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Method in the madness

Posted on 19 December 2011 by Tea Server



Nostalgia hits all of us at one time or another. The idyllic past becomes a refuge from the hectic present, a sort of an emotional safety valve; a blissful state of mind, which resides in distant memories. And the mind itself seemingly having this wonderfully therapeutic capability of filtering out all that is sad and leaving us only joyful reminiscences …

Normally it is the time one spends in college which holds the most beautiful memories. In my case, it is my professional firm which has a solid grip on my imagination. For years now any CV brought to my notice bearing the words PricewaterhouseCoopers gets extra attention, but one with the magic words A. F. Fergusons wins a guaranteed interview. And the memories always come flooding back.

My four years at F.C College had coincided, unfortunately, with the most repressive and brutal period of Zia’s regime. Given a free hand by the martial law establishment, the Jamiyat ran amok in the college and terrorized all those who dared standup to its regressive agenda. I saw Christian teachers humiliated, students beaten up and systematic vicious repression of any sort of free speech or thought. The only good experience I had during that period was my involvement with a number of the college sports teams.

After graduating, opting for a career as a chartered accountant was a very natural choice. My father was one, and growing up I had heard of a number of his friends who were in senior positions in the profession. He was especially fond of his squash partner in London, Safdar Saleem, who later on worked for Fergusons, and was very upset when he tragically died at a relatively young age.

My batting average for the college cricket team being considerably higher than my graduation marks percentage, I was pessimistic about getting accepted by Fergusons. My father leveraged his friendships and got me an entrance test appointment. I am sure his being the head of finance at WAPDA also helped. I topped the entrance test, remained coherent during the interview and AFF accepted me.

I still remember reporting for my first day at work. Entering the office I saw the wooden sign board for the partner and managers and noticed that all the names there started with an ‘s’: Sohail Hassan, Shahzad Hussain, Saad Bin Khalid, Sikander Gulzar and Shabbar Zaidi …

What struck me in those early days was the easy-going manner in which various firm members interacted with each other. While there was a great deal of respect for the management there was not even a hint of undue formality in any aspect of the professional relationship. A great deal of credit for this went to the mangers, specially Shahzad Hussain and Shabbar Zaidi, who had enough confidence in their professional and personal abilities to maintain a very cordial work environment.

Having endured very stifling college years this was pure manna for me.

AFF during my years there remained a bit like Italy during the renaissance. Work was something which though taken very seriously on a professional level was only one aspect of our existence in the firm. We had an outstanding cricket team, winning almost all of our matches; an in-house magazine, Meridian, which always had the most wonderful articles; and then there was our pride and joy, the “holy scriptures society”.

Membership to the “holy scriptures society” was strictly by invitation, restricted to gentleman of discerning taste having the right family background , and required suitable monitory contribution, in advance. The principal activity consisted in admiring, in printed form, a certain talent that would be grounds for a treason case in lower Court if recent incidents are to be trusted, if you know what I mean.

We had a number of unique individuals among the support staff: Noor Elahi, the doyen of our office peon, who knew where each audit file was located, and Khokar, the lead typist, who could quality check reports better than most of us. The most beloved staff member was our receptionist who knew every clients’ and numerous sweethearts’ numbers by heart. More importantly, she knew the best time to call.

Then there was the presence of our female colleagues, who were always treated with the utmost respect and dignity. The only problem being that the hall would go silent in their presence as polite conversation was an alien art to most of us.

But the most enduring memory of AFF will always be the refreshingly casual, yet thoroughly professional, manner in which the affairs of the firm were run. To use an accounting cliché, if ever there was a business which focused on the substance rather than form it was AFF. Granting its members a wide latitude, and trusting their competence and maturity, it instilled a sense of responsibility in all of us.

To an uninformed outsider this amount of leeway would be astonishing. Throughout my tenure the formal supervision modes would number precisely two: the monthly worksheet, without which we were not paid our stipend, and then the Sunday attendance, conducted by our then senior manager, now partner, on a huge blue register.

But then our side of the bargain was that each one of us had to live up to the high standards expected from us. And the peer pressure was immense. These two coupled together tended to bring out the best out of most of us by leveraging our talents and energy in a very constructive manner.

Having being part of many world class organizations since, I would rate AFF among the very best in terms of matching people development objectives with work demands.

So many cherished memories, outstanding people, friends for life. We can only be thankful to that old firm. Somehow through all the apparent madness of its methods it chiseled off the rough edges, made true professionals out of us, and in the process seduced us for life…

Syndicated from: Borderline Green

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wi-tribe Becomes ICAEW Approved Employer

Posted on 16 December 2011 by Tea Server

Tweetwi-tribe Pakistan joins hands with a qualification that is valued in practice, business and government wi-tribe Pakistan which offers global reach with a local flavor joins hands with a qualification that is valued in practice, business and government, for the depth and breadth of finance and business skills it teaches. An Associate Chartered Accountant (ACA) [...]

Syndicated from: Global news bulletin

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The Pakistanis Have A Point

Posted on 15 December 2011 by Tea Server

By Bill Keller for The New York Times

As an American visitor in the power precincts of Pakistan, from the gated enclaves of Islamabad to the manicured lawns of the military garrison in Peshawar, from the luxury fortress of the Serena Hotel to the exclusive apartments of the parliamentary housing blocks, you can expect three time-honored traditions: black tea with milk, obsequious servants and a profound sense of grievance.

Talk to Pakistani politicians, scholars, generals, businessmen, spies and journalists — as I did in October — and before long, you are beyond the realm of politics and diplomacy and into the realm of hurt feelings. Words like “ditch” and “jilt” and “betray” recur. With Americans, they complain, it’s never a commitment, it’s always a transaction. This theme is played to the hilt, for effect, but it is also heartfelt.

“The thing about us,” a Pakistani official told me, “is that we are half emotional and half irrational.”

For a relationship that has oscillated for decades between collaboration and breakdown, this has been an extraordinarily bad year, at an especially inconvenient time. As America settles onto the long path toward withdrawal from Afghanistan, Pakistan has considerable power to determine whether the end of our longest war is seen as a plausible success or a calamitous failure.

There are, of course, other reasons that Pakistan deserves our attention. It has a fast-growing population approaching 190 million, and it hosts a loose conglomerate of terrorist franchises that offer young Pakistanis employment and purpose unavailable in the suffering feudal economy. It has 100-plus nuclear weapons (Americans who monitor the program don’t know the exact number or the exact location) and a tense, heavily armed border with nuclear India. And its president, Asif Ali Zardari, oversees a ruinous kleptocracy that is spiraling deeper into economic crisis.

But it is the scramble to disengage from Afghanistan that has focused minds in Washington. Pakistan’s rough western frontier with Afghanistan is a sanctuary for militant extremists and criminal ventures, including the Afghan Taliban, the Pakistani Taliban, the notorious Haqqani clan and important remnants of the original horror story, Al Qaeda. The mistrust between Islamabad and Kabul is deep, nasty — Afghanistan was the only country to vote against letting Pakistan into the United Nations — and tribal. And to complicate matters further, Pakistan is the main military supply route for the American-led international forces and the Afghan National Army.

On Thanksgiving weekend, a month after I returned from Pakistan, the relationship veered precipitously — typically — off course again. NATO aircraft covering an operation by Afghan soldiers and American Special Forces pounded two border posts, inadvertently killing 24 Pakistani soldiers, including two officers. The Americans said that they were fired on first and that Pakistan approved the airstrikes; the Pakistanis say the Americans did not wait for clearance to fire and then bombed the wrong targets.

The fallout was painfully familiar: outrage, suspicion and recrimination, petulance and political posturing. Gen. Ashfaq Parvez Kayani, the chief of the army and by all accounts the most powerful man in Pakistan, retaliated by shutting (for now and not for the first time) the NATO supply corridor through his country. The Pakistanis abruptly dropped out of a Bonn conference on the future of Afghanistan and announced they would not cooperate with an American investigation of the airstrikes. President Obama sent condolences but balked at the suggestion of an apology; possibly the president did not want to set off another chorus of Mitt Romney’s refrain that Obama is always apologizing for America. At this writing, American officials were trying to gauge whether the errant airstrike would have, as one worried official put it, “a long half-life.”

If you survey informed Americans, you will hear Pakistanis described as duplicitous, paranoid, self-pitying and generally infuriating. In turn, Pakistanis describe us as fickle, arrogant, shortsighted and chronically unreliable.

Neither country’s caricature of the other is entirely wrong, and it makes for a relationship that is less in need of diplomacy than couples therapy, which customarily starts by trying to see things from the other point of view. While the Pakistanis have hardly been innocent, they have a point when they say America has not been the easiest of partners.

One good place to mark the beginning of this very, very bad year in U.S.-Pakistani relations is Dec. 13, 2010, when Richard C. Holbrooke died of a torn aorta. Holbrooke, the veteran of the Balkan peace, had for two years held the thankless, newly invented role of the administration’s special representative for Afghanistan and Pakistan. The antithesis of mellow, Holbrooke did not hit it off with our no-drama president, and his bluster didn’t always play well in Kabul or Islamabad either.

But Holbrooke paid aggressive attention to Pakistan. While he was characteristically blunt about the divergent U.S. and Pakistani views, he understood that they were a result of different, calculated national interests, not malevolence or mere orneriness. He was convinced that the outlooks could be, if not exactly synchronized, made more compatible. He made a concentrated effort to persuade the Pakistanis that this time the United States would not be a fair-weather friend.

“You need a Holbrooke,” says Maleeha Lodhi, a well-connected former ambassador to Washington. “Not necessarily the person but the role.” In the absence of full-on engagement, she says, “it’s become a very accident-prone relationship.”

On Jan. 27, a trigger-happy C.I.A. contractor named Raymond Davis was stuck in Lahore traffic and shot dead two motorcyclists who approached him. A backup vehicle he summoned ran over and killed a bystander. The U.S. spent heavily from its meager stock of good will to persuade the Pakistanis to set Davis free — pleading with a straight face that he was entitled to diplomatic immunity.

On May 2, a U.S. Navy Seals team caught Osama bin Laden in the military town Abbottabad and killed him. Before long, American officials were quoted questioning whether their Pakistani allies were just incompetent or actually complicit. (The Americans who deal with Pakistan believe that General Kayani and the director of the Inter-Services Intelligence agency, Gen. Ahmed Shuja Pasha, were genuinely surprised and embarrassed that Bin Laden was so close by, though the Americans fault the Pakistanis for not looking very hard.) In Pakistan, Kayani faced rumbles of insurrection for letting Americans violate Pakistani sovereignty; a defining victory for President Obama was a humiliation for Kayani and Pasha.

In September, members of the Haqqani clan (a criminal syndicate and jihadi cult that’s avowedly subservient to the Taliban leader Mullah Omar) marked the 10th anniversary of 9/11 with two theatrical attacks in Afghanistan. First a truck bomb injured 77 American soldiers in Wardak Province. Then militants rained rocket-propelled grenades on the U.S. Embassy in Kabul, forcing our ambassador to spend 20 hours locked down in a bunker.

A few days later the former Afghan president, Burhanuddin Rabbani, spread his arms to welcome an emissary from the Taliban to discuss the possibility of peace talks. As they embraced, the visitor detonated a bomb in his turban, killing himself, Rabbani and the talks. President Hamid Karzai of Afghanistan, without any evidence that American officials are aware of, accused Pakistan of masterminding the grotesque killing in order to scuttle peace talks it couldn’t control.

And two days after that, Adm. Mike Mullen, the outgoing chairman of the Joint Chiefs of Staff, took to Capitol Hill to suggest that Pakistani intelligence had blessed the truck bomb and embassy attack.

His testimony came as a particular shock, because if the turbulent affair between the United States and Pakistan had a solid center in recent years, it was the rapport between Mullen and his Pakistani counterpart, General Kayani. Over the four years from Kayani’s promotion as chief of the army staff until Mullen’s retirement in September, scarcely a month went by when the two didn’t meet. Mullen would often drop by Kayani’s home at the military enclave in Rawalpindi, arriving for dinner and staying into the early morning, discussing the pressures of command while the sullen-visaged general chain-smoked Dunhills. One time, Kayani took his American friend to the Himalayas for a flyby of the world’s second-highest peak, K2. On another occasion, Mullen hosted Kayani on the golf course at the Naval Academy. The two men seemed to have developed a genuine trust and respect for each other.

But Mullen’s faith in an underlying common purpose was rattled by the truck bombing and the embassy attack, both of which opened Mullen to the charge that his courtship of Kayani had been a failure. So — over the objection of the State Department — the admiral set out to demonstrate that he had no illusions.

The Haqqani network “acts as a veritable arm of Pakistan’s Inter-Services Intelligence agency,” he declared. “With ISI support, Haqqani operatives planned and conducted that truck-bomb attack as well as the assault on our embassy.”

Several officials with access to the intelligence told me that while the Haqqanis were implicated in both attacks, there was no evidence of direct ISI involvement. A Mullen aide said later that the admiral was referring to ISI’s ongoing sponsorship of the Haqqanis and did not mean to say Pakistan authorized those specific attacks.

No matter. In Pakistan, Mullen’s denunciation led to a ripple of alarm that U.S. military “hardliners” were contemplating an invasion. The press had hysterics. Kayani made a show of putting the Pakistani Army on alert. The Pakistani rupee fell in value.

In Washington, Mullen’s remarks captured — and fed — a vengeful mood and a rising sense of fatalism about Pakistan. Bruce O. Riedel, an influential former C.I.A. officer who led a 2009 policy review for President Obama on Pakistan and Afghanistan, captured the prevailing sentiment in an Op-Ed in The Times, in which he called for a new policy of “containment,” meaning “a more hostile relationship” toward the army and intelligence services.

“I can see how this gets worse,” Riedel told me. “And I can see how this gets catastrophically worse. . . . I don’t see how it gets a whole lot better.”

When Gen. David H. Petraeus took over the U.S. military’s Central Command in 2008, he commissioned expert briefing papers on his new domain, which sprawled from Egypt, across the Persian Gulf, to Central Asia. The paper on Afghanistan and Pakistan began, according to an American who has read it, roughly this way: “The United States has no vital national interests in Afghanistan. Our vital national interests are in Pakistan,” notably the security of those nuclear weapons and the infiltration by Al Qaeda. The paper then went on for the remaining pages to discuss Afghanistan. Pakistan hardly got a mention. “That’s typical,” my source said. Pakistan tends to be an afterthought.

The Pakistani version of modern history is one of American betrayal, going back at least to the Kennedy administration’s arming of Pakistan’s archrival, India, in the wake of its 1962 border war with China.

The most consequential feat of American opportunism came when we enlisted Pakistan to bedevil the Soviet occupiers of Afghanistan in the 1980s. The intelligence agencies of the U.S. and Pakistan — with help from Saudi Arabia — created the perfect thorn in the Soviet underbelly: young Muslim “freedom fighters,” schooled in jihad at Pakistani madrassas, laden with American surface-to-air missiles and led by charismatic warriors who set aside tribal rivalries to war against foreign occupation.

After the Soviets admitted defeat in 1989, the U.S. — mission accomplished! — pulled out, leaving Pakistan holding the bag: several million refugees, an Afghanistan torn by civil war and a population of jihadists who would find new targets for their American-supplied arms. In the ensuing struggle for control of Afghanistan, Pakistan eventually sided with the Taliban, who were dominated by the Pashtun tribe that populates the Pakistan-Afghanistan frontier. The rival Northern Alliance was run by Tajiks and Uzbeks and backed by India; and the one thing you can never underestimate is Pakistan’s obsession with bigger, richer, better-armed India.

As long as Pakistan was our partner in tormenting the Soviet Union, the U.S. winked at Pakistan’s nuclear-weapons program. After all, India was developing a nuclear arsenal, and it was inevitable that Pakistan would follow suit. But after the Soviets retreated, Pakistan was ostracized under a Congressional antiproliferation measure called the Pressler Amendment, stripped of military aid (some of it budgeted to bring Pakistani officers to the U.S. for exposure to American military values and discipline) and civilian assistance (most of it used to promote civil society and buy good will).

Our relationship with Pakistan sometimes seems like a case study in unintended consequences. The spawning of the mujahadeen is, of course, Exhibit A. The Pressler Amendment is Exhibit B. And Exhibit C might be America’s protectionist tariffs on Pakistan’s most important export, textiles. For years, experts, including a series of American ambassadors in Islamabad, have said that the single best thing the U.S. could do to pull Pakistan into the modern world is to ease trade barriers, as it has done with many other countries. Instead of sending foreign aid and hoping it trickles down, we could make it easier for Americans to buy Pakistani shirts, towels and denims, thus lifting an industry that is an incubator of the middle class and employs many women. Congress, answerable to domestic textile interests, has had none of it.

“Pakistan the afterthought” was the theme very late one night when I visited the home of Pakistan’s finance minister, Abdul Hafeez Shaikh. After showing me his impressive art collection, Shaikh flopped on a sofa and ran through the roll call of American infidelity. He worked his way, decade by decade, to the war on terror. Now, he said, Pakistan is tasked by the Americans with simultaneously helping to kill terrorists and — the newest twist — using its influence to bring them to the bargaining table. Congress, meanwhile, angry about terrorist sanctuaries, is squeezing off much of the financial aid that is supposed to be the lubricant in our alliance.

“Pakistan was the cold-war friend, the Soviet-Afghan-war friend, the terror-war friend,” the minister said. “As soon as the wars ended, so did the assistance. The sense of being discarded is so recent.”

A Boston University-educated economist who made his money in private equity investing — in other words, a cosmopolitan man — Shaikh seemed slightly abashed by his own bitterness.

“I’m not saying that this style of Pakistani thinking is analytically correct,” he said. “I’m just telling you how people feel.”

He waved an arm toward his dining room, where he hung a Warhol of Muhammad Ali. “We’re just supposed to be like Ali — take the beating for seven rounds from Foreman,” he said. “But this time the Pakistanis have wised up. We are playing the game, but we know you can’t take these people at their word.”

With a timetable that has the United States out of Afghanistan, or mostly out, by the end of 2014, Pakistan has leverage it did not have when the war began.

One day after 9/11, Richard Armitage, the deputy secretary of state, summoned the head of Pakistani intelligence for a talking to. “We are asking all of our friends: Do they stand with us or against us?” he said. The following day, Armitage handed over a list of seven demands, which included stopping Al Qaeda operations on the Pakistani border, giving American invaders access to Pakistani bases and airspace and breaking all ties with the Taliban regime.

The Pakistanis believed from the beginning that Afghanistan had “American quagmire” written all over it. Moreover, what America had in mind for Afghanistan was antithetical to Pakistan’s self-interest.

“The only time period between 1947 and the American invasion of Afghanistan that Pakistanis have felt secure about Afghanistan is during the Taliban period,” from 1996 to 2001, says Vali Nasr, an American scholar of the region who is listened to in both academia and government. Now the Bush administration would attempt to supplant the Taliban with a strong independent government in Kabul and a muscular military. “Everything about this vision is dangerous to Pakistan,” Nasr says.

Pakistan’s military ruler at the time, Pervez Musharraf, saw the folly of defying an American ultimatum. He quickly agreed to the American demands and delivered on many of them. In practice, though, the accommodation with the Taliban was never fully curtailed. Pakistan knew America’s mission in Afghanistan would end, and it spread its bets.

The Bush-Musharraf relationship, Vali Nasr says, “was sort of a Hollywood suspension of disbelief. Musharraf was a convenient person who created a myth that we subscribed to — basically that Pakistan was on the same page with us, it was an ally in the war on terror and it subscribed to our agenda for Afghanistan.”

But the longer the war in Afghanistan dragged on, the harder it was to sustain the illusion.

In October, I took the highway west from Islamabad to Peshawar, headquarters of the Pakistan Army corps responsible for the frontier with Afghanistan. Over tea and cookies, Lt. Gen. Asif Yasin Malik, the three-star who commanded the frontier (he retired this month) talked about how the Afghan war looked from his side of the border.

The official American version of the current situation in Afghanistan goes like this: By applying the counterinsurgency strategy that worked in Iraq and relying on a surge of troops and the increasingly sophisticated use of drones, the United States has been beating the insurgency into submission, while at the same time standing up an indigenous Afghan Army that could take over the mission. If only Pakistan would police its side of the border — where the bad guys find safe haven, fresh recruits and financing — we’d be on track for an exit in 2014.

The Pakistanis have a different narrative. First, a central government has never successfully ruled Afghanistan. Second, Karzai is an unreliable neighbor — a reputation that has not been dispelled by his recent, manic declarations of brotherhood. And third, they believe that despite substantial investment by the United States, the Afghan Army and the police are a long way from being ready to hold the country. In other words, America is preparing to leave behind an Afghanistan that looks like incipient chaos to Pakistan.

In Peshawar, General Malik talked with polite disdain about his neighbor to the west. His biggest fear — one I’m told Kayani stresses in every meeting with his American counterparts — is the capability of the Afghan National Security Forces, an army of 170,000 and another 135,000 police, responsible for preventing Afghanistan from disintegrating back into failed-state status. If the U.S. succeeds in creating such a potent fighting force, that makes Pakistanis nervous, because they see it (rightly) as potentially unfriendly and (probably wrongly) as a potential agent of Indian influence. The more likely and equally unsettling outcome, Pakistanis believe, is that the Afghan military — immature, fractious and dependent on the U.S. Treasury — will disintegrate into heavily armed tribal claques and bandit syndicates. And America, as always, will be gone when hell breaks loose.

General Malik studied on an exchange at Fort McNair, in Washington, D.C., and has visited 23 American states. He likes to think he is not clueless about how things work in our country.

“Come 2015, which senator would be ready to vote $9 billion, or $7 billion, to be spent on this army?” he asked. “Even $5 billion a year. O.K., maybe one year, maybe two years. But with the economy going downhill, how does the future afford this? Very challenging.”

American officials will tell you, not for attribution, that Malik’s concerns are quite reasonable.

So I asked the general if that was why his forces have not been more aggressive about mopping up terrorist sanctuaries along the border. Still hedging their bets? His answer was elaborate and not entirely facile.

First of all, the general pointed out that Pakistan has done some serious fighting in terrorist strongholds and shed a lot of blood. Over the past two years, Malik’s forces have been enlarged to 147,000 soldiers, mainly by relocating more than 50,000 from the Indian border. They have largely controlled militant activities in the Swat Valley, for example, which entailed two hard offensives with major casualties. But they have steadfastly declined to mount a major assault against North Waziristan — a mountainous region of terrorist Deadwoods populated by battle-toughened outlaws.

Yes, Malik said, North Waziristan is a terrible situation, but his forces are responsible for roughly 1,500 miles of border, they police an archipelago of rough towns in the so-called Federally Administered Tribal Areas, or FATA, and by the way, they had a devastating flood to handle last year.

“If you are not able to close the Mexican border, when you have the technology at your call, when there is no war,” he said, “how can you expect us to close our border, especially if you are not locking the doors on your side?”

Americans who know the area well concede that, for all our complaints, Pakistan doesn’t push harder in large part because it can’t. The Pakistan Army has been trained to patrol the Indian border, not to battle hardened insurgents. They have comparatively crude weaponry. When they go up against a ruthless outfit like the Haqqanis, they tend to get killed. Roughly 4,000 Pakistani troops have died in these border wars — more than the number of all the allied soldiers killed in Afghanistan.

“They’re obviously reluctant to go against the Haqqanis, but reluctant for a couple of reasons,” an American official told me. “Not just the reason that they see them as a potential proxy force if Afghanistan doesn’t go well, but also because they just literally lack the capability to take them on. They’ve got enough wars on their hands. They’ve not been able to consolidate their gains up in the northern part of the FATA, they have continued problems in other areas and they just can’t deal with another campaign, which is what North Waziristan would be.”

And there is another, fundamental problem, Malik said. There is simply no popular support for stepping up the fight in what is seen as America’s war. Ordinary Pakistanis feel they have paid a high price in collateral damage, between the civilian casualties from unmanned drone attacks and the blowback from terror groups within Pakistan.

“When you go into North Waziristan and carry out some major operation, there is going to be a terrorist backlash in the rest of the country,” Malik told me. “The political mood, or the public mood, is ‘no more operations.’ ”

In late October, Hillary Clinton arrived in Islamabad, leading a delegation that included Petraeus, recently confirmed as C.I.A. director, and Gen. Martin E. Dempsey, Mullen’s successor as chairman of the Joint Chiefs. Petraeus used to refer to Holbrooke as “my diplomatic wingman,” a bit of condescension he apparently intended as a tribute. This time, the security contingent served as diplomacy’s wingmen.

The trip was intended as a show of unity and resolve by an administration that has spoken with conflicting voices when it has focused on Pakistan at all. For more than four hours, the Americans and a potent lineup of Pakistani counterparts talked over a dinner table.

Perhaps the most revealing thing about the dinner was the guest list. The nine participants included Kayani and Pasha, but not President Zardari or Prime Minister Yousuf Raza Gilani, who provided the dining room at his own residence and made himself scarce. The only representative of the civilian government was Clinton’s counterpart, the new foreign minister, Hina Rabbani Khar, a 34-year-old rising star with the dark-haired beauty of a Bollywood leading lady, a degree in hospitality management from the University of Massachusetts and, most important, close ties to the Pakistani military.

For a country that cherishes civilian democracy, we have a surprising affinity for strong men in uniform. Based on my conversations with American officials across the government, the U.S. has developed a grudging respect for Kayani, whom they regard as astute, straightforward, respectful of the idea of democratic government but genuinely disgusted by the current regime’s thievery and ineptitude. (We know from the secret diplomatic cables disclosed by WikiLeaks that Kayani has confided to American officials his utter contempt for his president and “hinted that he might, however reluctantly, have to persuade President Zardari to resign.”) Zardari, whose principal claim to office is that he is the widower of the assassinated and virtually canonized Benazir Bhutto, has been mainly preoccupied with building up his patronage machine for elections in 2013. The Americans expect little from him and don’t see a likely savior among his would-be political challengers. (As this article goes to press, Zardari is recovering from chest pains in a hospital in Dubai; there are rumors he won’t return.) So, Kayani it is. The official American consensus is less enamored of Kayani’s loyal intelligence underling, General Pasha, whose agency consorts with terrorists and is suspected of torturing and killing troublemakers, including journalists, but Pasha is too powerful to ignore.

The day after the marathon dinner, Clinton’s entourage took over the Serena Hotel for a festival of public diplomacy — a press conference with the foreign minister, followed by a town meeting with young Pakistanis and then a hardball round-table interview with a circle of top editors and anchors.

Clinton’s visit was generally portrayed, not least in the Pakistani press, as a familiar ritual of America talking tough to Pakistan. In the town meeting, a woman asked why America always played the role of bossy mother-in-law, and that theme delighted editorial cartoonists for days.

But the private message to the Pakistanis — and a more careful reading of Clinton’s public performance — reflected a serious effort to reboot a troubled relationship. Clinton took care to pay tribute to Pakistani losses in the war against terror in the past decade — in addition to the military, an estimated 30,000 civilian dead, the equivalent of a 9/11 every year. She ruled out sending American ground troops into Pakistani territory. She endorsed a Pakistani plea that U.S. forces in Afghanistan do a better job of cleaning up militant sanctuaries on their own side of the border.

Questioned by a prominent television anchor, she repudiated Mullen’s testimony, not only disavowing any evidence of ISI complicity in the attack on America’s embassy in Kabul but also soft-peddling the spy agency’s coziness with terrorists.

“Now, every intelligence agency has contacts with unsavory characters,” she said. “I don’t think you would get any denial from either the ISI or the C.I.A. that people in their respective organizations have contacts with members of groups that have different agendas than the governments’. But that doesn’t mean that they are being directed or being approved or otherwise given a seal of approval.”

That particular riff may have caused jaws to clench at the C.I.A. compound in Langley, Va. The truth is, according to half a dozen senior officials with access to the intelligence, the evidence of Pakistan’s affinity for terrorists is often circumstantial and ambiguous, a matter of intercepted conversations in coded language, and their dealings are thought to be more pragmatic than ideological, more a matter of tolerating than directing, but the relationship goes way beyond “contacts with unsavory characters.”

“They’re facilitating,” one official told me. “They provide information to the Haqqanis, they let them cross back and forth across the border, they let this L.E.T. guy (the leader of the dangerous Lashkar-e-Taiba faction of Kashmiri terrorists) be in prison and not be in prison at the same time.”

And yet the Pakistanis have been helpful — Abbottabad aside — against Al Qaeda, which is America’s first priority and which the Pakistanis recognize as a menace to everyone. They have shared intelligence, provided access to interrogations and coordinated operations. Before the fatal border mishap Thanksgiving weekend, one U.S. official told me, anti-terror cooperation between the C.I.A. and Pakistani intelligence had been “very much on the upswing.”

The most striking aspect of Clinton’s trip, however, was her enthusiastic embrace of what is now called “reconciliation” — which is the polite word for negotiating with the Taliban.

Pakistan has long argued that the way to keep Afghanistan from coming to grief is to cut a deal with at least some of the Taliban. That would also mean Afghanistan could get by with a smaller, cheaper army. The notion has been anathema to the Americans tasked with killing Taliban; a principled stand against negotiating with terrorists is also a political meme that acquires particular potency in election seasons, as viewers of the Republican debates can attest.

Almost unnoticed, though, reconciliation has moved to a central place in America’s strategy and has become the principal assignment for U.S. officials in the region. Clinton first signaled this in a speech to the Asia Society last February, when she refocused Afghanistan strategy on its original purpose, isolating the terrorists at war with America, meaning Al Qaeda.

The speech was buried beneath other news at the time, but in early October, Tom Donilon, Obama’s national security adviser, met Kayani in Abu Dhabi to stress to skeptical Pakistani leaders that she was serious. Clinton’s visit to Islamabad with her generals in tow was designed to put the full weight of the U.S. behind it.

Clinton publicly acknowledged that the ISI (in fact, it was General Pasha in person) had already brokered a preliminary meeting between a top American diplomat and a member of the Haqqani clan. Nothing much came of the meeting, news of which promptly leaked, but Clinton said America was willing to sit down with the Taliban. She said that what had once been preconditions for negotiations — renouncing violence, shunning Al Qaeda and accepting Afghanistan’s constitution, including freedoms for women — were now “goals.”

In diplomacy, no process is fully initiated until it has been named. A meeting of Pakistani political parties in Islamabad had adopted a rubric for peace talks with the Taliban, a slogan the Pakistanis repeated at every opportunity: “Give peace a chance.” If having this project boiled down to a John Lennon lyric diminished the gravitas of the occasion, Clinton didn’t let on.

Within the American policy conglomerate, not everyone is terribly upbeat about the prospect of reconciling with the Taliban. The Taliban have so far publicly rejected talks, and the turban-bomb killing of Rabbani was a serious reversal. There is still some suspicion — encouraged by Afghanistan and India — about Pakistan’s real agenda. One theory is that Pakistan secretly wants the Taliban restored to power in Afghanistan, believing the Pashtun Islamists would be more susceptible to Pakistani influence. A more cynical theory, which I heard quite a bit in New Delhi, is that the Pakistani Army actually wants chaos on its various borders to justify its large payroll. Most Americans I met who are immersed in this problem put little stock in either of those notions. The Pakistanis may not be the most trustworthy partners in Asia, but they aren’t idiots. They know, at least at the senior levels, that a resurgent Taliban means not just perpetual mayhem on the border but also an emboldening of indigenous jihadists whose aim is nothing less than a takeover of nuclear Pakistan. But agreeing on the principle of a “stable Afghanistan” is easier than defining it, or getting there.

After Clinton left Islamabad, a senior Pakistani intelligence official I wanted to meet arrived for breakfast with me and a colleague at Islamabad’s finest hotel. With a genial air of command, he ordered eggs Benedict for the table, declined my request to turn on a tape recorder, (“Just keep my name out of it,” he instructed later) and settled into an hour of polished spin.

“The Taliban learned its lesson in the madrassas and applied them ruthlessly,” he said, as the Hollandaise congealed. “Now the older ones have seen 10 years of war, and reconciliation is possible. Their outlook has been tempered by reason and contact with the modern world. They have relatives and friends in Kabul. They have money from the opium trade. They watch satellite TV. They are on the Internet.”

On the other hand, he continued, “if you kill off the midtier Taliban, the ones who are going to replace them — and there are many waiting in line, sadly — are younger, more aggressive and eager to prove themselves.”

So what would it take to bring the Taliban into a settlement? First, he said, stop killing them. Second, an end to foreign military presence, the one thing that always mobilizes the occupied in that part of the world. Third, an Afghan constitution framed to give more local autonomy, so that Pashtun regions could be run by Pashtuns.

On the face of it, as my breakfast companion surely knows, those sound like three nonstarters, and taken together they sound rather like surrender. Even Clinton is not calling for a break in hostilities, which the Americans see as the way to drive the Taliban to the bargaining table. As for foreign presence, both the Americans and the Afghans expect some long-term residual force to stay in Afghanistan, to backstop the Afghan Army and carry out drone attacks against Al Qaeda. And while it is not hard to imagine a decentralized Afghanistan — in which Islamic traditionalists hold sway in the rural areas but cede the urban areas, where modern notions like educating girls have already made considerable headway — that would be hard for Americans to swallow.

Clinton herself sounded pretty categorical on that last point when she told Pakistani interviewers: “I cannot in good faith participate in any process that I think would lead the women of Afghanistan back to the dark ages. I will not participate in that.”

To questions of how these seemingly insurmountable differences might be surmounted, Marc Grossman, who replaced Holbrooke as Clinton’s special representative, replies simply: “I don’t know whether these people are reconcilable or not. But the job we’ve been given is to find out.”

If you look at reconciliation as a route to peace, it requires a huge leap of faith. Surely the Taliban have marked our withdrawal date on their calendars. The idea that they are so deeply weary of war — – let alone watching YouTube and yearning to join the world they see on their laptops — feels like wishful thinking.

But if you look at reconciliation as a step in couples therapy — a shared project in managing a highly problematic, ultimately critical relationship — it makes more sense. It gives Pakistan something it craves: a seat at the table where the future of Afghanistan is plotted. It gets Pakistan and Afghanistan talking to each other. It offers a supporting role to other players in the region — notably Turkey, which has taken on a more active part as an Islamic peace broker. It could drain some of the acrimony and paranoia from the U.S.-Pakistan rhetoric.

It might not save Afghanistan, but it could be a helpful start to saving Pakistan.

What Clinton and company are seeking is a course of patient commitment that America, frankly, is not usually so good at. The relationship has given off some glimmers of hope — with U.S. encouragement, Pakistan and India have agreed to normalize trade relations; the ISI has given American interrogators access to Osama bin Laden’s wives — but the funerals of those Pakistani troops last month remind us that the country is still a graveyard of optimism.

At least the U.S. seems, for now, to be paying attention to the right problem.

“If you stand back,” said one American who is in the thick of the American strategy-making, “and say, by the year 2020, you’ve got two countries — 30 million people in this country, 200 million people with nuclear weapons in this country, American troops in neither. Which matters? It’s not Afghanistan.”

Bill Keller, a former executive editor of The Times, writes a column for the Op-Ed page.

Filed under: Afghanistan, Democracy, India, Nuclear, Pakistan, Pakistan Army, Pakistani Taliban, Pakistanis, President Obama, Taliban, terrorism, United States, US-Pakistan Relations Tagged: Afghan National Army, Afghan Taliban, Afghanistan, Asif Ali Zardari, Gen. Ashfaq Parvez Kayani, Husain Haqqani, Mike Mullen, Mitt Romney, NATO, Northern Alliance, Nuclear, Pakistan, Pashtun, Peshawar, President Obama, Soviet Invasion, Taliban, United Nations, United States

Syndicated from: Pakistanis for Peace

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Brazil 2011-2012: Vamos Lá!

Posted on 15 December 2011 by Tea Server

Guido Mantega (Photographer: Renzo Gostoli / Bloomberg )

Brazil 2011-2012: Vamos Lá!

Summary of the past year: Well, in summary, from soaring to just plain growing. Economists surveyed by the Central Bank expect GDP to grow 3.0% in 2011 (adjusted real terms) versus 7.5% in 2010. As a recent Reuters report on Brazil puts it: “…corporate leaders, investors and government officials already express nostalgia for the boom years. They will have to scale down their expectations…” A continued Eurozone crisis could hamper exports such as soy, iron ore, and coffee. Domestic air traffic was up 18.5% in the first 9 months of 2011, versus a 27.4% increase in the same period of 2010. Still, domestic demand remains stronger in Brazil than in many developed economies.

Most unexpected event: For me, it’s got to be the Faxina (“housecleaning”) that President Rousseff has embarked upon to oust corrupt government ministers. As discussed in my previous post, 5 of Dilma’s ministers have exited disgracefully since June. Under-fire Labor Minister Carlos Lupi may be the sixth. Lupi may offer a test to Dilma’s mettle – he said he would only quit if he were shot, “and it would have to be a big bullet, because I’m a big guy.”[1]

However, analysts believe Dilma is only ousting Ministers whose guilt has been made public, without tackling the system in which ministry control and government jobs are political currency. Dilma’s challenge is that her party needs allies in the Chamber of Deputies, and as the price for friendship, other parties want their slices of bacon. One argument says that because Dilma’s legislative priorities (education, health care, infrastructure) do not require congressional aid, Dilma could crack down harder on corruption. Alberto Almeida of the Instituto Análise notes that the faxina has made bribery of government officials a lot tougher. This may prompt smaller political parties to merge with bigger ones, a positive result if this makes government coalitions smaller.

Person of the year: A tough call, but I’m going to go with Finance Minister Guido Mantega. A recent report in Bloomberg suggests Dilma will retain Mantega during the pre-election Cabinet reshuffle next year.[2] In a sense, this is not surprising given Mantega’s handling of the post-crisis economy. After the Lehman crisis, Mantega handled tax restructuring and state-lending initiatives that fostered 7.5% GDP growth in 2010. However, news of Dilma retaining a Cabinet official deviates from the norm these days. Mantega was never seen as close to Dilma; he was appointed Finance Minister in 2006 by Lula. Brazilian inflation around 7% and threats to demand for exports provide ample pretexts for Dilma to replace Mantega, but Dilma has kept faith with him. Mantega’s skill will be put to the test in the next 6 months. Brazil GDP contracted in the third quarter and inflation remains high compared to its target range. The jobs market, though, remains healthy.[3]

Prediction:  Hard to say where the economy will go, but economists expect real GDP growth of about 3% in 2012. This still beats the developing world. Investors in Brazil are hoping for a better year as well, and may well get it. The Ibovespa is currently down about 17% year-to-date (source: Cap IQ), though expected to appreciate next year. The real, on the other hand, may not be appreciating. As I type the real is at 1.87 versus the dollar, sky high compared to its post-Lehman low of 2.60. The real is seen by many as overvalued, especially given that Brazil’s trade balance is expected to decline.

On a sporting note, World Cup 2014 will also have a sharp effect on Brazil’s politics and economics. In the runup, Dilma’s government has disagreed with FIFA on issues such as cracking down on merchandise piracy, allowing beer sales inside venues, and ticket pricing. Hammering out these agreements along with completing infrastructure development could lead to a game of chicken between Dilma and FIFA. The risks are huge for both Brazilian taxpayers and anyone set to profit from the World Cup (players, sponsors, travel agencies). Also, I wouldn’t be surprised by the resignation of Ricardo Teixeira, President of the Brazil Football Confederation and 2014 World Cup Local Organizing Committee. Teixeira is facing money laundering and bribery allegations, and from what I understand, he and President Rousseff are not on speaking terms.

 


[1] http://www.economist.com/node/21540265

[2] http://www.bloomberg.com/news/2011-11-29/rousseff-said-to-spare-finance-chief-mantega-from-brazil-cabinet-shuffle.html

[3] http://www.bloomberg.com/news/2011-12-06/brazil-economy-stalls-as-rousseff-acts-to-boost-gdp-in-face-of-euro-crisis.html

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United Against ‘United Russia’

Posted on 14 December 2011 by Tea Server

Source: Google Images

Source: Google Images

Last Saturday Russia witnessed one of the biggest anti-government rallies of the past two decades. Just a few months ago the possibility of a protest this large seemed very unlikely. Putin’s confidence ratings remained high holding steadfast belief in the efficiency of a strong ruling hand over the country, although the support for his United Russia party had begun to deteriorate.

Unlike previous public rallies, the Saturday march was sanctioned by authorities and, more importantly, had received an unusually extended, but rather neutral coverage, on state-run channels. Thousands of policemen and paramilitary troops stood ready to deploy security measures against possible ‘violations of the public order,’ however, that no arrests or clashes occurred as this peaceful demonstration was enough to make an important point: Russian people’s votes do matter.

Tens of thousands of people joined the rally across Russia protesting against fraud in the parliamentary election, discontented over how the election was handled and refusing to settle for the same type of governmental attitude of turning a deaf ear towards their opinion for the next decade. People of different political opinion came to the rally, united in their frustration with the United Russia party, demanding re-election and dismissal of the Central Election Committee chairman, and chanting ‘Putin must go.’

The rally made it quite obvious that the existing political leadership underestimated increasing public discontent over multiple cases of power abuse in the country, including among others the dismissal of prosecution against high-level officials in cases of fatal traffic accidents, and the fraudulent election of the current Chairman of Federation Council of the Russian Federation. These and other examples clearly showed the negligence and disregard with which current political leadership treats the opinion of Russian citizens and their rights.

Many ask now whether United Russia and Putin stand a chance of political survival. According to an exit poll by the Institute of Social Studies, the ruling party gathered about 38 percent of the popular vote, which is more than 10 percent less than the official number issued, however, it still places Putin’s party ahead of others. In addition, pro-government supporters organized another rally, which according to some estimates garnered close to 25,000 people on Monday. Much of that support could be explained by the lack of strong opposition with a clear and consistent plan of action, as well as the fear of returning to the political and economic instability experienced during the 1990s.

Meanwhile, the Saturday rally has provided opportunities for a new opposition to emerge. Immediately after the Saturday events businessman and billionaire Mikhail Prokhorov, ousted from the liberal party Russian Cause in September, has announced his bid for presidential elections in 2012. Then, Russian ex-finance minister Alexei Koudrin said that he is considering forming a right-centered political party. Kudrin has recently left Kremlin over disagreement with Medvedev policies in September of this year.

One needs to be reminded that both, Prokhorov and Kudrin, come from Kremlin circles and their run for leadership has already been shadowed with suspicion over a possible Kremlin move to divert attention from critical issues at hand. This relation to the regime will definitely breed doubts among electorate in the future. Another question is whose interests this newly formed right-wing party will represent and how much vote it will be able to gather in Russia? The painful experience of the sweeping reforms of the 1990s is still vivid among Russia’s population, and so is a general distrust to the oligarchs reaching for political power.

What’s more, Russians tend to hold rather reserved attitudes towards opposition. November polls conducted by the Levada Center, a Russian independent polling and sociological research organization, demonstrated that for the most part, the Russian population remains very skeptical about existing opposition and finds that it rarely goes beyond simple criticism of the current regime to serious constructive proposals for improving the situation in the country. Hence, any opposition in the country will face a difficult task to win the confidence of the population.

In conclusion, last Saturday an empowered Russian population took a stand against fraud and corruption in the country. We will see in the coming months whether they have been heard in their demands for a change. Hopefully, the change will be timely and peaceful. As one recent Russian blog said, ‘no revolution is needed for a party that got 23 percent of popular votes to get 23 percent of the parliament seats and not 53 percent.’ Excellent point.

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UK Rejects Drafting New Eurozone Treaty: Continent Isolated

Posted on 13 December 2011 by Tea Server

What's Next, Prime Minister? — From The Evening Standard, London

At least 23 and perhaps as many as 26 of the 27 members of the European Union have agreed to an inter-governmental agreement that may or may not save the euro from the bond market vigilantes. A full-blown treaty failed because there was not unanimous support for the idea – Britain stood alone in saying flat out that it wasn’t signing up for that. Prime Minister Cameron had little choice either on the grounds of national interests or domestic politics. However, the EU is a much different place than it was just last week.

Mr. Cameron went to Brussels demanding that the UK have a veto over any financial services regulations. While this may seem a bit extreme, one must remember that France and Italy have protected their farming sector with the EU’s Common Agricultural Policy for decades. And the euro’s greatest benefit to Germany was the protection of its neighboring export markets – a single currency ensured that German manufactured goods were still relatively affordable outside Germany, the Low Countries and Scandinavia. Britain simply wanted to protect the 10% of its GDP that comes from financial activity.

President Sarkozy of France explained why he could not accept that, saying “You cannot have an opt-out and then ask to participate in all the discussion about the euro that you did not want to have, and which you also criticized.” His European policy has always been to form a core group within Europe that excludes the more free-market British, Scandinavians and Eastern Europeans – this will maximize French power.

The details of the “fiscal compact” are pretty clear. The BBC reported them as “a cap of 0.5% of GDP on countries’ annual structural deficits, ‘automatic consequences’ for countries whose public deficit exceeds 3% of GDP; the tighter rules to be enshrined in countries’ constitutions; European Stability Mechanism (ESM) to be accelerated and brought into force in July 2012 adequacy of 500bn-euro (£427bn; $666bn) limit for ESM to be reassessed; Eurozone and other EU countries to provide up to 200bn euros to the IMF to help debt-stricken eurozone members.”

The agreement itself is far less important than Britain’s position in the EU. As the Economist noted, “Whether the agreement does anything to stabilise the euro is moot. The agreement is heavily tilted towards budget discipline and austerity. It does little to generate money in the short term to arrest the run on sovereigns, nor does it provide a longer-term perspective of jointly-issued bonds. Much will depend on how the European Central Bank responds in the coming days and weeks.”

Frankly, I don’t think it will work in the long-term. Greater austerity is not going to get the Greek or Portuguese economies growing anytime soon, but Hoover’s ghost haunts the eurozone now. And as a result, saving the whole thing is going to cost Germany more in the end than it would have a year or more ago.

Instead, Britain now finds itself alone on matters of budgeting and taxation within the EU. The 17 eurozone members and at least six others will be part of the inter-governmental agreement (just shy of a treaty in international legal terms), and Sweden, Hungary and the Czech Republic may sign up to it after parliamentary debates.

Why was Mr. Cameron so uncooperative? Quite simply because he had no choice. As noted, 10% of the UK’s GDP is finance based. Moreover, though, he leads a coalition that ranges from Conservatives who still think of Europe as the enemy, Conservatives who are tolerant of the EU’s existence, and Liberal-Democrats who are rabidly pro-Europe. His room for maneuver was very small, and his margin of error even smaller.

No matter what he did, he risked splitting these various factions. By vetoing a new treaty, he opted to distance the Conservative Party from the junior coalition Liberal Democrats. Not only is he Prime Minister, he is also leader of the Conservatives, so this should come as no surprise.

For their part, the Liberal Democrats are putting a brave face on it, but there is a clear sense that they know their policies have suffered a huge, perhaps lethal, setback. Leader of the LibDems and Deputy Prime Minister Nick Clegg initially put the blame on the French and Germans rather than on Mr. Cameron. However, he has made it clear that he doesn’t like the result no matter who is to blame. He said on the Andrew Marr program on the BBC, “I’m bitterly disappointed by the outcome of last week’s summit, precisely because I think now there is a danger that the UK will be isolated and marginalised within the European Union. I don’t think that’s good for jobs, in the City [the UK's financial district] or elsewhere, I don’t think it’s good for growth or for families up and down the country.” Since then, he has been more vocal in his protests.

Less diplomatic were statements from LibDem bigwigs Lords Oakeshott and Ashdown. Lord Oakeshott stated on the record that LibDem Business Secretary Vince Cable had “given a very serious warning last Monday in the cabinet against elevating these financial regulation points into a make or break deal.” Former leader of the LibDems, Lord Ashdown, put it in the blunt terms of the special forces soldier he once was stating that the veto “tipped 38 years of British foreign policy down the drain.”

Where does all this leave us? The British governing coalition is clearly divided and may not survive the remaining three-and-a-half years this parliament has to run. Europe will move forward toward fiscal union, but without the UK. Moreover the other 9 EU members that aren’t part of the eurozone may discover that having Brussels handle their economic policy to suit German and French desires is less than appealing. There will be legal battles over the use of EU-wide institutions to enforce rules that do not apply to the entire EU. And in the end, the problem of heavily indebted countries failing to achieve meaningful economic growth remains the central issue in European finance.

2011 can’t end soon enough.

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Energy: 2011 in Review

Posted on 11 December 2011 by Tea Server

Fukushima Reactor — March 2011, BBC

With the arrival of December, it’s time to check the rear-view mirror to see where we have been in order to have some clue as to where we are going. In the energy realm, 2011 was the Year of the Three Fs: Fukushima, Fracking and Finance.

Japan is used to earthquakes, and the odd tsunami leaves the people there down but never out. When these events caused the back-up generators at the Fukushima nuclear power plant to fail, the result was the worst nuclear accident since Chernobyl – and by some measures, it was worse.

The disaster has returned to the energy debate a very important fact: nuclear accidents are extremely rare, but they are also extremely costly when they do occur. Reuters has cited a Nikkei report putting the cost at around $257 billion. This is almost certainly not the right number as it is still quite early days, but the order of magnitude is probably on target. By way of comparison, it’s in the same ballpark as the amount in the European Financial Stabilization Facility, three times what China spends on the People’s Liberation Army every year, or the entire debt servicing costs of the US national debt for 2010.

Some countries have decided to give up on nuclear power, notably Germany. Others have put their plans into mothballs until the political situation cools off, e.g., China. There is no getting away from nuclear power, though. There are over 400 operating plants in the world right now, and we are not about to turn them all off. A great many are coming to the end of their planned lifetime – America’s were built to last about 40 years. The Nuclear Energy Institute observes that America’s newest plant, Watts Bar 1 in Tennessee, was built in 1996, and the oldest is in Oyster Creek, New Jersey, with an operating license dating from 1969. It takes years to build a new plant, and most countries that use nuclear power need to start planning new plants or replacement technologies – indeed for some, this work should have happened years ago.

New designs will make nuclear power safer. The new AP-1000 is one of a new generation of reactors with passive safety features that keep working even when the power goes out. Bill Gates and the Chinese state nuclear authority are cooperating on a “traveling wave reactor,” which could run for decades on depleted uranium and produce significantly smaller amounts of nuclear waste than conventional reactors.

But we have to remember that uranium-235 is not easy to clean up, has proliferation issues, and despite what an entire generation thought it knew, is not green. Plutonium reactors have the same problems to an ever greater degree. In the end, just how much risk are we willing to run? That’s a question that has yet to be answered.

And that brings us to the second F, fracking. Short for “hydraulic fracturing,” fracking is a method of unlocking natural gas trapped in rock formations. By pumping water and chemicals into the ground, engineers have discovered a way to breakup the rocks and release the molecules of gas trapped inside – much like you squeeze the water out of a sponge. Natural gas burns cleaner than oil or coal, America has more natgas than it knows what to do with, and it is cheaper than conventional alternatives.

Fracking, however, is suspected of causing damage to the local water supplies. A recent documentary by Josh Fox called Gasland investigated this, and while the industry claims it to be mere propaganda, the scene of a man lighting his tap water on fire does stick in the mind.

Fracking is also has been blamed for minor earthquakes. This has brought the development of natural gas in many countries to a slowdown if not a halt. Lancashire, England, is not noted for earthquakes, but Cuadrilla Resources admitted that its fracking activities have caused quakes – below 3.0 on the Richter scale. These aren’t enough to get a Californian out of bed, but they are noticeable and can effect building foundations even if fracking isn’t hurting the local water supply.

France became the first nation to ban fracking this summer (note that about 80% of its electricity is nuclear in origin), and Australia is in the midst of a debate on it. China is simply moving ahead with fracking. This issue is going to increase in prominence in 2012, and beyond. Again, the question is how muck risk are we willing to take.

The third and final F is finance, and what we have seen in the last while is the use of energy commodities as speculative vehicles, driving up the costs of all forms of energy and distorting the market. Simply put, investors have been buying oil and other energy sources and holding them as a speculative play the same way they traditionally bought stocks and bonds. Demand has been up as a result, and Goldman Sachs put out a research note in March that said for every million barrels of oil speculators (not users of oil like refiners or auto owners) there was an 8-10 cent increase in the price of a barrel. “Using Goldman’s 8- to 10-cent estimates and data on speculators’ positions from the U.S. Commodity Futures Trading Commission, Reuters calculated that as of last Tuesday [7 April 2011], the total speculative premium in U.S. crude oil was between $21.40 and $26.75 a barrel, or about a fifth of last Tuesday’s price.” In other words, since they didn’t like the stock market, and didn’t trust the bond market, speculators tacked a 20% tax onto oil.

Of course, this can be stopped by banning all speculation in oil and other energy products, but that is hardly plausible nor really desirable. Speculators do provide liquidity to markets under certain conditions and are useful to an extent because of that. The heightening of demand by speculators can make marginal sources of energy more economically viable, encouraging long-term alternatives. Nothing would bring solar power, wind, tidal and geothermal on line faster than West Texas Intermediate crude hitting $250 a barrel.

This is an issue that isn’t going away in 2012 – not with the eurozone’s issues still not resolved, not with America’s budget impasse in Washington, not with tens of millions of Chinese, Indians and others wanted to enter their countries’ middle class. Short-term price distortions are likely in a variety of energy subsectors as hedge fund money flows around the world.

In 2012, we are likely to see more of the same. The clash between energy needs and environmental protections will continue; the drive to development in the BRICs and other rising powers will increase demand for energy; the ability of petro-dictatorships to stifle freedom will likely track the price of oil; and the problem of proliferation will follow nuclear energy wherever it goes.

Yet, I don’t think it appropriate to end on a negative note. There is enough energy for all 7 billion of us to live well – if we are smart enough, careful enough, and visionary enough.

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Haiti: Martelly Shifts Gear on Foreign Policy at CELAC

Posted on 06 December 2011 by Tea Server

President Martelly welcomed by President Chavez source: Le Nouvelliste

“The Venezuelan cooperation is now number one,” said President Michel Martelly shortly before boarding his plane to Caracas, land of Hugo Chavez. “It gives most grants and aids to Haiti,” added the president at Toussaint Louverture airport’s diplomatic room ahead of his first official trip to Venezuela as a member of the Community of Latin American and Caribbean States (CELAC).
Venezuela’s pledge of $1.3 billion in recovery aid to Haiti after the earthquake slightly surpassed U.S.’s $1.2 billion pledge, making Caracas the largest among all 58 donors. To that, President Martelly said, “We are grateful to President Chavez for Helping us from the bottom of his heart,” in a recent Associated Press interview. “Sometimes for a simple project, it might take too long for the project to happen,” explained the Haitian president, specifically referring to strict conditions accompanying the U.S.’s and other donors’ aids. “If you’re asking me which one flows better, which one is easier,” added Martelly, “I’ll tell you Venezuela.”
This presidential trip to the Venezuelan capital was also part of a larger event: the launching of new 33-member regional bloc CELAC away from Washington and Canada’s shadows. During the two-day summit held form Dec. 2 – Dec.3, 2011,  leaders focused on shielding their economies from the world’s financial meltdown. In spite of global economic woes, the Latin American region achieved a 5 percent economic growth last year. “The economic crisis should be at the center of our concerns,” said Dilma Rousseff who felt the region needed a new paradigm to respond to the crisis. “Together we can be stronger, together we can grow and that should be stronger for everyone,” she added. Her homologous partner Chavez went straight to the point, noting, “As the years go by, CELAC is going to leave behind the old and worn-out OAS,” referring to the Organization of American States, the Hemisphere’s arbitration entity. “Only Unity will make us free,” he later added.
Whether Haiti, a relatively small fish with a foreign aid economic model, can swim huge currents, as do autonomous economies such as OPEC country Venezuela or Dilma Rousseff’s Brazil, currently nursing the world’s fastest growing economy, remains to be determined. Nevertheless, Port-au-Prince’s warm embrace of Caracas differed vastly from that of his predecessor Rene Preval who looked upon Chavez’s motives with suspicions. With the exception of Brazil and Chile, where China has a strong foothold, the U.S. remains the biggest trading partner of many countries in the region. Yet, Chinese President Hu Jintao’s congratulatory letter, which Chavez read aloud to all 33 regional leaders, pledged to deepen cooperation with the new group, development that could shift the region’s geopolitical balance considerably.
Amid this distinct geopolitical puzzle, some observers noticed the emergence of Martelly’s foreign policy model, gearing his country toward his regional allies in search of sovereignty, rather than rigid Washingtonian conditions who stood between him and his army. Only the future will tell if Martelly’s regional play will favor Haiti’s long-term interests, but the president remained true to his ideals. “Now, if nobody wants to help, then we have to think about a way of getting that money,” said the president to the AP about his dream to reestablish the Haitian army. “But at the same time,” he continued. “Why do we need a foreign army to help us? A foreign army that’s costing much more money, why not hire young Haitians? Why not regain our sovereignty?”

Martelly welcomed at CELAC source: Le Nouvelliste

Although he told the AFP in an interview this weekend, “We no longer want handouts, we want to promote Haiti” in his quest to dissociate his country’s imagery with poverty and misery, President Martelly praised a CELAC’s resolution, promising vast contributions to help rebuild Haiti. Contributing countries included, Ecuador in several areas including security, Columbia in security and education, Chile in education to build 10 schools, and Panama that promised to ease travel restrictions for Haitians. A $40 million grant from Brazil will help restart construction of Artibonite’s hydroelectric plant while the new program “Aba Grangou” promised to reach about 100,000 vulnerable single moms with needed assistance starting January 2012.
However, If Washington’s reaction, still unknown, resembles anything like the 1,918 Haiti-related diplomatic cables revealed by whistleblowing website Wikileaks last summer, President Martelly may soon have a rude awakening as did his predecessor. “What emerges,” wrote the editors of the Nation about the diplomatic cables, “Is an extraordinary portrait of Washington’s aggressive management of Latin America’s first sovereign nation and its bare-knuckled tactics on behalf of U.S. corporate interest there.” If as the Nation deducted, the Haiti cables revealed Washington squaring off against Caracas and Havana, while Beijing and Taipei engaged in fierce diplomatic arm-wrestling that threatened to derail the UN military mission in Haiti, Martelly’s foreign policy shift toward regional allies could prove insurmountable.
Nonetheless, the president held nothing back expressing his frustration with the international community. “I’m the leader of a country that has been neglected for the last 200 years,” he stressed to AFP’s Ramon Sahmkow. “It is my responsibility to bring development to Haiti.”

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