MonitorsPublished on Aug 03, 2012
In a masterly stroke aimed at improving bilateral economic relations on the one hand, and job opportunities for the Tamil victims of the ethnic war, New Delhi and Colombo have agreed to set up Special Economic Zones (SEZ) for Indian engineering.
Sri Lanka: Trincomalee in development discourse
< class="heading1">Analysis

In a masterly stroke aimed at improving bilateral economic relations on the one hand, and job opportunities for the Tamil victims of the ethnic war, New Delhi and Colombo have agreed to set up Special Economic Zones (SEZ) for Indian engineering, auto components and pharmaceutical industries in the eastern port town of Trincomalee. The decision, taken at a meeting the visiting Indian Commerce Minister Anand Sharma had with Sri Lankan Economic Development Minister Basil Rajapaksa at Colombo, provides for the setting up of ancillaries units for auto-manufacturers and other engineering companies, located in Tamil Nadu and the rest of South India.

In good time, Sri Lanka can expect to have auto manufacturers too setting up shop on the island. The realisation has been there in Colombo for decades now that it could at best replicate the success story of Japan, which did not have any raw materials other than human ingenuity and human resources before it went on to become a top-notch industrialised nation in the world, overcoming the disastrous consequences of the Second World War. Post-war, Sri Lanka has a ’peace war’ on its hand, and its war-time developmental initiatives may have to go hand-in-hand with devolution initiatives, given the divergent nature of the conflicts, for Sri Lanka to replicate the Japanese success story, to a greater or lesser degree, in the regional context, for starters.

The India-Sri Lanka initiative now calls for officials from the two countries to produce a report in this regard within three months. Likewise, Indian pharmaceutical manufacturers are expected to send a team to Sri Lanka for discussing the details of setting up a special manufacturing zone for their operations. Translated, this could also mean medicines at a much cheaper price for Sri Lankans, who are now forced to bear the high cost of drugs, imported often from the distant West, where patent costs and transportation levies make them unaffordable for the common man.

It does not stop there. Minister Sharma was accompanied by an investor delegation from India, whose members have reportedly shown a keen interest in investing in existing/sick and new units in Sri Lanka. As is known, Sri Lanka is a global name in ready-made garments, and its dependence on the sector as a forex earner was sought to be exploited by ’peacenik nations’ at the height of ’Eelam War IV’, to extend or deny export concessions. With Southern India, starting with Tamil Nadu, being a hub of high-quality technical education, there is an interest to invest in Sri Lanka, as and when the Colombo Government facilitates the process through required changes to rules and regulations. Such a course could help Sri Lanka’s higher education sector and employability of its youth, where there has been a huge and persistent shortage over the decades. Guided and administered properly, it could become a forex-earner, too.
Irritants on either side

Though the media claimed otherwise earlier, Minister Sharma clarified that he and his team did not discuss the much-delayed Comprehensive Economic Partnership Agreement (CEPA) with their counterparts. Yet, the overall benefits to Sri Lanka and Sri Lankans in terms of job-creation for the locals could be greater, as and when CEPA is cleared. If nothing else, it would clarify areas of investor-interests from the Sri Lankan perspective. However, for that to happen, Sri Lanka would have to take a holistic view of CEPA, and not adopt just a sector-wise approach, all in a way contributing to balance bilateral trade, which at present is hugely in India’s favour, and for right and acceptable reasons, flowing from the size of economy, manufacturing and agricultural base.

Today, early Sri Lankan clearance for CEPA would boost investor confidence, not on peace and stability, but in the Government’s promises and processes. As may be recalled, the Sri Lankan reservations on CEPA erupted, almost as an after-thought, and many Indian investors in particular were waiting on the wings to view the progress on that score before making their medium and long-term investment decisions. At the same time, the implementation of an FTA between the two countries since the Nineties has shown up gaps between initial intention and actual implementation. While certain huge gaps that became a serious concern for India could be readily attended to, Sri Lankan exporter’s concerns in terms of customs clearances, which are otherwise a low-priority problem of daily recurrence, need to be fully addressed. The existence of different and differential regulations and tariffs between Indian States, and also that of a multitude of agencies at different-levels at the Centre and in the States has also been an irritant. Minister Sharma’s visit talked about Customs issues that need to be sorted out, overall.

In this respect, a lot needs to be said about the Sri Lankan officials’ approach to bilateral projects that are proposed/cleared at the political-level. The 50,000 free houses project that India has funded is a case in point. Most of those houses are planned for the Northern Province, which took the brunt of the ethnic war. So is the Sampur thermal power project, also in the Eastern Province as Trincomalee. Delays of the kind as the Government of India and its public sector undertakings had faced on these projects has the inherent potential to put off private sector investors, most of whom in the engineering and auto components SMZs could be supplying ancillaries to American and Japanese manufacturers, who are testy about deadlines and project commencements. In a way, it will be a message for the investor community in India, too, but more importantly to their counterparts from the rest of the world.

It is too early to say what shape the proposed SEZs would take. Yet, sustainable development of the East, as also of investor interest could involve creating a pool of skilled and semi-skilled labour force with adequate academic exposure. The investors would be aware of the needs, and may not be unwilling to promote the cause, locally, if only over a period. Peace, political stability and sustainability would become the password then. In return, Sri Lanka would be able to exploit its human resources availability at the mid-level of services sector, by providing them with job opportunities nearer home. Over time, this could benefit the local economy and transform the nation’s face all-round. For this to happen, Trinco already has the only natural harbour in the region. The port’s capacities would have to be increased over time, but whose inherent advantages were exploited the wrong way during the decades-old ethnic war.
Historic contexts

India already has an economic presence at Trincomalee, where it took on long lease the Second World War oil storage farm, for storing imported petroleum products for Lanka-IOC, under an existing bilateral arrangement. The agreement purportedly flowed from the India-Sri Lanka Accord, though as an Annexure letter from then Indian Prime Minister Rajiv Gandhi to Sri Lankan President J R Jayewardene. According to Sri Lankan strategic analysts, the Annexure had its origins in the efforts of the Sri Lankan Government to lease out the oil farm to a US company, at the height of the ’Cold War’ era. In the perception of some, the American reasoning may have flowed from the inability of the US Seventh Fleet, based not far away at Diego Garcia, to sail into the Indian waters before the surrender of close to a 100,000 Pakistani soldiers in what had by then been recognised by New Delhi and Moscow as ’Bangladesh’. The rest, as they say, is history.

In the post-war Sri Lanka, Trincomalee may be at the centre of a re-merger demand of the Tamil National Alliance (TNA). Citing pre-war demands of the moderate Tamil polity in the country, TNA leader R Sampanthan has also recently spoken about a realignment of the Provinces structure in the country by merging the ’Tamil districts’ of Batticaloa and Trincomalee with the North, and forming a new South-Eastern Province for the Tamil-speaking Muslim community. The current TNA call has its origins in the demand for a merged North-Eastern Province, and the promise of the late S J V Chelvanayagam, the ’father’ of the ’Tamil nationalist movement’ and founder of the ’Illankai Tamil Arasu Kadchi’, loosely translated as the ’Federal Party’ by the founders themselves, to make Trincomalee the capital of the merged entity.

Despite the focus of the Tamil militancy being in the North, particularly the ’cultural capital’ of Jaffna, particularly after the LTTE had annihilated other groups, Trincomalee became the official capital of the merged North-East, created under the Indo-Sri Lanka Accord, 25 years back. Post-war, the demand for merger does not involve Trincomalee as yet. If anything, the revival of any such demand, whatever be the fate and context of the one for re-merger after the Supreme Court of Sri Lanka had annulled the merger in 2006, could complicate pan-Tamil politics more than solving any real problem that the post-war Tamils face in the country.

In context, it could also mean that the pan-Tamil polity in Sri Lanka and the south Indian State of Tamil Nadu too may have little much to talk about the ’China factor’ in bilateral relations with Sri Lanka, particularly after former Chief Minister M Karunanidhi, whose DMK is a partner in the ruling Congress-UPA at the Centre, had flagged it in recent times, that too in the context of the ’TESO conference’ that he is hosting later in the month, at Chennai. It is in this regard, Sri Lanka and Sri Lankans, starting with the Tamils of the East in this particular context, have to decide, what is good for them in the twin-topic discourse on development and/or devolution, before they can expect full investor-participation, from across the Palk Strait to begin with, and the rest of the world in subsequent phases.

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

< class="heading12boldGeorgia">Afghanistan: State-making, ’abandonment’ and the new Great Game

Kaustav Dhar Chakrabarti

Afghanistan has emerged as a classical case where an affluence of opinion coexists with a poverty of authoritative analysis. Every aspect of the conflict -- insurgent support, ’pulse’ of the population, capacity of the Government and its armed force and the efficacy of international support -- have been debated vigorously without consensus over any issue. This makes an informed judgement about the future of the country difficult. However, given that international troops are scheduled to withdraw by 2014, present-day developments will have an enduring impact of the process of State formation. Arguably, the three most important determinant of stability are the relation between Kabul and the satrap-like regions, the future of western aid, and competition among Afghanistan’s neighbours.

While predicting futures is fraught with peril, Afghanistan post-2014 will lie somewhere between two extremes. At one end of the spectrum, Kabul will succeed in winning the patronage of local power-brokers and militia leaders by distributing western largesse among them. This will create amenable for the ’weaning away’ of local rebels away from the Taliban movement, and might culminate in important elements of the Taliban’s shura joining politics through a power-sharing arrangement. The other hand, a pessimistic analysis points to state fragmentation, with the security forces splitting along ethnic lines, subsequently leading to a civil war.

While accumulation of power is very complex and involves regional, ethnic, tribal and international dimensions, at a broader level, it is noticed that a north-south axis has developed in which Pashtun groups have created proto-states in southern Afghanistan and non-Pashtun groups have coalesced in the northern regions of the country. Currently, it is the non-Pashtun groups dominate all the organs of the state, which has led to a sense of alienation among the Pashtun communities and fed into the Taliban narrative of the US occupying the country through ’collaborators’. In turn, the insurgency is based in the southern and the eastern parts, where the government is the weakest. In such conditions, relations between Kabul and the country’s dominant regions will determine the future shape of the State. Particularly, will the different ethnic communities agree to form a power-sharing arrangement post-withdrawal? In other words, what are the likely attitudes of the different ethnic factions towards reconciliation?

The second determinant of a stable State is foreign aid. Given the week nature of the Afghan state, the large volume of aid involved implies that it will have to be borne by the United States and other western countries. Two recent events suggest continued international attention to Afghanistan’s nation-building, or at the very least, an effort to assuage fears of ’abandonment’ which is widely felt among Afghan elite. In early July, 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. This commitment does not include an equally substantial aid earmarked for developing the security infrastructure.

Concurrently, the US declared Afghanistan as a major non-NATO ally, a status that was not given to Iraq. As a major non-NATO ally, Afghanistan will have access to US military training, hardware and other recourses. By pledging to sustain the State beyond 2014, the US hopes to convince important players that their interests will be best served by siding with the US-backed Karzai Government, this assuaging deeply-held fears of abandonment and subsequent persecution at the hands of Taliban rebels in the ensuing civil war. It remained unanswered whether current aid levels required to maintain the armed forces and buy the loyalty of powerful regional strongmen will persist into the future; and whether Kabul will succeed in creating a patronage network that will prevent another round of internecine conflict.

Lastly, international efforts to generate stability will be greatly determined by a convergence, or divergence, of interests with regional actors, most notably Pakistan. According to conventional wisdom, Pakistan supports these rebel groups as a hedge against non-Pashtun groups that have come to dominate the Government since 2001 and enjoy warm relations with India. This has been Pakistan’s singular strategy since the Soviet withdrawal, where they supported Pashtun, pro-Pakistan groups like Gulbuddin Hekmatyar’s Hizb-i-Islami, the Taliban and most recently, the Haqqani Network.

However, during his first visit to Afghanistan, Pakistan’s recently-elected Prime Minister Raja Pervez Ashraf suggested to dismiss this zero-sum interpretation of Islamabad’s policy and said that it ’wants to work closely with Tajik, Hazara, and Uzbek leaders to strengthen our relations with these communities’. While his statement run against the grain of two decades long record of picking Pashtuns over others, nevertheless, it does throw open the possibility of a more accommodative strategy by Pakistan, should their fears of ’encirclement by India’ be assuaged. Will it jockey for exclusive monopoly of influence, or will Pakistan be open to avenues of its proxies sharing power with other Afghan groups known for their proximity with India?

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

< class="heading1">Country Reports

Sri Lanka

< class="heading12boldGeorgia">India urged to relax visa regulations

Sri Lanka has sought some relaxation on employment visa from India and both countries are engaged in negotiations to simplify the visa regime, Indian Commerce Minister Anand Sharma has said. Sharma, who was in Sri Lanka on an official visit, met Sri Lankan President Mahinda Rajapaksa over lunch and discussed bilateral ties.

Sources said Sharma informed Rajapaksa that the Commerce Secretaries of both countries are already engaged in simplifying the visa regime. Sri Lanka has sought relaxation on the employment visa.The sources said Rajapaksa told Sharma that he will visit India soon.

During his visit, Sharma had discussed with Sri Lankan Foreign Minister G L Pieris issues relating to customs clearance."We will resolve all issues relating to customs clearance. India will be sending a draft customs cooperation agreement to Sri Lanka soon," Sharma said.

< class="text11verdana">Source: Financial Express, New Delhi, August 3, 2012

< class="heading12boldGeorgia">Call to eliminate n-weapons

Sri Lanka has called for the elimination of nuclear weapons from national arsenals claiming that they pose an overarching threat to humanity. ?Sri Lanka maintains its concerns that the continued existence of nuclear weapons and of their possible use or threat of use, poses an overarching threat to humanity, and joins the collective voice for the elimination of nuclear weapons from national arsenals," Ambassador/Permanent Representative of Sri Lanka at the Conference on Disarmament (CD) Plenary Ravinatha Aryasinha said in Geneva.

?Pending this achievement, we are of the view that there is an urgent need to reach an early agreement on a universal, unconditional and legally binding instrument to assure non-nuclear weapon States against the use or threat of use of nuclear weapons," Aryasinha said.

He also said Conference on Disarmament should not be subjected to the vagaries of a changing international strategic landscape.??we express our profound disappointment that the Conference has not been enabled to undertake substantive work on its agenda. In order to continue to preserve the unique role of the Body, it is vital that all of us, the Member States, allow the Conference to begin its substantive work on the basis of a balanced and focused Programme of Work, that takes into account security concerns of all its Members in an equitable manner, thereby ensuring its acceptance by consensus," he said.

< class="text11verdana">Source: Daily Mirror Online, August 2, 2012


< class="heading12boldGeorgia">Terrorist attack on Kabul foiled

Security forces ambushed and killed five insurgents in the outskirts of Kabul as they were preparing to mount an attack on the capital. Soldiers from the intelligence agency, National Directorate of Security (NDS), raided a compound located east of the city and killed five militants after a prolonged gun battle. They recovered three vehicles rigged with explosives, small arms and rocket launchers. While the NDS spokesperson claimed that all militants were killed, other reports suggested that two assailants had managed to escape.

The NDS claimed to have found evidence to suggest that the militants belonged to the Haqqani network and had planned to attack three locations in Kabul, including a neighbourhood near the Parliament building and areas popular with the diplomatic community. The exact details were withheld for security reasons.

Both the Taliban and the Haqqani network have launched attacks against key Government buildings in Kabul on numerous occasions in the past year, targeting the US Embassy, the Ministry of Defence, prominent hotels, and other landmarks. More recently, on June 22, Taliban gunmen attacked a lakeside hotel in the outskirt of Kabul which took Afghan and foreign forces a day to defeat.

Earlier in April, dozens of militants occupied a high-rise construction site in Kabul and attacked the diplomatic centre for 18 hours. Such attacks serve many purposes. First, they create a sense of insecurity among the Government and the population and generate public opinion against the Government’s ability to provide security. Symbolic attacks on Kabul also serve to convince insurgent groups and their supporters that Government is ’not in control’ and can be defeated through violence.

< class="text11verdana">Source: The Associated Press, Reuters; August 2, 2012

< class="heading1">Finance Minister accused of graft

Finance Minister Hazarat Omar Zakhilwal has been accused of embezzling more than $ 1 million over the past five years by the TOLO news which carried out an investigation into his bank accounts. The Minister, a former consultant with the World Bank and an Economics lecturer in Canada, termed the accusations of malpractice false and stressed that his financial records are a reflection of his past professions,

The investigation claims that funds have been transferred to bank accounts held by the minister in Standard Chartered Bank, Alfalah Bank and other foreign accounts. Further, it also revealed that large sums of money were wired into his account by private firms and individuals, such as the Safi Landmark Company as late as 2009, dismissing Zakhilwal’s defence.

The High Office of Oversight and Anti-Corruption’s chief Azizullah Lodin seconded the news report and added that several cases of graft have been reported in the Finance Ministry over the years. He urged the Minister to resign from office to ensure an impartial audit.

< class="text11verdana">Source: Tolo News, August 1, 2012; Khaama Press, August 2, 2012

< class="heading12boldGeorgia">Tajikistan to conduct military operation

Tajikistan sealed its border passes with Afghanistan on July 31 to apprehend a former warlord accused of killing a serving general of the army. Tajik President Imomali Rakhmon mounted a military operation in the autonomous border region of Gorno-Badakshan against Toilb Ayombekov and his followers, accusing him of assassinating Maj Gen Abdullo Nazarov, the regional security service chief. The border is expected to remain closed till the end of the operations. Movement of NATO supplies, however, has not been disturbed.

The border was sealed after Tajik officials learnt that eight Afghan militants were supporting the warlord against Government forces. In a related incident, the local police chief of Badakhshan Province, which abuts the affected region of Tajikistan, was arrested in connection with Ayombekov’s activities. Central Asian Republic countries remain deeply apprehensive about the spread of the Taliban movement into the region, which has witnessed violent Islamist movements in the past as well.

< class="text11verdana">Source: Tolo News, August 1, 2012; Reuters, July 27, 2012

< class="heading12boldGeorgia">Hasina offers joint Cabinet, Khaleda rejects

Prime Minister, Sheikh Hasina, in the week has said that the opposition Bangladesh Nationalist Party (BNP) could join a small interim government to conduct next general elections if it agrees. She made the offer during her interview with of BBC Bangla Service.

Khaleda Zia, BNP chairperson, rejected the proposal and iterated her stance that no election would be held without a non-party neutral government. Contrarily, Zia, threatened to wage a tougher movement after the Eid-ul-Fitr to compel the government to restore non-party caretaker government system.

The present Awami League Government scrapped the provision for the non-party caretaker government through the 15th amendment to the constitution in 2011 but BNP is pressing for restoration of the provision.Looking at the state of politics in the countries observers has become sceptical about the future of election in the country.

< class="text11verdana">Source: New Age, July 31, 2012/ The Daily Star, August 3, 2012

< class="heading12boldGeorgia">FTA can push India export

A World Bank study claims that bilateral free trade agreement (FTA) can push Bangladesh’s export to India by nearly 8 percent and it will jump up to 11 percent if the deal comes with improved connectivity. Sanjay Kathuria, the World Bank’s Lead Economist for Bangladesh, informed that bilateral trade between India and Bangladesh comprise only 4 to 5 percent of the total regional trade. He further asserted that there is huge scope to increase the trade and bilateral trade deficit is a political concept, not an economic construct.

In reaction to the study Gowher Rizvi, International Affairs Adviser to the Prime Minister, suggested further study on the issue before drawing any conclusion. India is the third largest trading partner of Bangladesh and second largest source of imports.

< class="text11verdana">Source:, August 3, 2012

< class="heading12boldGeorgia">Nepal to get access to ports

Foreign Minister Dipu Moni said that Bangladesh is working towards providing Nepal with transit to access Chittagong and Mongla seaports. She said this during her meeting with Durga Prasad Bhattarai, visiting Foreign Secretary of Nepal.

Dipu Moni further informed that Rohanpur-Singabad rail transit route is already available to Nepal, the standard operating procedure is operational, which allows Nepalese cargo trucks to enter 200 metres into the zero point of Bangladesh at Banglabandha land port in Panchagarh.

Meanwhile, Bangladesh and Nepal on July 31 signed a Memorandum of Understanding on bilateral consultations between the foreign ministries of both.

< class="text11verdana">Source: The Daily Star, August 3, 2012

< class="heading12boldGeorgia">Plans to export surplus rice

The government is contemplating upon exporting rice to boost prices for the benefit of grower due falling of prices at the local market. Finance Minister AMA Muhith, however, informed that no final decision has been made and the government is exploring the option of rice exports.

The minister further added according to r new estimates, the rice production looks sufficient for the domestic market. At present, the average retail price of coarse rice is Tk 25 a kg, while the production cost per kg is said to be Tk 26.50, he said.

< class="text11Verdana">Source: The Daily Star, July 30, 2012

< class="heading12boldGeorgia">No proof of graft: PM

Prime Minister Sheikh Haisna has claimed that the World Bank (WB) has not provided her Government with any substantial proof of the alleged corruption in the Padma bridge project despite repeated requests. However, she declined to publish the WB’s letters to her government. She further asserted despite herself and the Finance Minister asking WB for evidence, they could not furnish any substantial proof.

WB wrote a letter to the government and cancelled $1.2 billion loan for construction of the Padma Multipurpose Bridge stating that it had substantial proof of corruption against some of the officials involved in the project. Construction of the Bridge has become uncertain after WB withdrew from the project.

< class="text11Verdana">Source:, July 30, 2012

< class="heading12boldGeorgia">Probe into Yunus’s forex earnings

The government has ordered an inquiry to find whether Grameen Bank’s founder and Nobel Laureate Muhammad Yunus had brought home foreign currencies as ’wage earner’ and enjoyed tax exemption during his tenure at the bank. The government has also approved a draft proposing amendments to the Grameen Bank Ordinance 1983 to ’reduce the power of the bank’s board and give more authority to its chairman in appointing the managing director of the micro-credit organization. Government official informed that they have information that Dr Yunus brought home his earnings abroad in foreign currencies as a wage earner while he was holding the rank of Grameen Bank’s managing director.

Grameen Bank (GB), the global microcredit lender, was founded by Yunus in 1976. GB is known for its poverty alleviation programmes specially focusing about women. Yunus was removed from GB by the government last year.

< class="text11Verdana">Source: New Age, August 3, 2012

< class="heading12boldGeorgia">Ban on INGO for helping Rohingya

Bangladesh has ordered three international charities to stop providing aid to Rohingya refugees who cross the border to flee persecution and violence in Myanmar. The charities are- Doctors Without Borders (MSF), Action Against Hunger (ACF) and Muslim Aid UK. Government official claimed that these charities have been providing aid to tens of thousands of undocumented Rohingya refugees illegally.

Officials further claimed that these charities were encouraging an influx of Rohingya refugees from across the border in Myanmar’s Rakhine state in the wake of recent sectarian violence that left at least 80 people dead. The charities have provided health care, skills training, emergency food and drinking water to the refugees living in Cox’s Bazaar since the early 1990s.

Rohingyas speak a Bengali dialect similar to one in southeast Bangladesh. Rohingyas are Muslims seen as illegal immigrants by the Myanmar government. According to some estimate some 300,000 Rohingya Muslims are living in Bangladesh, the vast majority in Cox’s Bazaar, after fleeing persecution in Myanmar. About 30,000 are registered refugees who live in two camps run by the United Nations.

< class="text11Verdana">Source: AFP New Age, August 3, 2012

< class="heading12boldGeorgia">Power to India!

The power blackout on 30 and 31 July in northern parts of India had witness Bhutan’s supplying some electricity to India to cope up with the situation.

Bhutan is South Asia’s only power-surplus country. It consumes 250 MW, but generates about five times more electricity than what it consumes it generates and this is exported to India. About 99 per cent of Bhutan’s electricity is hydel power

About 8,200 MW of hydro-electricity from several sources, including Bhutan, were supplied to the northern grid to meet with the black out.

< class="text11verdana">Source:, July 30, 2012;, August 2, 2012

< class="heading12boldGeorgia">Textile museum on cards

The Ahmadabad-based National Institute of Design (NID) in association with Royal Textile Academy of Bhutan the will help Bhutan set up a museum to preserve and promote Bhutanese textiles in.

NID will offer design intervention for this museum, which is expected to be launched in June 2013. In addition to this, NID will training Bhutanese to make textile-based products, Bhutan’s 13 traditional crafts, mainly cane, bamboo, woodwork and textiles. The museum will also set up a store for textiles and accessories. NID will create accessories made out of textiles for the store.

< class="text11verdana">Source:, July 27, 2012

< class="heading12boldGeorgia">Anna Team ends fast, to form political party

With the government refusing to play ball, Team Anna today (August 2) decided to end their"indefinite" fast at 5 pm tomorrow-the tenth day of the protest-even as they announced their"historic decision" to"give the country a political alternative".

Addressing his supporters today, Anna Hazare said:" It is another two years to go to polls in 2014. We have to go to people throughout the country in the next one and half years. Why waste time on fasts?"

< class="text11verdana">Source: The Indian Express, August 3, 2012

< class="heading12boldGeorgia">Chidambaram back in Finance Ministry

P Chidambaram returns to his favourite end of North Block to take charge of the Finance Ministry after three and half years spent presiding over the Home Ministry.

In a minor reshuffle, Prime Minister Manmohan Singh gave Home portfolio to Sushil Kumar Shinde, who was Power Minister.

< class="text11verdana">Source: The Hindu, August 1, 2012

< class="heading12boldGeorgia">Poor monsoon add to economic woes

The poor monsoon is adding to the woes already ailing Indian economy.Industry body, the Confederation of Indian Industry (CII) has expressed concern over the impact of the deficient rainfall on the broader economy at a time when there is already a sharp slowdown on account of various domestic and global factors.

In a parallel development, Minister of Agriculture Sharad Pawar said that the Empowered Group of Ministers (EGoM) would hold discussions with Chief Ministers of Maharashtra, Karnataka, Gujarat and Rajasthan where the possibility of an imminent drought was stronger.

< class="text11verdana">Source: The Tribune, The Hindu, July 30, 2012

< class="heading12boldGeorgia">Power failure cripples North, NE

It was a terrible Tuesday in succession to a similar Monday that over 600 million Indians are not going to forget in a hurry. In the world’s biggest blackout that affected one-tenth of the global population, 21 states and Union Territories went on the blink after three arterial power lines collapsed at 1 p. m.

The northern, eastern and north-eastern regions suffered the outage when their respective grids collapsed in quick succession with devastating effects. The blackout disrupted normal life, rail and air services as well as industrial production across sectors.

Over 300 million people in North India had faced a severe power blackout on Monday after the Northern Grid collapsed early in the morning, plunging eight states in the worst outage in a decade, lasting over 15 hours.

Over 300 trains and capital’s metro trains not only ran late but were stalled mid-way as a result of it.

< class="text11verdana">Source: The Times of India, August 1, 2012

< class="heading12boldGeorgia">Manufacturing growth weakest since Nov

Shrinking export orders and sluggish output dragged Indian manufacturing growth in July down to its weakest pace since last November, a business survey showed on Wednesday.

The HSBC manufacturing Purchasing Managers Index (PMI), which gauges business activity at India’s factories but not utilities, fell to 52.9 in July, from 55.0 in June-its biggest one-month drop since September last year.

< class="text11verdana">Source: The Tribune, August 2, 2012

< class="heading12boldGeorgia">China overtaken in exports growth rate

India has overtaken China in exports growth rate, recording an increase of 16.1 per cent in 2011, topping the list of all major trading countries in the world, says a WTO report.

"India had the fastest export growth among major traders in 2011, with shipments rising 16.1 per cent. Meanwhile, China had the second-fastest export growth of any major economy at 9.3 per cent," World Trade Report 2012 of WTO said.

In 2010, China topped the list with shipment growth rate of 28.4 per cent, while India recorded an increase of 22 per cent.

< class="text11verdana">Source: The Times of India, July 29, 2012

< class="heading12boldGeorgia">Four low-intensity blasts in Pune

Four low-intensity blasts rocked the busy Junglee Mahraj Road in Pune on Wednesday evening injuring one person.

The explosions were set off with pencil cells detonators placed in a plastic bag, a dustbin and on cycles at two locations, police said

< class="text11verdana">Source: The Hindu, August 2, 2012

< class="heading12boldGeorgia">Suspension of Parliament leaves legal

Several general regulations without parent legislation, including rules governing political parties and freedom of assembly, will cease to have legal force if an extension is not approved at a Parliament sitting before midnight on Sunday, August 5.Parliament however remains deadlocked and sittings have been suspended indefinitely amidst forced cancellations and escalating political tension.

Prior to the ratification of the new Constitution on August 7, 2008, Parliament passed a General Regulations Act as parent legislation for over 80 regulations without a statutory basis, or were not formulated under Acts of Parliament. These include regulations for criminal justice procedures, companies and finance leasing transactions, insurance, jails and parole, freedom of information and building codes.

The Act provided for further extensions based on recommendations by parliament’s Rules Committee. The last extension was approved in December 2011 and is set to elapse on August 5, after which the regulations would become null and void.With the People’s Majlis at a standstill and the outcome of talks between parliamentary group leaders unclear, Deputy Speaker Ahmed Nazim warned of an impending"legal void" should the parent act be allowed to expire.

< class="text11verdana">Source: Minivan News, August 3, 2012

< class="heading12boldGeorgia">Gayoom expresses"frustration"

Former President Maumoon Abdul Gayoom has said that he will not accept that the resignation of former President Mohammed Nasheed on February 7 was a coup d’état, even if the Commission of National Inquiry (CNI)’s report came to such a conclusion.

After giving a statement to the CNI, Gayoom in a news conference held at the office of his Progressive Party of Maldives (PPM), stated that he had seen the recording of the video in which ousted President Nasheed publicly resigned, and said that it was not made"under duress" and that therefore it was very clear that it"was not a coup"

?Even though I was in Malaysia, I saw the video recording of how he resigned and what he said - such as that he is now resigning, and that if he continued to remain as the president the country may face further grief and pain," Gayoom said.?Also, it was he himself who wrote the letter of resignation and it is he who sent the letter to Parliament," Gayoom claimed added.Gayoom said that there was no point in Nasheed claiming that it is"a coup" after he had resigned in accordance with the constitution.

?I told this to the members of the CNI, and I think they seem to believe it too. I also said that Mohamed Nasheed after (his resignation) went home to sleep, he slept that afternoon, that night, the following morning and then he changed his mind , then in the evening said he did not resign, or that his resignation was not permanent but a coup d’état. Then who is going to believe that?" Gayoom questioned.

?Something must have happened after 24 hours, some people must have talked to him and ’got into his head’ to make him change his statement. Before that he was under the belief that he resigned," the former president contended.

In the press conference, Gayoom stated that during the session with the CNI, he also highlighted two things that"frustrated" him about the commission.One reason for the frustrations was, he explained, the inclusion of a representative of ousted President Nasheed in the commission, following"foreign" influence.?Where is justice when there is someone in this commission who supports Nasheed’s claims?" the ex-president questioned.

Gayoom claimed that it would only be fair that he have his"own representative if Nasheed gets to have one". His second cause of frustration, Gayoom said, was that the CNI was mandated to look into the events that took place from January 14 to February 8.He stated that the"change" that took place on February 7 was the result of President Nasheed’s"unlawful" and"un-Islamic" actions carried out, that had"angered a lot of citizens", and contended that this would be clear if the CNI looked into what Nasheed had done after assuming presidency in 2008.

< class="text11verdana">Source: Minivan News, July 31, 2012

< class="heading12boldGeorgia">"Police failed to state what Nasheed was charged for"

Ousted President Mohamed Nasheed’s legal team on Thursday claimed that the Maldives Police Services had failed to specify what charges Nasheed was being investigated for, after the former President was summoned to police headquarters.

Speaking to local media following the questioning, member of Nasheed’s legal team Hisaan Hussain told local media that even the police gave Nasheed the opportunity to respond to the charges, but despite repeated requests failed to explain exactly what those charges were.

Another member of Nasheed’s legal team, former Minister of Human Resources, Youth and Sports, Hassan Latheef, also made similar comments in a live interview with local TV station Raajje TV, following Nasheed’s appearance in the police station on Thursday.

He said that police did not send Nasheed a formal summoning chit, but instead sent a letter asking him to present himself at police headquarters. Latheef added that police could not have taken action if Nasheed had declined the request, but said that Nasheed wanted to cooperate with the police in their investigation.

Latheef said that during the questioning, police stated that Nasheed was a suspect for perpetrating attacks against police and police property from May 29 onwards, and claimed that all the acts were carried out under Nasheed’s orders.?But they failed to provide us with any details of the charges. He repeatedly asked them to clarify the details of his wrongs and what damage were they speaking of," he said.

< class="text11verdana">Source: Minivan News, August 3, 2012

< class="heading12boldGeorgia">Leaders for open border with China

Senior Maoist leaders have said that Nepal and China should take initiative for open border between the two countries. They have argued that people to people contacts and businesses between the two countries have suffered due to lack of such facility.

United CPN (Maoist) Standing Committee member Krishna Bahadur Mahara said several border crossing with China in the northern part of Nepal should be opened and people from the two sides should be allowed to move freely through those points.

Mahara also said Nepal government should take initiative to establish consular offices in some major Chinese cities where trade and business activities with Nepali side have increased significantly in the recent years.

Vice-Chairman of the newly-formed Communist Party of Nepal (Maoist) C P Gajurel has supported this notion and said strong measures to this effect has become urgent to re-establish people-to-people relation between the two countries.

While applauding northern neighbour for "always showing generosity toward Nepal", Gajurel said it was Nepal’s weakness for failing to reap the benefits from China’s prosperity.He claimed that if more border points were opened with China, Nepal would have access to abundant opportunities. "Nepal will be flooded with tourists if we can attract only five per cent of Buddhist tourists visiting Lhasa to Lumbini," he claimed.

CPN-UML Chairman Jhalanath Khanal and Nepali Congress Vice-President Ram Chandra Paudel underscored the need of exploring business opportunities with China to reap the benefits from the northern neighbour’s fast economic growth.

< class="text11verdana">Source:, August 2, 2012.

< class="heading12boldGeorgia">Secretary appointment row

The caretaker Government of Prime Minister Baburam Bhattarai landed in fresh controversy over the appointment of a junior officer to the post of Chief Secretary. Four secretaries tendered their resignation on July 30, expressing dissatisfaction over the appointment of a junior secretary to the post.

Home Secretary Sushil Jung Bahadur Rana, Election Commission Secretary Shankar Koirala, Information and Communication Secretary Abindra Kumar Jha and Law Secretary at the Prime Minister’s Office Trilochan Uptery resigned a day after the Cabinet decided to promote Lilamani Poudel as the Chief Secretary.

The disgruntled secretaries claimed the decision to promotePoudel was not consistent with Article 19 of the Civil Service Act. They were laying claims to the top post. Koirala was the senior-most among the 13 candidates vying for the post.

< class="text11verdana">Source:, July 30, 2012.

< class="heading12boldGeorgia">Permission for weapons’ transit

Pakistan and the United States signed into an agreement a Memorandum of Understanding (MOU) on the reopening of NATO supply routes through the country. Under the deal, Pakistan will not levy any transit fee and the United States will pay a customs charge of $250 per container. Furthermore, cargoes will be allowed to transport food, medicines and items of daily use to allied forces fighting in Afghanistan.

The agreement replaces the existing arrangements for the passage of NATO supplies through the country into neighbouring Afghanistan. According to the deal, Pakistan will allow the NATO convoys to travel into landlocked Afghanistan till the end of 2015. Islamabad agreed to reopen the NATO goods on July 3 after the routes’ longest suspension in the ten year war in Afghanistan.

< class="text11verdana">Source: The News International, July 31, 2012

< class="heading12boldGeorgia">Lahore blast injures 20

Two separate remote controlled blasts injured at least twenty people in Badami Bagh Fruit Mandi of Lahore. According to the reports the first blast took place at the entrance of the market and the second took place at a nearby truck stand.

Emergency was imposedon all hospitals of the city. Police and other security agencies have cordoned off the area and an investigation is under way. Rescuers were reaching the site from all over the city.

< class="text11verdana">Source: Dawn, August 1, 2012

< class="heading12boldGeorgia">ISI chief to visit US

ISI chief Lt-Gen Zaheer-ul-Islam would hold talks in Washington with his CIA counterpart David Petraeus. The drone strike is expected to be a major agenda of the meeting. Islamabad in fact has been increasingly vocal in its public opposition to the drone attacks.

This would be the first meeting between the spy chiefs amidst persisting tension between the two countries. Mr. Islam is also expected to drive down to the Capitol Hill to meet top Congressmen, in particular the members of the intelligence and the foreign affairs committees.

< class="text11verdana">Source: The News International, July 30, 2012

< class="heading12boldGeorgia">Law and order bad in Balochistan

Interior Minister Rehman Malik said that the banned outfit Lashkar-e-Jhangvi and the Balochistan Liberation Army (BLA) were responsible for the deteriorating law and order situation in Balochistan. He further said that the international forces have prepared a complete road-map to disintegrate Pakistan and the plan is being implemented through these groups.

Citing some terrorist activities in the Province, Malik said that the BLA has claimed responsibility for all the incidents. In 2012, they have killed 138 Frontier Corps personnel, eighty nine police personnel and 872 civilians and injured 1,177 people

< class="text11verdana">Source: The Express Tribune, August 3, 2012

< class="heading12boldGeorgia">Banks to operate in India

The central bank has allowed the National Bank of Pakistan (NBP) and the United Bank Limited (UBL) to open branches in India, underlining the steady progress in improving economic and trade ties between the two countries.

The Indian Government’s decision of allowing Pakistani investments is being widely hailed on both sides of the border by businessmen and industrialists. They describe it as a big leap forward for the enhancement of bilateral trade and investment.

< class="text11verdana">Source: The News International, August 3, 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: Ankit Arvind)
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.


N. Sathiya Moorthy

N. Sathiya Moorthy

N. Sathiya Moorthy is a policy analyst and commentator based in Chennai.

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