MonitorsPublished on Jul 13, 2012
The announcement on the side-lines of the Rio+20 Summit that Bhutan and China have decided to establish diplomatic relations is not only a reflection on the evolving foreign policy of the Kingdom but it also carries with it broader implications for the political dynamics of Asia.
Bhutan: 'Himalayan dilemma' on the China front
< class="heading1">Analysis

The announcement on the side-lines of the Rio+20 Summit that Bhutan and China have decided to establish diplomatic relations is not only a reflection on the evolving foreign policy of the Kingdom but it also carries with it broader implications for the political dynamics of Asia. This new-found bonhomie between the two nations has already been dubbed to an equivalent of ’moving the Himalayas’. The rationale in the use of the jargon points to the delicate nature of relations that lies across the mountain range between Bhutan, India, China, and also Nepal to a lesser extent.

However, this development, when juxtaposed with other international efforts by Thimpu, would reveal the growing rapprochement of Bhutan with other nations too. Over the past few years, Bhutan has established diplomatic ties with a number of nations (which are either small or are distant, with limited implications in the Himalayan context). Since 2009, for instance, Bhutan has established diplomatic relations with 17 nations, including Afghanistan, Brazil, Indonesia, Myanmar, Cuba, Mongolia and Vietnam, to name a few. None of them was indicative of a change in Bhutan’s policies as the Rio development.

What are the real implications of this development? If one is to scrutinise the nature of Bhutan’s external ties, it would be appalling to see that the Kingdom has taken great efforts to limit its international engagement. Despite its close ties with India (both when the latter was a part of the British Empire and then as a Republic), Bhutan established formal ties only in 1968, even though the two nations had inked a Friendship Treaty in 1949. Its engagement with the other nations and international bodies has not been any better. Its entry into the international foray was in 1962 at the behest of the Colombo Plan, followed by the Universal Postal Union in 1969 and the UN in 1971. Bhutan has only seven permanent diplomatic missions across the world, including those in India and the UN, while Bangladesh and New Delhi have their embassies in Thimphu.

Practising a ’reserved’ foreign policy, Thimphu has limited relations with only 33 other nations, including all SAARC members. This is reflected in the Foreign Office establishment, which as a Ministry was created in 1972 by elevating the Department of Foreign Affairs which itself was created in 1970. In this backdrop, a Chinese mission would be a significant development. This is particularly so, as Chinese Premier Wen Jiabao has offered to "complete border demarcation with Bhutan at an early date". This also indicates that Beijing has already earmarked the key areas that the two sides need to look at even before they had established formal ties.

What ails India in context is not only the nature of the border talks that has been proposed but also the domestic developments in Bhutan. The ’McMahon Line’ that demarcates the borders between India, Bhutan and China along the Himalayas has been a bone of contention between the two Asian giants who were engaged in a military conflict in 1962 over the border issue. However, it was the same McMahon Line that was used as the basis for resolving the Myanmar-China border dispute. Thus progress, if any on the Bhutan-China border front, will have an impact on the India-China border talks.

On the other hand, Bhutan at present is facing a currency-crunch. The Indian rupee is in short supply, resulting in price rise and strict regulations on the functioning of banks. If one is to take into account the role of the Indian rupee in the Bhutanese economy and the dependency of the country on India for trade, New Delhi would have reasons to be wary of the possible inroads that China could make with its economic and political package that it can bring to the Bhutanese table.

For New Delhi, Bhutan in the present context is ’not just another neighbour’ that is engaging China but is a pivotal nation that could redefine the role of Beijing in the South Asian region. The past experience of China’s engagement in the region has already left its mark and has also delineated the geo-strategic landscape of the region. However Bhutan would be the water-mark that could bring forth the growing influence and political interplay of the two Asian giants, India and China.

Thus, China-Bhutan ties to a large extend could be stymied by India-China relations at one level. At another level, it will be a litmus test on the ’border issue’ along the Himalayas.

(The writer is a Research Assistant at Observer Research Foundation)

< class="heading1">India: Presidential poll: A display of eroding political values

Dr Satish Misra

The on-going campaign for the presidential election, scheduled to be held on July 19, is proving to be a futile exercise in which the outcome is seemed to be certain, yet battle cries continue to be heard through newspaper headlines, TV channels and the social media. The battle-lines are clearly drawn between former Finance Minister Pranab Mukherjee and former Lok Sabha Speaker P A Sangma, with the former having a clear theoretical edge, given the nature of the electorate and the required legislative strength of the political parties backing him.

While Mukherjee is the candidate of the ruling UPA coalition (except the TMC), and is also being supported by non-UPA parties like the SP, BSP, JD (U), Shiv Sena and the CPI-M, Sangma is the official candidate of the Opposition NDA combine and also the regional parties like the AIADMK and BJD who had proposed his name initially. If some "miracle"does not catapult Sangma to the presidential chair, then Mukherjee’s is all set to become the next President of India. But if one has to listen to Sangma, then the above calculations are wrong as he has never lost an election in his life. Asked if he was confident of victory, Sangma said, "There are no if’s. I will win. I have never lost an election in my life. My winning margin has always increased."

To begin with, the election to the highest office in the country, occupier of which is supposed to be non-partisan and above narrow considerations, has been reduced to a slanging match of accusations and counter-accusations. It may be argued that the present one is no different from the previous ones but does this behove the political class to continue on the treaded path and add to the prevailing popular cynicism? The Indian political system has seen bitter battles for the presidency like the one in 1969 in which V V Giri was elected the fourth President of the Republic.

The 1969 election witnessed ’conscience vote’ for the first time. The official candidate of the then ruling Congress party Neelam Sanjeeva Reddy was defeated by Giri. By then, Giri had the backing of then Prime Minister Indira Gandhi, who had earlier proposed Reddy’s name as party nominee. Saneeva Reddy had his sweet revenge a decade later, when the post-Emergency ruling dispensation of the Janata Party had him elected unopposed. Reddy thus is the only presidential nominee to have lost an election and has still returned to the Rashtrapati Bhavan on a later occasion.

Since then, many elections have been held for the presidency, but invariably the ruling party or coalition has been able to ensure the victory of its candidate. But the current election and the previous election, which saw a woman being elected to the highest post, are different in the sense that there were lots of mud-slinging in the public. In the contest between the UPA candidate Pratibha Devi Sinh Patil and NDA candidate Bhairon Singh Shekhawat, the atmosphere was highly charged and in the process, she became the target of the Opposition’s ire.

The principal Opposition party, the BJP, even launched a website ’Know Pratibha Patil’ which contained various allegations in the form of a compilation of articles from different newspapers and magazines. Though the stated objectives of the site was to "educate the people about Pratibha Patil", the real motive was to run her down in popular perception and denigrate her candidature. Thus the BJP raked up a series of scandals in which she or members of her family were allegedly involved or implicated. The entire media, barring few exceptions, carried these allegations and opined that she was "not above suspicion".

A similar atmosphere is being created in the present campaign also. From the day Mukherjee’s candidature was announced by the ruling coalition, he has become the target of ridicule, innuendos and subtle denunciations. Sangma, who had represented mainly two parties in the past -- the Congress and the NCP - is opposed by both these parties. NCP spokesman D P Tripathi went a step further when he asked parties supporting Sangma to withdraw support for him and accused him of lowering the level of campaign. "It is very unfortunate that P A Sangma is not observing decency, decorum and dignity in the presidential elections", the spokesman said.

In previous elections, the candidate, himself or herself, never uttered a single word against the rival, but Sangma has suggested that Rashtrapati Bhavan was being used as a "dumping ground"for the failed Finance Minister, thus imputing all kind of motives for Mukherjee’s candidature. Earlier, the supporting parties of Sangma led by the BJP tried to find faults with Mukherjee’s nomination papers on very narrow technical grounds which may or may not stand legal scrutiny. His nomination was challenged before the Returning Officer, and once it was rejected there, the BJP and others knocked at the doors of the Election Commission. Even the Election Commission of India rejected it, and the Sangma camp is now threatening to take these issues to the Supreme Court if Mukherjee won.

This will not be the first and the only time the election of the President will be challenged before the nation’s highest judiciary. That dubious distinction also goes to the ’V V Giri election’, where the incumbent President voluntarily appeared in the witness box, where the Bench offered the nation’s highest constitutional authority a chair. In any case, the court upheld his election. While the campaign in that case also was on an unprecedented scale, and at times vituperative, neither side targeted the rival candidate, who if elected would become the President of the world’s largest democracy. Political parties and leaders thus drew the line, but not anymore. The kind of the campaign and choice of words being used in the current contest only adds to the prevailing popular cynicism which is pretty high and goes on to weaken democratic beliefs and practices.

(The writer is a Senior Fellow at Observer Research Foundation)

< class="heading1">Country Reports

< class="heading12boldGeorgia">Ties with Mauritius

The Kingdom of Bhutan and the Republic of Mauritius established diplomatic relations on July 2. The Joint Communiqué on the establishment of diplomatic relations was signed by Lhatu Wangchuk, Ambassador and Permanent Representative of Bhutan to the UN and his counterpart Milan Jaya Nyamrajsingh Meetarbhan, at the Permanent Mission of Mauritius in New York.

Following the signing ceremony, the two Ambassadors exchanged views on areas of mutual cooperation and expressed the desire of their Governments to work closely in areas of mutual benefit. They also expressed the desire to further deepen the present level of cooperation between the two countries at the UN and at other multilateral forums.
< class="text11verdana">Source:, July 3, 2012

< class="heading12boldGeorgia">’Gross National Happiness’ Day

The ninth session of the Parliament that lasted twenty one days concluded on July 11, debated a host of issues that included endorsing the Druk Gyalpo’s (Dragon King, refers to the King of Bhutan) Relief Fund Bill, Education City Bill, Domestic Violence Prevention Bill and Road Bill after extensive deliberations. The Assembly also decided to levy Green tax for the vehicles.

The legislature ratified three international conventions?- SAARC agreement on intimation of regional standard, SAARC seed bank convention and Cape Town convention and aircraft protocol.

In the National Council, the members deliberated on the Alternative Dispute Resolution Bill and the Contract Bill. The Bills will be discussed in the 10thsession of the Assembly. Speaking at the closing ceremony, the Speaker Jigme Tshultim said the Disaster Management Bill will be deliberated in the Joint sitting, while the Land Bill has been deferred for deliberation in the next Parliament.

The Speaker said that in keeping with the UN declaration of March 20 as the ’International Day of Happiness’, the Assembly proposed to declare it as ’Gross National Happiness’ day. Bhutan, unlike most nations, does not measure human wellbeing against the GDP but ’gross national happiness’.
< class="text11verdana">Source:, July 11, 2012,, July 13,

< class="heading12boldGeorgia">Hydro-power project work soon

Works on the new hydro-power projects of total 3500 MW capacity under the Indo-Bhutan joint initiative will begin within one year. This also includes Sankosh, though downsized recently by the Empowered Joint Group (EJG) of Bhutan and India to a 2560 MW from its earlier planned capacity of 4050MW, is still the single largest project in Bhutan.

According to Economic Affairs Minister, K Wangchuk, pre-construction infrastructure works, including building access bridges and roads, are to start in August this year in both sides of the border by respective Government agencies. Construction of main work including the dam and power house is likely to begin in 2013.

Though initially planned as a joint venture with 51 per cent owned by Indian PSUs and rest with Bhutan’s Government-owned hydropower agency Druk Green Power Corporation, the Rs 110-billion project has been remodelled with India providing the entire funding.

Works for four other hydropower projects in the list - namely Kholongchhu (600MW), Chamkharchhu (770MW), Bunakha (180MW) and Wangchhu (570MW) are expected to start by this year. By so far harnessing only 5% of its viable hydropower potential, Bhutan earns Nu 10 billion per annum, that is 20% of its GDP, with it. These new projects will further brighten the picture. On the other side, this will significantly help Indian power sector that is facing annual shortage of around 73,000 million units.
< class="text11verdana">Source:, July 11, 2012

< class="heading12boldGeorgia">Trade sector, the highest grosser

The trade sector contributed the highest revenue of Nu 4,882.9 million to the government during 2010-11 fiscal. The revenue contributed by the sector saw an increase of 27.5 per cent in 2010-11 from 19.5 per cent in 2007-08, surpassing Government’s target of achieving 25 percent growth.

Prime Minister Jigmi Y Thinley in his fourth State of the Nation report said the overall target of increasing trade’s GDP contribution to eight per cent was achievable with the increase in the number of traders along with the increase in the income level of the people. Trade was the second largest sector to provide employment. The government has issued 20,373 retail and wholesale licenses and micro trade certificates so far.

According to labour force survey of the Labour Ministry, there were 27,800 people engaged in wholesale and retail trade in the country in 2011. "The trade sector generated 8.5 percent of the total workforce which was far above the target of six percent,"said Lyonchen.
< class="text11verdana">Source:, July 13, 2012

< class="heading12boldGeorgia">NCTC may be kept out of IB

Giving in to protests by various state governments, the Ministry of Home Affairs (MHA) has kept the National Counter-Terrorism Centre (NCTC) out of the ambit of the Intelligence Bureau in its revised proposal which is likely to be taken up by the Cabinet Committee on Security (CCS) after the July 19 presidential election.
< class="text11verdana">Source: The Indian Express, July 13, 2012

< class="heading12boldGeorgia">Nuclear-capable Agni-I missile test fired

India has successfully test-fired its indigenously developed nuclear capable Agni-I ballistic missile, with a strike range of 700 km, as part of the Army’s user-trial from a test range at Wheeler Island off Odisha coast.

The surface-to-surface, single-stage missile, powered by solid propellants, was test-fired from a mobile launcher at about 10.10 am from Launch Pad-4 of the Integrated Test Range at Wheeler Island, about 100 km from here.
< class="text11verdana">Source:, July 13, 2012

< class="heading12boldGeorgia">Wait for fighter jet gets longer

Wait of Indian Air Force for an early decision on finalising the contract to procure the much awaited Medium Multi-Role Combat Aircraft (MMRCA) just grew longer. The Government has decided to take a relook at the entire process that declared French Dassault Aviation as the lowest bidder in the multi-billion dollar contract.
< class="text11Verdana">Source: The Tribune, July 11, 2012

< class="heading12boldGeorgia">Army office probed for ’ISI link’

The Army ordered a court of inquiry after a lieutenant-colonel was found in unauthorised contact on the internet with a Bangladeshi woman suspected of working for Pakistan’s Inter-Services Intelligence (ISI).

Army sources said there was "no physical contact"between the two and dismissed television reports that the officer was caught in a "honey-trap"with the woman at a five-star hotel in New Delhi.
< class="text11Verdana">Source: The Asian Age, July 12, 2012

< class="heading12boldGeorgia">Lankan air force trainees moved

Succumbing to pressure from political parties in Tamil Nadu, the Centre has moved Sri Lankan military personnel undergoing technical training at Tambaram Air Force Station near Chennai to Bangalore.
< class="text11Verdana">Source: The Indian Express, July 7, 2012

< class="heading12boldGeorgia">Closer to ’drugs-for-all’

India is moving ahead with ambitious plans to spend nearly $5 billion to supply free drugs to patients -- bringing the nation closer to universal health coverage, officials said on Friday.

The "game-changing" scheme, in the words of one top Indian health ministry official, is part of the government’s latest five-year spending programme (2012-17) and is expected to start in October.

The Congress-UPA Government will pay Rs200 billion,or $3.61 billion while India’s 29 States will be asked to kick in Rs66 billion, over the next five years to the scheme, a Government statement said.

This initiative "would be a giant step in vastly expanding the access to medicines" in the country of 1.2 billion people, Ministry of Health joint secretary Arun Panda said.
< class="text11Verdana">Source:, July 6, 2012

< class="heading12boldGeorgia">IKEA stand signals FDI in retail

The Government and Swedish furniture major IKEA are set to arrive at a mutually acceptable solution to their dispute over the conditions set by the former regarding proposals involving foreign direct investment (FDI) beyond 51 per cent in a single-brand retail in what could set the policy benchmark in this regard.

According to sources privy to the matter, the IKEA, in a revised proposal being readied, might agree that it would meet the mandatory sourcing norm in 5-7 years, a climb-down from its earlier stand that the norm could be met only over a cumulative period of 10 years.
< class="text11Verdana">Source: The Indian Express, July 7, 2012

< class="heading12boldGeorgia">Third on foreign investors list: UN

Major global companies consider India their third most favoured destination after China and the United States, a UN report said on Thursday, and investment inflows could increase by more than 20% both this year and next.

Foreign direct investment (FDI) flows into India leapt 30% to nearly $ 32 billion in 2011, though held back by slow pace of reforms, it still remains a long way down the league table of FDI recipients. China drew $124 billion last year, while Brazil attracted nearly $67 billion and Russia $53 billion.
< class="text11Verdana">Source:, July 8, 2012

< class="heading12boldGeorgia">Industrial output growth picks up

India’s industrial output picked up more than expected in May, bolstering the case for the central bank to keep interest rates high at its next policy meeting as a slow start to the monsoon puts pressure on inflation, especially food prices.

Industrial production rose 2.4 percent in May from a year earlier, driven by manufacturing growth, data released on Thursday showed. The number, which was ahead of a Reuters poll forecast for an 1.8 percent increase, was the largest growth in output since February.
< class="text11Verdana">Source:, July 12, 2012

< class="heading12boldGeorgia">No service tax on NRI remittances

The Finance Ministry has clarified that no service tax would be levied on NRI remittances from overseas.

The clarification by the Central Board of Excise and Customs (CBEC), which functions under the Finance Ministry, follows concerns over reports that there was a move to levy 12 per cent tax on money sent back home by Indians abroad under the changed service tax regime from July 1.
< class="text11Verdana">Source: The Tribune, July 11, 2012

< class="heading12boldGeorgia">Keen to invest in Ghana’s hydrocarbon

India is keen to invest in Ghana’s hydrocarbon industry, visiting commerce minister Anand Sharma said as a large Indian trade expo opened in Accra on Monday. Ghana began oil production in 2010 and currently produces about 70,000 barrels a day.

Sharma, who is heading a 200-member delegation, India’s biggest to any African country, said, "We have a keen interest in the Ghana developing hydrocarbon sector and would discuss this and other sectors for close cooperation." The exhibition is being jointly organised by the Federation of Indian Chamber of Commerce and Industry and the Economic Community of West African States (ECOWAS).
< class="text11Verdana">Source:, July 10, 2012

< class="heading12boldGeorgia">PSUs to bid jointly for Afghan mines

Aluminium producer Nalco, in consortium with steel major SAIL and Hindustan Copper, will submit a bid for developing gold and copper deposits in Afghanistan this month, a top company official said on Wednesday.
< class="text11Verdana">Source: The Hindu, July 12, 2012

< class="heading12boldGeorgia">Third national stock exchange

India is about to get its third national stock exchange, just as trading volume here dwindles.

MCX Stock Exchange Ltd., known as MCX-SX, has received approval from India’s capital-markets regulator to offer trading in equities and related products, the exchange said. The Securities and Exchange Board of India has given MCX-SX permission to deal in equities, equity futures and options, interest-rate futures and some types of debt instruments, the company said late Tuesday.
< class="text11Verdana">Source:, July 11, 2012

< class="heading12boldGeorgia">Parties agree to hold high-level talks

Moderator of the All-Party Roadmap Talks initiated by President Mohamed Waheed Hassan Manik to resolve the ongoing political strife in the Maldives, Ahmed Mujthaba has said that all parties agree in principle to the need for high-level discussions.

In a press release by the Secretariat of the Moderator for the All Party Talks, Mujthaba stated that having considered the whole process in-depth, it had become apparent that a fresh approach had to be made.

He further stated that he had held a series of constructive meetings, separately, over the past month with the President and leaders of the largest political parties to discuss the prospects of continuing the political party talks.

"They have expressed a strong and shared belief in dialogue as the best way to address the challenges facing our nation. They agree that there are deep-rooted divisions and problems that must be resolved jointly if Maldives is to continue on its democratic path. I hope to secure the commitment of these parties to convene such a meeting at the highest level in the very near future."the statement read.

In conclusion, Mujthaba said that the most senior political party leaders needed to create an atmosphere conducive to discussions, and to come together prepared to work in good faith.

He added that the discussions previously held on May 31, June 1 and 2, 2012 in Bandos Island Resort and Spa, for nearly 16 hours and that in-spite of much debate there was no breakthrough.
< class="text11verdana">Source: Haveeru, July 12, 2012

< class="heading12boldGeorgia">Police probe nearing completion

Police Integrity Commission has claimed that large parts of its investigation into the events between February 6-9 in Male and Addu has been completed.

The Commission detailed that its probe includes the incidents in Male from February 6-8 and the events in Addu from February 8-9, where it is investigating the role and conduct of police during the unrest within the period.

The statement came at a time when Opposition Maldivian Democratic Party (MDP) has taken to the streets in protest claiming that the police brutality and major offenses during that period have not been investigated.

Since June 8, MDP has continued protests in the streets of Male every night.President of the Commission Shahindha Ismail detailed that its investigation had included February 9 following complaints of brutal arrests and beatings by police in Addu after the protest on February 8.

She further confirmed that prominent officers of the police were being summoned for the investigation into the events leading up to and following the transfer of power on February 7. Haveeru has learned that several statements of police officers have already been taken by the Commission in relation to the events.
< class="text11verdana">Source: Haveeru, July 11, 2012

< class="heading12boldGeorgia">US hopes CoNI report would lead to poll-date

US Ambassador to the Maldives, Patricia A. Butenis has expressed the hope that the date of the next presidential poll would be ascertained when the Commission of National Inquiry (CoNI) concludes its investigation of the events surrounding the February 7 transfer of power.Ambassador Butenis made this remark while speaking to the media at the VIP Lounge at Ibrahim Nasir International Airport prior to her departure from Maldives.

Butenis said that the US Government will cooperate with the present Government of President Dr. Mohamed Waheed until the CoNI finishes the investigation and issues the final report into the events that lead to the transfer of power.

Butenis noted that she met with the former President Mohamed Nasheed, former President Maumoon Abdul Gayoom and other political leaders during her visit. She said that she requested both of them to provide the way to move ahead with the all party talks.

In addition to this Ambassador Butenis said that the US Government will grant Maldives with $500,000 to provide technical support to ensure that the next presidential elections met international standards which would assist local election monitoring establishments to monitor the elections effectively.
< class="text11verdana">Source: Miadhu, July 12, 2012

< class="heading12boldGeorgia">Reshuffle in the army

Lt-Gen WaiLwin, a serving member of armed forces, has been appointed to the Yangon Division legislature, fuelling speculation that he is set to replace Vice-Presidential nominee Lt-Gen MyintSwe as Chief Minister and replace former General Tin AungMyintOo as Vice-President.

WaiLwin is a former deputy commander of the Rangoon Regional Command and commander of the Naypyidaw Regional Command. He will replace a lower-ranking military appointee to the Rangoon Parliament, Capt Lin Lin Kyaw.

Myint Swe is seen as hardliner who served as a General Staff Officer under former junta leaders Snr-Gen Than Shwe and Vice-Snr-Gen Maung Aye. He was later promoted to brigadier-general and appointed commander of the Southeast Regional Command, before becoming head of the Bureau of Special Operations-5, which oversees security in Rangoon. In this last position, he played a major role in suppressing the monk-led Saffron Revolution in 2007.

Tin Aung Myint Oo’s resignation for health reasons earlier this month came amid expectations of a reshuffle of Thein Sein’s government. The Ministry of Home Affairs announced plans to reassign deputy ministers in the finance, railways, education, transport and communications ministries, as well as the Ministry of the President’s Office.

Despite the reshuffle, however, critics say that the appointments of Myint Swe and Wai Lwin are evidence of the continuing influence of Than Shwe.
< class="text11verdana">Source:, July 12, 2012

< class="heading12boldGeorgia">Rohingya minority to become a UN responsibility

A statement released by the Presidential Office states that it wants to hand over responsibility for the Rohingya minority to the UN’s refugee agency in Arakan State, adding that it is also "willing to send the Rohingyas to any third country that will accept them."

The Presidential Office said that "it is impossible for Myanmar to accept people who are not ethnic to the country and who have entered illegally."In its statement, the Government said it wanted "to hand over Rohingya people"to the UN High Commissioner for Refugees (UNHCR) which would provide shelter in the form of refugee camps, as well as food and aid.

The President’s Office also offered its version of historical events, saying that the Rohingyas were brought into what was then Burma by British colonialists to work in agriculture. After independence in 1948, many of the migrants settled down in Arakan State and did not return home, it said, adding that many others entered Burma illegally after 1948.

It went on to say that the Rohingya migration was a "threat to national stability and peace."However, the Government "will handle the problem seriously and be responsible for the ethnic people,"it said.

The statement comes after Burmese President TheinSein on July 11 held talks with UNHCR head Antonio Guterres in Naypyidaw where they discussed plans for bilateral cooperation in handling the affairs of Burmese refugees at the Thai-Burma border, Kachin war refugees in northern Burma, and the issue of Rohingya Muslims in western Burma’s Arakan State.

The UNHCR estimates that 91,000 people have been affected by sectarian violence since it erupted in Arakan State last month. Eighty-two temporary camps have been set up to accommodate the displaced, according to Kitty McKinsey, the regional spokesperson for the UNHCR in Asia.
< class="text11verdana">Source:, July 11, 2012

< class="heading12boldGeorgia">First US Ambassador in 22 years

Mr Derek Mitchell took charge as Head of the US Mission on July 11. Mitchell was nominated by President Barack Obama and will be the first to American Ambassador to Myanmar in over two decades. The US withdrew its Ambassador in the wake of the military crackdown after the 1990 elections in Myanmar.

The US has also eased some of its strict sanctions against the country as a reward for a series of reforms including holding by-elections that saw Aung San Suu Kyi elected to parliament. The new set of relaxations now permits US firms to invest in the oil and gas sector.
< class="text11verdana">Source:, July 11, 2012;, July 13, 2012

< class="heading12boldGeorgia">Student leaders detained

At least 20 student leaders were detained in Myanmar on July 7 ahead of a rally to commemorate a 1962 suppression of the student movement. This is the biggest crackdown of its kind since the dissolution of the junta.

The detentions raise questions about the true extent of Myanmar’s reforms since it dropped outright military rule last year in favour of a quasi-civilian government led by reformist president Thein Sein.

Five student leaders were held in Yangon and Shweba and six in Mandalay and have been taken by the police for questioning.
< class="text11verdana">Source:, July 7, 2012

< class="heading12boldGeorgia">Foreign currency bank accounts

As part of its economic reforms, the Central Bank has permitted eleven local private banks to operate foreign currency accounts.

However, money can be transfers from one account to another inside the nation during the preliminary roll-out stage.

The 11 banks that have been allowed to operate foreign currency accounts are Myanmar Apex Bank, Myanmar Eastern Bank, Commercial Bank, United Amaya Bank, Myanmar Industrial Development Bank, Inn Wa Bank, Tun Foundation Bank, Ayeyawaddy Bank, Myawaddy bank, AGD Bank and Kanbawza Bank.
< class="text11verdana">Source:, July 13, 2012

< class="heading12boldGeorgia">Shah warns of monarchy’s return

Former King Gyanendra Shah has warned of the return of monarchy in the country if "people so desired."In a television interview in Kathmandu, Shah, who has lately been making religious tours around the country, pointed at the failure of the political parties to conclude the peace process and write a new Constitution.

Shah also claimed that the then agitating seven political parties, in a five-point agreement reached with him on April 24, 2006, had agreed not to do away with the monarchy, a claim that the major political parties have refuted outright.

The remarks were immediately put down by Prime Minister Baburam Bhattarai, who warned Shah of stripping all the facilities provided to him by the state if he continued to talk about his desire to stage a comeback. Bhattarai asked the deposed King not to try to take advantage of current political impasse in the country.

Shah stepped down in 2006 after a People’s Uprising brought an end to his autocratic rule. Nepal was subsequently declared a federal republic.
< class="text11verdana">Source:, July 8, 2012.

< class="heading12boldGeorgia">Indian Army chief in Nepal

Chief of Staff of the Indian Army Gen Bikram Singh arrived in Kathmandu on July 10 for a five-day official visit at the invitation of his Nepali counterpart, Gen Chhatraman Singh Gurung.

Gen Singh took part in a wreat- laying ceremony at Bir Smarak at the Nepal Army (NA) Pavilion in Tundikhel and held a meeting with Gen Gurung. He inspected the Birendra Peacekeeping Training Centre at Panchkhal and held separate meetings with President Dr Ram Baran Yadav and Prime Minister BaburamBhattarai.

President Yadav conferred the title of ’Honorary General’ of NA on Gen Singh at a ceremony at Shital Niwas. Both the countries have been maintaining the tradition of honouring each other’s army chiefs with the title since 1950.

Gen Singh visited the Mountain Warfare Training Centre in Mustang and the Indian Army Pension Centre and NA Western Divisional Headquarters in Pokhara. Likewise, he visited the birth place of Lord Buddha in Lumbini and also addressed the 19 command and staff course cadets.
< class="text11verdana">Source:, July 9-11, 2012.

< class="heading12boldGeorgia">Prachanda’s son suspended

Nepal’s ruling United Communist Party of Nepal-Maoist has suspended its Chairman Prachanda’s son, Prakash Dahal, from the party as also from a powerful state affairs committee over his alleged extra marital affair with a student leader.

Prakash has been suspended from the party’s ordinary membership and Newa State Committee as his public activities were in question, Maoist spokesperson Dinanath Sharma told reporters. According to party sources, the decision was taken during the UCPN-Maoist’s Politburo meeting.

The 29-year-old Prakash, who got married for the second time two years ago and has a year-old son, is having an "affair"with student leader Bina Magar, the local media reported. Magar is also married. Both of them are reportedly not in contact with their families for some time now.

Rumours about their relationship started doing the rounds after both of them returned from an Everest expedition recently. Prakash, accompanied by seven people, including Magar, had scaled the highest peak of the world under the banner of the Lumbini-Mount Everest Peace March 2012. His May 26 Everest mission was carried out with the objective of accomplishing peace and a new Constitution for the country on time.

Magar is the President of the Free Students Union of Saraswoti Campus and a central committee member of All-Nepal National Independent Students Union (Revolutionary).
< class="text11verdana">Source: PTI, July 10, 2012.

< class="heading12boldGeorgia">Man gets 170 years for trafficking

In the severest punishment of its kind in the country’s history, a man has been sentenced to 170 years in prison for trafficking six girls to Indian brothels.Bajir Singh Tamang, 37, was sentenced by the district court of Sindhupalchowk on July 11. He was also fined a sum of Rs. 8.12 lakh. The accused, who allegedly owns a brothel in Agra, was also asked to pay fines of Rs. 94,000 to each girl.

Nepal Police had arrested Tamang one-and-a-half years ago after the six girls who managed to escape from the brothels in Agra reached home and lodged separate cases.
< class="text11verdana">Source: The Hindustan Times, July 13, 2012

< class="heading12boldGeorgia">Airport row

India’s Infrastructure Leasing and Services Limited (IL&FS) has been dragged into a controversy after news reports emerged that the company has proposed to upgrade and manage Nepal’s only international airport, the Tribhuwan International Airport (TIA).

The Kantipur daily reported that there are documentary evidence that the company has also proposed the development and up-gradation of operational aviation infrastructure at TIA and 15 other domestic airports of the country. IL&FS on its part has denied making such a deal with the Maoist Government.

Meanwhile, the Supreme Court has ordered the Government to furnish detailed project report of the company’s plan to hand over the management of TIA to an Indian Company.
< class="text11verdana">Source:, July 11-13

< class="heading12boldGeorgia">Senate passes controversial Bill

The Contempt of Court Bill 2012 aimed at providing blanket immunity to all public office holders against contempt of court, was passed by the Senate on July 9. The enactment of the law would in all likelihood protect the current Prime Minister Raja Pervez Ashraf at least temporarily from being disqualified on the charges of Contempt of Court, like his predecessor.

The bill was also swiftly signed by the President on July 12, turning it into an act of Parliament. The law has faced a lot of opposition, and a couple of petitioners have already challenged it in the apex court. It remains to be seen how the court reacts to the new law.
< class="text11verdana">Source: Dawn, July 12, 2012; The Express Tribune, June 13, 2012.

< class="heading12boldGeorgia">Buddhist relics seized from smugglers

Pakistani officials said that police have seized a number of Buddhist sculptures that criminals were trying to smuggle out of the country. The police seized the relics from a large container in Karachi on July 6. The container was on its way to Islamabad.

The load contained various sculptures of Buddha and other religious figures. Experts say that if authentic, these valuable artefacts could be over 2,000 years old. They originally belonged to the Gandhara culture that covered an area of modern-day Pakistan and Afghanistan, and reached its height from the first to the fifth century.

A Sindh Government official stated on July 11, that many of the relics turned out to be fakes. However, he added, that the load also included a good number of genuine artefacts.
< class="text11verdana">Source: Dawn, July 7, 2012: Express Tribune, July 13, 2012.

< class="heading12boldGeorgia">Children to be deprived of polio shots

On June 16, a senior Taliban commander, Hafiz Gul Bahadur in the North Waziristan Agency issued a ban on polio vaccinations. This was followed by a similar decree by Mullah Nazir, a commander of his own faction of the Taliban of South-Waziristan. Both warlords issued the decrees in a campaign to protest US drone attacks.

An official in the Expanded Programme of Immunisation (EPI), Federally Administered Tribal Areas (FATA) has confirmed that these two agencies will not be included in the anti-polio campaign kicking off on July 16. As a result, a total of 227,654 children will be deprived of the vaccinations.
< class="text11verdana">Source: The Express Tribune, June 13, 2012.

Sri Lanka
< class="heading12boldGeorgia">No one can challenge Army’s right

Sri Lanka Army has said that no one can challenge or dispute its right to be serving anywhere in the country. "No one can challenge or dispute the right of the Army to be serving anywhere in the country. It is their prerogative and area of responsibility. The public in Jaffna overwhelmingly support the Army presence and they know very well it is the Army who will come to their help in the event of any emergency. I don’t think the Jaffna public would ever dare to allow the Army to move out in any case,"Army Chief Jagath Jayasuriya told media in Colombo.

The commander made this comment responding to a question, that troops in the Jaffna peninsula remain confined to their military formations, performing their routine legitimate duties, similar to the roles and tasks of any other Army.

"Like any other Army in the world, we, in the Army as directed by the government have thrown our full weight behind the country’s post-conflict recovery machine and infrastructure development tasks and roles. It has been amply proved that our commitment for any development project could perform comparatively much faster and more effective than any other civil organization could do. Everywhere in the world, the armies play a vital role in post-conflict situations and Sri Lanka remains no exception", the Commander said.
< class="text11verdana">Source: Daily Mirror Online, July 11, 2012

< class="heading12boldGeorgia">SLMC in UPFA combine for Eastern PC polls

The Sri Lanka Muslim Congress (SLMC), ending weeks of speculation and negotiations, has decided to contest the Eastern Provincial Council polls as part of the ruling SLFP-UPFA Alliance of President Mahinda Rajapaksa.

Announcing this at a news conference, SLFP General Secretary, Minister Sushil Premajanatha said that the SLFP, SLMC and the ’Tamil Makkal Vidhudhalai Puligal’ party of outgoing UPFA Chief Minister Pillaiyan would contest the elections under a single banner. Accordingly, SLFP, SLMC and TMVP would be fielding the chief candidate for the combine respectively in Ampara, Trincomalee and Batticaloa districts.

"No decision has been taken on the choice of the Chief Minister, if the alliance won,"Premajayantha said. The tussle, particularly between the TMVP and the SLMC for the post is expected to be addressed by President Rajapaksa, depending on the election results and the performance of individual parties/leaders, it is understood.
< class="text11verdana">Source:Daily Mirror Online, July 13, 2012

< class="heading12boldGeorgia">Land circular not to be implemented now

The Land Commissioner-General has given an undertaking to the Court of Appeal that the circular, ’Regulating the Activities Regarding Management of Lands in the Northern and Eastern Provinces’ would not be implemented in view of the undertaking given on the writ application challenging the the controversial circular.

A writ petition had been filed by TNA MP M. A. Sumanthiran challenging the said circular. The matter came up before a Bench comprising Ju S. Sriskandarajah (Pre and Deepali Wijesunde

The State had earlier declared that the said circular, which was being reconsidered.
< class="text11verdana">Source: Daily Mirror, July 11, 2012

< class="heading12boldGeorgia">Registration fees for news websites

The Government has announced the imposition of a registration fee of Rs.100,000 and Rs. 50,000 annual fee for news websites, which it said was the first step towards preventing filth being disseminated.

Media Minster Keheliya Rambukwella, addressing the weekly Cabinet briefing in Colombo, said that the proposed amendment to the Sri Lanka Press Council Law No. 5 of 1973, would make provision for the levy of a Rs.100,000 registration fee and Rs. 50,000 annual fee. The new regulation, he said, would also apply to news websites which have already been registered with the Media Ministry.

Asked what further action the Government contemplated against web publications which it said were causing harm to defenceless individuals, the Minister said: "This is the first step in the process of regulating those who were engaged in publishing filth. The legal process takes time. It cannot be done in a hurry. "He said the main objective of the new law was to ensure that the contents of internet sites did not cause harm to defenceless individuals.
< class="text11verdana">Source: The Island, July 11, 2012

< class="heading12boldGeorgia">Named major non-NATO ally

The US has declared Afghanistan as a major non-NATO ally on July 7. This was personally announced by Secretary of State Hilary Clinton during her visit to Kabul. She delivered the news while standing alongside President Hamid Karzai at the presidential house, signalling efforts to renew US relationship with Karzai who fell out of favour with Washington after last year’s rigged elections, and for his repeated failure to curb corruption.

As a major non-NATO ally, Afghanistan will have access to US military training, hardware and other recourses. The agreement, however, does not include any security commitment of the manner typical to NATO-like architectures.

Afghanistan’s elevation is part of the broader strategic partnership with the US that came about in May this year. In the context of Afghan-US relations, the purpose of the recent designation is to retain the confidence of important power-blocks both within and outside of the Government ahead of the withdrawal of foreign troops from the country. Highlighting this crucial goal, Clinton said, "Please know that the United States will be your friend. We are not even imagining abandoning Afghanistan. Quite the opposite. We are building a partnership with Afghanistan that will endure far into the future."

The US hopes that such gestures will convince important actors - incumbents, former militia commanders, tribal leaders, and insurgents - that their interests will be best served by siding with the US-backed Karzai Government. Given the time-honoured tradition of warring factions being pragmatic in choosing allies, a crucial component of the strategy of influencing such ’fence-sitters’ is to promise them US military support against their opponents. This is precisely the purpose of retaining a skeleton military force beyond 2014.
< class="text11verdana">Source: The New York Times, July 7, 2012, Khaama Press, July 7,2012

< class="heading12boldGeorgia">Tokyo conference pledges $16 billion

More than seventy countries attended the Tokyo Framework of Mutual Accountability, an international donor’s conference where participants pledged $16 billion spread over the next four years for the economic development of Afghanistan. Another $2 billion aid was reportedly added to the original figure after the release of the conference declaration. Additionally, the Asian Development Bank announced a further $200 million for construction of roads, railways, energy, and administrative reforms.

Unlike previous aid packages, for the first time, the flow of money has been made conditional to the Afghan Government’s efforts to reduce corruption, in the form of stronger anti-corruption measures and establishing the rule of law. The document stipulates the transfer of 20 per cent of the aid on the attainment of certain governance standards.

The economic aid package is independent of financing for the security forces, which are expected to receive about $4.1 billion a year even after 2014. The international community has been criticised of developing security institutions of the Afghan state at the expense of civilian structures. The imbalance between civil and military structures, many fear, might create conditions conducive for military coups and greater civil war between ethnic factions within the military.

Nevertheless, the conference marks an overwhelming positive development for the country. It is also success for the US in steering its allies towards a much longer commitment to national-building in Afghanistan. Events such as these will help assuage fears of ’abandonment’ felt across the Afghan Government and its traditional supporters in society.
< class="text11verdana">Source: The New York Times, July 8, 2012; Khaama Press, July 9, 2012; Tolo News, July 12, 2012

< class="heading12boldGeorgia">Security transition in Logar and Kunduz

Security responsibility for parts of Kunduz and Logar Province were handed to Afghan security forces on July 11 and 12 respectively. This marks the third phase of the transition, a staggered program in which international troops delegate security arrangements of select regions to local forces.

Several senior Government officials attended the ceremony in northern Province of Kunduz, including the Interior Minister, the Afghan Army Chief of Staff, the Provincial Governor and representatives of the International Security Assistance Force (ISAF). The following day, security for the Logar’s capital, Pul-i-Alam, and the Khoshi district were given to local forces.

The event was marked by the Province’s Governor’s criticism of insufficient security in the presence of senior officials such as Deputy Defence Minister Gen. Inayatullah Nazari, Independent Directorate of Local Governance (IDLOG) head Abdul Khaliq Farahi, and Deputy Interior Minister Abdur Rahman Rahman. Governor Taher Khan, clearly not impressed by the strength and capability of local police and army units said, ’we were promised that more national police and local police were to be deployed in Logar, but none of this has happened so far’.

Notwithstanding the Governor’s prognosis of the current state of Afghan police and army, the transition is a cornerstone of the US strategy of withdrawing most of its troops from the country by 2014. Critics of the strategy blame President Barack Obama of risking more than a decade of commitment for electoral gains. Proponents of the ’exit strategy’, on the other hand, argue that the presence of western troops is a principal motivation for insurgent mobilisation, and their exit will make rebels more amenable to peace talks with the Karzai Government.
< class="text11verdana">Source:Khaama Press, July 11; Panjwok, July 12; Tolo News July 13

< class="heading12boldGeorgia">Padma bridge with domestic funding

Prime Minister Sheikh Hasina this week said that the Padma Multipurpose Bridge would begin soon by mobilising internal resources and with assistance from the people of the country. Hasina said the government would spend a total of Tk 22.55 thousand crore on the project as global lender World Bank had pulled out of its loan commitment recently over perceived corruption.

Hasina also blamed the World Bank for wasting time over the Padma Bridge project and asked Finance Minister to explore ways for realising compensation from the bank for delaying the project by more than one and a half years. Hasina, however, apprehended that the government might have to drop some other development projects to build the bridge.

The bridge is important as it would connect the south-west and central regions with capital Dhaka and the port city of Chittagong and it is expected to contribute about two per cent to the gross domestic product.
< class="text11verdana">Source: New Age, July 9, 2012

< class="heading12boldGeorgia">FDI on the rise

UNCTAD’s World Investment Report-2012 has shown that foreign direct investment (FDI) in Bangladesh in 2011 increased by 24.42 percent to $1.13 billion, highest in the country’s history.

Interestingly, the United Nations Conference on Trade and Development (Unctad) report says the country’s economic growth in 2011 was slower compared to 2010 when FDI increased by 30 percent to $913 million.

Textile and apparel sector attracted highest chuck of FDI in 2011. FDI in textile and apparel sector was $272.04 million. Banking sector was the second biggest with $249.37 million FDI. Power, gas and petroleum sector was the third with $238.21 million. Besides, telecommunications sector attracted $180.99 million.

The highest investment of $152.30 million came from Egypt against its investment of $3.01 million in 2010. The US invested $117.74 million which was $56.95million in 2010. Netherlands’ investment was $116.75 million, up from $64.92 million in 2010.

The countries that made big investments in 2011 include the UK ($116.32m), South Korea ($113.06m) and Hong Kong ($104.84m).

Globally, the FDI inflow last year soared by 16 percent and stood at $1.5 trillion. Three largest FDI recipients were the US ($227 billion), China ($124b) and Belgium ($89b).
< class="text11verdana">Source: The Daily Star, July 7, 2012

< class="heading12boldGeorgia">Exports on the upswing

Bangladesh’s exports recorded 5.9 percent growth in the financial year ending in June this year. However, Bangladesh’s export that worth $24.3 billion had failed to meet the government target as demand for garments from key Western markets waned, the country’s trade promotion body informed. Government originally had set a target of $26.5 billion.

Readymade garment exports, the major export product of Bangladesh, registered a growth of 6.56 percent. Commenting on the country’s export performance Shubhashish Bose, head of the Export Promotion Bureau of Bangladesh, opined that thecountry’s growth was still good considering the weakening global economy, which cut demand sharply.

For the new fiscal year which has begun in July 1, the government expects exports to reach $28 billion as it is planning to diversify into new markets in countries like Japan, China, India, Russia, Brazil and South Africa.

In Bangladesh fiscal year is from July 1 to June 30.
< class="text11verdana">Source: The Daily Star, July 7, 2012

< class="brown12verdana">Contributors:

Afghanistan: Kaustav Dhar Chakrabarti;
Bangladesh: Dr.Joyeeta Bhattacharjee;
Bhutan & Myanmar: Sripathi Narayanan;
India: Dr Satish Misra;
Maldives & Sri Lanka: N Sathiya Moorthy;
Nepal: Akanshya Shah;
Pakistan: Jussi Albert Jännes;
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.