2ndlook

What Edge Does India Have Over China?

Posted in China, Current Affairs, India, politics by Anuraag Sanghi on May 17, 2013

China is currently in border disputes with Vietnam, Japan, Philippines, Cambodia, – apart from India. Is that why they are nervous?

Shankar's cartoon on Decmber 17, 1961 in his own cartoon magazine, Shanker's Weekly, forewarned PM Nehru about the imminent Chinese threat - nearly one year in advance.

Shankar’s cartoon on Decmber 17, 1961 in his own cartoon magazine, Shanker’s Weekly, forewarned PM Nehru about the imminent Chinese threat – nearly one year in advance.

What could have provoked China to send 50 soldiers over to the Indian border?

I mean, fifty soldiers …?

Obviously, they were not expecting fifty soldiers to take and keep Indian territory. Reasonably, they are also not trying to open a second front against India, while they were making tough moves against Japan. Understandably, this was also, like Kargil, not some adventurism by rogue elements in the PLA.

Three things come to mind.

Come to think

One – China seeks to ‘talk’ from a position of strength.

These perceptions are important to the Chinese. Especially, when the first foreign visit by the Chinese Prime Minister, Li Keqiang is to India – onward to Pakistan, Germany and Switzerland.

If this is true, don’t the Chinese understand that Nehru took on the Western world, without military or economic might. Indira Gandhi took on the US, plus Pakistan with the risk of a China joining in, on the side of Pakistan, in the 1971 War.

So these fifty soldiers and five tents will only reduce goodwill – and not induce any fear, respect or regard for the Chinese in India.

For the first time since 1998 more money leaves China than enters it  | Graphic source & courtesy- economistcom on Aug 4th 2012 | HONG KONG

For the first time since 1998 more money leaves China than enters it | Graphic source & courtesy- economistcom on Aug 4th 2012 | HONG KONG

Two – Was it Chinese nervousness?

While the Chinese were busy with the Japanese, did Indians take ‘advantage’ to strengthen their positions in the Himalayan heights? Was this a warning to India, not to take advantage of Chinese ‘preoccupation’?

India says Chinese soldiers have set up camp 19km (12 miles) on its side of the “line of actual control” (LAC) that separates Ladakh in its state of Jammu & Kashmir from China, in the absence of an agreed border. Japan reports that Chinese maritime surveillance vessels are every day circling the disputed Senkaku or Diaoyu islands in the East China Sea. And on April 26th China demanded that the Philippines “withdraw all its nationals and facilities” from a number of islands and reefs in the South China Sea, where they have been, in some cases, for decades. In all these cases China can with some justification claim it is responding to provocation.

Ajai Shukla, an Indian defence analyst, has pointed out that the Indian army has been undertaking what he calls its “third surge towards the Sino-Indian border”. The previous two were in the late 1950s—leading to the 1962 war—and in 1986, leading to the present stalemate. Now, once again, says Mr Shukla, India has been “thickening” its presence in Arunachal Pradesh and in Aksai Chin, with more soldiers, weaponry and infrastructure.

So China may feel India is exploiting both the inexperience of its new leaders who took over last November, and the pressure China is under on other fronts. It may harbour similar suspicions about Japan and its “provocations” over what China calls the Diaoyu islands. Its patrols near the islands were prompted by Japan’s ignoring its warnings not to “nationalise” three of the islands by buying them from their private owner last September.

The demand directed at the Philippines, that it withdraw from disputed islands, was also a reaction—to the Philippines’ taking its dispute with China to the International Tribunal on the Law of the Sea. China rightly points out that, although the law of the sea sets rules about the waters and exclusive economic zones around islands, it says nothing about sovereignty over them.

via Banyan: Thunder out of China | The Economist.

Three – India can cut-off China’s vital shipping and logistics lines through the Karakoram and the Straits of Malacca in Indian Ocean. Was China covering their nervousness with these aggressive gestures?

Compared to China, India has three major advantages: -

The Aces In Chinese Hand

1. China is under sanctions or limits from the three major armament vendor blocs US, EU and Russia. While US and EU have sanctioned China, ostensibly, over Tienanmen Square. But, of course, the real reason is US and EU don’t want to arm a rival for Western military influence in Asia.

Apart from some border issues between Russia and China, Russia, finally, has more commercial reasons.

China has simply copied Russian defense designs and tried selling these products to third-party countries at heavily discounted prices. Russians have been hit by reduced purchases committed by China, lower prices in face of Chinese competition and outright losses to Chinese orders.

China still does not have crucial sub-assembly technologies – like jet engines, AESA radars, electronic warfare systems, and has also been shut out of the market.

India on the other hand, can practically buy whatever is available.

2: – India is threatened from two sides – Pakistan and China.

Pakistan today does not have aircraft to fly or missiles to fire. Under similar sanctions like China, Pakistan’s preparedness is close to nil. In Kargil, they could send no more than 2000 soldiers.

China is currently in border disputes with Vietnam, Japan, Philippines, Cambodia, – apart from India. China’s behaviour has so caused affront in Vietnam, that Vietnam made friendly overtures to ex-enemy America against their ex-ally, China.

3: – Recent war record. In the last war against Vietnam, China came out with a bloody nose. In the last two wars against Pakistan, India came out victor.

On the more recent Kargil War, here are some interesting thoughts.

September 26, 2012: China has, in the last few years, demanded that India turn over a contested area in northeast India (Arunachal Pradesh, which China claims as a part of Tibet). China then escalated its demands by refusing to allow Indians born in the disputed area to visit China. This Chinese behavior has angered India, which two years ago implemented a five year plan to increase their ability to deal with any Chinese aggression against Arunachal Pradesh, by increasing its defense spending. But since both nations have nuclear weapons, a major war over Arunachal Pradesh is unlikely, but not impossible.

India fears that China might try to carry out a lightning campaign (a few days, or a week), and then offer peace terms (with China keeping all or part of Arunachal Pradesh). Since neither country would be willing to start a full scale nuclear war over Arunachal Pradesh (a rural area with a population of about a million people, spread among 84,000 square kilometers of mountains and valleys), the “grab and parley” strategy has to be taken seriously. In the meantime, China keeps finding ways to annoy India over this issue.

Meanwhile, India seems quite confident that they can handle China if a war breaks out in this mountainous wilderness. Partly that’s because India is playing defense here, which always confers an advantage. But India’s big advantage is that it has recent (1999) combat experience in mountain warfare. China has not fought since 1979, and what was in the hill country on the Vietnamese border. Not only was India’s combat experience recent but it was in the same mountain range (the Himalayas) where they face China.

That 1999 war got little publicity, so it’s generally unknown outside India how much that experience changed the Indian armed forces. That’s not surprising. The foe in that war, Pakistan, did not even officially admit to its role in that undeclared war until 2010. Two years ago the names of 453 soldiers killed in “the Kargil war” were posted on the Pakistani Army website.

Although the Pakistani troops, masquerading as Islamic terrorists, were forced to retreat during the 1999 conflict, Pakistan still considered it a victory (because it garnered much publicity for their terrorism campaign in Kashmir and India chose not to mount a major invasion of Pakistan). India lost about 550 troops in the fighting. The elected Pakistani government of the time was opposed to the Kargil operation and tried to remove the head of the armed forces (general Pervez Musharraf). In response, Musharraf staged a coup and ruled the country for the next nine years.

Although the Indians succeeded in forcing the Pakistanis to retreat, the unexpected conflict exposed deficiencies in the equipment, training, and tactics of the Army and Air Force, as well as the ability of the two services to coordinate their operations. The Indian military was not keen on giving a lot of publicity to the problems they had during the 74 day Kargil campaign. But in the last decade it’s been noted that Indian military reformers often invoke Kargil, and that tends to help overwhelm opposition to needed changes. This has led to more attention being paid to what went on during the high altitude (4,000 meters and up) conflict.

As a result of Kargil the army has purchased a lot of new high-tech gear for its infantry, revised training methods, and even changed the organization of infantry battalions. The air force has bought more heavy transports (American C-17s) and set up closer and continuous coordination with the army and navy. The air force has studied the unique conditions encountered over these high mountains and trained their pilots to deal with it. The Chinese are just now catching up with this item.

Initially, the impetus behind all these reforms was to avoid another “messy victory” as had been achieved in 1999. But nine years later China started making territorial demands about similar high mountain terrain to the east of Kargil. While initially scary, as the Indians reviewed their readiness for such a conflict they realized they were still in the midst of reforms intended to improve their mountain warfare capabilities. Now it was China’s turn to wonder if they were ready for war in the Himalayas.

via Leadership: The Indian Edge Over China.


India-China-India Face-off Ends: How Things Have Changed

Posted in China, Current Affairs, India, Media, Pax Americana, politics by Anuraag Sanghi on May 6, 2013

As for the current intrusion, all these war-like noises in the Indian media are good. It sends a good message

See how Daulat Beg Oldie can be used to cut off China from Pakistan and Gwadar.

See how Daulat Beg Oldie can be used to cut off China from Pakistan and Gwadar.

Right at the onset, the Chinese military contingent pitching tents at Daulat Beg Oldie in Ladakh was a gesture. It was, of course, very clear that India of 2013 was not the India of 1962, when facing China. The small Chinese contingent was making a symbolic gesture – and India was responding to that gesture.

The reasons are clear. Though not to everyone.

China has significant numerical superiority – but technically and qualitatively, India can hold off and beat any kind of Chinese adventurism.

The Great Indian Defeat of 1962

India’s qualitative superiority was also probably true even in 1962.

Keeping in mind that the Indian soldiers of ’62 had been all over the world during WWII. Unlike China. Except the peculiar situations of the 1962 hides this aspect.

What 99.9% of the commentariat on the 1962 War with China forget is that the Chinese used the cover of the Cuban Missile Crisis.

The Cuban Missile Crisis was when the world came closest to a nuclear war – according to some. While the world’s attention was locked onto Khruschev-Kennedy confrontation over Soviet nuclear missiles stationed in Cuba, China played mischief.

From 1959, to 1962, border skirmishes with China and ‘friendly’ talks were the norm.

Three contentious years later, Chinese forces launched a surprise invasion on October 20; the same day the Kennedy administration decided to enact a blockade of Cuba to keep Soviet missiles out of the Western Hemisphere.

Only days after Chinese forces crossed the Himalayas, President John Kennedy wrote to Indian Prime Minister Jawaharlal Nehru asking “what [America] can do to translate our support into terms that are practically most useful to you as soon as possible.”

via A Forgotten War In The Himalayas.

To this offer of help, Nehru wrote two letters to Kennedy. Detailing what help US could extend.

W. Averell Harriman, Assistant Secretary of State for Far Eastern Affairs, and Duncan Sandys, British Secretary of State for Commonwealth Relations, led a small group of diplomatic and military experts to India on November 22. While the experts assessed India’s military needs, Harriman, Sandys, and Galbraith discussed the implications of the border war with Nehru. Harriman and Sandys made clear their governments’ willingness to provide military assistance to India but pointed out the related need for negotiations to resolve the Kashmir dispute. In a private meeting with Nehru, Harriman stated that unless tensions over Kashmir eased, the United States could not continue to provide military assistance to both parties to the conflict. Nehru reluctantly agreed to negotiations but warned that in the wake of the humiliation suffered by India at the hands of China, Indian public opinion would not stand for significant concessions to Pakistan over Kashmir. (via FRUS, Vol. XIX, 1961-1963, South Asia.

Indian proposals to the US for help in armaments were met with talks, delays, and inaction. A drip of US military aid started, well after the war was over and continued till 1965 war with Pakistan.

Under the cover of the Cuban Missile crisis, the Chinese gave India a resounding slap in the middle of still-friendly talks.

SECOND -Before Indians could retaliate, the Chinese had withdrawn and were talking peace. The world, in an extremely stressful situation, pressured India to accept Chinese peace overtures.

After slapping us Chinese ‘talked’ peace profusely – before we could slap them back. And in the middle of the Cuban crisis, the world was afraid that this border conflict could draw in opposing allies and deteriorate into a wider conflict.

THREE – According to modern Chinese analysts, like Wang Jisi, in 1962, Mao was struggling to retain his hold on the party. He alone took this decision to send those soldiers to give a quick slap and run back to the Chinese side of the border.

Mao – Not 10 ft. Tall

Wang Jisi’s understanding of Chinese motivations, goes on to cover how Mao

lost control of number of practical issues. So he wanted to testify and show he was still in power, especially of the military. So he called the commander in Tibet and asked Zhang are you confident you can win the war with India?” Wang said.

The name Zhang referred to Zhang Guohua, the then PLA commander of the Tibet Regiment.

“The Commander said, ‘Yes Mao, we can easily win the war’. Mao said ‘go ahead and do that’. The purpose was to show that he was personally in control of the military. So it had little to do with territorial dispute, (may be) something to do with Tibet but not necessarily,” according to Wang, who was also associated with the Institute of International Strategic Studies of Party School of the CPC.

The strategist believes that most of the wars fought under the CPC leadership had strong links with domestic crises.

“Everything China did in the border war with Soviet Union was triggered by domestic crisis in 1969″ and so was 1979 war with Vietnam which was launched partly because Mao’s successor Deng Xiaoping wanted to emerge as top leader, he said.

Asked whether he was convinced that domestic issues, more than territorial ambitions, prompted Mao to launch the war against India, Wang said “Yes yes I buy that theory because I looked at other episodes of history.

“The general conclusion is that (India-China) border war was neither based on real interest in getting territory nor solving territorial dispute.”

Asserting that China did not gain much out of the war, Wang said he was told by a top Chinese diplomat who served in India that the “war was totally unnecessary”.

via Mao ordered 1962 war to regain CPC control: Chinese strategist.

How Now …

Unlike the 1962 situation and China’s use of the: -

  • Cuban Missile crisis as a cover
  • While planting a resounding slap
  • Immediately offering a hand of friendship

was classic Chinese.

Today’s India’s airforce with Su-30MKI air dominance aircraft, Brahmos missiles, aircraft carriers have no Chinese equivalents.

China depends:

  1. On Russia for vital engines for its aircraft.
  2. On it unreliable domestic armaments industry.
  3. It is also on an international blacklist for arms supply.

India, too is dependent on imports. But, look at India’s track record.

At the height of the Kargil war, India was able to muster the French and Israelis to make emergency modifications to Mirage aircraft. These modifications helped IAF to fire laser-guided bombs that smoked out the Pakistani soldiers from camouflaged caves in the Himalayas.

China & War

China has no such options.China’s track record in war scenarios has been patchy.

In Korean and Vietnam Wars the Chinese support and intervention had no effect. China’s invasion of Vietnam in 1979 was a failure. Its’ attack on India in 1962 was under the cover of international crisis. China’s was badly brutalized at the hands of the Soviets in the 1969 War with Soviets.

Keeping this in mind, China will be mindful of an open attack.

Peaceful India?

India on the other hand has a successful record against the US-Pakistan War against India in 1965.

Similarly, staring down the US 7th Fleet while attacking Pakistan on two front, or turning tables in Kargil.

In the all the three wars of 1965, 1971 and the Kargil War, China was kept out of the war, with only lip sympathy to Pakistan.

Gentlemen … Applause

But while all this was happening what do some Brown American do?

Here is what Sadanand Dhume was doing.

Other Brown Americans do it differently.

Another will ‘shield’ Hinduism, while attacking India’s economic achievements and future (auto, software industries, for instance.). Another will scorn Indian education challenges with a dubious US public school model.

These Brown Americans are no less than the more famous stone-pelters from Lal-Chowk in Srinagar. All that they want to do, is throw stones at something Indian.

NEW DELHI: The 20-day military standoff with China at an altitude of 16,300-feet in Ladakh has ended. After furious activity over diplomatic channels, coupled with two flag meetings on Saturday and Sunday afternoon, the Chinese troops retreated from the Depsang Bulge area to their bases on Sunday evening.

The resolution of the troop face-off came even as preparations were in full swing for foreign minister Salman Khurshid’s visit to Beijing on May 9 despite a growing political clamour to cancel the trip. Now, the visit will go ahead as scheduled, in preparation for the May 20 visit to India by Chinese premier Li Keqiang.

There was no immediate word on the conditions decided for the mutual withdrawal of the troops, confronting each other on the heights since April 15. The earlier refusal by the Chinese to withdraw its soldiers from northern Ladakh, where they had pitched tents 19 km inside Indian territory, has created a national security scare in India.

via China-India face-off ends as armies withdraw from Ladakh – The Times of India.



Global media investigation: 612 Indian firms in tax havens – Indian Express

Posted in Business, Current Affairs, India, Pax Americana, politics, Propaganda by Anuraag Sanghi on April 4, 2013

Only 612 Indian names, mostly businessmen, in the 1.2 lakh names. This vindicates 2ndlook reading on corruption in India.

For at least 5 years, it has been 2ndlook position that corruption in India is a small problem. All those stories about trillions in Swiss accounts, turned out to be just hot air. Based on 2ndlook at some economic and business realities it was clear that these corruption-in-India claims were just plain flibbertigibbet.

Arvind Kejriwal, Anna-bhau take that. Eat crow now.

Now we have data.

Indians businessmen are a small part of this offshore mechanism. This data is broadly in line with the trend. For India, which is a Top-5 economy, to have so few people in the list proves two things.

One: Indian take on corruption is round-tripped back into India.

Two: Indians generally lack faith in these corporate structures – and would rather hand over money to their CAs, who will handle this for free.

Typically, specialist Indian CAs handle this money on a simple understanding. Only the principal will be returned – and actual investments at the instruction of the beneficiary, if any, will come back to the beneficiary. Otherwise all risks and benefits from the deployment of these funds will be the CAs take.

Three: Indians understand money much better – and can handle it themselves instead of saand-ka-tel (snake-oil) MNC salesmen.

In the next few days we will read and hear more. But on thing is clear. Indian Express will not be able to suppress it – as the same data can be released by other media houses in the rest of the world.

I presume in the next 2-3 months, this data will be publicly available – and data-scraping software will be used by others.

Here is the initial story.

In the biggest global expose of its kind on offshore investments and secret financial transactions, an international group of investigative journalists has found details of more than 1.2 lakh offshore entities and trusts belonging to individuals and companies in more than 170 countries and territories, including India.

These individuals and companies include politicians, the mega rich and tax offenders, among others, who have invested in tax havens such as the British Virgin Islands, the Cook Islands, Samoa and other offshore hideaways.

The 612 Indians in this list include two members of Parliament — Lok Sabha Congress MP Vivekanand Gaddam and RS member Vijay Mallya — and several industrialists such as Ravikant Ruia, Samir Modi, Chetan Burman, Abhey Kumar Oswal, Rahul Mammen Mappillai, Teja Raju, Saurabh Mittal and Vinod Doshi.

The list also includes businessmen who have had a brush with authorities such as the Income-Tax department and the CBI. Several of the offshore investments were made in possible violation of RBI and FEMA rules.

Details of these transactions were contained in 2.5 million secret files and accounted for more than 260 gigabytes of data. They were obtained by the International Consortium of Investigative Journalists (ICIJ) and their total size is more than 160 times larger than the leak of the US State Department documents by Wikileaks in 2010.

Based in Washington DC, ICIJ (www.icij.org) is an independent network of reporters who work together on cross-border investigations. ICIJ collaborated with 38 media organisations around the world, including the The Indian Express, for this ambitious global project and to analyse the documents. The other media partners include The Washington Post in the US, The Guardian and BBC in Britain, Le Monde in France and the Canadian Broadcasting Corporation.

The 15-month long investigation has found that alongside perfectly legal transactions, the secrecy and lax oversight offered by the offshore world allows fraud, tax dodging and political corruption to thrive. The expose has also thrown light on the functioning of “nominee directors” in offshore companies, several of whom have also been engaged by Indian patrons of offshore companies.

For instance, a cluster of 28 “sham directors” have been identified as having served as the on-paper representatives of more than 21,000 companies between them, with some individual directors representing as many as 4,000 companies each. The expose comes shortly after a list of 18 Indians who had bank accounts in the LGT Liechtenstein Bank and around 700 Indians who had accounts in HSBC in Geneva became public. In both cases, account holders were prosecuted and paid penalties to Income-Tax authorities for deposits they had made abroad without paying taxes in India.

via Global media investigation finds 612 Indian firms in tax havens – Indian Express.

Anuraag Sanghi  |  February 24, 2011″ href=”http://quicktake.wordpress.com/2011/02/24/even-god-cant-help-you-corruption-ii/” target=”_blank”>c

Must India Curb Gold Imports: Why It’s A Bad Idea

Posted in Business, China, Current Affairs, Gold Reserves, India, Pax Americana, Propaganda by Anuraag Sanghi on February 10, 2013

India imports 800 tons of the 2500 tons of gold produced each year. This creates pressures on the dollar-currency architecture of the modern world. What can India do to resist US pressures on this front?

Gold smuggling has gained a new life with higher import duties on gold to curb rising demand, according to Indian financial intelligence agencies |  Graphic source & courtesy - economictimes.com

Gold smuggling has gained a new life with higher import duties on gold to curb rising demand, according to Indian financial intelligence agencies | Graphic source & courtesy – economictimes.com

Fourteen months ago, in December 2011, as the Western world took a break for Christmas, India and China took simultaneous actions to restrict demand gold in their respective markets.

Chindia in Tandem

China, till December 2011, was installing gold-ATMs to ramp up gold buying by its citizens.

Government of India (GoI) was tweaking policy (gold loans attracted zero-risk weightage in bank capital provisioning norms) to aid multi-billion corporations like Muthoot Finance to expand the gold-loans market.

And then the tune changed.

In India, the Prime Minster’s Economic Advisory Council (PMEAC) took a strident anti-gold stand. In the last 13 months, India has increased import tax by nearly 850% on gold – from a flat Rs.200/10 gm to 6% (roughly Rs.1700/10 gm at current prices & exchange rates).

In China, the Government cracked down on gold importers.

Dollar Drought

Three months before these concerted actions by India-China, in September-December 2011, as gold prices dropped from US$ 1900 to US$1600, global banking was seized by an acute dollar-scarcity.

Banks in Europe were raising money by using gold as collateral. India, the world’s largest importer of gold was particularly affected. The Indian rupee became Asia’s worst performing currency. India rushed to sign a US$15 billion of credit line from Japan.

China assured credit lines to some of its favored trading partners. Six months later, Africa got from China US$20 billion. Some US$10 billion of Chinese credit went to nations in Central and Eastern Europe and another US$10 billion to various Latin American countries came from China. Even before this, Chinese telecom firms made breakthroughs in Latin-America with credit.

A dollar-drought while the US was busy flooding the world with dollars?

A dollar shortage while Ben Bernanke is pumping trillions of dollars in the world economy?

As the difference increased in Indian and international gold prices, smuggling of gold too is making a comeback.

As the difference increased in Indian and international gold prices, smuggling of gold too is making a comeback.

Gold Tail That Wags the US dollar?

In the last 18 months, any drop in gold prices favored the dollar in the dollar:rupee trade.

Any drop in dollar-price of gold has been coupled with an increase in dollar price against the rupee. As a result, Indians had to spend more rupees to buy gold that was worth fewer dollars.

Now, this is strange!

On a long-term basis, gold has no positive, negative, inverse, divergent, convergent correlation with any other commodity, or exchange-traded stock. So why this short-term coupling of rupee:dollar:gold.

Is there a central bank consensus, including(?) Reserve Bank Of India (RBI), that the Indian consumer should not benefit from price-drops in gold?

Trade Deficit … Anyone?

India’s current account deficit i.e., exports + inward remittances less imports = current account deficit (CAD), is running at less than 6% – up from less than 3% at the start of the Great Recession.

Exports to a world in the grip of the Great Recession have grown slowly while imports-increase into a growing Indian economy is faster. While the Indian CAD situation needs addressal, it is by no means alarming.

It is well-known and widely-accepted that vast sectors of the Indian economy are not measured or monitored by official statistics. Hence, Indian GDP is understated. It is not surprising that Indian GDP measured on a nominal basis (US$1.85 trillion) is less than 42% of the figure obtained when measured on the basis of purchasing power (US$4.46 trillion).

Indian Gold Imports

Keeping these factors in mind, a CAD that is higher by 2% of India’s nominal GDP means a gap of about US$35 billion – no large sum for the Indian economy. Anyway, since a large part of Indian imports is gold, it further reduces the cause and need for alarm.

Ostensibly, India’s CAD situation is due to gold, India’s second largest import, according to GoI. The Indian Government has targeted gold for its policy-intervention attention. Prima facie, US$60 billion gold imports cannot be the issue for a US$2 trillion economy. There are good reasons to believe that this policy intervention by the GoI is happening under US pressure – because Indian gold imports account for one-third of total mine production of gold in a year.

In the past …

The Indian Government’s “management” of the rupee-dollar till the 1970’s meant the rupee at a higher value. Over the 1980s and early nineties in a series of devaluations, Indian rupee’s over-valuation was corrected. Before that, there was a massive arbitrage opportunity between  official exchange-rates and a thriving black market.

A blogger who has been travelling to this part of the world writes

“…in 1969 a dollar fetched 13 rupees, although you could buy 28 rupees for a dollar in Switzerland and 40 rupees for a dollar in Kabul. The official exchange rate is now 38.50 rupees for a dollar, a nice deal”

This high rupee-value gave rise to an active black market in foreign exchange, supported by gold smuggling into India; drug transshipment out of India from the Golden Crescent and the Golden Triangle. This drug+gold trade spawned a huge crime wave of global proportions.

Artificial valuation of the rupee made exports uncompetitive; imports cheap – for which there was no foreign exchange. India regularly had meetings with AID India Consortium and elaborate cases for borrowings were made. The trade deficit remained.

Will things be different this time? I am sure that a few people in the Central Bank consensus group who think that this time, it will be different.

How serious is the smuggling problem?

Gold imports through Thailand have increased as India has a free trade agreement with Thailand that allows gold imports at !1% instead of 6%  |  Image source & courtesy - economictimes.indiatimes.com...

Gold imports through Thailand have increased as India has a free trade agreement with Thailand that allows gold imports at !1% instead of 6% | Image source & courtesy – economictimes.indiatimes.com…

Why is the RBI Wrong?

RBI’s anti-gold policy is definitely misplaced.

Indian gold imports at 800+ tons are a cause of disequilibrium, with global production at some 2500 tons.

So be it.

India is at the receiving end of a bad deal in agricultural subsidies, foreign exchange reserves, technology imports, UN, IMF, World Bank – not to forget a bad deal in oil.

It is not like India controls global gold mines or production. Or is India in any position to stop other buyers from purchasing gold? Unfair apart, why must GoI + RBI take unilateral  steps to restrict gold imports into India?

Currency Printing: Like every other central bank in the world, the RBI also has been printing too many rupees. Unlike the rest of the world, Indian consumers have been sterilizing excessive printing of the Indian rupee by buying gold. This way, the market automatically sterilizes excess rupee liquidity.

More taxes is more profits for smugglers: The higher the difference between international prices and official prices, higher the profit margin for illegal imports.

In fact, raising of duty has only enhanced the profit margin of smugglers,” said a senior DRI official who did not want to be identified. (via Gold smuggling on the rise as imports turn costlier – Livemint).

“As of now, gold smuggling is limited to air passengers and carriers, which has limitations in terms of volume and cost. The bulk smuggling channels (by sea and land) have not revived, but the recent increase in customs duty will provide the profit differential to revive it,” said a senior customs official who too did not want to be identified due to the sensitivity of the issue. This person added that it would be impossible for enforcement agencies to contain smuggling through these routes. (via Gold smuggling on the rise as imports turn costlier – Livemint).

Trade Deficit: Is this increase in Customs likely to reduce India’s trade deficit? Unlikely. It will increase capital-flight to offshore financial centres – from where foreign-exchange earnings will get higher returns than in India. Higher customs or other barriers will mean more (and more) policy interventions that will increase compliance overload and reduce policy-impact.

If the proposed duties do indeed lead to more smuggling, though it would not appear in India’s balance sheet, it could continue to pressure the Indian rupee, which has been losing value against the U.S. dollar in recent months. (via Gold Smuggling Redux in India? – India Real Time – WSJ).

Questioning the anti-gold logic of the Govt apart, increasing customs duties from 2% to 6% will not change a 2000-yr of gold tradition  |  Graphic source & courtesy - economictimes.com

Questioning the anti-gold logic of the Govt apart, increasing customs duties from 2% to 6% will not change a 2000-yr of gold tradition | Graphic source & courtesy – economictimes.com

End of Bretton Woods: No fiat currency system has lasted for more than 75 years.

The Bretton-Woods system, pinned to the US dollar has morphed from a gold-based to an oil-based currency. In the last ten years, the petro-dollar surplus has decreased – and US debt has ballooned to US$17 trillion – 125% of US GDP. Add US consumer debt and corporate debt, and we are talking US debt at about 300% of US GDP.

Euro-Yuan Challenge: Euro-currency has not broken down. Not quite what Anglo-Saxon Media (ASM) has pushed us to believe. – in line with 2ndlook estimate of 2 years now. ASM also pushed the case of a Chinese hard-landing very hard. But the Chinese hard-landing is nowhere in sight. So, the Euro and Yuan are likely to increase their share in global trade. From nearly 90% of global trade, the US dollar share of trade has reduced to about 67%. As it gets close to 50%, (probably) in the next 7-10 years, we may see a greater role for gold as an objective cross-currency index. Gold trade will only increase in importance.

Rise Of The Underworld: Will we want to give the Indian narcotics-gold underworld a greater hold over the Indian economy – like it was 25 years ago. Like the narcotics-gold underworld dominates Pakistan or Afghanistan now.

Safety Net: In the face of global or local dislocations (due to drought, floods, earthquakes, war, epidemics) private gold reserves can help families to restart lives. Even without State support.

Much of the reason for Indian economic equilibrium over the last 65 years, has been the India’s private reserves of gold.

Let’s See Action

Covering a gap of US$35 billion means looking at three big targets of US$12 trillion each.

1. Increase oil refinery exports (set up two more Jamnagar type refineries), increase domestic crude output (split ONGC into four parts?) and shrink oil imports.

2. Fund 10,000 SMEs with credit for expansion and growth to add about US$12-US$15 trillion of output. Privatize city bus services and privatize train operations.

3. Sign a Third-World rupee-trade FTA, which will boost exports to the Third World by US$12 billion and replace dollar imports with rupee imports.

It is these measures which will yield answers to the Indian CAD problem – instead of curbs, taxes and barriers to gold imports.

But then …

What was on the Plate?

In October last year, the US Treasury Secretary, Timothy Geithner and the Chief of the US Federal Reserve were on a two-day India visiten-route to Tokyo to attend some IMF and World Bank meetings.

Any bets on Geither and Bernanke’s main item on the India-visit agenda was gold?

Anyone?

The depth of the global gold market with a large Indian diaspora makes it easy to avoid excessive taxation - a short step from criminal smuggling.  |   Graphic source & courtesy - economictimes.com

The depth of the global gold market with a large Indian diaspora makes it easy to avoid excessive taxation – a short step from criminal smuggling. | Graphic source & courtesy – economictimes.com

Aww … another conspiracy theory?

John Hopkins University in Baltimore, Maryland, USA hosts since WWII the Warfare Analysis Laboratory – a part of its Applied Physics Lab. Used frequently by the Pentagon, in 2009, a unique war simulation was conducted here.

Not a nuclear or a conventional war, not even a biological or chemical war – but an economic and financial war. Simulating how an Economic Hit Man from other countries would operate, its effect on the US and the US response.

Two years after this simulation, one of the participants, James Rickards has published a book outlining some of the presumably basic models used in the exercize.

All these actions point towards a declining US using more desperate means to stay on top.

For how long?

Rising Chorus … Within and Without

All these points are well-known and understood within sections of GoI. By the Indian and global press.

Some extracts below.

Gold smuggling has acquired a new lustre with imposition of higher import duties on the yellow metal to curb rising demand, financial intelligence agencies have said, warning of a sudden resurgence of underworld activity.

Import duty on gold has risen from nil to 6% in the last 12 months. Incidents of smuggling have seen an upswing recently.

Officials in the finance ministry fear that return of gold smuggling will revive Mumbai’s underworld, which thrived on the practice until the economic liberalisation of the early 1990s.

They say a rise in the illegal gold imports will undermine the government’s strategy to curb gold imports to check a runaway rise in current account deficit, which touched a record high of 5.4% of GDP in the first half of 2012-13.

Some officials said the recent confiscations point to a growing trend of organised networks engaging “carriers”, who are paid between 10,000 and 25,000 for each trip. They said illegal transfer of gold has become more lucrative for these carriers since the hike in import duties, adding that many of them are now resorting to rectal smuggling.

Agencies also fear that smugglers may take to the sea route once again.The authorities say they have seized Rs165 crore worth of gold between April and December 2012, an 11-fold increase over the seizures in the year-ago period.

India, the world’s biggest consumer of gold, imported $56.4 billion worth of the metal in 2011-12, accounting for nearly half of its current account deficit.

The country has already imported gold worth $38 billion this fiscal, prompting the government to raise import duties again by 200 basis points to 6%. Current account deficit widened to a record 5.4% of GDP in the first half of 2012-13, with higher gold and crude oil imports increasing the country’s dependence on foreign capital inflows

via Financial intelligence agencies sound alert on gold smuggling – The Times of India.

Gold smugglers have stepped out of 1970s’ Bollywood potboilers into present day reality with the government raising taxes to curb the import of the yellow metal.

According to data from the Directorate of Revenue Intelligence (DRI), an agency that monitors economic offences, the incidence of gold smuggling in the current fiscal year has zoomed at least eight times compared with the corresponding period the previous year.

As the government struggles to rein in a raging current account deficit that is likely to cross 4% of the national economic output this fiscal, it has increased the import duty on the precious metal thrice since last year.

India’s gold imports, (are) next only to oil imports in terms of value.

The increase in import duty on gold has clearly led to a price differential between Indian and international gold, and that, in turn, has led to an increase in smuggling. Spot gold prices here are as much as 5.7% higher than in Dubai, compared with a difference of 0.1% in 2008. Typically, gold is smuggled into India from Dubai.

In the first 10 months of 2012-13, till January, DRI has seized gold worth Rs.60.17 crore (200kg at the current price of gold) and cracked 36 cases of smuggling. In the corresponding period in 2011-12, it had seized gold worth Rs.7.42 crore and cracked 15 cases.

To be sure, the number is almost insignificant when compared with the value of India’s gold imports—$38 billion (around Rs.2.03 trillion today) till December.

And it refers only to seizures and the gold smuggled into India could be much more; DRI officials admit that they detect about one in every 10 cases.

“The duty rate hike in phases, from Rs.100 per 10g to 6% (about Rs.1,800 at the current price) now, has not really dampened the demand. In fact, raising of duty has only enhanced the profit margin of smugglers,” said a senior DRI official who did not want to be identified.

While the government’s actions are intended at discouraging import of physical gold, DRI and customs officials say the recent 2 percentage point increase in the import duty on the precious metal will make it difficult for enforcement agencies to contain bulk gold smuggling in India.

On 22 January, India raised the import duty on gold to 6% from 4%.

After restrictions were lifted on gold imports and a few commercial banks were allowed to import gold and sell the yellow metal to jewellers and exporters in 1997, the spread between international and local market prices shrank dramatically, but with the rise in import duty, it is now widening.

Modus operandi

Explaining the modus operandi of gold smugglers, the DRI official said most of the smuggled gold is brought into India through air mostly from Dubai and Thailand, concealed in either cabin baggage or different parts of the body. People carrying this gold are called carriers, or mules, and they work in pairs. Going by the data collected by DRI, on average, each mule carries at least 5kg of gold per trip.

According to the DRI official, the return on investment for a smuggler in a year amounts to as much as 200% for such trips.

Here’s how the math works: At the current price, it costs Rs.1.44 crore to buy 5kg of gold in Dubai. The cost of an air ticket, hotel expenses and the commission of the mule plus hawala fees to send the money to Dubai after the gold is sold in India comes to another Rs.2 lakh. The same gold can be sold in Mumbai for Rs.1.51 crore, netting the smuggler Rs.5 lakh for a single trip.

Such an operation typically takes four days. Theoretically, this means a smuggler can churn his initial investment seven times a month. Over a year, that means a profit of Rs.4.2 crore on the original Rs.1.5 crore investment.

“As of now, gold smuggling is limited to air passengers and carriers, which has limitations in terms of volume and cost. The bulk smuggling channels (by sea and land) have not revived, but the recent increase in customs duty will provide the profit differential to revive it,” said a senior customs official who too did not want to be identified due to the sensitivity of the issue. This person added that it would be impossible for enforcement agencies to contain smuggling through these routes.

Customs officials also claim their job has been made tougher by a 2011 Supreme Court ruling under which individuals arrested for violating the Customs Act can be released on bail. The apex court’s decision, both officials mentioned above said, has taken away the powers of the customs department to deter smuggling.

via Gold smuggling on the rise as imports turn costlier – Livemint

For some, it’s almost Haji Mastan time again.

There has been a 10-fold increase in the number of gold smuggling cases in recent months. Between April and June this year, authorities impounded gold worth 940 crore in some 200 cases of smuggling, up 272% over the same period last year, finance ministry data shows.

Smugglers make money if they can successfully avoid paying duties – 4% customs duty and other taxes, which add 5%-plus to the landed cost of gold.

via Weak rupee makes gold smuggling, bets attractive – Economic Times.

An increase in the import duty on gold, the third in less than a year, is expected to lead to a rise in smuggling of the precious metal into the country. On Monday, the government hiked the import duty on gold from 4% to 6%.

Air customs officials speculate that more gold will be smuggled from abroad through airports as import duty is now at its steepest.

There has been an increase in smuggling of gold through Chennai from Sri Lanka, Singapore, Malaysia and other Southeast Asian countries over the past three years.

This is the third time the government has raised import duty on gold. In March 2012, the government doubled import duty on standard gold from 2% to 4%. In January 2012, it increased duty from 1% to 2%. Of the 800 tonnes of gold that India imports every year, one-fourth is accounted for by Tamil Nadu.

While customs officials are apprehensive that they will have to be on their toes, bullion traders are unhappy that high duty will push up attempts to smuggle in gold by evading taxes and will lead to loss of jobs for local goldsmiths.

Jewellers say smugglers, couriers and middleman can make as much as Rs 1,800 for every 10g of gold imported (6% of Rs 30,000).

“With imports of 50kg, the margins can be as high as Rs 1 crore,” said a jeweller who did not want to be named. Jewellers say the government has seized close to 900kg of unaccounted gold in the last year.

via Import duty hike to up gold smuggling – Times Of India.

Gold smuggling is not new to India; in fact, many villains of Bollywood movies in the late 1970s were often smugglers. One of the most memorable Bollywood smugglers was Lion (pronounced Loyan) played by actor Ajit in movies like Kalicharan and Yaadon Ki Baraat. Even superstar Ambitabh Bachchan was a smuggler in his blockbuster movie in 1975 Deewar.

“In the late 1980s and early 1990s, the price of gold in India was 65% higher than in other countries,” wrote Douglas Farah, a national security consultant in the U.S., in a paper in 2004.

Citing a report by Interpol from the mid-1990s, Mr. Farah said that gold worth $4.2 billion was smuggled into India in 1991.

In the early 1990s, as part of India’s economic liberalization, the Indian government removed the restrictions on importing gold.

This eventually helped lower the price gap between prices in India and abroad.

If the proposed duties do indeed lead to more smuggling, though it would not appear in India’s balance sheet, it could continue to pressure the Indian rupee, which has been losing value against the U.S. dollar in recent months.

via Gold Smuggling Redux in India? – India Real Time – WSJ.

The government has raised customs duty on gold in bid to curb imports that are largely responsible for the high current account deficit and weakening currency, but a spurt in smuggling threatens to undermine its efforts.

“The operation is currently on…there was intelligence on a sudden jump in gold jewellery imports from Thailand,” said an official with the organisation privy to the development.

India has a free trade agreement with Thailand that allows gold jewellery imports at a concessional customs duty of 1 per cent.

The duty rates for imports through normal channels are much higher after a steep increase in this year’s budget and goes up to 10 per cent on standard gold bars, gold coins and non-standard gold stand, making Thailand an attractive place for purchases.

Though, stringent rules of origin norms are in place in the FTA to ensure that any goods taking advantage of the concessional duty regime undergoes a substantial value addition in Thailand, DRI is alleging large-scale misuse of these norms by importers.

According to DRI sources, the rules of origin under the FTA envisage a value addition of up to 20 per cent but since gold rates in Thailand are at the same levels at India and value addition can only push up the cost of goods and render gold jewellery imports uncompetitive.

Customs authorities had impounded gold worth 942 crore in some 200 cases of smuggling bettween April and June this year, up 272 per cent on 243 crore corresponding period last fiscal that involved 20 cases.

via DRI cracks down on gold smuggling from Thailand – Economic Times.


Perry, Perry On The Wall … Who’s the Biggest Brother Of All?

Posted in America, British Raj, Current Affairs, Desert Bloc, Media, Pax Americana, politics, Propaganda by Anuraag Sanghi on September 29, 2012

 

For reasons not quite clear, Perry Anderson does a hatchet job on India, using selective data on police, prisons, surveillance. Better data leads to conclusions different from Perry Anderson’s.

After millions of agents and billions of dollaqrs ...  |  Cartoon By Dwayne Booth, Mr. Fish - 9/25/2006 12:00:00 AM; source & courtesy - cagle.com

After millions of agents and billions of dollaqrs … | Cartoon By Dwayne Booth, Mr. Fish – 9/25/2006 12:00:00 AM; source & courtesy – cagle.com

Changing spots

Employed with an American university (UCLA) for 30-years, Perry Anderson, a Marxist professor of British origin, has been completely taken up with India.

Published in July was his first-post, Gandhi Centre Stage (LRB 5 July 2012), and his next post was After Nehru (LRB 2 August 2012). Between these two posts, Perry Anderson has come up with some 33,000 words.

Enough material for a 100-page book.

Follow the money

Cleverly mixed with his reluctant admissions of truths, half-untruths, and complete lies, it is unclear why he has taken up such a project.

Why India?

As a Marxist, wouldn’t Communist China or Socialist Russia be an easier – and more interesting objects for Perry Anderson’s affections? For me, Socialist Germany is the most interesting country-study one can do today.

As a Marxist, it is again rather puzzling that Perry Anderson has so much thinly-veiled pride for colonial-imperial Britain – and such antipathy towards an earnest, wannabe-socialist India.

This is the third of the posts for a 2ndlook at some issues that Perry Anderson raises in his posts.

Perry, Perry on the wall? Should he West not be worried miore about itself?  |  Justice Is Suspicious Character in Sanford Florida; By RJ Matson, The St. Louis Post Dispatch - 4/17/2012 12:00:00 AM

Perry, Perry on the wall? Should he West not be worried miore about itself? | Justice Is Suspicious Character in Sanford Florida; By RJ Matson, The St. Louis Post Dispatch – 4/17/2012 12:00:00 AM

Big Brother

Perry Anderson makes an interesting point on India.

the role and character of the army, the Central Reserve Police Force, Border Security Force, Central Industrial Security Force, Home Guards, let alone the clandestine powers and activities of the Intelligence Bureau (a vast military, paramilitary and surveillance complex, totalling upwards of two million operatives), receive even passing mention in most of the literature on the world’s largest democracy.

via Perry Anderson · After Nehru · LRB 2 August 2012.

Perry Anderson does not provide any comparative aggregates, for any other country. Either at a gross level or on a per-capita basis.

Except India.

Perry Anderson expects us to accept his surmise at face-value – without further examination, data or evidence? By not providing comparative data Perry Anderson attempts to imply that the numbers he provides for India is a large number – and other comparable countries are lower.

Which is completely untrue!

But, not to worry!

Cross country statistics are hard to come by. Takes some searching, but on some country pairs, some data is available.

For instance, India and USA.

Increasing data on this subject have been available to 2ndlook readers for the last 5 years.

Does Perry Anderson’s India numbers include army, police, para-military, industrial security forces?

150 years after Emancipation; 50 years after xcivil rights movement, we are left with this  |  Disney World  By Keith Knight, PoliticalCartoons.com - 3/27/2012 12:00:00 AM

150 years after Emancipation; 50 years after civil rights movement, we are left with this | Disney World By Keith Knight, PoliticalCartoons.com – 3/27/2012 12:00:00 AM

Half Untruths

Let us check out some data to see how valid Perry Anderson’s claim is about India’s ‘vast military, paramilitary and surveillance complex, totalling upwards of two million operatives’.

Before going further let us look at some data on Indian police & military size.

  1. CRPF – 3 lakhs
  2. BSF – 2.5 lakhs
  3. Railway Protection Force0.65 lakh
  4. CISF – 0.25 lakh
  5. Civilian Police – 10 lakhs
  6. Total Police – 16 lakhs (total of 1-5 items).
  7. Indian Armed Forces – 13.25 lakhs
  8. State Total – 30 lakhs
  9. Private Security Total – 30 lakhs

I wonder from where does Perry pull out the 2-million figure – when the actual is closer to 3 million?

Let us look at USA – the only Western country close to India in terms of size, diversity, population.

US Police & Military

  1. US Armed Forces – 15 lakhs
  2. US Civilian Police – 10 lakhs
  3. US Secret Police – 30 lakhs
  4. US Industrial Security – 20 lakhs
  5. Total US Military & Police apparatus – 75 lakhs

Indian population is 120 crores and the US population is 31 crores. The American military-police apparatus is bigger by 25% for a population, that is a quarter the Indian population.

Bigger technology, larger police, more secret policemen. More prison ers, more killings b y the State.   |  Cartoon titled Intelligence Bureaucracies By Huffaker, Politicalcartoons.com - 5/8/2006 12:00:00 AM

Bigger technology, larger police, more secret policemen. More prison ers, more killings b y the State. | Cartoon titled Intelligence Bureaucracies By Huffaker, Politicalcartoons.com – 5/8/2006 12:00:00 AM

Macro Numbers

US Census Bureau says, 63% of US population, is between the age of 18-65 – numbering 19.5 crores (from 31 crores). US DoJ data release for the year-2011, says the number of people in correctional system (probation, parole or prison) excluding under prosecution, is more than 70 lakhs – mostly from 18-65 years group. That is 70 lakhs people out of 19.5 crores – nearly 4% (3.63% to be exact).

Anyway you look at it, it is more than any other country in the world.

Each year, the US system has to deal with 2.1 crore people in prison, on probation or parole, or being prosecuted. Ranged against 2.1 crore law-breakers are 60 lakhs in the various types of police plus 10 lakhs in judiciary.

This totals to 2.8 crore people who are law-breakers or law enforcers from a working age population of 19.5 crores. With every seventh adult in the business of (il)legal-activity, makes US clearly a leader of the ‘Free’ World.

Bigger technology, larger police, more secret policemen. More prison ers, more killings b y the State.   |  Cartoon titled Intelligence Bureaucracies By Huffaker, Politicalcartoons.com - 5/8/2006 12:00:00 AM

Bigger technology, larger police, more secret policemen. More prison ers, more killings b y the State. | Cartoon titled Intelligence Bureaucracies By Huffaker, Politicalcartoons.com – 5/8/2006 12:00:00 AM

Custodial Deaths

Perry Anderson then goes onto wite about the excesses of the Indian Police.

Arvind Verma writes that 53,000 people were arrested under the Terrorism and Disruptive Activities Act, of whom just 434 could be convicted seven years later, he underlines some daily realities of Indian democracy: ‘Torture is routinely practised in most police stations and death in police custody is a frequent phenomenon’

Before looking at Indian numbers, let us look at some American numbers.

In the words of the BoJ-Statistics department report, ‘At yearend 2007, federal and state prisons and local jails held just under 2.3 million inmates (2,293,157).’

The US Bureau of Justice reports a total of 32,834 custodial deaths in the USA for 2001-2007 period. This has been broken up into local prisons with 8,097 inmate deaths from a local prison population of 782,595. This data is for local prisons only – which are lower level prisons. State prisons accounted for 21,936 deaths and Federal prisons for 2801 during 2001-2007, totalling 24,737 custodial deaths in State and Federal prisons for the 2001-2007 period.

This does not include arrest-related deaths.

For India, a activista report gave out the statistics.

“Torture in India 2011″ states that a total of 14,231 persons i.e. more than four persons per day died in police and judicial custody in India from 2001 to 2010. This includes 1,504 deaths in police custody and 12,727 deaths in judicial custody from 2001-2002 to 2009-2010 as per the cases submitted to the National Human Rights Commission (NHRC).

These deaths reflect only a fraction of the problem with torture and custodial deaths in India as not all the cases of deaths in police and prison custody are reported to the NHRC.

via 14,231 Persons Died In police And Judicial Custody In India From 2001 To 2010 By Suhas Chakma.

A comparison could be made by taking data on a pro-rata basis. Some 8,900 custodial death among 400,000 prisoners in India (2.23%) compared to nearly 33,000 deaths from a prisoner base of 2 million (1.65%).

This means 19 additional deaths each month in India. Does this speak of unspeakable torture and human abuse in a country of 120 crores, with a State policing apparatus that uses nearly 3 million ‘operatives’?

How many of these deaths could be due to pre-existing illnesses? India after all has the largest numbers of people affected by TB, diabetic, cardiac diseases. Prison conditions could easily result in higher mortality due to these illnesses. Poorer healthcare in Indian prisons?

Is this vastly different from mortality rates between general population in India and USA?

UPSA – United Police State of America

Overwhelming data point towards the fact the US is a police State beyond comparison. With

It is fashionable in the US to moan over how powerful ‘secret police’ has become of late.

But this is not new.

For 48 years, Edgar Hoover headed FBI. No POTUS (President of the US), no GOTUS (Government of the US), no SCOTUS (Supreme Court of the US) could touch him. He had a file on everyone. Including musicians (like John Lennon) to many Hollywood starlets.

No State has taken so much offence against its own citizens as the GOTUS.

Of late, the US Government made more requests to Twitterto reveal confidential information,  than all other Governments in the world put together.

Was the persecution of Julian Assange useful, or essential for any other reason ?  |  Julian Assange Siege  By Paul Zanetti, Australia - 8/16/2012 12:00:00 AM

Was the persecution of Julian Assange useful, or essential for any other reason ? | Julian Assange Siege By Paul Zanetti, Australia – 8/16/2012 12:00:00 AM

Police Killing – In India & USPA

Coming to the point about Indian police killing civilians.

First, let us take data for people killed by US-police during line of duty.

Looking for the number of burglaries last year in Devils Lake, N.D.? How about the increase in property crimes in Caribou, Maine? The answers (34 and 23 percent, respectively) are readily available from the FBI.

Want detailed information on how many people were shot by police in the United States last year?

That’s not so easy to find.

The nation’s leading law enforcement agency collects vast amounts of information on crime nationwide, but missing from this clearinghouse are statistics on where, how often, and under what circumstances police use deadly force. In fact, no one anywhere comprehensively tracks the most significant act police can do in the line of duty: take a life.

“We don’t have a mandate to do that,” said William Carr, an FBI spokesman in Washington, D.C. “It would take a request from Congress for us to collect that data.”

Congress, it seems, hasn’t asked.

via National data on shootings by police not collected – 142 Dead, and Rising – Deadly Force – ReviewJournal.com.

But let me confess. I am wondering is this is a case running and hiding …

A Pulitzer prize winning investigation by Washington Post, on Washington DC police practices concluded that the

extent and pattern of police shootings have been obscured from public view. Police officials investigate incidents in secret, producing reports that become public only when a judge intercedes. In a small hearing room closed to the public, nine of every 10 shootings are ruled justified by department officials who read the reports filed by investigating officers but generally hear no witnesses.

In the internal records used to track shooting trends, D.C. police undercounted by nearly one-third the number of people they killed from 1994 to 1997, tallying only 29 fatal police shootings. The Post investigation confirmed 43 fatal police shootings in that period. Seven fatal shootings were missing from police shooting trend records, and seven other fatal shootings were mislabeled as nonfatal.

The rise in police shootings in the mid-1990s went largely unnoticed among the top officials charged with policing the police.

“No one said there was a problem with shootings,” said Stephen D. Harlan, former vice chairman of the D.C. financial control board. Former D.C. chief Larry D. Soulsby, who presided over the department from 1995 to 1997, said the rise in shootings “was not a hot topic among police officials.”

Off-duty shootings have added to the total of District police shootings in the 1990s. When shooting incidents peaked in 1995, 36 percent of the shootings occurred while officers were off duty, considerably more than the 17 percent to 22 percent that various studies over the years have found in other large cities. Even more striking, more than half of the District’s 16 fatal shootings in 1995 happened off duty — compared with a national average that ranges from 9 percent to 16 percent, according to a study by the International Association of Chiefs of Police.

Many experts consider off-duty shootings problematic for several reasons: The officers are not readily identifiable; they may have been drinking; and they are usually acting alone without backup officers, making them more vulnerable and fearful.

The lawsuits that often follow off-duty police shootings have been costly to District taxpayers.

via Washingtonpost.com: Deadly Force.

It appears that while FBI is not publishing or releasing this data, it is nevertheless available – as this 2008 report reveals.

The number of justifiable homicides committed by police and private citizens has been rising in the past two years to their highest levels in more than a decade, reflecting a shoot-first philosophy in dealing with crime, say law enforcement analysts.

The 391 killings by police that were ruled justifiable in 2007 were the most since 1994, FBI statistics show. The 254 killings by private individuals found to be self-defense were the most since 1997.

Police are justified, the FBI says, when felons are killed while the officer is acting in the line of duty. Rulings on these deaths are usually made by the local police agencies involved.

Some law enforcement analysts say the numbers represent changing attitudes on the streets, where police have felt more threatened by well-armed offenders.

via FBI: Justifiable homicides at highest in more than a decade – USATODAY.com.

What in the USA are called officer-involved shootings, in India are called police-encounters.

But there is marked difference in the way this has been handled.

Indian courts (including the Supreme Court), media, bureaucrats have been monitoring these cases – and passed strictures on some policemen and departments.

Killings of people from minorities (Muslims in India, like the US Blacks) arouses the systems’ ire. In the Sohrabuddin case, a high-ranking politician (Amit Shah) and a high-ranking police-official (DG Vanzara) are being prosecuted. The Batla House shooting continues to to be debated years after the incident. This is only of course, anecdotal evidence. Quantitative data is also given which dilutes Perry Anderson’s critique to nothing.

Meanwhile in the Washington, DC, USA

Three times in the last three years, police have shot fellow officers, killing two and wounding the third. In all three instances, white officers shot black officers in civilian clothes, including a pregnant female officer, after mistaking them for criminals.

via Washingtonpost.com: Deadly Force.

India’s National Human Rights Commission (NHRC) has been meticulously compiling data and publishing this data. Media and civil activists have been involved in this. Given below is an extract from a report carried by an American magazine (Time) – which gives indicative data.

Mirror, mirror on  the wall, who ia is worst of them all.  |  Lawless OWS Hippies  By Pat Bagley, Salt Lake Tribune - 10/27/2011 12:00:00 AM

Mirror, mirror on the wall, who ia is worst of them all. | Lawless OWS Hippies By Pat Bagley, Salt Lake Tribune – 10/27/2011 12:00:00 AM

the violence is for real: public records show he has personally gunned down 87 gangsters in the mean streets of India’s film and organized crime capital since 1990. The 41-year-old’s scorecard has made him the country’s deadliest cop ahead of two other inspectors, Praful Bhosle, 46, and Vijay Salaskar, 45, who have clocked scores of 82 and 40, respectively. All three are from Bombay’s elite Criminal Intelligence Unit, which, as Mob crime spiraled out of control in the early 1990s, was tasked with taking down the bad guys, guns blazing if necessary. Few mobsters went quietly: police shot 71 in “encounters” in 1997, 83 in 1999 and 97 in 2001. In all, since records of shoot-outs began in 1982, police have killed 1,200 gangsters in and around Bombay.

The effect on India’s crime capital has been dramatic. From two a week at the height of the violence in the early 1990s, intergang gun battles are down to two a month. Once almighty syndicates are losing scores of men and millions of dollars because of the disruption to their businesses. Arun Gawli, who describes himself as a former Mafia don, sees himself as a virtual prisoner in his own mansion, living behind a phalanx of armed guards, CCTV and four separate locked gates, out of fear of what he calls “police contract killings.” “In a democracy, these sorts of killings are unlawful,” he says. Gawli, 51, claims he has lost a total of 60 associates to encounters in the past decade. “O.K., there were days a while back when I went astray. But this sort of murder campaign is way beyond acceptable.”

That’s a view shared by human-rights groups. Lawyer Seema Gulati even warns that the “growing trend of police killings” is endangering India’s democratic foundations. “They’re just bumping them off,” she says.

Police bosses counter that they are being criticized merely for being better shots than the Mafia. They add that none of the hundreds of complaints alleging staged shoot-outs or executions filed by victims’ relatives or human-rights groups or even a handful of official inquiries has ever led to a conviction for extrajudicial killing. “The allegations of fake encounters are baseless,” says Pradeep Sawant, Bombay’s deputy police commissioner. “It’s not that we always go to kill. Our idea is to arrest the gangsters. We only retaliate if we’re fired upon.”

Many in India argue that there are few alternatives, since the country’s judicial system is tainted by corruption and crippled by backlog. Kanwar Pal Singh Gill, India’s most famous cop for helping put down the Sikh insurgency in Punjab state in the 1990s, is blunt: “Our legal system doesn’t work at all. If there are no legal remedies, there’ll be extralegal ones.”

By and large, this is a compromise the public accepts. “We know the vast majority of encounters are fake,” says Hindustan Times editor Vir Sanghvi. “We do not think that this is a perfect situation, but in common with the rest of the middle class we have come to the regrettable conclusion that there is no real alternative.” For a professional enforcer like Sharma, success isn’t just measured in body bags or reduced gang violence, but invitations to celebrity parties and near unanimous media praise. “I don’t enjoy killing,” says Sharma. “But after we shoot some mobster, his victims look at me like God. That’s the best part of the job.”

via Urban Cowboys – TIME.

Based on official monitoring of such ‘encounters’ an updated Wikipedia entry gives more data.

According to the National Human Rights Commission of India, there were 440 cases of alleged fake encounters in the country during 2002-2007. Most of these happened in the states of Uttar Pradesh (231), Rajasthan (33), Maharashtra (31), Delhi (26), Andhra Pradesh (22) and Uttaranchal (19).[2]

From 2008-09 to June 2011, NHRC recorded 369 cases of alleged fake encounters. By June 2011, NHRC had resolved 98 of these cases, while the rest were pending settlement. The states with high number of cases were Uttar Pradesh (111), Manipur (60), West Bengal (23), Tamil Nadu (15) and Madhya Pradesh (15).[3]

via Encounter killings by police – Wikipedia, the free encyclopedia.

Though officially not published or collated, investigations by civil rights groups reveal indicative data about police officer-involved killings in the US.

The problem of fatal police shootings in America goes beyond a few bad apples. It points to persistent and systemic problems that lead to ongoing tragedies for communities of color. Between 1980 and 2005, close to 9,600 people were killed by police in America — an average of about one fatal shooting every day. However, the real number may be higher due to underreporting by some departments to the federal government. For example, the Los Angeles Police Department responded to a Freedom of Information Act request by claiming there were 79 fatal police shootings from 2000 to 2005. Yet only 38 fatal shootings were reported to the federal government for the same period.

While the precise number may not be clear, it is apparent that fatal shootings are not inevitable. Washington, D.C. had the nation’s highest rate during the 90s. It’s also clear that shootings are not distributed evenly throughout the population. In Chicago, for example, more than two-thirds of the shootings happened in black and Latino neighborhoods, and the majority of the incidents occurred in poor neighborhoods.

African Americans are particularly at risk of being killed by police. Black people were overrepresented among victims in each of America’s 10 largest cities. This contrast was particularly glaring in New York, Las Vegas and San Diego, where the percentage of black people killed was at least double their share of the general population. “There is a crisis of perception where African American males and females take their lives in their hands just walking out the door,” said Delores Jones-Brown, interim director of the Center on Race, Crime and Justice at John Jay College in New York. “There is a notion they will be perceived as armed and dangerous. It’s clear that it’s not a local problem.”

The shootings may be explained in part by implicit bias on the part of police officers, according to research by University of Chicago Professor Joshua Correll. In New York, connecting negative stereotypes with racial identity was considered as a factor in the 1999 fatal shooting of Amadou Diallo and the 2006 shooting of Sean Bell — both of which involved black male victims being killed by more than 40 shots fired by officers.

Another key part of the equation: a disturbing lack of internal accountability from local police departments.

In Chicago, nearly half of the officers sued in those shootings had been sued for previous violations. Most had been sued at least twice. Although being sued does not mean an officer is guilty, multiple lawsuits against the same officer should draw the department’s attention.

Yet little seems to happen to these and other officers accused of killing residents. Chicago’s initial “roundtable” investigations of 85 officers cleared all but one of them — and that officer got a promotion two years later. (Police officials said they did find fault among other officers but could not provide any statistics.)

A similar situation exists in Phoenix, which had the highest rate of fatal police shootings among the nation’s 10 largest cities. Although there were more than 100 incidents of officer-involved shootings in the city during the past five years, and numerous shootings in neighboring jurisdictions, only one shooting in the county has resulted in criminal charges being filed against the officer who fired — and that was for the fatal shooting of a white woman.

This broken system hurts everyone.

via Too many police shootings: More than a few bad apples.

Multiple reports and studies seem to converge to an estimate of roughly 400 officer-involved fatalities in USA. The 2008-report extracted above also gives a similar figure. The latest Wikipedia listingof officer-involved fatalities for 2012, of the last 9 months is close to 400. Full year figures will cross 500 – unless there is intervention.

The US Secret Service Colombian  prostitute scandal. Secret service agents on the POTUS detail ignored their job  - and spent time on hiring prostitutes.  |  Cartoonist Jimmy Margulies in 2012

The US Secret Service Colombian prostitute scandal. Secret service agents on the POTUS detail ignored their job – and spent time on hiring prostitutes. | Cartoonist Jimmy Margulies in 2012

So, while in the USA, officer-involved deaths are around 400 per annum. In  India the comparable figure is 75-80 ‘encounter’ deaths. Roughly in the same 4:1 to 5:1 prisoners ratio between US and India.

So the major difference in arrest-related deaths is the noise levels. While noise levels seem lower in US, in India these encounter deaths have evoked a significant backlash. Even mobsters like Arun Gawli thinks he can protest against these deaths.

Secret Police

With the biggest secret service in the world, the largest prisoner population, in addition to one of the the largest police forces in the world.

Regarding figures for people employed in pure intelligence work, India has some 25,000 people in the Intelligence Bureau. Compared to 30-lakh employees in US Secret Service.  So, Perry-bhau, we are talking of 25,000 intelligence operatives in India – versus US that has  30 lakhs.

The predominant target of the US secret police are the 70 million American males in the 18-60 years of age. Thousands of organisations, controlled by 17 apex American secret service agencies track these 70 million people.

Industrial Security

If Perry Anderson would like to include the CISF, in India’s ‘vast military, paramilitary and surveillance complex’, then would he like to include its Western equivalent – like private security, which has the same function?

A report commissioned by the US-DoJ estimates that the private sector provides about 1 million employees for industrial security. Another million by provided to US defence and government establishments by Defense Industrial Security Clearance Office (DISCO) through contractors. That is a total of two million private security personnel.

Indian private security industry is estimated at Rs.25,000-30,000 crores by value – and about three million by head count.

The elite did manage to drive away the 'usurpers'.  |  After the evacuation of OCCUPY WALL STREET  By Patrick Chappatte, The International Herald Tribune - 11/21/2011 12:00:00 AM

The elite did manage to drive away the ‘usurpers’. | After the evacuation of OCCUPY WALL STREET By Patrick Chappatte, The International Herald Tribune – 11/21/2011 12:00:00 AM

Anecdotal Evidence

Remember Bradley Manning. Dare I remind you of the another marine Brandon Raub. Probably you don’t have the courage to advise your Government after Obama has signed the NDAA Bill. So, no bail, only jail, if Daddy does not like you.

You got problems at home. Save your ideas and lectures where it is needed most.

Nearly a 100 countries in the world have a population that is lesser than the number of US citizens in prison, on parole or probation, or under prosecution by the State.

Of course! It clicks now.

After all, Britain the mother-country of Anglo-Saxon Bloc, first annihilated the native populations and then populated the entire continent of Australia with such people.

‘A staggering number of laws that sanction the use of coercive powers have been enacted in India,’ Arvind Verma writes. Noting that 53,000 people were arrested under the Terrorism and Disruptive Activities Act, of whom just 434 could be convicted seven years later, he underlines some daily realities of Indian democracy: ‘Torture is routinely practised in most police stations and death in police custody is a frequent phenomenon,’ while – nominally outside the jails themselves – ‘the police practice of getting rid of suspects through staged encounters is unfortunately all too common. Suspects against whom the police are unable to bring substantial evidence or those who are perceived to be dangerous are simply murdered.’ Nor, while the police are at work, have the military been idle. In the 1960s, the army was deployed ‘in aid of the civil power’ some 476 times, and in 1979-80 alone, 64 times; often ‘openly stationed so as to provide a perpetual reminder, and on occasion an actual expression, of the fact that the existing social and political order in India is only to be challenged by its critics at their peril’.

Let us compare again.

Big talk also means Big Walk.   Questions on Assange  By Paresh Nath, The Khaleej Times, UAE - 8/28/2012 12:00:00 AM

Big talk also means Big Walk. Questions on Assange By Paresh Nath, The Khaleej Times, UAE – 8/28/2012 12:00:00 AM

Behind Bars – Benchmark USA

Under all laws, all statutes, for all reasons, at all stages of prosecution, India has custodial population of 400,000 compared to the US with 2 million. N on -custodial prosecution figures are excluded from these figures.

Without getting technical or delicate, if we include all disappearances, encounter deaths as State Executions, the figure is less than the people executed in the US.

So …

Perry-bhau If our Indian Government wants to foolishly follow the Yumm-Rikan example, we will take care of it. Our Government! Our problem. Our solution. Don’t need no silly mindless, hectoring from you.

But I will limit it to one simple, suggestion. Give your gyaan to your YummRikan Government.

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