Thursday, July 31, 2008

Is India Responsible for Demise of Doha?

India led the charge to kill Doha, say the western government officials and commentators about the failure of the latest round of World Trade Organization (WTO) talks in Geneva to conclude a wide ranging agreement on world trade. Backing India's demands, including right to impose food import tariffs and end to agriculture subsidies in US and Europe, were Brazil, China and other developing nations in Asia. Africans were angry that their trade issues, particularly cotton, were not even discussed as the negotiators from developing giants fought pitched battles with their counterparts in developed nations.

"The way the Doha Round collapsed is a preview of what we're likely to see in other negotiations," said Kimberly Elliott, a senior fellow for the Center for Global Development, a Washington think tank, told the Wall Street Journal. "Emerging markets [such as China and India] are taking a big role," she said, sometimes elbowing out even poorer nations. Other important multilateral negotiations underway include carbon emission reductions which are likely to see similar discord between developed and developing nations.

By all accounts, the key reason for the Doha collapse was the failure to reach agreement on agriculture tariffs by developing countries and farm subsidies by US and Europe. Both sides were looking to protect their farmers from the downside of free trade. To learn more about the political power of US corporate farm lobby, please read my recent post "The US Food Aid and the Farm Lobby". Neither side could muster the courage to face the wrath of their powerful domestic lobbies in reaching a comprehensive agreement that would dramatically increase trade for a whole range of goods and services and significantly cut tariffs. There is a lot of interest by western companies in selling a broad range of luxury goods, financial services and high-tech products in emerging markets. The developing world would benefit by lowered tarriffs and easier access for their goods and services to markets in US, Europe, Japan and South Korea.

Mr. Pascal Lamy, the director general of the world trade organization, said negotiators' positions had converged on 18 of 20 topics on their "to-do list." But they couldn't narrow the gaps on the 19th, a safeguard mechanism sought by developing countries that would let them temporarily raise tariffs when food imports surge and severely lower prices for domestic farmers, according to Mr. Lamy. In particular, China and India wanted the trigger for such tariffs to be a 10% increase for imports, and the U.S. wouldn't settle for a threshold lower than 40%, The Wall Street Journal reports. Once "it became clear that the differences were irreconcilable," Mr. Lamy said, "the remaining issues, including cotton, were not even negotiated." The agreement on cotton was of particular interest to cotton producers in Africa. A successful agreement on cotton would have been felt most keenly in the West and Central African countries of Benin, Burkina Faso, Chad, Mali, and Togo, where cotton accounts for up to 60 percent of exports, as well as other African producers such as Uganda and Tanzania.

Venting his frustration at the failure, Lamy said to reporters, “What members have let slip through their fingers is a package worth more than $130 billion in tariff-saving annually by the end of the implementation period, with $35 billion saving in agriculture and $95 billion in industrial goods".

Prior to the collapse, Pakistani delegation led by Commerce Minister Mr. Ahmad Mukhtar, appeared to be hoping for significants benefits to flow to Pakistan from the success of Doha.

Before hitting the food import tariff deal-breaker, there was a weeklong meeting of 35 trade ministers of leading countries, including Pakistan, which produced significant agreements. Dr. Manzoor Ahmed, Pakistan’s Ambassador to WTO, told Dawn that it has been agreed that the US would cut its allowable subsidies by 70 per cent from $48 billion to $14.7 billion while EU has agreed to cut them by 80 per cent.It has also been agreed that developed countries could cut their agricultural tariffs by an average of 60 per cent.

A few days ago, Dr. Manzoor Ahmad also told Dawn that the most important area for Pakistan’s concern was cuts for tariffs on industrial goods. It had been agreed that all tariffs in developed countries would be brought below 6.5 per cent under the proposed package. Thus, current tariff of 19.6 per cent on export of cotton shirts would be reduced to 5.6 per cent or by over 70 per cent. For knitted shirts of man-made fibers where Pakistan could only manage exports of only two million dollars because of high tariffs of 32 per cent, this would now come down to 6.4 per cent, he said prior to Doha's collapse.

There would be many such new market opportunities for Pakistani exporters, the Pakistani trade rep hoped and added similar opportunities would arise in case of EU where Pakistani exporters would pay tariffs of eight per cent and 12 per cent on most of their exports. All these tariffs would be reduced to below five per cent, he said. On top of that generalized system of preference (GSP) of 20 per cent would likely stay. This would imply a reduction of over 50 per cent in duty on our exports to the EU, Dr Manzoor said and added in many other countries, such as Canada and Australia, also there would be many openings for Pakistani products.

All of Pakistani delegations' hopes and those of other developing nations were dashed, at least for the moment, with the collapse of Doha. There was also regional discord on display among South Asia nations as Bangladesh delegate complained about unfairness. He said, "We ask the Chair to apply the same methodology that was applied for selecting the tariff lines for Pakistan and Sri Lanka, and then give us the tariff lines that come up for Bangladesh." Bangladesh representative continued, "We strongly believe that same and equal methodology should be used, and we will accept the tariff lines that will be selected after application of that methodology".

The Doha collapse has revived the angry rhetoric that has often characterized the WTO standoffs in recent years, arguments that have tended to embrace the urgent geopolitical issues of the day. U.S. trade representative Susan Schwab told the Wall Street Journal that "in the face of the global food crisis, it's unconscionable that this came down to how much countries could raise their barriers to imports of food." Indian trade and commerce minister Kamal Nath, expressing a view felt widely among developing-country negotiators incensed at what they see as excessive, insensitive U.S. demands, said "it's unfortunate that in a development round" -- a major theme of Doha -- "we couldn't agree to an issue of livelihood and security." Mr. Lamy, Le Monde adds, declined to engage in what he called the "accusation game" and said he would consult with WTO members on what to do next.

Free trade advocates argue that the trend toward freer trade is essential for continued growth of the world economy. In 1990, trade represented about 40% of world GDP, according to the World Bank. By 2004, trade exceeded 55% of world GDP, and the global economy had expanded by 50%. The five fastest-growing countries from 1990 to 2004 were Albania, Bosnia and Herzegovina, China, Ireland and Vietnam, and all of them had annual double-digit increases in trade. Meanwhile, the countries that traded the least -- Iran, many African countries -- have stagnated.

Lamenting the demise of Doha, the Wall Street Journal editorial singles out Kamal Nath, the Indian Commerce Minister, for the harshest criticism. The Journal editorial says, "The real battle is between those who want to expand this era of global trade and prosperity, and those who want to carve out their own protected niches."

The Journal editorial goes on to say, "The latter seems to include Indian Commerce Minister Kamal Nath, who is the main villain in this week's failure. He preened as a Third World hero by refusing to open his country further to farm imports, insisting on a "special safeguard mechanism" that would have let countries jack up their tariffs if imports rose too rapidly. He claimed this would protect the "livelihood of millions of farmers" in India. But the rise of India's middle class has coincided precisely with the move of millions from the countryside to cities, as well as India's growing engagement with the world economy. More Indians will stay poorer longer because of his obstinance."

Not everyone is unhappy with the collapse of Doha. The critics of free trade hail Kamal Nath as a hero. Reuters reports that anti-globalization groups welcomed the collapse of talks on a new world trade treaty as a triumph for farmers, workers and the poor around the globe and a blow against "big business." And even mainstream labor and farm groups argued that the deal on the table at the World Trade Organization (WTO) Doha round negotiations over the past few days was so bad that it was just as well that it had been abandoned. "Victory for small farmers, workers, civil society and developing nations," declared the US-based Public Citizen group, which for over a decade has campaigned against the WTO and its drive to liberalize international trade. Public Citizen group is just one of many NGOs that have organized and gained strength over the last decade. This new breed of NGOs opposes what is perceived as the corporate-led globalization efforts to serve the interests of the big multi-national corporations rather the ordinary people in developing and developed countries.

Here's a video clip of Pascal Lamy announcing the failure of WTO Talks in Geneva on July 30, 2008:

Tuesday, July 29, 2008

Turkey, Pakistan and Secularism

As the Turkish Supreme Court prepares to decide on a petition to ban AKP, the ruling party in Turkey, is it reasonable to compare the secular zeal in Turkey with the religious zeal in Pakistan? It probably is. However, the situation in Pakistan is the mirror image of that in Turkey. Just as the religious orthodoxy in Pakistan is strong but limited to a small but vocal, radical minority of Pakistanis, it seems that the secular orthodoxy in Turkey is just as powerful but shared by a small, radical and vociferous minority of Turks.

While Turkish military and the Ataturk Thought Association act as zealous guardians of the secular creed that guides Turkey, the majority of the Turks have long been voting for AKP party, and its predecessors, with "Islamist" leanings. I am using the word "Islamist" rather loosely here, because AKP would be considered a very moderate middle-of-the-road party, like the Muslim League, in a country like Pakistan.

The Wall Street Journal reports that Ataturk's Thought Association's chairman, a retired four-star general, is now in jail. Its offices -- plastered with portraits of modern Turkey's founding father, Mustafa Kemal Ataturk -- have been raided by police. Several of its computer hard drives have been seized by investigators. They're hunting for evidence of plots by hard-line secularists to topple Turkey's mildly Islamic government, according to the Journal.

The hard core secularists in Turkey have been concerned about the demise of Ataturk's legacy almost since he died 70 years ago. A relentless modernizer, big drinker and fan of the fox trot, Mustapha Kemal Pasha, the father of the Turkish Republic had issues with Islam. He closed Islamic schools, banned Islamic dress and opened a German brewery in his new capital, Ankara. It was obviously not the path of least resistance in a country that is 99% Muslim, once ruled Mecca and was for centuries home to the Islamic Caliphate. Yet Ataturk's legacy prevailed for decades.

Pakistan's founder, Quaid-e-Azam Mohamed Ali Jinnah, was also of secular persuasion. However, he was not hostile to religion. His idea of secularism was very different from that of the Ataturk.

While Ataturk subordinated Islam under the state, Quaid-e-Azam believed in separation of state and religion. Here is an excerpt from Quaid-e-Azam Mohammad Ali Jinnah's most important speech laying out his vision for Pakistan: "You are free; you are free to go to your temples, you are free to go to your mosques or to any other place of worship in this State of Pakistan. You may belong to any religion or caste or creed that has nothing to do with the business of the State." Quaid-e-Azam M.A. Jinnah in address to first constituent assembly, Aug 11, 1947

The Quaid-e-Azam was not just secular, he was a secular democrat who believed in freedom of religion and personal choice. For example, he never advocated either requiring or banning the wearing of the headscarf by women, which seems to be where the battle lines are drawn today between Islamists and Secularists in Turkey.

Unlike the Ataturk Thought Association and the Turkish military who are strong defenders of Ataturk's legacy in Turkey, however inflexible and flawed it may be, there has not been a similar effort in Pakistan to defend the legacy of the Quaid-e-Azam. Not only has Quaid-e-Azam's idea of separation of mosque and state been set aside, there have been active attempts by the religeous parties to hijack the national agenda and the country's constitution in favor of a theocratic state based on their extreme interpretation of the Shariah laws. The efforts of the religious parties, a minority in parliament, began with forcing the adoption of the 22-point objectives resolution just a few years after the death of Quaid-e-Azam. The religious elements completely whitewashed the vision of the father of the nation and declared Islam as the ideology of Pakistan. Fortunately, though, the recent Pakistani elections have shown that the vast majority of Pakistanis reject the extreme agenda of the religious parties in Pakistan.

For the Ataturk Thought Association, a bastion of Turkey's secularism, the key Ataturk speech is a 230-word address to Turkish youth. It warns against "malevolent people at home and abroad," and urges ceaseless struggle against any "traitors" who worm themselves into power. According to the secularists, that dark fear has taken shape in the form of the AK Party.

Ataturk's secularism is not a simple formula. Unlike America's founding fathers, who separated church and state, Ataturk did not so much separate Islam from the state as make it subservient to the state. He abolished the position of the Caliph and put all mosques and imams under a government ministry. At the same time, he purged religious influences from other state agencies.

If, as expected, the anti-Islamist Turkish constitutional court rules to ban AKP, it will not mean the end of its government. The AKP legislators will most likely reconstitute themselves into a new party by a different name that would easily win the vote of confidence in Turkish parliament. Turkey will continue to move in the direction of a moderate Muslim state with modern ideas of democracy and personal freedoms that it shares with its European neighbors. Based on the results of recent elections in Turkey, the vast majority of Turks clearly endorses this direction and rejects the Ataturk version of secularism which is incompatible with democracy.

Monday, July 28, 2008

Obama and Carter Prayers in Jerusalem

Barack Obama, the Democratic Party candidate for US Presidency , visited the Wailing Wall in Jerusalem last week. He put on the traditional Jewish skullcap, stood at the Wall, touched it, and wrote a prayer that he inserted into a recess of the Wall. The visit, widely covered by the US and the world media, provided a good photo opportunity for the Obama campaign. The prayer is supposed to be private and personal. However, an Israeli newspaper has published the prayer Obama wrote. Here's the text of the prayer:

Protect my family and me. Forgive my sins, and help me guard against pride and despair. Give me the wisdom to do what is right and just. And make me an instrument of your will.

This prayer reminded me of my visits to Jerusalem and a joke I heard from an Israeli friend during one of my visits there. Here's the joke:

When President Jimmy Carter visited the Western Wall along with Prime Minister Menachem Begin around the time of Camp David accord, Mr. Begin said to Mr. Carter: "Mr. President, you can wish and pray here for anything you want and God will grant your wish and prayer." In response, Carter prayed out loud for Israel to withdraw from the occupied West Bank and Gaza to pre-1967 border. Hearing this prayer, Begin said to Carter, "Mr. President, you are only talking to a wall".

Jerusalem is a beautiful city that I have had the good fortune to visit several times. While there is a lot of history buried in all parts of Israel, I think Jerusalem is very special. It represents the best and the worst of the three great Abrahamic faiths. It has been the bone of contention and the scene of epic violence and murder committed in the name of three religions. But it also bears witness to the great architecture and historic events celebrated by the three monotheistic religions. For example, the hill on which the signature golden dome stands, is believed to be the location where Abraham offered his son for sacrifice to God. Each of three religions call this place by a different name: Muslims call it Qubbata-us-Sakhra (Dome of the Rock) from where Prophet Mohammad traveled to the heavens before returning to Arabia, Christians call it Mount Moriah where they believe Jesus ascended to heaven, and the Jews call it the Temple Mount, where they believe Solomon's Temple stood before its destruction. Each religion has its own narrative for this holy site. The Jews pray at the Western Wall (the wailing wall), an acient part of the foundation structure where Masjid Al-Aqsa now stands with the golden dome within its walls. It is believed by Jews to be the remains of the Second Temple believed to have been built in 516 B.C.

The Western Wall draws Jews from all over the world who come and make wishes and pray for themselves, their families, their people etc. It is open to all visitors of different faiths. The prayers are often written on a piece of paper and inserted in the recesses of the wall. I have seen reports that some entrepreurial people have started the business of receiving faxed prayers which they insert in the wall for a fee. Every year these pieces of paper are removed and buried by the rabbis.

I have had the good fortune to participate in the Friday prayers at Masjid Al-Aqsa, Islam's third holiest site. And visited Golgatha, the Garden of Gethsmane, the Church of Mary Magadalene and other Christian holy sites. I have also had the opportunity to pray at the Wailing Wall, looking the part with the skullcap and all. All I can tell you is that I did pray for myself, my family, warm and friendly relations among peoples of various faiths and world peace. But I will not share the details and the text of my prayer with you. That is a private matter between me and God.

Sunday, July 27, 2008

Taliban Insurgency Funded by Poppy and Marble

Funding is always a large part of any effective and sustained insurgency, in addition to other factors such as local population support, arms supply, depth of insurgents commitment, recruiting and training. Several recent reports indicated that the Taliban are doing very well on the funding front on both sides of the border. Of course, the funding from other enterprises pales in comparison to the poppy trade, that occurs in plain sight with active connivance, of the Afghan authorities. Below are recent media reports that capture the essence of what is going on in Afghanistan and Pakistan's FATA region.

An excerpt from the National Security Network(NSN) report:

In plain view of the United States and the international community, the opium trade is overwhelming Afghanistan’s legitimate government. The facts are stunning: in 2001, after a Taliban ban on poppy cultivation, Afghanistan only produced 11 percent of the world’s opium. Today it produces 93 percent of the global crop; the drug trade accounts for half of its GDP; and nearly one in seven Afghans is involved in the opium trade. In Afghanistan, more land is being used for poppy cultivation than for coca cultivation in all of Latin America. The trade strengthens the government’s enemies and – unless its large place in the Afghan economy is permanently curtailed by crop replacements and anti-poverty efforts – poses a potentially fatal obstacle to keeping the country stable and peaceful.

Afghanistan is caught in a vicious cycle. The fall of the Taliban brought the end of their highly coercive crop reduction program. A combination of U.S. inattention and widespread insecurity and poverty allowed poppy cultivation to explode. As the opium economy expanded, it spread corruption and empowered anti-government forces, undermining the Afghan state, leading to more poverty and instability, which in turn only served to further entrench the drug trade. Meanwhile the illicit activity has been a boon to the Taliban insurgency, which has traditionally used poppy cultivation as a lever to improve its own position. Today, the Taliban relies on opium revenues to purchase weapons, train its members, and buy support.

A recent New York Times report talked about how the Taliban took over a stone quarry in Pakistan's tribal belt to generate revenue. Here is an excerpt of the story:

A rare, unescorted visit to the region this month, during which the Taliban detained for two days a freelance reporter and a photographer working for The New York Times, revealed how the Taliban were taking over territory, using the income they exact to strengthen their hold and turn themselves into a self-sustaining fighting force. The quarry alone has already brought the Taliban tens of thousands of dollars, Mr. Zaman said.

The seizure of the quarry is a measure of how in recent months, as the Pakistani military has pulled back under a series of peace deals, the Pakistani Taliban have extended their reach through more of the rugged territory in northern Pakistan known as the Federally Administered Tribal Areas, or FATA.

Today the Taliban not only settle disputes in their consolidated domain but they also levy taxes, smuggle drugs and other contraband, and impose their own brand of rough justice, complete with courts and prisons.

An earlier New York Times report last year implicated the Afghan Police in the drug trade. Here's an excerpt: altogether different side of Afghanistan’s security forces was evident when a Dutch and Afghan patrol visited a police compound in Oruzgan Province. The police officers there were cultivating poppy within the compound’s walls, openly participating in the heroin trade. The Afghan Army squad that visited them, itself only partly equipped, did nothing.

Talking about the effectiveness of the Taliban as a fighting force, here are a couple of statements President Karazai of Afghanistan made to Der Spiegel recently:

"They did a lot wrong, but they also did a few things right. I wish I had the Taliban as my soldiers. I wish they were serving me and not people in Pakistan or others. When we came back to Afghanistan, the international community brought back all those people who had turned away from the Taliban ..."

"We wanted to arrest a really terrible warlord, but we couldn't do it because he is being protected by a particular country (Germany). We found out that he was being paid $30,000 a month to stay on his good side. They even used his soldiers as guards ....I don't want to name the country (Germany) because it will hurt a close friend and ally. But there are also many other countries who contract the Afghan militias and their leaders. So I can only work where I can act, and I must always calculate what will happen before doing anything."

There is plenty of blame to go around in allowing the Taliban to become powerful on both sides of the Pak-Afghan border. They have established themselves as an effective alternative to the age-old tribal elders jirga system. In fact, they have replaced the old system as defacto rulers capable of settling tribal disputes and managing the routine affairs normally reserved for the state. It is clear that the actions that enabled the Taliban to seize local tribal control and fund their insurgency are going to be recorded in history as the biggest mistake by US and NATO allies. Combine the strong funding with the extraordinary zeal of the Taliban and you have the most difficult situation that we see on the ground today. Just a "military surge" will not do the trick here. It'll require a multi-faceted carrots and sticks approach and tough decisions to change some of the bad choices made by the US, Pakistan, Afghanistan and NATO in Afghanistan.

Thursday, July 24, 2008

Obama's Election Poses Danger to the World

While Senator Barack Obama has been benefiting from his opposition to the unpopular war in Iraq and winning kudos for wanting to unconditionally talk with America's enemies, he has also been sounding more and more hawkish on Pakistan, a US ally. Governor Mitt Romney summarized it well last year when he said that Obama is essentially "saying he's going to sit down for tea with our enemies but then he's going to bomb our allies."

This aggressive stance by Mr. Obama raises some big questions: Is he going to end the war in Iraq and start a much bigger, far more dangerous and longer lasting war in Pakistan? Does he know that nuclear-armed Pakistan, a nation of 165 million people with about a million-man military, will be a far bigger challenge than Afghanistan, Iraq or Iran? Is he willing to radicalize moderate Muslims, destabilize Pakistan, and unwittingly aid the Taliban and Al-Qaeda in their quest to establish their extreme version of Islamic rule? Is Mr. Obama prepared for this local war in FATA to become a regional or global war? These questions are troubling many observers in the United States, South Asia and the rest of the world. Please read my post Is Obama's Recipe for Afghanistan Credible?

To put this in context, let us examine statements by US presidential hopefuls including Senator Obama, as reported in the press since last year:

Reuters Report, August 1, 2007: Obama said if elected in November 2008 he would be willing to attack inside Pakistan with or without approval from the Pakistani government, a move that would likely cause anxiety in the already troubled region.

Reuters Report, August 1, 2007: Clinton last week labeled Obama naive for saying he would be willing to meet the leaders of Iran, Cuba, Syria, North Korea and Venezuela without preconditions in his first year in office.

ABC News Report, August 1, 2007: In a strikingly bold speech about terrorism Wednesday, Democratic presidential candidate Illinois Sen. Barack Obama called not only for a withdrawal of U.S. troops from Iraq, but a redeployment of troops into Afghanistan and even Pakistan — with or without the permission of Pakistan President Pervez Musharraf.

Sioux City Journal, August 7, 2007: Obama said there was "misreporting" of his comments, that "I never called for an invasion of Pakistan or Afghanistan." He said rather than a surge in the number of troops in Iraq, there needs to be a "diplomatic surge" and that U.S. troops should be withdrawn within a year.

L.A. Times, Feb 20, 2008: Sen. John McCain of Arizona, close to clinching the GOP nomination, called Sen. Barack Obama 'naive' today and...blasted him for advocating a bombing of Al Qaeda hide-outs in Pakistan.

AFP Report, July 15, 2008: White House hopeful Barack Obama Tuesday promised to shift the "single-minded" US focus on Iraq to a threatening "terrorist sanctuary" in tribal Pakistan, in a broad new blueprint for US foreign policy.

CBS News, July 24, 2008: Obama's decision to travel to two war zones while highlighting his relatively hawkish rhetoric on Afghanistan and Pakistan reflects an attempt to deal with a problem faced by every Democratic presidential candidate since the Vietnam era: The perception that he is not as strong as his Republican rival when it comes to national security.

It seems from these reports that Obama has a chip on his shoulder. He wants to show Americans that he will be "strong on national security". He is out to prove his critics wrong about perceptions of being "soft on terrorism" or "not ready to be commander-in-chief". Does Obama suffer from the same kind of complexes that George Bush (the wimp) and George W. Bush (the lightweight, lacking gravitas) did, leading to Gulf war I and the ongoing Iraq war? Is he likely to lash out at Pakistan, without fully comprehending the consequences, just to prove his detractors wrong about their characterization of him as "soft or terror" or "closet Muslim" or "weak on national security" or "not being commander-in-chief material"? These are some of the risks that America and the world face if Obama is elected US President based on his unusual success story or charismatic personality or his soaring rhetoric.

Until recently, I have been a strong supporter of Mr. Obama's campaign to be president. I have a strong desire to see a black man become president in my lifetime and open up opportunities for more people of color and women in these United States. My support has been based on his message of change after many years of war in Iraq and economic decline in the United States. However, as Mr. Obama begins to articulate his positions on issues, I am having second thoughts. I do not want to help elect another warmonger whose only change would be the change in the war venue. And this change in venue could be far more disastrous than the situation under current President George W. Bush or potential situation under a future President John McCain, who are both known entities with plenty of foreign policy and national security experience.

Pakistan's Best Tax Collector Fired by PPP Government

Abdullah Yusuf, the most effective tax collector in Pakistan's history, has been fired, without explanation, by the PPP government while he was traveling overseas in his official capacity. When the surprise news came, he was in the Russian Federation to discuss customs issues and planned to go to Geneva, Switzerland next, according to Business Recorder newspaper.

Mr. Yusuf's key accomplishments include doubling of the revenue collection to achieve an aggressive target of over Rs 1.04 trillion in 2007-08; implementation of broad-based reforms within the tax system; universal self-assessment regimes; paperless customs clearances and e-filing systems and customer responsiveness with the business trade and bodies for creating a friendly business environment. Before Mr. Yusuf's reforms, the tax collection bureaucracy in Pakistan was notoriously corrupt and inefficient and he faced a lot of internal resistance. Mr. Yusuf is a chartered accountant and financial management consultant with extensive experience in public and private sectors.

Mr. Yusuf was appointed by Prime Minister Shaukat Aziz to the position of the Federal Board of Revenue (FBR) chairman as part of his broad agenda for reform in governance. Mr. Yusuf is also known to be close to President Musharraf. While there has been no explanation offered for Mr. Yusuf's termination, it appears to be politically motivated. This action is particularly troubling, given the revenue growth target for the next five years set at an ambitious 25% per year. Such lofty targets require a highly competent and aggressive FBR leader with a proven track record, like Mr. Yusuf. Pakistan's highest national interest requires that key appointments not be politicized.

It seems that the critics of President Musharraf have been obsessed with a YouTube video clip showing Mr. Yusuf dancing and President Musharraf and former Prime Minister Shaukat Aziz smiling. The focus has been on judging the performance of Mr. Yusuf on the dance floor and his relationship with Mr. Musharraf rather than his undeniable accomplishments as the chief tax collector of Pakistan. Indeed, this is sad day for Pakistan.

Earlier this year, I found myself on the receiving end of lots of email traffic after Mr. Yusuf's video appeared on YouTube. I'd like to share with you one particular message that I found closest to reflecting my own feelings about it. Here it is:

We seem to be a nation of hypocrites. I say this because we seem to judge people quickly from their outward appearance. Surely a human being is much deeper than the outward appearance. There is a hadith that our Prophet prohibited people from condemning any one as kafir, as he said that this was a secret between that person and God. There is a deeper lesson in this.We as a nation are quick to pronounce judgment on the moral fiber of all and sundry in quick time; but do we judge ourselves? Jesus had said, when a prostitute was brought before him for judgment, "let he who has not sinned cast the first stone". Do we ever think along those lines? This is what makes ours a nation of hypocrites. The CBR Chairman, and I did not know him personally; was mentioned to me by many friend and acquaintances of mine who had the experience of dealing with CBR, and I got a unanimous positive appraisal that during the tenure of this chairman, CBR's performance had improved quantum fold in attitude and performance. I also felt this in the form of a major tax-payer of Pakistan; and certainly the level of harassment that one went through the tax department was greatly reduced. Should we be judging this chairman for his good performance at his job, or condemning him for what he does on his own leisure time. To the citizens of Pakistan his performance at his job is most important for the well being of this nation. Dancing, I think, is a natural out-pouring of happiness, and man has been dancing through the ages. So what is wrong here!! I think what is wrong here is using these videos to malign him and judge him unreasonably. May Allah guide us all in the right direction.

Here's the "controversial" videoclip:

Tuesday, July 22, 2008

Is Obama's Recipe for Afghanistan Credible?

Senator Barack Obama calls Afghanistan the "central front in the war on terror" and advocates reinforcing American military presence there. The senator has talked about expanding the war into Pakistan's tribal areas by saying "If we have actionable intelligence about high-level Al-Qaeda targets, we must act if Pakistan will not or can not." Mr. Obama has also called for a $1b increase in non-military aid for the Afghan government, a government that has already received $15b in non-military aid with not much to show for it. Afghanistan ranks 172 on a list of 179 nations in Transparency International's corruption index.

Rory Stewart, a former British diplomat and current head of an NGO in Afghanistan, disagrees with Mr. Obama's assessment of the situation and his prescription for improving it. Writing in the latest issue of Time Magazine, Mr. Stewart says ," But just because Afghanistan has problems that need to be solved does not mean that the West can solve them all. My experience suggests that those pushing for an expansion of our military presence there are wrong. We don't need bold new plans and billions more in aid. Instead, we need less investment — but a greater focus on what we know how to do."

Mr. Stewart proposes that the West's efforts in nation-building, governance and counternarcotics should be smaller and more creative. He adds, "A smarter strategy would focus on two elements: more effective aid and a more limited military objective. We should target development assistance in provinces where we have a track record of success. Our investment goes further in stable and welcoming places like Hazarajat than it can in hostile, insurgency-dominated areas like Kandahar and Helmand, where we have to spend millions on security and the locals do not contribute to the project and will not sustain it after our departure. We should focus on meeting the Afghan government's request for more investment in agricultural irrigation, energy and roads. And we should increase our support to the most effective departments, such as education, health and rural development; they are good for the reputation of the Afghan state and the West. Creating more educated, healthier women and men and better transport, communications and electrical infrastructure may be only part of the story, but they are essential for Afghanistan's economic future."

Another commentator Brian Cloughly accuses Obama of proposing to continue the failed Bush policies in Afghanistan. He writes for the Reuters blog as follows: "So Senator Obama would continue Bush policy to send US troops and strike aircraft and missile-firing drones (”We need more Predator drones on the Afghan border region,” he declared) to attack US-identified targets in the territory of a friendly nation. He says “We must expect more of the Pakistani government”; but how much more does he want? His country has already killed scores of civilians in Pakistan in the past two years by having drone-launched missiles blast villages in which US-recruited Pushtun-origin agents, Afghan and Pakistan citizens, picked out what Senator Obama calls “high level terrorist targets” and sent information to their controllers in Bagram or Islamabad (and elsewhere that I won’t mention) by their amazingly technically advanced communications devices. But it is ironic, as well as morally appalling, that the villagers in Pakistan who were killed in the Predator-guided missile attacks - these slaughtered women and children - died because the target information that led to their massacre was incorrect. (And unfortunately for these pawns of the US, who were well-paid and inserted by ingenious means into the tribal areas on both sides of the border, many were identified and killed in the most disgusting manner. But their families in the US and elsewhere have been fairly generously recompensed, which may be some consolation.)"

On Mr. Obama's plans to stop infiltration from Pakistan, Mr. Cloughly writes: "But if America can’t secure its own border with Mexico, in spite of annual expenditure of billions of dollars in security measures, how can it expect Pakistan to seal its frontier with Afghanistan? Half a million illegal immigrants cross from Mexico into the US each year, including criminals of all natures, and, no doubt, some terrorists intent on mayhem in America. Yet Washington - and Senator Obama - make the demand that Pakistan stop all the militants and drug smugglers who want to move to and from their areas of operation."

Another commentator and author of "The Duel: Pakistan on the Flight Path of American Power", Tariq Ali, argues that the US presence in Afghanistan is designed for more than just fighting the "war on terror". He writes: "Jaap Scheffer, Nato's secretary-general, told the Brookings Institution in February that the continuing occupation had less to do with good governance than with the desire to site permanent military bases (and nuclear missiles?) in a country that borders China, Iran and Central Asia. Contributors to the organization's house magazine, Nato Review, have argued that the preservation of Western hegemony in the Asia-Pacific region requires a permanent military presence. Whatever the justifications or fantasies, the occupation cannot last, since those who live under it feel they have no option but to back those trying to resist, especially in a part of the world where the culture of revenge is strong."

Tariq Ali criticizes Ahmad Rashid, the well-known author and strong advocate for use of overwhelming military force in Afghanistan and Pakistan against the insurgents. Ali says, "Rashid was a firm supporter of the Soviet intervention, although he is coy about this in his book (Descent into Chaos). He shouldn't be. It reveals a certain consistency. Afghanistan, he thinks, can be transformed only through war and occupation by civilized empires. This line of argument avoids the need to concentrate on an exit strategy. Civilian casualties in Afghanistan are high and in the last two months more US and British soldiers have died here than in Iraq."

As the US presidential candidate articulates his positions on Iraq and Afghanistan, he is accused of being "US-centric" by making proposals more for domestic consumption than a serious effort to resolve the underlying issues. In words, Obama is not being completely honest with the American electorate or their international audience. Mr. Cloughly puts it as follows: "His (Obama's) speechwriters concentrate only on the sharp, US-centric aspects of international affairs. They care nothing about the sacrifices of Pakistan in this US-created conflict. He doesn’t know that Pakistan has been host to millions of Afghan refugees for decades. (No other country in the world has been forced to look after so many refugees for so long - a horrible global record, which is hardly the fault of Pakistan.)"

Here's a video clip of Obama's threat and Pakistan's response:

Monday, July 21, 2008

$100B Business at Stake in US-India Nuclear Deal

As the Indian parliament gets ready for a confidence vote this week, the fate of the government of Prime Minister Manmohan Singh and the US-India nuclear deal hangs in the balance.
The Indian government is pulling out all stops to win this vote to salvage the US-India nuclear deal. In addition to the Indian people, the international community and the nuclear suppliers group (NSG) are also watching the vote closely.

The NSG's interest lies in the estimated $100 billion worth of nuclear business in India over the next two decades. U.S. companies hope to capture as large of a share of that business as possible. Private studies suggest that if U.S. vendors win just two civil nuclear reactor contracts, they would create 3,000–5,000 new direct jobs and 10,000–15,000 indirect jobs in the United States, according to US International Trade Administration. Major nuclear plant manufacturers such as GE, Siemens, Urenco, Hitachi and others stand to gain from the consummation of the deal.

It has now been three years since the signing of the historic agreement between President Bush and Indian Prime Minister Manmohan Singh. During this period, political parties and media in India have been debating the merits and pitfalls of the agreement.

India has also asked the International Atomic Energy Agency to place the draft India-IAEA Safeguards agreement before its Board of Governors. After the board's approval, the U.S. will seek an exemption from the international Nuclear Suppliers Group that would allow the deal to proceed. The final step will be a vote in the U.S. Congress on the so-called 123 Agreement.

As the deal makes its way through the Indian parliament, the IAEA, the NSG and the US Congress, there is heavy lobbying taking place on all sides. The US nuclear suppliers lobby is actively pushing for passage in the US Congress, even if it requires a lame-duck session after the November elections. Some nonproliferation advocates in the U.S. have also stepped up their campaign against the deal. They claim the agreement will facilitate a new nuclear testing by India, and thereafter will allow India to upgrade its nuclear arsenal. Non-proliferation advocates have also argued that India could expel IAEA inspectors in the future and thwart the IAEA inspection regime.

The US legislation passed in 2006 -- the so-called Hyde Act -- that gave preliminary approval to the U.S.-India agreement, requires that Congress be in 30 days of continuous session to consider it. Congressional aides said that clock can begin to tick only once India clears two more hurdles -- completing an agreement with the International Atomic Energy Agency, and securing approval from the 45 nations that form the Nuclear Suppliers Group, which governs trade in reactors and uranium. Because of the long August recess, less than 40 days are left in the session before Congress adjourns on Sept. 26, according to the Washington Post.

India is said to be running short of uranium needed to fuel its reactors. It is anxious to win "clean" agreements with the IAEA and the NSG that would not result in fuel cutoffs if it decides to resume testing nuclear weapons.

Sen. John McCain, the Republican presidential candidate, is a strong supporter of the agreement, but Sen. Barack Obama, his Democratic rival, is more skeptical. During the congressional debate on the Hyde Act, Sen Obama added language in the bill limiting the amount of nuclear fuel supplied to India from the United States to deter nuclear testing. Though proliferation is a constant concern raised in the US, there has not been much discussion of the implications of this deal for other nations in the neighborhood: Pakistan, Iran and China.

Pakistan's nuclear fuel needs are currently very modest and they currently are met by China. China has promised to help Pakistan achieve its target of generating 8,800 MW of nuclear power by 2030 by speeding up the delivery of the six nuclear plants and supply the necessary fuel, according to various reports. At the same time, Pakistan is building a $1.2 billion facility to develop the capability to manufacture full-cycle nuclear fuel and power plants. The Iranian situation is currently very murky with the US and EU threatening sanctions if Iran continues to enrich uranium.

If India wins the IAEA and the NSG approvals that would not result in fuel cutoffs in the event it decides to resume testing nuclear weapons, it could easily bypass any US restrictions and obtain needed nuclear supplies from other nations eager to do business with India.

Here's a brief video clip with Dr. Leonard Weiss, an NPT expert, explaining the US-India nuclear deal:

Sunday, July 20, 2008

Is Indian Democracy Overrated?

"Normally they (Six members of India's Parliament) are in jail, serving time for crimes ranging from extortion and kidnapping to murder. The Indian constitution allows them out on bail to attend important parliamentary votes. But the sight of convicted murderers entering the parliamentary chamber won't be the most edifying of spectacles." So says a BBC report this morning.

In the wake of the Communist Party's pull-out from the Indian coalition in New Delhi, there is a vote of confidence scheduled for this week. The Indian government of Prime Minister Manmohan Singh is pulling out all stops to win this vote to salvage the US-India nuclear deal.

While many of the complex details of the deal appear shrouded in mystery, the deal essentially gives India access to US nuclear technology and nuclear fuel in exchange for putting some (not all) of its nuclear installations under IAEA's international safeguards on nuclear technology. It does not prevent India from continuing to develop and refine its nuclear weapons arsenal. Prime Minister Manmohan Singh and the supporters of the deal see it as the international community giving its nuclear program legitimacy, assuring its energy security and, they hope, set India on the road to superpower status. However, the opponents, led by the Communist Party of India, see the deal as a trap that will bind India into a strategic alliance with the United States with long term negative consequences. The opponents believe the nuclear deal, as it is being voted, is subject to the provisions of the Hyde Act, which could constrain India's nuclear program.

Members of parliament are being offered all kinds of incentives to vote a certain way. Both the government and the opposition are trying desperately to entice them with promises of largess, influence and plum jobs in return for their vote.

Here's more from the BBC: .".. wavering members of parliament have been busy speculating in public about what kind of job might persuade them to vote one way or another. The Ministry of Coal, perhaps, or the office of Chief Minister of the state of Jharkhand. That's politics, you might think. But a more serious allegation came from a communist leader, AB Bardhan, who suggested this week that the Congress party was trying to buy parliamentary votes for about three million pounds (six million dollars) each."

In an earlier post Pakistani Myths About India's Resurgence, I wrote as follows: "For those who sing the praises of India’s democracy, I would suggest viewing Bollywood hit “Sarkar Raj” that portrays the Godfather-like corrupt, criminal and murderous behavior of India’s powerful politicians. Again, I am certain India is blessed with many honest leaders and this must be a caricature of the reality of Indian democracy, but it does bring out the fact of criminals' presence in Indian politics. According to political science Professor Pradeep Chibber of UC Berkeley, as many as 30% of India's legislators have criminal records. However, the good professor contends that democracy is a messy process that must be allowed to work its bugs out. It should not be interrupted or abandoned because the alternatives are far worse. India has a functioning democracy with an independent judiciary and other institutions that are respected."

The key questions are: Is Indian democracy overrated? Has this democracy served its people well? It is well known that India continues to be the home of the largest number of poor people in the world. It has the highest population of malnourished children. Its farmers are committing suicides at an alarming rate. It has the dubious distinction of being the murder capital of the world, with the largest number of homicides in the world recorded last year.

In a recent interview of Ted Koppel by Charlie Rose regarding Koppel's latest China documentary, Koppel asked rhetorically what rights are more important than the right not to be hungry, the right to be literate, the right to basic clothes and shelter and the right to make a living. He argued that the Chinese government has been largely successful in providing these basic rights to the Chinese people. This is in sharp contrast to the situation in India where there is still widespread hunger, poverty and illiteracy, particularly in rural India where the vast majority of Indians live.

Recent foreign visitors to Pakistan, which has at best been a pseudo-democracy during the last several years, find that the average Pakistani enjoys a higher standard of living than his or her Indian counterpart.

In spite of heavy visa restrictions and quotas imposed by many nations around the world, about a million Indians manage to leave India in search of a better life.

Democracy is not Nirvana. It is not going to efficiently fix a lot of the basic issues of food, clothing, shelter and literacy that the less developed nations have to deal with it on a daily basis. The best thing that can be said in defense of Indian democracy is that the alternative forms of government would likely be worse for India.

Saturday, July 19, 2008

Strategy to Rehabilitate and Integrate the Taliban

As Pakistan struggles to deal with the insurgency in its tribal areas, it is important for the Pakistani government and its allies to have a clear strategy and action plan.

The Strategy

The first, and most important part of the strategy, is to distinguish between Al-Qaeda, who are mostly foreign fighters, and the Taliban, who have local roots on both sides of the Pak-Afghan border. The best way to deal with Al-Qaeda is to isolate them, and launch an all-out assault to defeat them, and drive them out of the tribal areas. Regarding the Taliban, it is important to clearly identify the groups that are irrevocably committed to violence and have a military strategy to deal with them. At the same time, Pakistan needs to pursue a political track with those Taliban and other militant groups who have genuine grievances and are willing to sit down and talk to resolve the issues. The strategy has to consist of both carrots and sticks with the militants who are local and show willingness for dialog. The sticks strategy has to be based on divide-and-conquer thinking. Understand the differences among the militants, and then deal with each group as appropriate. Here are some possible examples for the elements of a carrots strategy:

Rehabilitation for Jihadists

One example is the rehab schools for the jihadists in Saudi Arabia. These schools focus on fighting the Al-Qaeda misinformation and indoctrination about jihad. The curriculum addresses questions such as: What is jihad? Under what circumstances is it permissible? Who is authorized to declare jihad? And other similar questions. The inmates include many former fighters in Iraq and 108 Saudis released from Guantanamo Bay prison. The student inmates are taught that only the government has the power to declare jihad, not Al-Qaeda or any individuals or private groups, Afghan jihad against the Soviets was legitimate for Saudi citizens because it was authorized by the state of Saudi Arabia. The rehab school employs the services of Islamic scholars, Shariah experts, psychologists, and other staff to help the inmates adjust to life after militancy. The facility outside Riyadh consists of six compounds called resorts. Each has Sony Playstations, table tennis and other recreational facilities. The Saudi ministry of interior gives graduates jobs and pays them as part of rehab. In 18 months since the first class graduated, no one has re-offended yet, according to Saudi government.

Pakistan can use this model with appropriate modification to the program and add appropriate skills training to facilitate the return of the jihaists into society with jobs, families, housing and other things that normal citizens wish for.

Jobs for Jihadists

There must be a way for the jihadists to return to normal life, to have skills training, gainful employment and be integrated in society. There may be many different ways to accomplish this. But one that is working its way between Pakistani and US governments is the idea of Reconstruction Opportunity Zones (ROZ).

The U.S. Congress is actively considering legislation to establish Reconstruction Opportunity Zones (ROZs) in Pakistan and Afghanistan that will significantly reinforce the Pakistani government's strategy to counter the insurgency. Under the ROZ strategy, a significant number of goods including some textiles, manufactured or grown in designated sites (the ROZs) in Pakistan's border area with Afghanistan, as well as in Afghanistan, will be able to enter the U.S. market duty-free.

According to a recent statement by the Pakistan Embassy in Washington, successive US visits of Pakistani business delegations, as well as inquiries from businesses to the trade office at the Embassy confirm the strong interest of the private sector in this program. Experience with similar programs elsewhere in the world demonstrates their value in dramatically expanding exports. The export growth will generate much needed jobs and economic activity in the border areas, countering the recruiting efforts of the insurgents and contributing to stability there.

The ROZ initiative needs to gain congressional approval before it can be implemented. Bills have been introduced by Democratic Senator Maria Cantwell of Washington State (S. 2776) and by Democratic Congressman Chris Van Hollen of Maryland (H.R. 6387) and are working their way forward.


The problem of Islamic militancy is a very serious one for Afghanistan, Pakistan and the western world. Most of its victims are Muslims, not westerners, although it poses a serious challenge for the entire humanity. It requires creative thinking and well-considered and durable solutions. The current blame game between Afghanistan, Pakistan and the United States will not help. Threats to launch attacks on Pakistan may serve temporary political objectives of some politicians. However, such disarray among the allies in the war on terror will only benefit the militants, rather than help rid the world of the serious threats we face. After issuing threats of attacking in Pakistan's tribal areas, US presidential candidate Senator Barack Obama is currently in Afghanistan. His world tour is expected to take him to Iraq, Jordan, Israel, Germany, France and Britain. The keys to ending the terrorist threat from the Pak-Afghan border areas are in Islamabad and Washington, not in Kabul or Iraq or Israel. By dropping Islamabad from his itinerary, Mr. Obama is sending the wrong signal to the world. Let's hope he and his campaign will realize and correct this mistake soon.

Thursday, July 17, 2008

Will Obama Deliver Change?

As the US presidential elections get closer, the Democratic and Republican nominees are articulating their policy positions on foreign and domestic issues. Since the winner is likely to impact not just the United States but the entire world, close attention is being paid to the major policy speeches of Barack Obama and John McCain around the world. I have selected some of the commentary and analyses relevant to Muslim Americans and Pakistani Americans from various media to share with you.

Here are some excepts from a piece Pakistan Should Shudder; Afghanistan Should Despair by By Brian Cloughley, a guest writer on Reuters Blog:

Senator Obama’s foreign policy advisers and slick speechwriters had him say that “The greatest threat to our security lies in the tribal regions of Pakistan, where terrorists train and insurgents strike into Afghanistan. We cannot tolerate a terrorist sanctuary, and as president I won’t … We must make it clear that if Pakistan cannot or will not act, we will take out high level terrorist targets like bin Laden if we have them in our sights.”

Further to that comparatively minor slaughter (after all, what’s the death of a few innocent villagers, here and there?) has Senator Obama any notion of how many soldiers of the Pakistan army and the Frontier Corps have been killed in combating militants who were driven into Pakistan by the US invasion of Afghanistan, or who were turned to militancy by these unwelcome refugees? Does he know that well over a thousand grieving families of the army and the Frontier Corps have suffered the loss of sons, husbands, fathers and brothers because the US army is incapable of securing its side of the Afghanistan-Pakistan border?

Of course not: because his speechwriters concentrate only on the sharp, US-centric aspects of international affairs. They care nothing about the sacrifices of Pakistan in this US-created conflict. He doesn’t know that Pakistan has been host to millions of Afghan refugees for decades. (No other country in the world has been forced to look after so many refugees for so long - a horrible global record, which is hardly the fault of Pakistan.)

And if any talk-show interviewer asked Senator Obama “How many Afghan refugees remain in Pakistan” he wouldn’t have a clue what was being talked about. The fact that over a million Afghans are still in Pakistan and don’t want to go back to their own country because it is in a state of ungovernable chaos is neither here nor there to the presidential candidate, or to most of the world, in fact. Doesn’t it dawn on anyone that in that million (about 1.3 million, according to the UN) Afghans in Pakistan there are many who have reason to detest the present regime in Kabul and who want to get rid of it by fair means or preferably foul?

Let’s have no nonsense about the Pakistan government failing to do “more” about the Pakistan-Afghan border. Islamabad proposed that a barrier be built, and actually provided a detailed scheme for it. I attended a briefing by the former foreign minister of Pakistan at which he described it in detail. (Although I did not agree at all with the proposal to plant anti-personnel mines. I’ve seen too much of the effects of Soviet mines on Afghan children - the shattered legs and hands, the total destruction of youthful aspirations - to ever imagine that mines are anything but evil. OK, so I used them - Claymore mines - when in ambush in Borneo when we were fighting the Indonesians who wanted to take over Malaysia, decades ago; but I’ve changed my mind, having visited hospitals full of Afghan kids who have had their arms or legs blown off.) Predictably, however, the Kabul government vetoed the project, although a few miles of fences were eventually erected in spite of that stupid objection, which was entirely to do with Afghanistan’s insular objection to the well-established legality of the border.

But if America can’t secure its own border with Mexico, in spite of annual expenditure of billions of dollars in security measures, how can it expect Pakistan to seal its frontier with Afghanistan? Half a million illegal immigrants cross from Mexico into the US each year, including criminals of all natures, and, no doubt, some terrorists intent on mayhem in America. Yet Washington - and Senator Obama - make the demand that Pakistan stop all the militants and drug smugglers who want to move to and from their areas of operation.

Senator Obama declares that “The greatest threat to our security lies in the tribal regions of Pakistan.” No it doesn’t: it lies in the ignorance of those who fail to understand the problem.

Dr. Nazir Khaja, Chairman of Islamic Information Service in Los Angeles writes:

Much to the disappointment of the Muslim community the interaction of the Obama campaign and the Senator himself with issues related to Islam and Muslims leads one to draw a different conclusion. It appears to the Muslims that there is clearly a dissonance between the Senator's words and his actions pertaining to his campaign’s handling of issues that relate to the Muslim community and Islam. Either he is poorly informed or he prefers being politically correct or in-fact both.
Going back to the beginning of his campaign when the issue of the Senator being a "closet Muslim" was raised by those who wanted to discredit him, his response appropriately was to reaffirm his Christian Faith on public airways and dispel the falsehood. This was proper and yet it left the Muslim community thinking as to why he could not go the extra distance to point out to his inquisitors that even if he was a Muslim, why was it such an offence in a nation which upholds religious freedom and equality. The sensitivity around this question and the need for the Senator to be politically correct was understood by the Muslim community, which continued to respond to his message with great enthusiasm. They were left wondering though if the senator was accused of being a Jew, would he be responding in the same manner.

I have written recently in a post Is "Muslim" a Derogatory Epithet in America as follows:

Lately, the Democratic Party presidential candidate, Senator Barack Obama, has been under "suspicion" of being a "closet Muslim". He and his campaign have denied it and rejected the "Muslim" label as though it were an unflattering epithet. In fact, some of the Obama staffers have become so sensitive to this "charge" that they refused to seat hijab-wearing Muslim women supporters behind Obama on stage in front of the cameras at a recent rally in Michigan. Instead of ridiculing the lies about Obama, the latest New Yorker magazine cover has in fact served to reinforce the rumors and innuendos about Muslims and his Muslim connections.

In spite of vociferous rejections of the "Muslim" label and repeated denials by Barack Obama, a significant number of Americans continue to believe Obama is Muslim. Based on recent polls, about 10-12% of the Americans believe Obama is a Muslim. Another 12% believe he took oath of office for the Senate on the Quran. A whopping 39% believe he attended an Islamic madrassa in Indonesia as a child.

While Senator Obama talks about change, he is doing what every presidential candidate has done in the US: Follow the conventional wisdom to pander to the voters. As Ralph Nader put it, "Obama is an overly cautious captive of his handlers". He is shifting his positions on just about every issue of substance, domestic or foreign. He recently agreed with the US Supreme Court decision to overturn Washington DC gun ban. He has started talking about asking the commanders on the ground in Iraq on when and how to withdraw from Iraq, rather than just give them a withdrawal time-line. He has become extremely hawkish on Afghanistan and Pakistan. He has been playing up the fears of terrorism, just like George Bush, to establish his national security credentials. He has stopped talking about the suffering of the Palestinians under Israeli occupation. The list goes on and on. He may well be elected, in spite of, or as a result of these shifts. But will this represent the message of CHANGE that brought him where he is? I have a feeling that the young, idealistic supporters of Obama expect real change from him. If he does not deliver on it, he would at best be a one-term president, if at all, causing people to be disillusioned by the Democrats once again.

Protests Erupt as Karachi Stocks Hit New Lows

The investor confidence reached new lows when hundreds of irate investors took to the streets in Karachi today. A number of windows were broken and at least two people injured, Reuters news agency reported. They were protesting continuing slide in share prices in Karachi for the 14th consecutive day, eroding about 14% of capital since Monday, reaching a new 18-month low of 10,058.37. The KSE-100 is now down 36% from its peak of 15739.25 earlier this year. Fall of 20% or greater in major indices is considered a bear market.

Earlier in June, there was a brief respite for investors when the authorities imposed a temporary ban on short selling and tightened the circuit breaker lower limit to 1% and increased upper limit to 10%. But, as the limits were revised to plus or minus 5% last Friday, many investors took advantage of it and sold off their holdings, putting further downward pressure on share prices.

"The measures taken on Friday proved to be an exit strategy for foreign investors," Asad Iqbal, managing director at Ismail Iqbal Securities Ltd. told Business Recorder newspaper in Karachi.

Pakistan's State Bank has recently raised interest rates from 10% to 12.5% and cut 2007-8 growth from 7.2% to 5.8%. This forecast comes on the heels of dire talk of economic "meltdown" by the new leadership that is facing serious political instability amid growing differences in the PPP-PML(N) coalition government. The ongoing unease with new leadership is continuing to accelerate loss of confidence in Pakistan's economy by businesses, investors and consumers. The rupee is continuing its slide which has seen it lose 16.9% of its value against the dollar so far this year.

With the dramatic rise in international commodity prices, the food and fuel subsidies have contributed to Pakistan's rising budget deficit, which the central bank said would reach 6.5 percent to 7 percent. The deficit was just 4.3 percent in fiscal 2007. With imports rising faster than exports, the central bank said Pakistan's current account deficit will rise between 7.3 percent and 7.8 percent - a record high.

While it is true that at least part of the inflation in Pakistan is imported from global markets, it is important for the Pakistani leadership not to use it as an excuse for inaction on the economic front. Faced with international turmoil, it becomes even more important to assert leadership in economic matters to keep the national economy afloat and able to recover quickly in the future. The first step toward fixing the current mess is to put credible economic leadership in charge and stop the erosion in business, consumer and investor confidence.

Wednesday, July 16, 2008

Is America Retreating in Afghanistan?

US and Afghan troops have abandoned a remote village in eastern Afghanistan where militants killed nine US soldiers and wounded a dozen more on Sunday, according to media reports today. On Sunday, 100-200 insurgents had stormed the small combat outpost in the village of Wanat on the border of Nuristan and Kunar provinces.

Another report today indicates that Nato-led forces in Afghanistan fired into Pakistan after coming under attack from there by suspected militants. NATO troops used attack helicopters and artillery to fire from Paktika province after the militants fired rockets. Nato said it had closely co-ordinated with Pakistan's military, who agreed to help if firing from Pakistan continued.

Just looking at these two reports coming out the same day, one gets the impression that, while the US is retreating inside Afghanistan, it is threatening to get tougher with the militants inside Pakistan. Is there a contradiction here? Does the US believe that the only way to fight the Taliban is to expand the war into Pakistani territory. Is there a feeling that what the Taliban do inside Afghanistan is inconsequential? That the prolific poppy profits from the highly lucrative drug trade do not really matter? Why is the US not acting on its own advice to follow the money to cut off the funds for terrorists? The terrorists seem to be awash in drug money. They are well-equipped, well-organized and quite sophisticated, as demonstrated by their recent attacks on the US and Pakistani troops on either side of the Pakistan-Afghanistan border.

It seems to me that the US war on terror in Afghanistan is in complete disarray. With the Bush-Cheney team essentially lame-duck, there is an apparent leadership vacuum in Washington. There is not much of a strategy to deal with the resurgent Taliban, other than to blame Pakistan and to make demands on its new government. The reluctance or the inability to send more US troops to Afghanistan speaks louder than any words. Even the Obama promise to deploy troops from Iraq to Afghanistan seems hollow, given that he won't be able to do anything until late January, 2009. And then he is talking about a 16-month time-table for withdrawal from Iraq. Are the Taliban going to stand still for this period while the US takes its time to redeploy from Iraq to Afghanistan? Are the they not going to continue and get stronger to launch more attacks resulting in higher casualties on both sides of the Durand line?

All the reports and data lead to one conclusion: There is no confidence in Afghanistan or Pakistan in the ability of the United States to seriously deal with the Taliban threat. Those sitting on the fence in Afghanistan or Pakistan have no incentive to side with the United States. They know the Taliban are there to stay. They fear the consequences for siding with the US, once the US leaves the area, like it did the last time.

The only way to successfully deal with the Taliban threat for Afghans and Pakistanis is to see it as their own fight, with or without the United States. Unfortunately, I do not yet see any signs that it is happening. It seems that the US has lost the most important of all battles: The battle for the hearts and minds of the local population. You can blame it on general mishandling of the war. Or lack of any serious reconstruction of the war-ravaged country, Or you can blame it on excessive reliance on frequent air strikes that cause many innocent civilian casualties. What I do see is the possible return of the pre-911 situation in Afghanistan.

Is "Muslim" a Derogatory Epithet in America?

“Are you now or have you ever been a Muslim?” Has this question ever been asked in America? The answer, so far, is NO. Is it beyond the realm of possibility that such a question would ever be asked by high-level US investigators? It seems far fetched but let's examine such a possibility in the US historical context.

There have been periods in the US history when we have used a broad brush approach to demonize entire groups of people based on their ethnicity, skin color, religion or national origin. During the second world war, the US citizens of Japanese origin were called "Japs" and imprisoned in camps with the approval of the US Supreme Court. During the cold war in 1950s, the US was in the midst of the "Red Scare" where people saw "Commies" hiding in all corners of America. Sen Joseph McCarthy held congressional hearings and subpoenaed many people and asked the question: “Are you now or have you ever been a member of the Communist Party?” Aided by the FBI, under the direction of J. Edgar Hoover, McCarthy conducted his search for Communists. People were hauled before Congress to testify about their loyalty to the US government. They were asked to name names and report their friends, neighbors and family. Many Americans were convicted of being communists and some were executed for being Russian spies.

Lately, the Democratic Party presidential candidate, Senator Barack Obama, has been under "suspicion" of being a "closet Muslim". He and his campaign have denied it and rejected the "Muslim" label as though it were an unflattering epithet. In fact, some of the Obama staffers have become so sensitive to this "charge" that they refused to seat hijab-wearing Muslim women supporters behind Obama on stage in front of the cameras at a recent rally in Michigan. Instead of ridiculing the lies about Obama, the latest New Yorker magazine cover has in fact served to reinforce the rumors and innuendos about Muslims and his Muslim connections.

In spite of vociferous rejections of the "Muslim" label and repeated denials by Barack Obama, a significant number of Americans continue to believe Obama is Muslim. Based on recent polls, about 10-12% of the Americans believe Obama is a Muslim. Another 12% believe he took oath of office for the Senate on the Quran. A whopping 39% believe he attended an Islamic madrassa in Indonesia as a child.

Given our history, the rise in bigotry against Muslims should be a cause for alarm for all American. The best way for all of us to ensure a peaceful world is not by demonizing all Muslims or by using "Muslim" as a negative epithet or a synonym for "terrorist". Instead we should work toward marginalizing the tiny minority of Muslims who are engaged in terrorizing the world to advance their own hateful ideologies. Only by marginalizing such "terrorists" can we isolate them and rid the world of their terror and bigotry to live in peace.

Monday, July 14, 2008

The Obamas Lampooned as " Flag-burning Islamic Terrorists"

As the general elections get closer with Barack Obama enjoying a big lead over John McCain, the smears and whisper campaigns against the Obamas are getting nastier by the day. Now a cartoon on the cover of the New Yorker Magazine's latest issue caricatures Barak Obama in the Oval Office dressed as Usama Bin Laden, bumping fists with Michelle Obama wearing military style fatigues with an AK-47 machine gun slung over her shoulder. The background has a picture of Osama Bin Laden over the fireplace and American flag burning in the fireplace. It captures all the lies, rumors and innuendos against Barack Obama. For those unfamiliar with the polls, about 10-12% of the Americans believe Obama is a Muslim. Another 12% believe he took oath of office for the Senate on the Quran. A whopping 39% believe he attended an Islamic madrassa in Indonesia. All of these beliefs are completely baseless and repeatedly denied by Obama. In fact, some of the Obama staffers have become so sensitive to this "charge" that they refused to seat hijab-wearing Muslim women supporters behind Obama on stage in front of the cameras at a recent rally in Michigan. Obama later apologized for it.

The New Yorker magazine does have a reputation for its satirical covers. It is generally regarded highly by its supporters and critics. The magazine claims that its controversial cover is meant to satirize the campaign of lies and fabrications against Barack Obama. It has definitely got people talking about it. But the magazine's defense does raise a lot of questions about the approach it took. For example, could it have debunked the lies about Obama more effectively by showing this cartoon inside a thought bubble coming out of easily identifiable bigots? Or by showing it as a figment of Karl Rove's political imagination?

The way the New Yorker has chosen to satirize the issue comes across as really "tasteless and offensive" as the Obama campaign put it. By creating this controversy about someone like Obama with an unconventional background for a US presidential candidate, it is clear that the right-wing negative campaigns are getting a boost with much wider publicity. And it is serving to perpetuate and reinforce the worst possible stereotypes against Muslims in the United States. It is clearly unhelpful for people hoping for peaceful dialog and coexistence with the Islamic world. Given the current toxic environment in the United States against Islam and Muslims, Obama's stereotyping as Muslim could also expose him to great personal and physical harm.

If it is really not an innocent or botched attempt at satire, then what is its intent and who is behind it? In addition to Republicans who have successfully used whisper campaigns and smears in past presidential elections, there are other individuals and groups who are nervous about having Obama in the White House and they are trying to subvert his campaign by all means they consider necessary. For example, there are many who are vehemently opposed to Obama's insistence on direct talks with the Iranians on all issues between the US and Iran. Others see Obama as a problem because his presidency could hurt those who profit from the massive US military spending. Then there are those who believe Obama opposes the Iraq war and he wants to reach out to the Muslim world because he may have a soft corner for Muslims.

I expect to see a lot more insidious and inflammatory attacks on Obama for allegedly being "un-American", "unpatriotic", "unsympathetic to working class Americans", "closet Muslim", "Manchurian candidate", etc. etc. At the same time, I sense some level of discontent among some of the traditional Democratic Black and Jewish constituencies because of Obama's positions on personal responsibility and outreach to the Islamic world. I hope the Obama campaign is up to the task to deal with unconventional challenges from all kinds of bigots and interest groups plotting to derail his history-making run for the President of the United States.

Crisis of Confidence Triggers Karachi Stocks Selloff

In spite of cheaper valuations of Karachi stocks from shrinking price earnings multiples relative to other markets, foreign investors in Pakistan continue to be nervous. As soon as the trading range was revised to plus or minus 5%, many investors took advantage to sell their holdings Friday and pushed the KSE-100 down more than 4%. The decline continued this week as the KSE-100 index lost 265.84 to close at 11,695.82. Earlier in the morning, it opened at 11,961.66. This is a far cry from the peak of 15739.25 earlier this year.

"The measures taken on Friday proved to be an exit strategy for foreign investors," Asad Iqbal, managing director at Ismail Iqbal Securities Ltd. told Business Recorder newspaper in Karachi.

Securities and Exchange Commission Chairman Razi-ur-Rehman believes the market has a liquidity crisis and he blamed the bearish trend in the equity market on the State Bank of Pakistan's (SBP) tight monetary policy, which has affected market liquidity.

The State Bank raised interest rates to 12 percent from 10.5 percent in May which hurt the stock market. Traders are expecting another increase in the next scheduled meeting before July 31 to curb inflation and support the rupee.

The rupee ended firmer at 69.50/60 on Monday as sentiment improved slightly after the introduction of stabilization measures last week and on rumors the government may curb imports, traders said, according to Business Recorder. State Bank of Pakistan is reportedly taking steps to arrest the rapid decline in Pakistan's dollar reserves. According to the latest SBP weekly report, the foreign exchange reserves fell to $11.123 billion, down from $15.6 billion at the end of last year.

The State Bank last week moved to stabilize the rupee after it set its weakest ever closing level at 72.85/90 on July 8.

Among the most active stocks Friday, volume leader NIB Bank fell 8.7 percent to 9.69 rupees, Oil and Gas Development Co Ltd shed 5 percent to 110.45 rupees, while Arif Habib Securities was 4 percent lower at 143.49 rupees.

The Karachi stocks had rallied earlier from measures that included a 1-month ban on short selling, a special 30 billion rupee ($446 million) fund set up to stabilize volatility, and revision of the short circuits to 10% on the upside and 1% on the downside, announced June 24, 2008. Please read my post "Karachi Stocks Rally after Ban on Short Selling" to learn more about recent changes at the KSE.

Sunday, July 13, 2008

Missiles versus Schools for Pakistan's Tribal Areas

Taliban's Resurgence

The voices of the critics of Bush administration are being raised again more loudly and clearly as the resurgent Taliban step up their attacks and cause more casualties in Afghanistan and Pakistan.

According to a BBC report today, nine US soldiers have been killed in Afghanistan, in one of the biggest losses of American life in a single incident since operations there began in 2001. Another news report said militants in north-west Pakistan have killed at least eight Pakistani soldiers. At least 22 other Pakistani troops were wounded in the attack on their convoy outside Hangu city, near the border with Afghanistan. Three militants were said to have been killed as the soldiers returned fire.

In addition to the killing of military personnel, the Taliban have targeted many civilians and killed a Pakistani medical doctor and a number of Shia citizens last week. Several UNICEF health workers have also been kidnapped.

It Takes Schools, Not Missiles

New York Times columnist Nicholas Kristoff has an Op Ed piece titled "It Takes a School, Not Missiles" in today's newspapers. Reviewing Greg Mortenson's book "Three Cups of Tea: One Man's Mission to Promote Peace . . . One School at a Time", Kristoff argues "a lone Montanan (Mortenson) staying at the cheapest guest houses has done more to advance U.S. interests in the region than the entire military and foreign policy apparatus of the Bush administration". Kristoff quotes Greg Mortenson, an Army veteran, as saying “Schools are a much more effective bang for the buck than missiles or chasing some Taliban around the country".

Who is Greg Mortenson?

For those readers unfamiliar with Greg Mortenson and his volunteer efforts in building schools in Pakistan, here is a brief summary:

In 1993, Greg Mortenson, an American from the state of Montana, went to climb K2, the world's second highest mountain, in the Karakoram range of northern Pakistan. After more than 70 days on the mountain, Mortenson and three other climbers completed a life-saving rescue of a fifth climber that took more than 75 hours. After the rescue, he began his descent of the mountain and became weak and exhausted. Two local Balti porters took Mortenson to the nearest city, but he took a wrong turn along the way and ended up in Korphe, a small village, where he recovered.

To pay the remote community back for their compassion, Mortenson said he would build a school for the village. After a frustrating time trying to raise money, Mortenson convinced Jean Hoerni, a Silicon Valley pioneer, to found the Central Asia Institute. A non-profit organization, CAI's mission is to promote education and literacy, especially for girls, in remote mountain regions of Pakistan and Afghanistan. Hoerni named Mortenson as CAI's first Executive Director.

In the process of building schools, Mortenson has survived an eight-day armed 1996 kidnapping in the tribal areas of Waziristan in Pakistan's Northwest Frontier Province, escaped a 2003 firefight between Afghan opium warlords, endured a fatwā by an angry Islamic cleric for educating girls, and received hate mail and threats from fellow Americans for helping educate Muslim children.

He believes that the best way to "fight" terrorism is to build schools free of the Taliban's oversight (because he believes the Taliban promotes hatred). Because of this, several of the school's Mortenson's group built were destroyed by the Taliban, but the communities rebuilt them.

Mortenson and David Oliver Relin are co-authors of the New York Times best selling book Three Cups of Tea. During the serialization of the book on BBC Radio 4 in 2008, the BBC reported that Greg Mortenson had set up over sixty schools and as a result over 25,000 children had been educated. Pennies for Peace is a program Mortenson launched to involve American school-children in fund-raising efforts for the schools in Afghanistan and Pakistan.

What Brought Us Here?

As we criticize the Bush policies and demand the building of more schools rather than launch more missile attacks, I think it’s important to understand the origins of the Taliban and then try to deal with the effects of their ascendancy. Most of the radical madrasahs in Pakistan were built in the 1980s with the support of the CIA, the ISI and the Saudis as a way of finding, recruiting and preparing young men to fight against the Soviet Union. The madrasahs before the 1980s were neither radical nor politicized. Most were focused on feeding, clothing, sheltering and providing an Islamic education to youngsters with normal emphasis on Jihad as a way of rectifying social ills. The pre-1980 madrasahs were not exclusively focused on Jihad against the infidels (Russians in 1980s and Americans in this decade). The Taliban are, in fact, a product of these post-1980 radicalized madrsahs. The Taliban are mostly the children of the Afghan refugees from the war in 1980s who attended the new madrasahs in Pakistan while their home country was under Soviet occupation.

More Schools, Fewer Missiles

I strongly agree with the criticism of the Bush policy of relying excessively on military force to contain the Taliban. I think the efforts of Mr. Mortenson are extremely laudable.

I believe that the efforts like Mr. Mortenson’s should increasingly complement rather than completely replace the efforts of the military in providing security to Pakistani and Afghani people to live normal, peaceful lives. The post-1980 FATA is very different from pre-1980s FATA. The influence of the tribal elders has been completely supplanted by the Taliban leaders. Any peace efforts by peace jirgas lead to the murder of the jirga elders as soon as the military leaves the area. No one is safe from the Taliban’s fire power in the absence of Pakistani military. Not even school children who choose to attend schools not acceptable to the Taliban.

Choose Soft Power

Rather than just choosing between schools and missile, it is important that the US, Afghan and Pakistani authorities use an appropriate mix of sticks and carrots and shift more and more toward the use of soft power as the security situation improves and the people on both sides of the Pak-Afghan border begin to enjoy the fruits of peace in the region.

Saturday, July 12, 2008

IPL Mixes Business, Money, Entertainment and Sports

International cricket megastars with large paychecks to match their egos, Bollywood's elite actors, big business magnates, provocatively dressed cheerleaders, the big sports media, huge worldwide audience, deep pocket sponsors all come together to put on spectacular three hour, 2020 games of the two newly formed Indian cricketing leagues.

This is a revolution in the world of cricket, a sleepy, colonial era, gentleman's game that the British brought to their colonies including India and Pakistan. Taking a leaf from the sports leagues in US and Europe, it represents a coming of age for the business of sports in India. According to the New York Times, the Indian billionaires are for the first time staking their prestige on sports teams. The Indian Premier League’s most expensive franchise, at nearly $111.9 million, is the Mumbai Indians, fittingly owned by India’s richest man, Mukesh Ambani. The flamboyant liquor baron Vijay Mallya picked up the Bangalore-based Royal Challengers for $111.6 million, and the actor Shah Rukh Khan is backing the Kolkata Knight Riders for $75.09 million.

Forbes magazine reports that the Board of Control for Cricket in India (BCCI), a nonprofit body controlling the game in the country, has racked up $1 billion to date from selling commercial rights to Indian cricket for the next five years. (One source: Nike paid $45 million to flash its logo on players' apparel and to sell garments to cricket fans.) "It's all about extracting the most value," said Lalit Modi, BCCI's new marketing chief, who hopes to eventually make $1.5 billion from Indian cricket, ten times what BCCI made in the last go-around.

IPL offered contracts to several Pakistani players including Shoaib Malik, Shoaib Akhtar, Muhammad Asif, Shahid Afridi, Younis Khan, Muhammad Yousaf and Inzamam ul Haq.

According to the BBC, the players were offered to the franchisees in an auction process. Australia captain Ponting is among 13 of his compatriots in a pool of international cricketers available to the franchises, which were allowed to spend a maximum of $5m on eight contracted players. There have been recent reports that several top Australian players have been promised the IPL's salary cap will be axed in the future. The biggest stars could then expect IPL contracts of about $15 million. Australian captain Ricky Ponting has opposed this move. "I have certainly heard there may be no salary cap next year but I'm not sure if that will be good for the IPL," Ponting told Australia's Courier Mail. "The more I've thought about it, it might be detrimental to the whole set-up.

The winning bids, which were selected electronically in a sealed room, offered Pakistani players as follows: Shoaib Akhtar $425,000, Younis Khan $225,000, Kamran Akmal $150,000 and Umar Gul $150,000. These amounts are several times larger than the current compensation they receive from PCB.

According to BBC Sports, IPL's top 10 winning auction bids in February were:

Mahendra Dhoni: $1.5m (Chennai)
Andrew Symonds: $1.35m (Hyderabad)
Sanath Jayasuriya: $975,000 (Mumbai)
Ishant Sharma: $950,000 (Kolkata)
Irfan Pathan: $925,000 (Mohali)
Brett Lee : $900,000 (Mohali)
Jacques Kallis: $900,000 (Bangalore)
RP Singh: $875,000 (Hyderabad)
Harbhajan Singh: $850,000 (Mumbai)
Chris Gayle: $800,000 (Kolkata)