Data Theft Is a National Security Threat

http://www.nationalinterest.org/feature/data-theft-national-security-threat-14843?page=show
The OPM has failed to respond adequately to the theft of information on 22 million Americans.
David R. Shedd, January 8, 2016
In mid-2015 someone—all indicators point to the Chinese government—stole the security clearance dossiers of more than 22 million Americans. It was the most catastrophic cyber data breach in U.S. history, with the potential to inflict incalculable damage to our national security. Yet the response from the Office of Personnel Management (OPM)—the agency that failed to protect the files in the first place—has been curiously and dangerously lackadaisical.

The laid-back tone was set early on. The administration released news of the theft in dribs and drabs. To date, the full story of what was compromised remains veiled.
What we do know is this: our adversaries now possess a massive amount of highly sensitive information—personal and professional—about past and current U.S. government personnel. Many of those workers have been entrusted to guard America’s most sensitive secrets.

Our enemies are always looking for leverage to advance their nefarious goals. Now they possess tens of millions of files packed with highly leverage-able information.
The OPM breach is stunning in many ways. For one thing, it was absolutely predictable. For years, the Inspector General had reported security shortfalls in OPM’s information technology infrastructure. Yet OPM ignored these problems. For example, it failed to patch its vulnerable software, failed to install antivirus software and failed to implement the required authentication certification. OPM has yet to address all the IG recommendations for a more secure IT system.

While OPM paid scant attention to the Inspector General’s reports, the Chinese appear to have read them closely and moved to exploit the uncorrected vulnerabilities.

So You Think You Can Sell a Fourth Generation Carrier-Launched Fighter?

http://thediplomat.com/2016/01/so-you-think-you-can-sell-a-fourth-generation-carrier-launched-fighter/
A big problem for selling carrier-based fighters is that there are simply too few carriers to go around.
By Robert Farley, January 04, 2016

Saab is trying to find customers in Asia. A recent report indicated that the Swedish defense firm is trying to find partners in Asia for the Sea Gripen, a carrier-launched version of its much-lauded, relatively inexpensive Generation 4.5 fighter.
The problem is that the market for fighter aircraft is tight, because there are several good competitors and not enough aircraft carriers to go around. Thus have culminated a pair of long-standing trends in naval and aviation acquisition: good aircraft are chasing decks that simply don’t exist. To see how we got here, it’s useful to trace a bit of the intertwined histories of carriers and airwings.

The first generation of small carriers were mostly Colossus and Majestic class light carriers, sold by the United Kingdom in the wake of World War II. These ships served a variety of navies around the world, including several in Asia. Their air wings varied a lot over time, from piston-engined fighters near the end of World War II to helicopters and small jets in the 1970s. Embarked aircraft included the A-4 Skyhawk, F9F Panther, Super Etendard, and Hawker Sea Hawk, among others. These ships (and most of the aircraft) began to leave service in the 1970s and 1980s.

The next generation of purpose-built ships includes such vessels as the Thai Chakri Naruebet, as well as a few small European carriers. These ships often carried variants of the AV-8 Harrier, along with a collection of helicopters. The Harrier is a notoriously difficult aircraft, however, especially for navies that considered aviation a luxury, rather than a necessity. For this kind of carrier the F-35B would fit the bill nicely, except for the expense. Most of these ships are still in service, although the Harrier is on its last legs.

The Evolution of Israel’s Special Operations Command

Special Operations: Israeli SOCOM Evolves
strategypage.com, January 2, 2016

Since 2007, when Israel decided to establish a SOCOM (Special Operations Command), to coordinate the many different commando units it has in its armed forces, several other adjustments have been made to improve the effectiveness of Israeli special operations forces. The 2007 decision came about after observing the success of the United States with their SOCOM. The Israeli SOCOM took a few years of work to create and appeared in 2011 as “Depth Corps.” This name was recognition of the original idea for a “SOCOM” in the 1980s to concentrate on long range commando operations.

Israeli SOCOM operates in a similar fashion to the U.S. SOCOM. Many Israeli military commanders had, since 2000, urged the formation of a SOCOM. But the services could never agree on the details. It was the war with Hezbollah in 2006 that put Israeli SOCOM over the top. Among the many problems Israeli troops had in 2006 included some coordination hassles with special operations units. These are the kinds of problems that SOCOM deals with head on and effectively.

In mid-2015 Israel put four separate special operations battalions together into one brigade. The new brigade is part of the parachute division and will make the special skills of these four battalions available on a wider scale. Some members of these four units are complaining because the four battalions have different skills and tend to operate in different parts of the country. But the army leaders insist this will not be a problem. The four battalions are quite different. The Duvdevan battalion spends most of its time in the West Bank carrying out undercover counter-terrorist operations. This is similar to what the American Special Forces concentrates on. The Maglan battalion is a LRRP (Long Range Reconnaissance Patrols) specialist that belongs to the combat engineers. The concept of LRRPs is ancient but the modern versions were developed during World War II, and used heavily in Vietnam and in many other places since then. The Egoz battalion specializes in reconnaissance and counter-terror operations, mainly along the Lebanese and Syrian borders. The Rimon battalion specializes in desert operations and operates mainly in the south (the Negev Desert and along the Gaza and Egyptian borders).
All of these units belonged to local brigades that needed their special skills on a regular basis. These brigades have been assured that they will still have access to their former battalions but as a specialized battalion that is now part of a brigade that will make these units easily available to the entire armed forces.

Top US tech firms battle UK surveillance bill

http://thehill.com/policy/cybersecurity/265123-top-us-tech-firms-battle-uk-surveillance-bill
By Cory Bennett - 01/07/16
The biggest U.S. tech powers have joined forces to oppose a proposed British surveillance law that could give government investigators greater access to encrypted digital data.
The draft measure, known as the Investigator Powers Bill, would require Internet companies to retain customers’ Web activity for up to a year and compel them to help investigators access that data upon request.
In a joint submission to a committee of British lawmakers, Facebook, Google, Microsoft, Twitter and Yahoo cautioned that the bill would set “a very dangerous precedent.”

Enabling governments to manipulate companies’ encrypted devices “could involve the introduction of risks or vulnerabilities into products or services,” the coalition said in its comments, which the committee published Thursday.
“We would urge your government to reconsider.”
Tech giant Apple recently filed its own separate submission making the same argument.
The proposed measure has become the latest point of contention in the heated debate over encryption standards and government surveillance authority.
Law enforcement officials say they need greater access to secured digital data to uncover potential terrorist plots, an argument that has gained ground in the wake of the terorrist attacks in Paris and San Bernardino, Calif.

But privacy activists and technologists warn that any form of guaranteed access to encrypted data risks exposing broad swaths of sensitive information to hackers, as well as government investigators.
The group of U.S. tech companies expressed similar concerns in their submission.

Lone-Actor Terrorism: Definitional Workshop

https://rusi.org/publication/occasional-papers/lone-actor-terrorism-definitional-workshop
Edwin Bakker and Jeanine de Roy van Zuijdewijn
Occasional Papers, 22 December 2015
The first step in assessing the nature and scale of the threat posed by lone-actor terrorism in Europe is the establishment of a working definition of the term


Download the report here

Countering Lone-Actor Terrorism Series: No. 2
The aim of the Countering Lone-Actor Terrorism (CLAT) project is to understand lone-actor terrorism in a European context. The project will develop a database of lone-actor cases from across Europe. Its overall aim is to see if it is possible to discern any trends or patterns that could be translated into useful observations or recommendations for practitioners and policy-makers. During the first workshop of the CLAT Consortium, held in The Hague in January 2015, several academics and professionals were invited to help to define lone-actor terrorism (LAT). The aim of this two-day meeting was to arrive at a working definition of LAT that will be used when collecting cases for the database.

The presentations, discussions and personal definitions of the workshop participants are summarised in this report.
About the Authors

Professor Edwin Bakker is Director of the Centre for Terrorism and Counterterrorism at Leiden University and Fellow of the International Centre for Counter-Terrorism in The Hague. Dr Bakker has a research interest in home-grown jihadist terrorism, lone-actor terrorism and the impact of terrorism on societies. He teaches the massive open online course at Coursera.org ‘Terrorism and Counterterrorism: Comparing Theory and Practice’ that has attracted more than 100,000 participants.

Jeanine de Roy van Zuijdewijn is a Researcher at the Centre for Terrorism and Counterterrorism at Leiden University and Research Fellow of the International Centre for Counter-Terrorism in The Hague. Her research interests include lone-actor terrorism, foreign fighters and how threat assessments are made. She has assisted Dr Edwin Bakker in developing the massive open online course on terrorism and also teaches this course to undergraduate students.
About the Project

The Countering Lone-Actor Terrorism (CLAT) project is co-funded by the Prevention of and Fight against Crime Programme of the European Union, and has been undertaken by a RUSI-led consortium. Partnering institutions include Chatham House, the Institute for Strategic Dialogue (ISD) and Leiden University, one of the founding organisations of the International Centre for Counter-Terrorism (ICCT) at The Hague.

The One Tip You Need To Improve Your Time Management Skills

http://taskandpurpose.com/the-one-tip-you-need-to-improve-your-time-management-skills/?utm_source=newsletter&utm_medium=email&utm_campaign=tp-today
By Rusty Pang, on January 5, 2016
You can’t do everything. Be judicial about what you say yes to.
There’s an objective in the military to find a work-life balance. Many people have the best intentions when they say this should be a priority, but many are simply unaware of reality or unwilling to test it. There is no such thing as work-life balance for the military. There is only the cut line.

What is the cut line?
The cut line is a horizontal line in your life that separates what is worth spending your time on (above the line) and what is not worth your time (below the line). Don’t believe me? Allow me to illustrate.
In the Navy, we often work late hours or go on deployments. Try to have work-life balance with your family and the job when you are floating out to sea on the other side of the planet. It is impossible.
You’re at a shore command or in garrison. How’s that training at 0500 affecting your work-life balance? Or perhaps that 24-hour duty on your anniversary? What about being called in on your day off?
These were all examples of work-related disruption. How about personal? What happens when your daughter or son goes to the emergency room? Are you worried about working enough hours?
While it would be great to to able to balance family, health, and work in a holistic manner, reality rarely allows this to happen. I love that people are thinking about what they value but work-life balance, but it is a myth.
Here are some life events that disrupt the balance: having a baby, taking a vacation, working overtime, etc. If you still aren’t convinced, let’s do a mental exercise.

* Lethal Autonomous Systems And The Future Of Warfare – Analysis

http://www.eurasiareview.com/05012016-lethal-autonomous-systems-and-the-future-of-warfare-analysis/
By Canadian Military Journal January 5, 2016
By Daniel Sukman*
“I’m sorry Dave, I’m afraid I can’t do that” – Hal, 2001: A Space Odyssey

War is fundamentally a human endeavor. It is a clash of wills involving political leaders, soldiers, and civilian populations of opposing states and non-state actors. Within this human endeavour, the U.S. has always sought a technological advantage, since technological advantages have assisted the U.S. in overcoming numerical advantages held by adversaries. Maintaining the technological advantage is paramount as the U.S. moves into a period of fiscal restraint and significantly reduced force size.

Today, the world is approaching a robotics revolution in military affairs that may be on par with the introduction of gunpowder, levée en masse, and the advent of nuclear weapons.1 Unmanned and autonomous systems have the potential to fundamentally change the American way of war. This could change how policy makers posture and apply land forces to achieve strategic ends. Unmanned and autonomous systems may even change the roles and the missions of the Army itself. In order to capitalize on this, there is an overwhelming need to build more detail on top of existing guidance to allow the Services to develop new capabilities with both understanding and confidence.

It is clear that robotics and autonomous systems will have a place in society, and will play an increased role on the battlefield of the future. The question remains, what role will lethal autonomous systems play in the future? This article will examine the history, domestic and international policy trends, and the ethics of lethal autonomous systems on the battlefield of the future.
History of Autonomous Weapons Systems

Department of Defense Directive 3000.09 defines autonomous weapon systems as “…a weapon system that once activated, can select and engage targets without further intervention by a human operator. This includes human supervised autonomous weapons systems that are designed to allow human operators to override operation of the weapon system, but can select and engage targets without further human input after activation.”

Pathankot attack aimed at probing Modi govt's red lines: Christine Fair

http://www.business-standard.com/article/current-affairs/pathankot-attack-aimed-at-probing-modi-govt-s-red-lines-christine-fair-116010900252_1.html
Q&A with C Christine Fair, associate professor, Edmund A Walsh School of Foreign Service, Georgetown University
Bhaswar Kumar | New Delhi January 9, 2016
C Christine Fair

The Pathankot attack is not a spontaneous response to recent developments; it is a manifestation of the Pakistani national security strategy to pursue its revisionist agenda against India, says C CHRISTINE FAIR, author of Fighting to the End: The Pakistan Army's Way of War, and an associate professor in the Peace and Security Studies Program at Georgetown University’s Edmund A Walsh School of Foreign Service. Fair, who earlier served as a political officer to the UN Assistance Mission to Afghanistan in Kabul, tells Bhaswar Kumar in a telephonic interview that there is a consensus within the Indian security establishment that India lacks the offensive capability to defeat Pakistan in a short war.

The January 2 attack on an Indian Air Force base in Pathankot was allegedly carried out by Jaish-e-Mohammed (JeM) operatives. What are the dynamics between organisations like JeM and Pakistan’s military and civilian establishments?
Pakistan’s Inter Services Intelligence (ISI) set up JeM as a competitor to the Lashkar-e-Toiba (LeT), which the ISI had formed earlier. Prior to the formation of JeM, three Pakistani terrorists – Mushtaq Ahmed Zargar, Ahmed Okmar Saeed Sheikh and Maulana Masood Azhar – were released by Indian authorities in return for hostages taken during the hijacking of the Indian Airlines flight 814 in December 1999. Azhar and the two other terrorists, upon their release in Kandahar, were ferried to Pakistan under ISI escort. Within a few weeks, Azhar announced the formation of JeM in Karachi.

LeT and JeM are ideologically distinct organisations. JeM, like the Afghan and Pakistani Taliban, is Deobandi; LeT is Ahle Hadees. Besides, JeM generally conducts suicide attacks, while LeT conducts high-risk missions where the goal is not to die but its operatives would still rather die than be taken captives.
These terrorist groups have an army major assigned to them. It is the majors’ responsibility to ensure the groups’ operatives are trained and they get the required resources. A major can, for example, authorise a small-level attack in Kashmir against an Indian army unit – an offensive that does not have major strategic implications. On the other hand, every attack outside of Kashmir has to have the army chief’s imprimatur, given the likely strategic implications – after all, if the Americans get upset and hold up coalition support funding, it is the army chief who will have to answer.
The Pathankot attack came within a week of Indian Prime Minister Narendra Modi’s visit to Lahore and the resumption of talks with Pakistan. Have the terrorists and their handlers achieved their goal by creating a hurdle for the peace process?

Raid on Air Force Base Reveals India’s Dysfunction

http://www.newsweek.com/narendra-modi-india-raid-air-force-412812
By John Elliott On 1/7/16

Update |When Narendra Modi was elected India’s prime minister, the main hope was that he would transform the muddled and inefficient way in which many of the country’s institutions and organizations are run.
Economic reforms, which dominate media and parliamentary debate, are also important, but Modi was primarily seen as a capable regional politician and leader who could produce administrative change nationally.

Twenty months after last year’s landslide election victory, his failure to make significant changes was graphically demonstrated by an attack last weekend on an Indian Air Force base at Pathankot in the state of Punjab.
The base was not properly protected or capable of being defended against terrorism, despite being just 25 kilometers from the border with Pakistan, and the response by security forces was muddled and badly organized.
The event threatens to undermine Modi’s more innovative approach to foreign affairs, which led him on Christmas Day to drop in on the Pakistan prime minister in Lahore for a few hours when he was flying back to Delhi from Russia and Afghanistan.

Though sourly criticized by opposition politicians for being more of a photo-op than measured diplomacy the visit, the first by an Indian prime minister to Pakistan in 11 years, could help improve the two countries’ tortuous relationship.
The attack is seen in India as an attempt by extremists, probably supported by Pakistan’s military and secret Inter-Services Intelligence agency, to undermine any progress that the Modi visit might have generated. It coincided with an attempted raid by gunmen on the Indian consulate in the Afghan city of Mazar-i-Sharif.
The Pakistan-based Jaish-e-Mohammad (Army of Mohammad), an Islamist group with close links to the Pakistan military, is believed to have been responsible, and, significantly, Pakistan has not tried to deny that the attackers crossed from its territory into India.

Save national security from the establishment

http://www.thehindu.com/opinion/lead/save-national-security-from-the-establishment/article8082730.ece
January 9, 2016,  Josy Joseph
AP GAPS IN THE GRID: “Pathankot has shred to pieces the cycle of terror responses in India: from processing intelligence alerts, mobilising first responders, carrying out counterterror operations under a well-defined command-and-control system, minimising casualties and, finally, obtaining maximum intelligence to thwart possible future attacks.” Picture shows soldiers on watch at the perimeter fence of the Pathankot airbase.
The bungled response to the Pathankot attack underscores the need for a three-pronged revamp: parliamentary oversight, a well-defined national security doctrine and an independent federal commission of accountability.
Most terror attacks in India are characterised by three critical missteps: ignored intelligence inputs, inconsistent security response, and heavy casualties.
Consider, for instance, the Pathankot and the 26/11 Mumbai terrorist attacks. A few days before the boat with terrorists actually landed in Mumbai, the Intelligence Bureau had details of the specific location of a satellite phone used by terrorists on a boat moving towards the Mumbai coast. In the run-up to the attacks, there were at least two more specific alerts Indian agencies had about a possible attack on Mumbai.

After 166 people were killed, hundreds injured, and India held to ransom for days and humiliated on the global stage by 10 terrorists, no one was held accountable. Those who were supposed to act on the terror alerts, those who were supposed to guard the seas and those who were supposed to protect Mumbai, all carried on with their professional lives.
In Pathankot the story just got worse. The U.S. agencies had alerted their Indian counterparts around Christmas about a group of half-a-dozen terrorists planning to target the city. By early morning of January 1, a senior police officer reported his ordeal with the terrorists. Despite several hours available to intercept the terrorists in a limited space, New Delhi, in its wisdom, decided to waste time by flying in National Security Guard (NSG) commandos from the national capital, while thousands of trained army soldiers were already stationed all over Pathankot.

As with 26/11, the criminal neglect by those responsible for acting on the information would again be whitewashed. The Central government would again come to the conclusion that no one was responsible for the lapses that resulted in the humiliating attack and the mismanaged counterterror operation.
In all of its contemporary history, India has only been going around in a loop in its inability to tackle armed non-state actors. Jaish-e-Mohammad, the Pakistan-based terror group suspected to be behind the Pathankot attack, was founded by Masood Azhar, who was one of the three terrorists freed by India in yet another embarrassing episode of terrorism on another year-end: on December 31, 1999, the National Democratic Alliance (NDA) government of Atal Bihari Vajpayee decided to release three terrorists after Indian Airlines flight IC814 was hijacked to Kandahar, to secure the lives of the passengers.

Why Terrorists Will Continue to Beat Us
By Raghu Raman on 09/01/2016
http://thewire.in/2016/01/09/why-terrorists-will-continue-to-beat-us-18809/
Asymmetric warfare, the blue book of terrorists, is as old as warfare itself. Sun Tzu mentions this form of war in his 300 BCE treatise, and history is replete with countless instances where numerically smaller organisations have beaten vastly superior adversaries fighting asymmetrically.

Asymmetry in war means one side is by definition substantially weaker than the other. Predictably, it is this side which resorts to asymmetric war in one variant or the other – guerrilla warfare, insurgency, internal resistance and, in contemporary times, terrorism. As Clausewitz observed ‘war is a mere continuation of politics by other means’. His aphorism highlights two key components of any conflict – military victory and political will. Since the weaker player cannot possibly ‘invade’ the territory of the larger one, nor destroy any significant war waging capability the superior enemy may have, they have no choice but to attack the adversary’s political will. And in that arena they have some advantages.

Whether it was the French and then the Americans who were beaten out of Vietnam, the Soviets who were driven out of Afghanistan by the Mujahideen, or, most recently, the American withdrawal from Iraq, all narratives have one common thread. That while the larger invader or occupier scored higher in military victories, they lost in sustaining the political will to continue the fight. In fact, each of these defeats or withdrawals continued to have a domino effect in the politics of their own countries, with several political leaders losing their positions and, in the case of the Soviet Union, losing the Union itself. This paradox was addressed by Andrew Mack way back in 1975 in his paper aptly titled “Why big nation lose small wars: The politics of asymmetric conflict”. The reasons remain valid even today.

The terrorist’s advantage

Firstly, the weaker player focuses purely on attacking the political will of his adversary. Terror attacks are never launched with the intent to destroy or degrade an adversary’s armies or war waging capabilities. Even in the devastating attacks of 9/11, there was no intent or capability to affect the US war machinery. Instead, the attacks were intended to demonstrate that the political leadership of the country has failed to protect their citizens. Similarly, the 1983 Beirut attack that specifically targeted US and French soldiers and killed 300 of them hardly dented the US war machinery but compelled the peacekeeping force’s withdrawal from Lebanon by demolishing the political will of American leaders to continue. The 26/11 attack in Mumbai saw its own share of political decimation and recriminations against the government, giving fodder to the opposition as well.

In defence of intelligence

http://www.thehindu.com/opinion/op-ed/pathonkot-attack-in-defence-of-intelligence/article8078138.ece
THE HINDU I SPY: “The world has become too complicated a place in the past few years for traditional intelligence collection.” Picture shows vehicle checking in Chandigarh after the Pathankot attack.
The Pathankot attack was certainly not an intelligence failure. While there can’t be inputs right down to the last detail, clear warnings had been issued by the IB and State intelligence.
While many dedicated officers worked day and night for years to piece together the growing body of evidence on al Qaeda and to understand the threats, in the end it was not enough to gain the advantage before the 9/11 attacks.

R. K. Raghavan, D. Sivanandhan

 Every terror strike anywhere in the world is invariably followed by a tirade against intelligence agencies for their alleged failure to alert the police on the field. The history of the CIA/FBI (9/11 attacks on New York’s Twin Towers), the MI5 (July 7, 2005 attacks on London’s public transport system) and our own Intelligence Bureau (IB) and Research and Analysis Wing (26/11 Mumbai attacks) is replete with instances in which the police could not be tipped off about an impending assault on specific targets. The criticism of intelligence agencies after the recent Pathankot incident, in which at least six terrorists strongly suspected to belong to the Jaish-e-Mohammed (JeM) sneaked into an Indian Air Force (IAF) base, followed the same pattern.

Many reports have conclusively established that in this instance, both the IB and the Punjab State intelligence had sent out clear communications down the line, five days ahead of the terrorist incursion, that there was a huge threat to installations on the border with Pakistan, and therefore the need for extreme preparedness. An impression has gained ground, rightly or wrongly, that the warning had not been taken seriously, either by the local police or the defence installations in the area. As a result, the terrorist group was able to smuggle themselves into the Pathankot airbase and launch a daring attack.

Intelligence and inaction
In our view, here is one instance in which intelligence agencies were not to be blamed. The lapse was most probably on the part of the defence and police personnel in the area in not plugging every possible hole to avert the incursion. The airbase, a little more than 20 sq. km. in extent, is situated close to the border with a hostile neighbour. It did not require any extraordinary vision therefore to reach the conclusion that it was extremely vulnerable to enemy designs at all times, and particularly after information had been received of the incursion of a specific group. There was apparently a chink in the physical security arrangements. This was certainly not an intelligence failure.

When It Comes To Bad Loans Of Banking, The Big Boys Are The Bad Boys

http://swarajyamag.com/economy/when-it-comes-to-bad-loans-of-banking-the-big-boys-are-the-bad-boys/
Vivek Kaul, Vivek Kaul is the author of the 'Easy Money' trilogy.
8 Jan, 2016
When it comes to the bad loans of banking large industries have been responsible for a major part of the trouble.
The Reserve Bank of India (RBI) released the Financial Stability Report on 23 December, 2015. One of the key themes in this report was the fact that large borrowers are the ones who have landed the banking sector in trouble. As the RBI governor Raghuram Rajan wrote in the foreword to the report:
..corporate sector vulnerabilities and the impact of their weak balance sheets on the financial system need closer monitoring….

That is a euphemistic way of saying that corporates are essentially responsible for the rising bad loans of banks. As on 30 September, 2015, the bad loans (gross non-performing advances) of banks were at 5.1 percent of total advances [i.e. loans] of scheduled commercial banks operating in India. The number was at 4.6 percent as on 31 March, 2015. This is a huge jump of 50 basis points in a period of just six months. One basis point is one hundredth of a percentage.
What is the problem here? The inability of large borrowers to continue repaying the loans they have taken on in the years gone by. As on 30 September, 2015, loans to large borrowers made up 64.5 percent of total loans. On the other hand, bad loans held by large borrowers amounted to 87.4 percent of total bad loans.

What this means is that for every Rs 100 of loans given by banks, Rs 64.5 has been given to large borrowers. At the same time of every Rs 100 of bad loans, large borrowers are responsible for Rs 87.4 of bad loans. Hence, large borrowers are clearly responsible for more bad loans.
As on 31 March, 2015, bank loans to large borrowers made up 65.4 percent of total bank loans. At the same time, the bad loans of large borrowers constituted 78.2 percent of the total bad loans. What this means is that for every Rs 100 of loans given by banks, Rs 65.4 was given to large borrowers.

Despite Stalled Reforms, India Is an ‘Oasis of Opportunity’ in 2016

http://knowledge.wharton.upenn.edu/article/despite-stalled-reforms-india-is-an-oasis-of-opportunity-in-2016/?utm_source=kw_newsletter&utm_medium=email&utm_campaign=2016-01-08

The Make in India lion has not yet begun to roar. Unveiled by Prime Minister Narendra Modi in September 2014, all the initiative has attracted so far are foreign direct investment (FDI) promises. Modi has been globetrotting; his end of December excursion was, according to the rival Congress Party, “breakfast in Kabul, tea in Lahore (an unscheduled stopover to meet Pakistani Prime Minister Nawaz Sharif) and dinner in Delhi.” That was cheap political sniping, but Modi’s trips to other capitals — Washington, Moscow, Paris — have been far more expensive. Big-budget defense deals were signed in all three places; the high-cost imports seem to negate the Make in India philosophy of promoting domestic manufacturing.
At home, meanwhile, the reforms process has hit a major roadblock. The key Goods and Services Tax (GST) bill has been delayed thanks to a filibustering Opposition, which dragged in all sorts of peripheral issues — among them, Modi’s “intolerance,” the alleged financial irregularities of finance minister Arun Jaitley and the “vendetta politics” of the government — to hold up proceedings in Parliament. The GST would impose a tax on the manufacture, sale and consumption of goods and services across India and replace the indirect taxes that are currently collected on goods and services by the state and federal government.

“The GST bill, everybody agrees, has substantial benefits to all segments of the economy namely the government, the industry, the intermediaries and, more significantly, the ultimate consumer,” says Ashvin Parekh, managing partner of Ashvin Parekh Advisory Services.

Made in Spite of India
The GST bill delay is one more example of what Ravi Aron, professor at Johns Hopkins University’s Carey Business School, calls the “made-in-spite-of-India” business model. Work on GST started in 2000 when Prime Minister A.B. Vajpayee (of the ruling Bharatiya Janata Party or BJP) set up a committee to design a model. The committee submitted its report in 2009. By then, a Congress government was in power. But it, too, backed the GST, setting a schedule for implementation by April 1, 2010. The BJP-led Opposition boycotted Parliament and the bill never saw the light of day.

India: Trouble in the Air

http://thediplomat.com/2016/01/india-trouble-in-the-air/
Residents of New Delhi are literally choking to death. Can authorities solve the pollution problem?
By Neeta Lal, January 08, 2016
On December 24, 2015, people in India’s capital city of New Delhi – already considered the world’s most polluted city – woke up to a nightmare. Pollution levels across this city of 25.8 million had reached such alarming levels that they were classified in the most “severe” category of PM 2.5 and PM 10. The former had shot up to 295 micrograms per cubic meter and the latter 470, against the recommended upper limits for the two pollutants at 60 and 100 micrograms per cubic meter, respectively.

These toxic levels of pollution exceed those of the Chinese cities of Beijing and Shanghai, internationally notorious for their pollution, and have some severe ramifications for human health. Delhi’s air is redolent of diesel fumes from motorized vehicles, which are now designated as a class I carcinogen by the World Health Organisation and can lead to lung cancer.
According to medical experts, the city’s pollution has also led to a startling spike in the cases of respiratory illness, skin and eye allergies, cardiac arrest, memory loss, depression, and chronic lung damage. Four out of every 10 children in the capital also suffer from severe lung problems.

“The city’s air is a slow poison that is ruining people’s health,” states Dr J.C. Suri, HOD of pulmonology and sleep medicines, Safdarjung Hospital, New Delhi. ”The current scenario is extremely worrisome as the citizens are getting exposed to noxious air on a daily basis and for long hours. Vulnerable groups like children are the worst off.”

Can ISIS Gain a Foothold in Balochistan?

http://thediplomat.com/2016/01/can-isis-gain-a-foothold-in-balochistan/
There is growing evidence that it is trying to do just that.
By Muhammad Akbar Notezai
January 07, 2016
On August 28, 2014, Abdul-Rauf Rigi, alleged to be leading a Sunni sectarian organization called Jaish-al-Nasr, was assassinated in Quetta, the provincial capital of Balochistan. The motive for his killing could not be ascertained, but Jaish-al-Nasr had been accused by Iranian officials of carrying out attacks on Iranian Revolutionary Guards. Soon after Rigi’s assassination in Quetta, Iranian Press TV was claiming that he had sworn allegiance to the Islamic State (ISIS).

A reliable source told The Diplomat that the Jaish-al-Adl is a splinter group of Jundullah, which was spearheaded by Rigi’s brother Abdul-Malik. While on a flight from Dubai to Kyrgyzstan in 2010, Abdul-Malik Rigi was arrested by Iranian authorities and subsequently hanged. The source added that soon after his execution in Iran, Jundullah, which Abdul-Malik Rigi had founded in 2003, split into three groups: the Jaish-al-Adl, the Jaish-al-Nasr, and the Lashker-e-Khorasan.
Iranian authorities have accused Jundullah of carrying out a series of attacks, including a suicide bombing on October 18, 2009, which killed six commanders of the Iranian Revolutionary Guards. Of the three splinter groups, Jaish-al-Adl is believed to be the stronger, and has been blamed for a number of high profile attacks in the wake of the execution of Abdul-Malik Rigi.

For example, on April 8, 2015, the state-run Iranian news agency of Iran reported that eight Iranian border guards had been killed in clashes with militants near the border with Pakistan. On the same day, Jaish-ul-Adl claimed responsibility for the assault through a Facebook account believed to be linked to the organization. According to media reports, Jaish-al-Adl has accepted responsibility for other attacks on Iranian territory. One of deadliest took place in October 2013, when 14 Iranian guards were killed near the Sarawarn area, which is situated on the border. Jaish-al-Adl said that the attack was in retaliation for an alleged Iranian “massacre” in Syria, and was also in response to atrocities Iran is alleged to have committed against Sunni communities, including Baloch youths.

Tashkent syndrome Unable to apply transformative pressures, subjected to strong external pressures ourselves, we reverted to the status quo ante.

http://indianexpress.com/article/opinion/columns/tashkent-syndrome-1996-tashkent-declaration/
Written by K. SHANKAR BAJPAI, Published:Jan 9, 2016, 0:00
About Author
K. Shankar BajpaiThe writer is former ambassador to Pakistan, China and the US, and secretary, MEA ‘
We were surprised into war, ignoring a contingency obvious in the most rudimentary planning; we planned for Tashkent, but concluded without achievement.
On January 10, 1966, the Tashkent Declaration brought an inconclusive war to an inconclusive end. Pakistan failed in its objective without confronting any need to change it. We foiled Pakistan without any lasting effect. We were surprised into war, ignoring a contingency obvious in the most rudimentary planning; we planned for Tashkent, but concluded without achievement.

Arguably, we made the best of a poor job: Stalemate on the ground means stalemate at conference tables. Unable to apply transformative pressures, subjected to strong external pressures ourselves, we reverted to the status quo ante. The opposite case, that we muffed things from start to finish, is equally sustainable. That presumes options, which can only be conjectural but, clearly, we showed deficiency in anticipation and deficiency in handling – two equal weaknesses in statecraft.
Initially rejecting Moscow’s proposed summit, we soon realised it was better than facing the Security Council. Delegations need a dogsbody; returning from three years in Pakistan, I was chosen presumably for that intense experience. Dutifully preparing ordered briefs on all outstanding India-Pakistan issues, I couldn’t imagine discussion of refugee properties, abducted women or even Farakka. What were we really expecting?

Such decision-making was, of course, at more stratospheric levels but the privilege of access to them elicited the answer. We aimed at revising the ceasefire line to retain our gains beyond the old one, and get it accepted as the equivalent of an international frontier — precision of objective, at least. But Pakistan had suffered no setback that could extract such surrender of determined ambition. How to gain our aims, and what if we couldn’t?
The intention was to stick it out, but we ran into a difficulty. Moscow’s initial plea that Tashkent would only be a start, we could keep talking at more Tashkents, proved a ruse. Once there, we found the Russians determined on success. Worse, any fond hopes that our old “friendship” would help us yielded to their deft evenhandedness. Moscow’s illusions of weaning Pakistan away from its then pet hate, China, actually made it rather softer on Ayub Khan, but such are the ways of the world.

The Pakistan-Afghan Nexus: The Culture of Drugs Among Pakistan’s Youth

http://thediplomat.com/2016/01/the-pakistan-afghan-nexus-the-culture-of-drugs-among-pakistans-youth/
A growing culture of drug trafficking and use needs strong action.
By Mahboob Mohsin, January 07, 2016
Along its western front, Pakistan shares a 2250 km long border with the war-torn country of Afghanistan. The fact that the border is porous and poorly managed has contributed to multifarious problems for Pakistan. One major problem that does not usually make headlines is the export of opium to Pakistan, with the drug now making its way deep into Pakistani society.

The statistics of opium production in Afghanistan should be truly worrisome for its southeastern neighbor. According to the latest Afghanistan opium survey, the area under cultivation in 2015 is around 183,000 hectares and potential opium production in Afghanistan amounts to 3,300 tons. If we were to rely on the figures provided by the Afghan Ministry of Counter Narcotics and the United Nations Office on Drugs and Crime (UNODC), opium production in comparison with 2014 has decreased. Yet the number of poppy-free provinces fell in 2015.

Helmand province, which borders Pakistan, tops the list of poppy producers. It represents 47 percent of the total area under cultivation in Afghanistan. Meanwhile, as The Guardian reports, the Taliban presence in Helmand is returning.

Implications for Pakistan
On the other side of the border, as it looks, the culture of substance abuse appears to be of grave concern to no one, with the authorities having virtually made peace with the inflow of various forms of drugs. The supply and demand side of this phenomenon makes it a workable business which benefits many and feeds into terror financing and narco-terrorism. It is a massive cross-border drug trade with enormous sums of money involved. For instance, a U.N. report valued 2014’s crop at $22 billion in Afghanistan (or 4 percent of the country’s GDP). Now the business has taken root in Pakistan.

A False Start for Sino-Pakistani JF-17 Thunder?

http://thediplomat.com/2016/01/a-false-start-for-sino-pakistani-jf-17-thunder/
Malaysia publically declares that it is not considering the JF-17. How come?
By Benjamin David Baker
January 09, 2016
Not again. The jointly developed Sino-Pakistani JF-17 Thunder has apparently suffered another false start. As the Diplomat reported last month, Malaysian officials previously indicated that they were considering the JF-17 as a contender to its fighter replacement program. Kuala Lumpur’s interest in the aircraft was signaled last month by its High Commissioner to Pakistan, Dr. Hasrul Sani, who, according to the Associated Press of Pakistan, discussed the fighter against the backdrop of boosting the bilateral relationship in general. “I think the Malaysians might be genuinely interested because Pakistan has a respectable defense industry, with the products being considerably cheaper compared to the West due to cheap labor.”

However, Malaysian Defense Minister Datuk Seri Hishammuddin Tun Hussein has publically denied media reports that the country is considering the JF-17 as part of its Air Force modernization plans last Tuesday. Whether this discrepancy is due to a mistake or speculation on the part of Sani, or whether Kuala Lumpur has changed its mind, is currently unknown. One possibility is that China has requested that Pakistan withdraw its offer to Malaysia, due to tensions in the South China Sea.

Prior to Tuesday’s denial, author, analyst and former Australian defense attaché to Islamabad Brian Cloughley believed the Malaysian interest to be genuine, but cautioned there was more to consider. “Heads of diplomatic missions don’t usually say things publicly that aren’t accurate,” he said. “So there is probably something in this, in that interest appears to have been expressed, but the devil is as always in the detail, and there will have to be agreement by Beijing to any movement toward a deal.”

How South Asia Will Save Global Islam

http://thediplomat.com/2016/01/how-south-asia-will-save-global-islam/
The South Asian traditions of Islam offer a compelling alternative to the religion’s practice in the Middle East.
By Akhilesh Pillalamarri
January 08, 2016
The Middle East and indeed much of the Islamic world is on fire, driven by the rivalry between Saudi Arabia and Iran, and worsened by their politicization of Sunni and Shia communities. As Muslim communities come under increasingly radical influence, it sometimes seems to those from other regions that the Islam–at least as seen in the Middle East–is especially austere and harsh. In order to overcome this, one solution advocated by some is the “Turkish model,” which not only attempts to create a secular state but uses the state to intervene in and rework religion to suit the state’s purposes. Yet this too has deleterious effects.

But the world of Islam is not monolithic, nor is it limited to the Middle East, as is often pointed out. The largest population of Muslims in the world lives in South Asia. Per a 2009 survey, an estimated 484 million Muslims live in South Asia, mostly in Pakistan, Bangladesh, and India, more than the 315 million inhabitants of the Arab world. Over half of Muslims in the Asia-Pacific region and a third of all Muslims are South Asian. India and Pakistan together have as many or more Shia than Iran, and some of the largest Sunni populations in the world. Sunni-Shia tension was rare in South Asia until a few years ago and grew due to increased Saudi influence in mosques. Nonetheless, pluralism is highly valued by South Asian Muslims, 97 percent of whom believe it to be a good thing for there to be freedom of religion for different faiths. This is the greatest percentage of Muslims who believe this in any region of the world, including the West.

While Southeast Asian Islam, primarily represented by Indonesia, the largest majority-Muslim country in the world, is considered culturally and intellectually peripheral to the Muslim world, with few scholars or thinkers of influence and no major centers of Muslim world wide learning, South Asia is, on the other hand, along with the Middle East, the most important region of the Muslim world in terms of influence and importance. There is a very large corpus of religious literature in Urdu. The South Asian tradition of patronage and pilgrimage led to a large presence of Hindustanis, as the Persians called them, and Hindis, as the Arabs called them, in the port cities of the Middle East and the Arabian Peninsula. Soon enough, these South Asian Muslims came to Mecca by the 19th century, where they constituted 20 percent of the population.

China firm to build mega dam in PoK despite India’s strong opposition

http://idrw.org/china-firm-to-build-mega-dam-in-pok-despite-indias-strong-opposition/?utm_source=dlvr.it&utm_medium=facebook
Published January 8, 2016
A Chinese state-run company on Thursday announced plans to go ahead with a mega dam in Pakistan-occupied Kashmir (PoK), the latest indicator of Beijing moving forward with major projects in the region despite India’s strong opposition.
One of China’s biggest state-run hydropower companies, the China Three Gorges Corporation (CTGC) which manages the 22,500 MW Three Gorges Dam on the Yangtze river – the world’s largest dam – has signed an agreement to develop the Kohala hydropower project in PoK, the firm said in a statement posted on its website.
This 1,100 MW dam will come up on the Jhelum River, downstream from Muzaffarabad in PoK. The total investment in the project is estimated at $2.4 billion. Both countries had agreed on a 30-year tariff for the dam, according to Pakistani media reports.

The deal for the dam underlines China’s willingness to go forward with major projects in PoK, despite India’s consistent opposition.
Indian officials have pointed out China’s objections to joint exploration projects between India and Vietnam in the South China Sea, most of which is claimed by Beijing.
Beijing, however, has said the ‘purely commercial’ projects were without prejudice to the Kashmir issue and that it was not taking a position on territorial disputes between India and Pakistan.

Why China's Next Aircraft Carrier Will Be Based on Soviet Blueprints

http://www.nationalinterest.org/blog/the-buzz/why-chinas-next-aircraft-carrier-will-be-based-soviet-14845?page=show
James Goldrick, January 8, 2016

China has at last formally acknowledged that it has a new aircraft carrier under construction, the first to be built in China and the second in the People's Liberation Army-Navy's order of battle.

The PLA Navy appears to have embarked on a substantial carrier program, probably with the intention of creating four and perhaps up to six carrier battle groups (Chinese commentators have publicly acknowledged the need for at least three units in order to have an effective carrier capability). The rehabilitated ex-Russian carrier Liaoning, designated Carrier 16, has been the start of this effort, although its reliability has yet to be confirmed.
Experience gained with the ship will be used to evolve the follow-on units which are entering production. However, the challenge involved with these new carriers will not so much be the build, but the design. That the first new-built carrier will be in most respects a copy of the Soviet designed Liaoning should be no surprise. This is China's only practicable course of action if it is to get another unit into service in good time.

The PLA Navy was able to extract eight truckloads of detailed plans of the Liaoning from the Ukrainian vendors. These will have to be the foundation of the present activity because China is now facing the same reality that has dogged the efforts of all the major navies of the last century. The greatest restraint on naval expansion in the industrial age has been neither budgets nor disarmament treaties. It has in fact been the lack of drafting expertise to translate the design concepts of naval architects into the detailed compartment-by-compartment drawings that allow the shipbuilders to do their work (arguably, this has been a key problem for Australia with the new Air Warfare Destroyers). The scale of the effort involved is demonstrated by the report that the Liaoning's documentation amounted to many tons of paper.

Revealed: China's Lethal Low-Cost Fighter Goes Global

http://www.nationalinterest.org/blog/the-buzz/revealed-chinas-lethal-low-cost-fighter-goes-global-14844
Dave Majumdar, January 8, 2016
Beijing and Islamabad have officially signed on their first export customers for the Chengdu/Pakistan Aeronautical Complex (PAC) JF-17 Thunder—which is also known as the FC-1 Xiaolong in its native China. Nigeria and Sri Lanka are set to become the first customers for the Chinese jet.

According to Nigeria’s Punch, the oil-rich African nation expects to buy three JF-17 in 2016. “Giving details of the weapons to be acquired for the operation of the Navy, the fiscal document states that the sum of N5bn ($25 million) is budgeted for the procurement of three JF-17 Thunder multirole combat aircraft,” the paper reported citing a leaked budget document.
Meanwhile, Defense News reveals that Sri Lanka has sign on to buy an initial eight JF-17 jets during Pakistani prime minister Nawaz Sharif's three-day visit to Colombo. News of the deal is likely to be met with fury from India, which has been actively discouraging its neighbor from forging stronger defense links with Islamabad and Beijing. The JF-17 would be used to replace a portion of Sri Lanka’s existing fleet of Chengdu F-7s, Israeli Kfirs and Soviet-built MiG-27 strike aircraft.

The JF-17’s success on the export market thus far reveals that there is demand for a low-end, low-cost fighter aircraft that is build without U.S. components—which are subject to Washington’s export controls. It’s a part of the fighter market that has largely been ceded by Western manufacturers who are focusing their efforts on extremely expensive high-end combat aircraft, including the Lockheed Martin F-35 Joint Strike Fighter, Eurofighter Typhoon and Dassault Rafale.

Chinese Grand Strategy: Interests, Institutions, Influence

http://thediplomat.com/2016/01/chinese-grand-strategy-interests-institutions-influenceBy Mercy A. Kuo and Angelica O. Tang
January 06, 2016The Rebalance authors Mercy Kuo and Angie Tang regularly engage subject-matter experts, policy practitioners and strategic thinkers across the globe for their diverse insights into the U.S. rebalance to Asia. This conversation with Dr. Tom Kane – Senior Lecturer at the Centre for Security Studies, University of Hull, United Kingdom and author of numerous publications, including Strategy: Key Thinkers, Understanding Contemporary Strategy, and Chinese Grand Strategy and Maritime Power, among others – is the 26th in “The Rebalance Insight Series.”
What are the core elements of Chinese grand strategy and how have they evolved from the ancient period to the present day?

The founder of China’s Zhou Dynasty established the principle that his country should be a large state defined by its cultural ideals. Although China has split up at numerous points throughout its history, its leaders have consistently returned to this principle. They hold to it today. Moreover, as China has come into contact with powerful outsiders, Chinese leaders have become increasingly aware that, for their country to thrive as an independent state, they need to take full advantage of its geographical position and economic capabilities. These are the core elements of China’s grand strategy, and the government of the People’s Republic appears to be carrying out a successful long-term program of responding to them.

The most widely recognized parts of this program have been the economic reforms of the 1980s, and Beijing’s subsequent attempts to achieve national prosperity. As the PRC’s growing role in international trade has made it more influential, it has displayed an increasing willingness to engage with international organizations, and to lobby within them for its own interests. The PRC has also used its wealth to modernize its armed forces. Although its military capabilities remain modest when compared, for instance, to those of the United States, Beijing appears to be borrowing another concept from Chinese tradition and practicing the “empty fortress” tactic of using assertive behavior to achieve a reputation for power. Since neither China nor its potential opponents wish to escalate their disputes to actual war, this reputation often becomes reality – a concept examined in my Parameters analysis on China’s power projection capabilities.

China's Economy: A Bump in the Road or the End of the Road?

http://thediplomat.com/2016/01/chinas-economy-a-bump-in-the-road-or-the-end-of-the-road/
The debate on China’s economy, plus more on the new aircraft carrier and China-North Korea relations. Friday links.
By Shannon Tiezzi, January 09, 2016
Time for your Friday China links, starting with the great debate over the health of China’s economy…
Bill Bishop, editor of the Sinocism China Newsletter, gives his take on the current state of the Chinese economy. For Bishop, the major problem is not the current troubles in the stock market per se, but what those difficulties say about the ability of Chinese leaders to make smart economic policy. “[S]o long as Xi is making it clear that politics, not markets, are in command (政治挂帅), the odds increase that the upcoming Year of the Monkey will turn out to be the Year of the Bear,” Bishop writes.

Bishop’s piece came out just before the news that China was suspending its new “circuit-breaker” mechanism (though he predicted that move). As the Wall Street Journal reports, the China Securities Regulatory Commission admitted that the mechanism wasn’t working as expected, but instead was exacerbating the volatility it was meant to control. That’s a sharp departure from Tuesday, when the CSRC was still trying to claim the circuit breaker had successfully “calmed down investors and played a positive role in protecting their rights,” as per Xinhua.
Meanwhile, Xinhua’s new “Economic Watch” column debuted with a surprisingly pessimistic look at the state of the Chinese economy. However, it framed the current difficulties as necessary growing pains before reform kicks in and the economy stabilizes. “China is braced for unavoidable pains which it expects to precede future gains,” Xinhua said. The piece has more details on what 2016’s reforms are likely to be – notably attacking “zombie companies” as part of China’s emphasis on “supply-side reforms.”