Oil at four-year lows near $40 despite OPEC cut

Saudi Arabia, OPEC's de-facto leader, said today the group will slash a record 2 million barrels from its daily production as of January 1, while Russia and other countries said they would remove hundreds of thousands of additional barrels from the market.

An official decision to cut 2 million barrels from output all at once would be a first for the organization. OPEC had cut that amount from its output four years ago, but that was done in two stages.

Also significant would be formal support from Russia, Azerbaijan and other non-OPEC producers. Mexico, Norway and Russia slashed production in the late 1990s, at a time oil was selling for about $10 a barrel. (via OPEC to cut oil output by 2 mn barrels a day).

These price cuts may be difficult to sustain for a simple reason that Oil revenues are a significant part of Government revenues in these countries. While oil revenues are on a down ward drift - Government expenses are trending upwards. Combine this the recessionary global outlook, and pump priming will increase Government's expense bills.

The US-OPEC nexus of increasing oil prices leading to greater dollar liquidity onto higher lending resulting in global overcapacity boosting asset prices in booming stock markets is now broken.

To recreate that cycle will take a decade - at least, if at all.

RK Laxman's 50 year old cartoon - relevant even today

Fifty years earlier, RK Laxman’s cartoon made us smile. Today, the status remains as bad as 50 years ago. Today, it is no longer a smiling matter - it is tragic.

80% of India’s population

The Indian education excludes a vast majority of Indian from higher education as Indian higher system is predominantly in English. This puts a premium on English - and discounts Indian languages in the educational sweepstakes. The disadvantaged students who have studied in Indian languages ensure that their children get the 'advantage' of English education.

The negative effect this on Indian self esteem is not even a point of discussion here.

The principle of exclusion (a colonial idea), is a dominant marker of the entire Indian education system - rather than inclusion. British (and before that, Islamic rulers’) colonial-imperial practices supported foreign languages on the backs of the Indian taxpayers’ contribution - and actively worked on destruction of local cultures.

For instance, in the erstwhile State Of Hyderabad (equal to about 10%-12% of modern India), ruled by the Nizam, a large non-British kingdom, 2000 year old local languages like Telugu and Marathi were considered uncouth and barbaric languages - compared to a 700 year old language like Urdu, which was supported by the State. Paeans in praise Urdu can be heard even today - much like the 'emergence of Hinglish' is being celebrated in contemporary India.

Thus anyone without the knowledge of Urdu was excluded from the system of governance, administration and interaction with public services and utilities. So it is now in India, with English.

Colonial India’s English push was understandable. But, after 60 years of Independence, state patronage by the Indian Republic of English language is unwarranted - and illegitimate.

Access Control and opportunity loss

This restricts 80% of India's population from contribution and access to opportunity. Without looking at it from ethical or social equity viewpoints, but purely as an economic question means, we should look at the cost of this policy.

How does this hinder India. India loses every year about 200,000 highly educated people to the West. These 200,000 people have been educated at subsidized Indian Universities at a considerable cost to the poor Indian taxpayer. What return does the tax payer get from this? Negative returns.

The make up of these 200,000 people that India loses. 100,000 are students who leave India, mostly never to return. Another 100,00o are 'captured' by the Western organizations and systems. The other aspect of this loss is that this loss of people, directly and disproportionately, supports Western dominance of economic and academic systems - by India.

Something's gotta give

What happens when English stops being an important language in the global sphere? What use will India’s investment in English be at that time? And this will happen sooner than we imagine - at a greater cost than we believe.

The combined GDP of the English speaking world is 14.1 trillion (2003 figures) - of which the US contributions is more than 71%. By a similar comparison, the next largest bloc of multi-nation, same-language speakers is the Spanish whose combined GDP is US$ 3.20 trillion. The French speaking bloc comes a poor third at US$2.20 trillion. The English speaking bloc, in spite of their temporary dominance, is still worried about the French attempts to keep its Francophone flock safe. It is but a matter of time that the US contribution will decrease - and hence, trade denominated importance of English will decrease.

Will we become a nation that loses control over its future? The danger of becoming a South American clone is all too real. After, Spanish decolonization, the South American countries persisted with Spanish practices - and Spanish language. We all know how South American countries tracked the descent of Spain into dictatorships and instability.

The decline of the (Greco-Roman) Byzantine Empire, was similar. After the split of the Eastern Roman Empire from the Western, over the next 200-400 years, Greek language became the official language of the Byzantine Empire. Eastern Europe followed the lead of the Byzantine Empire and used Greek extensively - at a cost to their own language. After the fall of the Byzantine Empire, Eastern Europe lagged Western Europe.

The cost of switching from English

Assuming that a 100,000 essential books need to translated into local languages, at a cost of say Rs.100,000 per book, it still amounts to Rs.1000 crores. Is that a large sum of money for modern India. Hardly.

What is the loss to India? How much does this reduce India’s growth rate by? Hard numbers to quantify - but definitely big numbers.

Why persist?

So, why does contemporary India persist with this policy.

Because all the high and mighty, finally want their children to ‘escape to the West’, with a good education from India - at the cost of India’s poor. This vested interest makes this policy go around.

And a lot of propaganda.

Indifference in Pakistan?

हंस के लिए हैं पाकिस्तान, लड़ के लेंगे हिंदुस्तान

With a contemptuous smile, we robbed them off Pakistan;

Now we will battle, to conquer Hindustan

Synthesis of Pakistan

For many years, the above slogan (popular in pre-partition India amongst Muslims) summed up the idea of Pakistan. The State of Pakistan was an artificial creation - and popular leaders like Sheikh Abdullah refused to even meet up with Jinnah - and who was deemed irrelevant.

The Deoband seminary issued a call to Muslims, against the idea of Pakistan. Deoband seminary was set up after the 1857 War, as a religious institution to ‘escape’ British repression. 75 years after its establishment, the Deoband school became famous during Independence, due to its strong anti-Jinnah, anti-Partition stand. And 60 years after Indian independence, the Deoband seminary is again, leading an anti-terror campaign in India.

Colonial Legacy

Yet, the British colonial administrators needed to prove that only they could rule over India. Indians were after all 'men of straw ... of whom no trace will be found after a few years'. And they were led by 'half naked fakir'.

The colonial administrators created false divides - between Hindus and Muslims, between Hindus and Hindus. In some they succeeded - and in some they didn't. Kashmir, was after all an issue that was created by British commanders of Indian and Pakistani armies - in 1948. Mountbatten was the also the Governor General of India at that time.

Modern Pakistan

The Pakistan nation is actually 5 parts - The army, the ISI, the politicians, the 22 families and then there are the rest. Some may want to add the fundamentalist clergy as the sixth element. And now there are fringe terrorist groups - like LeT also on this list. Mahbub ul Haq's “22 families” speech in Karachi in 1968 highlighted the power and wealth of a few families in Pakistan.

No one in Pakistan talks to anyone. Each has contempt for the other four. And all five have separate agenda.

Frankly, my dear, I don't give a damn ...

And what partition era Indians remember most about the slogan above, was the indifference, to the fate of Pakistan by the soon-to-be Pakistanis - and their total India-centric focus. It is their reading, that the Pakistanis may not mourn away the passing away of Pakistan much - which is something that most Indians do not factor. Having got Pakistan for a song, they may soon be found snickering at its break up.

Is it this indifference which has allowed Pakistan to become a client state of the West?

Resident Non Indians

Some part of the Indian bureaucracy and English speaking media is possibly made up of RNIs (Resident Non-Indians), whose children and future, they have 'secured' in the West - much like the indifferent Pakistanis.

And this may be the one quality, that possibly is the one thing, that the RNIs and Pakistanis share - indifference to the fate of the country.

What should India's counter terrorism plan look like ...

The Blood letting

The Indian media (especially English) and the India's Westernized elite has been hounding for blood ever since the terrorist attacks on Mumbai's upper class business centres for the first time. After the 26/11 attack on Mumbai prime centres, they have been able to force the resignation of Shivraj Patil, India's Home Minister. Maharashtra's Home Minister, RR Patil has also resigned. Maharshtra's Cheif Minister is expected to be replaced also - soon.

Rafiq Zakaria, a Westernized Indian, now a US citizen, said on CNN, at the Global Public Square program.

This crisis has highlighted one of the peculiarities about India. Its society, economy, private sector are amazingly dynamic. The same cannot be said of the Indian state. Government in India is too often weak, divided, incompetent.

The Times Of India, desperately sombrely, thinks, "it is time to ask our politicians: Are you going to go back to playing politics with our lives? Or are you going to do something worthwhile with yours?" The normally incisive, MJ Akbar, falls into the trap of blaming politicians, latching onto politico bashing, by saying, "We have been defeated by incompetent governance, both in Mumbai and Delhi ... ineffectual leadership (is) turning a tough nation into a soft state. We should have been world leaders in the war against terrorists, for no nation has more experience Instead we are wallowing in the complacent despair of a continual victim."

The normally vacuous Lord Baron Meghnad Desai,writing in the Indian Express, continued with his inanities, "It is a test of leadership. Can India's political parties, tested for 60 years in the crucible of democracy, rise to this occasion and save our country?" Hindustan Times joins in with its own two bits. Inderji Hazra, in a very superior fashion writes, but does not see the contradiction when he talks about 'Frankly, the 'lack of form' shown by our political class isn't a big deal for me ... The two things: political meddling and the law of averages."

How can politicians become effective without 'meddling', and if they don't 'meddle', we will then blame them for 'inaction'.

Apportioning blame

Blaming politicians, who are temporary office bearers, is escapist and is a well tuned strategy by the entrenched Westernized bureaucracy, which bears the full responsibility for this - the success of this operation and the lack of efforts to kill this problem at its root.

The Indian Government (Central and State together) have an employee base of about 55 lakhs. The number of elected representatives total around 5,500. The Indian population totals 110 crores (1100 million). It makes no sense to make scapegoats of 5500 politicians.

Blaming 5500 politicians is the knee jerk reactions by the intellectually devoid. Taking down Shivraj Patil is small consolation.

The greater responsibility (for not taking actions) and the credit for the brilliant commando operation is with the bureaucracy. The rewards should go to the various people for handling this operation so well, starting with the Mumbai police - and the culpability of those who have twiddled for years, starting with the Indian diplomatic community, the IFS and the Finance Ministry bureaucrats, who have not earmarked enough attention to these areas, is more important.

Who gets killed determines actions

India Today reports,

'1,202 have been killed in 23 terrorist strikes in the country since the attack on Parliament. Five of them took place between December 2001 and May 2004 when the NDA was in power and the rest during the last four-and-a-half years of the UPA Government.'

Millions were affected in Bihar, when the Kosi river changed course and flooded Bihar.

As the overall flood situation in Bihar registered significant improvement with the water level all major rivers flowing below the danger mark, Bihar government today launched distribution of money for relief and succor on a war footing.

The water level of Kosi, Ganga, Burhi Gandak, Gandak, Mahananda and Bagmati were maintaining receding trend and was flowing below the danger mark along their course in Bihar, Central Water Commission sources said. The death toll in the current spell of floods stood at 217 in 18 districts, official sources said.

How come no one resigned till now? Not after the train blasts in 2006. Not after the bomb blasts in 1993. What is the difference this time around? The difference is that the rich and famous have been affected this time around.

We cannot afford the rich and famous to get affected, can we? But that is another discussion and another place.

Round up the usual suspects

One idea that has now been floating around is the creation of a central agency for coordinating intelligence and anti-terrorist activities - much like the FBI and the CIA. The many failures of the FBI and the CIA is usually overlooked - against its few successes. While there may be a case for such an agency, this cant be the winning idea between 1993 to 2008.

The other idea is of course war with Pakistan! A direct war with quasi-nuclear power is something that India cannot afford, is unprepared for and raises more questions than it answers. Post war scenarios are of course much worse. India will neither be able hold onto Pakistan or let go of a truncated Pakistan. It may well turn out to be another Bangladesh - where the HuJI is emerging as another terrorist force threatening the East and North East India.

Then there is perennial loser idea of international and UN intervention. These are defensive ideas whose value is limited. India now needs to become more aggressive.

What can India do!

India must follow a three point agenda.

One - Close down the Peshawar arms bazaar. This one-time small arms bazaar has became the sourcing centre for terrorists all over the world. Initially, stocked up with arms from the CIA funded jihad against the Soviets in Afghanistan, Peshawar, has become a problem that never ends. If required, there should be a UN mandate to send in a multinational force to surround, capture and destroy this centre for arms and armaments.

Two - Pakistan precarious financial position does not allow it the luxury of an arms race with India. The world must withdraw all technology from Pakistan for all arms and ammunition. No RDX, no tanks, no F-16s, no APCs. Pakistan must be put on strict diet of military technology blockade by the world. No less.

Pakistan's suspected role in counterfeit currency operations must also be put under the scanner. Controlling Government's of the 12 companies that dominate the currency printing business must be made to choose. Between India and Pakistan. If the German Government can arm twist their companies to suspend currency supply to Zimbabwe, there is no excuse for them to not to lean on dealings with Pakistan.

Pakistan’s (valid) security concerns should be met with a tripartite agreement between China, India and Pakistan which will guarantee Pakistan’s current borders. No disputes, no claims from Pakistan have any legitimacy any more. Let Pakistan take care of its current territory and people. POK will remain with Pakistan - and current LOC will remain unchanged. So, Pakistan will not lose.

Three - Pakistan is at the crossroads of a jihadi, terrorist, criminal elements who have joined together and created an incendiary mash-up. Fueled by a drugs trade worth billions, arms trade worth millions and respectability, as they are ‘carrying out a religious jihad’.

The leadership of these gangs has to be de-fanged. LK Advani, as the earlier Home Minister, forwarded a list of ‘Most Wanted 20′ to Pakistan nearly 7 years ago. Not one has come to India. The US has not co-operated on this one important Indian requirement.

How can India make this happen

It has to be realpolitik. India can no longer give away benefits without quid pro quo. Make P&G, ABB, Alsthom, Renault, Unilever, Siemens, Pepsi and Coke earn their living. The Indian operations of these companies pack a mean heft. They must join in to secure the markets they wish to exploit. The US has to deliver. Peshawar markets must close down. The Pakistan defence production cannot be used against India. Pakistan has to deliver the criminal elements - dead or alive.

Indian co-operation with the West on the new world financial system will be based on co-operation by the West. India should move to create systems which allow political and social stabilization a rule - and not an exception.

These strategic elements of using Indian advantages to gain our ends is the way to forge ahead.

Indian media breaks into the Top 10 of Alexa's Movers and Shakers of Internet

Alexa Web Search - Movers and Shakers: "

6. up 254% ~ Weekly Traffic Rank: 659 (was 2,724)

NDTV

Breaking News, Latest News, e-Bulletins, Stocks, Bollywood, Cricket, Video, Blogs and RSS feeds from India
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Covered in glory

While, busy going up the grease pole of ratings and rankings, the Indian media has not covered itself with glory on the analysis Mumbai 26/11 terror strike. They have stoked a feeding frenzy against the politicians - who are are accountable and should pay a price.

Glaring Omissions

They have NOT pointed any fingers against any bureaucrat(s) who have slept on the job. While they have extensively covered the visits, careers, deaths, heroics, funerals of Salasker, Kamte, Karkare and Maj Unnikrishnan, they have completely ignored the funerals of the foot soldiers and police constables - like Gajendar Singh. No politician has seen it fit to go the houses of the foot soldiers and police constables.

Shame on you, Indian media.

Indian media in feeding frenzy - 26/11 Mumbai terror strike

Too much or too little

There are two schools of thought about Indian neta - especially when it comes to an crisis. One school says, that Indian bureaucracy is the best and can get it done - except it is hobbled by 'interference' from the neta.

The other schools veers to the view which says that Indian netas are doing nothing. It is the netas inaction which is the root of all problems in India. Usually, both schools of thought are used by the same set of people - based on what seems more appropriate for the context.

How can politicians become effective without ‘meddling’, and if they don’t ‘meddle’, we will then blame them for ‘inaction’. So, it has been after the 26/11 terror strike in Mumbai.

Feeding frenzy in the Indian media

The Indian media (especially English) and the India’s Westernized elite has been hounding for blood ever since the terrorist attacks on Mumbai’s upper class business centres for the first time. After the 26/11 attack on Mumbai prime centres, they have been able to force the resignation of Shivraj Patil, India’s Home Minister. Maharashtra’s Home Minister, RR Patil has also resigned. Maharshtra’s Cheif Minister is expected to be replaced also - soon.

Rafiq Zakaria, a Westernized Indian, now a US citizen, said on CNN, at the Global Public Square program.

This crisis has highlighted one of the peculiarities about India. Its society, economy, private sector are amazingly dynamic. The same cannot be said of the Indian state. Government in India is too often weak, divided, incompetent.

The Times Of India, desperately sombrely, thinks, “it is time to ask our politicians: Are you going to go back to playing politics with our lives? Or are you going to do something worthwhile with yours?” The normally incisive, MJ Akbar, falls into the trap of blaming politicians, latching onto politico bashing, by saying, “We have been defeated by incompetent governance, both in Mumbai and Delhi … ineffectual leadership (is) turning a tough nation into a soft state. We should have been world leaders in the war against terrorists, for no nation has more experience Instead we are wallowing in the complacent despair of a continual victim.”

The normally vacuous Lord Baron Meghnad Desai,writing in the Indian Express, continued with his inanities, “It is a test of leadership. Can India’s political parties, tested for 60 years in the crucible of democracy, rise to this occasion and save our country?” Hindustan Times joins in with its own two bits. Inderji Hazra, in a very superior fashion writes, but does not see the contradiction when he talks about ‘Frankly, the ‘lack of form’ shown by our political class isn’t a big deal for me … The two things: political meddling and the law of averages.”

Mint, a sister publication of HT and WSJ, was out with its editor saying, "The heads have started rolling --- and high time too. While people such as Shivraj Patil, Vilasrao Deshmukh and R.R. Patil deserve to be sacked, this is also a good time to look at the overall leadership deficit in India."

Anti-neta colonial legacy

From colonial times, the Indian neta has been a favorite target of smear campaigns, innuendo and propaganda. Colonial administration in India worked hard to undermine the credibility of the Indian ‘neta’ -for obvious reasons. Colonial bureaucrats (and their successors, the IAS) covered their incompetence and corruption with this lopsided image of the neta. Indians politicians are possibly as corrupt as any others in the world.

Ask the Japanese about Kakui Tanaka and Lockheed affair. Or ask the British about Mark Thatcher shenanigans. But don’t ask Americans about the son of bootlegger who flouted the US Constitution many times - John F.Kennedy. After JFK’s killing, 60 years on, there are many suspects who had motives. Mafia tops this list.

The State Of Foreign Affairs

The state of inter-government relations in South Asia is a sign of lazy Indian diplomatic corps (the IFS) which considers all these neighbourhood postings as ‘punishment’ postings. The ‘best’ of IFS corps wants postings to Western capitals. Like the IAS, the IFS is another albatross around India’s neck.

A large part of India’s Foreign Ministry budget goes towards Western engagement (for proof, look at the dubious Festivals of India in USA, France, Russia, Britain, etc). Instead if the same money was spent in the sub-continent, it would have been better spent. The huge monies spent on Western embassies are mis directed. It would be ideal if those Western embassies were Spartan, frugal (I should actually say Gandhian) - and the money saved can be invested in the sub-continent.

No neighbour would want to willingly embrace China! After all, India offers a template that others can use - and China offers a road map that points downhill. It is India’s superior attitude which has made it attractive for our neighbours to embrace China.

For this reason, again SAARC has been bombast - and little action. It is our diplomatic corps that are found wanting. The SAARC opportunities in the economic area are huge - and history is on our side. It is our Western pre-occupation and Pakistani Fixation which are to blame

Let us get real, shall we?

The Indian Government (Central and State together) have an employee base of about 55 lakhs. The number of elected representatives total around 5,500. The Indian population totals 110 crores (1100 million). It makes no sense to make scapegoats of 5500 politicians.

Blaming politicians, who are temporary office bearers, is escapist and is a well tuned strategy by the entrenched bureaucracy which bears the full responsibility for this - the success of this operation and the lack of efforts to kill this problem at its root.

The Indian himself

Is the Indian looking at himself?

Firstly, the Indian does not want to pay his political leaders. For the last 20 years, I have received this chain mail, which talks about how each politician costs this country Rs.100,000 per hour, etc. What does the Indian expect - 10 million Gandhijis who will serve the country for free?

The same goes for the army, the police and the bureaucrats. The logic here is 'anyway they take so much in bribes that they do not need anything more." Or one step further, "However much you pay these guys, they will not stop. They will continue to take bribes."

It is these Indian attitudes which make for a soft state - and not some 5500 politicians - a mix of great and inane, competent and corrupt.

And the solution starts here with me. Are you with me or against me!!

Mumbai Massacre - The real blame and real culprits

Vital stats of the Mumbai siege operation

On 26th November, a Wednesday night, ten terrorists, (nine killed and one taken alive), mounted a terrorist strike in Mumbai. They attacked at least ten venues (Cama Hospital, Guru Tegh Bahadur Hospital, CST Train Terminus, Leopold Cafe, Girgaum Chowpatty, Metro Junction + the four buildings occupied) and later occupied four building complexes ((The Oberoi Trident Hotel; The old Taj Mahal Hotel and the new Taj;The Nariman Building), killed nearly 190 people over a space of nearly 60 hours. These terrorists came with machine guns, machine pistols, grenades, incendiary bombs, satellite phones, credit cards, Indian currency and US dollars, conflict rations of dry fruits like almonds, raisins, etc.

Indian commando On Nariman House, Mumbai

The assault on these terrorists, initially by local police and later by the elite NSG and MARCOS commando units spread over 60 hours, sanitized nearly a 1000 rooms, covered nearly 70 kilometres of passage ways, corridors, alcoves, enclosures, rooms and passages, in 4 building complexes, spread over nearly 1 square kilometre of dense urban population. Some 150 commandos were used - and final tally of defence personnel killed was 14 policemen and 3 commandos.

Jyoti Krishan Dutt

After this operation, crowds cheered and the commandos were surrounded by jubilant crowds. Indian media provided live coverage of this terrorist carnage with multiple cameras at multiple sites in a brilliant operation.

Israeli ‘experts’ were quick to condemn the Indian commando operation. Imagine the Israelis talking about collateral damage. ‘Experts’ carped about the total intelligence failure - whereas, it was clear that requisite intelligence information was drowned in the accompanying ‘noise’.

The aftermath

One day after the end of this operation, the Indian media and commentators are unanimous. Blame the politician.

The Times Of India, desperately somber, intones,

as heaps of bodies lie in morgues in a charred or decomposed state, and loved ones huddle outside to receive them one last time, it is time to ask our politicians: Are you going to go back to playing politics with our lives? Or are you going to do something worthwhile with yours? How many deaths will it take till you know that too many people have died?

Normally incisive, MJ Akbar, falls into the trap of blaming politicians.

The most significant part of the outrage should not be obscured by the drama of events hypnotized by attack, we should not become oblivious of defence. We have been defeated by incompetent governance, both in Mumbai and Delhi … Complacence and politics gave the terrorists more protection than silence or deception could. But ineffectual leadership turning a tough nation into a soft state. We should have been world leaders in the war against terrorists, for no nation has more experience Instead we are wallowing in the complacent despair of a continual victim. Some three years ago, Dr Manmohan Singh told George Bush that there were no terrorists among Indian Muslims. Perhaps he was unaware of the 1993 Mumbai bombings. Perhaps he want ed to please two constituencies: Bush, who needed a certificate for his view that democracy was the cure for all evil; and local Muslims, who were not being given jobs but could always be offered the consolation prize of a pat on the back. Dr Singh certainly did not fool any terrorists. The Lashkar-e-Taiba might even have interpreted such self-congratulation as a challenge.

Declares, Lord Baron Meghnad Desai,writing in the Indian Express,

It is a test of leadership.

Can India’s political parties, tested for 60 years in the crucible of democracy, rise to this occasion and save our country? Can we set aside partisanship of our politics and forge a united front? Can the two major parties set aside differences in their visions of India and weave a common narrative of why India is a nation, united and single?

Hindustan Times joins in with its own two bits. Inderji Hazra writes, in a very superior fashion,

Frankly, the ‘lack of form’ shown by our political class isn’t a big deal for me. The pre-poll mud-slinging looks bad. But so does the shit on our roads. What makes me break into a twitch is something beyond this beggar’s opera. When pundits talk about ‘asymmetrical warfare’, they never mean lathi-wielding policemen vs AK47-armed terrorists, do they? And aren’t patrols and security checks, whether along sea fronts or at the entries of malls too much of a drag to bother about day in, day out? As for bringing about more stringent anti-terror laws — or even following standard procedures of law and order and investigations — is it worth all that effort when only two things really determine how easy or hard it will be for future terrorists to attack us?

The two things: political meddling and the law of averages.

Before coming to conclusions about this attack, let us also look at some other incidents across the world in the last few years.

Global Benchmarks

On 23rd October 2002, at a theater in Moscow, the Nord-Ost incident, some 40-50 Chechnyan separatist “Special Purpose Islamic Regiment” took an estimated 850 people hostage. An estimated 300 Russians died in an attempted rescue - and 39 terrorists were killed. This entire operation took was completed after 3 days by releasing a deadly poison gas - that killed many more hostages than the terrorists.

On September 1st, 1995, again in Russia, in the Beslan school tragedy, more than 360 people were killed in the 1995 raid, purportedly led by the Chechen warlord Shamil Basayev, who escaped during the botched rescue attempt by troops. Basayev’s claims of responsibility for this attack on Beslan School Number One, are disputed. Basayev used a gang which turned out to be bigger than what Russian authorities initially claimed. An investigator, Mr. Torshin disputed the claim, posted on a Chechen website, saying it “could be a hoax”. Of the 32 hostage-takers, one was captured alive, 30 died and one was blown apart. And the number of time taken to ‘resolve’ this crisis was again about 3 days.

On 5th May, 1980. the ‘famous’ SAS rescued hostages from the Iranian embassy in London. On April 30th, 1980, six Iranian Arab gunmen, opposed to Ayatollah Khomeni, took hostages, demanding release of some nearly 100 Iranian political prisoners. After 5 days of planning, some 30 ‘crack’ SAS troops overran the embassy. Of the six gunmen, five were killed and one arrested. Of the twenty two hostages, ninteen were set free, one died and two injured in the cross-fire. A film was later made on this operation.

In Peru, the siege of the Japanese embassy began on 17 December when the Marxist rebels stormed a diplomatic cocktail party, seizing more than 400 guests as hostages. The Peruvian forces, with the help of the British SAS, took two weeks to plan this assault.On April 22nd, 1997, the hostages were finally released - after some 4 months.American FBI pitched in, claiming some credit for this operation.

In India, the Akshardham Temple attack took four days to clear.

Let us get real, shall we?

The Indian Government (Central and State together) have an employee base of about 55 lakhs. The number of elected representatives total around 5,500. The Indian population totals 110 crores (1100 million). It makes no sense to make scapegoats of 5500 politicians.

Blaming politicians, who are temporary office bearers, is escapist and is a well tuned strategy by the entrenched bureaucracy which bears the full responsibility for this - the success of this operation and the lack of efforts to kill this problem at its root.

Future Actions

India needs to act differently. India must work on a three point agenda.

Pakistani tribesman makes a grenade launcher in the Darra Adam Khel tribal area, 47 km from Peshawar

One - Close down the Peshawar arms bazaar. This small time bazaar became the sourcing centre for terrorists all over the world. Initially, stocked up with arms from the CIA funded jihad against the Soviets in Afghanistan, Peshawar, has become a problem that never ends. If required, there should be a UN mandate to send in a multinational force to surround, capture and destroy this centre for arms and armaments.

Two - Withdraw all technology from Pakistan for all arms and ammunition. No RDX, no tanks, no F-16s, no APCs. Pakistan must be put on strict diet of military technology blockade by the world. No less.

Three - Secure Pakistan’s borders with a tripartite agreement between China, India and Pakistan which will guarantee Pakistan’s current borders. No disputes, no claims from Pakistan have any legitimacy any more. Let Pakistan take care of its current territory and people.

These three actions will rid the sub-continent of all tensions and conflicts - no less. It has to be underpinned by India and China. The West, and Pakistan will protest, but must be made to follow this prescription.

The Third Currency Option - Junk the Dollar and the Euro

Europe’s Been Onto Something … While the US gently weeps

The EU region calling for a ‘G8 + India & China’ conference to thrash out this global monetary issue - and has been twisting the knife in the reluctant US side. The US has been dragging its feet. While the EU has been going gung-ho on this, the US has been floating many trial balloons.

Warren Buffet, Paul Volcker and Lawrence Summers have been co-opted by the President-elect of the US - Barack Obama. There has been talk of a manipulation in bullion prices - which may be required for re-anchoring currencies. Interesting deals - considered impossible till a few years, are being done in a tearing hurry.

Europe would obviously like to break the dollar hegemony - and muscle into the racket. They know the Third World-Russia-China are not prepared.

And what do Europeans want - some seats at the global regulatory table, to force US moneybags to seek approvals, which will come at a cost … or is that the approvals will come at a price …

Which will solve no one’s problems … back to square one …

The US Gameplan

US analysts, led by Paul Krugman, have been calling for Barack Obama to emulate Roosevelt - who waded into WW2, with 25,000 tons of nationalized gold. If gold is nationalized, it may depress demand in the short term - giving rise to huge volatility in gold prices. But Warren Buffett has been on the silver bandwagon for a while - and that is making the gold-silver equation hazy. What if Warren Buffet becomes the new US Treasury Chief? There is the real risk of another fraud like the gold standard happening all over again.

The US has been making its moves - differently. Paul Krugman’s Nobel Prize is an indication of this. Will the US use Paul Krugman as the Keynes of the Bretton Woods. The background of Bretton Woods itself, is of course, something that the US and Europe do not want the world at large to know.

What Has Been India Upto? Either … or …

India seems to completely lack direction on how to move independently in times like these. After, all why should India even look at IMF and World Bank - which are fig leaf organizations of the West, as transfer mechanisms of wealth from the Third World to the rich.

Or India is working on a different plan, of which we know nothing. After all, India does believe in moving steadily (even, if slowly).

While the US has been resisting calls for action, busy doing post-mortem, Asia and Europe have been moving. Interestingly, Manmohan Singh has done some huge work in the last 60 days - the nuclear deal with the USA and NSG, the IBSA Summit, the ASEAN free trade agreement - and now his three Asian nation visits.

India’s Trade and Commerce Minister, Kamal Nath, has been talking about a multi-lateral set up. The UN was made to issue a statement on this. Am I reading too much into this? At times, India has seemed clueless.

India is unlikely to get seriously affected by the current crisis - which is possibly creating complacency in India about what needs to be done.

Russia and China - The DragoBear Dance

The big issue is of course, China and Russia. China has 2 trillion of US dollars - and what does China do with this? Russia has come out from a default about a decade ago - with a nearly US$400 billion reserves - flexing its muscles in Georgia and dependent on a high oil prices. What happens to Russia if a new Pacific Republic (Cuba, Haiti, West Indies, etc) were to start drilling for oil? In 5 years, the world would be awash with oil - and Russia’s mineral earnings could evaporate.

This crisis seems to have made the Chinese Premier shaky. So, the world may not trust China and Russia too much. Russia and China can be the party poopers - but they cannot be the life of the party. Russia and China as significant military powers as well as a part of P5, will want their pound of flesh. They will, of course, be afraid of being left out!

US and EU have their own reserve currencies - leaving Russia and China out in the open. Russia and China (as full P5 powers) will want a ‘lion’s share’ of influence in any new architecture. Which any Third World grouping will not give.

The US will not have them and the EU does not want them!

Stalemate.

China says the US has plundered the world

The US has been evading transparency by not revealing M3 figures (on dubious grounds), printing money 24×7x365 and creating toxic assets. Now when the muck has hit the fan, they are acting coy. And this made the Chinese very angry.

China has alleged that the US has plundered the world - and is is now looking after its own. China alleges that the US is not bothered about the problems the US has created for other countries.

Late In the day, Mr.Hu … This is something that the world has been talking about for a long time. China has been a major supporter (and victim) of this scam - by allowing US companies unlimited access and support. Chinese citizens have been duped with low paying jobs at these enterprises.

Is China forgetting history … Mr.Hu - Today it is the US - but yesterday, it was Europe, Mr.Hu. Europe was blockaded by the US for the last 100 years - and hence, European loot is possibly forgotten in China. European loot was accompanied by a lot of bloodshed and killing also, Mr.Hu.

Has the Leopard Changed its spots Possibly, you dont know, Mr.Hu, because China has very little wildlife left. Leopards dont change their spots. Europe behaves today, because it has no options.

China is making common cause with EU over the dollar crisis. While Chinese disappointment is understandable, their actions are beyond comprehension. Just why will Europeans be bothered about Chinese welfare? Just look at their history!!

For that matter why in the world would anyone be interested in Chinese welfare - except the Chinese, of course. The Chinese Government is looking at all options - except Chinese welfare, unfortunately.

The answers A new currency floated by the five major economies who are most affected today - China, Russia, India, Brazil, South Africa. Maybe Japan will also join in. But, the answer, Mr.Hu is with these 5 - and not Europe.

Japan + ASEAN

China-leaning Lee Kuan Yew with an Islamic Malaysia may not be very hot about ‘giving so much influence’ to a ‘new member’ like India for an ASEAN initiative. Any action which hurts the US, their largest market and patron, will be something that will make Japan and ASEAN hesitate. The very economic model of ASEAN + Japan is undervalued currency + exports to the USA. Hence, they will be wary of any initiative that affects the USA - and the West.

Status Quo …

And that is why South Africa and Brazil are essential for India. China and Russia must join in. The benefits are too obvious - and the fallout is non-existent!

The New 5 - Three Horsemen Of Apocalypse

The real action will be 5 countries - Russia and China on one hand - and India, South Africa and Brazil on the other.

The G3 (i.e. India, South Africa and Brazil) have functioning democracies, decent regulatory systems (which can be ramped up), the technology platforms, the trading systems, a vibrant entrepreneurial class - all of which is powering their economies forward. What they don’t have is P5 status - which is useful, though not essential.

This Washington meeting - Contours Of The Deal

During the con-fab, ‘committees will be set up’ which create mechanisms for this management. The EU-USA-Asia may agree on a broad a global regulatory and oversight body to monitor and maintain oversight over a Dollar-Euro currency regime. Some of Asia may want to cling to this dollar-euro skirt.

But what is required is a Third reserve currency for the Third World.

The new currency may an Asian-Developing world currency. The big issue for the developing world will be obtaining assurances against predatory raids by the dollar bloc and the Euro-zone to dismantle any new system - like the alleged plot of 1997 Asian crisis.The lesser issues will also be inter-bank settlements, anchoring currencies (the role of gold or bullion).

Following is a 2ndlook at the how the Third currency option will work.

The Organization - The 3rd currency Option

Q: Who will handle this currency?

A: The BRIX Reserve Organization will be a the global body which will manage the operations of the BRIX currency. This organization will have initially shareholding by the BRICS countries - equally.

Q: What will happen when new shareholders come in?

A: The promoter shareholders will (later) offer shareholding to other countries to the extent of minimum 1% of total capital and not exceeding 5%. The promoter countries will gradually reduce their shareholding proportionately and equally by inducting other shareholders or selling existing shareholding to new shareholders.

Q: What will be the capital contribution by member countries?

Member countries will contribute to capital equal to 4000 tons of gold. Capital to increase by addition of new members and/or existing members. In case of exchange rate fluctuations, exchange rate will be based on 90 days average. In case of any significant decline in exchange value, concerned member country to make good the shortfall in capital contribution or face shift in member status.

Over the next 10 years, the

Q: What will be the role of gold in BRIX-BRO system?

A:All citizens of member countries will be allowed to own and trade in gold - within and outside the country during peacetime. In cases of national emergencies, countries may impose export restrictions for a limited defined period.

Governments will not be required to maintain any gold balances at all.

Q: What will be the role of BRO?

A: Firstly to provide a real time trading platform - for all the national currencies of member banks and countries. Additionally, there can be 'permitted' currencies' - like the Dollar and the Euro, for trading in non-member currencies.

It will also provide a real time settlement system , whereby participating members will be allowed to nett off transactions.This body must also approve for 'standard packages' for over-the-counter (OTC) trading of derivative products.

Q: How will BRO make money?

A: The Realtime Settlement System (RSS) will earn fees through transaction fees and earnings from float - which currently is used by the US and ECB. Individual countries based on trade and production patterns can expand or contract currency supply. Based on supply and demand for individual currency, the RSS will aid the price discovery and setting. National Central Banks will be able to borrow or lend BRIX through the BRO.

Q: Who will man the BRO?

A: Banking specialists will be deputed from (initially, founder) member countries in equal proportion at each level in the organization. Over a period of time, the BRO will build it own cadre of banking specialists - starting with entry level candidates.

The Currency

Q: What will the currency be called?

A: Initially, the start up name of the currency unit can be called BRIX.

Q: How will the BRIX currency look like?

A: The BRIX currency will only exist in bank accounts. It will not be printed, circulated physically or stored in vaults.

Q: What will happen to current US$-Euro reserves?

A: Initially all dollar reserves will be used to facilitate trade between member and non-member countries. The BRO will maintain dollar /Euro reserves equal to 3 months requirements for member countries. Excess dollar reserves of member countries will drawn down gradually over 12-36 months based on market developments.

Q: How will monetary expansion of the BRIX be handled?

A: All monetary expansion of the BRO will happen through trade volumes and capital infusions. The BRO cannot print, monetize, expand money supply.

The Mechanics and Operations

Q: How will exchange rates be determined?

A: Demand and supply for currencies will determine exchange rates. Output of products, services, will create supply and demand for various currencies.

Q: Who will be allowed to trade on the RSS?

A: National currencies will be traded on electronic platforms with accredited traders, backed by institutional settlement system, trade guarantee - based on demand and supply for various national currencies.

Member Benefits

Q: What changes will countries need to make?

A: Very few. All transactions must be linked to the index currency - the BRIX. No country will be required to change from their current currency system. As trades happen, a BRIX amount will be created. As the payout happens, that many BRIX will be extinguished.

Q: What reserve requirements will be imposed on member countries?

A: All countries will be required to maintain a reserve of 1 month's BRIX usage with the BRO. This amount will earn interest rate at market determined rates.

Q: What happens when countries go through emergencies, catastrophes or calamities?

A: In case of extreme volatility in any currency due to currency /economic /natural disaster, the BRO Board of Governors may approve loans - which will be guaranteed by the donor central banks. Loans by BRO will at all times will be covered by guarantees.

National central banks may guarantee only 'interest' payments or 'interest+principal' amounts. In case of normal commercial loans, the principal and interest repayments can be a commercial credit decision by the BRO.

Q: How will countries maintain their foreign currency reserves?

A: Countries will need to maintain minimal BRIX reserves. BRIX will be fully convertible into other currencies. However, since all national currencies will be convertible, the need will be minimal.

Q: What will be the disclosures and information requirements?

A: BRO will collate, circulate and publish information given by all member Governments regarding M3, currency, etc.

Safety, Checks & Balances

Q: What will happen when a 'rouge' Government prints too much money?

A: Whenever, exchange rate volatility exceeds the prescribed bands, BRO will impose trade restrictions after due enquiry.

Q: What about predatory currency traders?

A: Since, BRIX cannot be bought except by creating business trade, there cannot be large holdings of BRIX which can be used for predatory activities. National currencies of member countries can be at risk if excessive monetization. But, since, trading in all currencies will happen continuously, excessive monetization will first come to light in terms of excess supply and deterioration in exchange rates.

Q: What about fake currency?

A: The BRO will have its own mint and currency printing units which will print currencies for member countries. This will ensure that malafide, fake currency by foreign agencies, criminal elements will be eliminated. The BRO may also insist that weak economies print their currency at the BRO mint to ensure that there is transparency in money supply.

Q: What about trade in Government debt and securities?

A: All member countries will be required to intimate and route transactions of Government debt, securities through the RSS. This will ensure that there will be complete transparency in debt, M3, etc.