China’s spectacular growth over the 2000s has slowed since 2013. The driving force behind the country’s growth was investment, so the key to understanding the slowdown lies in understanding what sustained investment in the past. This column shows how a preferential credit policy promoting heavy industrialisation explains the trends and cycles in China’s macroeconomy over the past two decades. This policy was not without negative consequences, particularly in terms of the distortions it introduced for business finance. Going forward, China needs to focus on creating the right incentives for banks to make loans to small productive businesses.

By Chun Chang, Kaiji Chen, Daniel Waggoner and Tao Zha*

Growth has been the hallmark of China. In recent years, however, China’s GDP growth has slowed down considerably while countercyclical government policy has taken centre stage. Never has this change been truer than after the 2008 Global Crisis, when the government injected RMB4 trillion into investment to combat the sharp fall of output growth. Issues related to both the trend and cycle are now on the minds of policymakers and economists.

The key issue for China today is the slowdown of GDP growth since 2013 (e.g. Economist 2009, Wildau et al. 2009).  What causes such a growth slowdown?  The data indicate that much of the slowdown comes from a slowdown of investment, which has been the driving force of China’s growth since 1997. To understand why investment in China has recently slowed, we must understand what has sustained investment growth in the past.

Explaining China’s growth

Song et al. (2011) explain China’s spectacular growth trend in the 2000s.  They construct a model economy with heterogeneous firms that differ in both productivity and access to the credit market to explain the observed coexistence of sustained returns to capital and growing foreign surpluses in China for most of the 2000s. Their model replicates the observed disinvestment of state-owned enterprises (SOEs) in the labour-intensive sector as private-owned enterprises (POEs) accumulate capital in the same sector.  In this two-sector model, they characterise two transition stages. In the first stage, both SOEs and POEs coexist in the labour-intensive sector, while capital-intensive goods are produced exclusively by SOEs. In the second stage, SOEs disappear from the labour-intensive sector and POEs become the sole producers in that productive sector.  Song et al. (2011) present a persuasive story about resource reallocations between SOEs and POEs within the productive labour-intensive sector, which is identified as the source of total factor productivity (TFP) growth since the late 1990s.

Although discussions about SOEs versus POEs have dominated the literature on China, the SOE-POE classification does not help explain the rising investment rate, the decline of labour income share, or the weak or negative cyclical co-movement between investment and consumption or between investment and labour income.  Figure 1 displays the recent trend patterns in China – investment as a share of GDP has steadily increased, while household consumption as a share of GDP and the labour income (as well as household disposable income) as a share of total value added have steadily declined.

Figure 1. China’s trend patterns in the last two decadesAgainst a backdrop of these unbalanced trends is a stark picture of a structural break of the correlation between investment and consumption.  As shown in Figure 2, the strong positive correlation between investment and household consumption breaks down in the late 1990s, whether it is measured by annual growth rates or HP-filtered series.

Figure 2. Time series of correlations with the 10-year moving window.

According to Acemoglu and Guerrieri (2008), Fernald and Neiman (2011), and Chang and Hornstein (2015), a combination of two conditions may explain a rising investment rate and a declining share of labour income – the TFP in heavy industries must grow faster than in light industries, and the relative price of investment goods must decline.  For the Chinese economy, there is no evidence in support of these two conditions. In fact, since the late 1990s, the deepening of capital, not TFP growth, has become the major source of GDP growth in China.

Buera and Shin (2013) study the investment boom experienced by other fast growing economies (e.g. Korea, Taiwan, and Singapore).  In those economies, resources gradually move from unproductive firms to productive firms, so that the saving (investment) rate increases during the reallocation phase.  At the same time, the labour income share increased or remained stable during the investment boom period.  China is different. Much of the investment boom was at the cost of labour income growth and consumption growth.  Therefore, unless much of the investment income is channelled to households for their labour inputs, the investment boom is unsustainable in the long run.

Resource allocations

To address China’s key macroeconomic issues in one coherent and tractable framework, in a recent paper (Chun et al. 2015) we take a different perspective by shifting the emphasis to resource reallocations between the heavy and light sectors. The striking facts about both trends and cycles in China indicate that something fundamental has changed since the late 1990s. We argue that these changes began in March 1996, when the Eighth National People’s Congress passed a historic long-term plan to adjust the industrial structure for the next 15 years in favour of strengthening heavy industries.   Since March 1996, the government has been actively promoting so-called ‘heavy industries,’ which are largely composed of big, capital-intensive industries such as infrastructure, real estate, basic industries (metal products, autos, and high-tech machinery), and other heavy industries (petroleum and telecommunication). The promotion has been supported by medium- and long-term bank loans giving priority to the heavy sector. The other, more labour-intensive industries, or ‘light industries’, do not receive the same preferential treatment. Our approach is to build a two-sector model with a special emphasis on resource and credit reallocations between the heavy and light sectors and by introducing two new institutional ingredients into the model – a collateral constraint on producers in the heavy sector and a lending friction in the banking sector. With these new ingredients, the model can replicate both the trend patterns and the cyclical patterns displayed in Figures 1 and 2.

Problems with preferential policy

Our central policy message is that the spectacular economic growth in China is not an unalloyed progress as it begets the debt problem faced by the nation today.   We argue that preferential credit policy for promoting heavy industries accounts for the unusual cyclical patterns as well as the post-1990s economic transition represented by the persistently rising investment rate, the declining labour income share, and a growing foreign surplus.

Such a preferential policy, however, distorts business finance and entails negative consequences. Under the central government’s strategic plan of promoting heavy industries, local governments have made implicit guarantees of long-term bank loans to heavy industries, most of which are capital-intensive large firms and are less productive than the vibrant small businesses.  This is what we call ‘green banking.’ The result is fast growth, but the growth is unbalanced and at the cost of low consumption and low labour income.

The easy credit policy for promoting heavy industries crowds out short-term loans to productive small firms.  As a result, short-term loans are priced too high because they are not guaranteed by the government.  We call this short-term lending ‘yellow banking.’  Indeed, the Chinese data supports this crowding-out effect implied by the model.  Figure 3 shows that new medium-term and long-term loans move negatively with new short-term bank loans.  The average correlation between the two types of loans is -0.4.  This negative correlation is most conspicuous right after the 2008 financial crisis, when the government injected massive credits into medium- and long-term investment projects with a spike of new long-term loans to blunt the impact of the severe recession on the Chinese economy, while new short-term loans were left unchanged.  When this prodigious government credit expansion ceased in 2010, new short-term loans began to rise.

Figure 3. New bank loans to non-financial enterprises as a percent of GDP.

Going forward

Financial reforms in China should focus on ‘green banking’.  Only when the practice of green banking is properly reformed will commercial banks have incentives to make loans to small and productive businesses.  The stakes cannot be higher. The Eighteenth National People’s Congress, when discussing various policy goals in 2012, explicitly expressed concerns about low consumption growth and low labour share of income in China. In addition, a rapid ramping-up of China’s corporate debts and local government debts as a result of the preferential credit policy toward heavy industries has now reached a level that deems unsustainable.  Thus, China’s macroeconomy faces twin problems: (a) low consumption and income growth; and (b) overcapacity of heavy industries with rising debt risks.  How these problems are resolved might have profound policy implications.  Because both problems have stemmed from a preferential credit policy for promoting heavy industrialisation since the late 1990s, an effective policy would aim at reducing the preferential credit access given to large firms and especially those in heavy industries.   In short, financial reforms geared towards eliminating such a distortion would go a long way toward making both short-term and long-term loans function efficiently and put the economy on a more balanced path.

*About the authors:
Kaiji Chen, Assistant Professor of Economics, Emory University

Daniel Waggoner, Research economist and policy adviser, Federal Reserve Bank of Atlanta

Tao Zha, Samuel Candler Dobbs Professor of Economics, Emory University; Executive Director of the Center for Quantitative Economic Research, Federal Reserve Bank of Atlanta

References:
Acemoglu, D and V Guerrieri (2008) “Capital deepening and nonbalanced economic growth”, Journal of Political Economy, 116: 467–498.

Buera F J and Y Shin (2013) “Financial frictions and the persistence of history: A quantitative exploration”, Journal of Political Economy, 121: 221–272.

Chang, Y and A Hornstein (2015) “Transition dynamics in the neoclassical growth model: The case of South Korea,” The B.E. Journal of Macroeconomics, Forthcoming.

Chang, C, K Chen, D Waggoner, and T Zha (2015) “Trends and cycles in China’s macroeconomy,” 30th NBER Macroeconomics Annual, Forthcoming.

Fernald, J and B Neiman (2011) “Growth accounting with misallocation: Or, doing less with more in Singapore”, American Economic Journal: Macroeconomics, 3: 29–74.

Song, Z, K Storesletten, and F Zilibotti (2011) “Growing like China”, American Economic Review, 101: 196–233.

The Economist (2012) “Prudence without a purpose”, The Economist, 26 May.

Wildau, G, T Mitchell and J Anderlini (2009) “China growth lowest since 2009 as property and manufacturing drag”, Financial Times, 15 April.

By Scott N. Romaniuk and Marinko Bobić

US President Barack Obama recently (albeit allegedly) put an end to America’s foreign policy that had resisted external influence and interference in the Western Hemisphere. The Monroe Doctrine originally stated that efforts by foreign (European) states to colonize and become involved in states either in North or South America would ultimately be seen as aggressive acts. These conditions were articulated clearly and concisely by former president James Monroe in his seventh annual message delivered to Congress in December 1823.

Monroe declared, “we should consider any attempt on their part to extend their system to any portion of this hemisphere as dangerous to our peace and safety. With the existing colonies or dependencies of any European power we have not interfered and shall not interfere. But with the governments who have declared their independence and maintained it … we could not view any interposition for the purpose of oppressing them, or controlling in any other manner their destiny, by any European power in any other light than as the manifestation of an unfriendly disposition toward the United States.”

But the Monroe Doctrine cannot be generalized across all foreign actors. At times, US actions under the policy were heavily activist and excessively interventionist. Other times, they were responsive and defensive. It has always been a flexible renouncement of the Monroe Doctrine that has strangely escaped international attention. Those who have tended to the declaration, attached to the claim that the U.S. has put the days of meddling in the foreign affairs of states situated throughout the Western Hemisphere with impunity in the past, have demonstrated a profound degree of pessimism.

Keck wrote that, “the truth of the matter is that the Obama administration is almost certainly not disavowing the spirit of the Monroe Doctrine. If a country like Russia or especially China were to try and station large numbers of troops in Central America, it’d likely have to go through the US military first, as Moscow learned during the Cuban Missile Crisis.”

This historical deviation in US foreign policy should be contextualized in order to consider how the US might react in the face of real interference – in this case China. Why China? Over the past several years, much has been written on China’s (and the enigmatic private businessman Wang Jing who is providing $50 billion USD), efforts to build the second and largest interoceanic grand-canal project in Central America (only this canal will be in Nicaragua, not Panama). Thus, if ever there was a threat to the establishment and management of American hegemony in the Western Hemisphere, then China’s intervention in this region rightfully finds its place. It is not unlike British intervention in the final decade of the 19th century, when the British violated the principle of non-colonization. It also comes at a time when the relationship between the United States and China is not so smooth (at least on the surface this might appear to be the case).

With a preponderance to extending its influence beyond Asia, the Nicaragua canal, as with many projects currently being undertaken by China and others, is part-and-parcel of the so-called “return of geopolitics” and resurgence of geopolitical rivalry. There is value in questioning the strategic vision attached to the canal project in economic terms. Does it strengthen China’s economy? Or, does the canal project fill a dual role?

The project has questionable economic relevance due to the large investment. Toll charges would need to be set at competitive rates, but these might not be able to easily recover the investment, especially after social costs are taken into account. But, if it is expected to be completed by 2019, then the project overall has less than questionable significance in other areas. In other words, there is a very specific purpose for this canal. One of the major catches here, however, is whether its purpose is entrenched in the near future or if it is associated with a view 40-50 years into the future. Where is China looking?

If it were part of a “grand strategy,” it would be constructive to ask whether there is an assertive grand strategy at play or not. If so, does this project represent part of an assertive policy/strategy? Being able to locate this project in these terms is useful for seeing or putting together a more detailed map of Chinese strategy. Mixed signals have come to characterize China’s “unpredictable” foreign policy. Last year, Yinhong wrote about China’s President Xi Jinping, stating that he “frequently refers to the ‘Chinese Dream,’ or ‘the great resurgence of the Chinese nation.’ Coinciding with this, the People’s Liberation Army’s (PLA) goal to build up modernized forces has shifted to the simpler but more comprehensive and forceful aim of ‘being capable of fighting, and fighting victoriously.’”

China’s actions spurred ideas about “China’s Monroe Doctrine” with the establishment of the East China Sea Air Defense Identification Zone (ADIZ), which the US tested, and pushing for extensive “strategic space” around China, and other actions that have led to a the historical end of Japan’s security policies and the Japanese Prime Minister Shinzo Abe’s move to reinterpret and reform Japan’s constitution. Moreover, China has assumed a considerable role in ameliorating the economic situation in Russia brought on by post-Crimea annexation sanctions from the European Union (EU) and the US.

One aspect we can be sure of is that Beijing, in its foreign policy, places geopolitics at a very high level. Perhaps this is the result of China’s historical experience over previous decades, maybe even much longer. As such, China retains an intimate perception of itself as a political, economic, cultural, and military power well beyond its own borders. The idea is tantamount to present-day Russia and the way it sees what has been termed the “near abroad.” Yet, we don’t know if this is the limit of China’s historical experience, or at least in the sense that it may apply its experience to areas/regions beyond those in which it was involved. After all, Nicaragua has limited diplomatic relations with China, for it has recognized Taiwan’s independence.

East Asia is moving toward being part of a bipolar superpower system. Given this, it might not matter where China operated historically, in that where it did not operate won’t necessary constitute limits to its power projection. China has always been quite cautious when it comes to testing the “waters” and seeing the limits of its stride. There are some interesting relationships that should be underscored here when considering China’s grand strategy. One of them is this inclination to “test” others. It is certainly a “black box,” to use IR theoretical parlance.

If there is a grand strategy to be seen here, it is possibly creating as many, if not more, hindrances, to Chinese expansion of power abroad as it is prospects. Recently, Vietnam signed a decree that could lead to a military draft. Chinese naval movements have attracted the attention of Vietnam, Japan, the Philippines, and others in the region, which has resulted in the deployment of warships to disputed areas. We could be entering into a very long period of rivalry that becomes a “new normal” balance of military power and relations where China’s grand strategy becomes a little more than just an assertive foreign policy.

Managing choke points appears more significantly now than it did in the past. What appears to be an endless horizon of literature has appeared, offering analyses of the implications of losing control of some of these points due to issues like piracy, terrorism, insurgency, and lack of friends, partners, and allies, among other factors. Reducing distances and increasing the level of control that China could have over select choke points and access routes for vital commodities (like crude oil, particularly for China, the energy demands of which growing significantly and could double by 2035) figures prominently in its grand strategy. In addition, trade can be used as a springboard to further deepen relations between China and its distant partners.

An activist but far less assertive response by the United States to protect its interests in Central American would be to focus on the expansion of the Panama Canal as a response to China’s construction of a Nicaraguan canal. Financial support for such a response need not come from the US government. If US interests in an expansion of the Panama Canal are joined to economic, political, diplomatic, and military benefits, then there are numerous domestic sources of support.

Drawing information from “Defense Contract Trends: US Department of Defense [DoD] Contract Spending and the Supporting of the Industrial Base,” between 2001 and 2010, funds in USD obligated by the DoD to contract awards exceeded 100% with contract spending outpacing many other areas and US Army contract spending was steady each year after 1999.

The historical funding picture, as outlined by DoD can be interpreted in different ways. On one hand, it has remained steady, and one should take into account the commitment by Washington to spend on OCOs as operations in Afghanistan were slowly winding down. On the other hand, the US funding base has been stuck in a somewhat sedentary position with only moderate growth recorded over a periods of a few years. Moreover, the trajectory of DoD spending requires comparison with China’s spending.

Given the billions of US dollars in trade that takes place as a result of the Panama Canal, there is extensive interest in seeing expansion funded by the US government and many private companies, not only in the US, but further abroad that benefit from trade via the Panama Canal.

There is some work in differentiating between the US defending its position vis-a-vis the Monroe Doctrine and pursing its “Pivot to Asia” and what the Chinese have referred to as US intentions to “contain” China. With this, it is worth contemplating whether China’s intention is to challenge the U.S. and its Monroe Doctrine or reverse US efforts of Chinese containment. Has the Monroe Doctrine lost its original meaning? Even if it has, Obama’s decision to “open” Cuba is the beginning of creating more stable relations in Central and South America.

This point suggests the need for comparison between US economic initiatives and Chinese initiatives in the region. Which country is ahead of the other? Which country has great momentum in the region? Which country can see great long-term prospects for its economic initiatives? Strong criticism has been made against the move to “open” Cuba. What the US received in return is marginal at best, at least in the immediate period. However, the long-term effects could really be different. Normalizing relations with Cuba could take a tremendous amount of time with the market/economic benefits being heavily outweighed. Overall, China is pursuing a much smoother plan economically that has the potential for great payback far into the future – 25-50 years from now is where at least one of these countries is looking.

Yet, it appears as though a host of detractors, naturally, have put great effort into arguing that the move toward Cuba has amounted to very little and is even a difficult symbolic sale. This is something that other countries will certainly take notice of, and above all, relations between Cuba and neighboring countries are subject to change before relationships between the US and others in the region begin to noticeably improve.

Extensive investment in infrastructure with promises for more money to fund other projects has strengthened ties with some countries that maintain relations with China but have failed to move the relationship that others share with Taiwan. In this respect, China is poised to move on only a portion of the Caribbean Community (CARICOM) (now nearly half a century old) landscape.

But even with its activities in part of the region, there is a possibility of making its presence felt with “hard” power capabilities. This does not imply resorting to armed conflict, but there is a possibility that China would consider stationing military naval units at or near the Nicaragua canal with the aim of protecting its interests. This, however, should be discussed further but as a possibility in a specific context. One potential product of such an event is the arrival of other foreign naval units. Looking to the issues of drug trafficking and smuggling, these opportunities push us in a direction of considering the much larger and long-term effects of the movement of illicit goods and what it will take to police such challenges.

Russia, having a very close relationship with Nicaragua (Nicaragua having recognized Abkhazia and South Ossetia), has recently sent police to help Nicaragua with narcotics trafficking. It has also sent two ships that have taken part in anti-narcotics exercises in concert with the Nicaraguan and Honduras navies. Moscow dispatched its Vishnya-class intelligence ship, the Viktor Leonov as well as the Nikolay Chiker support ship to take part in the drills.

Each state’s intentions to deploy warships to the Caribbean require consideration amid their specific geopolitical interests. For example, Russia’s deployment of two ships may not be a direct result of the Nicaraguan canal, but rather it could be based on Moscow’s need to strategically place ships at various points around the world if it’s to effectively build on its plans for expanding its current influence.

The UK reported the use of military assets in the Caribbean to interdict drug trafficking in 2014 (although this has taken place at other times). HMS Argyll helped to intercept 850kg of cocaine (estimated worth of 36M GBP). HMS Argyll seized around 1,600 kilograms (estimated worth of 68M GBP). Still, the canal has not been the major attraction. Instead, drug trafficking and disaster relief (for Bermuda) have been the primary reasons for the warship’s presence in the Caribbean, or at least these are the more “official” justifications. The comparison is productive for understanding a network of interests, but also for illustrating a difference in firepower and capabilities of each state.

Through financing alone, a “Chinese canal” in the Western Hemisphere has directly challenged US pre-eminence in the region. The Nicaraguan government has granted China 50 to 100-years’ control of the canal. To protect its interests and this bold challenge and to facilitate its future interests in strategic primacy, China may step a bit further and build facilities to permanently host the Chinese navy, including warships, which are able to move freely into the Caribbean and Atlantic.

China’s navy is making increasing visits and forging a permanent presence in the Indian Ocean. They can do the same in the Caribbean and the Atlantic if they choose to do. This is a nuclear-powered People’s Liberation Army Navy (PLAN) and boasts naval build-up as well as a network of naval stations. In 2014, impressive pictures were taken of China’s first carrier battle group with China’s aircraft carrier Liaoning and numerous warships at sea.

China’s growing pains, despite this, are inescapable. PLAN is showing its relative inexperience on the ocean. The incident between the US cruiser and the Chinese carrier battle group in 2014 is demonstrative of this. PLAN has to show that it knows how to operate in the “global commons,” and operating at any given point is going to bring pressure from other countries that have expectations about China’s conduct within the “global commons. China should find this challenging testing ground for its freedom to maneuver as will other states observing or finding PLAN operating in their exclusive economics zones (EEZs).

Beijing is creating a problem for itself with regards its navy operating further away from China. As Beijing restricts other countries from operating in its own EEZs, it will have to face-up to the reality that it will be blocked from entering others’ with its warships if it stations them abroad.

States need to protect their interests. The use of force or threatening the use of force is a natural compliment to states’ foreign policies. Military presence is also a vital component in assuaging the influence of another state’s power in any particular region. China’s economics interests in the Strait of Malacca were accompanied by military presence in order to maintain a safe and uninterrupted flow of commerce in the form of petroleum. China cannot rely on another state to do so.

Projecting naval power effectively is vital. What does it mean to “project naval power effectively?” Would it be naval power operating far from China or would it be operating from bases in Central America, which allows PLAN to exist and operated “effectively” so far from Beijing?

That China is interested in developing its navy further cannot be denied. Its current military warship additions illustrate this very well and its pursuing additions to its navy that not only allow it to match states operating larger warships around China but also to surpass them and for China to become one of the leaders of the region. There is still a long way for China to go.

Recently China has publicized its plans to grow its navy by 351 warships. Its goal here is to outnumber the US navy by 2020. Whether it plans to deploy ships to regions around China or use these to expand its presence elsewhere, like Central America, is unclear. Certainly, it would be logical that these ships are intended to rival the US, and that means bringing them beyond the waters of China’s EEZs. The 2014 US-China Economic and Security Review Commission recommended to US Congress that the US navy should implement its own response in the form of building more ships to increase its presence in the Pacific “region.” If we were to calculate which regions these include, predominantly they would be the south and eastern Pacific.

Regarding the changes in China’s blue-water navy, turning to the scale of the navy (size) and the quality of its missions (territory navigated) is necessary. These compliment one another and expanding on one gives the impression of being a strategic disconnect. In 2014, PLAN navigated waters that it had never before (Sunda Strait) between the Indonesian islands of Java and Sumatra. PLAN is also modernizing. If China were to tie this into the idea of stationing a battlegroup in Central America, are these elements dependent on one another?

The U.S. is projected to increase its navy by 67 ships and undertake a rebalancing of its homeports. This raises an interesting question about China’s homeports and its ability to sustain an increase in its warships. There is interest in basing as much as 60% of the US force in the Pacific region. Another major question is whether the US has the resources to keep pace or stay ahead of China’s navy expansion plans.

Washington needs to understand the mechanisms behind any decision by Beijing to station warships or establish a naval base in the region. What are the added resources that are necessary for this type of initiative? This would be a major and very bold move by China and cannot simply be cast aside as symbolic. There are tactical and strategic implications that go beyond a military realm. A naval base can be established with a relatively small investment. The British have proved this with the establishment of a naval base in Bahrain – this is a 15M GBP investment.

Basing rights could come into play with China building a naval base in what many consider an “unstable” Nicaragua; but given the corrupt nature of the Nicaraguan government and the lack of transparency on both sides, a rather quick outcome could be seen. China invests heavily (in fact it is the heaviest investor in Burma) in regions that are considered “unstable” and are managed by fragile governments with many enemies even within the state. Burma is the site of ongoing internal warfare. Britain’s inexpensive but permanent military base is located in a country that ranked “moderate” on the Center for Systemic Peace global state fragility index.

This is a cost-effective means of establishing a presence (if even a small and remote one) in the area. China, since 2014, has pursued plans to build 18 naval bases in a variety of locations in the Indian Ocean, one being as far as Madagascar. Others include Yemen, Mozambique, Tanzania, and Pakistan. The construction of these would mean an incredible expansion of Chinese military presence.

Recently China has publicized its plans to grow its navy by 351 warships. Its goal is to outnumber the US navy by 2020. China has been identified now as a world-class military builder and not just a builder of commercial ships. But it should be noted that rapid expansion is not what China’s industry is prepared for in terms of PLAN. For now, it appears as though it is prepared for modernizing and replacing existing ships, though it will certainly be able to add to its current fleets.

Beijing could move warships to support future disaster relief operations or to support aid ships. Such moves could legitimize a (growing) presence of non-military and military ocean traffic around Nicaragua. Warships of Iran’s 34th Fleet, in the Gulf of Aden, was tasked with the special responsibility of protecting humanitarian aid ships in March 2015. Washington referred to the movement of its warships as provocative actions.

Unlike Tehran, Beijing has shown much more caution and has been quick to restrain itself in the interest of maintaining relations with Washington than Tehran has shown. Beijing could be expected to show a great deal more caution while calculating the benefits of sending some of its most powerful ships, including nuclear submarines.

Despite the possible courses of action, China has a lot of unfriendly states to maintain relations with in the Pacific, South Pacific, as well as the Indian Ocean. This fact alone grants leverage to the idea that China is looking to extend its reach to Central America even if Beijing is not yet ready or able to commit a significant amount of its resources to maintaining a presence of its warships in the area. Its aircraft carrier Liaoning, is unlikely to be of much operational use anytime soon.

The oil fields in the ocean around Vietnam have attracted a great deal of attention including live-fire exercises by Vietnamese warships. The Japanese are increasing their determination to protect the Senkaku Islands. China will find many pockets of growing pressure to contend with. It does not enjoy the “expand outward” position of the U.S. and it could find new pockets of hostility in overextended locales by states that would prefer to welcome a resurgence of the US’ historical Monroe Doctrine.

This article was published by Geopolitical Monitor.com and reprinted with permission.

The US last weekend conducted its first drone strike missions out of Turkey, the Pentagon said Monday, and plans to conduct manned aircraft flights from Incirlik Air Base.

No airstrikes have been conducted yet, the Associated Press reported. The base will service to also conduct search and rescue operations along with military operations, Capt. Jeff Davis said.

The use of the base comes as the US expands its mission in Syria, providing rebels with air cover to defend the groups from al-Qaeda-affiliated al-Nusra Front. It’s the first time the US has conducted airstrikes against anyone other than Daesh (ISIS) in Syria, Davis said.

Original article

By Sandip Kumar Mishra*

The US President Barack Obama announced his new strategy for the Asia-Pacific – ‘pivot to Asia’ – in 2011. It was also called ‘strategic rebalancing’ which emphasised that the US was ‘here to stay’ to and it would re-inject fresh energy into its security and economic presence in the region. The US appeared to contest the growing influence of China by revitalising its partnerships with its old allies in the region and also reach out to other like-minded countries for their support for US initiatives.

In the subsequent year, the US tried to reinvigorate its alliances with Japan, South Korea, Philippines, and Australia, and tried to reach out to countries like India to have a larger and effective grouping to support US positions in regional politics. Even in the economic arena, an ambitious project in the form of the Trans-Pacific Partnership (TPP) was given more importance. As mentioned earlier, the US ‘pivot to Asia’ was less a strategic balancing and more a counter-measure to China’s growing political and military might, and a last attempt to maintain the US position as the prime mover in the Asia-Pacific. However, it might be said that the US re-entry has not been impressive because of the lack of intensity as well as many internal rifts between the US allies such as mistrust between Japan and South Korea, lack of consensus among other countries of the Asia-Pacific such as India and ASEAN countries on the US move, and more than anything else, decline in US capacity. It has led to the ‘pivot’ being less appealing in subsequent years. A meeting is Hawaii a few days ago to chart the course of the TPP was not able to make any clear headway – it seems it will take more time to realise the TPP on the ground. It may be contrasted with the Chinese project of the Asia Infrastructure Investment Bank (AIIB), which has been successfully launched with wide participation by the countries of the region, including South Korea.

There is another unsaid but equally if not more significant ‘pivot to Asia’, which has been gradually but very decisively taking more space in the political and economic landscape of the Asia-Pacific: China’s ‘pivot to Asia’. China’s growing influence in the region is undisputable, especially in the economic sphere. China has emerged as the Asia-Pacific hub, being the number one trading partner of almost all the countries. With the successful launch of the AIIB and One-Belt One-Road (OBOR) initiative, China has almost become a pivot of the entire region in the economic sphere. In security affairs also, undeterred by US moves, China has become more assertive and has been making its intent and design more open. It has deliberately discarded its old policy of ‘hide your capabilities’ and asserted its foreign policy goals. It has made it clear that it would not accept any code of conduct for the South China Sea and in 2013 declared an Air Defense Identification Zone (ADIZ) in the East China Sea. China probably wants to make its claim for the ‘pivot’ known and open at this point of time, though not it might not be eager to execute them immediately.

Japan, under the current Prime Minister Shinzo Abe, has also its own ‘pivot to Asia’ intent. An important shift in Japan’s approach in recent years has been an aggressive policy to erode its peaceful constitution and unlock all the restrictions on Japan’s military role in regional politics. By citing China’s growing assertiveness and the need for an Asia-Pacific response, Japan has been able to convince the US that a changed Japanese posture is a much needed stance. Japan is aware that the neighbouring countries would not be happy with this attempt to become a ‘pivot’ to Asia and has thus been trying to reach out other, distant countries in Asia, including India, to garner support.

In the past one and half years, more specifically after the Ukraine crisis, Russia has also been trying to engage more with Asia. At this point in time, Russia has neither capacity nor intent to become a regional pivot in the security sphere, though it has been trying to be a player, at least, in East Asia via its cooperation and connections with North Korea. Moscow has signed a nuclear agreement with India and has been strengthening its relationship with China. Russia’s renewed interests in Japan, Thailand, Malaysia, and Vietnam are also reported to be part of its agenda to build a Russia’s ‘pivot to Asia’. Russia is more interested in the economic landscape of the region, and in April 2014, Moscow announced a special economic zone in Vladivostok to reach out to Asia-pacific countries.

Few other ‘pivots’ such as ASEAN’s as a collective entity, which tries to offer a ASEAN way in regional politics, as well as India’s growing regional interests, could also be cited as important variables that are going to shape the future of the region. However, they are nascent and less influential at this point of time.

Amidst all the ‘pivots to Asia’, the region has become an arena of contest between the various players of ‘pivot politics’. A multiplicity of ‘pivots’ means that there is no one who has substantial influence over the regional security and economic dynamics, leading to complex scenarios. It has resulted in less predictability and more instability in the region. The interplay of these ‘pivots’ – their contest as well alliances – is going to shape the future of regional political and economics, and must be keenly observed.

*Sandip Kumar Mishra
Assistant Professor, Department of East Asian Studies, Delhi University

By Monish Tourangbam*

In the United States of America, one sees a highly developed country and at the same time, a deeply and widely religious country. This reality in many ways defines the lives of many Americans, who are church goers and look towards a religious identification in their private as well as public lives. This in turn to a large extent explains the impact that religious affiliation has on how Americans vote during the Presidential elections. The very genesis of the first colonies in the eastern seaboard of the United States cannot be devoid from the religious aspirations of the people who desired to practice Christianity their way. The iconic attachment to the ‘Mayflower Pilgrims’, the symbolisms of the ‘city upon the hill’ or the ‘Manifest Destiny’ have shown the acute identification of religious signposts to the course of the American nation. Moreover, the separation of the state and the church in the US constitution and the waves of immigration led to a rainbow of citizens following different religions. More significantly, it also allowed a number of denominations to emerge within protestant Christianity. A pattern has been discovered in the voting patterns of the major sects of the Christians in the United States that impact the results of the presidential elections.

Religious interpretations of social issues particularly have in many ways influenced how campaigns are run and how voters are either enticed or repulsed. One of the most memorable and significant questions raised on a presidential candidate because of his religion was during the campaign of President John F Kennedy (the only Catholic elected US president) who had to passionately emphasize his American-ness to a group of protestant ministers at the Greater Houston Ministerial Association on 12 September 1960. Kennedy emphatically said, “…contrary to common newspaper usage, I am not the Catholic candidate for president. I am the Democratic Party’s candidate for president, who happens also to be a Catholic.”

Fast forward to June 2015, at the premier gathering of Christian activists, the annual conference of the Faith and Freedom Council in Washington D.C., Republican presidential contenders were seen stressing the importance of Christian values in their private and public lives. They espoused the idea that people who were attached to faith made public policies that were attuned to what the people of the country largely believed, more particularly on social issues such as abortion rights.”My faith has guided me for my entire life, and I don’t suspect that’s going to change,”said former Texas Governor Rick Perry. Presidential hopeful and former Florida Governor Jeb Bush called his Catholic faith “an organizing part of my architecture, if you will, as a person and certainly as an elected official.”

Conferences of this kind are reflective of the influence that the evangelical wing of the Republican Party wields during primaries as well. According to exits polls taken during the 2014 midterm elections, 4 in 10 Republican voters were found to be white evangelical Christians, with nearly half attending religious services weekly.

Among Democrats, a third was found attending services weekly and 11 percent were white born-again Christians. The Faith and Freedom Council was founded in 2009 by Ralph Reed (came to prominence in 1990s with the Christian coalition) who, in his own words, began assembling the “largest-ever database of reliably conservative religious voters.”

Reed believes in micro-targeting religious voters, through phone calls, emails, text messages and volunteer visits. Besides identifying potential targets (religious voters) for micro-targeting, the council also engages in looking for those who have never registered to vote. Evangelicals are seen as a crucial voting constituency in the US presidential elections and Reed is often credited as helping George W. Bush win re-election in 2004, by ensuring evangelical turnouts. The National Election Pool exit poll recorded 78% of the vote among white evangelicals having gone to Bush in 2004. Reed speaking of the mid-term election results in 2014 stated that Conservative voters of faith were the largest constituency in the electorate in 2014. “….Religious conservative voters and the issues they care about are here to stay. They will be equally vital in 2016. Politicians of both parties ignore this constituency at their peril,” he contended.

The rise of Christian political activists like Ferry Falwell and Pat Robertson in the 1980s made a substantial dent in the prominence of evangelicals in the voting patterns of America. President Ronald Reagan was associated with religious conservatives and his national popularity paved the way for increased conservatives’ participation in the socio-political milieu of the United States. Falwell proclaimed, “God is calling millions of Americans in the so-often silent majority to join in the moral majority crusade to turn America around.”More importantly, Falwell was instrumental in building coalitions with Jews, Roman Catholics and Mormons. Pat Roberson, who belonged to a political family, unsuccessfully ran to become the Republican Party’s nominee for the Presidential elections in 1988. However, his candidacy significantly encouraged evangelicals to switch their party registration from Democrat to Republican in order to vote for him and is often seen as the forerunner of evangelical-fueled candidacies in the Republican Party.

According to a Gallup poll, very religious Americans today tend to identify more with or lean towards the Republican Party than with the Democratic Party, with those who are moderately or nonreligious more likely to do otherwise. Though this relationship between religiosity and party identification is seen to be largely applicable to most demographic groups, African Americans tend to lean towards the Democratic Party, and the political orientation of very religious and nonreligious among them do not vary significantly. Though Hispanics and Asian Americans tend to identify with or lean more towards the Democratic Party, this “preference is significantly less pronounced among very religious Hispanics and Asians than among the others.”

Another survey by the Pew Research Center has pointed to the growing number of adults, across regions and demographics, in the US population who do not identify with any organized religion. Although from a very low base, a growth has been registered in non-Christian religions, especially among Muslims and Hindus. Simultaneously, a drop has been seen in the Christian share of the population in recent times, owing largely to declines among mainline Protestants and Catholics. As a result, concerns have been expressed that this scenario could impact the conservatives’ vote share in the country, hence affecting the support base for the Republican Party.

However, Ralph Reed of the Freedom and Faith Council discount this fear, arguing that those who do not identify with any religion, or the ‘nones’ as they are called, do not “gather in a single place weekly as evangelicals and Catholics do at church.” “?it is a lot easier to organize people who hold to what they believe is a transcendent and eternal truth than it is to organize people who don’t believe in anything, or much of anything,” Reed said.

The publicness and privateness of the Christian faith in American lives have been a constant discourse at the local and national levels. Viewpoints might differ regarding the extent to which faith affects voting patterns in America. Nevertheless, regular churchgoers seem more inclined towards developing a group mentality that shape their views towards issues, and hence determine their party and candidate preferences. The US constitution builds a wall of separation between the church and the state, interpreted as prohibiting the state from meddling into the affairs of the church and vice versa. However, this constitutional provision cannot negate the church’s influence in impacting who gets elected.

*The writer is Assistant Professor at the Department of Geopolitics and International Relations, Manipal University

By R. Upadhyay

The month of Ramzan has just ended and so has the Iftar war among various political leaders. It will come again and again each year and the political parties will continue to misuse this religious occasion not only for achieving some political mileage but also as a platform for re-grouping of political parties around the dining table against their political opponents. When are we going to grow up?

Iftar is a spiritual journey:

Although, the political leaders never claim any politics in the Iftar being hosted by them, the TV debate and the discussion in political circles on efforts for re-grouping of opposition parties in the lavish Iftar party hosted by Congress President Sonia Gandhi and absence of the Prime Minister in the Iftar hosted by the President remained a talking point among the people

Fasting from sun-rise to sun-set in the month of Ramzan followed by Iftar, the breaking-fast observance is not only a month-long exercise to abstain from food and drink for the whole day but is also a spiritual journey that requires abandoning ill-will, ill-talk, backbiting, slander, senseless arguments and other vices that could create obstruction in the way of self-purification and realisation of the concept of integral humanism and human transformation.

Like prayer it also symbolises the personal relationship of the devout Muslims with the Supreme to achieve the divine connect but ironically, time and again this pious occasion has been misused and politicised in India. The occasion could have been used as a platform for the interfaith spiritual dialogue among the participants of different faiths as the God known as the source that creates and retains all that exists in this universe belongs to everyone. Ramzan and Iftar will come and go but its achievement lies in evolving a sense of shared destiny for creating a cohesive society and closing the gap of hatred and mistrust between the fellow humans. It is however, amazing that even the devout Muslim intellectuals do not protest against its politicisation particularly when it is against the spiritual spirit of Islam.

Iftar Party and its Politicisation condemned by Islamic luminaries

The rationale behind organising such religious celebrations may be a debatable issue, but one fails to understand as to how such religious functions could be officially fitted into the ‘secular’ frame of Indian politicians. I do not know the exact stand of Islamic scriptures about the political Iftar hosted by ‘non-believers’ to the ‘believers’ but many prominent Muslim clergies and scholars have denounced such Iftar parties as ‘Un-Islamic’ and termed it a political gimmickry. Some from the community had even called these gala parties with all the glitz hosted by non-believing politicians of eminence,- a farce.

Many Muslim organisations, prominent Imams of the country and even members of All India Muslim Personal Law Board give their time to time statements against it and argue that “Ramdan was meant for prayers, piety and penance and not for socialising and politics”.

Mufti Mukkarram Ahmed, Shahi Imam of Fatehpuri Masjid, Delhi, who is a well respected Muslim cleric ridiculed such behaviour of the political leaders. His guidance on Iftar may be an eye opener for Indian Muslims as well as the ‘secularists’. He was quoted in Times of India in its issue dated December 9, 2001 that such Iftars are political ‘nautankis’ (drama). He said, “I avoid going for these political ‘nautankis’, but if I must, I carry my khazoor (dates) to break my fast because you can never be sure of the source of income of these lavish parties that politicians throw and Islam says that what you eat for Iftar must be from halal kamai (honest income)”.

Similarly, the late Shahi Imam Abdullah Bukhari of Jama Masjid, Dehi during one of his sermons after Friday prayer had denounced the Iftar parties hosted by politicians as “Islamic Tamasha”. His son Ahmad Bukhari, the then Naib Imam and presently the Shahi Imam also repeated his father’s remarks saying – “The Ramzan parties hosted by politicians have become a political tamasha. And it hurts our religious sentiments”.

They were of the view:

“First, convene a meeting of top Muslim clergymen to finalise an action plan, possibly to issue a fatwa to direct all Muslim politicians to stop giving iftar parties. Secondly, petition the Supreme Court to ban all iftar parties hosted by political leaders. Maulana Ikramul Haque, the Pesh-e- Imam of Patna’s Jama Masjid had even issued a fatwa to all Muslim leaders who attended Bihar Chief Minister Laloo Prasad Yadav’s iftar party to observe one day’s roza (fast) after Eid as punishment. ( http://www.rediff.com/news/feb/08iftar.htm).

In the year 2009, Darul Uloom Nadwatul Ulema had issued a fatwa stating that holding of Iftar by political parties had no religious sanctity.(http://indiaopines.com/political-twist-iftar)

Despite the stand of respected Islamic clergies, major political players in the country have made it a practice to organise Iftar party during the month of Ramzan and extend invitations to a cross section of political leaders as well as media men. Even the atheist political luminaries are found present on this religious celebration. Many non-Muslim hosts as well as political invitees with a view to prove their secular credentials even wear the skull cap generally donned by the Muslims on this occasion despite the fact that some Muslim participants don’t feel it necessary to wear it. Two prominent Muslims namely Vice-President Hamid Ansari and Delhi Lieutenant Governor Najeeb Jung didn’t don the cap in the Iftar Party hosted by Arvind Kejariwal, the Chief Minister of Delhi.

Conclusion

For over six decades, the country is witnessing this political gimmickry. In fact the custom of political Iftar in post Independent India was initially started by the first Prime Minister Jawaharlal Nehru with a gathering of prominent Muslim politicians. He continued this party till he was alive but the practice was stopped by his successor Lal Bahadur Shastri. It was however, re-started by senior Janata Party leader Chandrashekhar when the party came to power in 1977. Indira Gandhi too revived the tradition of her father when she returned to power in 1980.

Politicisation of the Islamic ritual of Iftar hosted by the political parties at the cost of public money is a unique phenomenon in secular India where this solemn religious observance is misused and mixed with politics by the incorrigible politicians who leave no stone unturned to turn this event into an opportunity to gain some political advantage. In fact to me, it looks that the political parties have used secularism only as a political slogan and gradually turned the religion relevant to state affairs to have multi-dimensional interpretation of this term for their political gains.

In the name of secularism , it is a pity that people are continuing to be fooled by Iftar parties and the like.

By Tushar Ranjan Mohanty*

On July 29, 2015, eight death row prisoners were executed in Pakistan’s Punjab Province. Three prisoners, identified as Muhammad Safdar, Aftab and his father, were hanged at Attock District Jail. Aftab and his father Usman had killed a man in 1998 over a monetary dispute. Muhammad Safdar had murdered two people over a ‘petty issue’ in 2003. Another convicted prisoner, Muhammad Tufail was hanged till death in Kasur District Jail. Tufail was hanged for killing a man and his son in 2001. Separately, another convict, Mohammad Nawaz was hanged till death in Sargodha District Jail for killing his relative over a land dispute in 2002. In Multan District Jail, death row prisoner Nayyar Abbas was hanged for killing a man in 1996. Another prisoner, Gulfam alias Gullu, was hanged till death in Gujrat District Jail for killing a man in 2001. Ahmed Din was hanged at the Jhang District Jail for killing Shireen Khan in a land dispute in April 2001.

Earlier, on July 27, 2015, two death row prisoners, Farooq Babar and Karim Nawaz, were hanged till death in Multan Central Jail. Babar had been found guilty of killing a man in 1998 after the deceased had failed to return an amount of borrowed money, while Nawaz, was convicted of murdering a man on 1999 over an old feud.

Prior to that, eight more death row prisoners were hanged in different prisons of Punjab on June 16, 2015, in spite of Federal Government’s one month moratorium on executions during Ramazan (Islamic month of fasting). A notification was issued on June 12, 2015, by the Federal Ministry of Interior and Provincial Governments had also been requested to comply with the order.

According to partial data compiled by The Express Tribune, at least 195 convicts were hanged till death across Pakistan since December 17, 2014.

Ironically, the Pakistan Government had lifted a seven-year moratorium on executions on December 17, 2014, in response to the Tehreek-e-Taliban Pakistan (TTP) attack on Army Public School (APS) in Peshawar, the provincial capital of Khyber Pakhtunkhwa (KP), on December 16, 2014, in which 148 persons, including 135 children were killed. The resumption of executions was justified as a necessary measure to deal with terrorism. While lifting the moratorium, the Federal Minister of Defence Khwaja Asif stated, on December 19, 2014, that the Government had consciously decided to lift the moratorium on capital punishment and that carrying out of death penalty against terrorists would begin soon. He asserted, further, “There will be no discrimination in carrying out convictions of terrorists who have been sentenced to death and whose appeals have been rejected,” and that the process of establishing military courts for the purpose of trying terror suspects was already underway.

Of the 195 persons hanged since December 17, 2014, just 23 were involved in acts of terrorism. Moreover, even between December 17 and March 9, 2015, when executions were limited to terrorism offences only, of the 24 persons hanged, only eight were involved in acts of terror. Significantly, it was on March 10, 2015, that the Government decided to implement the death penalty in all cases.

In the interim, and despite objections from the Judiciary, opposition political parties and civil society, the Government went ahead with the establishment of military courts. The Army set up nine courts — three each in KP and Punjab, two in Sindh and one in Balochistan. According to Prime Minister Nawaz Sharif’s special assistant for law, Ashtar Ausaf Ali, about 100 cases have gone to military courts and 27 judgments have been pronounced. The case files are ‘secret’ and it is not known how many of these judgments have awarded the death sentence, and to how many people. However, on April 2, 2015, military courts across the country on April 2, 2015, announced the award of the death sentences to six persons on terror charges. On April 15, 2015, the Supreme Court stayed the execution of these six terrorists, and the stay currently continues.

According to Ministries of Interior and Law and Justice and Human Rights officials, as on December 17, 2014, there were around 8,261 prisoners on death row in more than five dozen jails of the country. Of these, more than 6,770 were in various jails of Punjab. An unnamed senior official of Ministry of Interior disclosed that though it was difficult to put a precise number on how many prisoners were convicted for terrorism related offenses, estimates put roughly 30 per cent in this category.

During the hearing on the 21st Constitutional Amendment, which is intended to vest jurisdictional power in the Army for the establishment and operation of the military courts, Justice Asif Saeed Khan Khosa of the Supreme Court questioned, on June 23, 2015, whether the Army should be given a free hand to do everything in the name of ‘defence of Pakistan’. During the hearing he demanded, “Tell the court how many challans have been submitted in the anti-terrorism courts (ATCs) and the situation of trial and why the prosecution failed to proceed in terrorist cases.” Replying to the query, Attorney General for Pakistan (AGP) Salman Aslam Butt informed the court that, in 2014, 85 per cent of cases were outstanding in regular anti-terrorism courts (ATCs), but didn’t give the reasons as to why so many cases were pending. Parliament passed the 21st Constitutional Amendment and the Army Act to pave the way for the establishment of military courts for a period of two years.

Sarah Belal, head of Justice Project Pakistan (JPP), a human rights organisation that launched the report “Terror on Death Row” on December 18, 2015, lamented, “Lifting the moratorium is a knee-jerk reaction. Our research shows that the government is clueless on who is an actual terrorist on death row and who isn’t. Keeping that in mind, we’re going to see some gross violations of rights.” According to the report, 80 per cent of those on death row have not committed acts of terror, but were wrongly convicted. “They have the wrong people and terrorists roam free”, Belal added.

The problem is compounded further by the fact that several terrorist organizations in Pakistan continue to enjoy state support, creating systemic biases against a non-discriminatory policy of executing terrorists on death row. In a recent assertion, the Federal Minister for Interior Chaudhary Nisar Ali Khan defended the terrorist Jamat-ud-Da’wah (JuD) on the floor of the Senate (Upper House of Parliament), arguing that it was involved in ‘charitable works’. On July 7, 2015, he argued, “Presently, JuD is engaged in charity and social work, operating hospitals, clinics, schools, ambulance service and religious institutions.” He went on to add that that the United Nations High Commissioner for Refugees (UNHCR) had listed JuD as a resurrection of LeT, but no ‘supporting evidence’ was shared with Pakistan to establish such a connection. The JuD, a front of Lashkar-e-Toiba (LeT), is led by Hafiz Mohammad Saeed, the mastermind of the November 26, 2008 (26/11) Mumbai (India) terror attacks, and the US has declared a reward of USD 10 million against him.

Though the Government and the all powerful military in Pakistan remain in denial, the Supreme Court, on July 2, 2015, asked the Attorney General of Pakistan (AGP) why no action was being taken against terrorist organisations. Justice Jawwad S. Khawaja remarked,

You have an action plan [National Action Plan (NAP)], then why it is not being implemented? Why terrorist organisations are overlooked by them? Action should be taken against them as well. Governments should do their job. The Court will issue no directive. No one can heave a sigh of relief. Every day a terror incident is published in newspapers. This is the level of seriousness of governments that terror incidents are taking place every day. Tell us, what the government has done within six months and six days (sic).

A ‘20-point Plan’ on counter-terrorism was announced by Prime Minister Sharif in a televised address to the nation in the night of December 24, 2014. NAP was another element incorporated in the Constitution by the 21st Constitutional Amendment on January 7, 2015.

Expectedly, a handout has been issued by the Federal Ministry of Interior on July 4, 2015, to counter the Supreme Court. According to the handout, some 54,376 combing operations have been carried out under NAP, which came into effect on January 7, 2015, resulting in 60,420 arrests. Under NAP 3,019 intelligence-based operations were carried out while 1,388 pieces of intelligence were shared. Some 97.9 million mobile SIM cards have been verified using bio-metric technology, while 5.1 million SIM cards have been blocked. Further, Federal Minister of Interior Chaudhry Nisar Ali Khan, on July 4, 2015, argued that it was wrong to say that ‘not a single bit of work’ has been done under NAP, and that, had this been so, international think-tanks would not have included Pakistan in the list of countries where acts of terrorism declined over the past year. Nisar added that NAP is not the sole responsibility of a particular department, institution or Ministry, but that it is a “national agenda” for the success of which numerous Ministries of the Federal Government, intelligence agencies, armed forces and provincial Governments are striving.

Pakistan has long harnessed the issue of terrorism to actions and policies entirely unrelated to counter-terrorist objectives. The current frenzy of executions is a case in point, even as the collusion of the state establishment with externally directed terrorist groupings in particular, and some domestic groups as well, remains undiminished. Despite the great misfortunes this enduring strategy of complicity and support to terrorism has brought upon the people of Pakistan, the state, its agencies, and the elites that control these, still appear to believe that there are profiting from these processes.

* Tushar Ranjan Mohanty
Research Associate, Institute for Conflict Management

By Mrinal Kanta Das*

A former Communist Party of India-Maoist (CPI-Maoist) cadre, identified as Madhav Warlu Padda (38), was killed by his former colleagues with sharp weapons near Mauja-Kotmi village in Etapally area of Gadchiroli District in Maharashtra on July 22, 2015. An unnamed official said the former Maoist was eliminated because the Maoists were against his decision to surrender. He had surrendered in November 2014. Before his surrender, Padda had been with the Kasansoor Dalam (armed squad) of the CPI-Maoist for 10 years, since 2005.

Earlier, between June 22 and July 5, Maoists killed another four of their senior cadres – Hemla Bhagat, a member of the Darbha Divisional Committee (DVC) and ‘chief’ of the Maoists’ military intelligence wing in the area; Kosi Kursem, wife of Hemla Bhagat, who was working with the Dandakaranya Adivasi Kisan Majdoor Sangh (DAKMS), a Maoist front organization; Masa Podivami alias Badru a DVC member of the Darbha area, and Hinge – who ‘wanted to surrender’. Ayatu, the ‘secretary’ of the Malangir Area Committee, has reportedly been ‘detained’ by his comrades in the Bastar Division of Chhattisgarh.

The Maoists also killed a former intelligence unit ‘chief’ of the West Bastar Division, identified as Korsa Jagaram alias Shivaji, at Kottapal village in Bijapur District on January 1, 2015, three years after his surrender to the Police in 2012. Jagaram had been recruited as a Gopniya Sainik (secret informer) by the Bijapur Police after his surrender. Due to his involvement in several prominent attacks on the Security Forces and proximity to top Maoists, he had been a major intelligence source for the Police. “His death is a major loss for us,” an unnamed officer conceded.

According to partial data collected by South Asia Terrorism Portal (SATP), since 2005, 70 surrendered cadres have been killed by the CPI-Maoist, till August 2, 2015. These included 14 in 2005, six in 2006, two in 2007, five in 2008, eight in 2009, 12 in 2010, four in 2011, seven in 2012, four in 2013, six in 2014, and two in 2015. The data for 2015 does not include the four Maoist cadres killed in the Bastar region, as they had not yet surrendered.

The current killings are to be seen against the backdrop of the recent surge in surrenders in the Bastar area of Chhattisgarh, considered to be the strongest Maoist base. According to partial data collected by SATP, 251 Maoists have surrendered across India, thus far in 2015. At least 4,245 Left Wing Extremists (LWEs) have surrendered across India since 2005 (data till August 2, 2015).

Crucially, in 2015, eight ‘deputy commanders’ surrendered in Andhra Pradesh; one ‘section commander’ in Maharashtra and one ‘commander’, one Local Guerrilla Squad (LGS) ‘commander’ and one Local Operation Squad (LOS) ‘commander’ in Telangana. However the majority of ‘commander’ rank surrenders have been from Chhattisgarh, with one ‘divisional commander’, three ‘deputy commanders’, five ‘commanders’, one Jan Militia ‘commander’, one LGS ‘commander’, one LOS ‘commander’, one ‘section commander’ and two ‘platoon commanders’. In Jharkhand, there was no commander rank surrender in 2015.

Rattled by the spurt of surrenders in Chhattisgarh, the Maoist leadership, on November 1, 2014, warned journalists working in Chhattisgarh against helping the Police in securing the surrender of Maoist cadres. “We appeal to the journalist brothers to condemn the fake surrenders and stop encouraging those who have deceived the people’s movement. The journalists who support the surrendered Maoists will be termed as ‘anti-people’ by the party,” declared Ganesh Uike, ‘secretary’ of the CPI-Maoist South Regional Committee (SRC), in a press statement.

The Maoist leadership has always despised cadres who surrendered ‘without discussion’, or who plan to ‘run away’, though there is a standing policy of permitting some categories of their cadres to surrender after they have sought the permission of the leadership. Indeed, there have been phases when the surrender policy has been exploited to ‘retire’ aging or ailing cadres, at least some of whom are subsequently found to engage in overground activities in support of the Maoists. In one recent case, where details of some such arrangement emerged after the arrest of a CPI-Maoist cadre, identified as Maansingh alias Arjun (45) from the Pakhanjore area in Kanker District on July 23, 2015. Kanker Superintendent of Police (SP) Jitendra Singh Meena disclosed that Arjun had been associated with the Maoists since 2000 and initially worked as a ‘temporary member’, but was later assigned the task of assembling crude firearms and repairing guns and rifles. Maansingh surrendered on the direction of Maoist leaders, was sent to jail. He was subsequently released on bail, and again joined the underground movement. He was elevated to the rank of ‘commander’ of the Kuli janmilitia (people’s militia) after rejoining the outfit, but due to prolonged illness, was demoted from the position and again tasked with making and repairing weapons till his arrest. The reasons for his earlier surrender are not clear, but this may have been the result of ill health, or an attempt by the Maoist leadership to learn more about the surrender cycle.

Where surrenders are unauthorized, the individuals are initially monitored and subsequently warned, and are also strongly criticized through the media. Maoists eventually eliminate their former comrades especially where they are deemed to have engaged in ‘anti-Party activities’.

While ‘elimination’ is the final solution, a number of prominent surrendered leaders remain under current and significant threat. Thus on June 20, 2007, the Maoists in the Guntur District of then undivided Andhra Pradesh warned five surrendered Maoists to stop hobnobbing with the Police or face ‘dire consequences’. Similarly, on January 30, 2013, the CPI-Maoist Southern Gadchiroli ‘divisional committee’ criticized its former ‘secretary’ Shekhar alias Mallaya and his wife Vijaya, who had surrendered before the Andhra Pradesh Government in 2012. On June 9, 2013, an “internal inquiry commission” of the CPI-Maoist blamed Suchitra Mahato, the surrendered Maoist leader, for the death of ‘politburo member’ Mallojula Koteswara Rao alias Kishenji in an encounter in Junglemahal area of West Bengal in November 2011. Branding her as a “traitor”, the CPI-Maoist central committee approved “retaliation” against those involved in the “conspiracy”. On January 13, 2014, the CPI-Maoist condemned the surrender of the ‘state committee’ member of ‘Dandakaranya special zonal committee’ (DKSZC) GVK Prasad alias Gudsa Usendi alias Sukhdev. Similarly a statement issued by the succeeding spokesperson of the DKSZC, who was also given the nom de guerre Gudsa Usendi, condemned the surrender of DKSZC member Arjun and his wife Ranita before the Police in Telangana on August 1, 2014. The party said the couple could not withstand the “difficult time” faced by the movement.

The pressure of ‘difficult times’ has enormously been compounded by the Central Government’s enticing surrender policy, with generous financial rewards and rehabilitation schemes, which have forced many Maoists to rethink their future. The LWE-affected State Governments have also increased the amount for surrendered cadres. Maharashtra’s “Kaun Banega Lakhpati” scheme, along with a propaganda campaign, peace rallies, dialogue with the locals; Andhra Pradesh Government’s grant of ‘white cards’ [a kind of ration card], housing, LPG subsidy and admission to skill development courses; the Jharkhand Cabinet’s decision to give CPI-Maoist politburo, special area committee and regional bureau members a whopping INR 2.5 million; the Odisha Government’s decision to provide enhanced financial assistance and house building grants at the rate of the Indira Awas Yojna; have all proved crucial for the success of the surrender policy.

On November 29, 2014, the CPI-Maoist admitted that its cadres were deserting the party and “It is true that some of our ‘weak’ cadres are getting attracted towards the bankrupt and corrupt surrender policy of the Government and laying down their arms,” Gudsa Usendi conceded in a Press statement.

The killing of surrendered cadres, especially where the Maoists suspect collusion with the Police, is obviously intended to discourage the wave of surrenders and defections that is worrying the rebel leadership. Crucially, however, it also underlines the failure of the Government to provide a secure environment to those who are deserting the Maoists. While financial rewards and other elements of ‘rehabilitation’ have played a crucial role in encouraging the rising tide of surrenders, if the Maoists succeed in inflicting frequent reprisals on such cadres, the policy will eventually fail.

* Mrinal Kanta Das
Research Assistant, Institute for Conflict Management

By Michael Lelyveld

Mountains of corporate debt are casting a shadow over China’s economy after a series of shocks in the stock market during the past month.

On July 18, Reuters reported that China’s corporate debt has climbed to a new high of U.S. $16.1 trillion (100 trillion yuan), making it “a much greater threat” to the country’s economy than the stock market’s near-crash.

The estimate, based on a survey of over 1,400 companies, follows a similar finding for the 2014 debt level by ratings agency Standard & Poor’s (S&P’s) in a report released days before.

China’s corporate debts are already double those of the United States, according to Reuters. The debts are now equal to about 160 percent of China’s gross domestic product (GDP), the studies said.

Debt burdens have been climbing in recent years and appear to be accelerating rapidly.

In 2013, corporate debts totaled U.S. $14.2 trillion (88.2 trillion yuan) or 120 percent of GDP, according to S&P’s.

Last year, JPMorgan Chase & Co. estimated the debt as 137 percent of GDP in the third quarter. The Bank for International Settlements put the figure for 2013 at 125 percent.

The liabilities stood at just 90 percent of GDP in 2007, JPMorgan Chase said in its report last year.

S&P’s now expects China’s corporate debt to reach U.S. $28.8 trillion (178.9 trillion yuan) in the next five years.

The rising numbers suggest a problem that will be harder to manage than the stock market challenge.

In its report, S&P’s cited “high concern in Chinese real estate and default risk,” as well as “the growing vulnerability of corporate credit in China.”

“The Chinese credit growth rate still remains faster than most, but the corresponding risks are rising as well,” said Jayan Dhru, the agency’s global head of corporate ratings and infrastructure.

Dhru cited the “opaque nature” of China’s markets and the debt-to-GDP ratio among factors contributing to “relatively high” credit risks.

Chunk of debt

The biggest chunk of the debt is owed by state-owned enterprises (SOEs), complicating risk assessments for the overall economy.

According to ambiguous Ministry of Finance figures released in January, SOE liabilities rose 12.2 percent last year to 66.56 trillion yuan (U.S. $10.7 trillion), although the figure was actually lower than the debt level of 67.1 trillion yuan (U.S. $10.8 trillion) reported for 2013.

Either way, SOEs account for about two-thirds of China’s corporate debt problem.

Kent Troutman, research analyst at the Peterson Institute for International Economics in Washington, said the SOE debt affects how the totals may be counted and how the risks are assessed.

“Some folks count the SOE debt as corporate debt and some count it as part of the contingent liabilities of the government,” said Troutman.

If the SOE debts are treated as corporate, then the new estimates appear reasonable, he said. But there are arguments for counting the debts as an obligation on the government’s books.

“Because the government either implicitly or explicitly owns a large share of the SOEs, they may ultimately be responsible,” Troutman said.

Where the burden would ultimately land as a repayment risk has yet to be determined.

In 2013, China had 155,000 SOEs, including 52,000 owned by the central government. The rest belonged to local governments, according to the Ministry of Finance.

Further complications

The picture is further complicated by local government debts, which Beijing has been trying to restructure through a combination of debt swaps and bond offerings.

In April, UBS head of China economic research Wang Tao estimated that 10 trillion yuan of the 21 trillion yuan (U.S. $1.6 trillion of $3.3 trillion) owed by local governments at the end of last year could be classified as corporate debt.

China’s debts have swelled with the economic expansion that followed the central government’s 4-trillion-yuan (U.S. $644-billion) stimulus plan of 2008, which staved off the effects of the global slump.

While the plan succeeded in assuring economic growth, it did so by funding a binge of wasteful infrastructure projects with easy bank loans, leaving a hangover of debt.

Greater restraint and concerns about shadow banking and sustainable development gave way this year to worries about declining economic growth, prompting a push for more lending and local infrastructure projects again.

“It is a 180-degree reversal of the fiscal policy from tightening to loosening,” said Deutsche Bank economists in a May report cited by Bloomberg News.

Looser lending may have eased the real estate slump and the economic slowdown, but the effects are likely to drive up corporate debts and default risks in some of the same inefficient sectors that were saved by the last stimulus plan.

Troutman says the new debt level numbers amount to more than a right-pocket-left-pocket issue, in which the government effectively owes itself money for SOE liabilities that will ultimately be supported.

“It’s not all completely circular. Especially within specific sectors of the economy, these are real debts that have been taken on and are unlikely to be paid,” he said.

Premier Li Keqiang has signaled a tolerance for a limited level of defaults as a “moral hazard” check against reckless lending and debt accumulation.

In April, the Kaisa Group Holding Ltd. real estate development firm defaulted on a U.S. $52-million interest payment, sending chills through the bond market but without widespread contagious effects.

A day later, power equipment maker Baoding Tianwei Group Co. also missed a 85.5-million yuan (U.S. $13.8-million) bond interest payment, becoming the first SOE to default on the domestic market.

“Defaults by non-strategic, commercially unviable SOEs can help to instill greater market discipline and reallocate capital more efficiently in the economy,” Fitch Ratings said in a report three months ago.

The government is seen as unlikely to take the same hands-off approach in case of a major SOE bankruptcy, although critics have long argued that private businesses can only flourish if heavily indebted SOEs are allowed to fail.

Even more cautious

Given the continuing trouble in the stock market, the government seems likely to be even more cautious about letting troubled corporate debtors go under.

Beijing’s interventionist response to the stock threat also suggests that the government may be better prepared to step in, if a major default looms.

Conversely, regulators could order more debt discipline and accept more default risk in coming months if they believe market stability has been achieved.

Troutman said the effects of a default could trigger another reaction in stocks. But he added, “I gave up making predictions on the Chinese stock market a long time ago.”

The rising debts are likely to show up in higher non- performing loan (NPL) figures, although ratios have remained relatively low, due in part to the greater volume of loans.

At the end of last year, NPLs accounted for just 1.29 percent of commercial bank lending and 1.64 percent for all banks, according to the China Banking Regulatory Commission (CBRC).

In the first quarter of 2015, the commercial bank NPL ratio climbed to 1.39 percent, the CBRC reported. The ratios have been rising for the past four years, Troutman said.

Last month, UBS noted in a report that the NPL counts would be considerably higher if they included loan write-offs, which banks have been granting to keep their ratios down, Barron’s Asia said.

When the first group of US-trained fighters were inserted into Syria on Friday, Washington experienced a great shock. Tasked with fighting alongside al-Qaeda’s Syrian franchise, the Nusra Front, Washington’s newest proxy army in Syria was expected be welcomed by the group. Instead, Washington’s proxies, known as Division 30, were attacked by the Nusra Front with several fighters taken hostage. Quoting a senior Obama Administration official, the New York Times reported that Washington “expected the Nusra Front to welcome Division 30 as an ally in its fight against the Islamic State.”

Said another US official: “This wasn’t supposed to happen like this.”

Let’s pause for a moment and think about US strategy in Syria. Fourteen years after the attacks of September 11, 2001, it is official Washington policy to create armed and trained al-Qaeda allies in Syria. Yes, it wasn’t supposed to happen like this.

The attack on Washington’s proxy army shocked Washington’s “experts,” but it did not shock them enough to re-think the four year long effort to oust Syrian President Assad. It was this effort, of course, which created the atmosphere in which ISIS has over-run much of the country and threatens to take the rest of it as well. There was no ISIS in Syria before the US decided on regime change. This is similar to Iraq, where it was only the US invasion that produced a working al-Qaeda presence in the country. There was no al-Qaeda in Iraq prior to the US “liberation.”

But as according to past practices in Washington, when a particular foreign policy produces results counter to stated goals it not time to re-think the strategy but to double-down.

Therefore, as the Wall Street Journal reported over the weekend, President Obama has for the first time authorized the US military to attack Syrian government forces if they threaten Washington’s regime change army. The battle has been joined.

While it has been expected that Turkey’s opening up Incirlik airbase to US jets attacking ISIS in Syria signaled a move toward a “no-fly zone” in a small part of northern Syria, President Obama has upped the ante considerably and declared that the Syrian military is a fair target wherever it roams inside the country.

This move is a declaration of war on Syria, while Congress continues to be completely uninterested in its Constitutional obligations. Indeed in this new war it is Congress that is AWOL.

This article was published by the RonPaul Institute.

Skygazers at northern latitudes are familiar with the W-shaped star pattern of Cassiopeia the Queen. This circumpolar constellation is visible year-round near the North Star. Tucked next to one leg of the W lies a modest 5th-magnitude star named HD 219134 that has been hiding a secret.

Astronomers have now teased out that secret: a planet in a 3-day orbit that transits, or crosses in front of its star. At a distance of just 21 light-years, it is by far the closest transiting planet to Earth, which makes it ideal for follow-up studies. Moreover, it is the nearest rocky planet confirmed outside our solar system. Its host star is visible to the unaided eye from dark skies, meaning anyone with a good star map can see this record-breaking system.

“Most of the known planets are hundreds of light-years away. This one is practically a next-door neighbor,” said astronomer Lars A. Buchhave of the Harvard-Smithsonian Center for Astrophysics (CfA).

“Its proximity makes HD 219134 ideal for future studies. The James Webb Space Telescope and future large ground-based observatories are sure to point at it and examine it in detail,” said lead author Ati Motalebi of the Geneva Observatory.

The newfound world, designated HD 219134b, was discovered using the HARPS-North instrument on the 3.6-meter Telescopio Nazionale Galileo in the Canary Islands. The CfA is a major partner with the Geneva Observatory on the HARPS-North Collaboration, which includes several other European partners.

HARPS-North detects planets using the radial velocity method, which allows astronomers to measure a planet’s mass. HD 219134b weighs 4.5 times the mass of Earth, making it a super-Earth.

With such a close orbit, researchers realized that there was good possibility the planet would transit its star. In April of this year they targeted the system with NASA’s Spitzer Space Telescope. At the appropriate time, the star dimmed slightly as the planet crossed the star’s face. Measuring the depth of the transit gave the planet’s size, which is 1.6 times Earth. As a result, the team can calculate the planet’s density, which works out to about 6 g/cm3. This shows that HD 219134b is a rocky world.

But wait, there’s more! The team detected three additional planets in the system using radial velocity data. A planet weighing at least 2.7 times Earth orbits the star once every 6.8 days. A Neptune-like planet with 9 times the mass of Earth circles in a 47-day orbit. And much further out, a hefty fourth world 62 times Earth’s mass orbits at a distance of 2.1 astronomical units (200 million miles) with a “year” of 1,190 days. Any of these planets might also transit the star, so the team plans to search for additional transits in the months ahead.

HD 219134 is an orange Type K star somewhat cooler, smaller and less massive than our Sun. Its key measurements have been pinned down very precisely, which thus allows a more precise determination of the properties of its accompanying planets.

This discovery came from the HARPS-North Rocky Planet Search, a dedicated survey examining about 50 nearby stars for signs of small planets. The team targeted nearby stars because those stars are brighter, which makes follow-up studies easier. In particular, additional observations might allow the detection and analysis of planetary atmospheres.

HD 219134 was one of the closest stars in the sample, so it was particularly lucky to find that it hosts a transiting planet. This system now holds the record for the nearest transiting exoplanet. As such, it likely will be a favorite for researchers for years to come.

(EurActiv) — More than 20% of Germany’s population has a migrant background. Migrants are almost twice as likely to have a university education as the average German.

Statistics released by Germany’s Federal Statistical Office (Destatis) on Monday (3 August) show a recent surge of immigration in Germany. The European Union is out in front, followed by China and Syria.

In 2014, 16.4 million German residents, over 20% of the total population, had a migrant background. This is an increase of 3% in just one year, fuelled mainly by high immigration, according to Destatis.

Germany was home to 10.9 million immigrants in 2014, an increase of more than 10% since 2011. Over half of people with a migrant background (56%) held a German passport, including 46% of immigrants.

European Union immigration increased by over 18% from 2011 to 2014. Poland, Romania and Italy were the most important countries of origin of Germany’s EU immigrants over this period. Together these three countries count 343,000 citizens on German soil, according to Destatis.

Employment was the main motivation for migrants that arrived in Germany after the 2008 financial crisis (28%). Among those that migrated to Germany between 2000 and 2007, only 16.5% came specifically to look for work. Of the immigrants that arrived after 2011, 44% have a university education, compared to 24% of Germans without a migrant background.

The number of migrants from outside the EU also rose substantially between 2011 and 2014, Destatis reported. Germany’s Chinese minority increased by 54%, or 38,000, and the Syrian population almost doubled over the same period, with 35,000 people seeking refuge from civil war in Germany.

36% of all migrants that have arrived in Germany since 1960 said they speak fluent German, while for 11%, German is their native language.

By John R. Haines*

The well-respected Arms Control Association (ACA) recently claimed “the potential threat from Iranian ballistic missiles has been radically reduced” by the Joint Comprehensive Plan of Action (JCPOA) signed in Vienna on 14 July 2015 by the Islamic Republic of Iran and the E3/EU+3 (of which the United States is part).^[1] This is a curious claim by the ACA’s own reckoning.  Accepting for the moment its predicate—the “negotiations were about nuclear warheads, not about missiles”—one of the ACA’s principal conclusions—that UNSC Resolution 2231 “contains an eight-year restriction on Iranian (nuclear-capable) ballistic missile activities”—is misleading at best. That it is inaccurate is indisputable.

First, UNSC Resolution 2231 imposes no such restriction. Instead it terminates open-ended restrictions imposed by two earlier UNSC resolutions, 1737 (2006) and 1929 (2010), respectively. Second, the existing restriction on nuclear-capable missiles may last eight years, but not necessarily. UNSC Resolution 2231 reads as follows:

“Iran is called upon not to undertake any activity related to ballistic missiles designed to be capable of delivering nuclear weapons, including launches using such ballistic missile technology, until the date eight years after the JCPOA Adoption Day or until the date on which the IAEA [International Atomic Energy Agency] submits a report confirming the Broader Conclusion, whichever is earlier.”^[2] [Emphasis added]

It is evident from the plain language of the text that eight years^[3] is not the period. Rather, it is the longest one during which (in the ACA’s phrase) Iranian nuclear-capable ballistic missile activities are subject to restriction under UNSC Resolution 2231.

The resolution’s alternate condition for lifting the restriction on nuclear-capable missiles—the “Broader Conclusion,” elaborated as the IAEA reaching “the Broader Conclusion that all nuclear material in Iran remains in peaceful activities”^[4]—is the product of the IAEA concluding that there is “no indication of diversion of declared nuclear material and no indication of undeclared nuclear material and activities, for the State and for the year in question.”^[5] If the IAEA reaches the Broader Conclusion prior to October 2023 (i.e., eight years after the JCPOA Adoption Day), the restrictions terminate immediately.

Iran can argue persuasively that some ballistic missile systems—for example, its short-range Zelzal-3 (200km range), which is capable of striking targets on the southern Persian Gulf coast—are clearly not “designed to be capable of delivering nuclear weapons” and therefore subject to no restriction. Regarding other countries transferring or selling conventional missiles or missile systems to Iran, UNSC Resolution 2231 provides:

“All States may participate in and permit, provided that the Security Council decides in advance on a case-by-case basis to approve: the supply, sale or transfer directly or indirectly […] to Iran, or for the use in or benefit of Iran, of any […] missiles or missile systems…This paragraph shall apply until the date five years after the JCPOA Adoption Day or until the date on which the IAEA submits a report confirming the Broader Conclusion, whichever is earlier.”^[6]

So in Iran’s worst case—the Security Council approves no sales or transfers, and the IAEA never reaches the Broader Conclusion—the restriction on conventional missile transfers and sales expires regardless in October 2020. And this occurs immediately if the IAEA reaches the Broader Conclusion, as with nuclear-capable missiles. The language with respect to conventional missiles and missile systems is the clearest example of how the JCPOA opts for limited proliferation over nonproliferation. In the missile realm at least, it “gives but does not get,” terminating the entire sanctions architecture in exchange for Iran doing what it was already required to do. Here, the status quo prohibitions answer with alacrity JCPOA defenders’ frequent rejoinder, if not this, what?

It is fatuous to suggest the “negotiations were about nuclear warheads, not about missiles.” After all, delivery systems are integral to actualizing a nuclear weapon program. Cannonballs without a cannon are not especially menacing. If, as the author has argued, Iran has for some time possessed a limited number of rudimentary, Soviet-era nuclear devices (or for that matter, even if it has not), it is Iran’s threatened expansion and transformation of its nuclear program that disrupts the regional security dynamic. Nuclear-capable missiles are undeniably integral to this threat.

From Iran’s perspective, the debate is conjectural: its leaders declare the nation has no nuclear-capable missiles. According to Deputy Foreign Minister for Legal and International Affairs Abbas Araghchi, “the missiles of the Islamic Republic have never been designed for carrying nuclear warheads; all of our ballistic missiles are outside the qualifications of the new UNSC resolution and therefore there are no concerns.”^[7] In a statement issued just minutes after the United Nations Security Council adopted adoption Resolution 2231, the Iranian Foreign Ministry declared:

“Iran’s military capabilities, including its ballistic missiles, are exclusively for legitimate defense; these equipment have not been designed for the capability to carry nuclear payloads and thus, fall outside the scope and the jurisdiction of the UNSC resolution and its annexes.”^[8]

Foreign Minister Mohammad Javad Zarif reiterated this position before the Iranian Parliament. An English language report by the FARS News Agency quoted Zarif as saying, “Using the ballistic missiles doesn’t violate the Joint Comprehensive Plan of Action (JCPOA) and it is a violation of a paragraph in the annex of the [UN Security Council] Resolution [2231] which is non-binding,”^[9] FARS’ report in Farsi characterized the relevant text of UNSC Resolution 2231 as “a non-binding request to refrain from activities in the field of ballistic missiles designed to carry nuclear weapons, which never has and never will be part of the Islamic Republic of Iran’s missile program, and so will have no effect.”^[10]

While the ACA correctly notes that UNSC Resolution 2231 subjects the restrictions on nuclear-capable and conventional missiles “to re-imposition in the event of significant non-performance by Iran of JCPOA commitments,”^[11] doing so is subject to a Security Council vote.^[12] Further, the conditional re-imposition provision terminates finally in October 2025, ten years after the JCPOA Adoption Day.^[13]

How all of this constitutes, as the ACA concludes, “a much lower threat from Iran’s ballistic missiles”, is puzzling. It terminates the now-open ended restriction on Iran developing nuclear-capable missiles in at most eight years; terminates the now-open ended restriction on transferring conventional missiles and missile systems to Iran in at most five years, with an allowance for immediate case-by-case exceptions; is ambiguous regarding Iran’s obligation to disclose fully any missile-related possible military dimensions (PMD) of its nuclear program; and ignores completely the matter of CBR (chemical, biological and radiological) missile warheads.

One might add as well that the various timeframes—a maximum eight-year restriction on nuclear-capable missiles, a conditional one of five years on conventional ones—go unexplained. Except as the end product of haggling, they seem on their face inexplicable.

It is likely the timeframes have some meaning to Iranian leaders. They have knowledge, rather than inference, regarding the development status of Iran’s nuclear-capable missiles and nuclear warheads (and claim Iran has no such weapons and therefore that the prohibition has no effect). They have knowledge, rather than inference, regarding Iran’s non-nuclear (more aptly descriptive than the misnomer conventional) missiles. And they have succeeded in constructing as stable a strategic landscape for the next five to ten years as they judged possible, retaining their ability in the meantime to shape its contours over the horizon.

Radiological weapons are a useful instrument for doing so, existing as they do outside the JCPOA, untouched by its restrictions on conventional missiles and missile systems. If those Iranian leaders opposed to IAEA inspections of military sites prevail—only days ago, Ali-Akbar Velayati, head of the Center for Strategic Research^[14] stated categorically that there would be no military base inspections by IAEA or any other institutions^[15]—any such programs may go undiscovered and most certainly undocumented.^[16] Days later, Velayati declared the sections of UNSC Resolution 2231 on “Iran’s defensive capacities, especially missiles…[are], from the point of view of Iran, unacceptable.” He continued, “A resolution which was approved under the influence of Western expansionist countries…weakens Iran’s defensive power in order to be able to impose their demands on Iran. This is an issue to which the Islamic Republic of Iran has not acceded and will not accede.”^[17]

The estimable Anthony Cordesman wrote recently:

“Designing chemical and radiological warheads that can achieve anything like the potential lethality of the agents they carry under operational conditions is extremely difficult. Under many real world conditions, they would have more of an area denial, psychological, or panic impact than actual lethality. Chemical weapons and all but the most advanced radiological weapons have lethalities several orders of magnitude less lethal than nuclear weapons and the most lethal biological weapons. […]

That being said, Cordesman continues.

“Nevertheless, chemical, biological, or radiological (CBR) warheads would provide a much more effective deterrent to attack and provide Tehran with the ability to strike at major population centers. […] These capabilities, in combination with the deterrent and the psychological impact they would produce, would have a profound impact on the strategic balance between Iran and the US and its Arab Gulf allies.”^[18]

The JCPOA leaves Iran wholly un-contained with respect to radiological weapons, which the Soviet Union used in the early 1950s as a bridge to fission weapons. Missiles reify the threat of radiological weapons, transforming them from the realm of improvised weapons of terror to instruments of power projection, both as political weapons and sources of intimidation. While radiological materials retain their place in the arsenal of improvised terror weapons, the combination of radiological payloads and Iran’s seemingly unconstrained missile program has serious implications. They extend to both irregular warfare, where Iran seeks to project power indirectly^[19]—whether or not Iranian proxies actually come into possession of and use short-range artillery rockets with radiological payloads, it is nonetheless a contingency against which Israel and others must craft a layered defense^[20]—and to theatre warfare, where Iran seeks to menace regional adversaries directly and/or to threaten targets across the Persian Gulf. The much-assessed limits of Iranian missiles’ accuracy and lethality notwithstanding, Iran’s purposeful cultivation of ambiguity and opacity in this realm describes, in Itty Abraham’s colorful phrase, “a liminal stage between intention and a yet-to-happen event, the long moment between the Fall and the Second Coming.”^[21]

Director of National Intelligence James Clapper advised in 2012, “Tehran views its conventionally armed missiles as an integral part of its strategy to deter—and if necessary retaliate against—forces in the region, including US forces. Its ballistic missiles are inherently capable of delivering WMD, and, if so armed, would fit into this strategy.”^[22] He repeated the following year that “Iran’s ballistic missiles are capable of delivering WMD.”^[23]

This threat is compounded by the absence of any organized legal framework at the international level to counter radiological weapons. It is true that the IAEA has established a network of arrangements to protect radioactive materials and guard against their acquisition for malicious use. So, too, a 2005 international convention requires signatory states—Iran is not one—to criminalize nuclear terrorism, defined to include the malicious use of radiological materials.^[24] But overall, there are no restrictions on radiological weapons comparable to those imposed under international agreements on all other WMD categories—chemical, biological and nuclear.

There is some reason to fear a convergence of Iran’s post-JCPOA missile program—one Iran maintains is resolutely non-nuclear and therefore unconstrained by either the JCPOA or the non-binding “request” (as argued by Foreign Minister Zarif) under UNSC Resolution 2231—and radiological weapons, which have a certain defined utility for nuclear-threshold states. We turn again to Anthony Cordesman for context:

“Iran’s current missile already becoming [sic] somewhat more lethal as they are equipped with cluster munitions and better fusing—although their lethality will still be limited by their range-payload limits, and a lack of accuracy if this was the only area of improvement. Even substantial volleys of missiles and rockets with better conventional warheads against area targets would still be limited in real world lethality, and would be more terror strikes than strikes capable of quickly hitting and destroying key point targets.”^[25]

Cluster munitions, volleys against key area targets, and terror strikes all fit the calculus of radiological weapons, which along with Iran’s missile program, sit outside the bounds of the JCPOA. Of paramount concern is the risk of proliferation to well-known Iranian proxies like Hezbollah. The successful deployment of radiological weapons by violent non-state actors requires greater technical competence in the field than just the acquisition of radioactive material.^[26] Iran, however, has already shown that short-range artillery rockets can have a strategic impact and be used in irregular warfare and as an indirect form of power projection.^[27]

Virtually all sources agree that the Hezbollah has significant holdings of rockets and missiles, and there are also reports that Iran has transferred longer-range versions like the Zelzal-2. Uzi Rubin, a key developer of Israel’s missile defense program warned ‘The Iranians took the Zelzal-2 and turned it into a guided rocket. The third generation of it contains a homing sensor and a GPS.”^[28] Former Israeli Defense Minister Ehud Barak echoed this concern, warning in March 2014:

“We will continue to see many more missiles, a lot more accuracy, and within five years the missile will reach a maximum level of accuracy that will allow them to choose which building in Israel to hit. These means will proliferate, and will be cheaper for terror organizations like Hezbollah and Hamas in Gaza.”

Barak continued, “In the future we will see terrorism backed by science and technology…Somewhere in a small lab, hostile elements sit planning the future weapon of mass destruction. This is an unprecedented terrorism potential. We can’t wait until the threat is realized, as the gap will be difficult to close.”^[29]

The JCPOA’s failure to constrains Iranian missiles and missile systems—what limits are imposed under UNSC Resolution 2231 are so porous that Iranian leaders have already declared them not applicable to anything Iran is doing today or plans to do in future—is a highly consequential flaw. It does no good to deny that such flaws exist anymore than it does to cavil about terms Iran should somehow have been compelled to accept. The point is, the flaws exist, and Iran did not accede to such terms. We must deal with the situation as it is, not as we wish it to be.

That being said, Iranian missiles and missile systems are clearly a basis for future contention, starting with Iran’s declaration that UNSC Resolution 2231’s “request” for Iranian self-constraint is hereby denied. Like its interest in missiles, Iran’s interest in radiological weapons is not new: Ayatollah Rafsanjani declared nearly three decades ago “We should fully equip ourselves in the defensive and offensive use of [chemical, bacteriological & radiological] weapons.”^[30] The highly disruptive threat of short-range missiles paired with radiological materials in the hands of Iranian proxies should be of immediate concern. The longer-term threat of radiological weapons and theatre missiles, too, should attract prompt attention.

As the extended quote from which the essay’s title is taken notes, we are at the liminal stage between intention and a yet-to-happen event. It is incumbent on us to address the matter forthrightly and to understand the limits of what we have negotiated, in the interest of ensuring that that event—an Iranian radiological warhead atop a missile—never happens.

The translation of all source material is by the author unless otherwise noted.  The phrase “between the Fall and the Second Coming” is from an essay by Itty Abraham, an international relations scholar and director of the University of Texas South Asia Institute. The full quote is “ambiguity and opacity become threshold terms describing a liminal stage between intention and a yet-to-happen event, the long moment between the Fall and the Second Coming.”  See: Abraham (2006). “The Ambivalence of Nuclear Histories.” Osiris. 21:1, 52. http://www.jstor.org/stable/pdf/10.1086/507135.pdf?acceptTC=true&jpdConf…. Last accessed 30 July 2015.

About the author:
*John R. Haines is a Senior Fellow of the Foreign Policy Research Institute and Executive Director of FPRI’s Princeton Committee. Much of his current research is focused on Russia and its near abroad, with a special interest in nationalist and separatist movements. As a private investor and entrepreneur, he is currently focused on the question of nuclear smuggling and terrorism, and the development of technologies to discover, detect, and characterize concealed fissile material. He is also a Trustee of FPRI.

Source:
This article was published by FPRI.

Notes:
[1] Arms Control Association (2015). “Addressing Iran’s Ballistic Missiles in the JCPOA and UNSC Resolution” Issues Briefs [published online 27 July 2015]. 7:8. http://www.armscontrol.org/Issue-Briefs/2015-07-27/Addressing-Irans-Ball…. Last accessed 29 July 2015.

The new guidance on the development of internet finance in China provides insight into the future of China’s pioneering internet finance industry and the defining role it will play in the country’s economic reform process.

By Dev Lewis*

On July 15, the People’s Bank of China (PBC), China’s central bank, released a long-awaited document “Guiding Opinions on Promoting the Healthy Development of Internet banking”. It lays down the broad policy framework to govern internet finance in China, defines the term ‘internet finance’ specifically, and assigns jurisdiction of the sector to various Chinese regulatory bodies.

The release is timely, given that a largely unregulated sector is already a billion-dollar industry which the Communist Party of China (CCP) hopes will bring innovation, entrepreneurship and private capital into the Chinese economy.

The internet finance market began in the U.S. But China made it big business. Led by internet giants Alibaba Group and Tencent among a host of other smaller players, China has become the pioneer.

The Chinese Peer-to-Peer (P2P) lending market, consisting of money market funds like Ants Financial Group’s Yue’e’bao fund with $80 billion in assets, is one of the largest in the world. In January this year China opened the world’s first e-bank—WeBank, an online-only private bank—which lends to small and medium private businesses exclusively through virtual channels.

In 2014, China’s internet finance sector employed 390,000 directly and about 60 million indirectly, servicing more than 2 million enterprises.[1] Revenues hit $138 billion, up 51% from $91.1 billion in 2013[2].

Yet the term internet finance, although originally coined by Xie Ping, director of research at the PBC, did not have an officially recognised definition till the guidance was issued this month.

The Guidance now defines internet finance as “traditional financial institutions and Internet companies that use Internet technology for: payments, internet lending, public equity financing, internet fund markets, internet insurance, internet trust,consumer finance”.[3] Notably, digital currencies, such as Bitcoin, are not included in its definition, as it is difficult to regulate – and competition to Chinese mobile payment players.

China wants internet finance to enable entrepreneurship for the general public and financing for the middle class and SMEs, while generally improving the efficiency and quality of financing in China[4].The guidance actively encourages existing banks to build internet finance platforms and support SMEs. This will improve the internet tax policy, such as tax breaks to start ups, promote a credit infrastructure and market-based credit services.

This dovetails neatly with China’s Internet Plus action plan, recently unveiled by Premier Li Keqiang at the National People’s Congress in March, which aims to integrate the internet with manufacturing, agriculture and the financial sector[5]. It fits well within the CCP’s plan to allow private capital and SMEs to play a more “decisive” role in the Chinese economy, as outlined in the 3rd party plenum document in November 2013.

However, for these plans to succeed, the government needs specific regulations to mitigate risk, strengthen trust in the system and protect both borrowers and lenders from practices like margin lending or potential bank runs. The recent stock market crash, and the 2014 collapse of 300 P2P lenders, shows clearly the sleepless nights that China’s gung-ho finance sector is giving the extremely risk-averse CCP.

The importance and need for strong regulation is emphasised by the new approaches that China’s internet companies are bringing to finance. Take WeBank, which became operational in January. It has no physical presence, and plans on conducting everything virtually, using facial recognition technology for identity verification to using big data to analyse borrowers’ online profiles on e-commerce and other platforms to assess risk.[6]

These types of lending practices are unprecedented and hold unknown risks.

According to the Guidance, the PBC will supervise internet payment services, while the China Banking Regulatory Commission (CBRC), will be in charge of regulating internet loans, trust funds and consumer finance. The China Securities Regulatory Commission (CSRC), similar to India’s SEBI, will oversee equity-based crowd-funding, online insurance and P2P lending[7]. Included are the eight regulatory steps needed, starting from filing with the authorities, mandatory third party deposits with qualified banks and dispute mechanisms, to risk disclosure and policies to protect depositors. This will all be coordinated by the State Council, the chief administrative body in China headed by Premier Li.

After three years of go-go growth and innovative products that made China the world leader, providing services to millions of lower and middle class Chinese, there is finally a workable regulatory framework for internet finance. It reflects the seriousness with which the party views these services, protecting investors while not suppressing innovation.

China’s success can set a global precedent for the development of internet finance across the world, especially countries like India and in Africa.

India and China share similar characteristics on indicators such as internet penetration and use of mobile technology. As outlined in a previous article, China’s internet companies are venturing abroad, and India is a major destination. China would also like to bring lending practices such as crowd funding to the BRICS New Development Bank and the AIIB[8], both of which India is a member of.

The future success of these internet finance models can be critical in bringing financial inclusion to those populations of developing countries who have long been left out of the world of enterprise.

About the author:
*Dev Lewis is the digital media and content coordinator at Gateway House. His research focus is China and India-China relations

Source:
This feature was written for Gateway House: Indian Council on Global Relations.

References:
[1] iResearch News, China Unveils Guidelines For Internet Finance, July 20, 2015,< http://www.iresearchchina.com/news/6565.html>

[2] iResearch News, Q1 2015 Chinese Internet Economy Report (Brief Edition), June

[3] People’s Bank of China < Guiding Opinions on Promoting the Healthy Development of Internet banking, July 15< http://www.pbc.gov.cn/publish/goutongjiaoliu/524/2015/20150718104603560913226/20150718104603560913226_.html (Chinese)>

[4] Ibid

[5] State Council of the People’s Republic of China, China unveils ‘Internet Plus’ action plan to fuel growth, July 4, <http://english.gov.cn/policies/latest_releases/2015/07/04/content_281475140165588.htm>

[6] Wu Hongyuran and Zhang Yuzhe, China Boots Up an Internet Banking Industry, Caixin, January 21, 2015,< http://english.caixin.com/2015-01-21/100776767.html>

[7] Chen Jia, China’s new guideline targets Internet financing, July 20, http://english.gov.cn/policies/latest_releases/2015/07/20/content_281475150612696.htm

[8] Ben Shenglin, Banking on Beijing is Good For China, and the World, The Wire, July 6, 2015,

<http://thewire.in/2015/07/06/two-new-multilateral-development-institutions-are-born-5601/ >

The attack in Gurdaspur this week was different from any previous Pakistan-sponsored terrorist hit. India must be wary of the new and improved strikes coming from across the border, and must also plan a robust, long-term policy response.

By Sameer Patil*

Barely two weeks ago, on 10 July, amidst fanfare, Prime Minister Narendra Modi met his Pakistani counterpart Nawaz Sharif in Ufa, Russia, on the sidelines of the Shanghai Cooperation Organisation summit and agreed to resume the stalled India-Pakistan dialogue.

It seemed unlikely then that the meeting would be the breakthrough it was touted as, given the history of such bilateral hopes. The attack in Gurdaspur in India’s Punjab, on 27 July, proves this.

Typical of the India-Pakistan dialogue, multiple factors determine the volleys in the bilateral, but any terrorist attack can potentially smash it.

This time though, it’s ‘Advantage Pakistan’.

Three reasons why:

1. This is not a typical terrorist attack on India. It’s neither in a metro city nor in the theatre of conflict, Jammu and Kashmir, but in a tier-III city, Gurdaspur, in mainland India.
2. The attack was not a Mumbai-style frontal attack but a cross-border raid.
3. The attack was not targeted at the Indian military or at crowded locations, but at civilians in a bus and at state-level police personnel.

Clearly, whoever controls the activities of the anti-India terrorist groups in Pakistan are now seen to have carved out a unique space in Pakistan’s low-intensity warfare against India—with the Lashkar-e-Tayyaba imprint. The Pakistani government has condemned the attack in a statement. But the message, sotto voce, is this: dialogue or no dialogue, it will be business as usual when it comes to the Lashkar.

How should India respond? To win the set, India can do the usual: remove the “thorn with a thorn,” as Defence Minister Manohar Parrikar described it. Or carry out the “hot pursuit” option as India did in Myanmar last month, following the Manipur attack on 5 June, in order to quench emotional public opinion in India and boost the Army’s morale. In the past, India has responded to Pakistani adventures on the western border with this retaliatory option, though few actions are public knowledge.

But will these responses be an effective deterrence for the future? Especially now that the fight seems to be moving beyond Pakistan and its ISI spy agency, to the ISIS, the deadly Islamic State which has recently declared it will recruit from, and attack India?

So far, the Indian response has not been effective deterrence.. It will be better now for India to thoughtfully plan a win for the big game. In the last year, Modi has had enough engagement with Pakistan to understand the bilateral dynamics. Now is the time to craft a sophisticated, logical, and pragmatic Pakistan policy, beyond the limited black-and-white lens through which the country is currently viewed.

This will require New Delhi to take the following actions:

• Stick to the dialogue timetable. Continue plans for the Delhi meeting of the respective National Security Advisors.
• Engage openly across the political spectrum in the Kashmir Valley. Modi has the vision to do it.
• Learn from Pakistan’s successful propaganda warfare, and counter it well.
• Develop a robust research base on Pakistan, drawing from varied sources, particularly Pakistan’s thriving Urdu media and social media.
• If there are plans for an immediate removal of “thorns with thorns,” don’t publicise it. Just do it.

Track II dialogues and people-to-people exchanges will help develop a better understanding of Pakistan and curb India’s appetite for retribution. But only a determined rebuilding of India’s domestic economy will take the focus away from Pakistani malevolence and foreground India’s more important global goals.

About the author:
*Sameer Patil is Fellow, National Security, Ethnic Conflict and Terrorism, at Gateway House.

Source:
This feature was written for Gateway House

The death of the Taliban leader Mullah Umar will spark a protracted power struggle within the Taliban movement and derail the fledgling peace process between the Taliban and Afghan government. Islamic State will benefit from Umar’s death.

By Abdul Basit*

On July 29, 2015, news of the Afghan Taliban leader Mullah Umar’s demise exploded like a bombshell ahead of the second round of planned peace talks between the Afghan government and the Taliban. It put to rest months of speculation in the social media about the status and whereabouts of Mullah Umar. Though the Taliban Shura quickly appointed Mullah Mansoor Akhtar as Umar’s new successor, the development will have far-reaching consequences for the fledgling intra-Afghan peace process, future of the Taliban movement, regional peace and Afghanistan-Pakistan bilateral relations.

While Mullah Umar died in April 2013, the timing and circumstances surrounding the closure of this news are critical and challenging for the Taliban. It has come at a time when Al-Qaeda Central led by Ayman al Zawahiri is struggling to compete with its arch-foe, Islamic State (IS) globally, coupled with the rise of the IS franchise in Afghanistan which is openly questioning the Taliban’s Afghan-centric approach to jihadism.

Impact on Taliban-Afghan government peace talks

Mullah Umar’s death is a major setback to the budding Pakistan-brokered peace process between the Afghan government and the Taliban known as the Murree Peace Process. For now, the peace talks have been postponed. His death could derail the peace process and cast doubts on the authenticity of talks which were given a formal endorsement on 15 July through Mullah Umar’s purported annual Eid message.

On 30 July the talks suffered a major blow when the Taliban distanced themselves from the talks. A statement issued on the Taliban website rejected involvement in the peace talks maintaining: “Media outlets are circulating reports that peace talks will take place very soon either in China or Pakistan. Our political office is not aware of any such process.” Taliban’s confusing pattern of first committing and then disowning peace talks signifies the splits within the movement over how to proceed with the peace negotiations.

If the talks resume, rather than focusing on the central issues like power-sharing and ceasefire agreement, the deliberations of these peace parleys will inevitably turn towards ascertaining the unity of the Taliban movement and the credentials of the post-Umar Taliban leadership to deliver on any promises it might make.

Impact on the Taliban Movement

Since the birth of the Taliban movement, Mullah Umar has remained its ideological mentor as the Ameer-ul-Mumineen (Commander of the Faithful.) He was also an inspiring symbol and spiritual figurehead that united the insurgent movement. His demise will test the unity of the Taliban movement. Given the aura that surrounded Mullah Umar’s towering personality, it will be very difficult for the new Taliban chief Mullah Mansoor to fill the void left by Umar and keep the Taliban movement united.

It will also be a challenge for Mansoor to build a broad-based support for himself across the wide spectrum of the Taliban groups. The appointment of Mansoor as the new Taliban head has already sparked an internal power struggle. Many senior Taliban figures including top military commander Qayum Zakir, head of Taliban’s Qatar office Tayeb Agha and a senior member of Quetta Shura Mualvi Habibullah, have opposed his appointment.

Mansoor’s ascension has apparently divided the Taliban movement into three groups: i) one group is led by Qayum Zakir, ii) the second is led by Muhammad Rasool, who was Umar’s close confidante and governor of Afghanistan’s Nimroz province during the Taliban regime; iii) and the third group is led by Agha Jan Mutasim, who was Justice Minister of the Taliban.

Mansoor is a staunch supporter of peace talks. In the past, he had serious differences with Qayum Zakir – who opposes the idea of negotiations. In the days to come, these schisms will sharpen further. The mid-level field commanders and fighters based in Afghanistan are quite sanguine about achieving a military victory especially after the 2014 drawdown of US forces from Afghanistan and weakness of the inexperienced Afghan security forces.

Their recent military gains in northern Afghanistan provide them all the more reason to continue fighting and oppose the peace talks. Meanwhile, the members of the Pakistan-based Taliban Shura are weary of war, exhausted of exiled life and pressures exerted on them by the powerful Pakistani security establishment. They are keen to return to Afghanistan after reaching a political compromise with Kabul.

IS a beneficiary of Umar’s death

The acknowledgement of Umar’s death will create new opportunities for IS in Afghanistan. This is why IS will be the natural beneficiary of Mullah Umar’s death. IS propaganda campaign against Mullah Umar and Taliban’s jihadist narrative stand vindicated in the face of Umar’s death. Consequently, the vacuum resulting from his demise coupled with the power struggle within the Taliban ranks will provide IS with the ideal opportunity to fill the void and maximise its gains in Afghanistan.

Already, the Islamic Movement of Uzbekistan (IMU) and some factions of the Pakistani Taliban have pledged allegiance to IS. A hard-liner breakaway faction of the Afghan Taliban knows as Fidayee Mahazi—Suicidal Faction—also considers IS leader Abu Bakr Al-Baghdadi a better choice over Mullah Umar or his successor.

Impact on Afghanistan-Pakistan relations

The death of Mullah Umar will also test the recent thaw in Afghanistan-Pakistan relations which started with the inauguration of Ashraf Ghani as Afghanistan’s new President. Pakistan’s silence over the issue is deafening. It will raise several eye-brows regionally and internationally about Pakistan’s alleged role in this whole matter. The Afghan government will certainly become sceptical of Pakistan’s underlying motivations and designs behind the peace process. In this scenario, the centrality of Pakistan as a sincere facilitator of the peace process will come under intense scrutiny.

Tough questions will be asked whether Pakistan wants to be a peace-broker or a power-broker in Afghanistan. The Afghan authorities will confront Pakistan with pressing questions such as: if Mullah Umar died in Pakistan two years ago, who issued the Eid messages in his name, and who was managing the insurgent fight in Afghanistan? It will also arm the pro-Indian lobby led by former President Hamid Karzai with the ammunition to cast aspersions on Pakistan’s intentions in Afghanistan.

Umar’s death has created new uncertainties, complexities and security challenges in Afghanistan which will have a direct bearing on regional peace and stability. It will undermine US plans of exiting the region after ending the violence through a political compromise. The US will have to reconsider its withdrawal plans, moving away from a calendar-driven agenda to a condition-based approach that takes into account the ground realities.

Undoubtedly, the lessons learnt from the Syria and Iraq experiences show that the propensity of indulging in proxy wars, uncertain and ambiguous policy-decisions leading to impasses, and the abandonment of places like Afghanistan not only escalate existing conflicts, but germinate into further troubles.

*Abdul Basit is an Associate Research Fellow and Sara Mahmood is a Research Analyst at the International Centre for Political Violence and Terrorism Research (ICPVTR), a constituent unit of the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.

By Syed Badrul Ahsan*

There are things which we can learn from India. Observe the manner in which all classes and sections of Indians came together to honour A.P.J. Abdul Kalam when he died last week. Everyone, right from President Pranab Mukherjee to Prime Minister Narendra Modi to L.K. Advani to P. Chidambaram, united around the memory of the former scientist and president — to convey the powerful notion that beyond everyday politics, India is a nation which does not forget to pay respects to its eminent citizens.

We can learn from India what it means to have political differences of opinion and yet be on the same dais on occasions that have to do with the overall idea of India. When Narendra Modi was sworn in as India’s new leader in May last year, there were around him prominent politicians like Sonia Gandhi, Rahul Gandhi and, of course, his predecessor Manmohan Singh. It is only in India, within this subcontinent steeped in the richness of heritage, that an incumbent prime minister calls on a former prime minister for a conversation over tea.

All these decades after the trauma of Partition in August 1947, it is India which keeps on underscoring the beauty and desirability of democracy being the bedrock of national aspirations. All Indians respect Indira Gandhi, but at the same time they do not fail to excoriate her when they reflect on the consequences of the Emergency in which she kept the country confined between June 1975 and March 1977. It is in India where Amartya Sen can publicly declare his opposition to Narendra Modi’s taking charge as prime minister and yet not feel threatened by the powers that be. India respects individual self-esteem.

In India, despite everything, secular politics has by and large governed ideas. There have been three Muslim presidents of the country — Zakir Hussain, Fakhruddin Ali Ahmed and A.P.J. Abdul Kalam — and innumerable Muslim and Christian ministers, lawmakers, jurists and civil servants. Muslims and Christians and Jews and Hindus and Sikhs have served in senior positions in India’s armed forces side by side, have fought on the battlefield beside one another. Religion has remained personal. The country has been a collective affair, beyond and above religious dogma. In India, you can publicly call yourself an atheist, as Amartya Sen has, and no one will ask for your head. Arundhati Roy can challenge the state over matters of principle; and the state will not charge her with sedition.

Yes, there are too the negative points you can raise about India. But note that positive thoughts have always outweighed and outdone the negative. That is India, a land where foreigners find a home to spend quality intellectual time in. Only in India can you have a Mark Tully and a William Dalrymple explore Indian mores and politics and write about them. In India, it is not easy for victors to forget the vanquished, which is why the hapless Subhash Chandra Bose, despite his misfortunes, remains among the pantheon of Indian heroes today. India has its difficulties with its caste culture and yet out of that straitjacket a B.R. Ambedkar can emerge to give the country a constitution. Indians are people who feel sad at seeing artistes like Bade Ghulam Ali Khan going off to the new state carved out of the original country for Muslims and, again, feel excited when such great souls come back home. Only in India can you have diehard Hindus like Atal Behari Vajpayee and Narendra Modi go to power and then reach out to every religious base in the country.

Tribalism, in that religious and political sense, is what you will not see much of in India. On your peregrinations across Delhi, you will spot roads named after Hindus and Muslims and Buddhists and Christians. It is a spectacle you will not experience in the two countries, on India’s east and west, which were once part of the original country. Indian Muslims do not turn their backs on their country, do not leave it, for the country is a guarantee of safety and political equality for them. In India, you do not have a dwindling Muslim or Christian population because Hindus are not grabbing their land and eyeing their women (ghar waapsi, if you must know, is an aberration and all sections of the Indian population have roundly condemned it).

Only in India is it possible to have three Muslims, all of them Khans, to dominate the world of Indian cinema. Muslim lyricists, musicians and thespians have scaled the heights in India, despite such cantankerous men as Bal Thackeray. A Dilip Kumar can live in dignity only in India because his talent and not his faith is the basis of life for him. A Mohammad Rafi and a Talat Mahmood will always think of India as home, for India has always held fast to its centuries-old classical traditions in the arts. In India, a nation rises from despair, adds substance to its soul, before going out in the world — to meet the world on its own terms.

In India, a poor Muslim boy like A.P.J. Abdul Kalam can rise in the world of science and drape his country in the colours of national pride, before going on to serve it as president, as a humble man who comprehends the universality ingrained in the vastness of the land and in the endlessness of the cosmos.

This, then, is India — A.P.J. Abdul Kalam’s India.

*Syed Badrul Ahsan is Associate Editor, The Daily Observer, Dhaka, Bangladesh. He can be reached at editor@spsindia.in

By Surya Valliappan Krishna*

The Indian government’s strategy of dealing with the Islamic State thus far has been to deny the presence of a threat, and to take credit for the minimal radicalisation that has been seen in the India context. The situation however is much different. We’ve seen an estimated 200 cases of radicalisation so far, with approximately 10-15
confirmed participants.

A document titled “A brief history of the Islamic State Caliphate, The Caliphate according to the Prophet’ was in the hands of Pakistan Taliban members that outlined the Islamic State’s lethal plans for India. Since the Islamic State seeks to establish a caliphate in South Asia, attacking and disrupting India poses the biggest challenge. Given that the Islamic State is showing signs of expanding beyond its strongholds in Iraq and Syria, this cannot be brushed aside as an empty threat. It cannot be taken lightly as South Asia is home to a massive Muslim population and a potentially strong support base if not a critical recruiting ground.

Earlier last week, India’s Ministry of Home Affairs (interior ministry) called for a meeting of 10 states in a bid to formulate a coherent strategy related to the Islamic State threat. So far, we’ve seen that recruitment of Indian youth has been centred in Maharashtra, Tamil Nadu and Hyderabad.

The Centre’s strategy to counter the Islamic State is a welcome move. Until now, the situation was being dealt on a case-by-case basis and national security strategy was limited to Kashmir-based Islamist terror, conflict in the north-east and Naxal violence. It is unlikely that ‘hard power’ is going to be a part of this framework, given India’s inclination to not trigger a dormant pro-Islamic State sentiment among the Muslim community. The West has been attempting tocounter Islamic State using a combination of hard and soft power by employing both military force and counter narratives.

There has been some evidence of programmes in place to address de-radicalisation of attempted jihadists and returnees. In the case of Kalyan youth, Areeb Majeed, and an unidentified 19-year-old Hyderabadi woman, in addition to investigation, counselling and psychological help was provided by the authorities. This effort has been dubbed as Operation Chakravyuh by intelligence agencies.

These so-called individual cases of IS-related radicalisation are beginning to take the form of a network. The dangers of this trend are obvious, the backing and support of a network as compared to an individual jihadists is far more lethal.

The threat is not limited to India alone; there is general threat perception in the subcontinent. Maldives, given its tumultuous political situation since 2008, has seen the radicalisation of over 200 individuals among its population of approximately 300,000. It is no surprise that elements within Pakistan such as the Tehrik-i-Taliban Pakistan (TTP) and Jundullah have heeded the IS call. With the funding, structure, propaganda, glitz and glamour associated with the Islamic State, ‘franchise militancy’ will continue to be on the rise.

Association with home-grown terror groups is not limited to our neighbours across the border but has been seen in India itself. Members of an Indian Mujahideen associated cell with strong links to the Islamic State were arrested on April 15, 2015 in Ratlam in Madhya Pradesh. The Indian Mujahideen has also been actively recruiting youth for jihad in Iraq and Syria.

The Indian Diaspora and individuals of Indian origin too have got their fair share of the Islamic State action. With these individuals,living abroad in a culture perceived as anti-Muslim along with the brutal foreign policy of Western powers gives rise to an identity crisis resulting in a dire need to make a choice regarding either being Muslim or a being a citizen of a Western country.

What India needs is an effective counter narrative and a pro-active effort to engage the Muslim youth. It is increasingly being seen that radicalisation has been largely focused around the online realm. Internet is turning out to be the first point of contact rather than their moderate parents for these young Muslims who have questions
regarding the legitimacy of jihad. With the abundance of videos related to suffering of the Muslim community abroad available online, it is not that difficult anymore for an individual alienated by society and social context to believe in a cause much bigger than himself or herself.

In what form this strategy would take shape is yet to be seen. This is however a step in the right direction. With the number of India fighters in IS increasing, the large looming threat of returnee fighters is potentially catastrophic.

*Surya Valliappan Krishna is a postgraduate student at the Department of War Studies, Kings College London. He is a lead researcher on Mantraya’s ‘Islamic State in South Asia’ Project. He can be reached at editor@spsindia.in)