pakistan. The UK has been at the forefront of the flood response, committing a total of £134 million to provide emergency shelter, food packages and safe water and to help start the reconstruction process with support for farmers and for getting children back to school. The British public has made its support for Pakistan clear, donating a further £64m (Rs 8.5bn) to the Disasters Emergency Committee appeal.

The Forum highlighted the massive scale of the challenge that Pakistan faces after this summer’s devastating monsoon floods. The Asian Development Bank and the World Bank presented their damage needs assessment. Their conclusions were sobering. They estimated that this summer’s floods had caused a total of $10bn worth of damage across Pakistan. A minimum of $6.8bn is needed for repair, recovery and reconstruction across all sectors. Most affected are Pakistan’s agriculture and housing sectors. Agriculture and housing losses are estimated at $5bn and $1bn respectively.

Pakistan’s challenge was great enough before this summer’s floods. Pakistan’s population is expected to increase by 85 million by 2030. Pakistan’s working age population is increasing by nearly 10,000 people every day. That is 4 million people every year. For Pakistan to create enough jobs for these people, the economy needs to grow at 8% per annum. Over the past five years, growth has averaged just 4%.

The UK stands ready to increase its support to help Pakistan secure the vibrant, properous and strong future its people deserve. But, as Andrew Mitchell told the Pakistan Development Forum this week, an exceptional package of reforms by the Government of Pakistan is essential to securing this future. Without reforms to increase tax revenue and control public spending, the risks posed by large and persistent deficits – financed through ever greater levels of borrowing – are considerable and debilitating. Inflation is likely to keep rising, and investor confidence – which has fallen 25% this year – will continue to be shaky. All of which would destroy rather than create jobs.

The Government of Pakistan is making some tough decisions and beginning to make progress towards reform. The Reformed General Sales Tax Bill tabled in the National Assembly last week is part of the right approach. Pakistan’s politicians need now to move to agreement and implementation. To build public confidence, it needs to be accompanied by continued measures to tackle corruption and improve the effectiveness of public spending. In order to stay on a positive path to long-term development Pakistan needs to take some tough choices to reform the economy to ensure sustainable economic growth which will reduce poverty and inequality and allow Pakistan to realise its potential.

Finally, at this time of Eid-ul-Azha let me wish you and your families Eid Mubarak.

It’s braver to quit Afghanistan now

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Peter Preston

If the date for withdrawal from Afghanistan is fixed at the end of 2014 then our soldiers may be dying for nothing.

Let’s do what any smart politician does, and reach for the latest polling results. About 92% of young Afghan men in Kandahar and Helmand provinces (via a sample of 1,000 interviewed by researchers from the International Council on Security and Development, with an extra 500 respondents from northern areas of the country) know nothing about 9/11. Mention the twin towers and all you get is blank looks. And 43% can’t find anything good to say about democracy, either.

Forty per cent think Nato forces are there “to destroy Islam” (or Afghanistan itself); 61% believe that Afghan national security forces won’t be able to cope without international support; 56% suspect that Afghan policemen are helping the Taliban, and 25% reckon they’ll join them in the end. The equivalent figures for national army soldiers are 39% helping the enemy and 30% switching sides when that’s possible.

Now, the news since the last bout of similar polling a few months ago isn’t all bleak. Rather greater numbers are backing Nato to win in the end. But that was before the great and good of the alliance met in Lisbon this weekend and decided, after a fashion, to designate 31 December 2014 as “the end” in question. It’s a firm “deadline”, according to David Cameron – or a “provisional” and “aspirational” one, according Nato’s secretary-general, who seems curiously concerned that “conditions have to be right” to let the boys come home.

Of course people talking to pollsters only express opinions rather than facts. Of course circumstances can change. Of course Mr Cameron and, indeed, Barack Obama – both of whom need Afghanistan’s long, bitter war over before they face their electorates again – may be right to set a timetable. But can we pause for a moment, draw a deep breath – and not laugh out loud.

Presumably the Taliban have been consulted, diaries in hand, and circled various windows of opportunity for surrender. Presumably Osama bin Laden has rubber-stamped the agreement. And perhaps Mullah Omar’s nod to join Hamid Karzai in coalition – with Omar as deputy prezza and a deal on tuition fees for ex-insurgent students – hasn’t received quite the publicity it merits.

But let’s not be too blinkered as we look at the panoply of Cameron/Clegg deadlines. Growth surging by New Year’s Day 2015? The Irish economy turning tiger again? Bin Laden up on trial in the Hague? Labour down to 15% in more conventional polls?

If you set the right schedule, excluding factors you can’t control, then naturally such achievements are “very doable” (as the head of Britain’s armed forces says of the PM’s pledges). Anything can be realistic (in the view of our most senior general in Afghanistan) if you leave realism out of the equation.

Politics always dictates its own version of realism, to be sure. Mr Obama needs withdrawal targets to keep General David Petraeus on some kind of leash. Mr Cameron, remembering how the top brass bullied Gordon Brown, probably wants to keep Sir David Richards busy doing the do-able. Getting out of Helmand and quitting Kabul equals votes at home. Democracy may not enthuse 43% of Afghans, but it rules the roost back in Whitehall and Washington.

Yet things don’t look like that in the killing fields. Out there, to the Taliban, Lisbon timetables have no meaning (except to nominate a time of opportunity). Out there, any notional dates on year planners may be dust and delusion one blast later. You can’t be categoric in conditions like these. And if you’re forced to be “firm”, then there’s really only one conclusion: that the men who die between now and 2015 may well die for nothing. That, if you want to get out, then do what is always do-able if you’re brave enough: just get out now.

Written by rohitkumarsviews

November 23, 2010 at 8:15 am

Indian parties fail to end Parliament deadlock

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NEW DELHI – India’s ruling party on Monday called an all-party meeting to try to break a deadlock which has seen opposition lawmakers repeatedly halt parliament over allegations of massive corruption.


India’s ruling party has called an all-party meeting to try to break a parliamentary deadlock

Parliament was again adjourned for the day as the opposition disrupted proceedings to demand a cross-party investigation into the 2008 sale of 2G telecom licences for a fraction of their value.

Prime Minister Manmohan Singh has denied accusations that he failed to act over the multi-billion-dollar scandal and has vowed to punish anyone found guilty of graft.

But Singh’s Congress-led government has refused to agree to the joint parliamentary probe, saying a separate inquiry was already under way.

Finance Minister Pranab Mukherjee invited leaders of all parties to the meeting in an attempt to allow parliamentary business — including passing economic reforms — to resume, Congress spokesman Manish Tewari told AFP.

India’s chief auditing body declared last week that the sale of the 2G telecom licences by the then telecoms minister A. Raja lost the country up to 40 billion dollars.

The Comptroller and Auditor General said that the allocation of licences at discount rates to select firms was done in an “arbitrary, unfair and inequitable manner”.

No evidence to prove Pakistan supports Naxals

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US intelligence group acknowledges business-type relations

BY Iftikhar Gilani

A global team of US intelligence professionals has found no evidence of any link between Maoists or Naxalites and Pakistan-based terrorist groups or that country’s Inter-services Intelligence (ISI).

Creating a flutter, Chhattisgarh Police Director General Vishwa Ranjan last week had mentioned a meeting between Naxalites and Pakistan-based militant outfit Lashkar-e-Toiba (LeT). He said two LeT operatives had attended a Naxalite meeting in April or May calling it a new policy and planning for increasing “armed resistance.”

Such visions are alarmist and do not reflect the true nature of the situation, stated US-based intelligence group Stratfor after investigating the source of Naxalite weaponry and training. It concluded that the rebels appear to remain a very self-reliant group and have not established a strong partnership with Pakistan when it comes to weapons and training.

Home Ministry officials had been implicating terrorist groups and Kashmiri separatists tying up with Naxalites, referring to increasing attacks in rural parts of central and eastern India.

“Stratfor has watched Pakistan’s links with Naxalites before. But we are yet to see significant changes on the ground that would give any credence to the scenario. Many Indian officials are equally insistent that no connections exist between Naxalites and Pakistan. Although Naxalites have provided rhetorical support for Kashmiri (and other anti-India groups) opposed to New Delhi earlier, there has been little action to back up the rhetoric,” said the intelligence analyst Ben West.

While examining the Naxalites’ weaponry, West concluded, “There was evidence of some Pakistani involvement in supplying weapons,” but he hastily added, “It was through third parties.” He believed that Maoists have obtained arsenal from four different sources, from Indian security forces, theft from businesses, local arms factories and procuring from external militant and criminal groups.

The group has even recovered NATO ammunition, variants of the AK-47 assault rifle and even Israeli-made sniper rifles like the Galil 7.62mm from Naxalites. Over a period of six month, the report stated, one zone command spends more than three-quarters of the unit’s budget on weapons ($70,214) with the rest ($20,604) spent on supplies. Such evidence suggests that Naxalite weapon procurements from outside have their limitations; obtaining them locally is far cheaper and can be done by virtually any Naxal operative.

Further, the Naxalite arsenal is vast and diverse, consisting of weapons manufactured in China, Russia, the US, Pakistan and India. The lack of weapons uniformity among Naxalite groups indicates that they do not have a benefactor that has bestowed on them a reliable, standardised arsenal, and have had to build up their own from scratch.

Quoting its sources in India, Stratfor report claimed that Pakistani intelligence has established business-type relationships with Naxalites to sell arms and ammunition apart from attempts to use Naxal bases for anti-India activities. There is evidence that the ISI is providing arms to Naxalites in exchange for money or services, mostly through third parties like the United Liberation Front of Asom (ULFA) or the ostensible Bangladeshi militant leader Shailen Sarkar.

But Indian army sources told the US group that their investigations don’t have the evidence to prove a direct link between Naxalites and ISI, since the Pakistanis continue to play a peripheral role.

The group has, however, found Naxalite links with ULFA, the People’s Liberation Army of Manipur, the National Social Council of Nagaland-Issac Muivah, and Nepalese Maoists comprising the militant wing of the Unified Communist Party of Nepal, apart from Sarkar.

Home Ministry accuses Sarkar’s group of training Naxalites at ISI-funded camps in Bangladesh. The ministry also claims that Sarkar has met with Naxal leaders in India.

Admitting that evidence of direct links between ISI and Naxalites was hard to come by, the report said that murky and circuitous relationships were preferred the most in a tense diplomatic environment.

Further, the report said Naxalism is a low-maintenance, self-sustaining movement that will continue to undermine Indian rule. Pakistan does not need to expend more resources to sustain this. Naxalites are likely wary of undermining their own local legitimacy by accepting too much assistance from an outside government.

“While something like a standardised arsenal compliments of ISI would benefit the Naxalites operationally, such a move would be a high-risk, low-reward effort for Islamabad as it seeks to operate very subtly in India for the time being while tensions over the 2008 Mumbai attacks continue to cool off,” it added.

India’s Smaller Micro-Lenders Likely to Fail

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By: Yoolim Lee and George Smith Alexander

A quarter of Indian microfinance companies may fail after a clampdown last month in their biggest market pared debt payments and curtailed bank financing, said N. Srinivasan, who consults on the industry for the World Bank.


India’s micro-lending has expanded at an average annual rate of 62 percent over the past five years in terms of the number of customers, and 88 percent in terms of credit, according to Micro-Credit Ratings International Ltd., a Gurgaon, India-based ratings agency for the industry.

As many as 60 to 70 of the nation’s 260 microfinance institutions are likely to collapse in coming months as banks halt lending to them to curb risks, Srinivasan said in an interview Nov. 19 in New Delhi. That would have a “devastating effect” on the poorest borrowers in remote regions, he said.

Lending and collections by micro-lenders have ground to a near halt in southern Andhra Pradesh state after the local government introduced new rules in mid-October aimed at protecting borrowers. A slump in microfinance loans may trigger a chain reaction of defaults by borrowers with multiple debts, Srinivasan said.

“Multiple loans help people manage money, like juggling balls,” he said, adding that every poor household in Andhra Pradesh has 9.6 microfinance-loan accounts on average. “What’s happening is that right in the middle of it, you remove a ball. Suddenly there is no ball to throw.”

Andhra Pradesh, the largest market for most micro-lenders, on Oct. 15 capped interest rates that companies can charge and ordered them to collect payments monthly rather than weekly. It also barred them from using coercive measures to force borrowers to repay debt.

Straining Capital

The move led to a slump in micro-lenders’ cash flows, strained capital levels and spooked banks, which account for most of their funding needs. Microfinance companies are seeking 10 billion rupees ($221 million) from banks for a liquidity fund, Vijay Mahajan, head of a lobbying group that represents about 44 micro-lenders, said Nov. 16 in New Delhi.

The new rules sent shares of SKS Microfinance Ltd., the largest such lender in the nation, plummeting 47 percent before Chairman Vikram Akula said on Nov. 19 that the firm had received bank funding and didn’t have a cash shortage. The comments helped shares of SKS, more than a quarter of whose loans are in Andhra Pradesh, rally 5.4 percent that day.

Rival Share Microfin Ltd., backed by New Zealand billionaire Christopher Chandler, plans to delay an initial public offering until customers restart payments and state and central governments deal with the current upheaval. Banks need to regain confidence in the companies’ operations, M. Udaia Kumar, its managing director, said in a Nov. 18 interview.

‘Trickle-Down Effect’

“Even if a single MFI defaults, it might have a trickle- down effect on the entire sector,” he said. “Institutions with stronger net worth have a possibility of survival for a period of time.”

Share Microfin, based in Andhra Pradesh’s capital of Hyderabad, had planned to raise 10 billion rupees in early 2011.

Microfinance, which focuses on loans in poor areas largely shut out from traditional banking services, gained prominence globally when Muhammad Yunus won the Nobel Peace Prize in 2006 for his role in founding Bangladesh’s Grameen Bank. India, where banking services are available in about 5 percent of cities and towns, is the largest market for such credits.

India’s micro-lending has expanded at an average annual rate of 62 percent over the past five years in terms of number of customers, and 88 percent in terms of credit, according to Micro-Credit Ratings International Ltd., a Gurgaon, India-based ratings agency for the industry.

Moneylenders

A shortage of microfinance funding may force borrowers to turn to moneylenders, said Dipak Gupta, executive director of Mumbai-based Kotak Mahindra Bank Ltd. These unauthorized lenders operate outside the formal credit-delivery system and charge usurious interest rates.

“Money has stopped and a borrower is used to getting that money and circulating it,” he said. “If you don’t create an alternate system or don’t allow the system to rotate, he will go back to the moneylender.”

SKS, whose stakeholders include George Soros, has received 3.67 billion rupees from eight lenders including Axis Bank Ltd. in the past two weeks, Chief Financial Officer Dilli Raj said on Nov. 19 from Hyderabad, where the company is based.

Axis, India’s fourth-largest lender by market value, is awaiting a report by a committee set up by the central bank last month to review concerns about the microfinance industry, CFO Somnath Sengupta said.

The report, due in January, “will be the guiding principles for lending to the sector,” he said in an interview on Nov. 19. “We will continue to be prudent. There is no reason to panic.”

Axis’s loans outstanding to microfinance companies account for about 1 percent of the total, he said.

Still, the industry is bracing for consolidation, said Mahajan, who is also chairman of Hyderabad-based microfinance company Basix Group.

“We could see casualties among small microfinance institutions,” he said.

Obama, Bush and America’s Limits

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The release of George W. Bush’s memoirs and his successor’s ten-day trip to Asia complemented each other in a sobering way this last week. Bush’s book, “Decision Points,” brought back the folly of his early unilateralism. At the same time, President Barack Obama’s troubled Asia trip showed the limits of America’s influence even when it tries to work with others.

If there was one philosophy that dominated the Bush administration’s early years it was the notion that the best way to preserve American power was to exercise it unilaterally. The more constraints the U.S. voluntarily acquiesced to, the weaker it would become, and by bucking international institutions and even abrogating existing treaties, America would strengthen our position. The prime advocates of this approach–Dick Cheney, Donald Rumsfeld, Richard Perle and John Bolton–were effectively arguing that might made right.

Plenty of American foreign policy experts disagreed, usually less on moral grounds than on practical ones: by shaping international institutions to our liking while we had the power, the multilateralists argued, we would ensure they served our interests when we were less influential. But back then it was hazardous for politicians to make that argument. The Romans, the Turks and the British may have eventually faded (none of them, incidentally, thanks to too much international cooperation), but any suggestion that America might not be number one forever was taken as passive acceptance of that fate.

Now the idea that we won’t be number one forever is more widely credited. One of the most-discussed ads of this last election cycle showed a fully risen China looking back in 20 years and laughing at our decline. A post-midterms CBS poll showed 62% of the country thinks it’s headed on the wrong track, with only 29% saying it’s going in the right direction. The theme of American decline has been a touchstone for Obama’s opponents during his two years in office. That malaise, real or imagined, combined with the “shellacking” Democrats took in the midterms, created a difficult set of expectations into which Obama would be walking on his Asia trip. A few perceived wins would have been welcome for him; losses were likely to make him, and the U.S., look worse than they might in other circumstances.

Managing perceptions on international trips is the job of White House, State department and sometimes Treasury department aides; somehow all managed to fail the president at a bad moment. Typically, staffers are assigned to manage negotiations for months before a bilateral or multiparty summit to ensure there are no surprises once the President arrives. The aides are supposed to figure out what can be achieved, precooking the agreements and writing them up beforehand. Then with a little stagecraft, the principles show up, pretend to do some last minute negotiations (or not), and sign a document, often an irrelevant one, but nevertheless a “deliverable.”

Expectations were not so expertly handled on Obama’s Asia trip. In an attempt to boost worker protections, Obama had reopened negotiations on a free-trade treaty with South Korea that Bush had been unable to advance through Congress. Obama had sworn to seal the deal on the trip, which didn’t help, but when troubles arose in the run-up the administration did not telegraph them, leaving expectations of success higher than they should have been. Likewise, Treasury Secretary Tim Geithner’s public effort to get a G-20 deal on trade imbalances was thrown together rapidly and largely in public, leaving Obama without a safety net and facing headlines like this in the New York Times when it fell short of the American target.

Bungled expectations are short-term setbacks, and the administration is quick to argue that it may still have success on the South Korean deal or G-20 trade imbalances. But the reasons behind Obama’s failure to nail them down on a presidential trip abroad are more concerning. Obama, on his flight back to the U.S. Sunday, tried to play down the larger implications. “Sometimes because we’ve gone through a tough couple of years, there’s a tendency for us to think that somehow Asia is moving and we’re forgotten,” Obama said, “And in fact, I think everywhere in Asia, what I heard from leaders and people is that we are still central, and they want us there.” That may be, but the American president’s influence has clearly diminished in recent years: a more powerful America likely would have succeeded in tightening the trade deal with South Korea and might have convinced the G-20 to agree to fixed targets for limiting trade imbalances.

These failures take on a particular light against the backdrop of Bush’s memoirs. It would have been wise to seal these deals when the U.S. had more power to persuade other countries to agree to them. The U.S. is still by far the most powerful country on earth and is likely to stay that way for a long time to come: the markets’ confidence in U.S. treasuries and America’s continued economic and military power make that clear. But America is going through a cyclical waning of influence. Perhaps the experience will bolster arguments for multilateralism in the future.