23 May 2014

Beyond the olive branch

Published on The Asian Age (http://www.asianage.com)

By editor
Created 23 May 2014 - 00:00

The credo and tradition of the Indian Army was rubbished by Gen. V.K. Singh after he took over as Army Chief. He went to the Supreme Court against the government over a totally personal and selfish issue.

The credo and tradition of the Indian Army was rubbished by Gen. V.K. Singh after he took over as Army Chief. He went to the Supreme Court against the government over a totally personal and selfish issue.

The nation faces grave external and internal security threats which were being managed by adopting a policy of appeasement and projecting India as a soft state.

These have to be managed from a position of military strength without saber-rattling and extending an olive branch of peace. Our Prime Minister-designate Narendra Modi has made a good beginning by inviting Pakistan and other Saarc neighbours to his swearing-in function.

The threats from Pakistan and China, including their acting in cohort and the strategy required to deal with them, were discussed in a previous article. The internal threat posed by Maoist terrorism was also discussed. We need to now discuss the organisation at the apex level to manage these threats.

Unlike all democracies, the higher defence organisation in India isolates the military from the process of decision-making. Bureaucrats in defence ministry have all the authority, but are not accountable. In 1962, Jawaharlal Nehru’s orders to throw the Chinese out of the Himalayas was communicated to the Army Chief by a joint secretary. This showed that he was not in the loop when such a major decision was taken to go to war. The rest is history. The Public Accounts Committee in 1958 recommended integrated functioning and so did Administrative Reforms Commission in 1967. These were put in cold storage. Meaningless sops have been doled out from time to time. On March 25, 1955, Nehru announced in Parliament that as in other democracies the three Cs-in-C will be designated Chiefs of Staff. Their designations were changed but they have continued to function as Cs-in-C, heads of attached offices subordinate to the ministry. The Kargil Review Committee recommended both a CDS and a fully integrated defence ministry. This was approved by the GoM of the National Democratic Alliance regime. It was left to the successive government to take the final call. These proposals we scuttled. A headless Integrated Defence Staff and a meaningless Integrated Service Headquarters was established, like introducing Chiefs of Staff in 1955. The Naresh Chandra Committee has recommended a permanent full-time Chairman Chiefs of Staff instead of a rotating part-time incumbent and an additional four-star rank, as also deputation of one-star rank military officers to the ministry. Such cosmetic sops serve little purpose. The crying need is for a proper CDS and a fully integrated system as in other democracies.

Seven steps to an economic rebalancing

May 23, 2014
Suresh Prabhu

India’s economy is at the core of its global profile. The incoming government can transform global equations by rebalancing the Indian economy, making it a platform for a foreign policy outreach

The analogy of what might happen to an aircraft when it suddenly drops from 40,000 feet to 20,000 feet in a matter of seconds is one that lends itself to describing the state of the Indian economy. After smooth sailing at close to nine per cent growth rate it suddenly dropped to less than five per cent in a very short time, leaving behind unemployment, social unrest, banking woes and stuck projects in its wake.

The huge task before the Narendra Modi government now will be to quickly revive the economy. In doing so, a huge array of issues need to be addressed.

In its current stage of evolution, the Indian economy requires a fundamental rebalancing across multiple macroeconomic parameters. To begin with, it needs to rebalance savings and investments which have deflated over the recent past and are inadequate to sustain a high rate of growth. Second, the share of manufacturing in GDP must be stepped up in accordance with the employment imperative and the need to build an advanced knowledge-intensive, technology-based product profile. Third, the economic mindset has to incorporate a much faster pace of planned urbanisation, along with a humane approach, which would foster higher economic productivity given all factors of production.

Four, India’s financial sector requires modernisation and integration with the larger global system, a task which was interrupted by the global financial crisis. Five, India’s major resource — its people — must be critically upgraded in order to effectively participate in a knowledge-driven global economy. Six, our global integration in terms of the flow of goods, services, technology and funds must be greatly expanded. Finally, we must strategise to redress the massive infrastructure gap that we currently face.

The new government is keen to address these multiple dimensions to the Indian economy in order to revive growth and boost employment. I believe it would need to focus on immediate measures that would moderate inflation and bring in new growth drivers as a first step. Equally, it would need to lay strong foundations in all these rebalancing imperatives in order to ensure sustained high growth over the next two to three decades, remove poverty and improve the quality of life by improving human development indices. The central idea would be for the government to create the right conditions of governance, macroeconomic stability, and policy framework for private sector entrepreneurship to flourish.

The power of the sea

Published on The Asian Age (http://www.asianage.com)
By editor
Created 23 May 2014 - 00:00

A powerful Navy will give India greater flexibility in protecting its global national interests, while acting as a deterrent to any mischief by China and its proxies

A powerful Navy will give India greater flexibility in protecting its global national interests, while acting as a deterrent to any mischief by China and its proxies

The Chinese Navy — also known as PLAN or People’s Liberation Army Navy — has emerged as the world’s third largest Navy in terms of blue water capable combat units, after US and Russia.

China is also the global leader in building merchant ships, fishing vessels and ports. China has realised that sea power, if properly showcased and exploited, gives a nation greater flexibility than even nuclear weapons, in furthering its national interests.

I had written about China’s growing naval presence in the Indian and Pacific oceans in these columns (At sea, Sino-India ties need propulsion, April 11). In its eagerness to show off its sea power, China has taken some new initiatives, including a rare, embarrassing tumble, when it took the unprecedented step of cancelling, at the last minute, its much-publicised International Fleet Review (IFR) at Qingdao, scheduled for April 23.

To further showcase its growing sea power, China decided to recently host two maritime events almost simultaneously at Qingdao. The first was the 20-nation WPNS (Western Pacific Naval Symposium) comprising important Asia-Pacific Navy Chiefs, including US, Japan, Russia, South Korea, Australia, with three observer nations — India, Bangladesh and Mexico. The WPNS concluded on April 22, with a basic agreement for confidence building at sea, by reiterating well known flag signals for indicating activities like flying and diving operations etc, so that passing ships can keep clear and not impede such operations. The WPNS, is an ongoing annual dialogue, which was initiated by the US, some years ago.

On conclusion of WPNS, on April 22, China had planned to hold its second IFR, this year on April 23 (the first IFR was held in 2009, in Qingdao), to mark the 65th anniversary of the Chinese Navy (where President Xi Jinping was to take the salute of the participating ships, submarines and aircraft). The IFR was to be followed by sea exercises on April 24. Ten nations accepted the invitation and seven sent ships (India, Pakistan, Bangladesh, Brunei, Singapore etc). Japan was not invited and the US Navy, too, decided not to participate. India sent its home built stealth frigate, INS Shivalik.

On April 16, China abruptly cancelled the IFR, citing its preoccupation with the ongoing search for Malaysian Flight MH-370 as the excuse. The real reason was perhaps, that rising superpower China, was acutely embarrassed with the low foreign participation and the absence of the US Navy. Only elementary sea exercises were held on April 23.


Friday, 23 May 2014 | Arindam Chaudhuri | in Oped

Having been voted to power with a huge mandate, the Narendra Modi Government has a lot of expectations to fulfill. But for now, it must focus on reforming the judiciary, improving healthcare and education, and creating employment

Mr Narendra Modi is finally here. And he being a man of action, ambition and humility will continue to be in power for at least 10 years, if not 15. That means he has enough time to change India. Here are some of the key points that Mr Modi needs to work upon immediately.

Transform the judiciary: Mr Modi’s first priority, in an environment where the people are fed up with corruption, is to transform the judiciary. It is shocking that the annual budgetary allocation for the judiciary is less than one per cent of the Union and State Budgets.

This is despite the fact that new laws, increasing corruption and social activism are leading to the number of cases in courts increasing tremendously, even while older cases remain unresolved for years.

Corruption can only be reduced by ensuring that the judiciary becomes more effective. If the corrupt are confident that they can delay punishment indefinitely, due to cases languishing in the courts for years, then corruption will definitely keep increasing. We need to change this immediately.

Corruption is a worldwide phenomenon; but it affects fewer people in Western countries, for instance, because the judicial systems there are better functional. In the US, for example, the number of judges per one million people is 10 times more than in India. Going by the American benchmark, India will need about 1,00,000 additional judges.

This may seem like a large figure but it is possible to achieve this target in five years. Taking a ballpark figure of Rs30,00,000 being the investment required to set up one additional judge and his office assistants, if we were to have 20,000 additional judges per year, we have to budget approximately Rs6,000 crore per year.

Mr Modi must announce the allocation of Rs6,000 crore for the judiciary in this coming fiscal, and should plan to allocate Rs10,000 crore in the subsequent fiscal. The Ministry of Law and Justice work hand-in-hand with the Supreme Court and High Courts to finalise a plan for quadrupling the number of judges soon.

The Ministry should also draw a set of guidelines to encourage litigants, lawyers and even judges to settle cases within a certain deadline — something that has been practised successfully in Income Tax cases, where the decisions of tax officers are time-bound. These straightforward moves have the power of radically transforming the impact of governance .

If the corrupt start fearing quick judgements ( and penalties such as confiscation of their property and wealth), the general tendency towards corrupt practices will go down considerably. This is far more practical an approach and will work much better than the almost-forgotten Lokpal Bill.

Foreign Policy and Power Projection under Modi

IssueNet Edition| Date : 22 May , 2014

Narendra Modi (Photo Courtesy: http://www.narendramodi.in)

Narendra Modi, the BJP’s prime ministerial candidate, has been given massive mandate by the people in the just concluded general elections to the parliament. The BJP is poised to get a majority on its own steam, even without the support of coalition partners. So Modi enjoys a lot of freedom to shape and execute his policies without depending upon the support of coalition partners. But he has clearly indicated that he would like to carry all parties along with him in furthering his national development agenda.

Modi’s developmental model will offer greater opportunities for foreign countries to expand their economic relations with India, beyond the limitations of real politick.

Despite Modi’s huge public presence, New Delhi’s so called liberal left-leaning “intellectual” class which had rallied against him had never been able to carry out a dispassionate analysis of Modi and his style of governance. His success has made a mockery of the traditional yardsticks of class, caste and communal equations used by analysts to study Indian political operations. He had planned and fleshed out the entire BJP election campaign using the best available human resources and technology to achieve his campaign goals.

His assertive style of leadership has a few characteristics: leading from the front, clear articulation of objectives, single minded pursuit of goals, ability to motivate his team, and thinking out of the box, assisted by indefatigable energy and oratorical skills. This had helped him make Gujarat a frontline state in development. So we can expect him to largely use his experiential learning as chief minister while serving as prime minister. As a man with abundant commonsense we can also expect him to adapt his style to suit the complexities of his new job at the national level.

Foreign policy 

There is a lot of convergence in the overall foreign policy vision of the Congress party and the BJP. However, Narendra Modi’s grammar and articulation of policies will make a difference to the policy dispensation. His assertive leadership style and expression will bring the much needed clarity in foreign policy pronouncements. His developmental model will offer greater opportunities for foreign countries to expand their economic relations with India, beyond the limitations of real politick.

As Modi is an assertive leader; foreign countries like the U.S. and China who have been routinely trashing Indian sentiments as a part of their policy would be more cautious in handling sensitive issues.

Solution to J & K problem lies in New Delhi...

IssueNet Edition| Date : 22 May , 2014

J&K is an integral part of India. The only problem that can be called J&K Problem is the non- comprehension by India, its people and the government to this ultimate truth of its being the integral part of India and not distinct or separate entity in any way from the other states of India. The problem that would remain to be settled then is the need to free the areas of J&K illegally occupied by Pakistan and China. Once this fact is understood and fully comprehended by us, all else will fall in place.

It is proposed to discuss this very complex and muddled up situation, erroneously called “The Jammu & Kashmir Problem”, as under:
Strategic Importance of J&K
The Problem and its historic Mishandling

Strategic Importance of J&K 

The illegally occupied part of J&K by Pakistan is in two parts, Pakistan Occupied Kashmir (the so called Azad Kashmir by Pakistan) and Gilgit- Baltistan(GB) (earlier called the Northern Areas). China is in possession of Akshai Chin and the Shaksgam valley illegally ceded by Pakistan to China in 1963.

J&K forms the head of the Indian sub continent, and has been the traditional trade route of Central and South Asia to the East and Tibet, generally called the ‘Silk Route’. It is bounded by more countries than any other state of India; in the North East with Tibet, and further North with Xinjiang province of China, in the North West with the Wakhan corridor of Afghanistan, in the West with the Khyber Pakhtunkhwa province and further South with Punjab of Pakistan. This geographic layout is strategically so important that no power of the world wants to remain away from the area, as it gives them access to the sensitive areas of the neighbouring countries.. Its high mountains provide strategic depth and domination over the surrounding area. For hundreds of years in the past, the Russian, Persian, Chinese, Tibetan and the British Indian empires, sought the passes of this region to dominate each other. The region rests along “the ancient axis of Asia” where South, Central and East Asia converge and, since time immemorial, has been the gateway for both India and China to Central Asia.

The maps below show the geo strategic location and its dominating position.

Distorted Pak map: Erstwhile Jammu & Kashmir showing illegal occupation of Pakistan Occupied Kashmir and Gilgit Baltistan by Pakistan and Shaksgam and Akshai Chin by China The map is not accurate for boundaries, particularly the alignment of the line shown to Karakorum pass, leaving Siachin glacier in Pak occupied territory.

Pakistan Intends to Boost Military and Nuclear Budgets

May 20, 2014
Reports: Increase in Pakistan Defense and Nuclear Budgets Likely
Usman Ansari
Defense News

ISLAMABAD — Media reports here have outlined that Pakistan is set to increase funding for the armed forces and the national nuclear body, the Pakistan Atomic Energy Commission (PAEC), under the forthcoming 2014-FY2015 budget.

The budget would be just over US $81 million for the PAEC, up from nearly $63 million the previous year (which was later increased to $66 million).

Mansoor Ahmed, from Quaid-e-Azam University’s Department of Defence and Strategic Studies, who specializes in Pakistan’s national deterrent and delivery programs, said although the figures earmarked for the national nuclear body are mainly for a civilian power generation project, there are national security implications.

“This sum is primarily geared toward the construction of the two 1,000-megawatt generation-III safeguarded Chinese nuclear power reactors to be established at Karachi, K-1 and K-2, that were recently initiated by the prime minister,” he said.

However, he added, “Additional financial allocations are most likely earmarked for the unsafeguarded Khushab Nuclear Complex where the fourth plutonium production heavy water reactor is reportedly nearing completion.”

Ahmed said the Khushab Nuclear Complex has been vital in allowing Pakistan to modernize its national deterrent due to its central role in the production of plutonium.

“These and other classified projects are presumably aimed at the development of a new variety of lightweight, compact and more powerful and efficient weapon designs, suitable for a variety of ballistic and cruise missiles, that require additional fissile material [plutonium] production, and fuel fabrication in addition to maintaining and improving existing infrastructure.

“All this has been possible due to the steady enhancement of indigenous manufacturing capabilities developed by the PAEC during the past 35 years,” he added.

The budget increase for the armed forces is also significant.

China and America Clash on the High Seas: The EEZ Challenge

"Were the U.S. to accept China’s interpretation of UNCLOS, U.S. military vessels could be barred from operating in the roughly one-third of the world’s oceans that are now EEZs."

May 22, 2014

During U.S Secretary of Defense Chuck Hagel’s recent trip to China, China’s Minister of Defense, General Chang Wanquan, warned that Beijing would make “no compromise, no concession, [and] no trading” in the fight for what he called his country’s “territorial sovereignty.” Chang told Hagel: “The Chinese military can assemble as soon as summoned, fight any battle, and win.” The comments come amid an escalating campaign by Chinese nationalists to alter the status quo in the Western Pacific that has raised alarm in capitals across the region.

While China’s more aggressive external posture in the East and South China Seas has been on display since 2009, Beijing’s dispute with Japan over the Senkaku/Diaoyu islands and with Vietnam over disputed waters and islands in the South China Sea have grown increasingly volatile over the past year.

Just this February, U.S. Navy Captain James Fanell, Director of Intelligence and Information Operations for the U.S. Pacific Fleet, warned that recent navy war games by the People’s Liberation Army Navy (PLAN) revealed a “new task” for the service:

“To be able to conduct a short, sharp war to destroy Japanese forces in the East China Sea, followed by what can only be expected [to be] the seizure of the Senkakus, or even the southern Ryukus...Tensions in the South China and East China Seas have deteriorated, with the Chinese coast guard playing the role of antagonist, harassing neighbors, while PLAN ships, their protectors, conduct port calls throughout the region, promising friendship and cooperation.”

And this month, China and Vietnam found themselves embroiled in a dangerous game of brinksmanship after China deployed a massive oil rig to waters claimed by both countries near the Paracel islands. Shadowed by dozens of Chinese naval vessels, including a half-dozen PLAN warships, the Chinese flotilla immediately clashed with civilian vessels from Vietnam, where an outburst of anti-China protests has forced the evacuation of thousands of Chinese citizens.

Bomb Blasts Kill At Least 31 in Western China

May 22, 2014
Terror Attack in Xinjiang Kills 31 and Injures 94
Didi Kirsten Tatlow
New York Times

Explosions at a crowded market killed 31 people and injured 94 more Thursday morning in Urumqi, the capital of the restive Xinjiang region of China, in what officials said was a “violent terrorist attack.” It was the latest and deadliest this year, highlighting a growing challenge to Chinese rule in a region that is home to the mostly Muslim, Uighur ethnic group.

Shortly after the blasts, President Xi Jinping “pledged to severely punish terrorists and spare no efforts in maintaining stability,” Xinhua reported.

Guo Shengkun, the minister of public security, traveled to Urumqi with a team to investigate, after directing operations from Shanghai earlier in the morning, according to a report on the public security bureau’s website run by major Chinese Internet portals such as Sohu and Tencent. The report cited Meng Jianzhu, the country’s security chief, as saying “terrorists’ unbridled arrogance must be smashed.”

The series of explosions hit at 7:50 a.m., with witnesses cited by Xinhua, the state news agency, saying that two “cross-country vehicles” plowed into market crowds and explosives were thrown from them.

One of the vehicles exploded in the market, Xinhua said, citing someone in the market who said that there had been a dozen big bangs. Saloshka, a woman who said she was about 100 paces from scene, said on her Sina Weibo account that the casualties were “elderly grandpas and grannies” at market early.

Photographs said to be from the scene showed injured people, many elderly, lying on the ground, some being dragged away by others and loaded onto tricycles or ambulances, with blood stains amid scattered vegetables and personal belongings. Others sat on stools or the ground, appearing dazed.

Tianshan Net said that the explosions happened in the Shayibake District, on North Park Street. The district is known as Saybagh in Uighur, but according to Chinese media reports is almost entirely inhabited by people of Han Chinese ethnicity. Urumqi is a city segregated along ethnic lines, with Uighur and Han mostly living apart.

People’s Daily, the Communist Party newspaper, cited witnesses saying that two cars drove by the site of the attack, followed by a series of explosions. Xinhua named the nearby park as People’s Park.

Xinjiang has seen increasing violence with scores of Uighurs and Han, who are China’s biggest ethnic group, killed in knife, gun and other kinds of attacks.

Recently, the Chinese government said three people, including two attackers, were killed in a blast at Urumqi South Railway Station the day President Xi Jinping ended his first tour of the region. In early March, 29 people were knifed to death at Kunmin train station by attackers said to be from Xinjiang.

Rohan Gunaratna, a professor at Nanyang Technological University in Singapore who studies terrorism in Asia, said the attack showed the Chinese government should rethink its approach to counterterrorism in Xinjiang. It should focus on winning the support and trust of Uighurs so that they do not view militants with sympathy and instead help the government in its effort to gather intelligence, he said.

China's Grand Strategy Disaster

While Beijing's power is growing, so are its problems. So why is it picking fights with so many of its neighbors?

May 20, 2014

One question is foremost in the minds of observers of Chinese foreign policy these days: What is Beijing thinking?

Beijing seems intent on irritating or picking fights with most of its neighbors, while aligning itself with governments determined to upset the international legal order that China’s leadership says it supports. It would be hard to construct a foreign policy better designed to undermine China’s long-term interests.

For years, Beijing hewed to Deng Xiaoping’s admonition to “hide your strength and bide your time.” This was realized most famously by the “smile diplomacy” of the 1990s by which China reached out to countries throughout East Asia and sought to reassure them of its benign intentions. Beijing settled most of its land borders and worked to develop win-win solutions to problems to show its goodwill.

While Beijing’s rhetoric remains the same, its policy has become more pugnacious, with China taking overt steps to squeeze the Philippines out of contested territory in the South China Sea and pushing Japan to concede in a dispute over the Senkaku/Diaoyu islands. Apparently, however, picking fights with Manila and Tokyo wasn’t enough. Beijing added Vietnam to its list of adversaries with the gratuitous deployment of an oil rig to that country’s continental shelf earlier this month. And to compound the offense, Beijing dispatched dozens of vessels, including navy ships, to protect it, a significant escalation in the level of military involvement in territorial disputes.

That poke in the eye was preceded by the dispatch of Chinese ships to waters claimed by Malaysia, a misstep that was compounded by the brutish Chinese reaction to the search and rescue efforts for Malaysian Airlines flight MH370, which vanished with over 150 Chinese onboard. China also confirmed its claim to waters near Indonesia, pushing Jakarta off the fence and toward a harder position on South China Sea territorial disputes. And most recently, the media reports that Chinese boats are exploiting a South Korean Coast Guard distracted by the Sewol ferry disaster and fishing illegally in ROK waters during the lucrative blue-crab season.

In other situations, China is contributing to the erosion of the international order that provides the framework for the peace and stability it desires. Beijing continues to mouth platitudes when dealing with North Korea, pushing for a resumption of multilateral talks without taking steps that might help produce a change in Pyongyang’s behavior—such as vigorously enforcing United Nations Security Council resolutions. It has backed Russia’s meddling in the Crimea and Ukraine—seemingly backing calls for self-determination that go against Beijing’s interests in Taiwan—and seems intent on consolidating the relationship with Moscow. Meanwhile, China is fighting a rearguard action to maintain influence in Myanmar, even to the point of reportedly supplying weapons to rebel groups fighting the Naypyitaw government.

How Putin Won Big in China

48 MAY 21, 2014 10:43 AM EDT

Russian President Vladimir Putin has achieved what Western leaders feared: He has cut a big, long-term deal to supply natural gas to China, a pivot to the East that makes Russia much less vulnerable to whatever sanctions the West might impose.

The gas contract had been 10 years in preparation, mostly because the parties haggled relentlessly over the price. The parameters of the deal made public by Alexey Miller, chief executive officer of Russia's near-monopoly gas producer, Gazprom, suggest the final price will be roughly $10 per million British thermal units. That is less than Russia may have wished for, but about as much as it makes sense for China to pay. Data from Platts suggest that the weighted average price of gas from Myanmar, Turkmenistan and Uzbekistan came to about $10.14 last year. This year, Gazprom expects to export its gas at the average price of $10.62 per million Btu, but traditional consumers in Europe are trying to bargain it down.

Crucially, the deal opens up a major new market in case Europeans make good on their threat to cut their dependence on Russian gas supplies. China has signed up to import 38 billion cubic meters per year, more than its total 2013 pipeline imports (they reached 27.7 billion cubic meters) and about 20 percent of Russia's 2013 export volume. China can easily take more, too. The country currently gets two-thirds of its energy from coal, which it is eager to replace with gas for environmental reasons. The current gas imports are a drop in the bucket compared with the potential market size.

Two more bonus points: It's likely that China will help Russia finance the enormous infrastructure investment -- estimated at more than $30 billion -- required to uphold its end of the deal, and China will probably be paying in renminbi, making the deal safe from any Western sanctions.

A joint statement signed ahead of the deal sounds like an anti-Western pact. Echoing the Russian position on the Ukraine crisis, it contains this thinly veiled invective against U.S. and EU policies:
The parties stress the necessity of respecting nations' historic heritage, their cultural traditions and their independent choice of sociopolitical system, value system and development path, of counteracting interference in other countries' domestic affairs, of rejecting the language of unilateral sanctions, or organizing, aiding, financing or encouraging activity aimed at changing the constitutional system of another country or drawing it into any multilateral bloc or union.

Q&A on U.S. Allegations of Chinese Cyber Spying

May 20, 2014 
Guide to US allegations of China cyberspying 
Associated Press 

WASHINGTON (AP) — The Obama administration has brought unprecedented criminal charges against five officials in the Chinese military for hacking into private U.S. companies’ systems and stealing trade secrets. It was the first time the U.S. has revealed any evidence the Chinese government was going after American companies’ private information for economic gain. 

Q. What happened? 

A. A federal grand jury in Pittsburgh charged five Chinese military officials with hacking into six U.S. companies’ systems, conducting economic espionage and stealing trade secrets. The targeted companies are leaders in the nation’s nuclear power, metals and solar products industries: Alcoa World Alumina, the nation’s largest producer of aluminum; Westinghouse Electric Co., one of the world’s leaders in the development of nuclear power technology; Allegheny Technologies, a large metals company; U.S. Steel Corp., the largest steel company in the U.S.; United Steelworkers Union, the biggest industrial labor union in the U.S.; and SolarWorld, which makes solar products. 

Q. Why is it significant? 

A. The indictment is the first of its kind. It fulfills a longtime Obama administration promise to bring charges against nation-state hackers. 

The U.S. has brought economic espionage charges against individuals before, but this is believed to be the first time the U.S. has accused members of a foreign government’s military with hacking into U.S. companies without ever stepping foot in the country. The U.S. has long been concerned about cyber threats coming from China. The Chinese government has said there should be no finger-pointing without evidence. 

Q. How did they pull it off? 

A. At least in some instances, the alleged hackers were accused of “spear-phishing,” or tricking employees into opening an infected email. In one case, the U.S. said they created a fake email account under the misspelled name of a then-Alcoa board of director - apparently it was Nissan chief executive Carlos Ghosn - and fooled an employee into opening an infected email attachment called “agenda.zip” that let the hackers inside the company’s network. In another case, a hacker emailed U.S. Steel employees with a link to a report about industry observations, but clicking the link quietly installed malicious software that unlocked the company’s network. 

The Sino-Russian Hydrocarbon Axis Grows Up

Russia and China have just concluded a $400 billion gas agreement. Washington should take notice.
May 21, 2014

Eight years ago, in the pages of The National Interest, Flynt Leverett and Pierre Noël identified a “new axis of oil”—a “shifting coalition of both energy exporting and energy importing states centered in ongoing Sino-Russian collaboration”—that was emerging as an increasingly important counterweight to the United States on a widening range of international issues. While, at the time, Russian oil and gas exports to China were negligible, Leverett and Noël projected that Russian hydrocarbons would become “a major factor buttressing closer Sino-Russian strategic collaboration” in the future. 

Western analysts have long been skeptical of the prospects for sustained Sino-Russian cooperation—but over the last eight years, the new axis of oil has become undeniable market and geopolitical reality. Russia is now one of China’s top three oil suppliers (with Saudi Arabia and Angola) and is set to grow its oil exports to China significantly in coming years. While some analysts citeChinese firms’ acquisition of upstream positions in Kazakhstan and Turkmenistan and the opening of a Turkmen-Chinese gas pipeline as signs of Sino-Russian competition in Central Asia, these moves supported Moscow’s interest in keeping Central Asian hydrocarbons from flowing west and undermining Russia’s market dominance in Europe. And this week—just hours after Foreign Policy headlined “the deal that wasn’t”—Russia and China concluded a $400 billion gas agreement, marking a major step in the maturation of the (let’s now call it) Sino-Russian “hydrocarbon axis.”

Geopolitically, too, this axis has assumed ever greater importance. Moscow has been profoundly disappointed with what many Russian political elites see as the Obama administration’s fundamentally disingenuous “reset” of U.S. relations with Russia. Beijing, for its part, has been alienated by a series of U.S. military and political initiatives that, in the eyes of Chinese elites, are meant to contain China’s rise as a legitimately influential player in Asian affairs. In this context, the deepening of Sino-Russian energy ties has indeed buttressed closer cooperation against what both Moscow and Beijing view as a declining, yet dangerously flailing and over-reactive American hegemon. 

In Ukraine, Chaos Meets Self-Declared Independence

May 21, 2014

DONETSK, Ukraine (AP) -- The Donetsk People's Republic is starting to smell.

Rotting garbage is piling up in the hallways of the government office building seized by separatists in eastern Ukraine. Telephones ripped from the walls are piled atop broken furniture and mounds of old files. The stench of sweat and stale cigarettes is everywhere. The guards, slouching men with pistols shoved in their pockets or flapping loosely in holsters, look increasingly bored.

It's been six weeks since they took over the building, a week since they declared independence from Ukraine. But the authority of the alleged nation barely extends beyond their ten-story office tower and a few heavily armed checkpoints on roads leading into this industrial city 80 kilometers (50 miles) from the Russian border.

In the streets of Donetsk, the separatist leaders and their followers are increasingly derided as a collection of heavily armed, barely employed misfits. Outside of the rebels' headquarters, it can be difficult to find anyone who agrees with their calls to secede from Ukraine and link this part of the country - with its generations of ethnic and linguistic ties to Russia - to Moscow.

"All this shouting about us being a republic. What kind of a republic is this?" asked Leonid Krivonos, a 75-year-old retired miner, angry that the separatists are refusing to allow Ukraine's upcoming presidential election. "The young ones still have a future to look forward to, and they risk seeing that all destroyed."

The interim Ukrainian government hopes Sunday's presidential election will unite the country behind a new leader, but separatists across the east have vowed to block the vote.

Donetsk's separatist leader waves away any prospect of an election. After all, insists Denis Pushilin, chairman of the self-declared Supreme Council, Donetsk is not in Ukraine anymore.

"How can we hold an election of a neighboring country on our territory?" said the 32-year-old Pushilin, smiling in an interview in his tenth-floor office.

A few feet away, his bodyguard fell asleep in a desk chair, one hand clutching a holstered pistol.

If the tide of opinion has appeared to turn against the separatists recently - with Russian President Vladimir Putin supporting Ukraine's presidential election and billionaire industrialist Rinat Akhmetov calling on his 300,000 employees to stand up to the mutineers - Pushilin is unconcerned.

His movement's support is vast, he says, extending north from the Azov Sea for hundreds of miles (kilometers) in eastern Ukraine.

"It's people from different towns, from different political views, from different political organizations," he said.

His skin is pale from weeks spent living and working in the building. He is exhausted. But Pushilin has a talent for words. Until recently, he was a salesman for a pyramid scheme that attracted millions of Russians and Ukrainians ("Financial pyramids are not forbidden and are not illegal," he said, explaining his involvement). Talking points spill from him effortlessly.

Why the West Should Be Ashamed about Ukraine

May 22, 2014

Over the course of events that have transpired during the Ukraine crisis, there have been unwarranted provocations from Moscow, bouts of violence in eastern Ukraine, illegal referenda (and one annexation) and incessant finger pointing in all different directions. But one place at which everyone’s fingers should be pointed is Brussels.

Essentially, what the European Union has done is created a mess that it is unwilling to clean up. What’s worse is that it has not publicly owned up to its share of the fault (a large share at that) for the crisis in Ukraine and Putin’s adventurism. Much of the discussion on this topic has focused on the shortcomings of the Obama administration, punishing Putin, whether NATO expansionism led to where U.S.-Russian relations stand today, and so forth. While these are all valid sands in which to anchor debate, one topic that deserves more attention is the future of U.S.-European relations.

In terms of NATO, if Putin’s land grabbing were to continue or his attention were to turn towards Estonia or Lithuania, NATO would be obligated to get involved militarily. While it is unlikely that Putin is reckless enough to do anything forceful in these countries, the fact that it has even become a possibility is cause for concern. However, if the EU’s unwillingness to do more to punish Putin for perpetuating instability in Ukraine is indicative of how it would act if the situation in Ukraine or Eastern Europe became more dire, then Obama should think seriously about how closely the United States wants to remain aligned with Europe. In terms of NATO, Obama would need to think about how involved the United States should be in European security and defense. This is a European mess, started on Europe’s turf, by the EU.

Putin was right when he stated in his annexation speech that Crimea has historically and culturally been more aligned with Russia. He is right when he describes Ukrainians and Russians as brothers. Russia and Ukraine have histories that are deeply intertwined, dating back to thirteenth-century Kievan Rus’. Ukraine was in Russia’s sphere of influence for many, many years (debatably, it still is, to a certain extent). It is for these reasons that the EU should have expected pushback from Russia when it decided to pull Ukraine in the direction of Western Europe.

Regardless of a strong desire in western Ukraine to establish closer ties with the EU, the EU should not have tried to extend its influence into Ukraine. A Deutsche Welle survey showed a hefty percentage of Ukrainians were hesitant to sign an association agreement with the EU, and a large percentage also wanted to enter Putin’s customs union as well. As the unrest in eastern Ukraine has demonstrated, there are clearly many Ukrainians who did not want the EU association agreement to be signed.

How Japan and North Korea ‘Use’ Each Other

Both North Korean and Japan use each other primarily to posture towards third parties.
May 21, 2014

As Clint reported, the Japanese government announced on Monday that it will hold another round of talks with North Korea later this month. Back in March, Pyongyang and Tokyo held their first government-to-government talks in 16 months.

According to The Japan Times, Foreign Minister Fumio Kishida told reporters on Monday that Japanese and North Korean diplomats will meet in Stockholm on May 26-28 to discuss a wide range of issues, including North Korea’s past abductions of Japanese citizens and its nuclear and ballistic missile program.

The meeting is noteworthy, Clint rightly noted, mainly in that it is being held in Europe instead of Asia. The two sides usually hold their bilateral meetings in Asia, particularly China. The media reports gave no indication as to why the two sides decided to meet in Stockholm this time around but North Korea does maintain diplomatic relations with Sweden.

While it’s impossible to know with any degree of certainty, it’s possible that the decision to hold the talks in Europe rather than China was strategic in nature. One of the reasons that North Korea has mounted something of a charm offensive towards Japan in recent months is to help maximize the small degree of leverage the country holds over China. Beijing has noticeably strengthened its policy against North Korea under Xi Jinping, particularly regarding the country’s nuclear weapons program. Indeed, just this week Russia and China released a joint statement expressing common concern over North Korea’s nuclear program.

By reaching out to Japan at a time when the latter is embroiled in a bitter dispute with China, North Korea is seeking to demonstrate to its patron in Beijing that there are potential consequences for talking a harder line against Pyongyang. Japan too has an interest in demonstrating it can complicate China’s strategic calculus in any way possible, with North Korea being one such way.

Indeed, there is a long history of Japan and the Democratic People’s Republic of Korea (DPRK) using each other for other ends. Take South Korea, for example. Japan and the United States have sought to exploit the common threat North Korea poses to Tokyo, Seoul and Washington to improve relations between South Korea and Japan. Just this week the U.S. tabled another proposal for increased trilateral intelligence sharing regarding North Korea’s missile and nuclear programs. Such proposals have always failed to date, owing to deep mistrust between South Korea and Japan, but nonetheless Pyongyang remains a useful lever for Tokyo to use in trying to improve relations with Seoul without conceding on any of the historical issues.

For North Korea, Japan is first and foremost useful for domestic political purposes. Indeed, Japan’s colonialism is at the heart of the North Korean regime’s domestic legitimacy, as evidenced by—among other things—the fact that it appears in the preamble to the DPRK constitution. As an NK News analysis explains: “The resistance to Japanese aggression is a founding principle of the North Korean State and one of the primary characteristics of Kim Il Sung in the collective memory of North Koreans.”

Taiwan’s Nuclear Future and Authoritarian Past

The intense debate in Taiwan over nuclear power has echoes of a less democratic past.
By Brent Crane
May 21, 2014

Last August, chaos erupted in Taiwanese parliament. Opposing lawmakers thrust hard-clenched fists at one another while fervent activists tossed opened water-bottles from the stands like Molotov cocktails. Politicians and otherwise civilized men wrestled like teenage boys on the floor amid shouts, screams and camera flashes.

The Legislative Yuan had initially assembled to discuss the conditions of a national referendum deciding the fate of Taiwan’s fourth nuclear power plant in Gongliao, New Taipei City. The controversial plant, known ominously throughout the country as Nuke 4, remains a rallying cry for opponents of one of Taiwan’s most charged political subjects: nuclear power. The debate has been energized in recent weeks after former opposition party leader and staunch nuclear energy opponent Lin Yi-hsiung went on hunger-strike in protest of the government’s unwillingness to make concessions with Taiwan’s antinuclear lobby. On the surface, the conflict appears rather black-and-white: it’s the safety-conscious, environmentalists and academics versus the pragmatic economists and government bureaucrats. But the nuclear power debate in Taiwan is about much more than just safety and economics. It’s about reconciling Taiwan’s autocratic past with its democratic present.

Before beginning its transition to democracy in 1987, Taiwan was ruled under autocracy by the (since-reformed) Chinese Nationalists Party (KMT). Expelled from the Mainland following the Communists’ victory in the Chinese Civil War in 1949, the defeated Nationalists fled to Taiwan and established an extensive security state. The Marshal Law era (1949-1987) was a time of strict government censorship, domestic surveillance, unexplained arrests, torture, and executions. Most Taiwanese were not allowed to leave the country and the government went to great lengths to ensure that no one tried to swim across the strait to China. In true Orwellian style, anything that could float – bicycle tires, beach balls – had to be registered with the government.

In February 1947, with only a limited number of KMT troops on the island, what began as anti-government demonstrations quickly spiraled into a mass slaughter. In a matter of days, tens of thousands of civilians were left dead across the country at the hands of KMT security forces. The protests and the subsequent 228 Massacre, as it is now infamously known, prompted the KMT to enact tighter and more ruthless mechanisms of control upon the population in the years that followed. Just as the Communists on the Mainland were trying to purge the society of the bourgeoisie and “capitalist roaders,” so were the Nationalists fervently exposing and eliminating any perceived communist elements on the island. This nearly forty-year campaign is known today as the White Terror, and it, along with the 228 Massacre that preceded it, are critical to understanding the present Taiwanese political psyche.

Three Bishops' Secret Mission to Iran

A wager on peace or a fool's errand?
Maite Elorza

When representatives from the five permanent members of the U.N. Security Council plus Germany worked in Vienna to finalize a nuclear weapons agreement with Iran last week, they were probably unaware some Catholic bishops had a secret summit of their own with the Islamic Republic.

The four-day meeting in March led by Bishop Richard Pates of Des Moines was not made public until the same week the Vienna talks began. Pates said he, the retired archbishop of Washington Cardinal Theodore McCarrick, and auxiliary Bishop Denis Madden of Baltimore met in Qom with several prominent Islamic clerics to “promote understanding between the peoples of Iran and the United States.” Pope Francis didn’t send an envoy of his own to Qom (and likely declined to, if his relations with the Argentinian authorities are any indication). But Pates said the get-together was in line with the new pontiff’s view that “dialogue is the key to discovering truth and avoiding misunderstanding.”

If only the ayatollahs in Qom believed that. Among the clerics who participated in the summit was Ayatollah Morteza Moghtadaei, one of Supreme Leader Khamenei’s earliest and staunchest supporters. At the time of the meeting, Khamenei was holding (and continues to hold) Christian pastor Youcef Nadarkhani behind bars for his faith. Some days after the bishops left Qom, Khamenei publicly mused whether the Holocaust had happened. The bishops also met with Ayatollah Abdollah Javadi-Amoli who implored Americans in 2004 to “give up” the idea that Iran would cease nuclear production. “Don’t even think that Iran will relinquish scientific progress,” he said.

Lend Rouhani a Hand

As the hard-liners wage a media war against the reform government of Hassan Rouhani and his nascent nuclear deal, the West has to step up and show it means business.
MAY 21, 2014

Iranian President Hassan Rouhani is under fire from his right flank. Less than a year after the reform-minded Rouhani was elected, hard-line critics say that engagement in negotiations with the P5+1 over Iran's nuclear program puts the country in grave danger. The negotiating team is reading the "last rites for the Islamic Republic," one hard-liner said after a May 3 conference of Rouhani critics called "We Are Concerned."

That may be an exaggeration. The Rouhani government, with tentative backing from the powerful clergy, is making earnest efforts to reach an agreement over the future of Iran's nuclear program. But under pressure from political adversaries at home and influential quarters in the Middle East, Rouhani will need the West to cooperate too.

Hard-liners have transformed the negotiations into an excuse to weaken and possibly paralyze the Rouhani administration. They reject the "dishonorable" interim Geneva accord that freezes Iran's nuclear program in return for temporary, partial sanctions relief. They claim that Iran has made every concession, but received nothing in return, and that the most crippling economic sanctions are still in place -- and may not be lifted for years, even if a final agreement is reached. They also claim that the Rouhani administration has colluded with the West and has retreated significantly from Iran's defensible position of maintaining a meaningful nuclear enrichment program, but has received no concessions in exchange for its sacrifices.

While Rouhani's critics oppose the sanctions, they also refuse to make concessions that might get them lifted for good. The sanctions are not a response to Iran's nuclear program, they say, but an instrument to topple the Islamic Republic. They fear that even if Iran and the P5+1 (the five permanent members of the U.N. Security Council -- Britain, China, France, Russia, and the United States -- plus Germany) reach a comprehensive agreement, the sanctions may not be lifted.

The hard-liners declare that Iran's nuclear infrastructure is a national achievement and thus should not be given up or scaled back, and that Iran can resist the sanctions by resorting to what Supreme Leader Ayatollah Khamenei refers to as the "resistance economy" of self-sufficiency. Thus, the hard-liners reject any reduction in the number of centrifuges that Iran may have, oppose redesigning the new research reactor under construction in Arak to produce far less plutonium, and will not accept a complete halt to production of enriched uranium at 19.75 percent.

And the chorus of dissent within Iran is growing louder. In a May 21newspaper editorial, Kayhan, the mouthpiece of the hard-liners, declared that "all the concessions made to Iran in the Geneva accord were only promises" and that in return for Iran's "27 obligations" made to the P5+1, the West had committed itself to stop its efforts to halt the flow of Iran's oil exports. But, claimed the editorial, under U.S. pressure, Iran's oil exports greatly decreased in March and April. Moreover, Iran was to receive payments of $4.2 billion, but has received only $2.65 billion because, due to the sanctions on Iranian banks and financial institutions, the rest of the funds cannot be transferred to Iran. Japan has transferred what it owed Iran to banks in Oman and the United Arab Emirates, but the funds cannot be transferred to Tehran.