MonitorsPublished on Aug 26, 2011
That the Maldivian Government of President Mohammed 'Anni' Nasheed has taken the economic reforms process seriously, risking its electoral future, has been known for some time now.
Maldives: Opposition targets India on economic reforms
< class="heading1">Analysis

That the Maldivian Government of President Mohammed ’Anni’ Nasheed has taken the economic reforms process seriously, risking its electoral future, has been known for some time now. Yet, it is also becoming increasingly clear that the political Opposition in the country, or at least a section thereof, is equally keen on blaming most of it on India, though the Government and the President are on record saying that they were inspired, induced and influenced by the International Monetary Fund (IMF) to make its aid-package an attractive investment proposition.

The latest in the list were the Fiscal Responsibility Bill and the Business Registration Bill, both tabled by the ruling Maldivian Democratic Party (MDP) in Parliament recently. The new legislation aims at making the make Maldivian economy self-sustaining, if only over time. Little seems to be known in the country about the process that India itself had to undertake while seeking IMF aid to tie over the fiscal crisis that the nation faced in the 1989-91 period. The good-neighbourly Indian contribution comes in the form of aid and investment to help Maldives without tags, and does not seem to involve even sharing of its reforms experience, leave alone influencing the Maldivian experiment.

Debating the Business Registration Bill in the People’s Majlis, or Parliament, some Opposition members from the Z-faction Dhivehi Rayyathunge Party (DRP), owing allegiance to former President Maumoon Abdul Gayoom, made it as if India was behind it all. They were joined by members of the Jumhooree Party (JP) identified with one-time Finance Minister Gasim Ibrahim and the fundamentalist Adhalath Party. The members argued that India had wanted conditions created for big-time investment opportunities in various infrastructure and services sectors in the country, and the Bill aimed at facilitating the same. If it were true, India could have given all the aid that Maldives wanted as grants, again over time. That was neither sought, nor offered, it would seem.

Allegation against India

The local media quoted JP parliamentarian Ibrahim Muttalib dubbing the Business Registration Bill "a deceptive ploy" to "open up the country to foreigners". He argued that provisions in the legislation allowing foreign businesses to establish branches in Maldives and requiring at least US$1 million as capital "proves that this bill was drafted to allow foreigners to easily do business in the Maldives". He urged MPs to consider the consequence of foreign businesses entering the footwear, garment and wholesale industry: "What is being done today is part of a neighbouring country’s efforts to open up this country for its citizens," he said.

"The Indian Government proposed opening up of the service industry, tourism, travel agencies, construction, health industry, social security, financial industry, maritime travel, air travel and airplane repair under a SAFTA (South Asian Free Trade Association) agreement," the Maldivian media quoted him as saying. "But because all our local industries opposed it, the Government has decided to do it under a law," he claimed. Incidentally, the Bill specified businesses that could not be conducted by expatriates - such as fisheries, agriculture and selling commodities out of a private residence - all other kinds of businesses were "opened to foreigners" under the proposed law, according to him.

Opposition members also claimed that the Fiscal Responsibility Bill aimed at upturning the one passed by the Opposition-majority Parliament last year, directing the Government to seek prior legislative approval for large contracts. Speaking on the Fiscal Responsibility Bill in Parliament DRP’s Abdulla Mausoom argued that the purpose of the legislation was to negate controversial amendments brought to the Public Finance Act last year. He explained that the new Bill sought to abolish Article 5 of the Finance Act Amendment Bill, which stipulated that the Government must seek parliamentary approval before obtaining loans. According to the amendment voted through by the Opposition majority, "any relief, benefit or subsidy provided by the State" would also be subject to parliamentary approval, the Minivan News recalled.

Mausoom’s reference was to the 25-year agreement with India’s GMR Group last year, for modernising the Male International Airport in the national capital. The Cabinet had resigned en masse at the President’s initiative then, charging Parliament with adopting a ’scorched earth policy’ in dealing with the Executive. It was said that JP’s Gasim Ibrahim was vociferous in his criticism of the GMR deal, and questioned the procedure that was followed by the Government. The en masse Cabinet resignation took the heat off the agreement for a while, with the polity and the nation focusing on the political issues that had emerged, leading in turn to a constitutional deadlock.

Land for Indian embassy

The trend was witnessed earlier last this month when Parliament debated the amendments to the Land Act, conferring land ownership on individuals. An Opposition member referred to the Government allotting land on ownership basis for India to build its High Commission offices. The agreement was reached when Indian External Affairs Minister S M Krishna visited Male recently. Surprisingly, it was a member of the moderate Dhivehi Qaumee Party (DQP), who sounded more anti-India than others, on this score.

Founded by Dr Hassan Saeed, who was among the unsuccessful candidates in the first round of presidential polls and backed MDP’s Nasheed in the successful second round in 2008, the DQP fared badly in the Local Council elections of March this year. Earlier, it had accepted a secondary role in the divided and confused Opposition by signing an agreement with the official wing of the DRP in February this year.

In Parliament, DQP’s Rias Rasheed alleged that the Government allotted the land to India for in exchange for "buying a few MPs for MDP". Said he in this regard: "I will dare to say this, what can you do about it? You can’t do anything?Maldives will soon become a small province of India, a small town. Our own identity is being taken from us and the whole country is going to become enslaved to them." The new administration has "sold all our assets" to India, he added.

The MDP members contested this. Yet the fact remains that motivated allegations are levelled against India by interested groups that do not want to present the whole picture. For instance, Maldives allotted land to India for a new embassy building only in return for a similar gesture in the Indian capital of New Delhi. It is likely that India may also offer to fund build that embassy building, which would stand in the name of Maldives, as is the international norm in such matters. India does not expect reciprocity in the matter.

An archipelago with widely spread-out population centres, where the number of inhabitants per island often does not cross the three-digit mark, Maldives depends on imports for meeting most of the daily needs of its people. From sand for building Government offices, homes and high-end tourist resorts to medicines and stationery, the country has heavily depended on India for the supplies. The Tuticorin port in the south Indian State of Tamil Nadu has thus become the life-wire for Maldives with Thiruvananthapuram and Bengaluru, along with the Sri Lankan capital of Colombo, providing avenues for specialty medical care and higher education, which a 400,000-population cannot support, inland. Given the geographical proximity and economic prosperity, India is possibly the only country that would (have to look at) Maldives with care and concern. For the rest of the world, Maldives may be a tourist resort and a small-time investment proposition, where the numbers do not add up.

Reform Initiatives

Having inherited an indebted economy that did not have funds to pay salaries to Government employees, the Nasheed presidency has been on an over-drive to make the nation as self-reliant as possible before the incumbent seeks re-election in 2013. The Fiscal Responsibility Bill, which is a part of the process, thus seeks to impose limits on Government-spending and fix a ratio of Government debt to the GDP.

Presenting the draft legislation in this regard, MDP member Ahmed Easa told Parliament that a lot of effort was needed to "change the inherited, out-dated and indebted economic system". He claimed that "since 2005, (expenditure) in the annual State budget was out of proportion to income and the budgets had a very high level of debt." Accordingly, the Bill has fixed a seven per cent cap on Government borrowings from the Maldivian Central Bank or the Maldivian Monetary Authority (MMA), with a six-month re-payment period.

As a consequence of issuing treasury bills (T-bills) to finance the budget deficit, Easa said out, banks reduced lending to local businesses in favour of buying Government securities, which exacerbated unemployment and slowed growth. He cited the World Bank to point out how a 66 per cent increase in salaries and allowances for Government employees between 2006 and 2008 was "by far the highest increase in compensation over a three-year period to Government employees of any country in the world". "We are seeing the bitter consequences today of spending out of the budget without any control or limit," he said..

High-risk and debt sustainability

The Government’s reforms initiatives have been substantiated by debt-sustainability over the medium and long terms. As Finance Minister Ahmed Inaz informed Parliament, the public debt of Maldives - excluding Government securities - stands at US $637.6 million - including US $446 million outstanding debt inherited from the previous administration. He cited a December 2010 UNDP paper on achieving debt-sustainability in the country and observed that "as a percentage of GDP, public debt levels have almost doubled from 55 per cent in 2004 to an estimated 97 per cent in 2010."

According to the report, "Public debt service as a per cent of Government revenues will more than double between 2006 and 2010 from under 15 per cent to over 30 per cent." It recalled how the IMF had "recently classified the country as ’at high risk’ of debt distress". As short-term contributing factors for the country’s "rapid accumulation of public and private debt", the paper identified the devastating tsunami of December 2004, the cost of the democratisation process that began in the same year, the concurrent global food-fuel-financial crises between 2007 and 2010, and the Maldives’ graduation from a Least Developed Country (LDC) in January 2011.

The UNDP paper noted that the reconstruction effort was largely financed by international donors: "Following the tsunami, ODA (Official Development Assistance) increased sharply from US$72 million in 2004 to US $824 million in 2005. ODA levels remained above US $500 million annually for the next four years," the paper explains. However as a consequence of high demand for local expertise by multilateral agencies, "increases in public sector salaries were implemented in order to retain qualified personnel with the Government. "Between 2004 and 2009, the average monthly salary of a Government sector worker increased from Maldivian Rufiyya 3,223 (US$250) to MRf 11, 136 (US$866)," the paper notes.

According to the UNDP paper, though one-year old by now, the Government of former President Maumoon Abdul Gayoom responded to growing calls for democratisation with "a substantial fiscal stimulus programme" of increased government spending, "much of which was not related to post-tsunami reconstruction efforts." As such, "this strategy led to a large increase in the number of civil servants from around 26,000 in 2004 to around 34,000 by 2008 or 11 per cent of the total population. Thus the Government simultaneously increased the number of public sector workers as well as their salaries," the paper notes.

Consequently, by 2010 recurrent expenditure - wage bill and administrative costs - was projected to exceed 82 per cent of total expenditures "while capital expenditures will amount to just 18 per cent in the same year." As the ballooning fiscal deficit reached 26 per cent of GDP in 2009, tourist arrivals declined 10 per cent in the first year of the new administration, owing to the global melt-down. However the new Government’s efforts to reduce Government spending with pay cuts of up to 20 per cent and plans to downsize the civil service - which employs a third of the country’s workforce - was met with "a severe political backlash from parliament."

"In March 2010, Parliament passed a 2010 budget with amendments which increased the government’s proposed budget by seven per cent (or 4.5 percent of GDP)," the UNDP paper observed. "Three quarters of this increase funded a reversal in civil service wage cuts implemented the previous year. Progress on redundancies has also been slower than expected and reforms in this area are unlikely to be completed until the end of 2011 at the earliest. This will have important fiscal consequences," it said further.

Civil servants want wages restored

Independent of the Government initiatives, the powerful Maldivian Civil Services Association (MCSA) has argued that the Government had enough funds in the State income to restore their salaries that were reduced in the budget for 2010, to help the Government tide over the deficit. MCSA President Tharig Ali said that the current Government is known to be self-centered. The Minivan News quoted Ali as saying that the Government always procrastinated on these important issues which are related to the pulse of the people because it’s not in the best interest of those running the current administration.

A political threat as the MCSA’s statement may be, all these highlight the propensity of the Maldivian economy to go under, until a reasonable level of stability is achieved and growth-path defined. The Government’s efforts at a ’managed float’ of the rufiyya, the Maldivian currency, came a near-cropper after the exchange rate in dollar terms went up, and the US currency was hoarded more than earlier. After studying the Seychelles’ experience personally, President Nasheed has since got the Cabinet to clear a proposal for all fees and taxes to the Government to be paid in the local currency, forcing dollar-hoarders in particular to exchange them for rufiyya in the banks, thus stacking up the latter’s reserves.

However, industry sources involved in imports, particularly in the construction sector, have protested, saying that such a measure would deny dollar at the lower bank rates for their payments, thus pushing up the costs for the end-user. Sources in other import industries like pharmaceuticals, food produce and stationery also have similar anxieties. Ruling party sources indicate that any additional increase in common commodities could make the Government unpopular, as the people are yet to come to terms with the unavoidable hike in prices after the ’managed float’. As a party leader pointed out, "The Government claimed that the rufiyaa will stabilise after three or four months. Instead, it is only the consumer who has got used to the past price-hikes."

With the effects of the current US debt-crisis yet to unravel fully, the Government needs to be cautious, rather than be optimistic. It is unclear as yet if the US crisis would impact on tourist arrivals, as it did in the recent past, and if the Government’s efforts of those days for identifying new tourists from China and Africa would play out again. In the interim, the Government as in the past may be required to have genuine friends willing to help out. At the height of the fiscal crisis that Maldives faced in the past - be it under President Gayoom or under incumbent Nasheed - New Delhi had readily extended grants, the former to support the budget and the latter, to meet immediate revenue expenditure.

In recent days, India’s public sector Exim Bank has extended a $ 40-million line of credit for housing projects in Maldives, just as it had done in the past, at New Delhi’s say-so. The Maldivian Opposition parties, who were part of the Gayoom regime, were not unaware of it when India helped to tide over the budget. Nor are they at present, when New Delhi readily acceded President Nasheed’s request for a $ 100-m package soon after taking over, to meet salary payments and other commitments that could not be put off even to the very next day.

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

< class="heading1">Country Reports

< class="heading12boldGeorgia">Parties stake positions on economic reform bills

The ruling Maldivian Democratic Party (MDP) and Opposition Dhivehi Rayyithunge Party (DRP) have staked rival positions on the economic reform bills currently before Parliament. With two pieces of legislation of the 18-Bill reform package completed by committee and up for a final vote next week, the majority and minority parties in Parliament declared their stands at separate news conferences.

Briefing press at the MDP office, Majority Leader Ibrahim ’Ibu’ Mohamed Solih stressed that the ruling party was "open to amendments from the Opposition and ready to incorporate changes" to the General Goods and Services Tax (G-GST) bill and amendments to the Import-Export Act to excise and reduce import duties.

At the Tuesday evening deadline to submit amendments, Ibu Solih said that the MDP has proposed amendments requested by the Maldives Inland Revenue Authority (MIRA) and taken on board recommendations by the Maldives Association of Tourism Industry (MATI), Maldives Association of Construction Industry (MACI) as well as small businesses.

The party proposed completely excising import duties for fisheries and agriculture equipment and machinery, Ibu said, while maintaining current tariffs for imported fruits and vegetables to protect local farmers.
< class="text11verdana">Source: Minivan News, August 24, 2011

< class="heading12boldGeorgia">Masked men attack Indian gynaecologist

An Indian gynaecologist working at Hoarafushi Health Centre in Haa Alifu Atoll has said she will "never come back to the Maldives" after two masked islanders attacked, gagged and attempted to rape her. "They broke in to my room with their faces covered, holding knives, and they tried to attack me," Dr Deepali told Minivan News. "I could only see their eyes. It was like the worst nightmare I have ever seen."

Dr Deepali said at first she tried to escape by shouting, but then the men tried to cover her mouth and tie a rope to her neck. "I dialled the last dialled number on my phone and it was the Health Centre. When they answered the phone the attackers snatched it from my hands and switched it off, but luckily the person who answered heard me screaming."

Dr Deepali said she fought with the men and was able to escape. "I held their knife and pushed them back, then jumped out of the window and screamed for help," the doctor said. "Then they ran away." Dr Deeplai said it was the "worst experience I have ever had" and that she would "never ever come back to the Maldives." She said she will even "advise my friends and my students not to choose Maldives," she said. "I mean why should they do this? I did my best to serve the people here, why should they do this to me?"
< class="text11verdana">Source: Minivan News, August 23, 2011

< class="heading12boldGeorgia">Battarai is the new PM

UCPN (Maoist) Vice-chairman Dr Baburam Bhattarai has been elected the new prime minister of Nepal. He defeated his only rival Ram Chandra Paudel of the Nepali Congress (NC) by a margin of 105 votes in the 601-seat Parliament on August 28. Dr Bhattarai bagged 340 votes while Paudel got 235 votes.

The Maoist party’s last minute deal with the United Democratic Madhesi Front (UDMF) paved the way for Bhattarai’s victory. While the UCPN (Maoist), the largest political party in the Parliament, commands 236 seats in the House, UDMF, an alliance of five Madhes-based parties, has 65 members in Parliament.

Madhesi People´s Rights Forum, CPN-Samyukta, Rastriya Janamorcha, CPN-ML (Socialist), Nepal Sadbhavana Party (Anandidevi), Federal Sadbhavana Party, Rastriya Janamukti Party, CPN (Ekikrit), Federal Democratic National Front, Dalit Janjati Party, Nepaa Rastriya Party, Socialist People´s Party, Nepal Democratic Socialist Party, Nepal Family Party and independent lawmaker Sadrul Miya Haque voted for Bhattarai.

Besides NC members, Paudel was supported by MPs from the CPN-UML, Rastriya Prajatantra Party, CPN-ML, Rastriya Janashakti Party and also an independent lawmaker Baban Singh.

The Parliament now have an effective strength of 594, with three memberships having been scrapped, one resigned and three others having passed away.
< class="text11verdana">Source:, August 28

< class="heading12boldGeorgia">Govt for 3-month extension for CA

The caretaker Government registered a Bill to extend the Constituent Assembly (CA) term for the third time --- for a period of three months -- with the Parliament secretariat on Tuesday even as the largest coalition partner UCPN (Maoist) objected to the length of extension sought. Maoist Ministers boycotted the cabinet meeting scheduled to take a decision on the Bill as they were for extending the CA for at least six months.

The 601-member CA’s tenure is expiring on August 31 and the Interim Constitution needs to be amended for any extension. The amendment bill has to be endorsed by a two-thirds majority.

The main opposition Nepali Congress (NC) did not attend the all-party meeting at Singha Durbar called by the Prime Minister. NC leaders said they deliberately avoided the meeting and termed it meaningless. "The ruling Maoists and UML should have consulted us much earlier but they invited us for the meeting only at the eleventh hour just to endorse their proposal," said NC Chief Whip Laxman Ghimire. "Therefore we deliberately didn’t attend the meeting."

Ghimire said the NC would focus its all-out efforts on pressing the Maoists on concluding the remaining tasks of the peace process. "During the talks, our main focus will be the agenda of the peace process," he said.
< class="text11verdana">Source:, August 2, 2011

< class="heading12boldGeorgia">Maoists offer 45-day integration plan

The UCPN (Maoist) came up with a time-bound action plan on integration and rehabilitation of its former combatants, with flexible positions on disputed issues. The proposal commits to hand over the keys of the arms containers ? a major Nepali Congress demand ? and complete the regrouping process in 45 days after the formation of a Maoist-led government.

The proposal, endorsed by the party’s Standing Committee (SC) unanimously on Thursday tries to address concerns about Maoists’ "access to weapons" and rank determination raised by the NC and the CPN-UML that want to see ’irreversible progress’ on the peace process before they give a thumbs up to a Maoist Government. The Maoist party has reiterated its readiness to begin the regrouping process by August 31, complete it within one-and-a-half months and segregate them into two groups in 45 days after the parties vet the proposal.

On the rank determination, one of the most contentious issues, the Maoists have proposed ’honouring’ top PLA commanders with titles of honorary generals and allowing them into politics. The remaining ranks could be settled within a week through a technical panel of experts, the plan says.

On the number, the party has asked for 8,000 to be integrated, but Maoist leaders say even this is a negotiable point, if other parties so want. The Maoists have said they are ready to accept the established norms of entry into the Nepal Army, but that there should be some flexibility on age, education and marital status.

On the rehabilitation package, combat role of the integrated force and unit-wise integration, the party has not changed its earlier positions. Combatants, who opt for rehabilitation, should be given Rs 700,000 to 1 million as "a golden handshake".

The party has reiterated that the integrated forces must be given a combat role and that there should be a unit-wise integration. Maoist Chairman Pushpa Kamal Dahal, however, said the party was not rigid about it and is ready for open discussions on the issue.
< class="text11verdana">Source:, August 26, 2011

< class="heading12boldGeorgia">New Indian envoy arrives

Newly-appointed Indian Ambassador to Nepal, Jayant Prasad, arrived in Kathmandu on Thursday. Speaking to reporters at the Airport, Prasad said the Indian leadership attaches the highest importance to Nepal-India relationship.

"Our progress and prosperity are intertwined. India and Nepal today share the same challenges, of peace, of stability, of national integration, and of bringing the fruits of development to their peoples," he said, adding, "Nepal’s success in meeting these challenges will be, equally, India’s success."

A 1976 batch officer of the Indian Foreign Service (IFS), Prasad, 58, a career diplomat, was Special Secretary in India’s Ministry of External Affairs before being appointed Ambassador to Nepal. He had also served as Indian Ambassador to Afghanistan and Algeria. Former Ambassador Rakesh Sood, who had left Nepal two weeks ago after completing his three-year tenure in Kathmandu, has been appointed as new Indian envoy to France.
< class="text11verdana">Source:, August 25

< class="heading12boldGeorgia">US aid for dam construction

The US is studying the prospects of it funding the Diamer-Bhasha Dam in Gilgit-Baltistan, in Pakistan-occupied Kashmir. The proposed dam is expected to take eight years to complete and would cost $12 billion. The US has proposed to provide $200 million with the remaining to be funded by agencies like the Asian Developmental Bank. The American involvement in this project is expected to be a confidence-building measure for donors who could otherwise be apprehensive of this project.

This dam when complete will generate 4500 megawatts of electricity, the current deficit of Pakistan as well play an important role in water management and flood control. Floods of 2010 had left a fifth of the country inundated. India registered its protest when the dam was proposed in 2006.

This would be the first significant project to be funded by the US in Pakistan that is aimed development. All American financial assistance since 2001 has predominantly been for the Pakistani military. Civilian aid has been to the minimum and it includes budgetary support.
< class="text11verdana">Source:, August 23, 2011

< class="heading12boldGeorgia">Not a terrorist hub: Khar

Foreign Minister Hina Rabbani Khar who was on a two-day official visit to China has said that Pakistan did not want to be a base for terrorism and has applied to the world to help it deal with it. The said that "Pakistan just seeks the world’s understanding for the current challenges that Pakistan is going through?.we are the ones and our people are the ones that are paying the price who are experiencing the brunt of it,"

Her statement come in the wake of the bomb blast in China that killed 20 people in the western city of Kashgar in Xinjiang. The Chinese authorities have earlier said that the attack was carried out by militants trained in weapons and bomb-making at camps run by the East Turkistan Islamic Movement in Pakistan. The Chinese officials have blamed extremists trained in Pakistan for deadly attacks in the far west region of Xinjiang last month.
< class="text11verdana">Source:, 24 August 2011

< class="heading12boldGeorgia">Army chief visits Karachi

Chief of Army Staff General Asfaq Pervez Kayani visited the violence-torn city of Karachi where the local police along with the Rangers have initiated an operation to quell down the sectarian violence. The police and the Rangers have stated surgical strike in sensitive areas and are on the lookout for troublemakers. They have arrested a number of suspicious individuals.

The visit of the General has been attached with importance by analysis. Till now the army has not been a part of the civilian security agency operation but then the General has hinted that the army will assist and provide its services as and when required. The general has also said that the army will help the government to restore the peace and order in the city.
< class="text11verdana">Source:, August 24-25, 2011

< class="heading12boldGeorgia">Anna Hazare captures imagination

Pakistani intellectuals have been watching with interest and inspiration anti-corruption crusader Anna Hazare’s fast in India, and hope to launch one such after the upcoming Id-ul-Fitr.

Others have likened the developments in India to the pro-democracy movements in West Asia and Lebanon, and have described the Indian Constitution as the world’s greatest document in 500 years.
< class="text11verdana">Source:, August 25, 2011

Note: Though the reference to the pro-democracy movements in the Islamic world is apt in context, Pakistan had its lawyers’ movement in 2007, which was in a way a precursor to them all.

Sri Lanka
< class="heading12boldGeorgia">LLRC won’t bow down to pressure

As was being expected during the current run-up to the UN Human Rights Council meeting in Geneva, and the UN General Assembly meeting in September, President Mahinda Rajapaksa has announced the withdrawal of emergency regulations that have been in force for much of the past three decades, when the ethnic war raged. Announcing this in Parliament, President Rajapaksa indicated that the Government would not come to the House, seeking a monthly extension of emergency at the end of August, as has become a habitual constitutional need.

While Opposition party leaders and nations such as India and the US welcomed the same, Tamil politicians in the country in particular wanted the Government to withdraw the Prevention of Terrorism Act (PTA). Indications that the Government may be considering the possibility came when the local media indicated the possibility of a new law to try those already under detention under PTA.
< class="text11verdana">Source: Daily Mirror, Colombo, August 26-27, 2011

< class="heading12boldGeorgia">CEPA talks to be revived

After a period of silence, the Government has indicated that talks with India on the Comprehensive Economic Partnership Agreement (CEPA) would be revived soon.

The talks floundered after the two Governments had initialled the draft for President Mahinda Rajapaksa of Sri Lanka and Prime Minister Manmohan Singh of India to formally sign, on the side-lines of the 2008 SAARC Summit Colombo. The Sri Lankan Government cited street-protests by professionals like doctors and lawyers and also criticism of the proposals from local industry and trade organisations, as among the causes for going back on the commitment.

The local media has reported that some of these concerns are being addressed, and the talks would recommence, soon.
< class="text11verdana">Source: The Island, Colombo, August 24, 2011

< class="heading12boldGeorgia">US troops to stay on till 2024

Afghanistan and the United States are very near to signing a "strategic pact" that would permit thousands of US troops to stay in the country till 2024. Interestingly, the pact would allow US Special Forces soldiers and Air Force to remain in Afghanistan in addition to military trainers.

This pact between US and Afghanistan, having already been denounced by Iran and Pakistan, might lead to the total failure of the reconciliation process, as it might not be acceptable to the Taliban. This pact comes in the wake of drawdown of troops by the Coalition forces. However, Afghans wary of being abandoned are keen to lock America into a longer partnership after the deadline. Many analysts also believe that the American military would like to retain a presence close to Pakistan, Iran and China.

RanginDadfarSpanta, President Hamid Karzai’s top security adviser, says that "remarkable progress" had been made. US officials have said they would be disappointed if a deal could not be reached by December and that much of the small print have been agreed upon.
< class="text11verdana">Source: The Telegraph, August 26, 2011

< class="heading12boldGeorgia">Parliament rejects new vote decision

Parliament has rejected a decision by the Independent Election Commission (IEC) to replace nine Members of Parliament (MP) as part of efforts to settle a long-running dispute over last year’s elections.

After almost a year of street protests and controversy over last September’s fraud-tainted parliamentary polls, the IEC this week ordered that nine MPs be replaced. However, the lower house of parliament voted to oppose these changes, a spokesperson for Law Coalition, the mostt powerful bloc in Parliament said.

The IEC was assigned by President Hamid Karzai to make the final ruling in the nearly year long row over election disputes. But the issue is highly controversial in Afghanistan and has prompted a string of angry protests on the streets of Kabul by supporters of rival politicians in recent months.
< class="text11verdana">Source: AFP, August 25, 2011


< class="heading12boldGeorgia">Border strip-maps signed with India

In a move to settle border dispute, India and Bangladesh signed strip-maps of 4,156kms common boundary. Bangladesh High Commissioner to India Tarik Ahmed Karim and Indian High Commissioner to Bangladesh Rajit Mitter inaugurated the signing on strip-maps at the Department of Land Record and Survey in Dhaka.

State Minister for Land Rezaul Karim at the signing ceremony said that first Prime Minister Shiekh Majibur Rahman and former Indian Prime Minister Indira Gandhi signed the Land Boundary Agreement in 1974 to settle the demarcation of the boundary, adversely possessed land, and enclaves. However, the treaty could not be implemented due to the assassination of Sheikh Mujibur Rahman in 1975.

Home Minister Sahara Khatun informed that 1129 strip maps along a 4,156-kms common border has already completed, barring the un-demarcated 6.5kms. Finally, 8664 sheets of 1083 strip-maps were placed for the signing by the representatives at the plenipotentiary level of the two countries.

The strip map, an un-scaled drawing of a route, includes critical points along the border. It usually incorporates distances, route-side features and town facilities on a simple flip-over style map. The Opposition Bangladesh Nationalist Party (BNP) criticized the government signing the strip maps of Bangladesh-India border before resolving the border disputes between the two. Six and a half kilometres of the border is waiting to be demarcated.
< class="text11verdana">Source:, August 20, 2011/ The Daily Star, August 22, 2011

< class="heading12boldGeorgia">Right group for no arms sale

Amnesty International (AI) has urged the international community to stop selling arms to Bangladesh, claiming that they will be used by Rapid Action Battalion (Rab) and other law enforcement agencies to commit extra-judicial killings. According to AI since inception of Rabin 2004, it has been implicated in the unlawful killing of at least 700 people.

The UK-based human rights watchdog in the report, titled "Crimes Unseen: Extra-judicial executions in Bangladesh", made this recommendation. AI claimed the government consistently denies stopping this despite repeated appeals from national and international rights bodies including AI.
< class="text11verdana">Source: The Daily Star, August 24, 2011

< class="heading12boldGeorgia">Maritime Boundary: Dhaka presents its claim at UN

Bangladesh has presented its claim on the continental shelf in the Bay of Bengal at the UN Commission on the Limits of the Continental Shelf (CLCS) at the UN Headquarters in New York. Foreign Minister DipuMoni along with members of her delegation made the presentation on Bangladesh’s claim submitted to the United Nations earlier for delineation of its outer continental shelf in the under the provisions of the UN Convention on the Law od the Sea(UNCLOS) 1982.

Bangladesh’s claim on the continental shelf extends up to 400-460 nautical miles (850 km) southwards from its coastline. Dhaka says it has full rights over the undersea natural resources within this area.

According to the UN Convention, continental shelf of a coastal state comprises the submerged prolongation of its land territory -- the seabed and subsoil of the submarine areas that extend beyond its territorial sea to the outer edge of the continental margin, or to a distance of 200 nautical miles where the outer edge of the continental margin does not extend up to that distance.

A Foreign Ministry Press release said that the presentation was aimed at enlightening the CLCS about the critical legal and technical aspects of Bangladesh’s rights over the outer continental shelf. The CLCS, after examination of data submitted by Dhaka will give its recommendations on Bangladesh’s rights.

Meanwhile, Bangladesh also lodged two cases concerning maritime boundary claims of Myanmar and India in the Bay with two UN courts. The dispute with Myanmar is likely to be resolved by March next year while it will take 2-3 years to settle the dispute with India. Myanmar submitted its claim on continental shelf in the Bay on December 16, 2008, and India submitted its claim on May 11, 2009.
< class="text11verdana">Source: The Daily Star, August 26, 2011

< class="heading12boldGeorgia">Uncertain democracy, says PM

The Prime Minister Jigmi Thinley, in an interview to AFP news agency has said that democracy in his country was at a nascent stage. He believes that the countries experiment with democracy remains a fragile work0in-progress and admits that the nation still looks up to the monarch in times of crisis.

"Democracy is new to Bhutan. What it will bring to the country and how it evolves is something that we are uncertain about," the Prime Minister said in the interview. Jigmi Thinley considers that Bhutan is only an emerging democratic state and still has a long way to go before considered as a democratic state. The said this in the back drop that free press, elections and a new constitution with powers vested in the Parliament and the cabinet was a result if the King will to play the role of a symbolic Head of State.
< class="text11verdana">Source:, August 24, 2011

< class="heading12boldGeorgia">Regional trade hub

A new sub-regional grouping with the framework of SAARC consisting of Bangladesh, Bhutan, Neap and India is rapidly gaining acceptance. The Bangladeshi Commerce Minister Farouk Khan said that grouping was looking promising and could move in a much faster pace. He also said that this was very much with in SAARC and was aimed at making the enabling the SAARC forum to succeed.

The Minister also added that the major obstacle for the free trade in South Asia was the relations between India and Pakistan. He said that Pakistan refuses to give India the most favoured nation status whereas India treats all investment from Pakistan with suspicion.

The sub-regional deal could eventually fees into the South Asian freed trade pact of SARC or into BIMSTEC. This will also improve the rail and road connectivity between these countries as well as improve the overall infrastructure with investment made in hydro-electricity and water resource management.
< class="text11verdana">Source:, August 22, 2011.

< class="heading12boldGeorgia">Nepali refugee numbers go down by half

Nearly half of the 1,08,000 Bhutanese of Nepali origin who fled to Nepal in the 1990’s have been resettled in third countries. Since 2007 the UNHCR has resettled almost fifty one thousand people. A bit more than forty three thousand people have been resettled in the United States alone. While the remaining have been resettled in Canada, Australia, New Zealand, Norway, Denmark, Britain and The Netherlands.

The fate of the remaining people is uncertain. This is because of complications that have risen due to legal cases, marriage with local Nepali’s and non-registration. These apart, around fifteen thousand refugees are not interested in leaving the country and have decided to wait till the government takes a decision.
< class="text11verdana">Source:, August 24, 2011.

< class="heading12boldGeorgia">Anna Hazare ends fast after Parliament agrees to take up his three points

Social Activist Anna Hazare ended his 13-day long fast at the Ramlila Maidan on Sunday (August 28, 2011) after the two Houses of Indian Parliament passed an unanimous resolution to endorse his three-key demands in the draft Lokpal Bill that is being currently considered by Parliament.

The ’sense of the House’ resolution adopted on Saturday (August 27, 2011) night paved the way for the end of Hazare’s fast.

Ending his fast, Hazare declared that his fast had only been suspended and not ended saying that electoral reforms would be on his next agenda, followed by issues of decentralisation of power, education reforms, labour and farmers’ issues.
< class="text11verdana">Source: The Hindu, The Times of India, August 28-29, 2011.

< class="heading12boldGeorgia">Nine percent growth target despite global woes

Prime Minister Manmohan Singh has set a growth target of nine per cent for the Twelfth Five Year Plan period beginning April 2012, despite the global economic slowdown and domestic inflationary pressure and vowed to push forward the reform process.

"Given the uncertainties in the global economy, and the challenges in the domestic economy, even a 9 per cent target is feasible only if we can take some difficult decisions," the Prime Minister said at the full Planning Commission meeting.

Singh said he wanted to keep open "the possibility of raising the growth rate ? if the domestic and international situation improved ? to 9.2 per cent during plan period 2012-13 to 2016-17".
< class="text11verdana">Source: The Telegraph, August 21, 2011

< class="heading12boldGeorgia">US reiterates support for UNSC seat

The United States on Tuesday reiterated support for India’s bid for a permanent seat on the United Nations Security Council even though India abstained from voting on a resolution that called for an investigation into possible rights violations committed by Syrian security forces.

The Security Council approved the resolution, but four nations including Russia China against it while India and eight other countries declined to cast a vote.
< class="text11verdana">Source:, August 24, 2011

< class="heading12boldGeorgia">Mistrust straining ties with China, says US

A high degree of mistrust continues to strain the bilateral relationship between India and China, the Pentagon has informed the US Congress. New Delhi remains concerned by China’s close military ties with Pakistan and its growing footprint in the Indian Ocean, Central Asia and Africa, the Pentagon has informed the US Congress.

"China deepened its ties with India through increased trade and high-level dialogues in 2010, though border tensions remained an irritant in the bilateral relationship. Bilateral trade in 2010 reached nearly $60 billion," the annual report on Chinese military build-up to the Congress said.
< class="text11verdana">Source: Hindustan Times, August 25, 2011

< class="heading12boldGeorgia">Invited to Libya meet

India is among a group of countries invited to attend an international conference on Libya, which French President Nicolas Sarkozy will host in Paris next week to discuss the future of the north African nation after the overthrow of the Muammar Gaddafi regime.

The conference of the "friends of Libya" is intended to speed up humanitarian aid, medical supplies, rehabilitation and other immediate assistance for the war-torn nation as well as to work out a long-term plan for the reconstruction of a "new independent Libya", Sarkozy said after talks with Mahmoud Jibril, head of the Libyan National Transitional Council.

A top priority for the conference is to clear the way for releasing the frozen wealth of Gaddafi and his clans in bank accounts abroad to meet the country’s immediate needs, to support the transitional government and to finance the country’s reconstruction as a democratic nation.
< class="text11verdana">Source:, August 25, 2011

< class="heading12boldGeorgia">Oil-debt to Iran to be cleared

India will clear its debt over oil imports from Iran by the end of August, state-run Mehr news agency reported, citing Mohsen Qamsari, National Iranian Oil Co.’s director for international affairs.

Four Indian oil buyers are paying their debt and so far more than $2 billion has been settled, Qamsari told Mehr yesterday without providing details. Indian refiners’ debt to Iran was $4.8 billion in early August, National Iranian Oil Co. Managing Director Ahmad Qalebani said on August 8.
< class="text11verdana">Source:, August 21, 2011

< class="brown12verdana">Contributors:

Afghanistan: Avinash Paliwal;
Bangladesh: Joyeeta Bhattacharje;
Bhutan and Pakistan: Sripathi Narayanan;
India: Satish Misra;
Nepal: Akanshya Shah;
Maldives & Sri Lanka: N SathiyaMoorthy;

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