Outlook for India-Pakistan trade

NASIR JAMAL

India will go to the polls between April 7 and May 12. Analysts widely expect the polls to throw up a BJP-led coalition headed by Hindu nationalist leader Narendra Modi.

What will Modi’s ascension to the top political office in Delhi mean for Pakistan’s trade relationship with India? Should Islamabad, which has recently linked the grant of non-discriminatory market access to Indian goods, especially through Wagha-Attari land route, to resumption of the stalled composite dialogue, be worried?

Apparently, businesspeople on both sides of the border as well as trade officials don’t really see Modi’s expected victory as a threat, or even a setback, to the process of bilateral trade normalization.

Conversations with Indian businessmen in Amritsar in December and in Lahore last month show that his victory could be ‘blessing in disguise’ for the ‘now on now off’ trade talks.

“Modi is a doer. If he realises that trade with Pakistan is in India’s best interests, he will not let any issue, ideology or person impede it,” a businessman from Amritsar had told this writer. “He takes just a few minutes to take economic decisions if he is convinced.”

Many Indian businessmen share his assessment of the man who can often pledged to be ‘tough’ with Pakistan after his nomination as his party’s candidate for India’s premiership.

Improving trade relations with India is the key priority of the Nawaz Sharif government, which sees liberalisation of bilateral trade across Wagah-Attari as one the several ‘game changers’ for the country’s economy listed in its election manifesto. Ever since coming to power it has strived hard to revive the stalled trade negotiations with Delhi.

The hopes of an early normalisation of trade across the border got a major boost when commerce minister Khurram Dastgir Khan met India’s trade minister Anand Sharma on the sidelines of a Saarc business conclave in January. After commerce secretary level talks, the two ministers agreed to keep the Wagah-Attari trade route operational 24 hours a day seven days a week, work out modalities for containerisation of cargo, allow all tradable items by the only land route and liberalise business visa regime.

Pakistan also agreed to scrap negative list of items that cannot be traded and replace it with a much smaller list of 100 sensitive items, virtually giving India the non-discriminatory market access as an alternate to politically controversial MFN status. The agreed measures were to be implemented before the end of last month.

But Pakistan later refused to implement these measures, blaming Delhi for failing to execute its part of the agreement that required it to dismantle several tariff and technical barriers hampering access of major Pakistani exports like textiles into the Indian market.

Speaking at the inauguration of the India Show, Dastgir linked the implementation of all the agreed measures to the resumption of the composite dialogue, saying the commerce ministers could facilitate the process to a certain extent only.

Many said the move to link the trade normalisation process with the resolution of the other bilateral territorial and political disputes to have been taken under the military’s pressure. The government denies it.

A commerce ministry official told Dawn from Islamabad that the process to implement the measures agreed by the ministers was stalled because of India’s failure to meet its part of the commitment and not under the army’s pressure. “The security forces and the government are on the same page as far as I know of,” he said. He also sought to dispel reports that India had agreed to address Pakistan’s concerns before end of this month in return for non-discriminatory market access to its exports.

”We are doing our home work to protect our economic interests and industry; they are doing theirs. Both are very much committed to overcoming the hurdles in the way of free trade and discussing how to move ahead in such a way that no country gets hurt by opening up of trade. But it is premature to say when will we be able to surmount the impediments to the process,” he said.

The official also downplayed fears of derailment of trade talks if Modi wins the Indian elections. “I have only comment to make: when it comes to economic and political relationships between the two countries, individuals or domestic politics just don’t matter. What matter the most are national interests,” he said in reply to a question.

Changing oil marketing dynamics

KHALEEQ KIANI

The downstream oil industry is shaping up quite fast. This week, the Pakistan State Oil is expected to formally announce plans to take over at least 12pc additional shares of Pakistan Refinery Limited, one of the country’s oldest refineries.

Another medium-sized oil market company, Admore, is struggling to survive amid nasty disputes and court cases among its shareholders, which stem from its hostile takeover by a Lahore-based group enjoying political clout in the current set up.

The US-based Chevron, formerly Caltex, has already called it quits and is completing legal formalities for transferring its marketing business to Total-Parco Pakistan. It’s shareholding in Pakistan Refinery — a joint venture of Pakistan State Oil (PSO), Shell and Caltex — is up for grabs by PSO.

In fact, the entire oil marketing industry is expanding; having grown from just three to more than 10 small and big oil marketing companies in a matter of a few years. The number of refineries has also increased to five, and all of them have entered into the marketing business.

And the biggest of them all, which enjoyed a monopoly-like situation until a decade ago — the state-run PSO — has been loosing ground. Almost every small and big market company has intruded into PSO’s territory.

Although it still enjoys the role of a market leader and remains the country’s biggest company by revenue, its market share has dropped from over 75pc a decade ago to a little over 60pc.

The fact that the market leader is paying taxes and dividends to the government and earning profits on the back of guaranteed returns should not be a reason for satisfaction. A more serious approach should be to examine its entire business model and market challenges to unleash the true potential of the strategic public asset.

The company announced two weeks ago that it earned a record profit of Rs23.7 billion in the first half of the current fiscal year. A closer examination of its books reveals that Rs11 billion of that profit had accrued on account of delayed payment of mark-up from Hubco and Kapco as a result of clearance of circular debt by the government. Another Rs2.3 billion in profit came from its investments in Pakistan Investment Bonds.

While it may be considered a prudent business approach from a revenue diversification perspective, a professional management is expected to celebrate its success only if it is gaining market share and drawing maximum earnings from the core business.

These few numbers would throw a little light on the direction the downstream market is heading to. PSO lost its overall market share by about 1.8pc in just six months (July-December 2013), from 64.7pc to 62.9pc.

In the high speed diesel segment, PSO’s sales dropped by 1.4pc, against the OMC industry’s growth of 7pc. As a result, its market share went down by 4.6pc to 53.8pc at end-December 2013.

In the motor gasoline business, the overall industry grew by over 19pc, but PSO posted only a 15pc increase. Petrol consumption during the period was higher because of lower CNG availability. Its market share dropped by 1.7pc to 49.6pc.

In white oil, the industry grew by about 10pc, but PSO’s sales improved by only 3.1pc, and it ended up losing its market share from 56.5pc to 53.1pc.

In black oil, PSO was able to maintain its market share at around 75pc, mainly because of its long-term furnace oil supply contracts with the power sector, and because the government was able to address the circular debt in the period.

It is clear that while smaller companies like Byco, Attock Petroleum, Hascol and Total-Parco are gaining ground, the market leader is loosing its hold to smaller, newborn companies with limited infrastructure. In some cases, the oil giant was seen willingly allowing its infrastructure and supply line to be used by other firms.

Until recently, the company was without a chairman of the board of directors for over a year. And it has been without a full-time managing director for over eight months now.

It is in this background that PSO needs to take over a majority decision-making position in Pakistan Refinery for reverse integration for guaranteed product supply, given the fact that private refineries tend to reduce their supplies to PSO when its payables go up. And in turn, they sell their products directly to the market to gain more footholds.

In fact, the government has now revived PSO’s board of directors, which was barred from working two weeks ago on verbal orders, to take a final decision over taking over PRL’s shares. PRL is a Rs150 billion-entity in which PSO already holds a 37pc stake.

Address the rot within

JAWED NAQVI

BY delving extensively into the political experiment launched by the Aam Aadmi Party (AAP), Rajmohan Gandhi might have appeared to some in the room to have sidetracked the India-Pakistan dialogue he had himself helped set in motion in Delhi.

After all there were experts from both sides from relevant fields — military, business, media, diplomacy — bracing to offer last week’s confabulations the benefit of their distilled wisdom. But here was Mahatma Gandhi’s grandson going into raptures about a political party he had only recently joined, and of which he is a candidate in the ongoing parliamentary race. Indiscreet? No.

Quite a few in the two-day meet, organised jointly by Sherry Rehman’s Jinnah Institute and Gandhi’s pacifist Centre for Reconciliation and Dialogue, thought they were shortchanged.

Mr Gandhi was advertising the virtues of his party when the agenda for the meeting was to share the intricate perceptions and recommendations of two nuclear neighbours on issues bitterly dividing them. Track II is what they call these meetings, not without an air of self-importance. So there was no time to waste.

However, what Mr Gandhi did succeed in doing in discussing his common man’s agenda at a seemingly odd forum was to focus on the dire need of bringing domestic impediments to peace up for discussion rather than bury them conveniently because no one likes to take a public position on ‘internal affairs’ in a bilateral get together. Domestic issues are rarely discussed in such forums. Has the rise of Muslim extremism in Pakistan impeded or facilitated normalisation of ties with India? Should the conference not have discussed the problems facing Pakistan internally?

Internal problems in this regard are distinct in my view from the ones posed by the anti-state Taliban. The Taliban bring a set of global challenges, and that is not something Pakistanis would be averse to discussing with Indians.

A truly existential dilemma for Pakistan comes in the form of lawyer patriots showering the fanatical killer of the Punjab governor with rose petals, for example. Or take some equally nationalist judges who accept the point of view of extremists as valid and worthy of empathy. How does this internal equation play out in the conduct of foreign policy not just with India, but also with Iran, Saudi Arabia and others?

Likewise with Hindutva. In India too you would find pro-Hindutva lawyers with the rose petal syndrome. Here too you would face the bureaucracy and the police with more than a handful in their ranks siding with the country’s fascist strides. Will a Modi administration in India, assuming but not conceding he will make the grade in the upcoming elections, mean a change for the better for ties with Pakistan, or will it be plain bad news?

The AAP is bitterly opposed to Modi’s candidature for the top job for a variety of sound reasons — including corruption and communalism. And, though he has conveniently played down his anti-Muslim and anti-Pakistan vitriol during the current election campaign to woo the gullible and well-meaning fence-sitters, the world knows that Modi is the very antithesis of Atal Behari Vajpayee’s preference for moderation. Vajpayee too was a Hindutva mascot but he was not any fanatic’s poodle.

In any case, regardless of his differences with the neo-fascist Rashtriya Swayamsevak Sangh, Vajpayee found himself leading his nuclear-armed country to the brink of a potentially catastrophic war with Pakistan in 2002. It required massive international lobbying to defuse the crisis.

There was a view expressed at last week’s conference by mostly Indian interlocutors, that India’s foreign policy was too institutionalised for there to be much of a difference no matter who heads the government. In other words, had Modi been in charge of the country instead of Vajpayee, goes the argument, he would have taken the same militarist sabre-rattling course. I think the outcome would have been rather worse.

In any case, the suggestion that India’s foreign policy, or equally its defence policy, is written in stone makes for a specious claim. For Modi and Vajpayee, to whip up a militarist posture would be coterminous with their domestic political calculations. They bring out the baser instincts in the name of Indian nationalism.

Rahul Gandhi’s politics is no different. On his part, he leans on his notion of history that glorifies his grandmother as the one who wrecked Pakistan in 1971. And he does that without the street power to work the people up into a froth. Moreover, he is not right-wing enough to benefit from his occasional jingoism.

Before saying anything in Rajmohan Gandhi’s behalf on the subject, consider how AAP leader Arvind Kejriwal put it when he was asked to comment on ties with Pakistan.

He asserted not once but twice, since the TV anchor was persistent, that relations with Pakistan would be no different than with other neighbours of India. “We are for friendly ties with all countries, big or small, especially our neighbours.”

Gandhi shares that view to the hilt. Who says there won’t be a change in the policy regardless of who rules the country? It’s clear as daylight that Gandhi brings liberal perspectives to foreign policy which Modi does not.

There is a need to discuss the existential problems facing Indian democracy and Jinnah’s dream of a Pakistan in a dialogue between the two countries. If we can’t provide answers to them, then any core issue dogging them will remain a topic to rehash old press releases on peace.

The writer is Dawn’s correspondent in Delhi.

Wrong side of history

 UMMEKULSUM IMAM

THE Islamic world’s power dynamics are undergoing possibly the most seismic shift in a generation. The House of Saud’s dominance over global Muslim politics, an enduring, if calamitous, reality, appears to be abating.

A divergence of interests between the Kingdom and other regional players has been gaining currency. Much has changed in the Muslim world since the public rift between Saudi Arabia and its perceived patron, the US, over the issue of nuclear engagement with Iran.

With Turkey, Qatar, and Iraq adopting divergent policy postures to the Saudis and the latter two now publicly hostile, the regional sway held by the House of Saud seems to be slipping away. Pakistan, however, appears to be on the wrong side of history once again.

The latest fracas in the Middle East has been an unprecedented cleavage within the Gulf Cooperation Council (GCC), a previous bastion of support for regional Saudi supremacy. A categorical challenge to Saudi leadership has been mounted by the resource rich, increasingly independent Emirate of Qatar. Self-confidence spurred by swelling coffers of a gas-rich economy have led the new emir and his associates to openly confront Saudi policy on Egypt and Syria.

Energy politics is also undergoing important changes, mostly precipitated by technology and environmental concerns. Gas is the new oil, deemed preferable as a fossil fuel due to its lower carbon emissions. Resultantly, historically obscure Qatar has been making waves in the last few years through its global spending spree, and high-profile international investments.

The second element set to alter the geo-strategic energy landscape is the discovery of shale gas. With US gas exports expected to commence next year, US reliance on external energy resources will dwindle, diluting its dependence on its traditional Middle Eastern allies. This process is already under way, unnerving the Saudis. For decades US criticism of the Saudis was muted, both officially and in their media outlets. This embargo on silence has been lifted in the last few months, and is likely to escalate.

Unaccustomed to the withdrawal of unqualified international support, the Saudis seem more zealous in achieving their regional ambitions, but their plans appear thwarted. Turkey and Qatar are now supporting different groups to Saudi-backed jihadi elements in Syria and both back Egypt’s elected but deposed Muslim Brotherhood government.

Intriguingly, Qatar and Iran policies are in greater consonance today than those of Qatar and Saudi Arabia. Oman, a member of the GCC, played a mediating role between the US and Iran before nuclear negotiations became public, and has recently signed a slew of economic deals with Iran during President Rouhani’s visit to Oman. The GCC has never been this fractured before, with only the UAE and Bahrain standing firmly behind Saudi Arabia. Iraq’s Prime Minister Maliki, perceived as an Iranian ally, has recently publicly chastised the Saudi and Qatari governments for their support of insurgent groups. Iraq in February this year, pumped more oil than it has in the last 35 years.

With Iraq’s oil exports rising rapidly, and Iran’s potential reintegration into the international community, the waning of Saudi power is inevitable. Qatar, Iraq, Iran and Turkey are all emerging counterweights to traditional Saudi dominance in the Islamic world. With the erosion of Saudi hegemony in the Muslim world, a new era of a more enlightened version of the faith being practised may also ensue.

Pakistan, however, seems to have the misfortune of being the single Saudi foreign policy ‘success’ of recent times. Instead of acquiring energy and long-term economic security through implementing an accord with our gas rich neighbour, we have chosen the expedient and ultimately deleterious path of continued Saudi patronage.

The direct correlation between deepening Saudi influence and an escalation in extremism in Pakistan that has disfigured the country’s socio-economic landscape over the last three decades has been ignored in our obsession for finding a quick economic fix. Rather than working on improving economic fundamentals and investing in a progressive future, we appear eager to remain on the right side of an increasingly anachronistic regime, whose financial largesse over the years has carried punitive social costs.

The rise in militancy that has witnessed tens of thousands of innocent lives sacrificed, billions in potential investment lost due to a debilitating security environment, and the mutilation of our spiritual landscape, are largely the enduring legacy of a resilient Saudi-Pak partnership.

The addition of $1.5 billion to our foreign currency reserves is therefore an insignificant and temporary palliative. A prudent and favourable foreign policy course would be sensitised to geopolitical trends which can yield long term socio-economic benefits rather than being driven by personal linkages and fleeting financial gains.

The writer is a freelance contributor.

Test of diplomacy ahead

 Dr Maleeha Lodhi
How will relations between Pakistan and India shape up after the Indian elections? Will the election outcome help to accelerate or slow down the normalisation of ties between the two neighbours?

Most importantly for Islamabad, will the next government in Delhi agree to revive the broad based ‘composite’ dialogue, suspended since early 2013? Or will it persist with an approach that limits the bandwidth of talks by cherry picking issues of India’s priority in an effort to recast the terms of engagement?

Clear answers to these questions will obviously emerge after the elections. But Pakistan will have to carefully think through the strategy it should adopt to engage the new government and ensure result-oriented dialogue that helps to build stable relations. As of now, all outstanding disputes and irritants between the two countries are in a state of deadlock while the contribution trade liberalisation can make to steadier relations remains untested.

Even if Prime Minister Nawaz Sharif’s government moves to grant India Non-Discriminatory Market Access (a more politically acceptable term for MFN) ahead of the election, it is not certain how the next government will reciprocate and whether this will serve as a catalyst for resumption of the comprehensive peace process that Islamabad has long sought.

Many Indian analysts argue that irrespective of who wins the election, the fundamentals of India’s policy towards Pakistan will not change. That may be true. But the shape, character and stability of the next government will have a bearing on how Delhi conducts future business with Pakistan. An election widely depicted as being more about stronger leadership than new policy, would still influence the stance Delhi adopts towards Pakistan.

It might, therefore, be useful to consider the possibilities that might emerge from the election. The least likely is a Congress win. With a tenure marred by corruption scandals, an economic slowdown, and infirm leadership, Congress seems headed for a historic defeat on the back of a strong anti-incumbency wave. Even if the party makes a miraculous comeback and is able to cobble together a coalition it would be a weak government denuded of the capacity to take major policy initiatives.

Pakistan would then see continuation of a start-stop pattern of diplomatic engagement that would mimic that of the recent past. There would be movement on trade but no substantial progress on the contentious issues that divide the two countries and have served to stall trade liberalisation efforts in the recent past.

Opinion polls strongly support the second possibility – the Bharatiya Janata Party emerging as the largest party in a campaign dominated by its controversial prime ministerial candidate Narendra Modi, but falling short of a majority of 272 in the 543-member Lok Sabha. A BJP-led coalition could be built if the party secures around 175 seats. Modi’s premiership would be guaranteed if BJP musters 200 seats or more, enabling it to forge alliances with regional or smaller parties on its terms. 

Winning less than 150 sets will mean the BJP would have to concede more to regional allies many of whom have serious misgivings about Modi’s past record and personality and would insist on a leader other than him to head the coalition. 

What would a Modi-led government mean for relations with Pakistan? Many here argue that having previously dealt with a BJP government, Pakistan might find it ‘easier’ to manage relations with India under a strong, right-wing government, not on the defensive at home on Pakistan policy and able to make diplomatic compromises. But there are too many unknowns about Modi, a polarising politician in his country – and about his foreign policy team – to support such a sanguine view.

Even if Modi’s domestic economic priorities persuade him to enhance economic ties with Pakistan, his reputation for ‘muscular nationalism’ will urge him towards a harder line on contentious issues, especially Kashmir. Under Modi, even disputes regarded as low hanging fruit, such as Sir Creek, would see little progress.

A third possibility indicated by the rising influence of regional parties and formation of an 11-party Third Front (comprising leftist and regional parties) is a non-BJP, non-Congress coalition government similar to that led by Deve Gowda in 1996 and subsequently by IK Gujral. Although the Front includes leaders like Nitish Kumar it is unlikely to win enough seats. 

It could, however, hold the balance of power in a coalition supported by Congress. Even so, it would be a fragile arrangement unlikely to last long. Under such a shaky government there will be little expectation of significant progress much less any breakthroughs in Pakistan-India relations.

Each of these possibilities will oblige Islamabad to evolve a differentiated and carefully calibrated diplomatic response. But a more fundamental challenge lies ahead. This is if the new government chooses an approach similar to that followed by Delhi in recent years – of selective engagement on issues of priority to India while ruling out renewal of the comprehensive eight-issue process, known as the ‘composite’ dialogue. 

Despite Prime Minister Nawaz Sharif’s many positive signals and calls for an early restoration of the broad gauge peace process, Delhi’s posture remained unchanged during 2013 and beyond. It only agreed to meetings – as between the commerce ministers last month – outside that framework in an attempt to narrow the scope of diplomatic engagement. Normalisation, in other words, was acceptable if it proceeded piecemeal and not as an across-the-board process.

Pakistan went along with this approach in a spirit designed to preserve the momentum of normalisation. But a new government in Delhi will present an opportunity for a reset in ties. Islamabad will therefore have to re-evaluate how long it will accommodate a selective engagement approach if there is no Indian reciprocity on restoring the broader dialogue. 

In several recent track II meetings with former Indian officials the impression they conveyed was that there is no traction among their policy community for a revival of the composite dialogue. Instead there is a marked preference for limited engagement on issues prioritised by India. 

Dialogue, yes; normalisation, yes, but reconfigured on India’s terms. Movement on trade would be fine, as would dialogue on terrorism and maintaining tranquillity on the Line of Control – but these issues would be addressed individually and not as part of a wider normalisation framework.

Some here might argue that partial normalisation is better than none so why not press ahead with selective engagement – trade after all benefits Pakistan too. This view overestimates the role trade alone can play to power a peace process in a strategic environment that remains fraught and prone to tensions. 

There are several reasons why a fragmented dialogue will not achieve genuine or enduring normalisation and place relations on a steadier track. The most fundamental is sustainability. Past experience testifies that moves to open up trade are often set back or stall due to non-trade factors – incidents on the Line of Control in Kashmir are the latest example of this.

To be sustainable, building economic ties also requires addressing issues of discord between the two countries, which periodically and inevitably spark tensions and cause normalisation to regress. Also trade ties will not achieve their full potential unless contentious areas are simultaneously tackled.

It will be a mistake to settle for a fragmented or partial normalisation process. The comprehensive eight-issue framework drawn up in 1997, during Prime Minister Sharif’s second term, endured because it reflected the priorities and concerns of both sides. This process was sustained from 2004 to 2008 and then again in 2011-12. 

It enabled multi-layered talks on a range of issues and helped to create a web of multiple interactions between various ministries. Although the composite process yielded no dramatic breakthroughs and only a modest set of confidence building measures, discarding this framework would mean losing even the incremental progress that was made.

The renewal of a full-fledged comprehensive peace process remains the most viable means to manage differences and build on areas of convergence between the two neighbours. Limiting the bilateral engagement to a single track will neither build sustainable economic ties nor make longstanding differences go away.

The writer is special adviser to the Jang Group/Geo and a former envoy to the US and the UK.

Putin’s ‘honest brokers’

Maxim Trudolyubov (Insight) / 18 March 2014

PRESIDENT VALDIMIR Putin’s decision to slip soldiers in unmarked uniforms into Crimea this month and escalate the race for control over other Russian-speaking parts of Ukraine shows that former assumptions about Moscow’s political behaviour no longer apply. 


The United States and the European Union may still consider sanctions as a tool to check Moscow’s foreign policy, but to Putin, the threat of such sanctions means little: He has already factored them into his plans.
The chain of events the Kremlin has set in motion contains a message not only for Western policymakers, but also for the Russian plutocrats and corrupt officials who keep much of their wealth in the West. Putin is letting his Western adversaries know that he is telling his Russian enemies and financially corrupt friends: “If you won’t straighten up and behave as patriots, I am ready to throw you under the bus. If the laws prohibiting you to feather your nests abroad or to serve as ‘foreign agents’ do not persuade you, Western sanctions will do the job.”
After the Russia-supported president of Ukraine, Viktor F. Yanukovych, fled his country on February 22, the Kremlin went into emergency mode. Since then, key decisions have been made by a group of Russia’s top security officials. The diplomatic, military and business establishments have been pushed to the side.
The new ruling circle is now even smaller and more opaque than before. Those insiders who used to counterbalance the Kremlin’s hawks are being marginalised. Strategic decisions on Crimea are made at Security Council meetings presided over by Putin. Important members include his chief of staff, Sergei B. Ivanov, the council secretary, Nikolai P. Patrushev, the director of the secretary of the Federal Security Service, Aleksandr V. Bortnikov, and the head of the Foreign Intelligence Service, Mikhail Fradkov.
Putin has surrounded himself with the Kremlin’s version of “honest brokers” — ultraconservative in their conviction that Greater Russia must be restored, people whose values (as Putin loves to think) are not distorted by vested interests nor driven by the desire for personal financial gain (though many of their relatives have lucrative jobs at state-connected companies — but that is a minor offence by Russian standards).
This inner circle sees Ukraine’s February revolution as Western-led regime change. The fact that the United States and the European Union recognised the Ukrainian interim government and even promised it financial aid was presented in Russia as the ultimate breach of trust by the West. The Kremlin now sees international treaties concerning Ukraine, including the Budapest memorandum to the 1994 Nuclear Nonproliferation Treaty that guarantees Ukraine’s territorial integrity, as null and void.
Putin says that the nature of Ukraine’s statehood has changed and that it is no longer legitimate. Thus, Russia has the moral right to make a move against Crimea. Moreover, the Kremlin thinking goes, if Moscow had not come up with a quick and forceful response to the West (even at the cost of breaking rules), Russia would have been seen as weak.
When German Chancellor Angela Merkel said last week that Vladimir Putin was in “another world”, her statement was widely seen as a tactful attempt at saying that he is crazy. But to many Russians, Putin’s decisions, though they may have been radical, are not at all irrational.
The All-Russia Centre for the Study of Public Opinion, a state-backed polling organisation, declared that his approval rating exceeds 70 per cent and has reached its highest point in three years. Independent pollsters have also found that the Kremlin’s stance on Ukraine and Crimea is popular. “An absolute majority of the Russian public would have approved of Crimea’s accession to Russia,” says Lev Gudkov, director of the Levada Centre, an independent polling firm. “On the other hand, more than 70 per cent are against any use of force in Ukraine.”
The self-imposed state of emergency puts Putin in his element. Here is a sketch of what he is aiming to achieve: A popular leader is once more in tune with the majority of his people. The regime has renewed its mandate. The Westernisers — the rich, the clever and other untrustworthy minorities — are on the other side of the barricade. Honest leaders, people who don’t have bolt-holes in the West, are once more in charge.
For the moment, society is polarised. But a creeping purge of the elites is underway. Anyone who wants to keep a role within the system will have to make a choice: Agree to mobilise his resources for Russia and waive any remnant of property rights, or leave the country and face the consequences. The choice is the same for any public intellectual or journalist — take up a patriotic stance, stop writing, or go into exile.
Any criticism can be presented as unpatriotic. Russia now has an overarching agenda that dwarfs petty issues such as graft or the arbitrary rule of the law-enforcement officials. That’s the picture the Kremlin’s “honest brokers” would like to see. It’s not yet reality, but life in Russia is moving in that direction.
Theoretically, Putin can still pull away from Crimea. By not officially acknowledging those unmarked troops as Russian, he keeps his exit door slightly ajar. But no matter how unclear his intentions are regarding Ukraine, there is little doubt that he is fully committed to his dystopian vision of a united, patriotic Russia. As a response to the bottom-up revolution in Kiev he has started a top-down revolution in Moscow.

Maxim Trudolyubov is 
the opinion page editor 
of the business newspaper 
Vedomosti

Study to test ‘chocolate’ pills for heart health

It won’t be nearly as much fun as eating candy bars, but a big study is being launched to see if pills containing the nutrients in dark chocolate can help prevent heart attacks and strokes. 

The pills are so packed with nutrients that you’d have to eat countless candy bars to get the amount being tested in this study, which will enrol 18,000 men and women across the US.

“People eat chocolate because they enjoy it,” not because they think it’s good for them, and the idea of the study is to see whether there are health benefits from chocolate’s ingredients minus the sugar and fat, said Dr. JoAnn Manson, preventive medicine chief at Harvard-affiliated Brigham and Women’s Hospital in Boston.

The study will be the first large test of cocoa flavanols, which in previous smaller studies improved blood pressure, cholesterol, the body’s use of insulin, artery health and other heart-related factors.

A second part of the study will test multivitamins to help prevent cancer. Earlier research suggested this benefit but involved just older, unusually healthy men. Researchers want to see if multivitamins lower cancer risk in a broader population.

The study will be sponsored by the National Heart, Lung and Blood Institute and Mars Inc., maker of M&M’s and Snickers bars. The candy company has patented a way to extract flavanols from cocoa in high concentration and put them in capsules. Mars and some other companies sell cocoa extract capsules, but with less active ingredient than those that will be tested in the study. Candy contains even less.

“You’re not going to get these protective flavanols in most of the candy on the market. Cocoa flavanols are often destroyed by the processing,” said Manson, who will lead the study with Howard Sesso at Brigham and others at Fred Hutchinson Cancer Research Center in Seattle.

Participants will get dummy pills or two capsules a day of cocoa flavanols for four years, and neither they nor the study leaders will know who is taking what during the study. The flavanol capsules are coated and have no taste, said Manson, who tried them herself.

In the other part of the study, participants will get dummy pills or daily multivitamins containing a broad range of nutrients.

Participants will be recruited from existing studies, which saves money and lets the study proceed much more quickly, Manson said, although some additional people with a strong interest in the research may be allowed to enroll. The women will come from the Women’s Health Initiative study, the long-running research project best known for showing that menopause hormone pills might raise heart risks rather than lower them as had long been thought. Men will be recruited from other large studies.

Manson also is leading a government-funded study testing vitamin D pills in 26,000 men and women. Results are expected in three years.

People love vitamin supplements but “it’s important not to jump on the bandwagon” and take pills before they are rigorously tested, she warned.

“More is not necessarily better,” and research has shown surprising harm from some nutrients that once looked promising, she said.

US, EU set sanctions as Putin recognises Crimea sovereignty

(Reuters) / 18 March 2014

US President Barack Obama slapped sanctions on 11 Russians and Ukrainians blamed for the seizure. 


The United States and European Union imposed personal sanctions on Monday on Russian and Crimean officials involved in the seizure of Crimea from Ukraine as Russian President Vladimir Putin signed a decree recognising the region as a sovereign state.
The moves heightened the most serious East-West crisis since the end of the Cold War, following a disputed referendum in the Black Sea peninsula on Sunday in which Crimea’s leaders declared a Soviet-style, 97-percent vote to secede from Ukraine.
Within hours, the Crimean parliament formally asked that Russia “admit the Republic of Crimea as a new subject with the status of a republic”. Putin will on Tuesday address a special joint session of Russia’s State Duma, or parliament, which could take a decision on annexation of the majority ethnic-Russian region.
That would dismember Ukraine, a former Soviet republic once under Moscow’s thumb, against its will. Kiev and the West said the referendum, held under armed Russian occupation, violated Ukraine’s constitution and international law.
Russian forces took control of Crimea in late February following the toppling of Ukrainian President Viktor Yanukovich after deadly clashes between riot police and protesters trying to overturn his decision to spurn a trade and cooperation deal with the EU in favour of cultivating closer ties with Russia.
US President Barack Obama slapped sanctions on 11 Russians and Ukrainians blamed for the seizure, including Yanukovich, and Vladislav Surkov and Sergei Glazyev, two aides to Putin.
Putin himself, suspected in the West of trying to resurrect as much as possible of the former Soviet Union under Russian leadership, was not on the blacklist. A White House spokesman declined to rule out adding him at a later stage.
Amid fears that Russia may move into eastern Ukraine where there is a significant Russian-speaking community, Obama warned that “further provocations” would only increase Moscow’s isolation and exact a greater toll on its economy.
“If Russia continues to interfere in Ukraine, we stand ready to impose further sanctions,” he said.
A senior US official said Obama’s order cleared the way to sanction people associated with the arms industry and targets “the personal wealth of cronies” of the Russian leadership.
In Brussels, the EU’s 28 foreign ministers agreed to subject 21 Russian and Ukrainian officials to visa restrictions and asset freezes for their roles in the events. They included three Russian military commanders in Crimea and districts bordering on Ukraine.
There were only three names in common on the US and European lists - Crimean Prime Minister Sergey Aksyonov, Crimean parliament speaker Vladimir Konstantinov and Leonid Slutski, chairman of the Russian Duma’s committee on the Russian-led Commonwealth of Independent States (CIS), grouping former Soviet republics. The EU blacklisted Yanukovich earlier this month.
The US list appeared to target higher-profile Russian officials close to Putin, including a deputy Russian prime minister, while the EU went for mid-ranking officials who may have been more directly involved on the ground.
Washington and Brussels said further steps could follow in the coming days if Russia does not back down and formally annexes Crimea.
A senior Obama administration official said there was “concrete evidence” that some ballots in the Crimea referendum arrived in some Crimean cities pre-marked.
Russian Deputy Prime Minister Dmitry Rogozin, who was named on the White House sanctions list, suggested that the measures would not affect those without assets abroad.
Obama said Russian forces must end “incursions” into its ex-Soviet neighbour, while Putin renewed his accusation that the new leadership in Kiev, brought to power by the uprising that toppled his elected Ukrainian ally last month, were failing to protect Russian-speakers from violent Ukrainian nationalists.
Moscow responded to Western pressure for an international “contact group” to mediate in the crisis by proposing a “support group” of states. This would push for recognition of the Crimean referendum and urge a new constitution for rump Ukraine that would require it to uphold political and military neutrality.
While a Western diplomat said some of the Russian ideas may offer scope for negotiation, Ukraine’s interim president ruled out ever accepting the annexation of its territory.
A complete preliminary count of Sunday’s vote showed that 96.77 per cent of voters opted to join Russia, the chairman of the regional government commission overseeing the referendum, Mikhail Malyshev, announced on television.
Officials said the turnout was 83 per cent. Crimea is home to 2 million people. Members of the ethnic Ukrainian and Muslim Tatar minorities had said they would boycott the poll, held just weeks after Russian forces took control of the peninsula.
Putin’s popularity at home has been boosted by his action on Crimea despite serious risks for a stagnant economy.
Russian shares and the rouble rebounded as investors calculated that Western sanctions would be largely symbolic and would avoid trade or financial measures that would inflict significant economic damage.
However, British Foreign Secretary William Hague said EU countries had begun discussing the need for Europe to reduce its reliance on Russian energy “over many years to come”. Much of that energy is shipped through gas pipelines crossing Ukraine.
In a sign of possible internal debates ahead, euro zone newcomer Latvia said the EU should compensate any countries hurt by sanctions against Russia. The three former Soviet Baltic states, home to Russian-speaking minorities and dependent on Russian energy supplies, could suffer in any retaliation.
Moscow defended the takeover of Crimea by citing a right to protect “peaceful citizens”. Ukraine’s interim government has mobilised troops to defend against an invasion of its eastern mainland, where pro-Russian protesters have been involved in deadly clashes in recent days.
The Ukrainian parliament on Monday endorsed a presidential decree for a partial military mobilisation to call up 40,000 reservists to counter Russia’ military actions. Ukraine recalled its ambassador from Moscow for consultations.
Russia’s lower house of parliament will pass legislation allowing Crimea to join Russia “in the very near future”, news agency Interfax cited its deputy speaker as saying.
US and European officials say military action is unlikely over Crimea, which Soviet rulers handed to Ukraine 60 years ago.

Highlighting the stakes, journalist Dmitry Kiselyov, who is close to the Kremlin, stood before an image of a mushroom cloud on his weekly TV show to issue a stark warning. He said: “Russia is the only country in the world that is realistically capable of turning the United States into radioactive ash.”

Bill Clinton backs economic sanctions on Russia

Muaz Shabandri / 18 March 2014

Former US president lashes out Russia’s decision to go-ahead with the referendum vote, using strong words to criticise the Russian President Valadimir Putin. 


Former US president Bill Clinton drummed up support for Obama’s foreign policy, calling European countries to step-up pressure by placing financial sanctions on Russia.
“I think right now he (Obama) is doing all he can. If he wants to do more, Europe has to go with him because we could actually make what Russia is doing quite costly to them, but only with European support,” said Clinton.
On Sunday, Crimea voted heavily in favour of joining Russia, with an overwhelming 96.7 per cent voting to break off from Ukraine.
“It is a very dangerous situation and it is unnecessary. In the end, it is going to hurt Russia more than it helps Russia — politically and economically,” remarked Clinton.
He lashed out Russia’s decision to go-ahead with the referendum vote, using strong words to criticise the Russian President Valadimir Putin.
He questioned Putin’s hopes of “restoring Russia’s greatness and standing in the world”. “When I was the president 20 years ago, I signed an agreement that we helped write with Ukraine and Russia — in which Ukraine gave up all its nuclear weapons and sent it to Russia for security and Russia promised to respect the territorial integrity of Ukraine. Now, president Putin says the situation has been aggravated by the proto-fascist elements in the Ukranian upheaval.”
The referendum has put US and Russia on a collision course with the White House refusing to recognise the Crimea vote. Western media has termed the current situation as the ‘most dangerous security crisis’ faced by Europe since decades.
“They( Russians) believe if they take Crimea in this trumped up referendum, may-be depending on what’s going on now — they will cut-off gas to Ukraine and maybe to anybody in Western Europe who helps them (Ukraine). That’s a good way to define ‘Russian greatness in the 21st century’.”
Clinton expressed his faith in restoring Ukraine’s sovereignty by pushing dialogue, calling the referendum ‘unconstitutional’ and ‘farce’.

“Ukraine is an important country. There are 46 million people living there. Two-thirds of them are native Ukranians and they don’t deserve this. All they wanted was the right to determine their own future and they should have that.” Clintons remarks came in a talk with CNN’s Fareed Zakaria at a dinner hosted by GEMS Education as part of the Global Education and Skills Forum in Dubai.  “I hope and pray before this thing gets any worst that Russia can be persuaded not to force Ukraine to either be divided or be an either-or country — but to be a bridge country.”

Islands issue to be resolved peacefully, says Murr

(Wam) / 18 March 2014

FNC Speaker says the UAE has adopted a foreign policy based on certain principles such as tolerance and acceptance of various people and their cultures. 


Mohammed Ahmed Al Murr, Speaker of the Federal National Council (FNC), has affirmed that the UAE, since its establishment, has adopted a foreign policy based on certain principles such as tolerance and acceptance of various people and their cultures. These values, he said, contribute to stability, development and international peace.
Al Murr said this comes out of the country’s conviction that achieving international peace is connected with the establishment of ties and communication with various countries in accordance with rules of international law and mutual dialogue.
This, he said, promotes understanding, friendship and rapprochement, in addition to respect of neighbourhood, countries’ sovereignty and resolving conflicts through peaceful means.
“According to this principle, we issued our constant calls to resolve conflicts with Iran over its occupation of the three UAE islands — Abu Musa and Greater and Lesser Tunbs — through peaceful and negotiable means or international arbitration.”

He was speaking at the 130th Assembly of the Inter-Parliamentary Union in Geneva.

Dubai companies to build Pakistan’s energy projects

M. Aftab (Analysis) / 17 March 2014

Projects cover hydel, coal-fired, wind and solar, and natural gas 

An engineer works in the electricity control room at the Hub Power Co plant in Hub, Balochistan. Pakistan’s power sector is receiving investments from Dubai, China, Thailand, South Korea and Saudi Arabia. — Bloomberg

Two Dubai-based companies are leading the way to build Pakistan’s huge energy projects, as the deepening electricity crisis is crushing the economy. The two Dubai-based companies are: Arab National ConstructionHoldings, or ANC and Al Aqili Group.
The overall, multi-sector energy plan is estimated in the investment range of $50 billion to $60 billion, at this early start up date. When the crippling energy crisis eases, the economy will look up, industrial output will rise, and much greater production will be ensured.
On its back foreign trade will expand to the advantage of all the regional and global business partners of Pakistan, including the Gulf countries, and UAE. The target is to raise the GDP growth to five per cent plus in the short term, from a low of 2.5 per cent seen in the last seven years, after the country had recorded a six to seven per cent annual growth during 2001-05.
Investing in the Pakistani power sector now are government and private companies from Dubai, China, Thailand, South Korea, Saudi Arabia, and Pakistani private sector itself. The projects which are being implemented cover hydel electric power, coal-fired power, wind and solar power, and natural gas.
Following high level Saudi and UAE leadership talks in Islamabad, in the lest few days, King of Bahrain Hamad bin Isa Al Khlifa, is scheduled to visit Pakistan this month. The two countries are expected to sign six MoUs and agreements for mutual cooperation. These are likely to cover economic cooperation, trade, energy, and infrastructure, as at present indicated.
Dubai’s ANC has just signed up to install two coal-based power plants, to generate 1,320 megawatts of electricity, with two plants, each of  660 megawatts, at Gadani, in Baluchistan, at the mouth of the Arabian Sea — Straits of Hurmouz. The two plants will cost $2.5 billion. The total funding will be done by ANC itself.
Business-friendly Prime Minister Nawaz Sharif who recently visited UAE “wooed ANC to invest in Pakistan,” a senior official informed the Khaleej Times.
ANC will also build a jetty to handle coal, and supply the electricity, it generates, through a 75-kilometre long transmission line into the national power grid. The project will be completed within three and a half years. The agreement for the project has just been signed  in Islamabad by Faris Tayeb Abdul Rahim Al Baker, CEO of ANC and N.A. Zuberi, managing director of Pakistan Private Power and Infrastructure Board, or PPIB.
The ANC chairman,  who was present along with Sharif at the signing,  expressed his gratitude “for the level of commitment from the government to pursue the projects.”
Sharif said: “I have prioritised the energy sector and planned several projects in this regard. Pakistan will warmly welcome if more Dubai-UAE investors come forward.”
About 10 coal-based power projects of 660 megwatts each will be built at Gadani. Chinese companies have are investing in six projects. Two plants will be constructed by ANC, and one by government of Pakistan.
Two coal-based plants with a generating capacity of 600 megawatts each, are already being completed at Port Qasim near Karachi. Government of the Punjab is building seven similar capacity plants, including two at Sahiwal, and five more at other locations.
The government has invited foreign investment in coal mining at Thar in the southern Sindh province, and for establishing  mine-mouth coal power projects inn Sindh. A 1,000 mega watt plant is being set up at Solar Power Park  in Punjab. At the same time, Hydropower generation plants, to produce 2,730 mw are being completed at the already operational, huge multi-purpose Tarbela Dam, 60 kilometre west of Islamabad. These are the Prime Minister’s priorities to overcome the deepening energy crisis. More plants, based on various forms of fuel, will follow and will be open for foreign investors, especially those from United Arab Emirates and Saudi Arabia.
The other Dubai-based company — Al Aqili Group — also signed a separate agreement with Pakistan in Islamabad last week to supply 3,000 mega watts of electricity from  Iran under this long-term contact. The group will also finance and build transmission lines to supply the electricity into Pakistan’s national power grid. The agreement signing ceremony was witnessed by Khawaja Muhammad Asif, Pakistani Minister for Water and Power, and  Mohammad Saeed Al Aqili, CEO of the Aqili Group.
Al Aqili Group is rated as one of the top ranking companies in the world. It has a number of big and high profile partnerships with many of the prominent multinationals in the world. Al Aqili has successfully established an extensive network of relationships with the business communities, financial institutions, and governments in various regions of the world.
Pakistan has also signed an MoU for import of Liquefied Natural Gas, or LNG, from Qatar. At  the same time, Manila-based Asian Development Bank will invest $1 billion to establish a power plant at Jamshoro, in Sindh.“ Investment  in all these projects is a clear manifestation of foreign investors trust in Pakistan government’s pro-investment policies,” said Sharif.
Pakistan’s Private Power Investment Board, or PPIB, this week, also approved installation of several electricity generation and power supply projects, being implemented by foreign investors.
The investors, and their projects, which will, together, produce a separate 2,630 mega watts of electricity, include: Al-Mirqab of Qatar, CWE Investment Corporation China, Trans-Tech of Pakistan, Sino Hydro Resources Ltd of China, Korea South East Power Company, Ratchaburi Electricity Generating Holding PCL of Thailand, and Sachal Engineering Works (Pvt) Ltd Of Pakistan. As foreign-funded investment plans keep coming in Sharif is hoping that Pakistan will not only overcome its present energy crisis, but will also generate enough surplus to meet the growing future needs.