Washington Consensus v/s Beijing Consensus

We have already elucidated that the New World Order would be built around the Sphere Of Influence by major global powers by projecting their economic & military power across the influenced states. The Sphere of Influences are primarily determined by the relative economic strength of Established & the rising powers like US & China. US is truly the Lone Global Super Power not only in terms of Economy of 17 Trillion $ but also commanding world’s largest military force. China on the other hand has an economy of 10 trillion $ with one of the largest armies in the world after US. It’s an irony that while China has 10 trillion $ economy it does not have the military might to stand upto US & its allies in Asia-Pacific; Russia on the contrary has the military might to take on US & its allies but does not have the economic might which China has. It would be fair to state that in the New World Order the sphere of influence would be oriented from 2 opposite poles i.e. Washington Consensus & Beijing Consensus. World’s Geo Economics & Geo Politics will revolve around Washington & Beijing trying to exert its sphere of influence by soft economic power & muscle flexing through overt, covert means. 

The Washington Consensus:
The Washington Consensus refers to a set of reform policies that the US government and financial institutions based in the American capital advocate believe should be implemented by nations to ensure economic growth. It was first coined in 1990 about Latin American economies. The Washington Consensus is the Economic Policies & Reforms imposed by the financial institution controlled or based out of US like IMF, World Bank or to some extent even the ADB. Financial institutions like IMF, World Bank are the prime lenders of aid & loans most of the world including the Developing Countries who require big investment in infrastructure, other projects. These banks/institutions in turn ask for hefty interests on Loans from already debt-ridden countries & prescribe them reforms like Privatization of Resources, Austerity measures in garb of fiscal prudence. This financial model is not only followed by Global Financial institutions but also by Private Corporations & banks. Hence in later half of the last century this financial model better came to be known as Washington Consensus. Washington Consensus not only includes Financial Aid & Loans but also bailouts, corporate lending’s, tax structures & free trade agreements that embody the principles of Western Economic Model. Washington Consensus mainly encompasses US extending its sphere of influence through various treaties & agreements like NAFTA or proposed trade treaties like TPP (Trans Pacific Partnership) or TTIP (Trade Agreement between US & EU states) in addition to the military bloc of NATO. 

Beijing Consensus:
The opposite pole to the Washington Consensus that has emerged is Beijing Consensus, where China is trying to exert is sphere of influence through projecting its economic might across the influenced states like Central Asia, Pakistan, Iran, Maldives, Africa & even trying extending it to some Latin American countries. China has recently inaugurated the AIIB (Asian Infrastructure & Investment Bank), initiated the projects like OBOR (One Belt One Road) to revive the Old Silk Route of trade connecting Shanghai with Central Asian countries. To understand the Beijing Consensus one need to decipher the Economic Model that china aims to projects across the region & the world.

China is projecting its economic influence across the region like Pakistan where it has developed the strategic port of Gwadar in gas rich province of Balochistan & is planning to construct an economic corridor from Gwadar Port on the Gulf Coast to Karakoram Highway syncing it with its Silk Route Project of OBOR, similarly china is aiming to acquire strategic ports & listening posts across the Indian Ocean from Myanmar to Sri Lanka to Maldives. In addition to this, there is the great game in central Asia where China is trying to impose its shanghai based order through projects in Infrastructure, Oil, gas & financial assistance to the central Asian states like Kazakhstan, Kyrgyzstan in the name of SCO (Shanghai Cooperation Organization).

China’s sphere of influence is expanding beyond Asia-Pacific into Africa as well where its being called the Colonial Conquest of 21st century.  “China’s Export-Import Bank extended $62.7 billion in loans to African countries between 2001-2010, or $12.5 billion more than the World Bank.” Other figures go even higher. What is clear that Chinese people and money have flooded into Africa in the past decade, chiefly to buy raw materials to fuel China’s roaring economy. Once a largely neglected region of the world, sub-Saharan Africa has quietly become the center of a struggle for influence between what are arguably the world’s chief powers: China and the United States. U.S. companies had committed to invest $14 billion in Africa. But that is a mere pittance when compared to an estimated $75 billion in investments China has made in Africa from 2000 to 2011. China's top five African trading partners are Angola, South Africa, Sudan, Nigeria, and Egypt. In 2014, Premier Li unveiled an extra funding package totaling at least $12 billion for Africa, extending credit lines by $10 billion and boosting the China-Africa Development Fund by $2 billion

In Latin America, it is difficult for a pledge of $250 billion in direct investment to go unperceived, especially when the money is coming from China. At the China–Community of Latin American and Caribbean States (CELAC) forum in Beijing in January, Chinese President Xi Jinping signaled that his country will continue to literally build its way into the region with its investments in Latin American infrastructure projects. Chinese dragon has been flying high in Latin America, especially in the Venezuelan, Argentinean, Brazilian, and Ecuadorian skies. 

Instruments of Beijing Consensus:
China’s response to this changing global dynamic is that it launched expensive new initiatives, such as the Asian Infrastructure Investment Bank (AIIB), the BRICS Bank, and the ‘One Belt, One Road’ initiative in order to strengthen infrastructure both on the westward land route from China through Central Asia and on the southerly maritime routes from China through Southeast Asia and on to South Asia, Africa, and Europe. China’s frustration to the lack of Reforms at IMF by increasing the voting share & inducting Yuan (the Chinese currency) as part of SDR has been one of the sticking points it has with International financial Institutions part of the Washington Consensus. More than 60 countries have signed with AIIB, which includes many EU nations like UK, France, Germany etc, & even America’s closest allies like Israel. The Top Contributors of Corpus of 100 Bn $ of AIIB are China with 29.78 Billion $ (26.06% Vote Share), India with 8.37 Bn $ (7.51% Vote Share), Russia with 6.54 Bn $ (5.93% VS), Germany 4.48 Bn $ (4.15% VS), South Korea 3.74 Bn $ (3.5% VS) & Australia with 3.69 Bn $ (3.46% VS). Despite China claiming to establish AIIB on the moot issue of a non-western monopolistic financial institution giving fair & equal representation to countries outside Washington Consensus; the fact remains that China retains the VETO in AIIB with the largest voting share of 26.06% compared to any other member state. 

The ‘One Belt, One Road’ (OBOR) initiative is larger than the AIIB. It started with the idea that nearby countries in Central Asia—spread along the traditional Silk Road-could benefit from more transport infrastructure, some of which China could finance bilaterally. China has even added maritime road or strategy to its Silk Route Project by integrating it with its String of Pearls in South China Sea, Indian Ocean Region all the way extending its influence to Europe. China though faces resistance from neighbors like India, Vietnam, Indonesia & Japan to OBOR.

In Addition to AIIB, Even the BRICS Bank is HQed in Shanghai. BRICS offers a truly large economic landscape on which the experiment to internationalize the Renminbi could begin. Chinese President Xi Jingping made a call to BRICS Nations to push for governance reforms in IMF at BRICS Summit in UFA, Russia in July 2015.  The NDB, the trade cooperation agreement and the economic cooperation pact among BRICS could facilitate this. The second key advantage has to be diversification of the Chinese product market by moving towards an eventual BRICS Free Trade Zone, seeds for which were planted in Ufa.

Washington Consensus V/S Beijing Consensus:
The Washington Consensus dominated World Order in most part of the last century that oriented from Wall Street but now we see an emergence of Beijing Consensus or a Geo-economic order oriented from Shanghai. In Beijing Consensus it is China that is trying to spread its influence through Geo-strategic/economic means like AIIB, OROB, String Of Pearls, SCO or BRICS while it is Russia that is complementing China in the Beijing Consensus viz-a-viz the Washington Consensus. Russia, which is hamstrung with Ukraine Conflict at the European Cross roads & sanctioned by the west faces a financial crisis with Falling Ruble & Crude is being pushed into China’s sphere of influence & backing the “Beijing Consensus”. 

It is prudent to note that such counter-force against Washington Consensus by China and Russia is not meant to be a revolutionary measure. On the one hand, both China and Russia benefited from the post-Cold War expansion of neoliberalism, partially endorsing the policy packages advocated by the Washington Consensus. Their economic achievement to a large extent is the result of gradual integration in the liberal world order. Externally, both countries have taken an active role in overseas investment and trade, becoming major investors in many countries and industries around the world, with resources that can rival those of the traditional capitalist core countries.

Beijing Consensus is not about rocking the Washington Consensus but an attempt to create an alternate Geo-Strategic & Economic Vision where the rising powers like China demand for a more ‘equitable’ international order and global governance reform. IMF is already in talk with China with respect to its currency Yuan being in SDR, which in most likelihood, will be acceded to in near future. World bank President & AIIB Secretary General agreed on co-financing of projects & a meet is scheduled in fall in Washington to discuss the possible tie-ups. 

Bank of China in the meanwhile has become the First Asian Bank to join the Auction Setting of Gold Prices in London’s Bullion market. The Other members are Goldman Sachs, HSBC, JP Morgan Chase London, Bank of Nova Scotia, Societe Generale & UBS. London is world largest gold trading exchange & China is believed to be looking to establish its own benchmark system to rival London in Gold Trading. For this purpose the China is stockpiling gold as a part of plan to diversify its massive foreign exchange.

China faces several roadblocks in its vision from the recent turmoil in Chinese Stock Markets or the expected slowdown in China Growth estimates or the Massive Credit Bubble & Ghost Cities. Despite all these hurdles China’s Economic capacity as Low Cost manufacturing hub & being the largest trade partner of US puts it into a unique position that while US & China compete with each other in sphere of influence yet both are equally interdependent. Hence it would be fair to conclude that the Beijing Consensus just like the Washington Consensus is just projection of Regional & Global order the way the respective powers view it which will define the New World Order in this Century.

The Great Game in Central Asia

Image Source: Google 
Central Asia is the Jewel in the Crown that is now up for Grabs. Once part of Soviet Union the CIS States are rich in vast natural resources with large Oil/Gas reserves in areas near the Caspian Sea & Nuclear Material like Uranium.  From a Geo-political point of view, Central Asia has always been important. From the middle to the end of the 19th century, while the region was part of the Russian Empire, the oil-bearing areas of Baku were producing half of the world’s oil supplies. In World War II, during his campaign against Russia, Hitler tried to capture Baku and the Caucasian oil fields as part of his strategy for world domination. After the war, the Soviets retained these areas as reserves, choosing to exploit oil deposits on Russian soil, in Tatarstan and Siberia. Following the collapse of communism the ex-Soviet republics of Central Asia, especially Turkmenistan and Kazakhstan, have been trying to exploit their natural resources, since they consider oil to be the prime means of securing their economic and political independence.

Uzbekistan, Tajikistan and Kyrgyzstan – the other three post-Soviet countries in Central Asia – are not yet seen as major energy players. That could change though, with new investments being considered. Tajikistan and Kyrgyzstan, with no substantial raw materials deposits – though it is believed oil and gas resources in Tajikistan’s Bokhtar field are significant – rely on hydro power. They account for more than 70 percent of Central Asia’s total capacity.

China and Russia in Central Asia:
China's presence and influence in Central Asia - Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan - have been increasing. The westward strategy articulated by Chinese President Xi Jinping in his "New Silk Road economic belt" highlights Central Asia's importance for Chinese economy and development. Central Asia is resource rich, and, because of its proximity to China offers a great opportunity for cheap, reliable energy imports. China has been investing billions of dollars in the energy sector, which include a series of contracts with Kazakhstan worth $30 billion, 31 agreements of $15 billion value with Uzbekistan, and natural gas transactions with Turkmenistan in 2013, which reached about $16 billion. China has also provided loans and aid of $8 billion to Turkmenistan and is expected to provide at least $1 billion to Tajikistan. Last year, China upgraded relations with Kyrgyzstan to a strategic level. China’s strategic aims in central is to secure an alternate energy route preparing for eventual standoff in Indian Ocean & South China Sea in future which has the potential to choke off China’s Crucial energy supplies from Gulf Region via the Andaman Sea.

Kazakhstan is the leading oil producer in the region, with output of roughly 1.6 million barrels per day (bbl/day), of which approximately 90 percent is exported. The Baku-Tbilisi-Ceyhan network that came online in 2006 is not the only Kazakh attempt to break Russia’s monopoly. Astana is already one of the most significant oil suppliers to China. The first pipeline connecting the Caspian shore with China’s Xinjiang province, is one of the longest links in the world at nearly 2300 km. China in fact controls around 20 percent of Kazakhstan’s oil production and is its key trade partner. Bilateral trade should reach $40 billion next year. Similarly Turkmenistan is the main gas exporter and possesses the largest gas deposits in Central Asia and one of the richest in the world. It has similar goals. The first Turkmen undertaking to break Russia’s transit dominance was a pipeline to Iran built in 1997. The recent major venture – the Central Asia-China gas pipeline – allows Ashgabat to transfer its hydrocarbons directly to China. Interestingly from a regional perspective, it also offers to connect spurs from Kazakhstan and Uzbekistan. Unlike other pipelines that are consortia, the China-Central Asia pipeline is itself comprised of three separate join ventures, each based on 50% ownership between China and Turkmenistan, China and Uzbekistan and China and Kazakhstan. Essentially this means that China is the arbiter in Volume, Maintenance of this pipeline project.

The Central Asian Republics have been mostly in the sphere of influence of Russia having close geographical & strategic positioning being energy rich former soviet states. Russia has long standing political, historical & cultural ties with Central Asian States. Moscow too has upped its game to consolidate its position in its backyard with Floating a Eurasian Economic & Customs Union with countries like Kazakhstan being part of it. Though EEU has kicked in Jan 2015 yet you have Kazakhstan trying to assert its strategic autonomy & not being totally depend upon Russian Sphere of Influence. Kazakhstan has refused to accept the plummeting ruble as a common currency. Ukraine Crisis, the resulting economic recession & crash in ruble has badly hit Russia’s power to exert economic might over the crucial region in its backyard that has forced Astana to look towards China. 

China and Russia both are part of SCO that includes central Asian states & the new entrants India & Pakistan. But the fact remains that unlike EEU the SCO is a Shanghai based Order with China trying to increase its sphere of influence in the Crucial Resource rich region; a strategy that directly undercuts the Russian Influence over the region. It has to be stated along that China has the advantage of 10 Trillion $ Economy & Robust Military to project its soft power not only in central Asia but even getting involved in the Afghan Peace Talks viz-a-viz Taliban & Pakistan giving it a vital foothold in the region. China also has crucial stake in this region given central Asia is hotbed of Jihadi Recruitment & terrorist Organisations like ISIS & the ones operating in the neighboring Xinjiang Province of China. 

Russia is reluctant to further empower China, even in a multilateral setting, as it prefers instead to promote its own regional economic architectures such as the Eurasian Economic Union (comprised of Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan as of May 2015), or the Russian-Kazakh Eurasian Development Bank. Beijing in private has grown frustrated with this Russian reticence, but, undeterred, China has continued its economic activities bilaterally, often referring to its own initiatives as “SCO” projects. China is beginning to reassert itself as a continental power, while Russia struggles to maintain its economic and political supremacy in Central Asia. Facing greater competition from the US in East Asia, Beijing is shifting attention westward to take advantage of what it perceives as a vacuum in Central Asia.

India in Central Asia:
Kazakhstan has 12% of the world's uranium resources. In 2009 it became the world's leading uranium producer, with almost 28% of world production, then 33% in 2010, 36% in 2011, 36.5% in 2012, and 38% in 2013.  Kazakhstan, a leading uranium producer globally, will supply 5,000 tonnes of uranium to India during 2015-19 during PM Modi’s Recent visit to 5 Central Asian states in July. India also agreed to have major Military Exercise with Kyrgyzstan a country that Borders China. Turkmenistan was also part of the proposed TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline but given the security concerns of transporting the gas is through troubled region of Afghan-Pak the project has been in doldrums. After Iran Nuclear Deal going through & India getting access Chabbar Port on Iranian Coast a new proposal of TII (Turkmenistan-Iran-India) pipeline seems more feasible. The Iran Nuclear Deal has really put India back in the game with Iran & Afghanistan being pivot to this central Asia strategy. Indian PM Narendra Modi made a significant statement during the recent Central Asian Tour directly taking Swipe at China by mentioning that Reviving Old Silk Route is about benefiting Central Asia as a hub of trade not part of pivot between Global Powers expanding its Sphere of Influence. It is also pertinent to state that Indian Air Force already operates a Military Base in Farkhor. Tajikistan on the northern periphery of Afghan Border. 

US Foreign Policy in Central Asia:
Central Asia has not only been on the radar of Continental Powers like like Russia & China but even the Global Super Power like US. The United States has very nuanced foreign policy to tap into natural resources of the central Asian nations but provide aid & economic assistance to let these countries develop critical infrastructure that they need with an intended consequences of pushing them out of the Russian Influence Zone. The Region is very critical to United States not only being an energy rich nation but also being a strategic location giving access to Russia, Iran & China the continental, regional powers. US was heavily involved in central Asian region before 9/11 when it was negotiating Dauletabad Pipeline from Turkmenistan to Pakistan Sea Coast via Afghanistan & subsequently it also backed the idea of TAPI Pipeline.

In wake of 9/11 & Afghan invasion US Bases in Central Asia allowed critical NATO supplies into Afghanistan during the Afghan war. As the war winds down, US has vacated many bases like Manas in Kyrgyzstan. It is in Afghan-Pak context that central Asia becomes equally crucial for united states & its strategy against Terror Groups in Afghanistan be it Taliban or ISIS or Qaeda. The US strategy in central Asia is not only of being a soft one of Economic Aid through its Corporations & Financial Institutions but also allowing Powers like India, China & Iran to now access Central Asia directly which undercuts & checks Russian Sphere of Influence in the Region.

With the Signing of Iran Nuclear Deal the Flood Gates for Central Asia have opened with Global & Regional powers trying to extend their sphere of influence over the Region. While Russia tries to retain the influence over the region it dominated once, on the other hand you have china that plans to integrate its Energy Policy with its Trade Policy of One Road One Belt extending its sphere of influence over Central Asian Region. On the other side you now have the rising  & regional powers like India & Iran too eyeing for their share of pie; while the United States exerts its Soft Financial & Covert power in the Region playing the respective players against each other. The Great Game of Central Asia has just begun.

The Greek Tragedy

Image Source: cranleigh.org
The Greek Tragedy of Epic Proportions is just unfolding. The world just saw one of the oldest civilization crumble to financial ruins & virtually plead for Mercy in form of Bailouts from International Monetary & Financial Institutions. The Greek Tragedy is a stark reminder to the whole world about what fiscal prudence & debt management is about. While the world discussed the Greek Tragedy on a Flip Side this saga has marked the rise of Germany lead by its Chancellor Angela Merkel as a force to reckon with in European Union & the world. The Rise of Germany’s as Europe Power house is the untold story of the Greek Tragedy that has skipped most. It has always been Europe’s Dilemma when Germany was weak it tempted Foreign Invasions mostly French & whenever it became united it was strong enough to defeat its neighbors single handedly. In a sense this crisis also speak about a resurgent United Germany under Chancellor Merkel as a powerhouse of EU.

But the moot Question is how Greece Reached to this Dire Situation of a total financial meltdown?. Greece endured an awful occupation under German troops during WWII. This was nothing to the civil war that erupted following the end of the occupation, as communists and government troops tore the country apart. A government victory in 1949 left Greece economically wrecked scarred and politically deeply polarised. These divisions have lingered on with a formal accord over the civil war only reached in the 1980s when many exiled communists returned home.

Greece Entry into EU & Goldman Sachs:

Greece has had a tricky time with its finances. In the 1990s it consistently ran significant budget deficits while using the Drachma. As a result of this economic mismanagement it joined the Euro in 2001, rather than 1999 like many other EU nations. The story of Greece joining EU is another sordid saga marred with controversies of fudging of Greece’s debts by Goldman Sachs to enable it to join EU. 

Creative accounting took priority when it came to totting up government debt. Since 1999, the Maastricht rules threaten to slap hefty fines on euro member countries that exceed the budget deficit limit of three percent of gross domestic product. Total government debt mustn't exceed 60 percent. The Greeks have never managed to stick to the 60 percent debt limit, and they only adhered to the three percent deficit ceiling with the help of blatant balance sheet cosmetics. One time, gigantic military expenditures were left out, and another time billions in hospital debt. After recalculating the figures, the experts at Eurostat consistently came up with the same results: In truth, the deficit each year has been far greater than the three percent limit. In 2009, it exploded to over 12 percent.

Greece's debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period -- to be exchanged back into the original currencies at a later date. Such transactions are part of normal government refinancing. But in the Greek case the US bankers devised a special kind of swap with fictional exchange rates. That enabled Greece to receive a far higher sum than the actual euro market value of 10 billion dollars or yen. In that way Goldman Sachs secretly arranged additional credit of up to $1 billion for the Greeks. This credit disguised as a swap didn't show up in the Greek debt statistics. Eurostat's reporting rules don't comprehensively record transactions involving financial derivatives. 

At some point Greece will have to pay up for its swap transactions, and that will impact its deficit. The bond maturities range between 10 and 15 years. Goldman Sachs charged a hefty commission for the deal and sold the swaps on to a Greek bank in 2005.

Olympic Drain on Greece:

Another Important Reason that the Greeks were left in Ruins because of the Athens Olympics 2004 that virtually drained out Greek Economy into Further Debt. In 2013, Yannis Stournaras, then finance minister, argued that the Games had broken even. That August, he also said Greece would not need another bailout. Other estimates put the cost of the Athens Games at more than €7 billion, perhaps a lot more. Those figures may include upgrades to hospitals and archaeological sites. They do not include the cost of infrastructure projects such as a new airport, an extended and renovated subway and light rail systems. The Athens Games were so expensive, in part, because the Greeks made such a mess of their preparations. The IOC warned the organizers repeatedly about delays. The late rush to completion escalated the costs. The improved infrastructure is nice but the chief legacy of the Olympic Games is debt for the host. The IOC, on the other hand, reported that it made $985 million from the Athens Games.

The Greek Crash:

This house of cards came tumbling down with the financial crash of 2008. Like many other countries in the EU Greece was seriously affected, but it was unable to climb out of the hole as it had in the past by printing more currency (thus boosting the economy) as the Euro was controlled by the European Central Bank (ECB). Unemployment spiraled to 28 per cent. In 2010, the Troika (ECB, the International Monetary Fund and the European Commission) started handing Greece loans in exchange for spending cuts and tax hikes. This did not go down well in Greece although the economy did pick up. A second later bailout brought the total amount given to Greece roughly £169 billion. From Fudging in Balance Sheets to Over Spending in Athens Olympics to launching Pension & other social security schemes that proved massive drain on already burned out Greek Economy sending it into debt spiral downwards.

The situation despite bailouts from Troika got worse with Greek Debt to GDP Ratio soaring from 21% in 1980 to 100% in the year 2000 to 172% in the year 2015. Greece’s Debt is 320 bn Euros & it already has taken 240 Bn Euro of bailouts from Troika & Creditors with its GDP falling by 25% since 2010 & unemployment rate at a staggering high of 26% owing to austerity cuts conditioned along with the bailouts leading to less wages, jobs & recession. 

The bailout program was extended by 6 months in November 2014 till June 2015 pending a negotiation of a new deal. In January 2015, Syriza the Left leaning party in Greece was elected to power that was anti austerity & despised the motives of Troika to impose austerity cuts like Pension Cuts & more taxes as part of the deal that was rejected by Greek PM Alexis Tsipras who called for a referendum on the bailout being offered Troika. Greek Govt instead called foe Debt restructuring & haircut, which the Euro Group hax time & again rejected while its now being acceded too even by the IMF. The Greek Referendum overwhelmingly rejected the Troika Austerity deal by 61% No Vote to 39 % Yes vote amid sharp anti German rhetoric for WWII Debts it owed to Greece. The call for referendum & rhetoric sealed the fate of Greece with banks remaining shut with tight capital controls to save off emergency liquidity provided by the ECB. In meanwhile Greek Finance Minister Yanis Varfoukis resigned amid renewed talks between Greece & the Euro Group leaders. Antagonized by Greek’s snub of a referendum & rhetoric; backed by Public Opinion, German Chancellor Angela Merkel mooted the idea of Temporary Greek Exit out of Euro, which made situation in financially starved Greece more dire. Ultimately Greek Govt left with no choice had to bend & accepted a harsher austerity deal than on offer before the referendum; with a 3rd bailout package of 85 Billion Euros. The IMF has set off a political earthquake in Europe, warning that Greece may need a full moratorium on debt payments for 30 years and perhaps even long-term subsidies to claw its way out of depression. "The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date,” said the IMF in a confidential report. Greek public debt will spiral to 200pc of GDP over the next two years, compared to 177pc in an earlier report on debt sustainability issued just two weeks ago. 

The terms of Greece bailout secured are: Greece’s parliament must approve the deal and legislate Troika diktats into law with Tsipras’ signature by July 15. Monetization of Greek assets in hands of EU to generate 50 Bn euros of which 25 Bn will be used for repayment of recapitalization of banks & other assets & 50% of remaining 25 bn will be used to decrease debt GDP ratio while remaining 50% will be used for Investments. Higher regressive VAT taxes hitting millions of impoverished Greeks hardest along with broadening the tax base affecting ordinary people most. Stiff pension cuts (on top of 40% eliminated earlier) including for poor retirees cut no slack. Adopting a Code of Civil Procedure to streamline procedures and reduce costs – in other words, continued stiff budget cuts harming millions of Greeks already suffering hugely from earlier imposed austerity. Giving foreign investors freer access Greece’s economy. Privatizing power generation and transmission along with other state enterprises previously off-limits. Neutralizing labor rights ahead of eliminating them altogether – including restricting collective bargaining and right to strike as well as eliminating hiring and firing restrictions.

Bottom line: Athens has entirely surrendered to Troika. Greater than ever austerity imposed, hitting millions of impoverished/unemployed Greeks hardest, including poor pensioners to receive less than their already meager payments. Already Greek Unions have called for a Strike against Harsh deal with some speculating that Greece is heading for snap polls sooner than later. To conclude it’s a perfect Greek Tragedy with a Civilization gone to financial ruins.

Iran Nuclear Deal

Image © Chappatte in The International New York Times 
We have already discussed the Interim Iran Nuclear agreement clinched at Lausanne in April 2015 in “The Persian Affaire”. After nearly 19 days of Negotiations we had the Iran Nuclear Deal announced by P5+1 & Iran Foreign Ministers on 14th July 2015 in Vienna. This day will go down in history as one of the historic days where world powers signed a Nuclear accord legitimizing Iranian Nuclear Programme while claiming to limit its Nuclear Bomb making capabilities. After Treaty of Versailles, Iran Nuclear Deal stands in league of the historic moments in world geo politics. Before critical analysis of the Deal lets first go in brief what the terms of the Deal as stated in JCPOA (Joint Comprehensive Plan of action) are:

Enrichment, R&D & Stockpiles:
  • That Iran agrees certain to limitations on all uranium enrichment & certain specific enrichment activities on certain R&D for first 8 year followed by gradual evolution to next stage for peaceful purposes
  • Iran will phase out IR-1 Centrifuges in 10 years & at Natanz facility Iran will have maximum of 5060 IR 1 Centrifuges (earlier it had 19,000 IR 1 Centrifuges) & all the excess ones will be kept under IAEA Monitoring.
  • For a period of 15 years Iran with keep its Uranium Enrichment at 3.67% while earlier it has 20%.
  • Iran will Convert Fordow Facility into a Nuclear, Physics & technology center & will not enriched uranium at Fordow facility even for R&D for a min of 15 years.
  • During this 15 Yr period Iran will keep not more than 300 KG of enriched uranium of upto 3.67% UF6 (Iran earlier had 10,000 Kg of low enriched UF6)
  • All Other centrifuges & enriched uranium will be kept under IAEA continuous monitoring.

Arak Heavy Water Facility & Reprocessing:

Iran will build modernized heavy water reactor in Arak based on conceptual agreed design with upto 3.67 % enriched uranium in an International partnership & certification. Arak Reactor will not produce weapons grade plutonium. There will no additional or new heavy water reactors in Iran for 15 years & Iran will ship out all spent fuel for present & future power, research reactors.

Transparency & Confidence Building Measures:

Iran will implement & apply Additional Protocol to its comprehensive safeguards agreement. Iran will fully implement the agreement signed with IAEA for Past & Present Clarifications relating to its nuclear programme. Iran will voluntarily allow IAEA Inspectors to monitor its commitments laid in JCPOA; in case of Mines for 25 years, Containment & centrifuge rotors for 20 yrs, on site/plant enrichment technology & access to IAEA for 15 years. Iran will not engage in R&D for Nuclear Explosive Devices be it Uranium or Plutonium & will comply with terms set out in Annex IV of JCPOA & UNSC Resolutions.


The first step is “Adoption Day,” which occurs 90 days after the deal is endorsed by the U.N. Security Council. On that day, the United States and the European Union start taking legal steps to lift certain sanctions—while Iran must pass the Additional Protocol of the Nuclear Non-Proliferation Treaty (which allows for onsite inspection by the International Atomic Energy Agency) and issue a statement on “Past and Present Issues of Concern,” acknowledging or explaining military aspects of its nuclear program in the past. (Many critics were certain that Iran would never own up to this obligation.)

The second step is “Implementation Day.” This is when the West really starts to lift sanctions, but only “upon the IAEA-verified implementation by Iran of the nuclear-related measures”—that is, only after international inspectors are satisfied that Iran has fulfilled its main responsibilities in freezing and reducing elements of its nuclear program. Section 15 of Annex V lists 11 specific requirements that Iran must have fulfilled, including converting the Arak heavy-water research reactor, so it can no longer produce plutonium; reducing the number of centrifuges and halting production of advanced centrifuges; slashing its uranium stocks; and completing all “transparency measures” to let the inspectors do their job.

The third step is “Transition Day,” when more sanctions are dropped. This happens eight years after Adoption Day, and even then only after the IAEA Board of Governors issues a report, concluding, “that all nuclear material in Iran remains in peaceful activities.”

Finally, there is “UNSCR [U.N. Security Council Resolution] Termination Day,” when the Security Council drops all of its remaining nuclear-related sanctions. This happens 10 years after Adoption Day.

In other words, sanctions are not lifted upon the signing of the deal or anytime at all soon—and when they are lifted, it’s only after inspectors signify that Iran is abiding by the terms of the deal, not simply that a certain date on the calendar has passed.

Dispute Resolution Mechanism & Snap Back of sanctions:

In case of a Dispute between P5+1 & Iran that matter shall be referred to a Joint Commission which shall solve the issue within 15 days & if that matter is not solved it is then referred to Ministers of Foreign affairs parallely who would have 15 days to resolve the issue, if still not resolved then refer it to advisory board consisting of 3 members who shall give a non binding report in 15 days. Even if after this 30 day period no resolution is found that Report will be forwarded to Joint Commission to resolved it within 5 days & if still no solution found that either party can cease from its obligations under JCPOA & report the significant non-performance/breach to UNSC. After the complaining party has notified UNSC of significant non-performance/breach then UNSC would vote on Continue of Sanction Lifting & if the resolution is not adopted within 30 days of notification, the old UNSC resolutions would be re imposed unless UNSC decides otherwise. The re imposition on UNSC sanctions wont be retroactive in nature to agreement/contracts signed between any party/entities or Individuals with Iran. Iran has stated that in case UNSC sanctions are reimposed it would cease performing its commitments under JCPOA.

Critical Analysis of the Iran Nuclear Deal:

Iran Nuclear Deal has been met with vociferous opposition from Israel, Sunni Arab states like Saudi Arabia & the Republican Dominated US Congress. While the deal seems comprehensive; there are certain flaws & grave error that are worth pointing out. Under the deal so signed between the World Powers & Iran, No Nuclear facility/infrastructure in Iran will be dismantled or destroyed like Arak Heavy Water Reactor or the underground facility at Fordow. No advanced centrifuges will destroyed or shipped out but kept under IAEA Monitoring for specified period. 

Under the agreement, Iran is supposed to dilute its enriched-uranium stockpile, convert some of it to fuel plates for a small research reactor, or sell it on the open market. Diluting its enriched uranium could be reversed in a few months — possibly much faster if Iran uses advanced centrifuges. A bizarre aspect of this part of the agreement is that Iran will receive natural uranium for any enriched uranium it “sells.” This will help preserve Iran’s enrichment capability and also solve a problem it has concerning access to natural uranium. (Iran has little natural uranium and its uranium mines are running out.) 

Iran has agreed to replace the core of its Arak heavy-water reactor, which is under construction, so it will produce less plutonium and to send the spent fuel rods of this reactor out of the country. However, it will be permitted to operate the Arak reactor, a significant reversal of pre-2013 U.S. policy that work on this reactor be halted permanently because it is a serious nuclear-proliferation threat. Because of this new provision, Iran will develop its expertise on operating and building heavy-water reactors during the period the agreement is in effect. 

The IAEA can “press” for inspections of military sites and other suspect nuclear sites, but the access will be managed one with IAEA writing to Iran for prompt access who if decides otherwise the matter would go to joint commission for dispute resolution thereby meaning that Iran get sufficient time of 24 Days to cover its tracks of clandestine nuclear activities.

Some of the worst concessions concern Iran’s eleventh-hour demand to lift embargoes on conventional arms and ballistic missiles. The conventional-arms embargo will stay in place for five years, and the ballistic-missile embargo will be in place for eight years but will be lifted sooner if the IAEA definitively clears Iran of any current work on nuclear weapons. The IAEA is very unlikely to find evidence of current nuclear-weapons work, as it won’t be allowed to inspect non-declared nuclear sites where this activity is taking place.

Though US Sanctions Terrorism, Human Rights abuses & missile activities will remain in force; the correlating Arms Embargos & Ballistic Missile sanctions with Nuclear Deal is not only bizarre but tends to imperil the security of regional powers like Saudi Arabia & Israel who are bitter foes of Iran. This is akin to kicking the can full of troubles down the lane 10-15 years where Iran would substantially retain its nuclear infrastructure & capabilities to develop a nuclear bomb. In all these years Iran is also left with huge amount of investments/funds at its disposal to support proxy war in region; also making any future sanctions strategy ineffective. Despite these huge flaws, in most likelihood Iran Nuclear Deal will pass the test of Republican Dominated US Congress as President Obama has vowed to VETO any Congress rejection of the deal & the republicans do not have required nos to over turn a presidential VETO. For all practical purposes the Iran Nuclear Deal despite some gaping holes is now done & sealed.

Ramifications of Iran Nuclear Deal:

Iran Nuclear deal will have effect on the whole world & just not the middle east. Firstly with Iran joining International Community its oil will flow to the markets by 2016 & hence in all likelihood oil wont cross the barrier of 100$ per Barrel in Medium Term. Secondly, Iran legitimacy of a nuclear programme will start a new arms & nuclear race in the Region with countries like Saudi Arabia already signing up Nuclear Deals with Russia & South Korea; US is likely to compensate Israel with More military aid, F-35s, Missile Defense Shield, HiTech Weaponry. Saudi Arabia is already signing military deals worth Billions not only with US but with Russia & France as well. Another consequence of Iran Nuclear Deal & lifting of sanctions will be that Iran will have financial muscle to put behind terror groups like Hamas in Gaza, Hezbollah in Lebanon, Houthis in yemen, Taliban in Afghanistan or backing Assad in Syria to trouble its sworn enemies like Israel & Saudi Arabia; thereby igniting a theatre of proxy war in region on Sectarian Lines. The effects of Iran nuclear deal go beyond the Region as Russia gets to supply cheap Nuclear Plants in Iran, KSA, Egypt, the Western Oil Companies get access to Iran Oil/Gas Fields. Europe gets access to Iranian gas as an alternative to Russian gas supplies.

With Iran Nuclear Deal the dynamics on many levels will change specially in Gulf Region & Central Asia. Both China & India who are Iran largest trading partners before the deal could get access to Crucial Central Asian states & energy routes. India is already building the Chabbar port of Iran & linking it up with Afghanistan & Turkmenistan railway line. The race for central asia between India & China, China & Russia is bound to hot up after this deal. Though people speculate that that in wake of this deal relations in Middle East will change like Saudis teaming up with Russia & Iran with US in fight against ISIS in Iraq. But its highly unlikely that Iran will cozy up with US to replace Saudis who are still one of the pillars of American Strategy in Middle East & will remain so in near future. But the bigger question is No Deal better than this Deal given the alternatives were a catastrophic conflict in Gulf Region. The answer lies in hindsight !!

The New World Order

The New World Order has been an Issue of Constant Debate, there have been Books written on it like the “World Order” by Henry Kissinger who explained it regarding American Concept to the Westphalian System of Democratic states that has become a norm of international community. The Westaphalian System of Democracy founded in Europe cannot be imported & imposed across the world; the rules of society & governance differ from region to region depending upon the Culture, Practices of people, which define how the people in those regions choose to govern themselves. From Democracies in West to Empires in Sub Continent to Dictatorships in Middle east to Communist Regime in China; the World Order has been constantly evolving. Change is the only constant variable.

There have been a lot of Deliberations & Discussions on what “The New World Order” in 21st Century would be. Sans conspiracy theories about it the New World Order (Hereinafter referred as NWO) is being viewed from various perspectives some say it that the New World Order marks the shift of Balance Of Power From Western Hemisphere (US, EU) to Asian Giants (China & India), some allude NWO to BRICS a Block of Developing Countries challenging the Hegemony of Western Economic & Military Dominance. Some continue to hold that Developed countries (G7) still tend to shape the world order. Given So many perspectives are given to “NEW WORLD ORDER”, so lets try & decode what exactly could this mean in a more nuanced way sans ideological bends towards East or the West.

World Order has been constantly evolving from Empires to Nation States to Democracies; the World Order evolved in a big way after World war 1 when after Treaty of Versailles, “League of Nations” was formed, the Ottoman Empire the last Islamic caliphate had just collapsed leading to Mesopotamia & levant to be divided into Mandates of the colonial powers i.e. British & the French. The failure of League of Nations decades later lead to the second World war where the whole world participated either with Allied Powers as colonies or with the Axis powers. The catastrophic toll WW-II took on world community lead to the eventual rise of United Nations, which so far has stood the ground despite its big failures to address several conflicts across the world & demands for Reforms in UNSC.

The Formation of United Nations & later IMF, World Bank as financial institutions shaped not only the world political order but even shaping the world economic order. While the colonies were freed from British & Other colonial powers embracing Freedom, conflicts have continued to plague them from Palestine to the Indian Sub-Continent. After WW-II, the advent of Cold War the world was shaped between two blocks; a Pro Western Bloc in NATO, SEATO, CENTO & a Soviet Block which extended its Sphere Of Influence from East Germany to Caucuses all the way to Central Asia; complementing the above Blocks was a block of Non Aligned nations mainly consisting of third World Countries who opted to stay out of this tug of war between two rival blocks. After the fall of Soviet Union in early 1990s & the Berlin War emerged a New World Order in Europe in form of United Germany & ultimately leading to European Union with Euro as Common Currency & ECB as the Financial Institution running policy for the Union of States in Europe.

The New World Order (NWO) is not about NATO, EU, G7, EEU, BRICS, SCO, ASEAN, SAARC, OPEC, GCC, AIIB, IMF, World Bank; these are just subsets in larger battle of the “Sphere Of Influence”. The World has always been divided in “Sphere Of Influences” be it mandates after WW1 in Middle East & North Africa, Colonies in Asia or Eastern & Western Europe post WW-II. The Global Powers have continued to shape world order in accordance with changing times & circumstances.

Studying the Projection of economic & military powers of Great Powers & Rising Giants is essential to understand the evolving “The New World Order”. The United States of America is creating its sphere of influence by Creating unions like NAFTA – North American Free Trade Association, NATO Military Block with European Partners; or by negotiating the Biggest Trade Agreements in the world like TTIP (Transatlantic Trade & Investment Partnership) with EU states & TPP (Trans-pacific Partnership) with countries like Japan, Chile, Australia, NZ, Philippines, Vietnam, South Korea, Indonesia & extending its influence all the way across the pacific to South China Sea. US is now even courting Cuba & Brazil, extending its influence over central & south America, Europe & all the way across the pacific.

While on the Other side of Atlantic the EU is extending is sphere of influence over Balkans & Baltics with Germany leading the way as power house in Europe along with France & United Kingdom; both inside NATO & Outside NATO through EU, ECB & Euro. While its current adversary Russia is trying create a Sphere of Influence over former Soviet States ranging from Eastern European countries like Ukraine, Belarus to Balkans to Central Asian states like Kazakhstan with Eurasian Economic & Customs Union as a single trading & economic block. 

In Asia, China is building its own Economic Sphere be it SCO (Shanghai Cooperative Organization) or Shanghai based AIIB with Eurasia while retaining a VETO over it Operations & even having the BRICS Bank Headquarters in China. China is also seeking to have its currency Yuan as part of SDR at IMF & while extending its economic, military influence to Maldives, Pakistan, Sri Lanka, Burma, Iran & Vast Mineral rich East & Central African nations, which has been said to the Colonial Inquest of 21st Century. Thereby China is trying to create a Shanghai Based Pivot to Counter the American Pivot; a counter narrative to western economic & military might. 

Meanwhile India on the other hand is seeking to create its area of influence in South Asian Region like SAARC like four Nation Pacts with Bhutan, Nepal, Sri Lanka, Vietnam & the vast Indian Ocean region ranging from Gulf to the Andaman Sea. While Gulf Countries (Sunni Arab states) as GCC are trying to Counter Iran & its ploy to create a Shia Crescent of Syria, Iraq & Iran all having Shia Dominated Governments & Militias countering Sunni Arab States all the way up to Lebanon, Turkey Border.

Basically you have two major spheres of influence trying to extend their economic & military power; ‘One in the west lead by US & EU & the Other lead by the Chinese complemented by the Russian’; while India as a rising power & Gulf Countries are at sub sphere level. In this Bigger Battle of Spheres of influence, the concepts of BRICS or SCO or ASEAN fade out. As Russian President Vladimir Putin has stated few days at BRICS Summit 2015 that BRICS is not a political or a military alliance. BRICS is just informal group of nations having no formal Charter or Convention with a regional Bank with corpus to help members & like-minded states. Similarly SCO with (Russia, China, India, Pak & Central Asian states, Iran) is again Shanghai Based Security Architecture with Regional Focus on Terrorism, Economic Security & Dialogue with Member states & as of now has no Military option/force like NATO. BRICS & SCO is also riddled with different states having different economic issues & inherent contradiction like one between India-China-Pakistan, India-Russia-China or Iran-Pakistan-Afghanistan on various issues.

Hence it would be fair to state that the NEW WORLD ORDER is nothing but the battle of Great powers & the rising powers to create “Spheres of Influence” projecting their Economic & Military power over the Resources rich, Strategic  ‘Influenced States/territories’. The World will see Economics, Political & Social conflicts on the chess board of these very spheres of influence & the global giants will use the influenced states as Vassals, Proxies & Virtual Colonies through Economic Aid, Bailouts, Military & Humanitarian Aid versus the other blocs. It’s a battle royale that lies ahead in 21st Century in this “New World Order”.

The Persian Affaire

Image Source: 4cminews.com
Persia an Empire that once spread from Banks of Nile to Deserts of Babylon & all way bordering Indus Valley. Persia an empire that once spread from Banks of Nile to Deserts of Babylon to Banks of Indus Valley is now on the rise again. Persia Connects not only with King Cyrus The Great but also its rich culture & heritage that the Modern Islamic Republic of Iran has inherit. Iran seeks to recreate that Persian Empire in a The Persian Affaire where it has willing states to court it back to its prime status it held. This is about the Rise of Iran from the Shadows of the Persian Empire in the modern era.

The Nuclear Deal talks have been going between Iran & P5+1 since years & a negotiated settlement is being sought to curtail Iran’s way to nuclear bomb. Iran Nuclear Program has been in works since long  & to understand the technical issues involving in Iran Nuclear Negotiations with the World powers first things to understand is the Sanction Regime by US, EU & UN that have been imposed on Iran since the 1979 Revolution & more so after discovery of its clandestine nuclear programme. 

UN Security Council resolutions have been imposed on Iran in December 2006 after it restarted its Uranium Enrichment in late 2005. In March 2007 UN Security Council voted to toughen sanctions by banning all of Iran’s arms exports and extending the freeze on assets of those associated with the enrichment programme. 

In March 2008 UN Security Council passed further sanctions, including the monitoring of Iranian banks and all Iranian cargo planes and ships suspected of carrying previously sanctioned items. It also extends asset freezes. In June 2010 - UN Security Council imposed fourth round of sanctions against Iran over its nuclear programme, including tighter financial curbs and an expanded arms embargo. These measures prohibit Iran from buying heavy weapons such as attack helicopters and missiles.

One needs to decipher the Historical acrimonious relationship between Iran & world powers mainly the United States & EU after 1979 Revolution, which deposed the pro western regime of Shah of Iran & Hardliners like Ayatollah Khomeini took over the Islamic Republic of Iran which was followed by months of stand off of with US Diplomats & Embassy Staff. The relations between West & Iran froze to an extent that Iran was called the part of Axis Of Evil along with North Korea while Iran accused USA of being the Great Satan more evident during George Bush Jr Presidency coinciding with President Ahmadinejad of Iran. Iran has acrimonious relationship not only with US whose CIA Officers were killed in Beruit attack by Hezbollah fighters in Lebanon a Terror Group backed by Iran but hostile relations with Israel who has fought couple of wars with Hezbollah in Lebanon. 

Iran actions on Clandestine Nuclear activity resulted in sanctions not only from UNSC but also US & EU who imposed various sanctions on Iran forcing it to comply with the International Norms. In June 2012 - US banned the world’s banks from completing oil transactions with Iran, and exempts seven major customers - India, South Korea, Malaysia, South Africa, Sri Lanka, Taiwan and Turkey - from economic sanctions in return for their cutting imports of Iranian oil. In July 2012 - EU ban of Iranian oil exports takes effect.  As a result in October 2012 - Iran's rial currency fell to a new record low against the US dollar, having lost about losing 80 per cent of its value since 2011, which many economists peg as the result of international sanctions.

During President Obama’s first tenure intense back channel talks & lobbying started with Iranian regime specially after President Rouhani came to power with Foreign Minister Zarif who warmed up to the efforts for a negotiated settlement of Nuclear enrichment issue. The negotiations in Lausanne lead to an Interim Deal in April 2015 where major World Power i.e. P5+1 agreed to chalk out the basic framework of a Nuclear Deal with Iran on the basis of which a final agreement is to be concluded by June 30, 2015. 

The Contours of the Interim Agreement as Concluded in Lausanne in April 2015 as per facts sheet issued by United States are; The centrifuges are to be cut down by 90%, the supply chain of Nuclear Fuel will be tracked by IAEA through Regular Inspections. Restrictions for 15 years on FORDOW Facility or even 25 years on some other sites. Spent Fuel or Plutonium needed for bomb is to be shipped out. Iran will sign additional protocol of IAEA; no further building of heavy reactors like Arak and cap of 15 years on selling of heavy water. While the original core of the Arak Reactor enabling weapon grade plutonium for bomb will be destroyed or removed from the country.

Iran will ship the spent fuel from the reactors out of the country for Reactor’s lifetime & commit to no reprocessing or research on spent Fuel. All centrifuges & enrichment infrastructure from FORDOW & Natanz will be placed under Continuous monitoring by IAEA including Uranium Mills in Iran. Iran agrees to reduce its installed centrifuges by 2/3rd from 19000 to 6,104 installed under deal with only 5060 for enriching in 10 years. Enrichment will not exceed 3.67% for at least 15 years & the current stockpile of about 10 K Kg of low enriched uranium will be reduced to 300 Kg of 3.67% LEU.

After reading the above terms in the Interim Deal struck in Lausanne in April 2015 the picture that emerges is that all the centrifuges, supply lines of uranium & facilities will be under dedicated monitoring program by IAEA. The cut down in centrifuges & enrichment significantly lowers the chances of a nuclear Bomb Breakout specially given IAEA strict inspection regime. Taking excess centrifuges reprocessed nuclear material abroad means that nuclear breakout chances are substantially decreased. Most importantly if Iran substantially violates any part of the deal the sanctions will Snap Back which Russia & Some powers are objecting too.

Though the Interim Iran nuclear deal framework agreed in Lausanne in April 2015 substantially lays out the framework there are still contentious issues that are to be sorted out & details that are to worked out specially given the vehement opposition by Israel & the Republican Dominated US Congress who has the power of Oversight on any Nuclear Deal struck with Iran. The negotiations are still on in Vienna to reach a Final agreement. Will history be made in Vienna 2015 is something the world is watching for.  

Lies and Deceit of Pakistan Army

The Islamic army of the Islamic Republic of Pakistan is unlike any standing regular army, in the world. The motto of Pakistan Army, Iman, Taqwa and Jihad fi Sabilillah means- faith, piety and war in the name of God. The Pakistan army neither has faith in its people- nor are the officer corps known to be a pious lot and over the years has time and again hit out at India- its arch enemy! Throughout age and evolution of Pakistan itself, from 1947 till date, Pakistan army has come to be singularly “the most important pillar of Pakistan state!”

As with most nascent countries at the time of birth, suffering from teething issues, Pakistan had to suffer its share of trouble, tribulations and trauma of various social and political miscarriages. With time, instead of healing and progressing towards a better life for its citizen and gentry, Pakistan descended into a regressive cauldron of “long term suffering” for the majority of its people, the army and ruling class being an exception.

At the outset of its existence, Pakistan army became all supreme with the Gen Muhammad Ayub Khan’s 1958 coup. The Pakistan army was here to stay and continues to this day- in some form have a strong ‘iron-grip’ hold over the state, or the other! With Ayub’s coup – Pakistan Army became all powerful in all domestic and international matters of state policy- even when, whenever under a civilian government- if at all, ever!

With coming and going of successive military rulers- from Ayub, Yahya, and Zia and till Musharraf in the recent past- Pakistan army’s General Head Quarters at Rawalpindi truly, became the “nodal power centre” of the Pakistan state! Accept it or deny it, or even call it a propaganda theory- fact remains, Gen Ashfaq Parvez Kayani- Chief of Army Staff of Pakistan Army is power behind the man at Aiwan- e- Sadr, President Asif Ali Zardari and his Prime Minister- Yousaf Raza Gilani! The power and hold of the Pakistan Army over its people can be gauged from the fact that, a common Pakistani – will think twice before opening his mouth against anything to do with the Pakistan army and it’s all powerful Inter Service Intelligence. Yhose who do tend to speak up or try to be vocal- are either picked up, tortured or killed as with the case of noted journalist, Najam Sethi in the 90’s and as recently, Syed Saleem Shahzad the journalist who was picked up by the Inter Service Intelligence, tortured and killed, in cold blood.
The lavish life styles of officer cadre of Pakistan army are legendary. It emanates from the fact that, the Pak army has an equal share in most business and financial enterprises and their dealings thereof within and outside the conuntry. Organisations like the ‘Fouji foundation and Army Wives Welfare Organisation” are conglomerates unto themselves- with budgetary allocations from the state running into millions. The Pakistan army have dedicated teams of officers and ex-servicemen who run ‘fouji’ welfare centres, businesses, enterprises and engaged in trade on behalf of the “army”. With interests in stock markets, agriculture, IT, textile and all other forms of economic diversification, the Pakistan armed forces and its intelligence agencies have its fingers dipped in every pie of state and civil life of the state of Pakistan.

The Corps Commanders of Pakistan are almost a law unto themselves- martial rule or civilian rule, notwithstanding. The Corps cdrs are so powerful within their jurisdictions- they get protocol equivalent to Chief Minister or Governors of provinces and their advice are sought from time to time by the civilian sat-raps as and when the situation arises! The commanders of Pakistan armed forces and army in particular lead a life of extravagance, which is not known to many a standing army, in the region or of a similar “economy at par with Pakistan’s”!

Every state in the world has its own trained, armed professionals- who call themselves its army. But Pakistan, is the only state of which the army over rides the powers of an elected civilian govt and holds sway over its masses, irrespective, of the army at the helm or not. 

As a dwindling economy, post break away of Bangladesh, Pakistan’s state of affairs took a beating and it survived by virtue of aiding the United States and Central intelligence, at the mercy of providing for and training “mujahedeen’s” by the American ‘petrol’ dollar via CIA and Saudi Arabia. It was during this time, with Gen Zia ul Haq, at the helm as President and COAS did winds of fortune began to blow kindly upon Pakistan in general and Pakistan army, in particular.

Apart from training the mujahedeen’s in the 80’s against the USSR, Pakistan army, slowly and steadily started diverting funds and hardware to train Indian separatists into militants/terrorists and create insurgency situations inside Indian state- which in turn spread to the Indian hinterland in form of terrorism towards the Indian people. This is how, after suffering ignominious defeat at the hands of Indian forces in each conflict- viz 1947, 1965, 1971- the Pakistan army devised an unique, ‘5 point strategy to counter the Indian state’s war machine, from within.

The ‘Badla of Ikkattar’ – or “revenge of 1971”, as it’s known in circles- within Pakistan army and state- is an ‘unofficial’ official doctrine of ‘breaking up India’- which as per plan, is working very well for Pakistani’s and Pak armed forces in particular.
  1. Funding militant/terror groups inside the state of Jammu and Kashmir - continues unabated till date
  2. Funding moderate separatist groups and people inside J&K to speak out and fight against the Government of India and the Indian Army - continues till date
  3. Funding militant and terror modules inside Indian hinterland by using religion as a tool to bring in educated, moderate followers of Islam –turn to violence and extremist militant against the Indian state – continues till date
  4. Funding groups of civil society members within India and giving them intellectual platforms outside India to propagate Pakistan propaganda such as – “Aman ki Asha”- is the way forward in order to divide Indian society down to the middle
  5. Pakistan army’s bent towards India’s long time- rival, China to put India in a corner, in order to move in ‘at will’

In case you wonder, where the money is coming from- Pakistan has plenty of access to huge amount of narcotics money, dollars which came in during the Zia and Pervez years and that’s the basis of its funding terror, via a fledging black economy! With change of fortune, since Zia days and ‘black-money’ being no problem for the Pakistan army- it has systematically been able to put its above mentioned plan into action and continues unabated since. In recent time, with Gen Pervez Musharraf at the helm of Pakistan- dollar has not stopped for Pak army- sanctions, following nuclear test and dwindling white money, notwithstanding. Pakistan army-navy-air force and its intelligence agencies have never felt short of money, even at the peril of its countrymen dying, day in and day out because of their follies and internal strife.

Pakistan army has always been financially stronger than an average Pakistani and it still is. With no dearth of money and a ‘ever-helpful’ Chinese PLA to the rescue- following the void created by Americans slowly and steadily giving up on its “best friend in South Asia” and “Pakistan not being the friend it used to be”... Pakistan, like always will “muddle out”. Though, hope not it.

What needs to be seen- analysed and understood-in the present scheme of things is Pakistan’s duplicity against India will never cease till it sees to it – “India balkanised” at all and any cost! What we Indians need to understand and realise is – “Pakistan army is the Pakistan state itself” and it can’t be trusted, so long, Pakistan continues- its fake, pseudo charade of- Aman ki Asha via its stooges in Pakistan civil society and ex military cut outs! This neo-modern day treachery, by sections of our (Indian) own – civil and ex military society is going to cost us the very land we fought for- to achieve and sustain from imperial rulers.

Cross-border interactions- mushaira’s- Aman ki Asha- people to people contact is always beneficial- but not at the hype it is happening and this very –Aman ki Asha will turn to nirasha once the velvet gloves of ‘Pakistan army’ and its ‘best-friend’ “PLA” come out to play with us. The day is not very far and the writing is on the wall. If only we can get rid of our blinkers and smell the stale coffee brewing across!