The Timing of Eric Holder's Resignation

The resignation of United States Attorney General Eric Holder just before Indian Prime Minister Narendra Modi is to be a guest of the White House can be read either as a move to close the chapter on the Khobragade affair – or not, depending on his replacement.

Holder’s departure will go beyond the mere verbal expressions of regret that have emerged from Washington about the incomprehensibly severe and degrading treatment of India’s Deputy Consul General in New York last December: on a charge of exaggerating her maid’s income on an official form she was arrested in front of her child’s school, handcuffed and strip searched.

It could allow a revival of warmer relations.

However, if Holder is replaced by Preet Bharara, the US Attorney in New York who Indians perceive as primarily responsible for what happened, the resignation would take on an entirely different color. (Bharara himself has said in a speech at Harvard that the initiative came from the State Department.)

No matter what the reality, if a Bharara nomination is announced when Modi is in Washington it will be an undeniable insult and the consequences could be long term and disastrous, especially if it pushes India into a joint Russian-Chinese effort to end America’s global dominance by gutting the dollar as the international reserve currency.

A coordinated move in Eurasia to reduce holdings of the US$ -- a move often touted as desirable by people of a particular political color -- will undoubtedly cascade into an economic tsunami that will leave no country untouched.

As such a gargantuan collapse will set off a no-holds-barred global power struggle it would most probably include major terrorist attacks and the uncontrolled spread of ebola; it could be a cataclysm worse than any world war.

Keep your fingers crossed.

What Now for India?

I was dead wrong about the outcome of the elections, but not in my trepidation about what is happening in India.

A great flood of money has washed through our electoral system, empowering forces that are rooted in the divisive communal politics the British introduced during the colonial rule and have fostered through proxies since independence.

Where that money has come from and what it will require the new government to do should be of acute concern to Indians.

All indicators signal that we are headed for a period of undisguised crony capitalism that will see foreign interests in the driving seat, acting through major Indian corporations.

Those alliances are by no means secret, and some are notorious, especially RIL's hookup with BP that has given the most predatory of the energy majors a role in the pricing of our sovereign natural gas resources.

The association of the TATAs with British interests dates back to the opium trade era of colonial rule, and its diversification in recent decades seems to have included, most obviously in the controversy over the allocation of 2-G spectrum licenses, a shadowy role in launching the corruption scandals that tarred the UPA government in its final years.   

The Ruia Brothers of ESSAR and the Vedanta-Cairn India combine also have an earned notoriety.

Beyond the interests of these usual suspects, we can definitely expect the new government to push for foreign/private investment in the Defense Sector, and the forging of an Indian "military-industrial complex."

Such a combination of forces first emerged in the United States after WW-II, and during the Cold War it spread to all major industrial countries, including supposedly "Socialist" countries.

Once created, the arrangement has proved impervious to democratic control, for it thrives on creating and manipulating violent international confrontations, using intelligence agencies subverted from their legitimate roles. "National security" is used to trump all efforts at democratic control. 
 
On the social front, we can expect to see big business profit from an unprecedented alienation of land from small farmers and inattention to environmental concerns.

The outlook overall is thus grim indeed for India, unless by some miracle Narendra Modi in power jettisons those who financed his rise and implements a truly democratic and indigenous agenda. 

The Congress in Opposition

The prospect described above offers the decimated Indian National Congress a golden opportunity to rebuild itself as a broad-based representative of national interests.

If a BJP government follows the negative trajectory described above, it will have to step rough-shod over the interests of millions of Indians, especially small farmers and the economically powerless. It will have to misuse the intelligence and police services.

If the Congress sets out to give a voice to those injured by such policies, it can expect to reap a rich dividend at the next general elections.

To do that, it will have to organize a national network to report on what is happening, and perhaps start its own media organizations to provide fair coverage.

At the very least it should have a website to publicize what is happening in the country.

Intelligent use of social media -- which it seems to have not done at all this time around -- should help the rebuilding process.

The Long View

In the long view of history, the particulars of who, what and why of this election are likely to disappear in the face of one overwhelming fact: a single political party has once again become the representative of the nation as a whole. 

The fact that regional caste-based politics have been shown the door is a major positive development. 

The end of the myth about a "Muslim vote bank" is also something to applaud. 

Perhaps that will begin the process of bringing to an end the regressive idea that religion can be the basis for electoral politics, allowing organizations such as the RSS to reinvent themselves and become truly national in identity and purpose.

 

Short the Market!

As the Sensex and Nifty surge to all-time highs and giddy pundits predict that Narendra Modi’s projected rise to the Prime Ministerial gaddi will send the markets into the stratosphere, I would like to hand out an outsider tip: short the market!

Most of the money inflating the Indian indices has come from foreign institutional investors (FIIs), and if reality bites on the 16th, we can expect a torrid flow back and a radical correction in the markets and the value of the Rupee.

That will create a sense of panic and doom and lay the whammy on those trying to put together a non-Modi government.

Perhaps that, rather than the fabled “animal spirits” of foreign investors, is behind the ballooning markets.

Look at it from the point of view of the Powers that be, the Permanent Members of the UN Security Council.

The United States and China are engaged in a delicate pas de deux, the one pushing for a process that would bring in a multi-party democracy in Beijing and the other insisting that the existing Beagle Boys gang is best for the Chinese people.

(I think Michelle Obama and kids pushed the American message with great delicacy on their recent trip to China but had little success – even after the Pentagon tried to assuage Chinese fears of losing Tibet by flicking the kill switch on one of our B-15 troop transports. It also seems to me that Beijing’s mad dog behavior towards Japan and Vietnam is intended to signal its readiness to take off the gloves.)

At this suspenseful stage, neither Beijing nor Washington wants a regime in New Delhi capable of an assertive foreign policy.

Britain, France and the Russian Federation all have important arms supply relationships with India that would not be improved by having a strong and stable government in Delhi.

Additionally, Britain’s hopes of investing in India its ill-gotten trillions from organized crime, especially the “illicit drugs” trade out of Afghanistan, depend on weakness in Delhi.

Going by recent developments, I think the main conduit for those investments is going to be the TATA group. Its Chairman emeritus has just been given a knighthood of “the order of the British Empire” – yes, the same one that killed about 500 million Indians in less than 200 years – and his successor’s background is in infrastructure (the sector into which most FII money will probably go). Also,Voltas, a TATA company, continues to signal that the Brits will not want for toadies when they come, again.

In combination then, my tip to savvy investors is to short the market for the aftermath of the 16th, and go long on TATA Infra.

Apocalypse 2009

This post is covered by the "January License" which allows a journalist to prognosticate freely about the coming year without being called a doofus if things don't turn out exactly as he said (or even if they turn out to be dead wrong).

Barack Obama warned the American people last week that the economic situation would get much worse before it got better. He did not say how exactly things would get worse. The general expectation is that the current economic downturn will turn into a severe recession, maybe even a prolonged 1930s type Great Depression.

I think not. Something much more apocalyptic might be in the cards. Here's why.

Ever since a German academic, Oswald Spengler, published The Decline of the West in the wake of World War I, fear of losing global dominance has been an active concern of European-American strategists. In the United States in recent decades, it has been regularly addressed in official and unofficial reports.

In 2005 the US Central Intelligence Agency produced a report, Mapping the Global Future, in which a group of senior intelligence analysts concluded that the rise of China and India would have as great an impact on world order as the emergence of a united Germany in the 19th century, and that of the United States in the 20th. The report projected that by 2010 the Chinese economy would be the second-largest in the world, after the United States. While the Indian economy would be smaller, New Delhi would be a significant influence in Central Asia, Iran, and the Middle East, all areas of critical interest to Washington. The only thing that could prevent the rise of the two countries, the report said, was "an abrupt reversal of the process of globalization or any major upheavals in these countries."

That's exactly what will happen in 2009; and this is how I think it's going to happen.

The United States has an unsustainable burden of debt, personal, corporate, and official. In addition to an unprecedented level of individual credit card debt and the trillions Washington has raised from foreign creditors through the sale of Treasury Bills (to meet massive budget deficits), Wall Street has a little understood burden of "collateralized debt obligations," estimated to be over $3000 trillion. (Total world GDP is some $60 trillion).

With personal bankruptcies, home foreclosures and business failures all at record levels, the country is headed into a deep recession that will collapse all debt pyramids. When that happens, there will be a downward spiral of all prices, commodities, manufactured goods, services and real estate. Even the most efficient businesses will find it impossible to make a profit. As businesses go under, millions of people will be thrown out of work, causing further demand destruction and accelerating the downward spiral. As in the Great Depression of the 1930s, world trade will collapse and globalization as we have known it will stop, and perhaps even go into reverse if nations seek unilaterally to protect their markets.

The path out of the crisis will be as hair-raising as the descent into it.

To escape deflation the United States will have no option but to deliberately hyper-inflate the dollar (by printing its currency without restraint). That will collapse its value at home and abroad and cause unprecedented socioeconomic turmoil. The life savings of millions of retirees will become worthless in short order; workers on fixed salaries will find it impossible to make ends meet; the unemployed will have to depend on soup kitchens. World trade, monetary and financial systems will be reduced to chaos as no market will be able to function properly.

The effect of all this will be quite different in each of the world's regions. The United States itself will emerge cleansed of debt and internationally more powerful than before the crisis.

Western European countries, with their well-developed capacity for mutual cooperation, will probably be best able to fend for themselves (although it would be a minor miracle if the Euro survived). Eastern Europe, Russia and the Central Asian republics of the former Soviet Union will remain extremely vulnerable to Western pressures, and most will probably be shorn of much capacity for independent international action. African and Arab countries will also be more firmly under the heel of those who want their resources. The Asian situation will depend on two countries mainly, China and India.

China
China will probably face the most severe challenges, for its economy is deeply dependent on Western investments and markets. With about 40 to 50 per cent of GDP tied to exports; a deep global recession will hit it hard. Millions of people are already out of work, and as Xinhua warned in an unprecedented editorial last week, 2009 will see an increase in "mass incidents" that would "test even more the governing abilities of all levels of the [Communist] Party and government". In Xinhua jargon "mass incidents" means public demonstrations and riots. Peasant rebellions.

Economic pain will translate readily into a political threat to Beijing because the Chinese population is deeply divided between the rural poor, who number nearly a billion and have a per capita income of about $400, and an urban population of about four hundred million, with a per capita income more than ten times as much. The latter are predominantly members of the Communist Party, their relatives and friends, and are cordially hated by those who have not been able to milk the system. Chinese history is replete with peasant rebellions leading to the withdrawal of the "mandate of heaven" from the ruling elite; in 2009 we could see that ancient drama replayed.

India
With less than 10 per cent of GDP linked to the export sector India is much less vulnerable to foreign shocks than China. But the slowdown and possible reversal of globalization will hit the country hard. In addition, we can expect intensified efforts to destabilize the country by the Pakistan-British complex of ISI-MI6 "jihadists" and "Naxalites." Assassination of key politicians during the forthcoming elections should be expected. (By "key" I do not necessarily mean important. If a "North Indian" kills Raj Thackeray, the fallout would be disastrous for national integrity.)

We can also expect an intensified British effort to drive Brand India into the dirt. (Or should I say shit, in the wake of Slumdog Millionaire?) The rape of a British teenager in Goa last year is to be made into a film by Warner Bros. It's to be called Goa. No word yet of the filmy future of 2008 Booker prize winner Aravind Adiga's sulphurous dump on India, but Salman Rushdie's Midnight's Children is to become a Hollywood product. "Sir" Rushdie's novel of India-as-freak-show-and-failure is back in the elimelight, selected as the "Best of the Bookers;" better than Kiran Desai's tale of post-colonial angst and general hopelessness, The Inheritance of Loss, and Arundhati Roy's caste-is-king-in-Kerala story, The God of Small Things. (All the Booker-prize winning Indian novelists portray our country from such a pucca British viewpoint and are so unformly anti-Indian in attitude, that I wonder sometimes if they've been ghostwritten.)

Asian Responses
Both China and India can be manipulated only with the connivance of their own nationals. In China's case the collaborators have been members of the overwhelmingly corrupt Communist Party. If the CP tries to remain in power by using violence (2009 is the 20th anniversary of the Tienanmen massacre), it could set off a process that will destabilize much of Asia. If out of the chaos a xenophobic demagogue comes to power with the backing of the military, we could be headed back to the days of Mao. Of course, the CP leadership (a national gathering is set for March), could decide to defuse and manage the rural unrest by calling multiparty elections and arranging for a smooth transition to democracy, but that would be a break from China's long tradition of leadership without vision or trust in the Chinese people.

In India the collaborators have been people hungry for success at any cost. They range from the habitually corrupt deal-makers in political parties who subvert the democratic system, to policemen without the integrity to do their job, to the deracinated Rushdies and Adigas who trash their country without thought of its strengths or achievements.

There is no simple policy prescription for this situation. Perhaps a first step would be for the leaders of India Inc. to sit down together and decide what they want done in the country. They bankroll the politicians and have the power, if they act together, to insist on minimum standards of performance in law enforcement, urban management and rural development. Reducing the British capacity to manipulate the Indian intelligentsia will take longer, but just acknowledging the problem might be a good first step. (More on this in a later post.)

Mumbai Postmortem

In all the comment and analysis that has followed the 26/11 terrorist invasion of Mumbai there seems to be a general consensus that jihadists sponsored by Pakistan's spy agency, the ISI, were responsible for the attack. The United States and Britain have energetically taken up this traditionally Indian view, and even China, a strong ally of Pakistan, joined in the unanimous call by the United Nations Security Council urging Islamabad to act.

Amidst this heartening consensus there is a niggling question that remains unaddressed: what has the ISI to gain from an attack on India at this time? Even the most die-hard India-haters in the ISI leadership must surely see that improved ties with New Delhi have eased the mounting pressures on Pakistan from a set of potentially disastrous problems that include terrorism at the hands of drug mafias pretending to be Islamists, and a national economy on tenuous life-support from the International Monetary Fund. In this situation it makes little sense for New Delhi to blame Pakistan for the Mumbai attack or threaten military action. No matter how "surgical" the strike on terrorist training camps, its only real effect will be to derail a peace process that is critically important to both countries. Which brings us back to the question: who benefits from the Mumbai attack?

For an answer we must look to Indian history, specifically to the creation of Pakistan at the time of Indian independence from British colonial rule in 1947. Though billed as a homeland for Indian Muslims, Pakistan was conceived by British policy-makers primarily as a tool to defend and promote their strategic interests in the region. That required animosity between the two newly independent countries, which was achieved by the conflict over Kashmir, initiated when both Indian and Pakistani armies were still under British command. (The assassination of Mahatma Gandhi at this time removed from the scene the major agent for peace.)

Pakistan’s Directorate of the Inter-Services Intelligence (ISI), which was established by a British officer serving as Deputy Chief of the Pakistani Army after the country's independence, has been a primary tool for manipulating the region. Set up to coordinate action against Indian forces in Kashmir in 1948, its primary aim has remained unchanged for six decades. However, its roles and capacities grew enormously during the Cold War, when Pakistan emerged as a key Western proxy. In the 1950s and 1960s it was the base for American U-2 surveillance aircraft operating over the Soviet Union and China, and in the 1980s it became the staging area for the Mujaheddin, with the ISI serving as the conduit for massive financial and arms aid from the United States. After the end of the Cold War and the collapse of the Soviet Union, Pakistan became the pivot of a Western effort during the 1990s to control the rich resources of the newly independent Central Asian republics. That involved the ISI in promoting jihadist groups, organizing the Taliban takeover of Afghanistan, and overseeing the rise of Al-Qaeda.

During most of this period British and American interests in South Asia were coherent, but that began to change after 1998, when, in the wake of the Indian declaration that it had become a nuclear-weapon State, the United States initiated a major revaluation of its policies towards the region. The Indo-US strategic relationship that emerged, and American interventions in Afghanistan and Iraq, accelerated the growing UK-US divergence; Tony Blair’s “poodle” reputation and his resignation from office were rooted in his attempt to continue traditional support for Washington.

The transatlantic split became more visible in January 2008 when London failed to gain firmer control of Afghanistan by having one of its former intelligence operatives take charge of the UN, EU and NATO operations in the country. Word of the appointment was leaked at the UN, and generally taken to be a fait accompli till Afghan President Hamid Karzai refused to endorse it; his opposition was a clear signal that Washington and London were not on the same page. At just about the same time, the Karzai government told two senior British officials in Afghanistan, one working for the UN and other for the EU, to leave the country within 48 hours; they had been conducting unauthorized negotiations with the Taliban insurgents.

What is the reason for the US-UK split over South Asia?

The cause is not ephemeral policy; it is rooted in basic differences in the nature of American and British power. The United States is a large country with a continental economy, global military reach, and a fundamentally democratic society; it is the dominant force in international affairs, confident of meeting any challenge to its power. Britain is a medium/small country with an unspectacular economy, governed by a social/political elite that grew rich on the criminalities of the colonial era, including the slave and opium trades, and the economic strangulation of dependent territories. Because of that, and despite centuries of parliamentary democracy and a free Press, the British impact on the world has been fundamentally undemocratic; globally, Britain’s power now continues to depend on its capacity to subvert and manipulate developing countries, especially the resource-rich countries of Africa, and the populous countries of Asia.

The new Indo-US strategic relationship that has emerged over the last decade has thus been inherently threatening to Britain. So is the more recent détente between India and Pakistan. Add Afghanistan to the mix, and a war directed at the drug lords who finance “Islamic terrorism” – the prime instrument for manipulating societies across Asia and Africa – and we have panic time for the remnants of imperial Britain. Over the last decade, just as all these developments were in train, terrorist attacks on India, Pakistan and Afghanistan have risen to an unprecedented crescendo. All three governments would do well to take seriously the declarations of innocence by the official authorities of their neighbors. They should also look to British proxies within the region if they want to defend their people from gratuitous assaults.

Stuff From The Financial Times

Sorry for the break in postings. Trying to get a book written.
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The Financial Times got my attention with a promotional letter with the following information:

PetroChina pushes past Exxon Mobil to become the world's largest listed energy company.

General Motors now sells 59 percent of its vehicles overseas.

China and India account for 45 percent of global coal use.

Royal Dutch Shell announces plans to produce biodiesel from algae in two years

The United States is borrowing at the rate of $800 billion a year.

The Taj Mahal and other Indian heritage sites now reuire tourists to pay in rupees, rather than in dollars.

An article by Meghnad Desai in the 6 June issue of the paper itself had more interesting stuff. Desai says the bubble in oil prices has nothing to do with increased demand from India and China. It is caused entirely by hedge funds pouring speculative money into the New York Mercantile Exchange, which was originally created so that people who actually bought and sold oil could insulate themselves against volatility in prices. The market is thus doing exactly the opposite of what it was meant to do.
Publish Post

Musharraf on the Skids -- or Not

As Pakistan's political parties trade and barter to form provincial and central governments that will accommodate egos and interests long muffled under military rule, former strongman Pervez Musharraf is the subject of much speculation. Is he on the skids or not? Indications that his role and future are in play come from all directions.

The main opposition parties would love to see him go softly into the good night, and that might happen even without a formal move to impeach him. For one thing, the military is reported to have made clear to the politicians that they are not wedded to Musharraf. So has the United States. Deputy Secretary of State John Negroponte told the Senate Foreign Relations Committee on Thursday that it was Pakistan and not Musharraf that was "indispensable" to combat terrorism. Dawn reported that with the headline "Bush govt distancing itself from Musharraf: New Pakistani govt in two weeks: Negroponte."

Anwar Iqbal reporting from Washington focused on Mr. Negroponte's view that: "We cannot tell the precise colouration or individuals” who will be included in the new government but “we hope that they will be inclined towards moderation. ... We hope we will be able to work with them as well as, if not better than, we have worked with those in the past." It was, Iqbal noted, "the first time since the Feb 18 elections" that Washington had "signaled the Bush administration’s desire to distance itself from President Pervez Musharraf."

Decoding Kosovo's "Independence"

The declaration of independence by the province of Kosovo in Serbia is like the proverbial Buddhist onion: every layer of reality (or illusion) peeled away reveals another, till finally, at the heart of it one discovers the powerful void, sunnata.

The outermost layer presents a picture of the Muslim Kosovars escaping predominantly Christian Serbia.

Peel that away and you find a remnant of the Cold War: Britain, France, Germany and Italy speedily recognized Kosovo because it weakened Serbia, a traditional Russian ally (both are Slavic).

The next layer down is the revenge of the Hapsburg empire (in the dissolution of which the Serbs had a significant role); Kosovo is the final act in the implosion of Yugoslavia, which was set off by German recognition of Croatian independence.

Deeper still is the animosity left over from the Christian schism that separated the Church of Rome from the Eastern Orthodox, and under that are layers of hostility dating back to the tribal confrontations of Teuton and Slav.

Peel away those final layers and at the heart of it all is the ineffable, all powerful nothingness of manipulative politics, Washington's masterful hand, introducing into its emerging rival, Europe, a country that will be sick and backward, violent and undemocratic, a perpetual worry and drain.

Anyone who feels that this is all so much waffle should read the lead article in the latest issue of Foreign Affairs (March-April 2008). It is on "The Clash of Peoples" by Jerry Z. Muller, a professor of history at the Catholic University of America. He argues that everywhere but in the United States "ethnonationalism" has been on the march, and will not be denied, especially in the developing world, where States are "recent creations and where borders often cut across ethnic boundaries." There is "likely to be further ethnic disaggregation and communal conflict," he prophesies, much in the vein of Samuel Huntington, who predicted the "Clash of Civilizations" and the "bloody borders of Islam" just as the end of the Cold War threatened to bring about a period of world peace.

And what does Professor Muller recommend be done about the distressing prospect he foresees?

He notes that "once ethnic antagonism has crossed a certain threshold of violence, maintaining the rival groups within a single polity" is increasingly difficult. Partitioning countries would be "the most humane lasting solution." The "challenge for the international community in such cases is to separate communities in the most humane manner possible: by aiding in transport, assuring citizenship rights in the new homeland, and providing financial aid for resettlement and economic absorption." The "bill for all of this will be huge," Muller declares in conclusion, "but it will rarely be greater than the material costs of interjecting and maintaining a foreign military presence large enough to pacify the rival ethnic combatants or the moral cost of doing nothing."

Muller does not mention other reasons for creating small and bloodied rump States: they can be easily manipulated to do whatever the "international community" wants. In the case of East Timor, which was liberated from Indonesia, Australia quickly nailed down an agreement to drill for offshore oil (which Djakarta had long resisted). In Kosovo there is to be a major new American military base.

Suicidology

There have been a number of reports that in 2007 some 17,000 small farmers in India committed suicide. P. Sainath of The Hindu in Madras has been writing about the growing number of farmer suicides for several years, and his theme has been that the main cause of these deaths is economic distress, which he ascribes to globalization. According to him, small farmers borrow money to buy commercial fertilizers and improved seeds marketed by transnational corporations like Monsanto; when the expected high crop yields fail to materialize, off they go to drink pesticide or hang themselves. Among certain circles in India it is now an article of faith that globalization drives the poor to suicide.

I don't think corporate-driven globalization is good for the societies involved or for the natural environment; economic decisions driven by the need to maximize profits for a small elite cannot work to the general good. But the thesis that the rising rate of suicides in India is linked to globalization seems far-fetched to me. It is far more likely that the real reasons are embedded in the stresses generated by the overall economic and social development of the country, a process much broader than globalization. It is also possible that the increased attention in the popular Press is a factor in the rising rate of suicides (up from 5 to 11 per 100,000 since the 1960s); in fact, the World Health Organization advises caution in Press coverage because of the danger of copy cat suicides.

WHO reports that there were some 1.5 million suicides globally in 2004 (the latest year for which statistics have been compiled); the highest rate is in Eastern Europe, and globally, men are four times more likely to off themselves than women.

Global statistics are probably an underestimate, for few African countries report suicide statistics,and even where statistics are more reliable, there is a tendency towards under-reporting. In the United States, which does not officially report national suicide rates, the American Association of Suicidology (www.suicidology. org) estimates it to be the same as in India, 11 per 100,000.

US State Department Now Hiring

According to the Associated Press today, the Bush administration's 2009 budget proposal envisions adding 1,076 jobs at the State Department and diplomatic missions in one of the largest one-year boosts to the ranks of the foreign service.

It seems the State Department is facing a critical shortage of diplomats, and many embassies are operating at 70 percent of their desired staffing levels. Some 10 percent of vacant positions remain unfilled this year because of a lack of personnel.

The new positions will include 450 new jobs intended to free diplomats for intensive language and national security training; 350 posts for a new "Civilian Stabilization Program" aimed at improving conditions in post-conflict zones; 200 diplomatic security agents; and 50 political advisers for military commands.

Signs of Growing Power Struggle in Asia

There are more signs of a growing but still murky Euro-US power struggle centered on Asia (for the background to which see earlier post on Anglo-Saxon Empire). Items:

• President Bush on a tour of the Middle East made nice with a series of Arab tyrants. In Saudi Arabia he brandished a ceremonial sword and walked hand-in-hand with the Crown Prince. The New York Times reported that in Egypt Bush "lavished praise on President Hosni Mubarak ... emphasizing the country's role in regional security while publicly avoiding mention of the government's actions in jailing or exiling opposition leaders and its severe restrictions on opposition political activities." Other stops on Bush's tour were in Bahrain, Kuwait, and the United Arab Emirates.
  
• President Sarkozy of France has just signed an agreement with the United Arab Emirates to establish a permanent French military base there. It will have about 500 air, naval and ground personnel. They will gather intelligence and provide "security," ostensibly against threats from Iran. In Saudi Arabia Sarkozy lauded the country for its strong religious foundation. In oddly uncharacteristic remarks for an icon of middle-age gallic libido and sophistication, Sarkozy spoke of God "who does not enslave man, but liberates him, God who is the rampart against unbridled pride and folly of men." He too left with a Saudi sword.
• In Afghanistan, British politician Paddy Ashdown is set to take over as the UN Secretary-General's Special Representative AND political head of the multinational NATO operation in the country. (Although Afghan President Hamid Karzai has reservations on the appointment, it is expected to be announced shortly.) This is the first time the UN and NATO will field a joint head of mission. It is especially significant, coming on the heels of the expulsion from Afghanistan of a senior British political officer for having unauthorized negotiations with the Taliban.
  
• Ashdown will have under him a newly appointed commander of the 40,000-strong NATO force in Afghanistan: General David McKiernan, currently commander of US forces in Europe. In 2003 McKiernan oversaw ground operations in Iraq when a US-led invasion toppled Saddam Hussein.
  
• The US, which has 14,000 of its troops serving under the NATO flag and another 12,000 separately, has been critical of the performance of the European troops in Afghanistan. Earlier this week US Defense Secretary Robert Gates drew the ire of the Dutch government by saying that its troops in the country were not trained for counter-insurgency operations. The NATO troops in southern Afghanistan, where the Taliban are resurgent, are mainly Dutch and British.

In some ways the situation in Asia is reminiscent of the early days of colonialism, when various European Powers contended for influence by establishing bases and alliances with local regimes. It also harks back to the time towards the end of World War II when President Franklin Roosevelt began to pressure the Europeans to get out of Asia. In the two decades after that war European colonial rule in the region was effectively ended; the US became the dominant extra-regional Power, relying on the British to provide on-the-ground know-how and contacts. Pakistan's Directorate of Inter Services Intelligence (ISI), which the British established in 1947 during their management of the first "India-Pakistan war" over Kashmir, had a key role in that scenario. It helped organize the shock troops -- the Mujaheddin of Afghanistan -- to fight the continuing "Great Game" to contain Russian power; it helped manipulate the oil-rich Muslim world through the Organization of Islamic States; and it helped destabilize Non-Aligned India. In the process it parented the South Asian variant of "Islamic terrorism," and became the God-Father of the drug trade out of Afghanistan. The multi-billion proceeds of the drug trade made the ISI and the terrorist movementsit supported independent of all of Pakistan's governmental structures, setting the scene for the current scene of turmoil in the region.

The power struggle now shaping up marks the end of the era of Europe's unquestioned acceptance of US supremacy. With India, China and Russia as new power factors in Asia, with the ISI as a wild card, the Europeans are making a bid to reassert their independence. Buckle your seat-belts.

Anglo-Saxon Empire?

The latest issue of Foreign Affairs (January-February 2008) has a review of "God and Gold: Britain, America and the Making of the Modern World," a new book by Walter Russell Mead. It is a kindly assessment, which is not surprising, for Mead is a resident scholar at the Council on Foreign Relations (CFR) in New York, the publisher of Foreign Affairs. A cartoon illustrating the review shows John Bull clad in the British flag relaying a baton to Uncle Sam in stars and stripes. The theme of the book is the importance of Anglo-Saxon world dominance.

Mead thinks "the biggest geopolitical story in modern times" is "the birth, rise, triumph, defense, and continuing growth of Anglo-American power despite continuing and always renewed opposition and conflict." The reviewer, Owen Harries, Editor Emeritus of The National Interest, observes that "Americans need to know how and why this has been the case -- not only to understand themselves fully but also to appreciate the nature of the world they have created and to cope with the problems it presents." To that worthy end, let me recall the infrequently told tale of how the baton of power really passed from Britain to the United States.

The story could appropriately begin with the American Declaration of Independence in 1776, but I'll give the Reader's Digest Condensed Book version here and begin it in November 1943. That was when the leaders of the United States, Britain and the Soviet Union -- still known then as the "Big Three" -- met in Tehran, Iran. Nazi Germany had begun losing the Second World War, and the meeting was to decide how best the Allies could push towards victory. For Roosevelt and Stalin the primary focus of the meeting was the war itself; Churchill had an additional aim: how to retain control of the British empire, especially the "jewel" in the imperial crown, India. It was a topic on which Churchill and Roosevelt had strong differences, but with Britain heavily dependent on American military and financial aid, there was little doubt whose views would prevail. As early as August 1941, America's traditional anti-imperialism found expression in the "Atlantic Charter" which set out the common aims of the two countries. It declared unequivocal "respect [for] the right of all peoples to choose the form of government under which they will live; and [the] wish to see sovereign rights and self government restored to those who have been forcibly deprived of them."

Churchill believed the Atlantic Charter did not apply to the British empire, but Roosevelt thought it did, and that made for rocky relations between the two. Mention of India, especially, infuriated Churchill. So much so that Roosevelt stopped raising the issue personally, leaving it to aides to assert that the British had to give way to the nationalist movement under Gandhi. As a result, Churchill had "come to hate Gandhi more than Hitler or Tojo" by one account, and wanted him dead. In February 1943, when the 74-year old Indian leader was on a 21 day fast in prison -- the entire nationalist leadership was in prison for most of the war -- the British Prime Minister sent a "most secret" encrypted message to the Viceroy in Delhi instructing him against any show of "leniency." The Viceroy assured his boss that he "felt no compunction" about letting Gandhi die. A later secret cable from Churchill demanded to know why Gandhi was "not dead yet." Roosevelt was so concerned about the situation that he sent a personal emissary to India, and when the Viceroy refused to let him visit the prison, the President instructed an aide to "bluntly" tell the British ambassador in Washington that "Gandhi should not be allowed to die in prison."

Gandhi survived, but his wife Kasturba died of "bronchitis" a month after the Tehran meeting. His private secretary of 26 years, the only person familiar with all of the Indian leader's intricate web of personal and political relationships, had died unexpectedly of a "heart attack" in 1942. Other imprisoned nationalist leaders, Stanley Wolpert noted in Nehru: a tryst with destiny, also suffered severely. Jawaharlal Nehru's brother-in-law died in custody of asthma, pleurisy and heart failure. Jayaprakash Narayan "was not killed in jail, but left it prematurely grey and in several ways physically impaired." Vallabhai Patel, the administrative pillar of the Congress Party, was "dreadfully ill" with a "clogged digestive system" that kept him in agony day and night, his requests for medical care ignored on the grounds of security.

At Tehran Roosevelt evidently felt it necessary to distance himself from Churchill and bring home to him that Britain was no longer a "Big Power." Amidst rumors of an impending assassination attempt FDR declined an invitation to stay at the British residency, opting instead for the hospitality of the Russian compound. Churchill's request for a private meeting with Roosevelt before the first three-way meeting was turned down. The president wanted to see Stalin first. While they met, noted Jon Meacham in Franklin and Winston (2003), "Churchill was stewing, his circle as worried as he was" especially after they "got wind of the colonial part of the conversation, including Roosevelt's advice to Stalin that it was not worth discussing India with Churchill." The next morning Churchill asked to have lunch with Roosevelt but was again turned down; instead, another US-Soviet meeting was held, at which, Churchill noted mournfully to an aide, "many important matters were discussed, including particularly Mr. Roosevelt's plan for the government of the post-war world."

At dinner that evening Stalin and Roosevelt took to ragging Churchill about their plans for post-war Germany, so infuriating the Prime Minister that he stormed out of the room in a rage. Seeing that Stalin was amused by Churchill's discomfiture, Roosevelt decided on the final day of the conference to try and establish rapport with the Russian leader by ridiculing Churchill. "I began to tease Churchill about his Britishness, about John Bull, about his cigars, about his habits" he recalled later. "It began to register with Stalin. Winston got red and scowled, and the more he did so, the more Stalin smiled. Finally Stalin broke out into a a deep hearty guffaw, and for the first time in three days I saw light."

Back in Washington, Roosevelt forwarded to "Dear Winston" a "your eyes only ... destroy after reading" memorandum that had been written at his request by a former Secretary of War, Major-General Patrick Hurley. Warren Kimball, editor of Churchill and Roosevelt: the complete correspondence (1984), noted that the letter and the memorandum typified the changes "in the Anglo-American relationship as postwar politics began to rival wartime strategy." The cover letter, in which Roosevelt breezily endorsed Hurley's "general approach to the care and education of what used to be called the 'backward countries'," was obviously intended to be salt in the wound, for the enclosure was a biting attack on Britain's imperial claims, focusing especially on Iran and its prized oil wells, then a British monopoly.

"It is the purpose of the United States to sustain Iran as a free, independent nation and to afford the Iranian people an opportunity to enjoy the rights of man as set forth in the Constitution of the United States and to participate in the fulfillment of the principles of the Atlantic Charter" the memo said. Washington would provide Iran with expert advisers to help it escape "foreign and domestic monopoly and oppression." That would be the model for "the relations of the United States toward all the nations which are now suffering from the evils of greedy minorities, monopolies, aggression and imperialism." The memo declared that the American people were fighting "not to save the imperialism of other nations, nor to create an imperialism of our own." The United States expected the war to end or "radically revise" the world order established by European countries. However, "British imperialism" seemed to "have acquired a new life" because of "the infusion into its emaciated form of the blood of productivity and liberty from a free nation through lend-lease." Woodrow Wilson's "policy for America in the First World War had been designed 'to make the world safe for democracy' and to sustain Britain as a first class world power." For many years that had been the "cornerstone of America's foreign policy; but an "effort to establish true freedom among the less favored nations, so many of which are under the present shadow of imperialism," would "inevitably run counter" to it. To warrant continued American support, Britain "must accept the principles of liberty and democracy and discard the principles of oppressive imperialism."

Roosevelt's vision of the postwar world had no chance of being realized, for he never recovered from the violent stomach upset that laid him low while at dinner on the second night of the Tehran Conference. Rumors of poisoning were quickly hushed up, but the president went into a slow and visible decline. On 28 March 1944 his regular physician sent him to be examined by Dr. Howard Bruenn, a cardiologist at Bethesda Naval Hospital who found him "breathless, with an enlarged left ventricle and a blood pressure of 186/108." Bruenn diagnosed hypertensive heart disease (of which there had been no evidence in a 1941 cardiac examination). A little over a year later FDR was dead at the age of 63 from what was said to be a cerebral hemorrhage; it has been impossible to say what else might have been wrong with him, for his medical file disappeared from a locked safe at Bethesda and has never been found.

[Little is publicly known about the assassination fears that led FDR to stay in the Russian compound in Tehran. It is interesting to note, however, that at Churchill's side at Tehran was "Pug" Ismay, the original James Bond, reputed to be the trigger-man in the group that killed Rasputin; he is supposed to have delivered the coupe de grâce with a pistol after the Czarina's favorite holy man survived poison and stabbings. At Churchill's insistence Ismay would later become Luis Mountbatten's hatchet-man when he went to India as the last British Viceroy. An article in The Hindustan Times of December 29 commenting on the assassination of Benazir Bhutto noted the staggering list of murdered South Asian leaders: Aung San, Mohandas Gandhi, Liaqat Ali Khan, Solomon Bandaranaike, Sheikh Mujibur Rehman. Zulfiqar Ali Bhutto, Mohammed Daoud, Hafizullah Amin, Indira Gandhi, Zia-ur-Rehman, Zia-ul-Haq, Rajiv Gandhi, Vijaya Kumaratunga, Ranasinghe Premadasa, Gamini Dissanayak, Najibullah, King Birendra and family, Lakshman Kadirgamar. The list would be even longer if the rest of the former British Empire were included]

When Harry Truman was suddenly elevated to the presidency on FDR's death he had little experience in world affairs; in the few weeks he had been Vice President no one had briefed him about significant foreign developments. "I felt like the moon, the stars and all the planets had fallen on me" he told reporters. Jon Meacham in Franklin and Winston noted how Churchill reacted; he canceled plans to attend FDR's funeral, hoping that Truman would visit him in London. "Perhaps Churchill was making a bid to take Roosevelt's place as the senior partner in the alliance; for a moment, a passing moment, he seems to have indulged in a fit of pride, for himself and for Britain. Roosevelt had never traveled far to see only Churchill, instead forcing Churchill to come to him -- or to him and Stalin. ... If he could get Truman to come to him, Churchill may have thought in those feverish hours on April 13, then perhaps the world would see that he, and Britain, were still forces to be reckoned with." But Truman was too busy to to visit Britain, and Churchill did not meet him till July 1945, when the "Big Three" met at Potsdam to take stock after the German surrender. Churchill again found himself odd man out, not only because Truman was impatient with his windy speeches but because the Labour party was voted into power midway through the conference and Clement Attlee took over as head of delegation at Potsdam. However, even as Churchill seemed to fail, entirely unforeseen developments were working to push the United States back into Britain's imperial corner.

The first of those events was the successful test of the nuclear bomb at Alamagordo, New Mexico. When word of it reached the Potsdam conference (Stalin learning of it from his spies within the Manhattan project), it changed the entire post-war strategic picture. The mighty advantage of Soviet land forces in Europe was suddenly neutralized. As George Kennan would note in February 1946 in his famous "long telegram" to the State Department from the American embassy in Moscow, the nuclear bomb fired up Russia's age-old sense of insecurity. The Soviet regime was "committed fanatically" to the view that there could be no peaceful coexistence with the United States; it would seek to to disrupt the "internal harmony" of American society and would have to be contained with the "logic of force." Not entirely by coincidence, Kennan's assessment became a hot item in Washington two weeks before Churchill made his famous "iron curtain" speech at Westminster College in Fulton Missouri.

Fortuitously (or not), Churchill, then leader of the Tory opposition in the British parliament, was vacationing in Florida when the invitation to deliver the speech came from Truman. Before writing the speech he traveled to Washington and met with Admiral William Leahy, who retained in the Truman administration his wartime role of coordinator of the three military services (and was thus, sans title, the first Chairman of the Joint Chiefs of Staff). Leahy noted for the record in February 1946 that the speech at Fulton would deal with "the necessity for full military cooperation between Great Britain and the United States in order to preserve peace in the world." Churchill returned to Washington in March for Leahy to approve the final draft of the speech.

The speech has acquired a reputation for flagging off the Cold War, and it certainly did that for the general public; but its true historic significance lies in the 180 degree turn it signaled in American policy towards imperial Britain. To face the threat of expansionist communism, Churchill argued, there was need for a "special relationship between the British Commonwealth and Empire, and the United States of America." There had to be a "continuance of the intimate relations between our military advisers, leading to common study of potential dangers, the similarity of weapons and manuals of instructions, and to the interchange of officers and cadets at technical colleges. It should carry with it the continuance of the present facilities for mutual security by the joint use of all naval and air force bases in the possession of either country all over the world. This would perhaps double the mobility of the American navy and air force. It would greatly expand that of the British Empire forces and it might well lead, if and and as the world calms down, to important financial savings. "

The idea that Roosevelt had so emphatically rejected was presented as the only option if the United States wanted financial savings and "an overwhelming assurance of security." There was even a hint of a threat: do not "underrate the abiding power of the British Empire and Commonwealth. Do not suppose that half a century from now you will not see 70 or 80 millions of Britons spread about the world united in defense of our traditions and our way of life."

A storm of protest greeted the speech. Critics ranged from the Wall Street Journal to The Nation. Walter Lippman termed it an "almost catastrophic blunder." Stalin said it was a "call to war." According to Truman biographer David McCullough, Truman was given a copy of the speech on the train to Fulton on 4 March but claimed later that he had not known what Churchill would say. In the period that followed, the president "seemed bewildered and equivocating, incapable of a clear or positive policy toward the Russians." But communist advances in Turkey and Greece soon led to the enunciation of the "Truman doctrine" of unconditional support for States threatened with such subversion; the United States was on the road to the ignominy of Vietnam, the killing fields of Cambodia and the "secret war" in Laos.

Fourteen years after Churchill's "iron curtain" speech, President Eisenhower in his farewell address to the American people warned about the threat to democracy from the misplaced power of the "military-industrial complex." His successor in the presidency was assassinated as he tried to extricate America from Vietnam and end the nuclear arms race. The country would not have another two-term president till Ronald Reagan, and that only because he survived an assassination attempt; Bill Clinton would survive another kind of assassination to stay for two terms. Throughout this era in American politics there have been scandalous violations of democratic principle and practice in domestic and foreign affairs. George Bush's two terms in office will go down in history as a low point on both counts. Far from bringing the United States financial savings and assurance of security, the fateful alliance with the British Empire has brought it to a world of high and increasing dangers to constitutional rule. The Anglo-Saxon empire that Mead celebrates in Foreign Affairs has been and is deeply inimical to the best of America.

Who Killed Benazir?

If mass media coverage of Benazir's murder were a screenplay, it would begin with the directions: "Spotlight crime scene. Background is impenetrably dark."

A week after the event, political analysts and opinion mongers have expanded only minimally on reportage: the country is in turmoil; there are concerns about the security of its nuclear weapons; suspicion that President Musharraf had a hand in the assassination is widespread, but Al Qaeda cannot be ruled out. For the United States, which pushed for Benazir's return as a way to ease the country out of military rule, the assassination is a disaster. Instead of a half-step towards a more legitimate government in Islamabad, it is now stuck with a seriously weakened Musharraf.

The only analyst to go beyond that tight spotlight has been Tariq Ali, the Trotskyist enfant terrible of the 1960s who has evolved into a biriyani-scotch radical welcome on the BBC. The strange thing is, Ali wrote his trenchant analysis well before Benazir was killed, for it appeared in the 11 December issue of the London Review of Books. "The Daughter of the West" is a a total dump on Benazir, dwelling on the corruption of her family and her personal involvement in the killing of her brother Murtaza; one might almost read it as an explanation of why she deserved to be offed. Coming from as well connected a figure as Ali, whose uncle was a former chief of Pakistani military intelligence, and whose relationship with MI-5 must remain a matter of interesting speculation, it is more than the preternatural "scoop" that Robert Fisk of The Independent declared it to be.

It is quite possible that Musharraf ordered the murder; but is it likely? What would be his motivation? He had much more to gain from playing ball with Benazir than from bumping her off; Musharraf is damaged goods in everyone's book and now that he is sans military uniform, there is very little to prevent another ambitious General from elbowing him aside. He would have to be a complete political moron to throw away the only prop that would have allowed him to hobble off the scene with a modicum of dignity.

If Musharraf is not behind Benazir's murder, who is? Certainly not the CIA; Benazir was Washington's baby. And almost certainly not Al Qaeda. The Pakistani government has claimed to have evidence that Al Qaeda was responsible but the alleged perp, a Taliban commander by the name of Baitullah Mehsud, took the unusual step of issuing a public denial. A spokesman for Mehsud called reporters in Peshawar to say (according to one published report): "We are sad over Benazir Bhutto's death. We do not have any enmity with Pakistani leaders and are only opposed to the United States"

The last of the usual suspects is Pakistan's spy service, the infamous Directorate of Inter-Services Intelligence (ISI). The evidence here is mute but graphic: video footage of the assassination shows a clean-shaven man with a sleeveless vest, rimless sun glasses and close-cropped hair -- the stereotypical ISI operative -- pointing a gun at Benazir. The fact that the crime scene was immediately hosed clean, as was the bloodied interior of the SUV in which Benazir was riding, also points to an inside job. But why would the ISI kill Bhutto? It is hard to imagine that her third ascent to the prime ministership would have been a threat to its power or many privileges.

It could be that the murder is a calculated response to a too forceful American effort to order Pakistan's internal affairs: the Benazir-Musharraf partnership deal was put in place by gimlet-eyed John Negroponte, whose experience in kicking butt in Cold War Latin America might not have translated well into the izzat-ridden world of Punjabi Islam. If this is a case of the worm turning, then the ISI's British connection becomes a live matter. The ISI was established by the British immediately after Indian independence, at a time when they were stage-managing the first India-Pakistan war over Kashmir. (Armies on both sides were led by British officers, and Luis "Dickie" Mountbatten was not only free India's first Governor-General, but chairman of the cabinet committee handling the situation in Delhi.)

London maintained a close working relationship with the ISI throughout the Cold War, its influence strengthened by its intimacy with Saudi royals who had clout in Islamabad. A common element binding the intelligence agencies of all three countries -- Britiain, Pakistan and Saudi Arabia -- was resentment at the CIA's dominating role. In the post Cold War era that resentment led Osama bin Laden to (ostensibly) break with his handlers in Saudi intelligence and set up shop in Afghanistan. It caused Pakistani operative Mir Amar Kansi to go on a shooting rampage outside the CIA's headquarters building in Langley, Virginia, in January 1993; and it led to the broad Pakistani role in supporting the 9/11 attacks. British authorities, though swallowing hard over American intervention to force a peace settlement in Ireland, have been less open in expressing their displeasure with Washington, for they have far more at stake; but there is no denying that in recent years London has moved towards an increasingly independent line. The decision to halve the number of British troops in Iraq at a time when the United States is in the middle of a desperate pacification effort is only the most visible indication.

At the United Nations the British ambassador outfoxed American envoy John Bolton and slipped Beijing's candidate for Secretary-General into office, gaining in the process a greater command over high-level UN appointments than London has had for decades. Newly appointed Secretary-General Ban Ki-moon handed Britain the post of Under-Secretary-General for Humanitarian Affairs (which gives it ready access to all the world's trouble spots), and appointed Britons as his political representatives for the peace processes in Nepal and the Middle East, both areas in which British policy has a long and invidious history. Washington neutralized the latter appointment by pushing Tony Blair into the role of Middle East mediator. Such fencing has reached the ground level: a British UN staffer was recently expelled from Afghanistan by President Karzai for having unauthorized contact with the Taliban.

Against that background Benazir's murder might portend much more than instability in Pakistan. It might mean we are in the middle of a large power struggle in Asia, and that could have very dire consequences.