Film Industry: American Muscle To Chinese Skeleton

Posted in China, Desert Bloc, Film Reviews, Pax Americana, Propaganda by Anuraag Sanghi on May 27, 2012

US and China gang-up to save their film industries.

Piracy by China on IP rights of Hollywood. Cartoonist Clay Bennett takes a swipe at China and Hollywood. Sourece & courtesy - claybennett.com  |  Click for source.

Piracy by China on IP rights of Hollywood. Cartoonist Clay Bennett takes a swipe at China and Hollywood. Sourece & courtesy – claybennett.com | Click for source.

Davids & Goliaths

The two biggest economies in the world, US and China have at least one ‘threat’ in common. And the threat is actually from much smaller economies.

US and China have allied to ensure that the threat is ‘managed’.

The Chinese and the US film industry have no answer for old warhorse Bollywood and the upstart Nollywood.

Between Bollywood and Nollywood, they occupy the Top-2 positions in the world film industry. Bollywood with little support from mainstream banks, and Nollywood with no support at all have left Hollywood and the Chinese trailing far behind.

Boom Time In China

Even though

Cinema in China is booming. In 2010 box-office revenues grew by 64% to just over 10 billion yuan.  |  Image source & courtesy -  economist.com  |  Click for image source.

Cinema in China is booming. In 2010 box-office revenues grew by 64% to just over 10 billion yuan. | Image source & courtesy – economist.com | Click for image source.

Cinema in China is booming (see chart). In 2010 box-office revenues grew by 64% to just over 10 billion yuan. More than 520 films were made—about as many as in America. Only India produces more. (via China’s film industry: Kung fu propaganda | The Economist).

What The Economist does not mention is that India alone produces as many as China and US together. And that Nollywood comes in at No.2 position.

Globalized and organized Hollywood is finding that Bollywood and Nollywood is increasing their leadership in viewer and production numbers – without the advantages that Hollywood has.

The only relief that Hollywood has, is from China.

Hollywood is already doing well in China. Blockbusters like Avatar have been hugely popular and foreign films – usually big-budget Hollywood fare – account for about half of the country’s box office takings.

For the past decade, China has only permitted 20 foreign films to be shown in cinemas. A new deal agreed last month allows a further 14 movies to be shown in cinemas, provided they are in Imax or 3D formats.

China is certainly rich in potential. Box office takings surged 29% to $2.1bn (£1.3bn) in 2011 and are expected to see similar growth in 2012. While that’s only a fraction of the $10.2bn taken at the US box office, US ticket sales are declining. (via BBC News – Hollywood plays China card as audiences dwindle at home).

In the last ten years, mainland China has promoted its domestic industry – and taken control of it. Using various front companies, the Chinese Government has bought out and put up studios that will increase production along Party lines.

Along the way, Chinese actors and directors have found traction in Hollywood. And Hollywood blockbusters have gained significant market share in China.

Where the Japanese have gone before

In turn China, with its bulging foreign exchange reserves has decided to take a stake in Hollywood. Much like the Japanese bought in Hollywood back in the 1990s. Sony into Columbia Tristar (1989) and Matsushita (in 1990, Matsushita Electric bought MCA+Universal Studios for $6.5 billion)

BEIJING — Hollywood studios, facing steep challenges in the North American movie market, are taking more interest in China.

The Walt Disney Company and Marvel Studios, a division of Disney’s Marvel Entertainment subsidiary, are producing “Iron Man 3” in China. An agreement with Chinese authorities will allow more American companies to distribute more movies and reap a greater share of the box office in China, the world’s fastest-growing economy.

But at least one billionaire businessman is betting that the American movie market is still the ticket to international success. And he is Chinese.

Wang Jianlin, a rags-to-riches tycoon, is taking over AMC Entertainment, North America’s second-largest movie theater chain behind Regal Entertainment. And he is promising to integrate it into a new, made in China, global brand called the Wanda Group.

Wanda is a private company in a nation dominated by state-owned enterprises. But the AMC deal is closely aligned with the Chinese government’s priorities, which include encouraging Chinese companies to “go global,” pushing an overhaul of Chinese media and entertainment properties and placing greater emphasis on consumer spending. Policy makers in Beijing also want to bolster China’s “soft power” capabilities to extend its cultural influence internationally, and the film industry is considered one of the most promising avenues for doing so.

Which raises the question: Why invest in the United States cinema market at a time of weakness, when box office receipts are sluggish and American film producers are looking to China?

Some analysts have suggested that Mr. Wang’s acquisition of AMC was political, an effort to curry favor with Chinese leaders, who are pushing their nation to enhance its influence by exporting cultural products. Others contend that Mr. Wang is eager to establish himself as China’s first global corporate chief.

But to pull off the deal, Wanda needed plenty of that: more than $3 billion in cash, including $500 million it has promised to invest in AMC in North America. In the end, much of the cash came from China’s big, state-controlled banks. (via China Tycoon Places Risky Bet on U.S. Movie Market – NYTimes.com).

Soft Power – China?

China’s expected rise as a global soft-power has been beset with unexpected difficulties and slower if not zero growth. From the time that Joseph Nye coined the term soft-power, China has been positioned, by Western media as the challenger to American (& Western) soft-power. To Western media, India, seemed like an unlikely candidate as Emerging Soft-Power, has been ranked highest among emerging economies.

But curiously, the more China tries to become a soft-power, the more incapable it finds itself. Most recently, the Chinese President, Hu Jin Tao, lamented the lack of Chinese soft-power – and cautioned the Chinese nation of the dangers from Western culture.

To add heft to China’s quest for soft-power, the Chinese film industry has been significantly supported by the Party and Chinese banks. Investments into construction of film exhibition theatres, studios, animation labs, have been liberal and copious. At the same time, severe restrictions have been on import of films – to twenty in a year, from all sources.

On left y-axis read the zero at top as 100. On the right y-axis, percenetages are based on 2005 as base year with 1 deal.

On left y-axis read the zero at top as 100. On the right y-axis, percentages are based on 2005 as base year with 1 deal.

In 2009, the State Administration of Radio, Film and Television promulgated the Interim Provisions on the Qualification Access for Operating Film Enterprises, Interim Provisions on the Administration of Chinese-foreign Equity and Contractual Joint Ventures of Radio and Television Program Production and other policies in succession. In the capital operation process, Chinese film industry ushered in the market reform, mitigating the problem of capital shortage and vitalizing the market.

There has been a continuous increase in the number of Chinese home-made films since 2003. In 2009, the number hit 456, up 12.32% on a year-on-year basis. The year 2009 has been a banner year in the output of home-made films since 2006. In certain sense, the year 2009 was a critical period of development for Chinese film industry. In the very year, the gross revenue of the Chinese film market reached RMB10.67B, up 26.47% compared with RMB8.43B in 2008.

Huayi Brothers Media Group and Beijing Polybona Film Distribution Co., Ltd. (Polybona Films) are the leading private film bodies. Take Huayi Brothers Media Group as an example, under the flagship of Huayi Brothers Media Group, Huayi Brothers Pictures Co., Ltd. realized the complete industrial chain system from screenwriting, direction, filmmaking and marketing to distribution.

The films, including the Rabe’s Diary and The Message, which Huayi Brothers Media Group invested in and participated in the operation in 2009, acquired good box-office takings in succession. Furthermore, the film, such as Tangshan Earthquake and You Are the One 2, which Huayi Brothers Media Group invested in 2010, are expected to obtain the good box-office takings and worth waiting for.

On Oct. 30, 2009, Huayi Brothers Media Group listed on Shenzhen’s ChiNext Board. The rapid development of the private film bodies, including Huayi Brothers Media Group, Orange Sky Entertainment Group (International) Holdings Ltd. and Polybona Films, not only aggravated the market competition between state-owned film enterprises and private film bodies but also vitalized Chinese small-and-medium-budget film-making market.

The Chinese film-making market showed a sound development gradually. PE/VC took a wait-and-see attitude towards the Chinese film-making market in general. According to the latest China Film-making Industry Investment Research Report 2010 issued by Zero2IPO Research Center, there were 28 investment deals in Chinese film industry from 2005 to 2009, including 26 deals whose investment amount was disclosed with a total investment of US$256.00M and US$9.85M in average. There were nine investment deals in Chinese film industry in 2009, which has reached the peak since 2005. (via Investment in Chinese Film Market Strong in Words but Weak in Action – PEdaily.cn – Zero2IPO Group).

Since 2004, the number of Chinese animation production enterprises has been on the rise, with the number of enterprises engaged in the production of TV cartoons rising to 200 in 2010 from 15 in 2004. Meanwhile, a host of registered animation film production institutions have emerged, with the figure increasing to 68 in 2010 from 25 in 2008.  |  Caption & image via researchinchina.com

Since 2004, the number of Chinese animation production enterprises has been on the rise, with the number of enterprises engaged in the production of TV cartoons rising to 200 in 2010 from 15 in 2004. Meanwhile, a host of registered animation film production institutions have emerged, with the figure increasing to 68 in 2010 from 25 in 2008. | Caption & image via Global and China Animation Industry Report, 2011 – ResearchInChina.

Echoes from Japan

Interestingly, animation films in China have been a big success – unlike India. Vastly different from the traditional lines of Chinese films.

Keep in mind, that Japan is a big consumer of anime, gaming, cartoons. 

Kung Fu Panda, a 2008 American computer-animated action comedy film is enough proof of this.

“Kung Fu Panda,” the animated movie about a bear named Po with a passion for martial arts is a huge hit in China.

The film, from DreamWorks Animation and Paramount Pictures, has already grossed more than $12 million after less than two weeks in release.

Globally, the movie has brought in $275 million (via ‘Kung Fu Panda’ is a success at the box office in China – The New York Times).

Was the success of Kung Fu Panda and its sequel, in China a flash in the pan?

Kung Fu Panda and its sequel are arguably the most successful Chinese-themed Hollywood movies to date, and the movie’s screenwriter, Glenn Berger, says Hollywood’s China infatuation is not necessarily a passing fad. (via BBC News – Hollywood plays China card as audiences dwindle at home).

Quiet Flows Buddhism

For long the Chinese needed and used Buddhist story props and ideas in Chinese films – especially made by the centurion Shaw Brothers – Run-Run and Run-Me. Based out of Hong Kong and later Singapore, the Shaw Brothers was the global face of Chinese cinema from 1950-2000. Devout Buddhists, their story-lines incorporated Japanese colonialism, Buddhist monks, great belief in the Chinese identity. Some Chinese dynasties like the Manchu, Ching and Mongol Yuan dynasty of the 14th century was a favorite target.

But in the last 10-15 years, the Buddhist monk has disappeared. Instead gangsters and underworld have become dominant themes in Chinese films.

The pre-occupation of Hollywood with death, war, violence, crime is well-known. Is that the way Chinese will ‘progress’?

Israel’s Refugee ‘Problem’

Posted in America, Current Affairs, Desert Bloc, European History, Media, Pax Americana, politics by Anuraag Sanghi on May 24, 2012

75 years ago, the world turned its face away from Jewish refugees from Germany. America allowed talented, the rich and accomplished Jews to come to America. Today Israel thinks that refugees are ‘cancer’ and ‘plague’

Jews were refugees a few decades ago. They seem to forget that.  |  Cartoon by Baloo; source & courtesy - balooscartoonblog.blogspot.com  |  Click for image.

Jews were refugees a few decades ago. They seem to forget that. | Cartoon by Baloo; source & courtesy – balooscartoonblog.blogspot.com | Click for image.

Nearly 75 years ago, on on 9–10 November 1938, German SA Sturmabteilung, Nazi Stormtroopers in English, attacked Jewish business and residential establishments. That was soon after the start of ten years of unprecedented persecution of Jews in Germany. That night came to known as the Kristallnacht– the night of crystal, as Nazi stormtroopers broke glass doors, displays and show windows.
After the WWII, governments the world over decided that the Jewish experience must not be repeated. Most countries put in place laws that would safeguard refugees. The strongest safeguards possibly were in Germany, itself.

In the last ten years, there have been an estimated 60,000 African refugee-immigrants (mostly from Sudan and Eritrea) who have come to Israel to make a living.

Protesters gathered Wednesday across the country to protest the growing influx of African infiltrators in Israel. Over 1,000 people attended the demonstration in Tel Aviv’s Hatikva neighborhood, holding signs calling for the deportation of the migrants, one of which read “Bibi [Netanyahu] decide – Sudan or Israel.” Similar demonstrations were held in Eilat, Bnei Brak, Sderot, Ashdod and Ashkelon. (via TA anti-African rally ends in rioting, a… JPost – National News).

Israelis, themselves seeking refuge a few decades ago, came out in the streets to create an opinion against African refugees.

Thousands of Israelis, including high-profile politicians, attended an anti-African demonstration in Tel Aviv. The rally turned violent, with attacks on Africans and grocery shop windows being smashed.

­The gathering, which took place in Tel Aviv’s Hatikva neighborhood, targeted the influx of African asylum seekers and was organized by Michael Ben Ari, a Knesset member from the National Union party, along with far-right activists Itamar Ben-Guir and Baruch Marzel, Israeli newspaper Haaretz reports.

But the rally was also attended by politicians from the ruling Likud party, including Knesset members Miri Regev and Danny Danon.

Former army brigadier general and Israeli Defense Forces spokeswoman Regev described asylum seekers as a “cancer in our body.”

On Thursday, Regev explained that her use of the word “cancer” was meant “to illustrate the spread of a negative phenomenon. This is a manifestation of rage that has been unleashed after a long time of people feeling unsafe in their own homes.”

“With all due respect to the Left and Peace Now – they are the reason that our country is in the state it’s in. Because of their High Court petitions we cannot deport all those infiltrators to their countries of origin,” she reportedly charged.

Danon also said the “infiltrators” had to be immediately expelled from Israel.

“We should not be afraid to say the words ‘expulsion now,’” Danon was reported as saying.

The crowd carried signs proclaiming messages such as “This is not Africa” and “Stop talking, start expelling.”

But as the sun set the rally turned violent, with demonstrators attacking at least a dozen African men and women who were unfortunate enough to be near the scene. They also smashed the shop front of a grocery store that served the migrant workers, subsequently looting it. Dene. They also smashed the shop front of a grocery store that served the migrant workers, subsequently looting it. Demonstrators also broke the window of a cab driven by a suspected African migrant worker. A bonfire was also lit up in the street. On Sunday, Prime Minister Benjamin Netanyahu told his ministers that the phenomenon of “illegal work infiltrators” was “very grave,” and that it “threatened the social fabric of society,” Israel’s national security and national identity. He also warned that unless action is taken, the migrants could “inundate” the country and “cancel out its image as a Jewish and democratic state.”Thousands of migrants from Eritrea and South Sudan came to Israel, saying they wanted to escape the poverty and political instability at home. The government has been trying to deport refugees from South Sudan back to their homeland, but the motion was halted by the Jerusalem District Court. The court issued a temporary order prohibiting the deportation until it rules on a petition filed by five human rights organization against the state’s decision to deport the immigrants, arguing that their lives may be endangered if they return home. (via Israeli Kristallnacht: Africans attacked in Tel Aviv anti-migrant demo (PHOTOS) — RT).

Attention deficit disorder?  |  Cartoon by Baloo; other details embedded in image  |  Click for image.

Attention deficit disorder? | Cartoon by Baloo; other details embedded in image | Click for image.

Ironically, the Jewish State of Israel itself finds it difficult to handle some 60,000 African immigrants.

The Israeli prime minister has stoked a volatile debate about refugees and migrant workers from Africa, warning that “illegal infiltrators flooding the country” were threatening the security and identity of the Jewish state.

“If we don’t stop their entry, the problem that currently stands at 60,000 could grow to 600,000, and that threatens our existence as a Jewish and democratic state,” Binyamin Netanyahu said at Sunday’s cabinet meeting. (via Israel PM: illegal African immigrants threaten identity of Jewish state | World news | The Guardian).

In a nation of 80 lakh people (8 million), can less than 60,000 migrants become a threat?

Is the State of Israel so fragile?

Israelis claim that these Africans have increased the crime rate in Israel. Facts as reported by The Guardian, that

According to police data quoted by the Hotline for Migrant Workers, the crime rate among foreigners in Israel was 2.04% in 2010, compared with 4.99% among Israelis. Micky Rosenfeld, spokesman for the Israeli police, said the overall crime rate in Israel had fallen. There had been one alleged rape of a teenage girl connected to the migrant community, for which three suspects were in custody, he added.

Yohanan Danino, the Israeli police chief, said migrants should be permitted to work to discourage petty crime. Nearly all are unable to work legally, and live in overcrowded and impoverished conditions. “The community needs to be supported in order to prevent economic and social problems,” said Rosenfeld.

But the interior minister, Eli Yishai, rejected such a move, saying: “Why should we provide them with jobs? I’m sick of the bleeding hearts, including politicians. Jobs would settle them here, they’ll make babies, and that offer will only result in hundreds of thousands more coming over here.”

Israel has been paranoid about immigrants since this cartoon from this 1990.  |  Cartoons credits embedded.  |  Click for image.

Israel has been paranoid about immigrants since this cartoon from this 1990. | Cartoons credits embedded. | Click for image.

On the other hand, time and again, Jewry, seems to usually land up at the side of powerful oppressors. Ignoring the persecution of the Roma Gypsies for decades, Israel now pays lip service. In another part of the world, a commentator notes, for instance,

from 1948 until 1994, the semi-official bodies representing the Jewish community in South Africa had been consistently mute on the apartheid question.

In Israel itself,

Israel is constructing a vast steel fence through 150 miles of the Sinai desert as a deterrent to people-trafficking and the smuggling of drugs and weapons. The barrier would be completed, bar one small section, by October, Netanyahu said.

Israel is also constructing the world’s largest detention centre for asylum seekers and illegal migrants, capable of holding 11,000 people. The £58m building, close to the border, will receive its first detainees by the end of the year. Binyamin Netanyahu’s coalition has skimmed a minimum of 2% from every ministry’s budget to fund the construction and start-up costs of the (detention) building.

According to UNHCR figures, 66% of Eritreans who arrive illegally in the UK are granted refugee status and 96% of those arriving in Canada.

In 2010, Israel recognised three refugees, rising to six last year. In total, just 170 people claiming asylum have been granted refugee status by the Jewish state since it signed the refugee convention in 1949.

All this not surprising. Israel has seen itself as a part of the West. Never a part of the Middle East or considered Africans as close as people from Mars are. Israel’s biggest failure is the state of permanent hostility it has engendered in the neighbourhood. Israel’s dysfunctional relationship with its neighbours has taken significant efforts from Israel – possibly, based on its superior ‘European’ extraction.

The only logic for Israeli policy is the probable Israeli intention. Is it that they are not staying in the neighbourhood after, or when American aid ceases?

Last summer’s protests against the cost of living suggested that many Israelis were less than satisfied with the state of the state. Almost a year later, housing is as unaffordable as ever and wages are relatively low. The gap between Israel’s rich and poor remains one of the highest in the western world. This winter saw a steep increase in electricity and gas prices. And, despite last year’s “cottage cheese protests”, food prices continue to rise. (via Refugees join Palestinians as the reviled ‘other’ in Israel – The National).

Nearly 65 years ago, the world turned away its face from the fate of Jews in Germany.

Today Israel’s Interior Minister, Eli Yishai, Yishai said: “I’m not responsible for what happens in Eritrea and Sudan, the UN is.” Does the UN have a country where these refugees can stay? How does Yishai expect the UN to handle these refugees?

After ten years of persecution in Hitler’s Germany, one would expect global Jewry to change.


The fact they it has made no difference to them is probably my problem. But Jews have no such expectation of themselves.

It is a problem of my expectation.

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Indian diplomacy: Heavy Lifting

Posted in America, Current Affairs, Gold Reserves, Pax Americana, politics by Anuraag Sanghi on May 22, 2012

Manmohan Singh, attacked at home with scandals and policy paralysis; internationally blamed for a placid Indian economy. No, I didn’t mean flaccid. In the middle of this has been a diplomatic triumph that he cannot talk about. But 2ndlook can …

An oil tanker loads gas in Assaluyeh seaport at the Persian Gulf, 1,400 km (870 miles) south of Tehran, Iran  |  May 27, 2006.  |  Credit: Reuters/Morteza Nikoubazl  |  Click for image.

An oil tanker loads gas in Assaluyeh seaport at the Persian Gulf, 1,400 km (870 miles) south of Tehran, Iran | May 27, 2006. | Credit: Reuters/Morteza Nikoubazl | Click for image.

Who’s knocking

It takes chutzpah to host US Secretary of State Hillary Clinton and a trade mission from Tehran on the same day. That’s what India is doing — and it has so far played the two sides off rather well. While good relations with the United States are important, Iran’s cheap oil is too attractive to pass up, and India has a long history of goodwill towards its Persian neighbour. A compromise looks likely.India has been publicly dismissive of US calls to stop doing business with Iran. Given its $185-billion trade deficit, it is not hard to see why New Delhi would rather keep trade flowing. Oil accounts for two-thirds of India’s import bill, and Iran is a major supplier. India has even been able to negotiate payment in its own currency, the rupee. That’s like a gift voucher which Tehran can only spend in Indian shops.

Clinton, meanwhile, has called for India to support US sanctions. But she can’t afford to push too hard.

Privately, the Indians seem to be more co-operative. Under pressure from politicians, refiners have cut imports of oil from Iran by 15-20 per cent. That strategy may be enough to win a waiver from US-led sanctions during Clinton’s two-day visit, assuming American politicians believe a quietly helpful India is better than an openly hostile one.

India’s best outcome would be to keep both sides happy. As Iran’s second largest customer, it is in a good position to secure a discount to the market price of oil —something it is unlikely to get from other suppliers like Saudi Arabia. And the United States may be prepared to bend its rules to keep an emerging superpower on-side. New Delhi’s diplomatic balancing act might just work. (via Tightrope diplomacy).


And behind this heavy lifting, was a bigger story!

“The dispute over Iran’s nuclear programme is nothing more than a convenient excuse for the US to use threats to protect the ‘reserve currency’ status of the dollar,” the newspaper, which calls itself the voice of the Islamic Revolution, said.

“Recall that Saddam [Hussein] announced Iraq would no longer accept dollars for oil purchases in November 2000 and the US-Anglo invasion occurred in March 2003,” the Times continued. “Similarly, Iran opened its oil bourse in 2008, so it is a credit to Iranian negotiating ability that the ‘crisis’ has not come to a head long before now.”

Iran has the third-largest oil reserves in the world and pricing oil in currencies other than dollars is a provocative move aimed at Washington. If Iran switches to the non-dollar terms for its oil payments, there could be a new oil price that would be denominated in euro, yen or even the yuan or rupee.

India is already in talks with Iran over how it can pay for its oil in rupees.

Even more surprisingly, reports have suggested that India is even considering paying for its oil in gold bullion. However, it is more likely that the country will pay in rupees, a currency that is not freely convertible. (via Iran presses ahead with dollar attack – Telegraph).

This payment ‘crisis’ was triggered when

Barack Obama signed into effect the Iran Threat Reduction Act on December 31, 2011. That Act bars foreign banks from the US if they conducted transactions with the Central Bank of Iran (CBI), a move intended to choke off Iran’s oil incomes, its main source of revenue.

The law calls for US financial sanctions on anyone settling oil trades with CBI, and comes into effect from June 28. The exceptions are White House-blessed waivers or a very tight oil market. (via Why India’s real Iran dilemma isn’t oil – Economic Times).

Show me the money

The drama of payments to Iran played itself out over the last one year with many twists and turns:

  • An ‘angry’ Iran threatening to cut oil supplies
  • India ‘outraged’ and eager to pay, but without banking options
  • US ‘determined’ and pressing India to cut oil purchases from Iran

With many rounds of shadow-boxing,

In December 2010, the Reserve Bank of India (RBI), fearing US sanctions on India’s financial sector, had walked out of the Asian Clearing Union that cleared Iran’s oil payments.

This started a merry-go-round as India scoured the world to pay Iran for its oil and simultaneously tried to reduce its dependence on Iranian oil. India began to use one of its small nationalised banks with little or no exposure to the West, to pay for the oil.

The first stop was Germany’s EIH Bank, but in a few months that stopped. Turkey’s Halkbank has been processing India’s payments to Iran since then, though there were palpitations when Halkbank refused a BPCL application. This week, Halkbank stated that it remained open for business for India. (via Why India’s real Iran dilemma isn’t oil – Economic Times).

To buffer India-Iran trade from external influences, India proposed a rupee payment system, which can be direct transaction without any third-party involvement.

Iran has asked India to pay for oil partly in yen as the two nations seek an agreement on how to maintain trade amid tightening global sanctions, according to three people with knowledge of the matter.At talks in Tehran last week, India proposed to pay its second-biggest oil supplier in rupees through a bank account in the South Asian nation. Iranian officials sought partial payment in yen because they’re concerned that they may not get sufficient value from the rupee, which isn’t fully convertible.

The nations have struggled to preserve $9.5 billion in annual crude trade. The Gulf nation is concerned that India’s entire crude oil bill can’t be paid through exports to Iran, the people said. Iran’s imports from India are worth about $2.5 billion a year, while its annual oil sales to the South Asian nation are valued at about $9.5 billion, the people said.

Iran also wants India to invest in non-strategic infrastructure projects in return for crude supplies, the people said. (via Iran Said to Seek Yen Payments From India for Oil Amid Sanctions – Businessweek).

India and Iran agreed to use the Indian rupee for oil-trade with Iran. On this development, Indian media reported,

Dismissing the possibility of US sanctions impacting India-Iran ties, Tehran on Tuesday announced that the two countries have worked out a new mechanism for oil payments, following which Indian energy firms will pay for 45 per cent of their crude oil imports from Iran in rupees and rest through barter and semi-barter system.

This mechanism for future payments was arrived at a meeting between officials of the two nations in Tehran in mid-January. India has cleared all oil payment dues till date.

“A suitable mechanism has been found out. All the money not paid by India last year has been paid,” Iranian envoy to India Syed Mehdi Nabizadeh said.

“This was the proposal by India and we accepted it. Both the sides are satisfied,” Nabizadeh said.

India is keen to use the new mechanism as it fears that the current payment route through Turkish bank may end due to fresh US sanctions.

The Iranian envoy said the two countries are looking at mechanisms for payment of the remaining 55 per cent.

Iran could increase its imports of goods from India to settle part of the payments, Nabizadeh said. Indian companies are also expected to invest in projects in Iran, such as developing oil and gas fields, extracting iron ore, building roads and railways and purchasing fertilisers. India could also export iron, steel, machinery, equipment, agricultural products like rice, and minerals to Iran that faces international sanctions.

Nabizadeh, however, ruled out gold as an option for oil payments. “Gold is not suitable,” he said. (via India resolves Iran oil payment issue : India News – India Today).

Hits and Misses

Rupee-trade would have another benefit for India. Indian demand for US dollars will reduce by about 4%-6%. Coincidentally, around the same time (December 2012), the dollar started appreciating against major currencies – except the yen. Rupee-trade is something that India and the former Soviet Union used effectively for more than 20 years. Prime Minister Manmohan Singh

discussed alternative financial conduits with Russian officials during his visit to Moscow in December. India, which got 11 percent of its crude imports from Iran last year, is exploring the option of making payments for Iranian crude through Russia’s Gazprombank OJSC, though no deal has been reached, three of the people said Jan. 9.

For Iran this rupee trade limits the usage of oil-sale realizations to purchases from India. Based on this Iran would limit oil sales to India – which it has done. This is possibly behind the fig-leaf of 11% cut in oil-purchases from Iran.

This is in the short-term. In the medium term, both countries are looking at ways forward that are not dependent on external players.

Amid talk of reducing crude imports from Iran, and barely a week after US secretary of state Hillary Clinton’s visit to India, Iranian President Mahmoud Ahmadinejad has called Prime Minister Manmohan Singh, urging him to expand bilateral ties in “different fields”.

India declared that it is reducing its dependence on any particular region for crude import – even if not under Washington’s pressure. Ahmadinejad spoke to Singh on Monday evening

In his conversation with Singh, Ahmadinejad insisted that bilateral cooperation between India and Iran would lead to considerable achievements for both nations. Singh responded that widening ties with Iran was on the basis of “national interests”.

In yet another sign that Iran is trying to reach out to India, despite the oil cut, government sources said Tehran was likely to send its foreign minister, Ali Akbar Salehi, soon to invite Singh for the 16th NAM summit to be held in Tehran in August and for bilateral talks with Ahmadinejad. (via Amid oil cuts, Ahmadinejad speed dials PM Manmohan Singh – Times Of India).

But before this was another bombshell – using adequate safeguards of ‘plausible deniability’. An Israeli website, ‘revealed’ that India had dropped an atomic bomb on the US dollar.

India would use gold to pay Iran for oil.

New Delhi: An Israeli website has suggested that India has agreed to pay Iran in gold for oil purchases, but Indian authorities have called the report “speculative”.

In an “exclusive report” on Jan 23 this year, the website, debka.com, quoted Iranian sources as saying that “India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of US dollars”.

However, Indian government officials said the report was “speculative” and hence did not merit any response. (via Gold for Iran oil report speculative: India – India News – IBNLive).

If gold usage became common to settle oil transactions, it would be the end of the Euro and the US dollar as we know it. US Govt. debt (US$15 trillion) is roughly equal to global trade and speculation in oil.  If that oil-trade started to get settled in gold,

  • gold prices would appreciate (choose any number between 100%-500%)
  • Global demand for US dollar would reduce by about US$ 10trillion-US$ 20trillion in 12-36 months.

All this serves or damages US interests. But, it serves no short-term Indian  interest to rock the boat.

So, what is driving Indian thinking and actions?

360 degrees

Is it an oil ‘shortage’?

India has been reducing oil imports from Iran, ever since Saudi Arabian King Abdullah’s January 2006 visit here. Iraq, which is rejoining the global oil market, is also a big oil source. Then there is Nigeria, though internal problems there may impact its capacities soon. Thus, there is unlikely to be an oil supply problem in the world, despite the IMF hyperventilating about a “supply shock”.

Between the Saudis, Iraqis, Libyans and Russians there is enough extra oil, close to 1 million bpd more oil may be coming from these producers alone. Besides, the 600,000 bpd that Iran currently sells to the EU will soon be free for countries with the nerve and muscle to ignore sanctions. (via Why India’s real Iran dilemma isn’t oil – Economic Times).

Unlike Iran, India does not harbor any ill-will against the US or the West. In which case why is India playing so hard?

But as a past sufferer of international sanctions, India, like China, fundamentally dislikes them. They end up penalising the poor citizen, but keep elites in business. We can expect that a further set of UN sanctions against Iran would die at the hands of China and Russia.

So, is the nuclearization of Iran a true story?

Iran though is determined to get a nuclear weapon, despite all it’s protestations to the contrary. In conversations with the Indian leadership, Iranians said they took away a couple of lessons from current events.

Muammar Gaddafi, who gave up his nuclear programme to the West, died in a “West-imposed” conflict. But North Korea’s Kims (the late father and the successor son) remain untouched despite them being serious nuclear bad boys. That, Iranians said, was because North Korea has the nuclear device. The world needs a different narrative if Iran has to be weaned away from its nuclear dreams.

In which case the next question is …

What has India gained?

First, let us look at how India looks with the US Axis.

The Barack Obama administration will be delighted that the sustained diplomatic and political pressure on India is finally bearing fruit. Meanwhile, a protagonist lurking in the shade is all excited – Saudi Arabia.

A mystery lingers. What did the Obama administration promise the Manmohan Singh government as quid pro quo? Manmohan most certainly sensitized US Secretary of State Hillary Clinton of India’s “wish list” during her recent hurried visit to hold consultations personally with him just ahead of the US-India Strategic Dialogue co-chaired by her, which is scheduled to convene in Washington.

Delhi has been under immense pressure from Washington to fall in line with the letter and spirit of the US’s sanctions on Iran over its nuclear program and curtail the sourcing of crude oil from Iran. (via Asia Times Online :: India dumps Iran, squeezes Obama).

What about Iran? How does Iran feel about this? One reading seems to suggest

India is shrewdly exploiting Iran’s current vulnerabilities. Thus, by taking advantage of the obstacles being put by the US on the Asian Clearing Union payment mechanism of India-Iran trade, New Delhi persuaded Tehran to accept a system of barter trade for up to 45% of its oil exports, which would effectively work as an export promotion drive for Indian companies in the Iranian market.

Iran accepted the deal grudgingly since it is keen to continue somehow or other with its longstanding relationship on oil with India through the present difficult corridor of time. The heart of the matter is, remove oil from the Iran-India relationship and it will atrophy to virtually nothing. Evidently, New Delhi has assessed that the relationship means more to Iran than to India at the moment.

Iranian President Mahmud Ahmadinejad telephoned Manmohan on Monday in an attempt to shore up the relationship. He stressed that Tehran sets no limits to the broadening of ties with India and that the traditional, historical relationship has been of a “brotherly” character and is assured of a “promising future”. Manmohan responded with a caveat that India attaches importance to ties with Iran and welcomes a broadening of relations with Iran “on the basis of national interests”.

There is some evidence that Tehran is also settling for a low-key relationship. Tehran parried repeated Indian attempts to schedule a visit by the secretary general of Iran’s Supreme National Security Council, Saeed Jalili, to New Delhi. Tehran estimates that the consultations are best scheduled when New Delhi is genuinely open to strategic engagement with Iran. (via Asia Times Online :: India dumps Iran, squeezes Obama).

To some the question remains

the big question still remains: What is it that India hopes to extract from the Obama administration in return for its momentous decision to comply with the US’s Iran sanctions?

Indian diplomacy is hard at work. Starting from 2006 when India began voting against Iran in the International Atomic Energy Agency, Iran has become a factor in the US-India strategic partnership and New Delhi has been able to leverage it because Washington is extremely sensitive to Iran’s regional standing.

Manmohan’s timing is superb. Although Obama needs to take a decision on giving a “waiver” to India under the Iran sanctions regime only in July, Manmohan took the decision now to cut India’s oil imports from Iran.

Clearly, New Delhi has set its sights on the forthcoming US-India Strategic Dialogue in early June. After having discussed with Clinton during her recent visit the future directions of the US-India strategic partnership, New Delhi expects a tradeoff.

Obama’s political prestige is at stake over the Iran nuclear issue, especially in a tricky presidential election year for him. Manmohan is handing over to him a major foreign policy “achievement” in making Tehran look somewhat more isolated in its region just when the talks over the Iran nuclear issue are moving into a crucial phase.

If Indian diplomats are worth their salt, they are tiptoeing toward the US-India Strategic Dialogue with a killer instinct; they won’t settle for some two-penny worth gains. (via Asia Times Online :: India dumps Iran, squeezes Obama).

Why is Iran so important to India.

Iran is a counter-balance to the anti-India axis of China-Pakistan. Pakistan would be hard-pressed to fight a war against India alone. If aided by China, India could play the Iran card. What is in it for Iran?

Why would Iran do it?

Historically, at times Iran has ruled over modern Baluchistan and parts of Afghanistan. These territorial ambitions of Iran would become reality. Iran would justify the annexation to protect the Shia Muslims of Pakistan of a ‘crumbling Pakistan’.

Just months before the outbreak of the 1857 War against the British, both Iran and Afghan rulers had been negotiated into neutrality by the British. So, while the British Raj was fighting for its empire, and India for its freedom, was alone.

Possibly, this lesson has not been lost on Indian diplomats.

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Kissa Kahani Bazaar massacre

Posted in British Raj, History, India, Indo Pak Relations, politics by Anuraag Sanghi on May 20, 2012

Did the British change or learn anything after the Jallianwala Bagh massacre? Not really. Little over ten years later, the Raj repeated the same action in Peshawar – the infamous massacre at Kissa-Kahani Bazaar; the publisher’s market in Peshawar.

Troops advancing on the protesters  |  Image source - INP; courtesy - tribune.com.pk  |  Click for image.

Troops advancing on the protesters | Image source – INP; courtesy – tribune.com.pk | Click for image.

Qissa Khawani Bazaar is one of Peshawar’s well-established market areas, a place named for its long association with publishing, and these days, sweets. Unfortunately, the bazaar is also the site of one of the most violent attempts by the British Raj to suppress the Indian independence movement.

By 1930, the Khudai Khidmatgar (Servants of God) had transformed from a movement to unify the Pakhtun tribes under one umbrella into a legitimate non-violent independence movement, drawing inspiration from Gandhi’s Satyagraha philosophy. However, it was the events of April 23 that year which thrust the movement into the limelight.

Following the arrest of Khan Abdul Ghaffar Khan (Baacha Khan) for a speech urging resistance to the British occupation, a number of his followers were rounded up by the police on frivolous charges. When two prominent workers surrendered, they were escorted to the Kabuli Police Station, where they were warmly welcomed by a large crowed assembled around the station.

The size of the crowd – which though noisy, had made no threat of violence – panicked the escorts, and they used force to disperse the assembly. The crowd reacted to the gunshots by slashing the tyres of the vehicles and attempting to free the two political workers.

As the British lost control of the situation, the military was brought in to restore order, while civilians from nearby collected at the scene to aid the injured. Upon reaching the scene, the famed indigenous Royal Garhwal Rifles was ordered to move forward and fire.

They refused.

Archive photos: A military vehicle burns in the empty streets. | Image source - INP; courtesy - tribune.com.pk | Click for image.

Archive photos: A military vehicle burns in the empty streets. | Image source – INP; courtesy – tribune.com.pk | Click for image.

The egg-faced leadership withdrew the Rifles and sent in the City Disturbance Column, who killed and injured members of the crowd while driving in. When the crowd demanded access to the dead and wounded, the Column was ordered to open fire.

The Market of Storytellers ran red with blood as bullets flew around for hours. However, the survivors stood their ground and faced the hail of gunfire with God’s name on their lips. After hours of firing, over 400 people had lost their live, with some estimates going as high as 700.

Gene Sharp, Professor Emeritus of political science at the University of Massachusetts, Dartmouth, wrote, “When those in front fell down wounded by the shots, those behind came forward with their chests bared and exposed themselves to the fire, so much so that some people got as many as twenty-one bullet wounds in their bodies, and all the people stood their ground without getting into a panic…. This continued from 11 till 5 o’clock in the evening. When the number of corpses became too many, the ambulance cars of the government took them away.”

Ghaffar Khan later wrote that this and subsequent aggression towards his non-violent movement were because the British thought a non-violent Pashtun was more dangerous than a violent one.

Though King George VI ordered an investigation into the event, historical records in the Peshawar Archives indicate that like many previous incidents, the British Government tried to covered up the Qissa Khawani Bazaar Massacre by bribing Judge Naimatullah Chaudhry.

However, Naimatullah published a 200-page report criticizing the British and passed a resolution in favour of the local people.

In the aftermath, the Khudai Khidmatgar became widely known for their resistance work while their leader was propelled to national stature and soon earned himself the nickname Frontier Gandhi for his devotion to non-violent resistance.

Archive photos: A sepoy taking aim early in the day  | Image source - INP; courtesy - tribune.com.pk | Click for image.

Archive photos: A sepoy taking aim early in the day | Image source – INP; courtesy – tribune.com.pk | Click for image.

As Khan said, “There is nothing surprising in a Muslim or a Pathan like me subscribing to the creed of nonviolence. It is not a new creed. It was followed fourteen hundred years ago by the Prophet all the time he was in Mecca.”

(Published in The Express Tribune, April 24th; via Qissa Khawani Bazaar massacre: Standing tall before a hail of gunfire – The Express Tribune).

Three very interesting things about this post in the Pakistan’s Express Tribune .

One: This post refers to the Indian Independence Movement – without naming, involving, using Pakistan, Jinnah et al.

Two: Pakistan’s Express Tribune credits Gandhiji’s Satyagraha Movement for inspiring people in Peshawar, under the leadership of Khan Abdul Ghaffar Khan – aka the Frontier Gandhi.

Three: Khan Abdul Ghaffar Khan – aka the Frontier Gandhi, was persona non grata, in Pakistan for many years – and was in jail in Pakistan.The Pakistani Establishment – and the reactionaries both were anti-Ghaffar Khan.

Frontier Gandhi’s grandson, Asfandyar Wali Khan (also spelled Asfandiyar Wali Khan) is seen as a threat by fundamentalists – and the Pakistani Taliban attempted to assassinate him in October 2008. As the 2ndlook post ‘Behind The Web of terror’, on December 17th, 2007, pointed out, the answer to the Pakistani problems in the North West tribal areas was Khan Abdul Ghaffar Khan. On October 3rd, 2008, the Frontier Gandhi’s grandson was the target of suicide bomber. The terrorists are obviously worried that Khan Abdul Khan Ghaffar Khan’s sensibility may make a comeback.

Wonder what’s bothering Washington (Post)?

Posted in Current Affairs, Desert Bloc, Propaganda by Anuraag Sanghi on May 18, 2012

Indians are the biggest savers in the world. Can buying a few grams of gold be termed as lust? Sin, covetousness?

From India struggles to balance its books as citizens lust for gold - The Washington Post   |  2012-05-18 19-55-55  |

From India struggles to balance its books as citizens lust for gold – The Washington Post | 2012-05-18 19-55-55 |

International crisis

Are purchases of gold by Indian consumers an international problem?

Washington (Post) teams thinks so.

Washington (Post) thinks it is in the same league as the Greek economy; elections in Egypt or the breakdown of the State in Pakistan’s frontier areas. (See graphic above).

Let’s understand this ‘issue’ better!

In India, the world’s biggest annual bullion importer, gold jewelry plays a central role in weddings and festivals. India imported 933 metric tons of gold for private consumers last year, a 35 percent rise over five years and just under a quarter of global demand, according to the World Gold Council.

Indian households’ disposable incomes grew by 13 percent during the 2010-11 financial year, but the amount in their bank accounts rose by only 3 percent, according to official data.

High inflation often renders the idea of financial savings unappealing, and many people in rural areas lack access to banks.

India is struggling to balance its books partly because its citizens keep buying gold. The country’s current account, the difference between the value of its imports and exports of goods, services and financial-transfer payments, is running at a deficit of about 4 percent, largely because of high import bills for oil and gold — India bought 969 metric tons of bullion last year at an overall cost of $48 billion.

The lack of money in Indian bank accounts forces the government and private companies to borrow abroad, pushing the country further into the red.

“You’re not looking at something sustainable. The balance of payments becomes very skewed,”

The International Monetary Fund predicts that India’s economy will grow by 6.9 percent this year, a significant drop from the double-digit rates touched in recent years.

India’s government has been trying to exert some control this spring. (via India struggles to balance its books as citizens lust for gold – The Washington Post).

How India’s gold buying affects the world

Has crime rate in India gone up in India to fund gold consumption.

Not true.

India has low crime rates; lowest imprisonment ratios, a small police force – despite a huge number of unlicensed firearms, with really poor people.

Is the Indian Government likely to renege on its debt obligation? India has not in its history defaulted on sovereign debt.

Have Indian consumers borrowed large amounts and likely to default on their obligations to international lenders? Indians consumer debt is contracted locally – and hence Washington (Post) has no cause for worry.

Are Indians causing international flare-ups to fulfill their ‘lust for gold’?

Have Indians annihilating people?

Like the British did with Australian aborigines? Or the Spanish and European migrants did to Native Americans in North and South America? Or committed gross human rights violations like the Belgian king in Congo? Have Indians enslaved millions or invaded other countries – like Europe did in the Scramble for Africa?

Answer – None of the above.

James Gillray, a leading caricaturist in 1797, in his print Midas, published after Bank Restriction Act came into force. Prime Minister William Pitt the Younger (28 May 1759 – 23 January 1806) is using the Bank of England as a commode. From both his rear end and his mouth Pitt is showering the English people with new currency notes that also are in his paper crown.  |  Image source - rc.umd.edu.  |  Click for a larger scan.

James Gillray, a leading caricaturist in 1797, in his print Midas, published after Bank Restriction Act came into force. Prime Minister William Pitt the Younger (28 May 1759 – 23 January 1806) is using the Bank of England as a commode. From both his rear end and his mouth Pitt is showering the English people with new currency notes that also are in his paper crown. | Image source – rc.umd.edu. | Click for a larger scan.

Call this lust …

Lust – meaning.

Usually the words associated with lust are

deadly sin, mortal sin, craving, appetite, or great desire, desire, longing, passion, appetite, craving, greed, thirst, cupidity, covetousness, crave, yearn for, covet

After paying international prices, can there be covetousness, cupidity, deadly sin, mortal sin? The Japanese save money in pension funds; Americans buy gilt-bonds and shares, British savers buy shares and put money in insurance and mutual funds.

Indians buy gold.

How can retail buying of gold by small people be described as lust. Most families in India have less than 100 gm of gold. Is that craving, longing, passion, greed, cupidity?

Would you call Indians lustful, if they do not wish to undergo the fate of the British people?

War by other means

This portrayal of the Indian consumer as sinner smacks of aggressive intent.

First demonize and then annihilate. It is not as though the Indian Government is cornering the gold market – and trying to destabilize the world currency system – ramshackle as it is.

So why this attempt to demonize the Indian consumer?

If this is causing a trade imbalance, does Washington (Post) demonize American consumers – for their oil consumption, for their garbage generation? For creating a housing bubble and credit balloon which burst – causing global misery. For running a a 100-year old trade imbalance, that has only been reversed, when the US used war materiel production to enhance economic activity.

So, if crime is not the issue, default is unlikely, why are these dem fine White folks so worried about us Injuns?

On a clear day

Ahh! I get it.

It must be the Washington (Post) acting in Christian spirit of being their Injun Brother’s keeper. They are trying to save us Injun’s from ourselves.

We stoo-pid, silly Injuns.

Why can’t we take advice from Washington (Post)?

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