Prime Minister Manmohan Singh has finally broken his silence to offer his defense in the 2G spectrum scam, which is fast paralyzing the government. He has essentially blamed former telecom minister A Raja and coalition pressures for all the wrongdoings and promised that the guilty will be punished irrespective of rank or influence.

While admitting that several complaints were made to him about Raja’s policies, the PM said he had no reason to believe anything seriously wrong had been done. He then admitted that he could not make up his mind that something serious was wrong, which later prevented him from intervening when Raja made a comeback as telecom minister in UPA II.

While the PM says he went along with Raja’s claims of no auctions based on TRAI recommendations, approval of the Telecom Commission and concurrence by the finance ministry, it is clear that all of these could easily have been checked by the PMO and corrections made on the spot. Clearly, that did not happen.

The problem is not so much about Raja’s claims, which multiple investigations have proved false, but about the detailed information given by him to the PM, on which the PM failed to act, which in turn led to the perpetration of the scam in 2008.

The PM has made no attempt to deny that he was in the know. Arun Shourie recently made startling revelations that he had given the PM details of the scam beneficiaries and paper trail in August-September 2009, but did not receive a response from either the PM or his office. Shourie also alleged that the same whistle blower was introduced to the CBI, who engaged him, but refused to act.

The CBI FIR was filed immediately after this in October 2009, but the CBI’s affidavit in the Supreme Court shows that it did very little till the SC started hearing Prashant Bhushan’s PIL on the 2G scam in October 2010. This inaction acquires new color in the context of Shourie’s allegations, considering that the CBI is accountable to the PM.

By now, various reports/documents suggest that the PM knew of Raja’s intent and modus operandi well before 2G licenses were finally awarded on January 10, 2010. So why did he fail to act? The PM claims it’s on account of coalition pressures. Yet, the same PM refused to bow to coalition pressure from the Left par- ties during the Indo-US nuclear deal, displaying a will of steel by staking the future of the government for what he considered was good for India.

This is valuable evidence that the PM can resist pressure when he wants to. Another explanation offered is that the PM is simply too busy to address all correspondence in minute detail. Yet in is simply too busy to address all correspondence in minute detail. Yet in Raja’s case, the PM found time to exchange five letters directly, including one in which the PM detailed the alternatives that Raja could consider, so the second theory doesn’t stick either.

How do the facts stack up? Is the PM indeed culpable in the Rs 1.76 lakh crore 2G spectrum scam? Let’s first test Singh’s acknowledged strengths: strong personal financial integrity and a mature handle on economics and public policy. While the worms just don’t stop tumbling out from the 2G scam investigations, so far there is no incriminating financial evidence linking Singh to the scam.

Moreover, the PM, in his two-page letter of November 2, 2007 to Raja, states in Section 4 of its annexure, “In order that spectrum use efficiency gets directly linked with the correct pricing of spectrum, consider (i) introduction of a trans- parent methodology of auction, wherever legally and technically feasible, and (ii) revision of entry fee which is currently bench marked on old spectrum auction figures.”

In effect, the PM favored auctions in spite of Raja’s claims that TRAI had not recommended auctions, and was also careful to protect exchequer revenues by suggesting “revision of entry fee” as a prudent alternative. Responding within hours on the same day, a defiant minister Raja wrote: “It will be unfair, discriminatory, arbitrary and capricious to auction spectrum to new applicants as it will not give them level playing field.” Singh scores on economics and public policy. Clearly, if Singh had enforced his advice, there would have been no 2G scam.

The PM’s culpability comes into question only if it can be established that Raja acted after informing the PM and without misleading him in any way. For this we need to examine the events leading to Raja’s resignation and arrest.

The five specific allegations against Raja are:

1. He claimed to implement TRAI’s recommendations regarding “no cap” on the number of operators, but in fact, violated this by capping the number of licenses processed at 122 out of 575 applicants. In 2009, the courts observed that Raja had acted contrary to this claim.

2. He defied the law minister to circumvent scrutiny by an eGoM. This violates governments’ transaction of business rules under Article 77 of the Constitution.

3. He followed a bespoke first come first served (FCFS) process over transparent auctions even though the demand far out- weighed supply. This violates provisions of the Constitution, Article 14, 19 (i) (g) and 21.

4. He illegally and arbitrarily advanced the cut-off date from October 1, 2007 to September 25, 2007, a move that favored handpicked companies. The courts have declared this action illegal.

5. Finally, he manipulated the FCFS process by changing the established priority based on “date of application” to a new arbitrary criteria of “compliance with LoI” which meant “first to pay gets spectrum”. The CAG’s report shows that insider information pay gets spectrum”. The CAG’s report shows that insider information coupled with these tailor made norms, allowed a few companies to fraudulently access spectrum by jumping the queue.

The fact that the PM was well apprised of these impending policy violations is evident from a closer look at the correspondence between them. Five letters were exchanged between Raja and the PM directly – three on one day (November 2, 2007), followed by Raja’s last letter on December 26, 2007 and the PM’s two-line acknowledgment on January 3, 2008 exactly one week before the infamous award of 2G licenses on January 10, 2010.

Of the five listed wrongdoings which were later found either illegal or in violation of administrative procedure/rules, Raja informed the PM about the first four through his two letters D.O. No. 20-100/2007-AS.I of November 2, 2007 written two months before the scam broke out.

The last, regarding the change of the FCFS definition was conveyed to the PM on December 26, 2007, through a detailed six-page letter including annexure, DO No. 260/M(C&IT)/VIP/2007 – two weeks before the spectrum scam broke out.

This shows that every single action by Raja, except ones under scrutiny under the Prevention of Corruption Act, were known to the PM in detail and well ahead of Raja’s actions. It is equally clear from the turn of events: CBI’s FIR of October 21, 2009, CAG Report of November 2010 and the Shivraj Patil one man committee report of January 31, 2011, that whatever Raja told the PM, he followed to the letter. The DoT corroborates this in its affidavit of November 11, 2010 in the Supreme Court which, citing Raja’s letter of November 2, 2007 and December 26, 2007 admits, “Not only was there no difference of opinion with the Honorable PM, his office was duly kept informed of all decisions”.

In conclusion, and based on the facts, it is clear that all allegations against Raja of wrongdoing and illegal acts which have led to the loss of Rs 1.76 lakh crore as reported by the CAG and eventually, his resignation and arrest, were known, in detail and in advance, by the PM.

In summary, the PM offered Raja sound advice on public policy that was anchored in strong economic principles, but consistently failed to reign in a minister turned rogue since 2007, which makes allegations of his culpability in the 2G spectrum scam difficult to dislodge. It is these serious lapses that the PM must defend.

And formation of JPC by the government has started on the bitter note with ugly exchange of words on the floor of house hence the proceedings subsequent are expected to raise political temperature to a new high. But the million dollar question for us remains as to whether we can tame corruption and clean up the mess to avoid huge embarrassment that country is facing due to series of scams? Though time is limited for everyone.

 – Prashant Tewari (Editor in Chief, OE)

Is Varun BJP’s New Hindutva hero?

Bharatiya Janata Partyon Monday rejected the Election Commission’s advice to it not to nominate Varun Gandhi as candidate in the Lok Sabha elections and declared that he would be the party candidate in Pilibhit. “He (Varun) is our candidate. We have turned down the advice (by the EC) be- cause it is does not not have the right to give such an advise,” party spokesman Balbir Punj told media persons after meeting Varun. He said he was speaking as the authorized spokesman of the party and this was the view of the party leaders after consultations among them.

In an unprecedented action, the Election Commission on Sunday night asked the BJP not to nominate Varun as its candidate in the Lok Sabha elections after holding him guilty of making communal speeches. Varun Gandhi does not deserve to be a candidate at the present general elections?’ the three-member Commission advised the BJP. Punj said in a democracy, it was the right of political parties to decide on who their candidates will be and it was not for the Commission to say that.

The BJP would not accept the Election Commission’s advice, he said adding it was the collective decision of the party leaders. Punj also questioned the Election Commission’s authority to advice against nominating Varun. “The entire episode smacks of prejudice and bias,” he said. “If the Election Commission is so con cerned, then it should be forthright in giving the same suggestion in the case of Sanjay Dutt, M K Subba, Shibu Soren, Sajjan Kumar and Jagdish Tytler,” he said.

The BJP spokesperson also sought to question the competency of the Commission in deciding the veracity of the compact disc containing anti-Muslim speeches allegedly made by Varun. “Where is the original CD? The Election Commission has no right to give such ad- vice. It should refer the matter to an independent investigation agency,” Punj said.

Whether or not Varun will be able to fight the elections will depend on the judiciary. The hate speech that has given rise to this controversy in the India’s electoral battle, was allegedly delivered during rallies in Pilibhit constituency of Uttar Pradesh. While cousins Priyanka and Rahul have joined the issue, criticizing the youngest Gandhi for his speech, Varun says that the CD was doctored.

“If you ask me, I would say yes, it was a rousing speech, a strong speech. May be I should not have been so aggressive; may be, I should not have used the words which I did. However, certain expressions attributed to me have been distorted from what I spoke and one of the two CDs containing my speech has been doctored,” he said

“What people should realize is that I was speaking at a village where four girls had been raped. When I spoke, I wanted to instill confidence among victims, I wanted to offer hope to the hopeless. I don’t care about a warrant (for arrest) but what bothers me is that I should not be hurting anyone and, believe me, my intent was not to hurt anybody,” Varun said.  “You must appreciate the fact that in my area, there has been persecution of Hindus in a particular belt. There have been 11 cases of rape in the last one year. People have been thrashed and threatened. There has been communal tension in this belt for one year. While I don’t want to cement it (tension), I cannot wish it away either.”

“My mother (Menaka Gandhi) has been elected to Lok Sabha from Pilibhit in seven consecutive elections, but the constituency has never witnessed a communal riot, not even in the Ram Janmabhoomi movement phase. But during the last one year, things have been different. Many of our people, including former minister Ram Saran Verma, have been arrested under the National Security Act,” he said.

– OE News Bureau

Just when oil markets appeared to be calming, crude oil prices surged as the potential for more oil shipment disruptions spread across the Middle East and North Africa.With Libya’s oil exports almost entirely halted for the last several days, renewed unrest in Oman, Iran and Iraq rattled oil traders. An interruption of shipments from any of those countries would further tighten oil supplies, even as Saudi Arabia has rushed to fill the vacuum of Libyan supplies by pumping more oil from its fields.

The worries about the oil supply rippled through other markets, with stock markets turning lower on concerns that the higher cost of energy would slow economic recovery. Gold prices also surged on the latest reports, and indexes on Wall Street declined sharply, with the Dow Jones industrial average down more than 1.3 percent. The Saudi Arabian benchmark stock index fell 6.8 percent.In the latest sign that the political contagion was spreading, demonstrators in Oman on Tuesday tried to block a major road leading to the industrial port town of Sohar. Protesters in recent days have set fire to at least one police station and two government office buildings in the normally stable Persian Gulf country, which is ruled by a family dynasty and is the largest non OPEC oil producer in the Middle East.”To have protests in Oman, which had previously been seen as a sleepy gulf kingdom, heightens concerns that nowhere is immune from the contagion affects,” said Helima L. Croft, a director and senior geopolitical analyst at Barclays Capital. “Every day we seem to have a new country with a new problem.”

Oman produces 860,000 barrels of oil daily, almost 1 percent of world supplies, and its production has been rising in recent years with investments from Royal Dutch Shell, BP, Repsol and other international companies. Its importance is magnified by the fact that its crude is of such quality that it can be blended by most refineries around the world, although most of its exports now go to China and Japan. Oman straddles the Strait of Hormuz, a strategic route through which 40 percent of the world’s oil tanker traffic crosses. On the other side of the strait lies Iran, another major producer, where there were reports on Tuesday that security forces had used tear gas to disperse protesters in Tehran. Iran, with approximately 10 per- cent of the world’s oil reserves, exports about 3.7 million barrels a day.

The price of light sweet crude rose to $99.63 a barrel while Brent crude rose 3.24 percent to $115.42. Oil jumped above $100 a barrel in after-hours trading in New York. The national average price for a gallon of regular gasoline rose by nearly a penny on Tuesday to just over $3.37, which is 20 cents higher than a week ago.

In testimony on Capitol Hill, Federal Reserve Chairman Ben S. Bernanke said that it would take a sustained increase in oil prices to push up consumer inflation significantly and threaten the economy. “Currently the cost pressures from higher commodity prices are being offset by the stability in unit labor costs,” he added.The rising tensions across the region sent the Saudi Arabian stock market into a tailspin, with Saudi shares suffering the biggest daily decline in more than two years despite rising oil prices. The Saudi index fell 6.8 percent, to its lowest close since July 2009.

Refiners around the world have been hoping that Iraq, as violence ebbed, would again become a major oil producer, with production stabilising at 2.3 million barrels a day. But over the weekend rebels bombed the country’s largest refinery, reducing the refinery’s capacity to refine petroleum products by 75,000 barrels a day. The attack came less than three weeks after a terrorist attack on a pipeline leading to a second refinery north of Baghdad.Greg Priddy, an oil analyst at the Eurasia Group, a political risk consultancy, said it was “highly unlikely” that output in another major producer in the region would be shut off. But he said that markets were jittery because “if the Saudis are going to make up for the shortfall in Libya, their spare capacity is thinner.”

He added, “Another major country going out completely would use most of their spare capacity, and that is really what the market is worried about.”

Saudi Arabia has a total production capacity of 12.5 million barrels a day, and currently produces nine million barrels after increasing its output by several hundred thousand since the beginning of the year. Saudi officials say they are ready to pump what it takes to fill any supply gap, but much of its 3.5 million barrel excess capacity contains sour crudes that do not easily replace the Libyan sweet crude European refineries in particular desire to produce diesel. In Libya, major oil operations in the eastern part of the country remained under the control of rebel forces. While foreign operators withdrew most of their foreign workers, local Libyan employees can still produce some crude. Oil experts say at least one million of the country’s 1.6 million barrels a day of production has been shut down.

Little if any oil can be shipped out of Libya because most ports were closed. Meanwhile, storage tanks were filling up rapidly. Oil traders said one major oil company cargo ship was supposed to berth this week, but no one was at the port to deliver an oil shipment, and shipping companies were reluctant to send ships into the Libyan ports.

Most fields in Libya are operated by a combination of the National Oil Company, which owns 50 percent of the fields, and international consortium, which share the other half.

The Arabian Gulf Oil Company, the largest subsidiary of the Libya National Oil Corporation, claims it had broken off from its mother company. It said it would honor its contracts but would divert the funds to the opposition, not to Tripoli.Arabian Gulf’s Hamada field had been shut, and output at Nafoora, Sarir and Misla had dropped to under half of maxi- mum capacity.The company was still exporting crude at the Tobruk terminal, according to a re- port by PFC Energy, a consulting firm, but Arabian Gulf has stated that with only sporadic loading operations, it could reach its maximum storage capacity within two weeks, even with the drastically reduced production levels.Arabian Gulf officials “have claimed that the company’s export revenues will no longer be controlled by its parent company,” PFC Energy said in the report, “but have not been able to confirm how those revenues would be managed by the subsidiary or potentially channelled to Libya’s opposition.”Eni, the Italian oil giant and largest foreign operator in Libya, evacuated most of its employees and their families last week. The company’s fields were still producing 120,000 barrels a day of oil and natural gas, about half their capacity before the re- volt began. The company declined to say which fields it had shut down and which were still in operation, citing safety concerns. Eni still has 21 Italian employees in Libya, a spokesman said.

(Courtesy: Clifford Krauss & Jad Mouawad, The New York Times..)

Indian Jew Noshir Gowadia is a sacrificial lamb like Bernie Maddoff whom the Israeli’s sacrificed by saying beat this guy he stole $75 billion where as the fact is they stole $4 trillion from US Banking system. With total control on US Congress, Justice system, Media, Banking & big Businesses Israelis have been manipulating every thing including their sales of Military Technology to China for last 5 decades.

Here are few statements from various news papers. Please feel free to send it to Israeli slaves US Congress posing as friend of India supplying free arms to Pakistan so that Israeli’s can sell their junk at inflated prices by bribing main political parties of India namely Zionist Christian Sonia’s Congress & Zionised BJP. At the same time their Israeli Masters are selling most sophisticated Military Technology after stealing from America to China another hostile neighbor of India.

“Every time we discover a new program in the Third World arms proliferation game, we always find that the Israelis have got some hand in it,” says a senior analyst with the U.S. State Department’s Arms Control and Disarmament Agency, who spoke to the Washington Report on condition of anonymity. “Israeli scientists helping with a Third World arms program [are] about as inevitable as ants at a picnic.”

Larry M. Wortzel, a former U.S. military attache in Beijing and now an analyst at the Heritage Foundation, said the Israel China arms channel has flowed for more than 50 years. “It grew and grew, and the United States just winked at a number of serious transfers,” he said.

CIA Director R. James Woolsey in a written testimony to US Senate: “We believe the Chinese seek from Israel advanced military technologies that the U.S. and Western firms are unwilling to provide,” Woolsey also informed the Senate that Israel has been selling military technology to China for over a decade, and that the sales may amount to “several billion dollars.”

Israeli Defense Ministry Director David Ivry: Israel has been selling arms to China but refused to describe the arms sold or their value.Early in 1992, Robert Gates now Defense Secretary, then director of the CIA, charged that China had illegally obtained ballistic missile secrets from the American-made ”Patriot” ground-to-air missile system, which figured prominently in defending both Israel and Saudi Arabia during the Gulf war. While Patriot missiles deployed to Saudi Arabia had U.S. crews, however, some of the Patriots in Israel were manned by Israeli crews. Gates said Israel was suspected of sup- plying China with these secrets, thereby making public suspicions that had circulated within the Pentagon since allegations of technology theft against Israel were formally raised immediately after the end of the Gulf war.

Not long after the Patriot brouhaha subsided, Israel again was denying charges that it illegally exported U.S. technology to the communist regime in Beijing. This time, the suspicions revolved around the ill-fated Lavi fighter. Israel spent more than $1 billion in U.S. aid on the aircraft, which was based on the U.S. F-16 Falcon. After Israel ditched the pro-gram at Washington´s insistence, intelligence reports said Tel Aviv was selling the F-16 avionics technology to China for in- corporation into that country´s new F10 ground attack fighter.

The Cox report confirmed the suspicion in 1999, stating, “Significant transfers of U.S. military technology have also taken place in the mid-1990s through the reexport by Israel of advanced technology transferred to it by the United States, including avionics and missile guidance useful for the PLA´s F-10 fighter.”

South Africa acknowledged that, in the late 1970s, it created six nuclear bombs with the technical assistance of Israel. Further it said they developed an inter- mediate-range ballistic missile called the “Jericho II.” Which can deliver a nuclear, biological or chemical warhead more than 900 miles away was developed with Israeli help.

So indictment and sentencing of Indian American JEW Noshir Gowadia for allegedly sending military secrets to China, Germany, Israel and Switzerland is a big joke.

 – Dev Makkar

During the days of struggle for independence, Pundit Jawaharlal Nehru was set in the hear t of ever y Indian. However after he took over the administration, it was found that he was more of a dreamer than a realist. His concept of a socialistic pattern of society was utopian, and the realm of control and regulations that he introduced stifled the economic growth of the country. The situation got worse when Indira Gandhi and her stooges star ted using the controls for personal ends. The corruption that she gave vent to has been continually growing like cancer. It has crossed all bound sand we are now witnessing the politicians unashamedly accumulating property by indulging in large scale corruption.

But corruption is not the only ailment of the country. The policy initiated by Nehru and perpetuated by the followers has given rise to various other ills that have been deeply affecting the social fabric. While pondering over the conditions prevailing at present I feel that India has been rushing towards catastrophe in economic, political and social spheres. Unless the engine is put in reverse gear, we are going to face the devastation. I am therefore putting below some suggestions that can help in preventing it.

Idea of india how to make it click

1. Introduce Presidential system of governance

Our Parliamentary system of government was adopted because of our association with the British rule. It was, however,overlooked that the system needs vigilant public opinion and the presence of two strong parties that can take over the administration. These conditions did not exist in India.

The problems arising from the absence of two capable parties did not come to the notice so long as there was one party strong enough to continue at the helm. The weakness of the system became evident after the fall of congress party from the hegemony. Not only did that lead to unstable administrations, it also led to mismanagement and gave rise to large scale corruption. Maintaining majority at any cost has turned out to be the main job of the Prime Minister and Chief Ministers. Whenever they find that the majority is at stake, they have to go in for purchasing the required number of heads. Everyone knows the level of corruption indulged during the vote of confidence session of parliament last year.

Corruption is a cancer that cannot be rooted out so long as there are chances for getting corrupted. The only way to control it is to reduce the chances. Our Parliamentary system has been conducive to its growth. In order to avoid it we need to adopt the Presidential system under which the administration can be carried on by the President at the Center and Governors at the State levels elected to govern for five years irrespective of the majority. That would avert this constant struggle to maintain and pay for a majority headcount. Moreover, the scramble that we witness for getting elected as legislators prevails, because every legislator aspires to get a ministerial berth and use it for personal gain. Under the Presidential system legislators would be ineligible to hold administrative positions. That will put an end to the undue craze for becoming a legislator. Only those who are really interested in working as legislators would then contest the election. The temptation for becoming a legislator would thus go down and that will curtail the chances for indulging in corruption.

2. Scrap controls and regulations

Another aspect that gives rise to corruption is the regime of controls and regulations. Influenced by the Soviet model, Nehru was enthused to lead the country towards economic development by wielding State authority. He ignored the fact that Soviet Union had failed to achieve any measurable degree of economic growth even while exercising total authority over the life of people. In a bid to metamorphose the country Nehru created a maze of controls regulating every aspect of life. He failed to see that Government machinery is ill suited to exercise the controls in public interest. The result is the large-scale corruption prevailing in implementing the controls.

 With the inauguration of liberalization some controls have been removed and the rigors of some have been modified. What is, however, required is to do away with the controls to the extent possible. For instance, with the comfortable foreign exchange reserve, no control is necessary on foreign exchange and the rupee should be made fully convertible. Similarly there is no need for measures like the Industries (Development and Regulation) Act and they should be repealed. Not only do such controls lead to corruption, they also tend to inhibit entrepreneurship. Their removal will reduce the chances for corruption. Moreover, it will give rise to healthy competition and will lead to sound economic growth.

3. End deficit financing

The concept of preparing the annual budget was evolved with the intention to adjust expenditure to the level of revenue. If it was necessary to spend more than the estimated revenue, the budget would propose the measures for raising more revenue. If, however, the shortfall is negligible, it could be left as uncovered deficit. But that concept has been set aside and we are witnessing deficits to the extent of trillions of rupees. Such deficits are bound to lead to inflation. Expansion of currency without adequate backing results in effective devaluation of rupee, which becomes evident in the form of rise in prices.

Though other factors like high prices of crude oil may play their part from time to time, deficit financing has been the main cause for continuing rise in prices. The biggest culprit for our budget deficit happens to be the Planning Commission. Nehru had introduced planning with a good intention, and that worked well during the first two Plans. Thereafter the emphasis of planning has been shifted to spending. If the amount planned for a head is spent even without achieving tangible result, the plan is considered as having fulfilled the target; while effecting economy on a plan head is treated as the shortfall of the plan. In short, it has been a spending spree and the money gets divert- ed to the coffers of politicians and other unscrupulous people. The Planning Commission has lost the plot and has been virtually planning for inflation without growth. Since it has ceased to serve its purpose, it is time to scrap it and put deficit financing to the end.

4. Make English our official language

English language now occupies the international status. Its importance can hardly be exaggerated, when millions of our countrymen have been living abroad. Its importance for scientific studies also is indisputable. No wonder that many families have been sending their children to English medium schools. The time for treating English as a foreign element has long been past.

Adoption of regional languages as the medium of State administration has given rise to all sorts of fissiparous tendencies. That needs to be put to an end to in the interest of unity in the country. It should also be noted that the people in South have been clamoring for retaining English at the administrative level. Adopting English as the official language at the Center and State level would not only placate the South, but will also provide an efficient medium for administration. Moreover, it will help in forging the sense of unity that was witnessed during the British rule.

 5. Implement common civil code across India

Though our constitution forbids discrimination on the ground of race, religion etc. we happen to have a Hindu Civil Code. Nehru had come out with the Hindu Code Bill because he was not willing to hurt the sentiments of conventional Muslims.

Hindus have long been feeling unhappy on account of the Civil Code being restricted to them and have been clamoring for a Civil Code applicable to all .Whatever be Nehru’s motive, there is no justification for restricting the provisions of Civil Code to a particular sector of the society. The Supreme Court also has directed the Government to approach it with a Common Civil Code. The administration has, however, ignored it in order to avert displeasing the Muslim voters.

In case, the leadership is too sensitive to Muslim sentiments, it can come out with a Common Civil Code together with the provision for an Islamic Code to be adopted by Muslims as an option. That Code should cover every provision in the Islamic canons inclusive of crude punishment for offenders, disavowal of interest on investment, etc. Muslims will think twice before opting for such a code. Since Islamic tradition heavily discriminates against women, the Code should provide for exercising the option jointly by husband and wife.

6. Quota on caste, not community

The reservations based on backwardness have created a rift within the society There was justification for reservation in favor of scheduled castes, because they were kept backward by the society. No other community was so debarred; they have remained backward on their own. They can surely be encouraged to come forward by providing in he belongs to a particular community. centives in the form of scholarships etc. but reservations for them in administration or educational institutions can in no way be justified. The Government is not an employment exchange.Its machinery is expected to function in the interest of people.Integrity and efficiency are the essential requisites for it. Its employment policy should be based on those criteria. Providing reservation there in leads to inefficiency and loss of integrity. No one would have the incentive to function efficiently, if his colleague or a subordinate is going to be his boss simply because he belongs to a particular community.

The reservations in educational institutions are leading to sub-standard outcomes. How could it be safe to have doctors with lower caliber to treat the patients?

It is hazardous. Similarly an engineer with sub-standard caliber cannot be expected to undertake reliable work. Indira Gandhi had favored the policy of reservation in order to pursue her parochial ends. It is now the time to reconsider it in the over all interest of the country.

But the policy adopted so far has created well entrenched privileged classes and the backward communities would oppose curtailment of the favors granted to them. They, however, need to understand that the reservations are meant to enable the backward people to come forward;continuing the same indefinitely amounts to perpetuating the backwardness. That fact can take some wind out of the sail of proponents of reservations.The consensus should therefore be arrived at for reservations to lapse after a reasonable period. Thereby it would be possible to put an end to discrimination’s, which have created rift within the society. The importance of forging unity would be particularly palatable at the present juncture. The enlightened people would wholeheartedly endorse such a move. It is hard to make out how the system has been perpetrated by the judiciary.

7. High time to check population explosion

We have been facing a population explosion. The population has grown almost fourfold since the independence. The measures taken so far have failed to restrict growth,because majority of the people refrain from adopting birth control measures. The growth in population sets at naught the progress in every other field. We should therefore be willing to adopt an effective policy for containing the population.

Such a policy should be deterrent enough to restrain the people from generating more children. Our people are very sensitive to payment of taxes and would like to avoid them whenever possible. In order to take advantage of that sensitivity it is necessary to introduce a tax on people who have more than two children. Every couple producing a third child should be subject to pay tax at the rate of Rs.1000/- (subject to revision from time to time) per month for 10 years starting from the birth of the third child. The liability to pay the tax for that period should continue irrespective of the child’s lifetime. Otherwise there would be a tendency to put it to death.Moreover, during the said period of 10 years if the couple produces another child, not only would it have to pay the tax on both the children, it should also be subjected to a surcharge at the rate of 25 percent of the tax payable otherwise.

These provisions would induce people to adopt birth control in their own interest. It is obvious that most people will fail to pay the tax, and it would not be possible to put all such offenders in jail. It should therefore be provided within the Act that those failing to pay the child tax will be subject to mandatory sterilization.I strongly believe that if we start initiating the seven points mentioned above, India will be well on its way to assume its place at the world top table.

(MANSUKHLAL (MANU) DOSHI was born in Mahuva (Saurastra), in December 1919, and moved to the US after re- tiring as the Assistant Commissioner of Industries, Gujarat. He is living in USA now)

The Maoist insurgency is a blatantly illegal and the no holds barred war against the Indian State, against the idea and existence of Indian democracy and it must be dealt with an iron hand, believes Harsh V Pant

A few days back the Maoists abducted Atindranath Dutta, the officer in charge of the Sankrail police station in West Bengal and killed two of his colleagues. After 55 hours in captivity, Dutta was released in the presence of the national media by Maoist leader Kishenji who underlined that this was the ‘first case of release of Prisoner of War’ by the Maoists.

Dutta’s release came hours after the state government let 22 alleged Naxals walk free by not opposing their bail plea. The West Bengal government later admit- ted that it gave in to the demands of the Maoists to secure the release of the police officer and cited the release of militants in the 1989 Rubaiya Sayeed kidnapping case and the 1999 IC-814 hijack as precedents.

The state home secretary went to the extent of calling India a ‘soft State’ while the chief minister’s principal secretary admitted that the government “had to bend over backwards’.This prisoner swap happened even as the security forces had surrounded the Maoist abductors with their leader Kishenji also part of the squad. They were instructed to call off their operations. This incident once again underscored the growing might of the Maoists and the abject passivity of the Indian State even when its own institutions are assaulted with impunity.

Emboldened by their ‘victory’ armed tribals led by Maoists seized the Bhubaneswar-New Delhi Rajdhani Express near Jhargram in West Midnapore, took the driver and his assistant hostage, and demanded Chhatradhar Mahato’s release. Meanwhile, the politicians are busy blaming each other for being supporters of the Maoists even as it is clear that no political party is above board when it comes to flirting with extremists for short term political gains.

For some time now we have been hearing the Indian government talking of Naxalism and Maoism in grave terms, labeling them as the greatest internal security threat facing the nation. Yet the policy response has not been up to the mark. It has been full of sound and fury signifying nothing.

The United Progressive Alliance government in its first term failed to see the Naxalite threat for what it was one of the most significant challenges to the very existence of India. As a result its response was a mixture of denial, accommodation, and neglect.With the Left parties as coalition partners and an ineffective Shivraj Patil as the home minister, the government ended up worsening an already serious situation, giving ample opportunities to the Naxalites to demonstrate their might across an ever expanding swathe of territory called the ‘Red Corridor’.

For years Naxals have been killing security personnel and civilians continuously and consistently with a ruthlessness that is unprecedented but the Indian State has tended to look the other way while celebrity activists have tended to justify these acts on all sorts of moral grounds. In the absence of leadership from New Delhi, the states decided to chart their own courses and their approaches ranged from offering amnesties to the raising of armed militias like the Salwa Judum. Realizing that the situation has got out of control, the UPA government in its second term had no option but to take the threat head on and its started with the new Home Minister P Chidambaram admitting in Parliament that the national security threat posed by the Maoists has been underestimated for the last few years.

Conventional wisdom on tackling Naxalism much prevalent amidst the Indian liberal intelligentsia suggests that this is a mere socioeconomic problem. And only if we can provide jobs to the dis affected youth and win their hearts and minds, we can prevent Maoism from spreading.

This assumption is the basis for the developmental package that the government has announced for Naxal infested areas where significant development aid is now being channeled in the hope this will help in alleviating the perception of alienation from the national mainstream.

It is true that good governance and economic has simply passed over certain parts of India, and Naxalites thrive in this developmental and governance vacuum, often supplanting the State’s legitimacy. And as the state’s authority has eroded, Maoists have moved in to fill this vacuum by erecting parallel structures of governance. Development, however, is never the goal of such movements. It is all about power.

A multi-pronged strategy is needed to tackle Naxalism and one of the planks will have to be to ensure that the develop- mental aid trickles down to those at the very bottom of the nation’s socioeconomic ladder. But this should not mean that the military defeat of Maoists should be put on the back-burner. For far too long there has been a complacent attitude regarding fighting these forces.

There has been an absurd sentimentality about the Maoists’ leftist pretensions.

The argument went that these are idealistic, well-intentioned people who have gone awry but soon they will recognize the benefits of participatory democracy and start engaging with the nation’s electoral process.

The Congress party remained ambivalent about defeating Maoism and we kept hearing cliches suggesting that development was the only way to tackle the men- ace of Naxalism and the Maoists were merely disaffected youth.

It is surprising because India has been rather ruthless in fighting other challenges to its internal security, be it in Jammu and Kashmir or in the northeast where all kinds of insurgencies have challenged the might of the state and the state has never been diffident in responding in kind.

As the home minister has pointed out, left-wing extremism affects 20 states, and over 2,000 police station areas in 223 districts in those states. While 231 security personnel were killed in Naxalite violence in 2008, 250 had already died this year till August. Despite this the Naxalites have continued to be seen as misguided or harmless or even basically right in what they wish to achieve though perhaps a bit too harsh in their choice of means.

The Maoists have made it clear time and again that they seek the dismemberment of the Indian State and have cynically exploited the genuine grievances of the local population in their areas of operation toward their larger ideological ends.

The Indian intelligentsia and the Indian government should disabuse themselves of any possible reconciliation with the Maoists at this juncture. The Maoists have asserted that they will only come to the negotiating table if security forces are withdrawn from their areas of operation,all arrested Maoists are released and there won’t be any precondition of laying down arms.

There should be no question of accepting any of these demands. The extremism of their goals and the excesses of their method make them the most dreaded enemies of the Indian State.The main task of great urgency before the Indian government today, therefore, is a military defeat of the anti-democratic Naxal forces. The Indian government needs to re-establish its authority, creating conditions for pursuing and inclusive political process and developmental agenda.

As recent events make amply clear,India has been failing its paramilitary and police consistently. In the absence of ad- equate personnel, training and equipment, the Indian police have been reluctant to take on the Maoists head on making it even more difficult for the local population to challenge the Naxal’s writ.

In the absence of adequate security, a ‘hearts and minds’ strategy is unlikely to work and the local populace will continue to get targeted by both the Naxals and the security forces.

In this context while the recently launched Operation Green Hunt against the Naxal movement is a step in the right direction, the government will have to think about building institutions of governance rather rapidly after clearing the areas of the Maoist cadre if wants a permanent solution to this problem.

The Maoist insurgency is a blatantly illegal and no holds barred war against the Indian State, against the idea and existence of the Indian democracy — and that includes the poor tribals and farmers in whose cause Maoists claim to fight. It is not only ignorant but also extremely dangerous to romanticise the Naxal cause.

While recognizing the limits of Indian democracy and developmental model, there is no need to be apologetic about the ability of the Indian democracy in bringing ever greater number of people, especially the marginalized, into the main stream.

Today it is the Maoists who because of their destructive tactics and senseless violence are actually the greatest impediment to the development of the areas for whom they are ostensibly fighting.

It is time for the Indian State to assert itself as well as expose the intellectual vacuity of their ideology. Anything less would allow such forces to keep working towards the weakening of the Indian State.

(Harsh Pant teaches at King’s College London and is presently a visiting professor at the Indian Institute of Management- Bangalore)

India Inc has come down on heavily on US Prez’s protectionist policy

United States’ President Barack Obama’s proposal to reform tax structure, scrapping incentives for American companies outsourcing services to other nations, has been lambasted as a protectionist move by Indian business chambers. ‘Say no to Bangalore and yes to Buffalo,’ seems to be the latest mantra of United States President Barack Obama as he struggles to bring the ailing American economy back on track.

Meeting one of his major election promises, Obama on Monday the announced end of years of tax incentives to those US companies which create jobs overseas in places like Bangalore. Instead, the incentives would now go to those creating jobs inside the US, in places like the Buffalo city bordering

Canada in upstate New York.?”We will stop letting American companies that create jobs overseas take deductions on their expenses when they do not pay any American taxes on their profits,” Obama said at White House announcing the international tax policy re- form. Obama said he wants US companies to remain most competitive in the world. “But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens,” he argued.

Announcing a set of proposals to crack down on illegal overseas tax evasion, close loopholes, and make it more profitable for companies to create jobs in the US, Obama said his series of tax re- forms would save $210 billion in the next 10 years.

The impact of proposed tax reforms on India, which has become a hub for global IT companies, might be marginal, said the National Association of Software and Service Companies (Nasscom). ”

As far as India goes, global companies that earn profits here are subject to a tax rate of 33.9 per cent (including surcharge and cess) and the impact of the proposed reforms on them would be marginal. The tax reforms announced yesterday have only been proposed and there will be ex- tended debate on them before they can be implemented, as it requires existing laws to be changed,” it said in a written statement. The chamber is still evaluating the likely impact of the tax proposal.

India Inc believes the move by the Barack Obama administration to reduce tax breaks for US firms that ship jobs overseas will hit American companies more than impact on the Indian outsourcing industry.

“It’s a more US-US issue rather than one aimed at stopping outsourcing, or off- shoring, or anything to do with India,” said Som Mittal, president of the National Association of Software and Service Companies (Nasscom), a representative body for the industry.

“If you look at Indian companies operating in the US, or elsewhere, they work there and pay taxes there. Hence, it is not about stopping outsourcing, or offshoring, but just to collect taxes,” Mittal said.

His comments came after President Barack Obama said on Monday that the current US tax system gave US-based multinationals that shipped jobs to places like India an unfair advantage over other domestic rivals and wanted corrective steps. “It’s a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York,” Obama said, explaining why he intended to close tax loopholes and crackdown on overseas tax havens.

“I want to see our companies remain the most competitive in the world. But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to over0seas tax havens.” According to a McKinsey-Nasscom study, the Indian software and outsourcing industry employs some two million people, earning total revenues worth $52 billion, of which nearly $48 billion comes from exports.

The Confederation of Indian Industry also felt that the remarks were more in the nature of posturing and that it was not intended at curbing outsourcing of work by US firms to Indian companies. “It’s an internal issue. It will only reduce their competitiveness,” said Hari Bhar tia, vice president of the chamber. “It is a populist posture. Perhaps his (Obama’s) intention was not the same. However, it sends a wrong message.”?Joining the chorus, another industry

body Confederation of Indian Industry (CII) said that even though the move was expected, the developed world should not resort to protectionism in recessionary times as it might not help the recovery process. “The US is going through a deep recession, and we understand the steps taken by them to rewrite their tax code. However, the CII does not want protectionism to be the order of the day,” said Secretary general Chandrajit Banerji. In fact, an early economic recovery in the US would help both the nations, given that India was a net investor in the US, Banerjee added.

Meanwhile, Federation of Indian Chambers of Commerce and Industry (Ficci) termed the proposed move a retro- grade step, forcing business concerns to take measures to restrict their economic activities in one region and not in the other. “In any case, several US corporations have come and set up operations in India because of the several advantages our country has to offer. Our large and growing market, large pool of skilled manpower, reasonable labour costs make investing in India an attractive proposition. While this move would certainly have some impact on US investments abroad and into India, in the long run this would only run counter to the interest of US corporations desirous of cost-efficient operations across the globe,” said Ficci president Harsh Pati Singhania.

The delegation was told the “Buy America” clause or moves to reduce the tax breaks for US companies that create jobs offshore was neither intended for India nor impact its software and out- sourcing industry. Infosys Technologies, India’s second largest software and outsourcing company, also felt that the US proposal was aimed at closing corporate tax loopholes and crack down on overseas tax havens.

 – OE News Bureau

Raging Battle

Parable of the Family with an Orphan: A large family takes in an orphan. The house is already crowded so the orphan must share an attic room with a child too weak to protest the intrusion. The parents give each of the two children half of the room but ask each child to share a beautiful cabinet, treasured by both. The parents take a long trip, leaving their strongest son in charge. When the parents leave, other children in the family attack the orphan and try to get him to leave. The weakest child, in particular, fights unfairly. He waits for the orphan to sleep and then attacks him. The orphan wakes up each time and hurts the weak child; he also takes over more of the room, including the beautiful cabinet.

As the orphan continues to take over more of the room, the weak child continues to take revenge. The strongest son tries to bring peace and sometimes succeeds for short periods. The basic problem, however, is that each child believes that he should have the entire attic room to himself.

Finally, the parents return. They realize that they made a mistake by leaving home while there was such a difficult situation in the attic. They don’t just ask the two children to stop fighting, however. Instead, they take immediate action.

The parents decide that the boys need temporary separation, something constructive to keep them busy, and careful supervision. The parents work with the two boys to build shelves and cabinets down the middle of the room, with private storage space for each boy on each side. They install plumbing so each side of the room has plenty of fresh water. Finally, when the crisis is over, the parents set up a way for the boys to share the beautiful cabinet.

The parents do more than just provide better space, however. They provide the love, kindness, and super vision that each child needs to do well. They also make sure that the other children support the solution.

Each boy reverts to his old behavior a few times, but the parents remove his privileges each time and the old behaviors stop. Besides, each boy becomes too busy pursuing his own goals to be distracted by fighting.

They lived happily ever after…with a few disagreements here and there.

The “large family” is the United Nations. The “orphan” is Israel. The “other children” are the Arab states. The “weakest son” is the Palestinian people. Attacking the orphan unfairly means “terrorist attacks.” The “attic room” is the territory of Palestine before the United Nations carved Israel into it. The “beautiful cabinet” is Jerusalem.

The “strongest son” is the United States. Alas, there are no wise parents to super vise the boys. The UN Security Council has not been able to perform this essential role. The “strongest son,” there- fore, must work with the “other children” to implement peace. If the “strongest son” and the “other children” work together effectively, then peace will spread throughout the entire family.

Recently, this has not happened. Instead, extremist Palestinians have engaged in bombings when Israelis agreed to work on peace. Extremist Israelis have engaged in assassinations or other acts of aggression when Palestinians agreed to work on peace. Israelis are swiftly completing a wall between Israel and Palestinian territory, but the wall is not on the 1967 border. Rather, it snakes into Palestinian territory to unlawfully take land and water rights from 200,000 Palestinians. Extremists from both sides have destroyed the peace process.

The Palestinian people are allowing extremists to lead them. The Israeli people are allowing extremists to lead them. As the violence keeps increasing, wisdom from any quarter would be welcome.

A SHORT HISTORY OF CONFLICT

After World War II, the United Nations gave land to the Jewish people of the world so they could live together in peace. This land, Israel, includes holy places for the Jewish religion and is surrounded by Muslim countries. Palestinian Muslims lived on the land at the time that the United Nations gave it to the Jewish people.

Portions of the land given to the Jewish people, or taken over by them when they won wars against Arab states, are also holy for Muslims. Certain portions of Jerusalem controlled by Israel, called “East Jerusalem,” are very important to Muslims. For religious reasons, Palestinian Muslims believe that they must gain control of East Jerusalem as part of any lasting peace settlement.

Further, Palestinians view themselves as living in an occupied nation, where invaders (Israelis) have placed them under military rule. To fight back, Palestinians have built a terrorist network to attack innocent Israeli civilians. Israelis feel they must continue to control Palestinians with military force to protect themselves against more terrorist attacks.

Palestinian View: Palestinians feel that they are not a free people because Israeli soldiers stop them at checkpoints be- tween cities. Many Palestinians, there- fore, must get Israeli approval each day to go to work, return home, go to the hospital, get groceries, or visit their own families. After a terrorist attack, soldiers sometimes refuse to let Palestinians through the checkpoints to get to work or other essential places, infuriating Palestinians even more. Further, Israelis control much of the Palestinian water supply and give Palestinians less access to water than they need. Palestinians feel humiliated and abused by the Israelis.

Another issue causing Palestinians great anger is that Israelis have continued to build settlements in Palestinian territory, illegally converting even more Palestinian territory into Israeli territory. Palestinians see the settlements as a sign that Israelis do not want peace.

In March and April of 2002, Israeli soldiers attempted to destroy Palestinian terrorist networks and attacked several of the largest Palestinian cities. In addition to attacking the terrorists, the Israeli soldiers destroyed much of the Palestinian government, including records, equipment, buildings, electricity supplies, water supplies, roads, and more. Palestinians see the attack as an Israeli attempt to keep them from ever having an independent state. In addition, representatives of international relief agencies, as well as Palestinians, accuse Israel of committing war crimes during this attack.

Palestinian Demands: Palestinians want Israel to comply with international law and retreat to the borders that existed in 1967. Palestinians express this demand as four key conditions for peace, in-

A Separate Palestinian state (with the same borders as were in 1967),

1. Palestinian control of East Jerusalem,
2. Ending Israeli occupation of Palestinian territory, and
3. Freedom of Palestinian refugees to return to their home-Land

Isralis have occasionally discussed supporting a separate Palestinian state, but insist that it must be in the distant future. In addition, Israelis may not be willing to give up actual control of Palestinian territory for security reasons, even if Palestinian territory is eventually called an “independent state.” Meanwhile, Israelis have continued to place Israeli settlements on Palestinian land, expanding Israeli territory at Palestinian expense. Palestinians no longer regard Israel as sincere in its negotiations for a separate state.

Regarding control of East Jerusalem, Ehud Barak, former leader of Israel, offered to negotiate the control of East Jerusalem. This is something no other Israeli leader had offered and something the Israeli people did not want offered. In fact, Barak was removed from power partly because of the offer and was replaced by Ariel Sharon. Although Barak had offered to negotiate control of East Jerusalem and make other concessions, Palestinians were angry that all of the key conditions they considered essential for?lasting peace had? not been offered.?Israelis were angry because they were told? that most of the key conditions for peace had been offered and that Arafat had refused to negotiate.

Regarding the third Palestinian?condition for peace, ending occupa?tion of Palestinian territory, Israelis?seem willing to do this–as long as Palestinian borders are redefined so that?Israel can continue to control Palestinian movements through checkpoints between cities?and other means. In other words, Israelis are willing to end the appearance of occupation but they are not willing to reduce their control over the Palestinians.

Barak may have offered real independence to Palestinians, but Israelis and Palestinians disagree about what Barak actually offered. The specific offer of restoration of Palestinian land has remained secret, so it is difficult to determine which side is correct. Palestinians claim that Barak’s offer to return Palestinian land was not sincere and would have continued Israeli control of land between major Palestinian cities. Israelis claim that the Barak offer did not break up the Palestinian land and that Arafat’s refusal to negotiate the offer means that he will never accept peace.

Much of the current conflict rests with the different views of what was offered. Additional information on the offer and dis- agreements is provided here.

At about the same time as Barak’s offer, Sharon deliberately provoked Palestinians by an act viewed by Muslims as extreme disrespect to their religion. Terrorist attacks by the Palestinians started in large measure in response to Sharon’s actions. Israelis were then angry by Arafat’s refusal to negotiate in good faith and by the resumption of terrorist attacks.

In short, Israelis believe that Barak offered Palestinians their land back and that Palestinians then responded with extreme violence. Palestinians believe that Barak offered no real freedom and that Israelis deliberately insulted their religion (Sharon’s visit) and killed Palestinian protesters during negotiations.

The fourth demand of the Palestinians, for Palestinian refugees to have their land back, has not been solvable. If all of the Palestinians who lost their homes to the Israelis were allowed to return, then Israel would have more Palestinians than Israelis–ending Israel as a Jewish state. Israelis have not been willing to consider this as an option. Some Palestinians, however, vow to continue fighting until all Palestinian refugees can return to their former homeland. Negotiators have proposed that Israel allow Palestinian refugees to return to the West Bank and Gaza, but not to Israel. According to international law, the West Bank and Gaza are Palestinian territories and should be under the control of the Palestinians, not the Israelis.

Palestinian Compromise: If Israel re- treats to 1967 borders and provides Palestinians with complete independence, will Palestinians stop terrorist attacks? As of March of 2006, the answer is “probably not.” Although many Palestinians simply want an independent nation, others, such as the powerful Hamas organization, consider all of the territory called “Israel” to be part of Palestine. Hamas leaders have vowed to continue their terrorist campaign until their demands are met, including the destruction of Israel. Further, when Arafat failed to accept Barak’s offer of a separate Palestinian state, many Israelis concluded that Arafat did not want peace.

Arafat did not make a serious effort to stop Palestinian terrorism against Israelis.

International law is on the side of those who advocate for two independent states sharing the land that was called “Palestine” before 1948. However, recent violence against each side has been so vicious that the majority of people may be more interested in revenge than negotiations.

Israeli View: Israelis view Palestinian militants as terrorists who will not compromise to gain peace. Palestinian extremists have, in fact, engaged in terrorist acts against Israeli civilians when peace negotiations between Israelis and Palestinians seemed (to the Israelis) to be moving forward fairly. Because Palestinian terrorists attacked at key times, moderate Israeli leaders have been replaced by more extreme Israeli leaders who do not want to compromise. Israeli leaders do not trust Palestinian leaders to negotiate peace. Israelis do not feel safe enough to reduce their control of Palestinian territories.

Israeli Demands: Israelis want the Palestinians to stop the terrorist attacks. Israelis have four key conditions for peace, including:?l Palestinian borders that ensure continuing Israeli security from Palestinian at- tacks, not the 1967 borders,

l Israeli control of all of Jerusalem,

l Enough Israeli control within Palestinian territories to allow Israel to destroy terrorist networks, and

l Prevention of Palestinian refugees from returning to their homelands

By comparing the Israeli demands with the Palestinian demands, one can see that the two sides are unlikely to find peace, the demands are completely contradictory. In addition, many Israelis believe that Israel is entitled to all of the Palestinian territories. Every time a com- promise is reached, Israeli and Palestinian extremists work against it often with violence.

Israeli Compromise: If Palestinians stop their terrorist attacks on Israelis, will Israelis retreat to 1967 borders and allow Palestinians complete independence? As of March of 2006, the answer is “definitely not.” Although a majority of Israelis are willing to have their military leave the Palestinian territories, a power full minority consider all of the territory currently called “Palestinian” to be part of Israel. They do not want to compromise or pull back. Instead, they want to keep expanding Israeli settlements into Palestinian territories.

Sharon, before entering a coma, began reducing the settlements. However, when Sharon talked about an independent state of Palestine, he meant a Palestinian state that is still under the control of Israel. Past proposals have, in fact, allowed Israel to maintain control over a new Palestinian state. Palestinians have not found such Israeli offers of “independence” acceptable. Now that Hamas won the last Palestinian election, Palestinians may be even less likely to compromise.

A Road to Peace: With hate so intense on both sides, and demands of each side so completely incompatible, peace will re- quire very powerful outside intervention. The United States and Arab Nations, especially Saudi Arabia, need to join forces. Perhaps an international group, with the United States and Saudi Arabia as leaders, needs to negotiate where to put borders to ensure Israeli security and also Palestinian land integrity. Left to them-selves, neither Israelis nor Palestinians can make a lasting agreement on borders. If an international group negotiates the borders, it will also need to determine how to separate the two sides. International forces will probably need to stand between Palestinians and Israelis for a long, long time. Israelis and Palestinians may even need a physical wall to separate them.

Israelis have destroyed much of the government and infrastructure of the Palestinians. The Palestinians will need a great deal of outside support to rebuild themselves into a separate nation. Without such support, the world will be facing “another Afghanistan” where anarchy will again breed terrorism.

Muslim nations will need to play a strong role in helping to build a new Palestine without terrorism. Muslim nations will need to help mentor new Palestinian leaders who do not support terrorism. Palestinians will need another type of leadership, other than Hamas, to build a new strategy for long-term peace.

The United States will need to use its influence to help Israel shape a new strat- egy also. Israel has had to mobilize for war, justifiably, since its beginning. It has had little peace. However, Israel elected a leader, Sharon, who was associated with a massacre of Palestinians in Lebanon. Electing a man known for brutality does not say much for the peace strategy of the Israeli people. If an international group in- sures Israel’s security, Israel will need a different kind of leadership, as well as a new strategy for long-term peace. Acting Israeli Prime Minister Ehud Olmer is following Sharon’s path and Sharon is un- likely to return to leadership.

An outside group will also have to determine how to allocate water rights fairly between the Palestinians and Israelis. Without outside intervention, water wars are likely to erupt, even if the land borders are settled peacefully.

What ideas do you have to move us to- ward a lasting peace? It is very important to realize that the Muslim religion teach- es peace and tolerance, not terrorism and war. In fact, the Muslim religion does not allow a person to commit suicide or hurt innocent people, even during war.

Methods of Fighting: The Palestinian people, led by Yasser Arafat until his death in 2004, are outraged by Israeli occupation of Palestinian territories. The Israeli leadership is continuing to use military y force against protesters. Israel has one of the most advanced military forces in the world and the Palestinians have a very limited military capability. Most of those dying in the conflict have been Palestinians.

The method of fighting for each side is quite different. The Palestinians have no army and have used bombs against civilian men, women, and children to try to make the Israelis afraid for their personal safety. They expect the Israelis to respond to the bombings by attacking the Palestinian people. When Israel does this, Palestinians hope that other countries will then help the Palestinian people and protect them from the Israelis.

The Palestinian bombers almost always die in the attacks, so the Israeli military then kills Palestinians suspected of planning the attacks. The Israeli military has killed or seriously injured many Palestinian civilians while pursuing terrorists. In addition, Israelis have damaged a great deal of Palestinian proper ty during chases.

In short, each side is responding to the other by killing civilians-men, women, and children who are not part of the military. Each side is killing for revenge, as well as to meet its own goals. Each side is trying to convince the rest of the world that it is acting with high morality. Each side is creating a climate of violence and terror for their own children and grandchildren.

This is not a matter of two nations at war, however, since the Palestinians do not yet have a separate state. Israelis have the ability to kill or drive away most of the Palestinians, while the Palestinians do not have that power against the Israelis. This unequal contest may turn out badly for all of us unless the USA and others intervene effectively. If Palestinians continue to use terrorism to try to achieve their goals, and if Israel continues to use military force against the Palestinian people to combat terrorism, many other nations may find themselves involved against each other regarding the conflict.

The Water Issue: A concern of the Israelis, Palestinians, and Arab nations in the region is the water issue. Mikhail Gorbachev (former Premier of the Soviet Union) and Shimon Peres (former Prime Minister of Israel) noted that “More than anywhere else, the Middle East exemplifies the perils and possibilities created by the water crisis.”

“In the past 10 years the various states in the Middle East have spent billions to acquire arms instead of building water pipelines or finding ways to conserve, clean and use water more efficiently on a shared, regional basis.”

“We all know that deserts create poverty, and that poverty often leads to war  especially when everyone is armed to the teeth. But missiles in an armed desert can’t carry water any more than mine- fields can stop pollution from crossing borders.”

“The alternative to another round of conflict, this time over water instead of land, is cooperation. Desalinization or joint management is cheaper than launching wars for rivers.”

A recommendation by Jad Isaac of the Applied Research Institute, Jerusalem, in- cludes a confidence building measure by the Israelis. He emphasizes that Gaza and West Bank Palestinians do not have sufficient access to water now and suggests that negotiations for peace include Israel making sufficient water available to the two areas.

Role of the USA: What is the role of the USA in this? Palestinians claim that the fighting has expanded partly because the USA has not influenced the Israeli government to use more restraint. The Israelis claim that the conflict has expanded because Palestinian leadership has not stopped the terrorism.

A plan was developed by a group of experts, led by former U.S. Senator George Mitchell, to find a path to peace. The leaders of the Israelis, Palestinians, and the United States accepted the plan. The plan requires for each side to stop attacking the other side and for each side to try to help the other side achieve what it wants most, one step at a time. However, both the Palestinians and Israelis have continued the fighting instead of actually following the plan.

Crown Prince Abdullah of Saudi Arabia then proposed a plan in April (2002) that has the support of neighboring Arab states and is consistent with the Mitchell plan. It has the interest of the United States, Israel, and the Palestinians. It includes full normalization of relationships with Israel by all Arab states and recognition of Israel as a state by all Arab states. In return, Israel must pull out of Palestinian territories, back to 1967 borders. It allows for compromise and negotiation on return of Palestinian refugees to their homeland.

Both Israelis and Palestinians have asked the USA to help broker a peace process. Intervention by the USA did seem essential to gain a lasting peace, but now that the conflict has escalated, much more than the USA may be needed for an effective intervention.

The Bush administration is focused on combating terrorism, a method of fighting associated with Arafat. Arafat has not been very convincing in trying to stop terrorism. Evidence suggests that instead trying to stop it, he may have supported terrorism.

To complicate the situation even more, Israel has been accused of committing war crimes against Palestinians and will not let the United Nations investigate to see if the accusations are true. Allegations against Israel are being made by international humanitarian agencies who tried to render aid to wounded Palestinians.

Consensus seems to be growing that a slow, step by step process, such as recommended by the Mitchell plan, will no longer work. Trust between the Israelis and Palestinians has been destroyed and the Mitchell plan requires trust by both sides. Something quite different may be needed. See “A Road to Peace” above.

Why Do Palestinians Fight This Way?:

Why are Palestinians killing civilian Israeli men, women, and children when the Qur’an specifically prohibits killing non- combatants? Why are they doing this when they know that such deaths harden the hearts of the Israeli people and will make it unlikely for Palestinian children or grandchildren to ever have peace? Why are Palestinians planting the seeds of suffering for their own children and grand- children?

The short answer is that the Palestinians are exhausted, desperate, and very angry because of the Israeli occupation of their land. They also lack a leader who is focused on long-term peace.

Why Do Israelis Fight This Way?: Why are Israelis supporting military actions against civilians and occupying land that is not theirs? Why are Israelis allowing their armies to do this when they know that such actions harden the hearts of the Palestinian people and will make it un- likely for Israeli children or grandchildren to ever have peace?

The short answer is that the Israelis are exhausted, desperate, and very angry be- cause of the terrorist attacks. They also lack a leader who is focused on long-term peace.

US and Isreal are most trusted allies? A chronological look at the evidence

There is a big debate going on in the Jews around the world, there is a striking convergence of opinion concerning the relationship between the US and Israel. The new US President and his administration is trying to balance both Israel and Arab interest by keeping channel of communications open to all players having interest in Middle East.

Supporters of the PLO – synonymous with “supporters of a Palestinian state”, because the PLO will run any such state – are convinced that the US is an ally of Israel. Some believe the US employs Israel in order to expand the American empire, and others – echoing the claims of that infamous forgery, “The Protocols of Zion” – believe that history’s greatest superpower, the US, is actually the pawn of tiny Israel. Either way, they are agreed that the US and Israel are supposedly ‘a team.’

Supporters of Israel naturally disagree with supporters of the PLO about most things but not on this point, as they also believe that the US is a friend of Israel – perhaps its only real friend. Whereas those who are pro-PLO are especially infuriated by perceived US support for Israel, those who are pro-Israel are deliriously grateful for the same (especially so in the case of Zionist Jews).

Given that across the spectrum of those politically mobilized on this issue, from one pole to the other, everybody appears to have the same opinion on this, casual observers are naturally drawn into agreement as well, creating a crushing consensus all over the world: the US is an ally of Israel.

But is it true?

Let us first ask: what is an ally? My dictionary defines ‘ally’ as “one who is associated with another as helper.”

Everybody knows that the US says it supports Israel. But actions speak louder than words. What is the evidence of US actions? In this piece I provide a chronological list of relevant US policies over the years.

I am hoping that this piece will begin a debate. It is not finished, and the research relevant to its claims is ongoing. I shall be updating the piece as I gather more data. But I have already assembled quite a lot, below, and what I have is certainly sufficient to challenge the common view. I believe, in fact, that what I have presented below is already sufficient to refute the common view many times over, and the compilation of these documented facts came as a big eye-opener. Hopefully this documentation will begin a serious debate on this question, rather than an automatic assumption based on official claims of US support for Israel – which claims are cheaply, and therefore easily, made.

It is important to remember that what is examined here is the behavior of the US foreign policy Establishment, which is secretive. The evidence therefore speaks to what is, and has been, the true position of the US ruling elite with regard to Israel and the Jewish people. It does not speak to the position of the American people, many of whom, I believe, will be outraged to find that, as I document on next pages, the US specializes in attacking Israel. In fact the section on 1947-48 contains dramatic evidence that ordinary Americans tend not to favor the anti-Jewish policies of the US ruling elite.

CHRONICLE OF CONFLICT

MAPPING THE CONFLICT

The chronology already goes up to the year 2005, but I have yet to complete the research on some of the missing years in between.

The 1930’s – Negative – The US Establishment helped sponsor the rise of the German Nazi movement.

1939-1945 Negative BThis year’s material is divided into the following sections:

Introduction

1. The general policy of the Allies towards the plight?of the Jews
2. No US visas for European Jews trying to escape the Nazislaughter
3. The allies refused to sabotage Hitler’s Final Solution by military means

1945 – Negative – After 1945, the US created US Intelligence by recruiting tens of thousands of Nazi war criminals.

1947-48 – Mixed to Negative – Forced by external circumstances, the US government gave lukewarm support to the creation of the State of Israel. But then it re- versed itself and implemented policies de- signed to destroy Israel.

1949-1953 – Negative – In Israel’s hour of supreme need, the US allied with Israel’s mortal enemies.

1955 – Mixed – The US forces Israel to withdraw from Sinai, but makes some concessions to the Israelis.

1955-1965 – Positive (in one regard only) – Israel indirectly gets some US weapons.

1958 – Negative – Israel assists US military intervention in the Middle East; when this places Israel in danger, the US doesnothing.

1964 – Mixed – The US abandoned its previous official policy of trying to get Israel to relinquish the territories won in the War of Independence. Why had it been trying to do this?

1964-1967 – Negative – Although Israel suffered terrorist attacks from its Arab neighbors during these years, when they staged a full-scale military provocation, the US refused to help.

1967 – Negative – After the Six-Day War, the US put pressure on Israel to relinquish the territory gained, even though it knew it was indispensable to Israeli defense.

1967-70 – Negative – The Arabs attack the Israelis. The US response is to try and remove the Israelis from territory they need for their defense.

1970 – Positive – Washington temporarily abandons the diplomatic ef for t to make Israel withdraw from the territories.

1973 – Positive – The US assisted Israel in the Yom Kippur War.

1973-1975 – Negative – The US sup- ported the election of a pro-PLO Nazi war criminal to the post of UN Secretary General.

1975 – Negative – The US reached an agreement with Israel not to have contacts with the PLO. The US immediately violated the agreement.

1977 – Negative – Jimmy Carter worked hard to give the terrorist PLO the dignity of a ‘government in exile,’ and then he teamed up with the Soviets to try and saddle Israel with a PLO terrorist state next door.

1978 – Negative – When Israel tried to defend itself from the PLO terrorists, the US forced Israel to stand back.

1979 – Negative – Jimmy Carter began large-scale US sponsorship of anti-Semitic Islamist terrorists, especially in Afghanistan and Saudi Arabia.

1981 – Negative – The US pushed for a PLO state in the West Bank against Israeli objections.

1982-1983 – Negative – The US military rushed into Lebanon to protect the PLO from the Israelis.

1985 – Negative – 1985 includes more material than other years, so we have di- vided it into subsections.

1. Shimon Peres acted as a US agent, against Israeli interests.
2. Bettino Craxi and Giulio Andreotti (respectively, the Italian prime minister and foreign minister) committed political suicide for the sake of pushing the PLO. The US was behind them.
3. Ronald Reagan denied the Holocaust
4. Who was in charge of US covert operations in 1985?

1987-1988 – Negative – The ‘First Intifada’ was a US-PLO strategy used to represent the Arabs in West Bank and Gaza as supposedly oppressed ‘under- dogs.’

1989 – Negative – With Dick Cheney, the US began supporting a PLO state in the open as the ‘only solution’ to the Arab- Israeli conflict.

1991 – Negative – Bush Sr.’s administration forced Israel to participate in the Oslo process, which brought the PLO into the West Bank and Gaza.

1994 – Negative – Yasser Arafat was given a Nobel Peace Prize, and the CIA trained the PLO, even though Arafat’s henchmen were saying in public, this very year, that they would use their training to oppress Arabs and kill Jews.

1996-1997 – Negative – The United States exerted such strong pressure on the Netanyahu government (including threats) that, even though Netanyahu had been elected on an anti-Oslo platform, he had the necessary cover to betray the Israeli public that had elected him.

2005 – Negative – Mahmoud Abbas, who will soon have total control over Gaza, is the one who invented the strategy of talking ‘peace’ the better to slaughter Israelis. The US ruling elite loves Mahmoud Abbas.

( Prashant Tewari inputs from R. Jerry Adams, Ph.D., Evaluation and Development Institute and Francisco Gil-White)

Time was when oil was being sold at $140 a barrel, and while consumers cringed at the high prices, the oil-rich nations of the Middle East prospered. The result was an economic boom that spanned industries ranging from financial services and real estate to tourism. Stock prices soared. Sovereign wealth funds snapped up choice assets around the globe. In late 2008, the oil bubble burst, the financial crisis began to roll across the world and boom turned to bust. How have the combined effects of the global slowdown and low oil prices affected the economies of the Middle East?

In 2002, oil prices in the nations of the Gulf Cooperation Council (GCC) stood at $25 a barrel. By July 2008, that number had jumped to $147. The increase enabled the GCC’s six member countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) to almost triple their gross domestic product from $350 billion to more than $1 trillion. Now oil prices have fallen again this time to below $40 a barrel and the oil boom and bust have come at a steep price, especially for Dubai.

In 2002, oil prices in the nations of the Gulf Cooperation Council (GCC) stood at $25 a barrel. By July 2008, that number

had jumped to $147. The increase enabled the GCC’s six member countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) to almost triple their gross domestic product from $350 billion to more than $1 tril

infrastructure overall, which had suffered from decades of under investment. Government efforts concentrated on developing oil and gas, the power sector and transport infrastructure. The private sec- tor, for its part, concentrated on residential, commercial and tourism real estate projects.

As Don De Marino, co-chairman of the National U.S.-Arab Chamber of Commerce, notes, “Real estate in the Gulf is fundamentally a private sector game. Actual recourse lending is pretty limited, so real estate investors who borrow from the banks do so personally. The rest of the investment funds come mostly from the earnings from other businesses.”

Dubai-based developers Emaar and Nakheel led the region by launching the world’s tallest tower, largest shopping mall and largest man made island, along with a string of luxury hotels and residential developments. Other developers, such as Saudi Arabia’s Kingdom Holding, jumped on the bandwagon by launching massive mixed development projects in Jeddah and Riyadh.

However, the oil boom and subsequent bust, with a decline to below $40 a barrel – came at a price. The strong project pipeline caused a surge in the expatriate population, as people came to fill open jobs. This led to increased domestic lion, according to the International Monetary Fund.

The increase in oil prices widened the fiscal surplus of GCC economies to a record high. From 2002 to 2008, an estimated $1.5 trillion in surplus was accumulated, leading GCC members to embark on a mission to diversify their economies. On developing and improving infrastructure overall, which had suffered from decades of under-investment. Government efforts concentrated on developing oil and gas, the power sector and transport infrastructure. The private sec- tor, for its part, concentrated on residential, commercial and tourism real estate projects.

As Don De Marino, co-chairman of the National U.S.-Arab Chamber of Commerce, notes, “Real estate in the Gulf is fundamentally a private sector game. Actual recourse lending is pretty limited, so real estate investors who borrow from the banks do so personally. The rest of the investment funds come mostly from the earnings from other businesses.”

Dubai-based developers Emaar and Nakheel led the region by launching the world’s tallest tower, largest shopping mall and largest manmade island, along with a string of luxury hotels and residential developments. Other developers, such as Saudi Arabia’s Kingdom Holding, jumped on the bandwagon by launching massive mixed development projects in Jeddah and Riyadh.

However, the oil boom and subsequent bust, with a decline to below $40 a barrel came at a price. The strong project pipeline caused a surge in the expatriate population, as people came to fill open jobs. This led to increased domestic demand and an acute housing?shortage. Such factors, coupled with

the weak U.S. dollar and high commodity prices, raised average inflation in the GCC to about 13% year-on-year in June 2008. The oil windfall expanded domestic credit growth but was intensified by the inflow of hot money. (All the GCC currencies, with the exception of Kuwait, are pegged to the U.S. dollar.)

The large current account surpluses and high inflation resulted in speculative inflows looking for currency revaluation.

According to widespread press reports, the impact has been especially hard on Dubai. As Ashwin Verma, a partner at Black House Development Company, a New York-based real estate investment and development firm, notes: “Dubai went from a trading economy to a real estate economy. Unlike [oil-rich] Abu Dhabi, most of Dubai’s GDP comes from real estate.

Dubai is one of seven emirates and the most heavily-populated city of the United Arab Emirates. Abu Dhabi, a sister emirate and the largest by area, is the capital of the U.A.E .Another ‘World’s Largest Mall’ The possibility of super profits in real estate attracted companies and individuals alike. The easy availability of liquidity

enticed property developers to launch such highly-ambitious projects as an underwater hotel, a mile-high tower, a kilo- meter-high tower, a revolving high-rise apartment, yet another “world’s largest mall,” massive theme parks, a floating city and a twisted residential tower. While the governments channeled most of the surpluses into their sovereign wealth funds, the government linked companies and the private sector tapped international markets to finance domestic projects. Lulled by a false sense of security brought by bulging state coffers, these companies integrated leverage into their business model. They regularly went to the international debt markets to fund their construction plans. The generous mortgage finance and attractive rental yields due to the housing shortage sparked investors’ interest in real estate, while the relaxation of strict foreign-ownership of property laws in countries such as the U.A.E., Bahrain and Oman added another impetus.

As the list of elaborate projects grew, so did the line of investors queuing overnight to book properties. Residential proper ties were sold even before they were built solely on the basis of blueprints, and strong demand led to massive

speculation in the secondary markets for these off-plan properties. In some cases, properties were sold even before the developer had approval from the respective government departments. The hype brought international attention, and that, in turn, drove overseas investment.

Flipping of properties became the most profitable venture, sending property prices to dizzying heights. What was supposed to be an auxiliary support for economic Diversification efforts become the main pillar of it. The construction contagion spread from one country to another as real estate and tourism development became the common denominator of the GCC diversification strategy.

In January 2008, the projects planned or underway totaled $1.6 trillion. This had increased to $2.54 trillion by January of 2009, with Saudi Arabia and the U.A.E making up 70% of the projects, mostly in the real estate, leisure and infrastructure sectors.

However, as the global credit crunch froze the international financial markets, the hot money evaporated. The drastic $100 slide in crude oil prices eroded investor confidence in the region. The tourist arrivals slowed to a trickle during the peak winter season as a recession engulfed major economies. In a spectacular swing, abundance of liquidity in the beginning of 2008 had vanished before the year end.

The lack of liquidity forced developers to put many projects on hold, and speculators were left with inflated assets that could not be sold, as banks tightened mortgage lending criteria. Most of the projects have either been cancelled or put on hold for lack of funding. In Dubai, construction cranes once jokingly called the national bird have mostly been idle. According to Proleads, a firm that tracks construction projects, about 150 projects in the GCC were on hold in January this year, about 88 of them in the U.A.E. alone. “Current very steep decline in oil prices is playing havoc with virtually all real estate projects,” says De Marino. “If there is a bright spot, it’s that the banks are not sitting with the properties. But clearly the downside is the private cash tied up. The fact is that no one locally saw just how rapidly oil prices would collapse.” Of course, the overbuilding and speculation are not confined to the Gulf. “Every country and city in the world is in the same spot Miami, China, even New York,” notes Verma. “However, Dubai is not supply- constrained like New York or London, so prices can fall much further.”

In explaining why the problem is magnified in the region, Verma points to three factors. “As the real estate sector unwinds, there are fewer jobs, and people are forced to leave because they cannot stay without a job. Fewer people means less demand for real estate and fewer shoppers at the mall. It becomes an obvious downward spiral.”

In addition, he says, “bankruptcy and debt laws in Dubai are very harsh. It makes sense in markets [not characterized] by the wide adoption of credit for growth. However, so many buyers have [been using] credit without knowing the legal implications of default. Now that they know, people are leaving, which once again translates to fewer buyers, less shoppers again, a downward spiral.”

Finally, he notes, “monetary policy is important. In the U.S., the government can print trillions of dollars and amortize over the largest economy in the world. They can slash interest rates to practically zero to reduce debt and the cost of servicing debt. In Dubai, they can’t. That’s why they need Abu Dhabi [to help]. They can’t lower interest rates. In fact, interest rates are going up, further squeezing borrowers and stifling any remaining growth. This further increases [the number of] defaulters, again driving people out.”

Many leading contractors and developers have laid off employees and adopted a wait- and-see approach to future projects. The retrenchments may have significant repercussions on domestic demand.

In 2007, Dubai’s construction and real estate sectors employed about 50% of the total workforce. Moreover, OPEC’s December cut of 4.2 million barrels a day will also affect the GCC countries. The cuts translate to about a 10% contraction in the oil sector of Saudi Arabia, Kuwait and the U.A.E. Meanwhile, the Algerian oil minister has said

that OPEC may announce further production cuts to support the prices on March 15. Lower oil prices, reduced oil production, out flow of expatriates and falling demand for goods and services are expected to slow GDP growth to a bare minimum.

Meanwhile, the huge amount of wealth destroyed by the crash in the GCC stock market has hurt investor sentiments. The GCC stock markets collectively lost more than $600 billion in market capitalization last year. According to the IMF’s most recent forecast, the GCC economy is expected to expand by 3.5% in 2009 compared to 6.8% last year. After years of heady growth, reality is returning to the GCC real estate market. Recent surveys indicate average home prices in the GCC falling by 10% to 40% from their peak prices with Dubai being the most affected.

Moreover, the GCC companies, mostly in real estate and finance has unveiled a 131-km metro line while Saudi Arabia, Oman, and Qatar are going ahead with power, petrochemical and trans- port projects.

A recent Gulf Construction Survey indicated this shift. According to the survey, two thirds of senior executives from construction companies predict that the operations will move away from Dubai to Abu Dhabi, Qatar and Saudi Arabia. Still, some investors are cautiously optimistic. “Dubai is a model for the region; as Dubai goes, so goes the perception of commerce and trust in commerce in the region,” says Verma. “Dubai is built on entrepreneurship and innovation. These may sound like buzzwords, but it’s actually true. They just had the world – and investors – build them a first-class city and infrastructure. So

they will use this as a base to recreate themselves.”

(The author is based in Dubai) cial?face severe head-?winds when it comes?to repayment or rollover of an estimated $40 billion of debt due?this year, given the absence of liquidity and investor appetite. Going for- ward, governments are expected to replace the private sector as the leading entity to announce new mega projects. Unlike during the 1970s oil boom, GCC governments have spent only one third of their oil wealth and can pursue counter cyclical fiscal measures to rescue their economies. The region’s countries are better equipped to weather a low-revenue scenario?due to their huge foreign asset positions?and low public?debt. The extent?of spending in?each country will?be dependent?on oil prices, as?countries have different ?break even points.

Nevertheless, the emphasis has shifted from real estate to investment in human capital and infrastructure to improve non-oil-sector growth over the long term, including technological universities, mass rapid transport systems and value-added industries. Abu Dhabi has unveiled a 131-km metro line while Saudi Arabia, Oman, and Qatar are going ahead with power, petrochemical and transport projects.

A recent Gulf Construction Survey indicated this shift. According to the survey, two thirds of senior executives from construction companies predict that the operations will move away from Dubai to Abu Dhabi, Qatar and Saudi Arabia. Still, some investors are cautiously optimistic. “Dubai is a model for the region; as Dubai goes, so goes the perception of commerce and trust in commerce in the region,” says Verma. “Dubai is built on entrepreneurship and innovation. These may sound like buzzwords, but it’s actually true. They just had the world and investors build hem a first-class city and infrastructure. So they will use this as a base to recreate themselves.”

– Romil Raj (The author is based in Dubai)

Houston: Oil prices tumbled below $50 a barrel Monday, spooking global financial markets and signaling that the remarkable 50 per cent price drop since June was continuing this year and even quickening.

The new drop in U.S. and global benchmarks of more than 4 percent was accompanied by a series of reports of increased Middle Eastern oil exports; continuing increases in U.S. production despite planned exploration cutbacks by many oil companies; and renewed worries about the declining economic fortunes of Europe.

The plunge once again sent jitters through global markets. The Dow Jones industrial average fell 331 points, or 1.86 percent, while the Standard & Poor’s 500-stock index, a broader benchmark, fell 37.62 points, or 1.83 percent. And the Vix, a measure of market volatility that is known as Wall Street’s fear gauge, leaped by around 12 percent.

In response, investors sought safety in government bonds around the world. As bond prices rose, the yield on the 10- year Treasury note fell to 2.04 percent on Monday.

The decline in oil was not the only source of concern in the markets. Worries about Greece’s ability to stay in the euro-zone have reasserted them- selves in recent days, for instance. The dollar continued its surge against the euro on Monday.

Still, as the oil price decline has continued, investors have increasingly seen it as a bad omen for the global economy. The drop may point to lower demand for oil and lower economic activity. And the decline suggests that policymakers have not managed to deal with the threat of deflation, or falling prices.

“There is certainly a deflationary mindset in the market,” said Jim Vogel, a debt markets strategist for FTN Financial, “and as we enter 2015, it’s beginning to nag some people that there could be a deflationary component to the economy.”

Leading the way is oil

“It is a very shaky start for the oil market,” said Tom Kloza, global head of energy analysis for Oil Price Information Service. “The norm is a lot of money comes into commodity index funds at the beginning of the year, and that can create a market rally. Today, instead of new money coming into oil, you got some more old money going out of oil.”

West Texas Intermediate crude dipped below $50 a barrel briefly Monday before recovering. Brent crude, the global benchmark, fell to about $53 a barrel.

The drop in prices has led to a rising tide of oil company announcements in recent days of investment cuts for the coming months. Ensign Energy Services, a Canadian drilling contractor, reported that it would be laying off 700 workers, or roughly 10 percent of its workforce, in California fields.

Several Texas based companies that have borrowed heavily in recent years to produce in new Texas and North Dakota shale fields are expected to announce steep investment and job cuts in the coming days.

Consumers continued to benefit from the oil price collapse, with the AAA auto club reporting Monday that the average national price for regular gasoline had fallen to $2.20 a gallon, 8 cents lower than a week ago, 51 cents lower than a month ago, and $1.11 below a year ago.

Energy experts say American families are likely to have as much as $115 billion more in disposable income in 2015 than last year because of lower gasoline prices alone. Additional benefits should come from drops in heating oil and diesel prices.

The last time oil and gasoline prices fell this low was in the wake of the 2008-09 financial collapse, when crude oil fell from well over $100 to below $40 a barrel in a matter of months. Energy analysts say the current price slump is of an entirely different nature, based primarily on a glut of oil being produced in the United States, along with increased production in Canada, Iraq and a handful of other countries.

While in the past the Organization of the Petroleum Exporting Countries has sometimes agreed to cut back production to shore up prices, Saudi Arabia and other Persian Gulf producers have decided to protect their global market share by cutting prices in the United States and Asian markets while increasing production somewhat.

In a recent interview with Middle East Petroleum and Economic Publications, based in Cyprus, the Saudi oil minister, Ali al-Naimi, indicated his country would remain steadfast rather than cut production anytime soon.

“If I reduce, what happens to my market share?” alNaimi said. “The price will go up and the Russians, the Brazilians, U.S. shale oil producers will take my share.”

Adding further pressure to prices is the weakening demand for oil and petroleum products in Europe and developing nations. That weakness is compounded as increasingly efficient vehicles come onto the market and China seeks to reduce the oil depend- ency of its economy.

There is little reason to believe any of those trends will change until midyear at the earliest, energy experts say. According to Simmons & Co., based in Houston, the 93 million barrel a day global market will continue to be over- supplied by at least 1 million barrels a day during the first half of 2015.

“It might be the dead of winter, but it looks as though markets will confront considerably more downside risk in the months ahead,” according to a Citi Research report released Sunday night, “and it will likely take well into the year before prices will bottom, let alone achieve a new equilibrium.”

Citi says it is most probable that the oil market will stabilize by the end of 2015, with the Brent price averaging $63 a barrel for the year – several dollars above the current price. But its more bearish forecast, with a 30 per- cent probability, is for Brent to average $55 for the year, roughly the current price.

A number of signs suggest that oil and oil product supplies will soon be increasing. The ramping up of several refineries in Saudi Arabia and the United Arab Emirates is likely to increase exports of products like gaso- line and diesel by 500,000 barrels a day in the coming months. Even without the Keystone XL pipeline, other Canadian pipelines coming online will bring as much as 350,000 more barrels onto the market.

Citi has projected that global investments in oil exploration and production will decline up to 15 percent this year, but U.S. companies continue to produce more efficiently.

Rystad Energy, a Norwegian global consulting firm, issued a report on Monday saying that the average break- even price for the principal shale fields in the United States had dropped to $58 a barrel, with the core areas of some fields remaining economical to produce at $50.

Oil-producing states are expected to suffer economically from the oil price drop, although the top oil-producing state, Texas, has worked hard to diversify its economy after the price bust of the 1980s. With a projected $3.5 billion budget deficit, Alaska has already announced a delay in six important infrastructure projects, including a gas pipeline from the North Slope.

© 2015 New York Times News Service

Sitaram Kesri bless his troubled soul, from his vantage point in..errr…heaven (?) is surely laughing at Sonia Gandhi’s predicament. If party stalwarts of the Indira Rajivera Pranab Mukherjee, Sharad Pawar and Jitendra Prasad,frightened by the prospect of political wilderness under Sitaram Kesri’s inept leadership, or worse, having to see one of them ascend to the throne, made common cause with Sonia Gandhi’s domestic minion Vincent George to plot and execute poor Sitaram Kesri’s humiliating eviction in 1996, the new breed of empire loyalists  Anand Sharma, Ajay Maken, Digvijay Singh and Abhishek Manu Singhvi have been let loose by Sonia Gandhi on Jayanthi Natarajan. In 1996, Sonia Gandhi’s path was speedily cleared of all thorns and threats; we can be sure she will do the same for her son now. Rajesh Pilot and Madhav Rao Scindia’s untimely deaths were fortuitous for the new regime;

Pranab Mukherjee persisted with the empire loyalist mask until he was elevated to the Rashtrapati Bhavan; Jitendra Prasada died unexpectedly in the midst of his hectic anti Sonia Gandhi campaign while wily Sharad Pawar distanced himself far enough from Sonia Gandhi to do his own thing but not too far away that he could not carve out a political niche for himself within the erstwhile Indian Nouveau Roman Empire. G Karuppaiah Moopanar alone, also of the old guard resigned from the Congress when Narasimha Rao was Prime Minister in protest against the Congress’ decision to ally with the AIADMK; he refused ministerial posts in the Indira Rajiv governments, refused to become Prime Minister after the Deve Gowda government fell; instead, being a proud man, GK Moopanar moved to Chennai to start Tamil Manila Congress or the TMC.

Jayanthi Natarajan was confronting a determined usurper and even if this is simply a case of thieves falling out, we must hand it to Jayanthi Natarajan for refusing to turn over meekly like Sitaram Kesri and play dead. Jayanthi Natarajan, until yesterday an empire loyalist, hit back at the Roman Empire by going public with a letter she wrote to Sonia Gandhi on 5 November 2014 with the clear message, “if I go down for corruption, I take your son (and you by implication) down with me”.

If Sonia Gandhi in her manic ambition to rule a country and a people not her own had no qualms about letting her thugs lock up the elderly Sitaram Kesri in the bathroom to usurp the Congress president chair, she has even less qualms now about throwing Jayanthi Natarajan to the lions in the Colosseum. How Sonia Gandhi deals with this threat remains to be seen; but given her past success in removing all thorns from her path, Jayanthi Natarajan may still be neutralized. It is just as likely that woman to woman, Jayanthi Natarajan may yet prove to be Sonia’s Nemesis. “If pushed to a corner”, declared a grim-faced Jayanthi Natarajan on Times Now, “I will not hesitate to make public all communications between me and Rahul Gandhi’s office. I can assure you, I can take care of myself”.

Regional satraps should not break the Delhi glass ceiling Sitaram Kesri from his vantage seat up above has another reason to laugh too. The Gandhi glue is melting and the Congress is coming unstuck now in the exact same manner it came unstuck after Rajiv Gandhi’s death. First to cry ‘nay’ was Jaganmohan Reddy, son of Sonia Gandhi loyalist and now deceased “Samuel” Rajasekhara Reddy, Seventh Day Adventist Chief Minister of Andhra Pradesh.

When “Samuel” Rajasekhara Reddy died an untimely and wholly unexpected death (another one in the Congress) in a helicopter crash in September 2009, his son Jaganmohan Reddy, to keep his father’s little fiefdom intact for himself and his family, announced his plan to undertake “odarpu yatra” or a condolence yatra, across Andhra Pradesh to cash in on his father’s death and strengthen his own position within the party and the state leadership.

Sensing new danger, Sonia Gandhi refused permission to Jaganmohan Reddy to undertake the condolence yatra. Needless to say Jaganmohan Reddy was sitting on mountains of ill gotten wealth which he was not prepared to share with New Delhi and therefore did not need Sonia Gandhi to become a power centre in his own right in Andhra Pradesh. Refusing to play second fiddle to the Delhi dynasty and cock secure of his late father’s money- powered clout in Andhra Pradesh, Jaganmohan Reddy quit the Congress to do his own thing.

He and his mother took charge of YSR Congress, a political outfit founded by one Siva Kumar, a Samuel Reddy loy- alist. Jaganmohan Reddy’s resignation from Sonia Gandhi’s Congress and his rapid rise in Andhra Pradesh politics inflicted a deadly blow to the state Congress which was kept afloat only by the continuing pre-eminence of Sonia Gandhi in New Delhi. Just so Jagan Reddy and all other “sons” posing a threat to her own son’s right to be heir, got the message that power and all benefits of power must be disclosed and shared with New Delhi, Sonia Gandhi unleashed the CBI against Jagan Reddy. Jagan Reddy, his father’s slavish loyalty to Sonia Gandhi counting for nothing was arrested for disproportionate assets under the Prevention of Corruption Act and lodged in jail. Sonia Gandhi and her CBI kept Jagan Reddy in jail from May 2012 to September 2013 like they kept Kanimozhi, the daughter of another ambitious regional satrap who was also arrested by the CBI in the 2G Spectrum case and spent six months in jail from May 2011 till 29 November, 2011.

The next to cry foul and quit the Congress was GK Vasan. Few remember that in total contradiction to his late father’s reason to resign from the Congress, GK Vasan, after GK Moopanar’s death in August 2001, swallowed his father’s pride, buried his father’s proud legacy and merged TMC with Sonia’s Congress in 2002. After Sonia Congress’ comprehensive drubbing in the 2014 Lok Sabha elections, when she and Rahul Gandhi refused to step down as President and Vice President of the party, and when Sonia Gandhi and her son continued with dynasty political-business-as- usual, sending the strong signal that regional satraps should remain con- fined to their regions and should not attempt to knock down the Delhi glass ceiling, GK Vasan too quit Sonia’s Congress in November 2014.

The similarities between how Sonia Gandhi dealt with Jaganmohan Reddy and GK Vasan are too obvious to be missed. Jaganmohan Reddy wanted to strengthen the state Congress (and himself in the process) using his father’s name. GK Vasan too wanted to strengthen the TN Congress (and himself in the process) after the Congress lost the Lok Sabha elections in 2014, by launching a membership drive with the pictures of GK Moopanar and K Kamraj on the membership card instead of pictures of Sonia Gandhi and Rahul Gandhi. Sensing the same danger, Sonia Gandhi expelled GK Vasan from the Congress.

In all the noise over Jayanthi Natarajan’s resignation and the cacophony from the hounds of war let loose by Sonia Gandhi to mount a no holds barred attack against Jayanthi Natarajan, P Chidambaram has become conspicuous by his silence on the issue considering he and Jayanthi Natarajan are old friends and colleagues from the same state and practicing the same profession. However, as if to make up for his father’s silence, Karti Chidambaram, incidentally Kanimozhi’s good friend, has begun to voice murmurs of discontent. On the 22 January, Karti Chidambaram convened a meeting of all his father’s loyalists over lunch where he and his supporters were supposed to have expressed serious discontent with the party high command.

Karti Chidambaram was served with a show cause notice by the Pradesh Congress President. That situation is developing yet. It is now clear that sons of regional satraps are not willing to stand waiting at the kitchen doors while Sonia Gandhi and her son continue to sit at the Congress high table. L’affaire Jayanthi Natarajan: Going beyond the cacophony

What Sonia and Rahul Gandhi are doing to Jayanthi Natarajan must be placed against this background. It speaks volumes for Sonia Gandhi’s unmatched talent for bribing, buying and silencing dissent that while her ministers were accused of corruption and went to jail or were expelled from the party, she and her family, including her son and son-in-law were never found guilty, were not held to account and have not spent a single day or night in jail. Not even in Modi Sarkar’s times.

The case against Jayanthi Natarajan is two fold. She sat on files and she moved files to Chennai. As a good friend put it caustically, Jayanthi Natarajan’s corruption falls under two broad categories – positive corruption and negative corruption. Positive corruption is you pay me money, I will clear your files. Negative corruption is  you don’t pay me money, I won’t clear your files. The high points of the case:

1. Jayanthi Natarajan sat on several files, the most prominent among them being Lavasa, Vedanta, Nirma Cement, Adani projects and GVK power project.
2. Jayanthi Natarajan was summoned by Prime Minister Manmohan Singh to his office on 20 December 2013 and asked to put in her resignation papers.
3. Manmohan Singh tells her, he is not demanding her resignation but Sonia Gandhi wants her to step down to focus on party work in preparation for the coming general elections.
4. Jayanthi Natarajan, a self proclaimed Gandhi family loyalist,steps down promptly.
5. The next day, on 21 December, Rahul Gandhi addresses CEOs and industrialists at a FICCI event where he says that now all bottlenecks with regard to environmental clearances have been removed (meaning with Jayanthi Natarjan’s resignation) and that all stalled projects will now be given speedy clearances so that they may begin work.
6. Jayanthi Natarajan says all the stalled projects were stalled and environmental clearances not given at the express instructions and directives from Rahul Gandhi.
7. Jayanthi is also stripped of her position as Congress spokesperson and she is left alone in political wilderness.
8. Within days of GK Vasan quitting the Congress party expelled from the Congress party (depends on who is saying it) Jayanthi Natarajan writes a tearful and plaintive letter to Sonia Gandhi- the contents of said letter already in the public domain.
9. The question now is – why did Jayanthi Natarajan wait for two months before she went public with all the sordid details? And why did she go public just on the eve of Delhi state elections?

Not Jayanti Tax but Sonia Tax

What we should not forget is that Narendra Modi considered Jayanthi Natarajan to be corrupt when he referred to “Jayanthi Tax” in one of his election speeches. Be it as that maybe. But Jayanthi Natarajan has now quit the Congress not because she had a con- science but she, like Jaganmohan Reddy refused to pay Sonia Tax.

Sonia Gandhi gave all her men and women the freedom to practice corruption with two riders that they do not rock her throne and not question her choice of heir apparent, and that they pay Sonia Tax from the bounty they scalp from the rich and the poor alike. When Rahul Gandhi issued directives to Jayanthi Natarajan not to clear some projects, he was guilty of negative corruption; when at the FICCI meeting of industrialists he told India Inc. that their projects would now be cleared, he was guilty of positive corruption because the new Minister of State was prepared to pay Sonia Tax.

Jayanti Natarajan didn’t and suffered for it. And now she’s having her payback time.

-BY RADHA RAJAN