Power And Dollar

Why Can’t America Happy Talk With Pakistan And Save 2010 Election?

Did anyone foresee that US-India relationship has an impact in 2010 election?  Or that it may cost $20B annually?  US Secretary of State Clinton is visiting Pakistan for three days to have a frank and open discussion and is in no time to have a “happy talk”.  Pakistan is the most important ally to US in the anti-terrorism war.  Therefore, US should be happy to have such an important ally and Pakistan should happy to see it is an important ally to the most powerful country on earth.  What made this strong Pakistan-US relationship to the point where there is no time for happy talk?  What sours the relationship?  Is US able to fix it?  Is US going to find a new friend?

The sore point is about the future of Afghanistan.  US want to remove terrorist heaven in the area and be done with it.  The core interest of Pakistan is its relations with India.  The US’ version of the Afghanistan future is not advancing Pakistan’s interests with India. 

Pakistan, relative to India, has no strategic depth.  Of all its fronts, Afghanistan is the only front where Pakistan can develop, cultivate and incorporate as Pakistan’s back.  That was why Pakistan would have supported US’ interests in Afghanistan during the Soviet Union’s Afghanistan invasion and created resistance forces where Pashtuns, Pakistanis cousins, had the controlling stakes.  If US’ version of Afghanistan is to dilute the influence of Pashtuns, open Afghanistan to more international players (say India) or US itself develops a stronger ties with India and marginalizes Pakistan as a result, then this ally relationship may not be simply a bargaining chip for Pakistan, but actually may become contrary to the self interest of Pakistan. 

US have developed an undisputable interest with India in the eyes of Pakistan.  Both India and Pakistan have nuclear weapons (not just capability, unlike Israel).  However, US scold Pakistan and promise to assist India to develop civilian nuclear abilities (Hyde Act).  Of course, US see India as a counter weight to China.  However, in doing so, US are compromising its anti-terrorism objective by alienating Pakistan. 

If India serving as a counter weight to China is more important than losing Pakistan, then can US find a replacement ally in the area to fight terrorism?  Ironically, the only player adjacent to Afghanistan available in the area is China.  All other countries are either unavailable (Is Iran available?  At what price?) or they have their own problems to deal with, say Turkmenistan, Tajikstan, Uzbekistan.  Do these countries listen more to Russia or China since they love their Shanghai Organization so much?  Do US want to invite China to extend its influence to Afghanistan?  Or have US ever invited China to play in Afghanistan?  Can US impose this arrangement to Pakistan, i.e. can US tell Pakistan to fight a war and strengthen Pakistan’s nemesis at the same time?  Worse, what if this arrangement actually is eroding the supporting base of the Pakistan governing elite?

More likely than not, Clinton’s trip means this relationship management has gone beyond the authorities of Special Representative for Afghanistan and Pakistan Richard Holbrooke.  If this frank and open discussion is meant to be a give and take negotiation, then we can wait and see if a resolution will come.  If this frank and open discussion is meant for Pakistan to rant and move on to live with this arrangement, then this military campaign in Afghanistan will drag on as other NATO allies plan to return home.  If Clinton’s trip is meant to facilitate Obama’s final decision on Afghanistan’s troop level, then considering its fiscal policy consequences and electoral consequences in 2010 and possibly 2012, Clinton is actually carrying one heavy responsibility.


October 30, 2009 Posted by | Afghanistan, Current Events, election, Election 2010, Hillary Clinton, India, politics, wordpress-political-blogs | 1 Comment

Zimbabwe Crisis: Is It About Democracy?

Zimbabwe crisis has been going on for months.  US is not interfering with force since Zimbabwe involves no strategic resources.  In a way, most of the African leaders are supporting Mugabe, even though an unstable Zimbabwe is not to their interests.  Whose interests are at stake?  What is this debate about?


The strongest voice against Zimbabwe’s Mugabe is Britain.  Why?  Since Mugabe started its land reform, Britain suffers the greatest risk in Zimbabwe.  Three quarters of the most fertile land Zimbabwe are held by British descent, who are citizens of Britain.  They control a great portion of the economy, as well as livelihood of the citizens.


A land reform is inevitable.  It was only a matter of time and approach to the reform.  Mugabe’s land grab was brutal.  However, most of the African nations see the reaction to Mugabe’s regime as a return to the colonial time and a refusal to wealth distribution from colonialists to Africans.   


That is why African Union says it is an African problem.  Even India will not boycott cricket against Zimbabwe.  China and South Africa both blocked the UN sanctions against Mugabe and his relations.  Some even considered him a hero.


This is not a debate about democracy promoted by the west and the corruption and dictatorships supported by third world countries like China.  This is a debate of former colonialists protecting their interests and developing countries’ elites choosing their own path to solve their problems.  

July 3, 2008 Posted by | activism, advocacy, Africa, Current Events, election, 非洲, India, opinion, politics, wordpress-political-blogs | 1 Comment

Where Are The Teeth Of Russia-China Agreement?

How to assess the impact of the Russia-China anti global missle defense agreement?  This anti global missle defense agreement produces no action.  The key will be India.  How can US protect its interests? 


Both Russia and China do more business with the West (United States) than with each other.  This anti global missle defense agreement is a symbol.  However, China is the first overseas trip for the new Russian President.  This is also a symbol.  But this symbol is carried with action: the first visit.


Heads of states visit overseas after inauguration, no different than you meeting your peer managers after your promotion or you meeting your neighbours after your move.  The thing to watch is the order of the visits.  The first one is China means China is now the important country to Russia.  


Other than action, the next thing to check is: are there incentives to substantiate the agreement?  Or there disincentives to substantiate the agreement?  Given US is the biggest trading partner of China and Russia takes up only 12% of that US-China trade, any action will come with only political will without popular support.  Therefore, it will be a long process for the two countries to build up the substance.  Russia-China trade is focused on very few items: Russia exports heavy industrial products, especially with technology transfer; and natural resources.  China exports everything it manufactures, no different than what it does to US or Mozambique.


Following that, are China and Russia looking for more friends to join this “multi polar” tent?  If so, then they acknowledge that they alone cannot accomplish that goal at this time and they need help to dilute the US influence.  China is taking that move already. 


India is an observer in Shanghai Cooperation Organization (founded in 1996) while China is an observer in South Asian Association of Regional Cooperation (founded in 1985).  China is now considering having India as a full member so that India can participate in regional security matters.  Similarly, China wants to be a full member of SAARC. 


Where is the vested interest?

Both countries want to have more access to oil, be it from Iran or Sudan.  And they both see the United States as manipulating word oil supply.  


India sees China’s involvement in Central Asia as building up a thick and heavy pressure on India’s north.  If India becomes a full member, India will feel more secure and melts more ice.  India wants to focus on domestic economic issues and sees border issues against China and Tibetans’ movements as a liability.  


India also sees US support to Pakistan as a check on India.  Therefore, any US counter offer is met with skeptism.


Same for China.  China wants to be a member of SAARC so that it can get involved in the regional security issues.  This can be interpreted as a hedge against the instability of Pakistan.  However, by being more friendly with India, China will have it back secured from US containment.  Oil supply route will pass through a long series of friendly countries without fear of interruption.  Its ports at Pakistan and Myanmar will have no questionable threat agents in between.  For India, it can support anti global missle defense to the extent it does not affect its economic development.


China-India trade has been increasing by 50% annually.  There is enough domestic support to strengthen a political tie based on economic ties.  Therefore, this is a much easier route to strengthen the common interests than through Russia.  


For Russia, by being an important partner in Shanghai Cooperation Organization, Russia’s eastern front is a lot more secure that is west, when NATO refuses Russia to join.  And if India becomes a member, Russia will not have to worry about US building its base from Persian Gulf eastward.   


Therefore, the next thing to watch is: Will India want to play along? 


What can US do to protect its interests?


London has been getting a lot of foreign companies’ listing business in their London Stock Exchange.  By having a lot of investors owning the shares of the biggest Indian companies, English now have influence on the boards of the more influential institutions in India.  If US wants to be heard in India or China beyond its inter-governmental relationships, then one peaceful means to use the its superior financial environment to attract more companies to list their stocks in NYSE.  Most of the retail investors do not vote.  Board seats are held by institution investors, each usually with only a few percent points.  US has been the melting pot.  Melt them into US economy so that their companies see that their interest is the interest of the US.  

May 23, 2008 Posted by | China, Current Events, India, opinion, politics, Thoughts, wordpress-political-blogs | 5 Comments

India Still Has Potential

India held its last election in 2004 and due for another one in 2009 or earlier.  The party in power is Congress and they won primarily for their agenda for the lower castes and/or the poor.  India has been having great economic performance as well.  India still has potential to be exploited.  This potential can be achieved when the social integration of the untouchable is successful.  And investments in that area require a tacit knowledge. 


CNN made a mistake in using the word class.  It could have been a typo if class were used consistently through out its content.  However, class and caste are used inter-changeably in the content.  That seems to suggest the difference between caste and class is misunderstood.  Class can be ascribed, as Plato suggests.  Caste is innate.  


Prior to Congress’ victory, many foreigner investors considered the previous government led by BJP as more investor friendly.  This is to argue otherwise.  


BJP’s core value was Hindutva.  That was to ask: who is Indian?  That came as polarizing as Bush was to the States.  Yes the poor were ignored and that constituted as a block of votes for Congress.  However, investors need this much needed Congress for political stability is the first requirement for any investor into long term investment cycle.


Violence in the rural areas can be instigated by religion as well as by caste differences.  This is only one case that gets to the media.  


Labour upgrade is difficult because education is not as accessible to the lower castes as the upper castes, not necessarily just the untouchables.  Jobs, lending practices are sometimes not favourable to the untouchables in some areas.  


Although the federal government has strong affirmative action laws for the lower castes since the first legislature, social inequality continues.  And sometimes it can turn violent with great organizational support.  


Differences in religion can be just as problematic.  And with the separatist movement at the far corners, although calming down in recent years (or decades now), managing such a diversity requires great political skill.  


Having investments in that area requires all this local knowledge.  The current Congress is just as pro-economic growth as BJP.  In fact the current government is much better equipped than anyone else to manage growth in India.  They have a good finance minister from a major seaport of India.  They have a long history of governance.  In a country where they have strong regulation and a lot of oligopolies, this is an important asset.  The current government is also the party that can unite different castes, religion, promote peace in the region and continue its relationship building effort with its greatest perceived threat of China at the same time.  


April 30, 2008 Posted by | Current Events, economics, India, Investment, market, opinion, politics, stock, wordpress-political-blogs | 22 Comments