In the wake of the outrage in Pakistan, New York Times is reporting that the Bush administration has decided to cancel General Jay Hood's appointment to the US Embassy in Pakistan. General Hood is the former head of the US prison in Guantanamo Bay in Cuba, where hundreds of Muslim prisoners, many from Pakistan, have been held without charge since the prison was set up following the 11 September, 2001 attacks on the US. There have been widespread reports of torture at the prison. The General admitted in 2005 that there had been a number of incidents involving Guantanamo guards showing "mishandling" the Koran.
Even though no formal announcements has been made, it is known that Pakistan had refused to accept this appointment. Pakistani Foreign Minister Shah Mehmood Qureshi said his government had "genuine reservations" over the appointment of Maj-Gen Jay Hood.
The Hood appointment was announced in March. According to the NY Times, this appointment reflected the military's aim to put a crisis-tested veteran in a critical job at a pivotal time in the fight against al-Qaeda and the Taleban in Pakistan's tribal areas. The paper quoted a US Central Command spokesman as saying Gen Hood was now being considered for "a different, equally important job" at command headquarters.
Friday, May 9, 2008
Thursday, May 8, 2008
Rivals: Asians Against Asians Or Asian Union?
Bill Emmott, a former editor of The Economist and a longtime Asia-watcher, says in his recently published book "Rivals" that China will continue its remarkable rise for years to come. But he thinks that a modernizing India and a resurgent Japan could end up jostling for supremacy in Asia, pitting "Asians against Asians." A balance-of-power politics could evolve resembling Europe's in the 19th century.
Talking about the Bush administration's growing ties with India, Emmott says the US recognize the fact that while Al-Qaeda and its cohorts pose the biggest short-term and perhaps medium-term challenge to America, in the long term it is the expected shift in the world’s economic and political balance towards Asia that promises to have the greatest significance.
Economists at Goldman Sachs estimate that if China continues with pro-growth policies and manages its economy reasonably well, it could overtake the United States as the world’s biggest economy by 2020. By 2050 India might also have overtaken the United States if it pursues vigorous economic reforms in this decade and beyond. India, at present the world’s 11th-largest economy, has long been thought of as a laggard compared with China: good at information technology and outsourcing but incapable of the sort of manufacturing that has powered China’s economic emergence.
Even if the dates and figures in forecasts such as Goldman’s are wrong, Asia is going to get richer and stronger, probably for a long time to come. The reason why Tibet and Tata come into the picture is that the rise of Asia is not just going to pit Asia against the West. It is going to pit Asians against Asians. This is the first time in history when there have been three powerful countries in Asia at the same time: China, India and Japan. That might not matter if they liked each other or were somehow naturally compatible. But they do not and are not. Far from it, in fact.
An array of disputes, historical bitternesses and regional flashpoints weigh down on all three countries. Conflict is not inevitable but nor is it inconceivable. If it were to occur – over Taiwan, say, or the Korean peninsula or Tibet or Pakistan – it would not simply be an intra-Asian affair. The outside world would be drawn in.
Such a conflict could break out suddenly. Last month’s unrest in Tibet has shown just how volatile China can be – and how easily one of those flashpoints could cause international tension.
If the Asians can manage their relations peacefully, it will not only help China make a successful transition to the world's great superpower, but a strong Indian performance might succeed in lifting people out of poverty throughout the whole subcontinent, including Pakistan and Bangladesh. The self-confidence that such an outcome would foster would make it easier for the three main powers to work together and, with the rest of Asia, to create a true single economy along the lines of the European Union.
What cannot be in dispute is that the outcome matters enormously. The catastrophic decisions that European nations made a century ago are still within our folk memory. The world still lives with the consequences of the First World War. We have to hope that Asia, now in some ways at a similar stage of development, manages to cope with its tensions better than Europe did.
Sources:
Times Online
Wall Street Journal
The Independent
Talking about the Bush administration's growing ties with India, Emmott says the US recognize the fact that while Al-Qaeda and its cohorts pose the biggest short-term and perhaps medium-term challenge to America, in the long term it is the expected shift in the world’s economic and political balance towards Asia that promises to have the greatest significance.
Economists at Goldman Sachs estimate that if China continues with pro-growth policies and manages its economy reasonably well, it could overtake the United States as the world’s biggest economy by 2020. By 2050 India might also have overtaken the United States if it pursues vigorous economic reforms in this decade and beyond. India, at present the world’s 11th-largest economy, has long been thought of as a laggard compared with China: good at information technology and outsourcing but incapable of the sort of manufacturing that has powered China’s economic emergence.
Even if the dates and figures in forecasts such as Goldman’s are wrong, Asia is going to get richer and stronger, probably for a long time to come. The reason why Tibet and Tata come into the picture is that the rise of Asia is not just going to pit Asia against the West. It is going to pit Asians against Asians. This is the first time in history when there have been three powerful countries in Asia at the same time: China, India and Japan. That might not matter if they liked each other or were somehow naturally compatible. But they do not and are not. Far from it, in fact.
An array of disputes, historical bitternesses and regional flashpoints weigh down on all three countries. Conflict is not inevitable but nor is it inconceivable. If it were to occur – over Taiwan, say, or the Korean peninsula or Tibet or Pakistan – it would not simply be an intra-Asian affair. The outside world would be drawn in.
Such a conflict could break out suddenly. Last month’s unrest in Tibet has shown just how volatile China can be – and how easily one of those flashpoints could cause international tension.
If the Asians can manage their relations peacefully, it will not only help China make a successful transition to the world's great superpower, but a strong Indian performance might succeed in lifting people out of poverty throughout the whole subcontinent, including Pakistan and Bangladesh. The self-confidence that such an outcome would foster would make it easier for the three main powers to work together and, with the rest of Asia, to create a true single economy along the lines of the European Union.
What cannot be in dispute is that the outcome matters enormously. The catastrophic decisions that European nations made a century ago are still within our folk memory. The world still lives with the consequences of the First World War. We have to hope that Asia, now in some ways at a similar stage of development, manages to cope with its tensions better than Europe did.
Sources:
Times Online
Wall Street Journal
The Independent
Mobile Internet in South Asia
When Intel puts its weight behind an initiative, it automatically gets a boost. But when Google and Intel together join forces, no one in their right mind can bet against such a combined force. Mobile Internet with broadband access has achieved that inevitability with Google backing a Wimax joint venture between wireless veteran Craig McCaw's Clearwire and Sprint-Nextel. In addition to Intel and Google, this venture is also supported by Comcast and Time-Warner.
As the world goes mobile, Intel's objective is to extend its leadership position in platforms used to access the Internet. Google is aiming at capturing the huge market for mobile advertising that is likely to grab a increasingly larger share of online advertising revenue.
The wireless carriers such as Verizon and AT&T have long been busy building walled gardens and controlling the distribution and content of mobile platforms. On the other hand, Intel and Google have long been arguing for an open model similar to the Internet access by PCs where the consumer is in charge. Such a model would obviously benefit both Intel and Google to extend their current dominance in the desktop/laptop user market into the mobile Internet space. Now the two giants appear to be succeeding with the roll-out of the Wimax network and Sprint-Nextel's willingness to work with them to beat Verizon and ATT Wireless as the incumbent carriers.
According to Wall Street Journal, the WiMax venture will create a network that potentially covers 120 million to 140 million people in the U.S. by 2010, the companies said. The venture, valued at more than $12 billion, will have a two-year head-start on rivals Verizon Wireless and AT&T Inc., which are just beginning to sketch out plans for their next-generation wireless networks.
While the potential for Wimax in the US market looks very good, I believe the really big opportunity is in the emerging markets, such as India and Pakistan, where the mobile phone has achieved greater than 50% penetration and the PC/Internet penetration remains in single digits. South Asia is witnessing some of biggest deployments of Wimax with a lot of consumer interest in both fixed and mobile broadband.
According to Juniper Research, South Asia will be the driving force behind the growth of Mobile WiMax, or the 802.16e standard. The Asia and Australia regions are expected to account for more than 50% of the total WiMax deployments by 2013.
Pakistan, being among the first countries in the world to roll-out a functional WiMax service, is experiencing tremendous growth in demand after Wateen Telecom’s launch of its WiMax service and roll-out plans announced by Mobilink.
India's state-owned Bharat Sanchar Nigam Limited is rolling out a Wimax network for broadband access in response to government requirement that 20 million broadband lines be in service by 2010.
Given the pent-up demand for the Internet access and the ubiquity of mobile phones, Wimax roll-out will likely spur the largest adoption of mobile Internet in South Asia first.
Related Link:
State of Telecom Industry in Pakistan
As the world goes mobile, Intel's objective is to extend its leadership position in platforms used to access the Internet. Google is aiming at capturing the huge market for mobile advertising that is likely to grab a increasingly larger share of online advertising revenue.
The wireless carriers such as Verizon and AT&T have long been busy building walled gardens and controlling the distribution and content of mobile platforms. On the other hand, Intel and Google have long been arguing for an open model similar to the Internet access by PCs where the consumer is in charge. Such a model would obviously benefit both Intel and Google to extend their current dominance in the desktop/laptop user market into the mobile Internet space. Now the two giants appear to be succeeding with the roll-out of the Wimax network and Sprint-Nextel's willingness to work with them to beat Verizon and ATT Wireless as the incumbent carriers.
According to Wall Street Journal, the WiMax venture will create a network that potentially covers 120 million to 140 million people in the U.S. by 2010, the companies said. The venture, valued at more than $12 billion, will have a two-year head-start on rivals Verizon Wireless and AT&T Inc., which are just beginning to sketch out plans for their next-generation wireless networks.
While the potential for Wimax in the US market looks very good, I believe the really big opportunity is in the emerging markets, such as India and Pakistan, where the mobile phone has achieved greater than 50% penetration and the PC/Internet penetration remains in single digits. South Asia is witnessing some of biggest deployments of Wimax with a lot of consumer interest in both fixed and mobile broadband.
According to Juniper Research, South Asia will be the driving force behind the growth of Mobile WiMax, or the 802.16e standard. The Asia and Australia regions are expected to account for more than 50% of the total WiMax deployments by 2013.
Pakistan, being among the first countries in the world to roll-out a functional WiMax service, is experiencing tremendous growth in demand after Wateen Telecom’s launch of its WiMax service and roll-out plans announced by Mobilink.
India's state-owned Bharat Sanchar Nigam Limited is rolling out a Wimax network for broadband access in response to government requirement that 20 million broadband lines be in service by 2010.
Given the pent-up demand for the Internet access and the ubiquity of mobile phones, Wimax roll-out will likely spur the largest adoption of mobile Internet in South Asia first.
Related Link:
State of Telecom Industry in Pakistan
Wednesday, May 7, 2008
World Food Crisis Alarm Bells Ring Louder
"I am pleased to announce that ADB will provide $500 million as immediate budgetary support to the hardest-hit countries so that they can bring food to the tables of the vulnerable, poor and needy," the Asian Development Bank Chief Haruhiko Kuroda told a news conference, adding that he expected to make the first loans within weeks. But Mr. Kuroda said the best long-term solution to painful price spikes was through boosting agricultural output, adding that the bank would double lending to agricultural, natural resource and infrastructure projects to $2 billion in 2009.
As the alarm bells sound louder in the major world capitals, the rich nations and the multi-lateral institutions such as the World Bank, the Asian Development Bank, UN Food Program and others are showing a great sense of urgency in responding to the growing international crisis.
In the absence of any coordinated international effort to assure food supplies, nations are acting unilaterally to avert the crisis within their national borders. Export bans and prices floors established by main rice exporters China, Pakistan, Vietnam and India have increased price volatility and raised uncertainties about future supplies, according to the ADB. Indian sugar and soy-oil futures are dropping amid market talk that the government may halt trading to guarantee food supplies and rein in the inflation that is at its highest level in 3½ years. There is some evidence that, at least partially, the dramatic food price increases are being fueled by hedge funds and speculators. Investors fleeing Wall Street's mortgage-related strife have plowed hundreds of millions of dollars into grain futures, driving prices up even more. The US Federal Reserve efforts to pump liquidity into the markets have exacerbated the crisis.
"Trade measures or price controls are not efficient ways to combat the food crisis or food-price inflation. It distorts the market and could exacerbate the situation in the international grain market," Mr. Kuroda said in an interview carried by Reuters.
The World Bank, with its focus on poverty reduction, is concerned about reversals of the gains made in war against poverty if the food crisis is not dealt with effectively. “Based on a very rough analysis, we estimate that a doubling of food prices over the last three years could potentially push 100 million people in low-income countries deeper into poverty,” World Bank President Robert Zoellick said. “This is not just a question of short-term needs, as important as those are; this is ensuring that future generations don’t pay a price too.” He reiterated his call for a “New Deal for Global Food Policy” to meet the food price crisis, which includes a call for US$500 million from donor governments to close an immediate gap identified by the UN’s World Food Program. To date, about half of the half-billion-dollar target has been met, Zoellick said.
US President Bush and Secretary of State Condeleeza Rice have also expressed serious concerns about potential instability in the low-income countries. The US is pledging to more than double its food aid in 2008-2009 to avert a major humanitarian and security crisis. Mr. Bush is also attempting to at least partially untie the US food assistance to purchases from US farmers. The European governments have already done so.
As the nations of the world and multi-lateral institutions wake up to the fact that there is a serious food crisis gripping the world, it is important that they work on a comprehensive strategy beyond just the emergency food aid. The strategy needs to focus on helping the farmers in poor nations with education, infrastructure and facilities to enable them to feed themselves and their nations. The small farmers in poor countries have very low productivity and crop yield due to lack of water management, good quality seeds, fertilizer, equipment, storage and transportation facilities, etc. Such investments are the best way to prevent backlash against globalization, reduce conflict and poverty and assure peace and security in the world.
Tuesday, May 6, 2008
Pakistan Rupee in Sharp Decline
Pakistani Rupee has hit a new low at Rs. 66.00 for a US dollar. The rupee decline seems to have accelerated against the weak US currency recently amid reports of rising imports, stagnant exports and falling foreign exchange reserves held by the State Bank of Pakistan.
“The fast erosion in the central bank reserves is creating pressures on the rupee,” the treasury dealer Rehanuddin at Invest Cap told the Gulf Times.
The central bank has so far lost around $4bn in the last five months to $12.65bn this week over $16.48bn on October 31. Analysts say the reserves will dwindle to $10bn by the end of the fiscal year on June 30. “Political uncertainty, lack of foreign investment and import pressures have badly hit reserves,” Aqeel Ahmed, senior analyst at First Cap Securities, said.
"The import pressure is rising rapidly on high oil prices, our exports are not increasing due to food shortage while foreign investment is also slow and all these factors are contributing to the weaknesses of the rupee," said Syed Nabeel Iqbal, the chief of trading and research at Karachi-based Khanani & Kalia, one of the largest foreign exchange firms in the country.
According to market sources, three major Pakistani companies - Lucky Cement, the National Bank of Pakistan and Habib Bank - are planning to float Global Depository Receipts (GDRs) amounting to close around 1 billion dollars.
State-owned Oil and Gas Development Company Ltd is planning to float its bonds to be exchangeable with its lucrative stocks. It is hoped that the major privatization will help boost Pakistan's dwindling foreign currency reserves.
China announced in April it will provide Pakistan with 500 million dollars in balance-of-payment support.
'All this is positive news which may help the rupee in maintaining stability in its declining path, but when all these positive factors will figure in is a big question,' said said Khurram Shahzad, senior analyst at Invest Cap Securities.
Failure by Pakistan to arrest any further significant decline in rupee will accelerate inflation and add to the misery of the people already suffering high prices for basic commodities.
The bottom line, however, will be the competence of the new economic team in charge of Pakistan's finance and treasury in dealing with the challenges and taking advantage of the opportunities. Given the terrible track record of the current Finance Minister Mr. Ishaq Dar in the Sharif government of the late 1990s, it is hard to be sanguine about the prospects of Pakistan's economy.
Any hope of recovery will depend on how soon the Pakistani ruling politicians can rise above the nepotist politics and choose competent technocrats to navigate the Pakistani economy through troubled waters.
Sources: Gulf Times
Business News
“The fast erosion in the central bank reserves is creating pressures on the rupee,” the treasury dealer Rehanuddin at Invest Cap told the Gulf Times.
The central bank has so far lost around $4bn in the last five months to $12.65bn this week over $16.48bn on October 31. Analysts say the reserves will dwindle to $10bn by the end of the fiscal year on June 30. “Political uncertainty, lack of foreign investment and import pressures have badly hit reserves,” Aqeel Ahmed, senior analyst at First Cap Securities, said.
"The import pressure is rising rapidly on high oil prices, our exports are not increasing due to food shortage while foreign investment is also slow and all these factors are contributing to the weaknesses of the rupee," said Syed Nabeel Iqbal, the chief of trading and research at Karachi-based Khanani & Kalia, one of the largest foreign exchange firms in the country.
According to market sources, three major Pakistani companies - Lucky Cement, the National Bank of Pakistan and Habib Bank - are planning to float Global Depository Receipts (GDRs) amounting to close around 1 billion dollars.
State-owned Oil and Gas Development Company Ltd is planning to float its bonds to be exchangeable with its lucrative stocks. It is hoped that the major privatization will help boost Pakistan's dwindling foreign currency reserves.
China announced in April it will provide Pakistan with 500 million dollars in balance-of-payment support.
'All this is positive news which may help the rupee in maintaining stability in its declining path, but when all these positive factors will figure in is a big question,' said said Khurram Shahzad, senior analyst at Invest Cap Securities.
Failure by Pakistan to arrest any further significant decline in rupee will accelerate inflation and add to the misery of the people already suffering high prices for basic commodities.
The bottom line, however, will be the competence of the new economic team in charge of Pakistan's finance and treasury in dealing with the challenges and taking advantage of the opportunities. Given the terrible track record of the current Finance Minister Mr. Ishaq Dar in the Sharif government of the late 1990s, it is hard to be sanguine about the prospects of Pakistan's economy.
Any hope of recovery will depend on how soon the Pakistani ruling politicians can rise above the nepotist politics and choose competent technocrats to navigate the Pakistani economy through troubled waters.
Sources: Gulf Times
Business News
Monday, May 5, 2008
PPP Cutting Deal With Musharraf
A few weeks ago PPP's senior leader and current Defense Minister Chaudhry Ahmad Mukhtar described President Musharraf as a "national asset". Now a report in the Wall Street Journal is describing the details of secret negotiations underway between the President's men and Zardari's representatives.
Let us not forget how we got where we are. It all started with President Musharraf signing the NRO (National Reconciliation Ordnance) that gave the PPP leadership blanket amnesty. This arrangement between General Musharraf and late Prime Minister Bhutto, brokered by the Bush administration, paved the way for the PPP leadership to return to Pakistan, participate in the elections and share power with Mr. Musharraf. It was only later that the Saudis insisted on Pakistan allowing Nawaz Sharif's return that apparently displeased the US and the PPP leadership. But Sharif's remarkable showing in the elections in Punjab has made him a very important player that the PPP has to deal with.
According to the Wall Street Journal report today, the terms under discussion are as follows:
1. The President is willing to agree to a constitutional change that would restrict the president's power to dismiss Parliament.
2. Mr. Musharraf isn't prepared to relinquish his power to appoint the chiefs of the armed forces.
3. The former judges would be returned but the new judges appointed by Mr. Musharraf after their dismissal would be retained.
4. Mr. Musharraf will be legitimized by the current parliament as Pakistan's president for a five-year term.
The talks involve Lt. Gen. Nadeem Taj, head of Pakistan's Inter Services Intelligence, and close presidential aide Tariq Aziz. The two emissaries have been in regular contact with top PPP leaders, including Asif Ali Zardari, Ms. Bhutto's widower who leads the party. PPP leaders have publicly declared that they are willing to have working relations with Mr. Musharraf.
The strains between the PPP and the PML (N) have given Mr. Musharraf's supporters a cause for optimism.
Let us not forget how we got where we are. It all started with President Musharraf signing the NRO (National Reconciliation Ordnance) that gave the PPP leadership blanket amnesty. This arrangement between General Musharraf and late Prime Minister Bhutto, brokered by the Bush administration, paved the way for the PPP leadership to return to Pakistan, participate in the elections and share power with Mr. Musharraf. It was only later that the Saudis insisted on Pakistan allowing Nawaz Sharif's return that apparently displeased the US and the PPP leadership. But Sharif's remarkable showing in the elections in Punjab has made him a very important player that the PPP has to deal with.
According to the Wall Street Journal report today, the terms under discussion are as follows:
1. The President is willing to agree to a constitutional change that would restrict the president's power to dismiss Parliament.
2. Mr. Musharraf isn't prepared to relinquish his power to appoint the chiefs of the armed forces.
3. The former judges would be returned but the new judges appointed by Mr. Musharraf after their dismissal would be retained.
4. Mr. Musharraf will be legitimized by the current parliament as Pakistan's president for a five-year term.
The talks involve Lt. Gen. Nadeem Taj, head of Pakistan's Inter Services Intelligence, and close presidential aide Tariq Aziz. The two emissaries have been in regular contact with top PPP leaders, including Asif Ali Zardari, Ms. Bhutto's widower who leads the party. PPP leaders have publicly declared that they are willing to have working relations with Mr. Musharraf.
The strains between the PPP and the PML (N) have given Mr. Musharraf's supporters a cause for optimism.
Sunday, May 4, 2008
Can Pakistan Attract More Foreign Capital?
Until mid-2007, foreign investment in Pakistan rose steadily. For the fiscal year that ended in June 2007, the country received $5.2 billion in foreign direct investment and $1.8 billion in portfolio investment. The investors have turned lukewarm since the second half of last year. In the eight months that ended in February, foreign investment was just two-thirds what it was in the same period one year earlier.
At the Karachi stock market, the numbers continue to look good. Even with the turmoil of 2007's last months, the KSE 100 index was still up 40% for the year. And its performance so far in 2008 compares very well not just with Western markets, but with the Bombay Stock Exchange's Sensex index, which has suffered double digit drop.
While the new government of Prime Minister Gillani faces many economic challenges including food and energy crises, the expectation of relative stability is likely to spur foreign investors to start pumping money back into the Pakistani economy.
One of the triggers investors are expecting is the resumption of privatization, particularly of the banking and the energy sectors. According to the Wall Street Journal, the new government's first test is coming up in the banking sector. Last year, Pakistan announced plans to sell stakes in the National Bank of Pakistan and Habib Bank through global depositary receipts, or GDRs, on the London Stock Exchange. As political storm clouds gathered, the sales -- expected to be for a 23% stake in NBP and a 7.5% stake in Habib Bank -- didn't materialize.
The Journal says that investors are asking if the new government, formed by parties that have promoted populist policies, can take the measures needed to avert an economic crisis. "Let's not skirt around the issue that these guys have been in power in the past and they've had a pretty bad track record in governance and also dealing with foreign investors," says Sakib Sherani, an economist with ABN Amro Bank in Pakistan.
In spite of the economic woes, some observers expect the Karachi market to gain 20% to 25% in 2008, in line with growth in corporate earnings. The expectations are based on the idea that some sectors of the economy, such as real estate, are undervalued, and on the continuing attractive valuation of Pakistani stocks. By some estimates, stocks in Pakistan have a historic average price-earnings ratio of 11. The prospects for outsize returns in Pakistan relative to the rest of the world are likely to revive Pakistan as a cash magnet in 2008.
At the Karachi stock market, the numbers continue to look good. Even with the turmoil of 2007's last months, the KSE 100 index was still up 40% for the year. And its performance so far in 2008 compares very well not just with Western markets, but with the Bombay Stock Exchange's Sensex index, which has suffered double digit drop.
While the new government of Prime Minister Gillani faces many economic challenges including food and energy crises, the expectation of relative stability is likely to spur foreign investors to start pumping money back into the Pakistani economy.
One of the triggers investors are expecting is the resumption of privatization, particularly of the banking and the energy sectors. According to the Wall Street Journal, the new government's first test is coming up in the banking sector. Last year, Pakistan announced plans to sell stakes in the National Bank of Pakistan and Habib Bank through global depositary receipts, or GDRs, on the London Stock Exchange. As political storm clouds gathered, the sales -- expected to be for a 23% stake in NBP and a 7.5% stake in Habib Bank -- didn't materialize.
The Journal says that investors are asking if the new government, formed by parties that have promoted populist policies, can take the measures needed to avert an economic crisis. "Let's not skirt around the issue that these guys have been in power in the past and they've had a pretty bad track record in governance and also dealing with foreign investors," says Sakib Sherani, an economist with ABN Amro Bank in Pakistan.
In spite of the economic woes, some observers expect the Karachi market to gain 20% to 25% in 2008, in line with growth in corporate earnings. The expectations are based on the idea that some sectors of the economy, such as real estate, are undervalued, and on the continuing attractive valuation of Pakistani stocks. By some estimates, stocks in Pakistan have a historic average price-earnings ratio of 11. The prospects for outsize returns in Pakistan relative to the rest of the world are likely to revive Pakistan as a cash magnet in 2008.
Saturday, May 3, 2008
The US Food Aid and the Farm Lobby
The US Congress is expected to approve an additional $770m in international food aid to alleviate the food crisis arising out of an unprecedented inflation in world food prices. With the prices of various food staples for the poor doubling and tripling in about a year, it is not clear if this increased amount would help avert widespread hunger feared in parts of Africa and Asia.
In addition to the actual amount of US aid, the other key aspect is how this aid is delivered. If the aid is intended to be tied to purchases from US farmers to provide short-term relief to the poor, it will do nothing to solve the long-term issue of the poor nations' ability to feed themselves by increasing their domestic food production.
With food prices soaring, U.S. farmers are enjoying robust demand, and have less need for the government to buy some of their crop for use in overseas aid. And the U.S. increasingly has come under pressure from other developed countries to change the design of its food aid. Canada recently announced it would move toward more untied aid, and European countries made the switch in the 1990s, according to the Wall Street Journal.
The Journal goes on, "Attempts to shift a percentage to cash have met with aggressive opposition from the U.S. agriculture industry". The farm lobby in the US continues to flex its muscle and enrich itself, without regard for the severity of the hunger crisis in the poor nations. Three years ago, farmers and their allies in Congress effectively destroyed an effort by the Bush administration to begin this switch to untied food aid.
European governments switched to giving all-cash donations in the mid-1990s, arguing that cash allows more flexibility in responding to crises and that the U.S. uses its food aid as a form of farm subsidy. The Europeans understand that these subsidies run counter to the spirit of free trade and globalization being championed by the developed world as a way to open the emerging markets for their multi-nationals. The backlash from the hungry against global markets will be a commercial setback as well as a security issue for the entire world.
The outdated Public Law 480, signed in the 1950s by President Eisenhower, governing US food aid motivated by domestic politics and objectives has continued to live in various garbs. It has distorted the whole idea of helping end hunger and primarily served the interests of the farm lobby and re-election of the congressmen from farm states. It has also not helped in promoting better nutrition, health and fitness of the American people by subsidizing unhealthy dairy, meats and cereals while penalizing healthy options such as growing fruits and vegetables. It is one of the worst examples of the "special-interests" politics that dominates the American democracy.
As long as the US farmers and politicians continue to play selfish games with US aid to the poor, all of the US efforts will amount to nothing more than a superficial PR campaign disguised as generosity toward the poor. A little more sincerity may actually help feed the poor for more than just brief periods of acute crises and simultaneously address the fundamental issues of self-sufficiency. Unless there is fundamental change in the attitudes of the Midwest legislators, this will be another missed opportunity to help improve the battered US image abroad and contribute to stability and security of the US and the world.
Monday, April 28, 2008
Intellectual Property Piracy in India, Pakistan
The US trade representative's office has placed nine countries, including India and Pakistan, on priority watch list for intellectual property piracy. In addition to the traditional categories of computer software and music, the USTR has added counterfeit pharmaceuticals to the list of concerns.
"Trade in counterfeit pharmaceuticals continues to be a particularly grave concern in light of the risks to human health and safety, and the U.S. continues to be actively engaged in addressing this serious problem," the USTRO statement said. The USTR report also noted that the manufacture and distribution of counterfeit pharmaceuticals is a “growing problem” that particularly threatens consumer health and safety.
It cited a “proliferation” of phony drug production in Brazil, China, India, Mexico and Russia. The priority watch list also includes Argentina, Chile, Israel, Thailand and Venezuela.
Several countries including Egypt, Lebanon, Turkey and Ukraine were shifted off the Priority Watch List in 2008.
The report said that while the U.S. continues to work with China to strengthen its intellectual-property regime, "high levels of copyright piracy and trademark counterfeiting remain serious concerns."
USTRO believes that US companies have lost billions of dollars due to copyright theft and piracy in China while Beijing insists it is doing its best to stamp out the problem. In a conference call with reporters Friday, the assistant US trade representative in charge of intellectual property, Stan McCoy, said: “If things proceed in line with current expectations, a decision from the (WTO) panel would be possible this fall.”
On Russia, the report summary said the U.S. will continue to monitor that the country meets the obligations it committed to as part of a bilateral agreement with the U.S. on Russia's ascension to the World Trade Organization.
"Implementation of these commitments remains essential to completing the final multilateral negotiations on the overall accession package," the report said.
The USTRO watch list also includes Algeria, Belarus, Bolivia, Brazil, Canada, Colombia, Costa Rica, Czech Republic, Dominican Republic, Ecuador, Greece, Guatemala, Hungary, Indonesia, Italy, Jamaica, Kuwait, Malaysia, Mexico, Norway, Peru, Philippines, Poland, Romania, Saudi Arabia, South Korea, Spain, Taiwan, Tajikistan, Turkmenistan, Uzbekistan and Vietnam.
As the biggest beneficiaries of globalization of the capital, labor and consumer markets, the US corporations are cheer-leading the opening of the emerging economies for their goods and services, while at the same time complaining about the IP piracy. They want to use the power of the US government to benefit their share-holders and ignore the lack of affordability of their products and services by the vast majority of the people in the emerging markets. This is no different from the efforts of the music recording industry in the US which prices, packages and distributes music without regard for the vast majority of their customers and then goes to court to sue the very customers they are trying to market their products to. These strategies are not likely to work either in the US or elsewhere in the world. Instead, such strategies will backfire, unless there's serious rethinking by the US corporations to address the real needs of their international customer base.
"Trade in counterfeit pharmaceuticals continues to be a particularly grave concern in light of the risks to human health and safety, and the U.S. continues to be actively engaged in addressing this serious problem," the USTRO statement said. The USTR report also noted that the manufacture and distribution of counterfeit pharmaceuticals is a “growing problem” that particularly threatens consumer health and safety.
It cited a “proliferation” of phony drug production in Brazil, China, India, Mexico and Russia. The priority watch list also includes Argentina, Chile, Israel, Thailand and Venezuela.
Several countries including Egypt, Lebanon, Turkey and Ukraine were shifted off the Priority Watch List in 2008.
The report said that while the U.S. continues to work with China to strengthen its intellectual-property regime, "high levels of copyright piracy and trademark counterfeiting remain serious concerns."
USTRO believes that US companies have lost billions of dollars due to copyright theft and piracy in China while Beijing insists it is doing its best to stamp out the problem. In a conference call with reporters Friday, the assistant US trade representative in charge of intellectual property, Stan McCoy, said: “If things proceed in line with current expectations, a decision from the (WTO) panel would be possible this fall.”
On Russia, the report summary said the U.S. will continue to monitor that the country meets the obligations it committed to as part of a bilateral agreement with the U.S. on Russia's ascension to the World Trade Organization.
"Implementation of these commitments remains essential to completing the final multilateral negotiations on the overall accession package," the report said.
The USTRO watch list also includes Algeria, Belarus, Bolivia, Brazil, Canada, Colombia, Costa Rica, Czech Republic, Dominican Republic, Ecuador, Greece, Guatemala, Hungary, Indonesia, Italy, Jamaica, Kuwait, Malaysia, Mexico, Norway, Peru, Philippines, Poland, Romania, Saudi Arabia, South Korea, Spain, Taiwan, Tajikistan, Turkmenistan, Uzbekistan and Vietnam.
As the biggest beneficiaries of globalization of the capital, labor and consumer markets, the US corporations are cheer-leading the opening of the emerging economies for their goods and services, while at the same time complaining about the IP piracy. They want to use the power of the US government to benefit their share-holders and ignore the lack of affordability of their products and services by the vast majority of the people in the emerging markets. This is no different from the efforts of the music recording industry in the US which prices, packages and distributes music without regard for the vast majority of their customers and then goes to court to sue the very customers they are trying to market their products to. These strategies are not likely to work either in the US or elsewhere in the world. Instead, such strategies will backfire, unless there's serious rethinking by the US corporations to address the real needs of their international customer base.
India Races Ahead in Space
"The mission was perfect," said G Madhavan Nair, chairman of the state-run Indian Space Research Organization (ISRO). Mr. Nair was celebrating the latest successful launch by India of a mission with 10 satellites from the Sriharikota space center off India's east coast. With its headquarters in Bangalore, the ISRO employs approximately 20,000 people, with a budget of around US$815 million. Its mandate is the development of technologies related to space and their application to India's development. In addition to domestic payloads, it offers international launch services. ISRO currently launches satellites using the Polar Satellite Launch Vehicle and the GSLV for geostationary satellites.
This latest success by ISRO makes India a serious contender in the fast growing $2.5B commercial satellite launch business expected to grow rapidly over the next several years. The BBC is reporting that the rocket carried an Indian mini satellite to gather technological data which will be available for sale, and eight tiny research satellites belonging to research facilities in Canada, Denmark, Germany and the Netherlands. India started its space program in 1963, and has since designed, built and launched its own satellites into space.
Last year, India put an Italian satellite into orbit for a fee of $11m. In January, India successfully launched an Israeli spy satellite into orbit, according to the BBC. The Israeli satellite launch drew strong protest from Iran amidst growing and multi-dimensional India-Israel collaboration. Israeli arms sales to India in 2006 were $1.5 billion, roughly the same as in each of the preceding three years as well. This from Israel’s total arms sales of $4.2 billion in 2006; the India market comprised more than one-third. A report by the Brookings Institution, a pro-Israeli US Think Tank, welcomed this collaboration and said, "The Israeli-Indian connection in commercial military and space intelligence fields is good for both countries and for the United States. In less than two decades since diplomatic ties were upgraded, New Delhi and Jerusalem have come a long way. Camp David was a pivotal moment on the way. The cooperation between Israel and India, with U.S. blessing, provides important security to two democratic countries in a very unstable part of the world."
India's own satellite named Technology Experiment Satellite (TES), which can be used as a spy satellite, has been beaming down what space officials call "excellent pictures". TES, launched in October 2001 from the Sriharikota launch pad, is a precursor for the launch of fully operational spy satellites. Indian Defense Minister has been touting India's satellite-based Military Surveillance and Reconnaissance System that was scheduled to become operational by 2007 allowing it to keep watch on developments in its neighborhood, including Pakistan and China. It has, however, been delayed with no new dates announced.
Beyond the Indian commercial ambitions, this milestone for India represents a strategic capability as an emerging economic and military power on the world stage. This is also a great comeback for ISRO about two years after a launch in 2006 had to be destroyed less than a minute after lift off when it veered from its path.
The Pakistan Space Agency or Space and Upper Atmosphere Research Commission (SUPARCO), the equivalent of ISRO in India, is the Pakistani state-run space agency responsible for Pakistan's space program. It was formed in September 1961 by the order of President Ayub Khan on the advice of Professor Dr Abdus Salam, Nobel Laureate, who was also made its founding director. The headquarters of SUPARCO is located in Islamabad, however with the development of Sonmiani it is expected that the new headquarters will be moved in the near future. The agency also has offices in Lahore and at Karachi (an engineering installation). SUPARCO has no launch capability of its own. It has relied on Chinese and Russian space agencies to launch its satellites Badr-1 and Badr-2.
SUPARCO saw major cuts in its budget in the 1980s and 1990s. Last year, its annual budget was a modest $6m. In fact, Pakistan had no communication satellites in space until 2003. The urgency to place its first satellite in a geo-stationary orbit was keenly felt in the middle of 2003, by which time Pakistan had already lost four of its five allotted space slots. The five slots were allotted to Pakistan by ITU (International Telecommunication Union) back in 1984, but the country failed to launch any satellite till 1995. That year Pakistan again applied for and received the five slots, but once again the government failed to get a satellite into orbit, losing four of it slots in the process. According to officials, if Pakistan had failed to launch its satellite by April 19, 2003, the country would have lost its fifth and last 38-degree east slot when the availability of these space slots is getting difficult every day.
Pakistan’s former Science and Technology Minister, Dr. Atta-ur Rehman said retention of the slot was important from commercial and strategic points of view as it would assure retention of a foothold in space. Air Vice Marshall Azhar Maud, Chairman NTC, said that a geo stationary satellite could be used to secure defence communication, act as a lookout for a missile attack and detect any nuclear detonation or explosion. M Nasim Shah of the Space and Upper Atmosphere Research Commission(SUPARCO) said that the technology is vital for making the nuclear command and control mechanisms “credible”.
Recognizing that it is significantly lagging behind Indian Space program, President Pervez Musharraf has outlined his vision for SUPARCO by laying down a clearly defined agenda for the national space agency. Revitalization, restructuring, reorientation and modernization of SUPARCO are the main objectives outlined by President Musharraf. SUPARCO is to be brought at par with other successful space agencies of the world. Specific objectives include research and development of communication satellites, remote sensing satellites and satellite launch vehicles, with the objective of bringing rapid growth and socio-economic development in the fields of education, information technology, communications, agriculture sector, mineral excavation and atmospheric sciences. As an established and well recognized nuclear and missile power the next logical frontier for Pakistan is space. President Musharraf had made it clear that Pakistan would need to catch up to the world space leaders and make up for lost time and neglect in the past.
In 2001, Pakistan was reportedly in the process of developing its own Satellite Launch Vehicle (SLV). Dr. Abdul Qadeer Khan, considered the father of Pakistan's nuclear program, said in March 2001 that Pakistani scientists were in the process of building the country's first SLV and that the project had been assigned to SUPARCO. According to Dr. Abdul Majid, chairman of SUPARCO, Pakistan envisaged a low-cost SLV in order to launch lightweight satellites into low-earth orbits. Dr. Khan also cited the fact that India had made rapid strides in the fields of SLV and satellite manufacture as another motivation for developing an indigenous launch capability. According to an Islamabad news source, the SLV would be derived from an already available missile launching system, which may be an indication that technologies acquired for the ballistic missile program would eventually be used to develop an SLV. All the experiments necessary to ready the SLV for a complete flight test have not been completed, although Pakistani scientists have tested three of the four stages. The nuclear proliferation allegations and events leading up to the Dr. A.Q. Khan's fall from grace and subsequent house arrest have clearly been a setback for Pakistan's space efforts.
India's success in space is likely to be seen in Pakistan as a threat, or at least a major challenge that they must respond to. Pakistan has a lot of catching up to do to try and reduce the gap between the space capabilities of the two nuclear-armed rivals in South Asia.
Just as Russia's Sputnik launch on October 4, 1957, spurred the Americans to respond with a comprehensive effort in space technology, the Indian success yesterday has the potential to serve as a wake-up call for Pakistanis to renew their efforts and focus on science and technology education, innovation and research to become competitive with India in space. Only time will tell if Pakistanis are really up to this challenge.
Sources:
1. News Agency Reports
2. BBC News
3. Wikipedia entries on ISRO, SUPRACO
4. CNS-Current and Future Space Security
Related Links:
Haq's Musings
Pakistan Space Program
Pakistan's Space Capabilities
SUPARCO Presentation at Berlin, Germany
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