6 July 2014


Evening on the Brahmaputra River by Vikramjit Kakati, Wikipedia Commons.


By Wasbir Hussain

India and China signed three Memoranda of Understanding (MoU) during the Indian Vice President Hamid Ansari’s recent five-day visit to Beijing from 26 June– 1 July. One of them was on the ‘flood data’ of the Brahmaputra River – also called the Yarlung Tsangpo in China. In the past, we have heard of similar MoUs between the two neighbours on the Brahmaputra, and it is all about the sharing of the hydrological data of Brahmaputra River during monsoons. In the latest MoU on the subject that was signed on 30 June – in presence of Indian Vice President Ansari and his Chinese counterpart Li Yuanchao – Beijing agreed to provide 15 days’ additional hydrological data—from 15 May 15 to 15 October each year.

Bluntly put, the latest MoU on the Brahmaputra flood data means nothing as an additional 15 days worth of hydrological information will not enable India to deal with the problem any differently. What India needs is input from the Chinese side on dams and other projects Beijing is pursuing or intends to pursue based on the waters of the Yarlung Tsangpo. The 510 MW Zangmu dam built at the Gyaca County in the Shannan Prefecture of China’s Tibet Autonomous Region is expected to be commissioned next year. What must be noted is that Beijing has given clearance for the construction of 27 other dams on the Yarlung Tsangpo River that flows 1625 kilometres across China, and 918 kilometres through India in its downstream course.

Moreover, China actually plans to divert water at the Great Bend, located just before where the river enters India, also known as the Shoumatan Point; and also intends to build hydroelectric power projects that could generate 40,000 MWs of power. The plan to divert the Brahmaputra is a reality because China wants to solve the water scarcity in its arid northern areas. The diversion of the water is part of a larger hydro-engineering project, the South-North water diversion scheme, which involves three man-made rivers carrying water to its northern parts. If the water is diverted, the water levels of the Brahmaputra will drop significantly, affecting India’s Northeastern region, and Bangladesh. Estimates suggest that the total water flow will fall by roughly 60 per cent if China successfully diverts the Brahmaputra. Besides, it will severely impact agriculture and fishing as the salinity of water will increase, as will silting in the downstream area.

With an unprecedented mandate and a demonstrated policy to improve ties with its neighbours, the new Narendra Modi government in New Delhi can initiate setting up of something like a South Asia Shared Rivers Commission or Authority by bringing Bangladesh, Myanmar, Bhutan and Nepal on board. The Commission can begin by formulating a framework agreement among the states that share rivers for their use, development, protection, conservation and management of the water and related resources, and establish an institutional mechanism for cooperation among these states. Once such a commission emerges and a cooperative framework on the shared rivers is agreed upon by the concerned states, it can engage with China and try to bring Beijing on board. After all, eleven major rivers flow out of China to countries in its neighbourhood and there is enough commonality of interest.

Cooperation on the Brahmaputra with China is of utmost importance to India and Bangladesh. The principle of cooperation between China, India and Bangladesh—the Brahmaputra basin states—can be on the basis of sovereign equality, territorial integrity, mutual benefit and good faith in order to attain optimal utilisation and adequate protection; conservation of the Brahmaputra River Basin; and to promote joint efforts to achieve social and economic development. These actually are the guiding principles of an effective and successful Nile River Valley Cooperative Framework (NRVCF) involving Egypt, Sudan, Ethiopia, Uganda, Kenya, Tanzania, Burundi, Rwanda, the Democratic Republic of Congo (DRC), as well as Eritrea as an observer. The NRVCF has enough flexibility in the sense that two of the nations who are part of the Framework can have certain specific bilateral understanding or arrangements. What is significant is that every member nation must maintain total transparency on its plans about utilising the resources of the shared river and inform the states concerned of any project at hand.

Indian Prime Minister Narendra Modi, who has already demonstrated India’s big power ambitions by his proactive foreign policy push, will be well advised to come up with a comprehensive shared river water policy, keeping China’s plans and/or intents in mind. Delay may cost India dearly and we may have a case of non-utilisation of waters of shared rivers such as the Brahmaputra – one that has neither being tapped for hydro-power or navigation, 26 years after it was declared National Waterways Number Two.

Wasbir Hussain
Executive Director, Centre for Development & Peace Studies, Guwahati, and Visiting Fellow, IPCS, New Delhi

Power Struggles in Middle East Exploit Islam’s Ancient Sectarian Rift


JULY 5, 2014

A Bahraini protester during clashes with police in Sanabis, west of Manama, on Thursday. Bahrain’s Sunni allies have helped quell the Shiite-dominated uprising.CreditMohammed Al-Shaikh/Agence France-Presse — Getty Images

RIFFA, Bahrain — Black and yellow concrete barricades block the roads entering this wealthy Sunni enclave, where foreign-born Sunni soldiers in armored personnel carriers guard the mansions of the ruling family and the business elite.

Beyond the enclave are impoverished villages of Shiites, about 70 percent of Bahrain’s more than 650,000 citizens, where the police skirmish nightly with young men wielding rocks and, increasingly, improvised weapons like homemade guns that use fire extinguishers to shoot rebar.

Their battles are an extension of sectarian hostilities nearly as old as Islam. But they are also a manifestation of a radically new scramble for power playing out across the region in the aftermath of the United States invasion of Iraq and the Arab Spring revolts.

This island nation off the eastern coast of Saudi Arabia was the first place where Arab Spring demands for equal citizenship and democratic governance degenerated into a sectarian feud, and at first it seemed to be an anomaly. But Bahrain’s experience now appears to have been a harbinger of what was to come as centuries old but newly inflamed rivalries between Sunni and Shiite Muslims tear apart much of the region — threatening to erase the borders of states like Syria and Iraq, destabilizing Bahrain and Lebanon, and accelerating a regional contest for power and influence between Shiite Iran and Sunni Saudi Arabia.

Scholars and activists say that the sectarian violence gripping the Middle East is not simply the unleashing of religious rivalries once suppressed by the secular autocrats who ruled the region. Instead, they say, the religious resentments have been revived and exploited in a very earthly power struggle.

“There are forces that keep the tension alive in order to get a bigger piece of the cake,” said Sheikh Maytham al-Salman, a Shiite Muslim scholar who was detained for nine months and tortured by the Bahraini police in 2011 because of his support for the uprising.

Pearl Square, where demonstrators staged a weekslong sit-in three years ago, has now been turned into a permanent military camp, its namesake statue demolished, in a grim memorial of the day in March 2011 when vehicles and troops from the neighboring Sunni monarchies rolled across the causeway from Saudi Arabia to crush the Shiite-dominated movement for democracy.

India to become third largest economy by 2030: PwC

Published: July 5, 2014 

The HinduPricewaterhouseCooper predicted in a report that Indian economy will become third in the world by 2030. Photo: K.K. Mustafah.

India is set to become the third largest economy in the world by 2030, according to latest estimates by a PricewaterhouseCoopers (PwC) report.

The London-headquartered accountancy giant said the rapid rise of the Indian economy with its young workforce would push it up from being the 10th largest economy in 2013 to the third largest by 2030, pushing the UK back into sixth place.

“In the longer run, other emerging markets may overtake the UK, but only India looks set to do so before 2030 according to our latest projections,” PwC said in its latest economic outlook.

China, the world’s second largest economy, is expected to close the gap with America by 2030, while Mexico is predicted to be the 10th largest economy by 2030, above Canada and Italy, both G7 nations.

Only a couple of years ago there were forecasts that Britain would rapidly become a second-class economic power and would need to defer to the BRIC countries of Brazil, Russia, India and China in the near future.

China has ranked above Japan for a decade as the world’s second-biggest economy.

By some calculations Brazil leapfrogged the UK in 2012, with Russia and India close behind.

Britain’s fall was partly related to the costs of the banking crisis and the recession that followed, coupled with a sharp decline in the exchange rate, which knocked about a quarter off the country’s value in relation to its main rivals.

But since the beginning of last year the economy has recovered all the lost ground from the recession and banks have begun lending again.

The pound has bounced back from about $ 1.40 in 2009 to $ 1.71 on Saturday.

Brazil, by contrast, has suffered a rocky couple of years that have slowed GDP growth and pushed down the value of the real.

Russia will close the gap on the top eight, but its reliance on the oil and gas industry for growth and its rapidly ageing population will prevent it jumping up the table as quickly as previously thought.

Only India will move ahead of the UK by 2030, though it will be sharing a projected GDP of $ 6.1 trillion among more than 1.5 billion people, only half as much again as the UK’s predicted output of $ 4 trillion, produced by a population less than a 20th the size.

PwC urged policymakers in the UK to implement further structural reforms to ensure that it remained ahead of emerging markets.http://www.thehindu.com/business/Economy/india-to-become-third-largest-economy-by-2030-pwc/article6180722.ece


Map of Kashmir showing disputed territories 

The 740km line of control dividing Indian and Pakistani administered Kashmir, which has been labelled ‘Asia’s Berlin wall’, has a profound impact on on communities.

By Ashima Kaul

It’s been labelled ‘Asia’s Berlin wall’, and the 740km Line of Control dividing the former princely state of Jammu and Kashmir into Indian and Pakistani administrated regions is worthy of its title. Since its designation in 1947 there have been countless stories highlighting the negative impact it’s had on the individuals, families and villages which exist along its length. Refugees reside on both sides of the border with those in India having primarily crossed over in 1947 and during the Indo-Pakistani war of 1971. The majority of crossings since 1990 have been in the opposite direction and it seems the motivation has been a combination of the fear of being harassed by security agencies and reuniting with relatives or visiting homes.

Shabir Ahmed, a 40 year old resident of Poonch whose sister lives in Muzaffarbad says that “the procedure to apply for a permit to visit the other side is very cumbersome. It takes months. It is because of the complicated process that the number of people visiting each other has not grown.” There are many who fled to the other side in the early 90’s from Sawjian, the village he belongs to on the Indian side of the Line of Control. He adds “we understand that the circumstances in which they went are related to the security of our country, but they had no other choice. We plead that their cases are looked into under the new cross border confidence building measures started by the government.”

Both cross border trade and bus services for divided families on the Poonch-Rawalkot and Uri-Muzaffarbad routes are subjected to enormous hurdles and barriers. There was recently a complete closure of all trade between both the trading points in Poonch and Uri over a single case of narcotics. On 17 January 2014, a truck from Pakistan was caught by authorities in Uri, Kashmir on the Indian side. It was found to be carrying a narcotic commonly known as brown sugar, worth an estimated $18 million. The truck was seized by Jammu and Kashmir authorities and the driver was arrested and sent to jail in Srinagar, the capital of Indian-administered Jammu and Kashmir.

Taliban Launches Helmand Offensive; More Than 160 Killed

July 04, 2014

An Afghan security officer frisks a man at a checkpoint in Helmand on June 25.

Last updated (GMT/UTC): 25.06.2014 12:02

Afghan officials say more than 800 Taliban fighters have launched an offensive in Helmand Province aimed at retaking territory that was recently transferred to the control of Afghan government forces by departing U.S. troops.

Provincial governor spokesman Omar Zwak says at least 100 militants, 21 Afghan soldiers, and 40 civilians have been killed in five days of fighting.

The casualty toll could not immediately be confirmed.

Correspondents report that some 2,000 families have fled fighting in the districts of Sangin, Nowzad, Kajaki, and Musa Qala.

The battle is along the northern arc of the Helmand River and its tributaries, a stretch of valleys and "green belt" agricultural land between the provincial capital, Lashkar Gah, and the strategic Kajaki dam.

The region is notorious as one of the bloodiest areas of fighting in Afghanistan for British and U.S. troops who have been deployed in Helmand Province since late 2001.

The green belt also is one of the biggest opium-producing areas in Afghanistan.

The last U.S. Marines withdrew from the northern arc of the Helmand River in early May.

Four Afghan Brigades

Security there is now the responsibility of four brigades in the 215th Afghan National Army Corps.

Pakistan’s War at Home

SINGAPORE – Last month, after years of indecision, Pakistan’s military launched a full-scale military operation in the North Waziristan Tribal Agency aimed at eliminating terrorist bases and ending the region’s lawlessness. In particular, the army wants to clear out foreign fighters who are using the territory as a base for various jihads around the Muslim world. But, by triggering yet another refugee crisis, the operation risks spreading the terrorist threat to other parts of Pakistan, including its largest city and commercial center, Karachi.

Operating from sanctuaries established in the tribal agency, various terrorist groups, in association with organizations elsewhere in the country, have already attacked Pakistan’s four neighbors – Afghanistan, China, India, and Iran. Of the region’s foreign fighters, Uzbeks belonging to the Islamic Movement of Uzbekistan have recently become the most visible threat, taking responsibility for the June 8-9 attack on Karachi’s Jinnah International Airport, in which 30 people, including all ten of the militants, were killed.

In launching the North Waziristan operation, General Raheel Sharif, Pakistan’s new Chief of Army Staff, stated that his forces would draw no distinction between supposedly “good” and “bad” Taliban. The former, including the Haqqanis – named after Jalaluddin Haqqani, who led the Islamic resistance against Soviet forces in Afghanistan – had been trained and equipped by the Inter-Services Intelligence (ISI), Pakistan’s main security agency.

Following the United States’ invasion of Afghanistan in 2001, the Haqqanis created a sanctuary in the North Waziristan Tribal Agency. The ISI countenanced this in the hope that the Pashtun group would later act as Pakistan’s proxies in Afghanistan after US combat troops depart at the end of 2014. But the Haqqanis, it appears, did not keep to any such bargain, and allowed their Uzbek guests in North Waziristan to launch the Karachi airport attack.

This conflict, however, will not be easy to contain or manage. Pashtuns, the main ethnic group on both sides of the Afghanistan-Pakistan border, are engaged in a bitter struggle in both countries to assert what they consider to be their legitimate political and economic rights. Karachi, hundreds of miles to the south, will not escape the fallout from the North Waziristan operation.

The military, which planned to flush out the main militant hideouts with air strikes, and then send in ground troops, instructed residents to leave the area beforehand. Some 350,000 people have already fled, creating a humanitarian crisis on a scale similar to that in 2009 when the military broke the Taliban’s grip on the Swat Valley.

The movement of so many people is likely to have a profound effect on Pakistan. According to a report by the United Nations High Commissioner for Refugees, released just five days after the assault, at the end of 2013 there were 51.2 million forcibly displaced people in the world, six million more than the year before, and the largest number since World War II.

Asia's Nightmare Scenario: A War in the East China Sea Over the Senkakus

America & Japan vs. China. Who wins?
July 5, 2014

It is clear that an armed clash between Japan and China over the Senkaku/Diaoyu islands is a real possibility. If that happens Washington would face a very serious choice. Failing to support Japan militarily would fatally weaken the US-Japan alliance, torpedo President Obama’s ‘Pivot’, and undermine America’s whole position in Asia. But supporting Japan would mean going to war with China. Whether that would be wise depends, as much as anything, on how a US-China war over the Senkakus would play out. 

Of course no one knows for sure. There has not been a serious maritime conflict for decades, nor war between two nuclear-armed states so we cannot be sure how the fighting would go. Nor do we have any real experience of war between nuclear-armed states, so that factor too adds to uncertainty. But there are some broad judgments that can be offered. If these judgments seem even moderately likely to be right, the implications for America’s choice about war over the Senkakus are rather sobering. They suggest that this would be a war that America would not win, could not control, and should not undertake. And that of course has huge implications for America’s position in Asia.

Suppose that fighting starts between China and Japan with a small armed clash near the islands, in which losses are sustained by both sides. It is possible this kind of incident could be quickly contained without further fighting, but only if both Tokyo and Beijing acted with tact, forbearance and political courage. No one would bet on that, so it is at least equally likely that the clash would escalate, and if so Japan would quickly ask America to help.

What happens next if America joins the fight depends first on the strategic aims of each side? China’s primary aim might be to land forces to take control of the islands, and at the minimum it would want to exclude Japanese and US forces from the air- and sea-space around them. America’s and Japan’s aims might well look the same. Tokyo might decide that the time had come to put its control of the islands beyond dispute by stationing forces on them, and at a minimum it would want to prevent further challenges of the kind we have seen recently by excluding Chinese forces from around the islands.

What operational objectives would flow for each side from these strategic aims? Let us first suppose that each side decides to limit the geographic scope of the conflict to the areas around the disputed islands. To achieve their primary aims by deploying and sustaining occupation forces on the islands, either side would need to establish a high degree of sea and air control around them. That is likely to prove impossible for either of them: neither China nor the Allies have any serious chance of achieving the sea and air control required to securely deploy and sustain occupation forces on the disputed islands against the other side’s formidable sea and air denial capabilities. So as long as both sides limit their operations to the area around the islands, neither would be able to take control of the islands by establishing forces on them.

Queen names new Royal Navy aircraft carrier in Rosyth

The naming of Royal Navy aircraft carrier HMS Queen Elizabeth in 60 seconds

The UK's largest warship marks "a new phase in our naval history", the Queen has said, as the vessel was officially named in her honour at a ceremony at Fife's Rosyth Dockyard. 

A bottle of whisky was smashed on the hull of the 65,000-tonne HMS Queen Elizabeth - the first of two new Royal Navy aircraft carriers being built.

The Red Arrows flew over the dockyard before the ship was officially named.

First Sea Lord Admiral George Zambellas said the ship was "fit for a Queen". 

"HMS Queen Elizabeth will be a national instrument of power and a national symbol of authority," he said in a speech.

"That means she will be a national icon too, all the while keeping the great in Great Britain and the royal in Royal Navy."

'Inspiration and pride' Addressing the audience, the Queen said the "innovative and first class" warship, the largest ever to be built in the UK, ushered in an "exciting new era". 

"In sponsoring this new aircraft carrier, I believe the Queen Elizabeth will be a source of inspiration and pride for us all," she said. 

"May God bless her and all who sail in her." 

The Queen was accompanied by the Duke of Edinburgh for the ceremony 

The Red Arrows flew over the dockyard before the Queen officially named the ship 

The monarch pressed a button to release a bottle of whisky, which smashed against the ship 

HMS Queen Elizabeth is the first of two new Royal Navy aircraft carriers being built 

About 3,500 people involved in the design and construction of the carrier watched the celebrations, alongside dignitaries and politicians including Prime Minister David Cameron, First Minister Alex Salmond and former prime minister Gordon Brown.

Mr Cameron said it was a "very proud day" for Scotland and the UK, while Mr Salmond said it was a "huge day" for the workers and their families.

Ian Booth, of the Aircraft Carrier Alliance which is overseeing the ship's construction, said it was a "historic occasion".

"The ship truly reflects the very best of British design and ingenuity," he said in a speech.

A bottle of single malt whisky was smashed to mark the naming of the aircraft carrier, described by the Queen as ''a magnificent achievement''

The Red Arrows fly-past was followed by a procession of three generations of Royal Navy aircraft, including a historic 1950s de Havilland Sea Vixen fighter - the last and only flying aircraft of its kind in the world.

The Queen oversaw the ceremony by pressing a button to release a bottle of Islay malt whisky - suspended at the front of the ship - to smash on to the hull. 

The naming ceremony, a naval tradition dating back thousands of years, marked the first time in more than 15 years that the Queen has christened a Royal Navy warship.

ISIS: The New Taliban

Reuters/Corbis Images
A fighter with an ISIS flag and weapon in Mosul, Iraq, June 23, 2014

In the days since the Islamic State in Iraq and Syria (ISIS) took control of much of northern Iraq, Western leaders and analysts have expressed alarm at what they have called a powerful new form of jihadism. Some have likened ISIS to a new al-Qaeda. Both assessments are wrong. 

In its rapid advance toward Baghdad, ISIS has already eliminated national boundaries between Iraq and Syria, captured significant arms and weapons caches, caused a spike in global oil prices, reinvigorated ethnic and sectarian conflict across the Arab world, and given Islamic extremism a dramatic new source of appeal among many young Muslims. On June 30, the first day of Ramadan, ISIS also declared that it was reestablishing the “Caliphate,” long an aspiration of other jihadist groups. 

Yet despite these accomplishments, ISIS may not be as unusual as it has been described. Nor does it seem primarily interested in global jihad. In many ways, what the group is doing to Syria and Iraq resembles what the Taliban did in Afghanistan and Pakistan in the early 1990s. 

Like the Taliban, ISIS’s war so far has been about conquering territory rather than launching an al-Qaeda-style global jihad or issuing fatwas to bomb New York or London. Although it has attracted some three thousand foreigners to fight for it, ISIS’s real war is with fellow Muslims, and in particular Shias, against whom it has called for a genocidal campaign. Just as the Taliban changed the contours of Islam in south and central Asia so ISIS intends to do the same in the Middle East. ISIS is also seeking territorial control of the central Middle East region. 

There are several instructive parallels between the two groups. The hardcore forces of ISIS probably number fewer than 10,000 trained fighters; the Taliban never numbered more than 25,000 men—even at the height of the US surge when there were over 150,000 Western troops in Afghanistan and twice that many Afghan soldiers. 

Like the Taliban, ISIS successes are built around military competence that includes excellent command and control, sound intelligence, well prepared logistics support, training, high mobility, and rapid speed of maneuver. Just as ISIS, after years of preparation and recruiting in Iraq and Syria, has overrun Mosul and other important Iraqi cities in a matter of weeks, Taliban conquered all of southern and eastern Afghanistan in a blitzkrieg offensive in a few months in 1994. The main strategy of both groups is the frontal assault combined with outflanking movements, as well as night attacks. And both organizations are also prepared to play a long game. In 1996, after the Taliban had laid siege to Kabul from the south for two years without success, they used a flanking movement from the east to finally surprise the government and conquer the city. 

An even more effective innovation of both groups is to wage battle across several countries and borders, creating multiple logistic centers and sources for recruits, while confounding national responses to them. Thus the Pakistani and Afghan Taliban treat their two countries as virtually one when it comes to fighting their opponents, while ISIS is now using tactics it perfected in Syria to capture cities in Iraq. And just as the Afghan Taliban established sanctuaries in Pakistan, where it could regroup and reequip, ISIS is now able to use territories in both Syria and Iraq to make their survival much easier and their defeat more difficult. 

Chris Steele-Perkins/Magnum Photos
Taliban fighters, Afghanistan, 1996

Both groups are preoccupied with capturing territory rather than promoting global jihad, but their militarism and their extreme Islamism renders them ill-equipped to govern the areas they control. Like the Taliban, ISIS’s political outlook is distinct from both traditional Islamic fundamentalist parties, such as the Muslim Brotherhood, and global terrorism organizations like al-Qaeda. The primitive and extreme version of Islam it imposes—already on view in ISIS-controlled Syria cities like Raqqa—terrifies local populations and demoralizes armies and governments. But as the Taliban showed before it, this way of ruling cannot constitute a viable political program in the long term. 

ISIS/ISIL: Jihadists Go for the Lulz Mix Equal Parts al-Qaeda and LulzSec then Blend

I don't seek out media appearances but last week was a busy one for me. I was interviewed by CBS News, BBC World Service, Jonathan Green of Australian Broadcasting Corporation's Sunday Extra, and by Piya Chattopadhyay of the CBC's The Current. I also had invitations from NPR and CTV that I, unfortunately, had to turn down due to time constraints. It was a busy week but thankfully all of the journalists, hosts and producers who reached out to me had a sincere interest in complex stories. They are my kind of people so talking to them was actually quite fun.

A thirty minute guest slot on a radio show seems like an eternally long time when the invitation is extended. But believe me when I tell you that it passes in an instant. A five minute appearance is even worse. It's like being shot out of a cannon. I still have no idea what I said during my brief 1 a.m. BBC World Service appearance but I do know that an absolutely terrifying number of people do. So that leaves a few more thoughts on this subject that I didn't quite get to...

It wasn't too long ago that the hacker group LulzSec rampaged through the internet. They appeared to be an unstoppable force. They were seemingly above the law. In fact, they openly mocked it day in, day out. Throughout it all their message was magnified by non-stop attention from global media fueled by a massive social media footprint. For months the feds looked absolutely lost and outmatched. In reality, they were quite the opposite. They quietly and methodically identified the key players, picked the core group apart, then shut them down and locked them up. Along the way they leveraged the intelligence gathered and the informants created to go on a rampage of their own. The feds won and they won big. So when looking at groups like this it's important to remember that Superpowers don't tweet their way to lulz. They use intelligence, police work, courts and the occasional missile. And Hellfires are the ultimate last lulz.

If Iraq must be divided, here’s the right way to do it

By Michael O'Hanlon and Edward P. Joseph
JULY 4, 2014

As Iraq spirals toward chaos and its Kurdish region talks independence, the issue of partition, orfederalism, has resurfaced. This is a concept that then-Senator Joe Biden strongly advocated in 2006. Though it would be difficult to accomplish, federalism could still be a helpful element as Iraqis struggle through their current tragic mess.

The appeal of federalism could grow if Iraqi leaders in Baghdad cannot agree soon on a government of national unity, ideally one without Prime Minister Nouri al-Maliki, who has proven so divisive. Whether a “soft partition” — meaning the creation of a Sunni autonomous zone to complement the existing Kurdish one — or “hard partition” –meaning the formal redrawing of regional lines — it would seem a natural idea. Not only because of the recent violence, which has caused hundreds of thousands of Iraqis to flee their homes, but also the arbitrariness with which state borders were drawn by the European powers after World War One.

We did a study of the possible soft partition of Iraq in 2007, and found that the new Sunni autonomous zone would need the following: 
  • A proportionate share of Iraq’s total oil revenue (perhaps 15 percent to 20 percent) because the Sunni regions generally lack oil resources; 
  • An arrangement with Baghdad allowing Sunnistan police to patrol the region’s cities on a routine basis, but with Sunnis, Shi’ites and Kurds continuing to support a national army for the country’s overall defense; 
  • A means for Sunnis to safely sell their property so those seeking to leave places like Baghdad (now roughly 10 percent to 15 percent Sunni) could settle in the new autonomous region with enough means to buy homes; 
  • An economic transition fund to help create job opportunities for resettled Sunnis; 
  • Clearly defined, enforced and monitored minority rights for all Iraqis choosing to stay in regions where they are not in the ethnic/sectarian majority, an inevitability since many Iraqis are in mixed marriages, and 
  • Physical protection by a combination of national and local security forces for people relocating. 
These ideas should be part of the public conversation today as Iraqis debate their political futures.

The Iraqi constitution even allows for these possibilities. The idea of a Sunni autonomous region, largely protected from any further predations by future Shi’ite leaders in Baghdad, may even persuade moderate Sunni leaders at the national, provincial and tribal levels to support a new government of national unity. In other words, it could help resolve the current crisis.

That said, partition cannot be seen as an alternative to cooperation by Iraqi political leaders across sectarian lines. In fact, to be stabilizing and consistent with U.S. national security goals, restructuring Iraq via one of these means must be done collaboratively, not by fiat by one group or because of developments on the battlefield.

IMF warns of negative spiral in France as recession looms again

France has sunk into an economic malaise and could take years to climb back out

Markit’s PMI services gauge for France fell for the third month to 48.2 in June, pointing to an outright fall in GDP following zero growth in the first quarter Photo: Xeridat / Barcroft Media

03 Jul 2014

France is on the cusp of a fresh recession as services contract sharply and the country braces for yet another round of austerity cuts, with record jobless levels likely to bedevil Francois Hollande’s presidency for years to come.

Markit’s PMI services gauge for France fell for the third month to 48.2 in June, pointing to an outright fall in GDP following zero growth in the first quarter.

The International Monetary Fund cut its growth forecast this year from 1pc to 0.7pc, warning that there would be no “appreciable decline” in French unemployment until 2016. “Volatile and uneven leading indicators point to the risk of a stalled recovery,” it said.

The IMF said public debt should peak at 95pc of GDP next year but a “growth shock” would push it to 103pc by 2016. The Fund warned of a “negative spiral of low growth and falling inflation” that is pushing up real borrowing costs and further choking investment, already dismally weak. Core inflation was 0.3pc in May.

The economic relapse is a political disaster for Mr Hollande, already the least popular leader in modern times with a poll rating of 23pc, and reeling from a crushing defeat by the far-Right Front National in European elections.

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The country is being left behind by Spain and others as they reap the first rewards from supply-side reforms, although the France’s Socialists grumble that they are merely under-cutting France with deflationary wage cuts in a 1930s-style race to the bottom that ultimately benefits nobody.

Mr Hollande is paying the price for a failed strategy in his first two years in office when he clung to the old model and relied on tax rises rather than spending cuts to cover austerity packages. The state sector has risen to 57pc of GDP, suffocating the private economy.

Yet the country is also caught in a vicious circle as it tries to meet EMU deficit rules, forced to push through successive austerity packages without offsetting monetary stimulus or a weaker currency. The IMF said France’s exchange rate is over-valued by 5-10pc.

The effect of austerity has been to erode the tax base, leaving the budget deficit stuck at over 4pc of GDP. France has gained remarkably little from fiscal tightening equal to 5pc of GDP over the last three years. Undeterred, it is now pushing through extra cuts of €50bn by 2017 under the new premier Manuel Valls, dubbed the “economic Clemenceau” for his willingness to endure casualties stoically. The biggest hit will come next year, raising the risk that economy will once again to fail to achieve escape velocity.

There is unlikely to be a quick rescue from the European Central Bank. Mario Draghi, the ECB’s president, offered no further clues yesterday on whether the bank would launch quantitative easing to revive credit and to build a safety buffer against deflation.

Mr Draghi said the ECB’s next rounds of cheap loans for banks (TLTROs) could inject €1 trillion into the system, and signalled that borrowers would not be treated too harshly if they used the money to play the “carry trade” by investing in government bonds rather lending to the real economy.

However, it is unclear what the ECB policy is. Bundesbank chief Jens Weidmann said the rush into peripheral bonds was “not without danger”, and may reverse abruptly. He warned that loose money is once again encouraging bad practices.

The bar for QE clearly remains extremely high. The ECB is likely to wait until later this year to see whether the measures agreed last month start to unlock credit for small business in Southern Europe. For now private sector loans are contracting at a 2pc rate.

President Hollande has made his peace with the employers’ federation Medef this year, launching a burst of Gallic Thatcherism. He is pushing through tax relief for business and a shake-up of labour markets along with wage freezes, despite ever-louder protests from his Socialist Party base.

The IMF praised the package of measures but said dismissal rules are still among the most restrictive in the OECD club of rich states, and there has been “no progress” on product market reform for five years. At best it will take years to pull France out of its deep malaise.

America’s New Allies: Russia, Iran and Syria?

"Notwithstanding a variety of differences in priorities and preferences, Russia, Iran and Syria all oppose the Sunni extremists seeking to bring Maliki down and support a unified Iraq."

July 3, 2014

Iraqi Prime Minister Nouri al-Maliki must be pretty unhappy with the United States. Facing an existential threat to his country and a political threat to his leadership, Maliki has to contend at the same time with a disenchanted patron in Washington responding much more weakly than he prefers to the former challenge and not at all to the latter (if not offering tacit encouragement to some of Maliki’s political rivals). So, predictably, he is turning elsewhere for support and to limit his dependence on American help. Enter Russia, Iran, and Syria.

Moscow likely enjoys the opportunity to provide Su-25 ground attack fighters—even if they are used and aging aircraft—at a time when U.S. officials are perversely stating that the ongoing instability may further delay Iraq’s receipt of U.S. F-16 fighters (and when Maliki has openly expressed frustration with slow U.S. deliveries, saying that Iraq was “deluded”). In addition to shipping the planes, Russia has also sent technicians, who must presumably start by assembling the jets, readying them to fly, and offering a refresher course to Iraqi pilots who probably have not flown Su-25s for some time.

For its part, Iran appears to be both providing military supplies and sharing intelligence from drones operating in Iraq, according to U.S. officials. Looking ahead, a top Iraqi parliamentarian and Maliki ally has warned that Baghdad may “need Iranian strikes” on ISIS in Iraq if the U.S. does not conduct air attacks itself. Syria is of course aggressively fighting the militants on its own territory and has recently launched its own airstrikes against them across the border into Iraq. Maliki expressed appreciation for the Syrian attacks, saying “they carry out their strikes and we carry out ours and the final winners are our two countries.”

Notwithstanding a variety of differences in priorities and preferences, Russia, Iran and Syria all oppose the Sunni extremists seeking to bring Maliki down and support a unified Iraq. Likewise, while all are constrained by limited capabilities, they face few domestic obstacles in aiding Maliki’s government—political, legal or otherwise—and are much closer to Iraq than the United States, which makes the crisis more important for them. Distance has also helped Iran and Syria to act fairly quickly. It is still unclear whether the three governments are acting with any coordination, however. If so, it is probably general and strategic rather than specific and tactical—at least so far.


The Ally America Needs
Japan’s moves away from pacficism are nothing to worry about—in fact, they’re great for the United States.

July 03, 2014

Japan’s historic move to reinterpret the country’s postwar “peace constitution” this week and adopt a more active role in Asia-Pacific security comes none too soon for the United States. Right now, more than ever, Washington needs robust allies.

In East Asia, the broader Middle East, the Sahel and Eastern Europe, extremists, sub-national groups and even hostile countries seek to take over territory and change borders and governments through coercion, intimidation and terrorism.

Although these events might seem disparate and limited in scope, their number and frequency amount to a global challenge to the international order the United States has led since World War II.

The United States depends on some basic building blocks of power to maintain this global order: our economic and military might, diplomatic skill and strong and cooperative allies. But at a time when we need all the friends we can muster, most are becoming less reliable as they deal with internal political and economic issues and reduced defense budgets. Even within NATO, member countries make individual decisions on each separate crisis—often struggling to act in concert, as the tepid response to Russia’s incursion into Ukraine showed. In the future, the United States will have to work hard to convince some traditional allies and partners to mount effective international responses when our common interests are threatened.

Japan, however, is bucking this trend of tepid responses. For the last 60 years, the country’s Constitution has prevented Japan from fully participating in international peacekeeping operations and constrained the alliance with Washington. But this week, the government of Prime Minister Shinzo Abe decided for the first time to allow the Japanese Armed Forces to do more than defend their homeland from a direct attack. Japan will now be able to join the United States—its alliance partner—in the event of aggression by adversaries. Japan’s self-defense forces could, for instance, be authorized to shoot down missiles heading for the United States and defend American warships on the high seas.

The threat of greatest immediate concern is North Korea. In the event of large-scale North Korean aggression, Japan can now not only provide bases and logistic support for U.S. forces, but its ships and planes can also join with the U.S. military to conduct combined defensive patrols in the Sea of Japan and the airspace over it. Although there is little likelihood that the disputes in the South China Sea and East China Sea will lead to conflict, this Japanese decision, along with American assurances that our treaty with Japan applies to the Senkakus—an island chain claimed by both China and Japan—make that likelihood even lower.

Central Asia’s Energy Rush

The region’s major powers are in a tussle to control its rich energy sources. 
By Michał Romanowski
July 03, 2014

Central Asia is rapidly emerging as the key playing field in the contest to access energy resources and the leverage they offer. The new Great Game is played out once again in the region, only this time it is not over political or territorial influence, but over the vast raw material deposits that are in the possession of the former Soviet Union republics, especially those situated by the Caspian Sea. The Caspian’s share of oil and gas global exports is set to rise to 9 and 11 percent, respectively, in the coming 20 years. Much is at stake.

Russia, although not a direct producer, was and still is – given the developed pipeline network – supervising much of an energy transit from Central Asia. The Central Asia-Center gas pipeline system, the first line of which was completed in 1960, makes for a good case study. It allows both Uzbek and Turkmen gas to be delivered to Russia, which then resells it at a profit to energy-hungry Europe or uses it for domestic purposes. Moscow exercises its influence over the region and as a consequence gains both politically and economically.

In the wake of the collapse of the Soviet Union, Central Asian states sought to loosen Russia’s firm grip. An independent complex pipeline system was a priority for transporting the resources outward. Given that the Caspian Sea is landlocked, gas and oil need to cross several borders before reaching an end customer. This requires a very substantial investment, yet energy diversification in Central Asia is moving steadily ahead.

State of Play

Kazakhstan is the leading oil producer in the region, with output of roughly 1.6 million barrels per day (bbl/day), of which approximately 90 percent is exported. The Baku-Tbilisi-Ceyhan network that came online in 2006 is not the only Kazakh attempt to break Russia’s monopoly. Astana is already one of the most significant oil suppliers to China. The first pipeline connecting the Caspian shore with China’s Xinjiang province, is one of the longest links in the world at nearly 2300 km. China in fact controls around 20 percent of Kazakhstan’s oil production and is its key trade partner. Bilateral trade should reach $40 billion next year.

Turkmenistan is the main gas exporter and possesses the largest gas deposits in Central Asia and one of the richest in the world. It has similar goals. The first Turkmen undertaking to break Russia’s transit dominance was a pipeline to Iran built in 1997. The recent major venture – the Central Asia-China gas pipeline – allows Ashgabat to transfer its hydrocarbons directly to China. Interestingly from a regional perspective, it also offers to connect spurs from Kazakhstan and Uzbekistan.

Beijing already buys the majority of Turkmen gas exports. Yet the volumes sold to China are to be tripled by the end of this decade, while the Russian figures, after a pipeline blast in 2009, have fallen dramatically and show no sign of returning to previous levels.

Considerable investment is also being made in Turkmenistan to build a domestic east-west gas pipeline, which should be concluded by 2016. In addition, a Turkmenistan-Afghanistan-Pakistan-India link is expected to be finalized in the near future. Finally, there is the never ending story of the trans-Caspian connection. It remains highly uncertain, but Turkmen authorities expressed their readiness to supply gas should it go ahead.


By Jennifer McArdle

Much like the Indo-U.S. strategic partnership, Indo-U.S. cyber engagement appears to have plateaued and could benefit from a tailored reset. Since the 2001 establishment of the Indo-U.S. Cyber Security Forum, India and the United States have sought to partner on various cyber issues of collective importance: cyber security, cybercrime, cyber forensics and cyber security norms, among others. Apart from a 2013 goal of supply-chain security, Indo-U.S. cyber cooperation is largely software-based. This ignores a mutual, more incipient cyberhardware threat, which permeates broader defence issues. A failure to address the issue of hardware security could have a highly deleterious impact on India’s defence apparatus. The time is ripe for India and the United States to expand the Indo-U.S. cyber-dialogue to include hardware security.

The weapon platforms that are critical to state security and deterrence—nuclear weapons, cruise and ballistic missiles, fighter jets and any number of other systems—are dependent on semiconductor integrated circuits, or chips, which make up the hardware of the system. The semiconductor supply chain has become increasingly globalized, and asJohn Villasenor at the Brookings Institution has noted, tampered or malicious chips, which operate as hidden ‘back doors’ for espionage or sabotage, have likely heavily contaminated the global supply chain. Malicious hardware can be inserted into a chip after the design phase but before it is manufactured and placed in a product, thus making it challenging to detect. Should a malicious chip be placed in a critical weapon system, that platform could cease to operate.

At present, while India does design its own semiconductor chips, it lacks the capacity to manufacture its semiconductors domestically. As the East West Center notes, most of India’s integrated circuit design work is done for various multinational corporations, who transfer the design for manufacturing elsewhere, often to locations such as Shenzhen, China. So long as India’s chips are manufactured externally, India risks placing compromised circuits in their indigenous weapons systems, thus exposing them to potential sabotage or espionage. India needs a secure supply of ‘trusted’ semiconductors for its domestically produced systems.

Last October, the former Union Minister for Communications and Information Technology, Kapil Sibal announced at the Observer Research Foundation (ORF) and Federation of Indian Chambers of Commerce and Industry (FICCI), India Conference on Cyber Security and Cyber Governance, that imported computer hardware posed a serious security threat to India. The Indian government had decided to invest in manufacturing semiconductor chips. Four months later, on February 14, former Prime Minister Manmohan Singh, sanctioned the construction of two semiconductor wafer plants, or ‘fabs’, in cooperation with two different business consortiums. Construction is expected to begin in September.

While India has announced the creation of two ‘fabs’, it is unclear what leverage the Indian Ministry of Defense (MoD) will have manufacturing ‘trusted’ chips for its critical defense systems. If the U.S. model sheds any light on potential defense microelectronic trajectories in these two semiconductor plants, it might prove to be very little.

An anti-US Stuxnet? Startling attack against industrial complex revealed.

A cyber-espionage campaign targeting industrial control system networks bears all the hallmarks of sabotage – and has an apparent Russia connection, one group says.

A three-year Eastern European cyber-espionage campaign against US and European energy companies granted attackers access to industrial control system networks that could be used to sabotage and disrupt energy supplies across the US, Japan, and Europe, security researchers say.

The attack group has earned the name "Energetic Bear" for its apparent Russian connection and focus on energy companies, according to an analysis by Crowdstrike, a cyber-security company in Irvine, Calif. The attack began in 2011, and the specialized malware has impacted 1,000 companies in 84 countries, the company says.

Whoever is behind the attacks, they have the hallmarks of being state-sponsored – including echoes of Stuxnet, the world’s first known cyber-weapon, which was deployed by the US and Israel to sabotage Iran’s nuclear fuel production facilities at Natanz four years ago, several cyber-security researchers told the Monitor.

Beyond its breadth, stealth and sophistication, what is most unusual is the industrial control system network software targeted by the “Bear,” they say. The intent was not simply to compromise these networks, but to control them.

Details about the spy campaign began to dribble out last week. That’s when F-Secure, a Finnish cyber-security company, startled the industrial controls system security community with its conclusion that the attacker had used OPC – a type of translator software widely used in industrial networks – to intercept critical details of its victims' systems.

First, the attackers crept onto the websites of three key industrial control system (ICS) software vendors in Europe. From there, they inserted a nasty piece of malware that has been dubbed Havex (for an inscrutable word in the malicious software code) deep into otherwise legitimate software downloads on the websites.