Can India Become the Next China?

By Anthony Fensom

November 20, 2014

With its growing labor force, the South Asian giant has some impressive long-term growth potential. 

China’s citizens may have celebrated “APEC blue” skies at the recent Beijing summit. But amid the nation’s recent diplomatic triumphs, analysts suggest China could still be eclipsed by India as Beijing confronts growing environmental and structural challenges.

Speaking at Brisbane’s recent G20 Leaders’ Summit, China’s Finance Minister Zhu Guangyao said the world’s second-biggest economy was undergoing “a period of pain” as it tackled structural problems threatening its growth targets.

“We do have problems that have been accumulated over time…the first is the overcapacity of our economy, second is the problem of shadow banking, and the third main problem is debt accumulated over time by local Chinese governments,” he said.

Zhu said the world economy “faces greater downward risks,” with the Chinese economy also adjusting to a “new normal” of slower growth.

“Right now the Chinese economy is in a period when we are changing gear. Our economic structure is undergoing a period of pain and we are also in a period when we are absorbing large-scale stimulus packages we rolled out earlier,” he said.

He added, “Now is a ‘new normal’ for China’s economy…[which] means the Chinese economy will be running at a relatively high speed instead of a super-high speed. In the normal economic functions we must also take into consideration factors such as the environment and energy.”

Zhu quoted the Chinese president in suggesting that Beijing’s emissions deal with the United States reflected a new focus on putting the environment ahead of unsustainable economic growth.

“[Chinese] President Xi Jinping attaches great importance to our work on this front…he said we want both clear water and green mountains as well as golden and silver mountains. And if we have to choose between the two, we would rather choose clear water and green mountains over gold and silver,” he said.

China’s pledge to peak total emissions by 2030 and boost the share of non-fossil fuels in its total energy mix to 20 percent has sparked concern among coal exporters, with the G20 urging Japan to apply its lower-emission technologies to coal-fired power stations around the region.

But while Zhu pointed to China’s rapid growth, saying its GDP expansion for 2013 was the equivalent of its entire economy in 1994, he said the nation was attempting to drive structural reform to build “a new model where we are powered more by innovation.”

India to Outpace Rivals

How China’s Economy Can Weather a ‘Long, Slow Fall’

To implement reforms or not — that is the tough question currently facing China’s leadership

The times are changing. China’s economy grew at an annual rate of 7.3% in the third quarter of this year, its slowest pace since the global crisis five years ago, as a slump in its property sector decimated domestic demand and industrial production. Despite signs that the economy will fall short of the annual growth target of 7.5%, top leaders have refrained from unleashing the type of massive stimulus they used to fend off recession in 2009.

Some expect growth to slow more dramatically: New York-based non-profit business and research organization The Conference Board forecasts that China’s annual growth will slow to an average rate of 5.5% between 2015 and 2019, compared with 7.7% last year, and drop further to an average rate of 3.9% between 2020 and 2025.

Most economists and experts agree that China urgently needs structural reforms, but they are divided over whether Beijing should sit tight or go ahead with a major stimulus package. Regardless, China will likely muddle through implementation of reforms whether or not it endures a hard landing: Thanks to the country’s modest level of development, China has more room to expand than Japan did when it faced its own abrupt transition to a low growth era in the 1990s.

Despite similarities between Japan’s past experience and China’s current predicament of unbalanced growth, industrial overcapacity, excessively high property prices and an undercapitalized financial system, China has bigger growth potential and its authoritarian government has a stronger capacity for taking bold and quick action when necessary. The Chinese government owns almost all of the country’s banks, and President Xi Jinping appears determined to implement reforms that should help rein in shadow banking and local government debt while shifting the world’s second-biggest economy away from investment and export-driven demand toward consumption-driven growth.

Sri Lanka: Is Indian concerns on Chinese naval presence justified?

N Sathiya Moorthy

18 November 2014

Three Chinese naval vessels calling on Sri Lankan ports in over six months - two of them submarines that can only be offensive platforms - and sections of the Indian strategic community is disturbed once again. They are even more concerned about Colombo's purported nonchalance to India's concerns, expressed to visiting Sri Lankan Defence Secretary Gotabhaya Rajapaksa, brother of the nation's President who was reportedly called in mainly for the purpose a couple of weeks ago. 

It's not known if Sri Lanka had informed India about the Chinese naval visits, or if it is required by security protocols or precedents between the two. If not, did Sri Lanka make any effort at concealing/downplaying the Chinese naval visits from India or the rest of the world? Three, does India have reasons to believe that anything secretive might have happened with or on board these vessels that should be of concern, now or later? 

If the answers to these questions are convincing, there is no reason for the Indian strategic community to keep talking about the 'China bogey' all the time, as if they could not afford to miss any opportunity to flag it - real and imaginary. India is far away and far ahead from 1962, and they can trust the Indian security apparatus (of which most of them were a part until the day before) to do what is needed under the circumstances. The same may go with truant neighbours, if any. 

'Cautious optimism' has been the key to India's military preparedness in dealings, whether with China or Pakistan. Barring the singular fiasco, which is often attributed to mis-judgment and mis-communication on the Indian side, even the 1962 debacle could have been averted in military terms. Or, at least that is what many in the Indian strategic community have come to believe - talk and write about. 

If India were to feel threatened by every Chinese movement - political, diplomatic, economic or military, whether land or sea - no Indian can sleep in peace, now or ever. The situation has not reached remotely there. If nothing else, for every sleepless night that Indians might end up having, there will be another - and possibly the same - that every Chinese too would be experiencing, if provoked. 

'String of Pearls' and after 

Libya As A Failed State: Causes, Consequences, Options

by Fortuna's Corner

November 19, 2014

http://www. washingtoninstitute.org/ uploads/Documents/pubs/ ResearchNote24_Engel-2.pdf

post-Qadhafi Libya destined to become a “Somalia on the Mediterranean”? Analyst Andrew Engel studies the causative factors in Libya’s failed transition to democracy.

Libya’s post revolutionary transition to democracy was not destined to fail. With the ninth largest oil reserves in the world, Libya was well positioned to develop along the lines of resource-rich Persian Gulf states with similarly small populations. But Libya has become a failed state in what could be a prolonged period of civil war. Fissures have emerged along ethnic, tribal, geographic, and ideological lines against the backdrop of an Islamist versus non-Islamist narrative. Is Libya destined to become a “Somalia on the Mediterranean”?

In this thoroughly documented Washington Institute study, Libya analyst Andrew Engel examines the causative factors of this failure and offers prescriptive recommendations for creating a coordinated, unified political and security strategy to prepare for a worst-case scenario in Libya.

THE AUTHOR

Andrew Engel, a former research assistant at The Washington Institute, received his master’s degree in security studies at Georgetown University and currently works as an Africa analyst. He traveled across Libya after its official liberation.

India’s ‘Act East’ Policy: A Perspective

Dr Rahul Mishra and Brig Vinod Anand, Senior Fellow, VIF

http://www.vifindia.org/article/2014/november/20/india-s-act-east-policy-a-perspective

India’s Look East Policy (LEP) came of age when New Delhi celebrated two decades of engagement by holding the ASEAN-India Commemorative Summit in November 2012. The first phase of LEP lasted for one decade till 2002 when the then Minister for External Affairs Mr Yashwant Sinha announced the commencement of the second phase. While in the first phase, the emphasis was on political, diplomatic and people to people relationships, improved connectivity and enhanced trade, the second phase revolved around strengthening of economic relations, defence and security cooperation besides strengthening relationships in other areas. During the second phase, though the dominant impulse remained the economic engagement, increasingly the LEP also acquired strategic orientation. The LEP focused not only on the ASEAN members but also expanded to include South Korea, Japan, Australia, New Zealand and other countries in the East. Over the two decades, not only has India progressed from a dialogue partner to the present status of a strategic partner in respect of ASEAN but has also established strategic partnerships on bilateral basis with many ASEAN countries and Japan, Australia and South Korea. It can also be said that after 2012, the Indian government continued to work towards what it called the third phase that was termed as an ‘Enhanced LEP’.

In fact, when Modi government took over the reins of power in May this year, it conscientiously continued with the previous government’s policy and the new Minister for External Affairs, Smt Sushma Swaraj termed the new phase as ‘Act East Policy’ which in a sense meant that more substance was to be imparted through early implementation of many elements of the LEP. While the plan to engage ASEAN has been charted out in the ‘Plan of Action to implement the ASEAN-India Partnership for Peace, Progress and Shared Prosperity (2010-2015)’ announced during the Commemorative Summit of 2012, the Modi administration has been in an overdrive to reach out to all the nations in the wider Pacific region.

Prime Minister Modi’s successful visit to Japan, the India visit of Australian Prime Minister Tony Abbott and the visit of China’s President Xi Jinping are seen as high points in the Modi government’s policy towards the wider East Asian region. Japan is also considering joint projects with India in some of the ASEAN countries besides expressing its interest to invest in India’s North East. The level of defence and security cooperation including joint military exercises and co-production and co-development in defence industry is on the cards. India-Japan civil nuclear agreement could not be concluded because of some apprehensions on part of Japan but that aside, the scope of strategic and economic cooperation is expected to follow an upward trajectory.

During the India visit of Australian Prime Minister Tony Abbott, India and Australia signed the much-awaited India Australia Civilian nuclear cooperation agreement that would enable supply of Uranium to India. The successful conclusion of Abbott’s visit is a watershed event in India-Australia relations. Apart from the civilian nuclear deal, Indian companies are also working towards joint energy ventures in Australia. Earlier this month, Modi attended the ASEAN-India and East Asia Summit in Myanmar where he further outlined his plans to revitalise relationships with ASEAN and East Asian countries in both economic and security fields. From Nay Pyi Taw, Modi travelled to Australia for the G-20 Summit where he held bilateral meetings with Prime Minister Abbot to build on the evolving strategic relationship with Australia. In order to expand India’s footprint in Pacific, he visited Fiji after attending the G 20 meet.

Perspectives on the South China Sea

By Murray Hiebert, Gregory B. Poling, Phuong Nguyen 

SEP 30, 2014 

The South China Sea is arguably one of the world’s most dangerous regions, with conflicting diplomatic, legal, and security claims by major and mid-level powers. To assess these disputes, CSIS brought together an international group of experts—from Australia, Canada, China, Indonesia, Japan, Malaysia, the Philippines, the United Kingdom, the United States, and Vietnam. This volume gathers these experts’ analyses to provide a diverse and wide-ranging set of perspectives on the region and to explore possibilities for future cooperation.

Contributors: Alice Ba, Chu Shulong, Jerome A. Cohen, Patrick M. Cronin, Vu Hai Dang, Alan Dupont, Bonnie S. Glaser, Euan Graham, Bing Bing Jia, Yoji Koda, James Manicom, Charmaine G. Misalucha, Jonathan G. Odom, Phillip C. Saunders, Carlyle A. Thayer 

Publisher CSIS/Rowman & Littlefield 

ISBN 978-1-4422-4032-2 (pb); 978-1-4422-4033-9 (eBook) 

Purchase

Download PDF file of "Perspectives on the South China Sea"

Managing Indo-Pacific Crises

By Koh Swee Lean Collin and Darshana M. Baruah

November 19, 2014

http://thediplomat.com/2014/11/managing-indo-pacific-crises/

A crewman from the Vietnamese coastguard ship 8003 looks out at sea as Chinese coastguard vessels give chase to Vietnamese ships that came close to the Haiyang Shiyou 981, known in Vietnam as HD-981, oil rig in the South China Sea, July 15, 2014.

Is there a multilateral mechanism that could manage air and maritime encounters in a tense region? 

Tensions in Asia are rising over unresolved territorial disputes and sovereignty issues. In contrast to the immediate post-Cold War period, recent tensions are characterized by the evident proclivity of some, if not all, parties towards the threat or use of limited force. As a much preferred tool of statecraft, maritime platforms tend to be the archetypical instrument for this sort of diplomacy.

The spike in maritime encounters in recent years have largely involved coastguard-type forces in disputed waters of the East and South China Seas. More recently, though, regular naval ships have begun to appear on the scene. Not only do heavily armed warships cast an ominous shadow over the coastguard vessels operating on the frontlines, at times they become involved, for instance by directing fire control radar at opposing military assets in the vicinity. Moreover, these numerous encounters between rival maritime patrols in the regional flashpoints are now being augmented by aerial encounters involving highly capable fighter jets and sophisticated surveillance assets.

Escalation

The risk of collision, especially in the constrained littorals that characterize the region, has risen as a result of these encounters. The risk is arguably higher in the air – one need only recall what happened to the Chinese J-8 interceptor that crashed after colliding with a U.S. Navy EP-3E reconnaissance aircraft off Hainan Island in April 2001. Dangerous close-proximity aerial and surface maneuvers aside, operational miscalculations prompted by misperceptions of the other party’s intent, fed by endogenous factors such as psychological stress at moments of high tension, may result in an inadvertent resort to force.

The risk rises further still if modern combat systems, characterized by long-range, short response time, high precision, and heavier destructive power are involved. As the stakes in a potential confrontation can be extremely high (involving, for instance, the loss of an entire platform and many of its crew) local commanders may feel compelled to escalate. And should over-zealous local commanders decide to take matters into their own hands, the outcome could be devastating.

Regional Initiatives

Inside the ISIS Petroleum Empire

Fazel Hawramy, Shalaw Mohammed, and Luke Harding

November 19, 2014

Inside Islamic State’s oil empire: how captured oilfields fuel Isis insurgency

Islamic State has consolidated its grip on oil supplies in Iraq and now presides over a sophisticated smuggling empire with illegal exports going to Turkey, Jordan and Iran, according to smugglers and Iraqi officials.

Six months after it grabbed vast swaths of territory, the radical militant group is earning millions of dollars a week from its Iraqi oil operations, the US says.Coalition air strikes against tankers and refineries controlled by Isis have merely dented – rather than halted – these exports, it adds.

The militants control around half a dozen oil-producing oilfields. They were quickly able to make them operational and then tapped into established trading networks across northern Iraq, where smuggling has been a fact of life for years. From early July until late October, most of this oil went to Iraqi Kurdistan. The self-proclaimed Islamic caliphate sold oil to Kurdish traders at a major discount. From Kurdistan, the oil was resold to Turkish and Iranian traders. These profits helped Isis pay its burgeoning wages bill: $500 (£320) a month for a fighter, and about $1,200 for a military commander.

The US has pressured Iraqi Kurdistan’s leaders to clamp down on smuggling, with limited success. But oil is still finding its way to Turkey via Syria, with Islamic State deftly switching from one market to another, smugglers say, with cheap crude channelled to Jordan instead. On Monday, a UN panel urged countries neighbouring Iraq and Syria to seize oil trucks that continue to flow out from jihadist-occupied territory.

“We buy an oil tanker carrying around 26 to 28 tonnes [of oil] for $4,200. We sell it in Jordan for $15,000. Each smuggler takes around eight tankers a week,” Sami Khalaf, an oil smuggler and former Iraqi intelligence officer under Saddam Hussein, told the Guardian. Khalaf, who lives in Jordan’s capital, Amman, said smugglers typically paid corrupt border officials $650 to pass through each checkpoint.

Iraqi intelligence officials confirm that Isis uses Anbar province, which shares a border with Jordan, as a major smuggling hub. Isis controls three major oilfields in Iraq – Ajeel, north of Tikrit, Qayara, and Himrin.

One official, based in Kurdish-controlled Kirkuk, said 435 tonnes of crude oil from the Ajeel oilfield in Salahuddin province was recently transported to Anbar. From there it went to Amman. Iraq’s oil ministry spokesman, Asim Jihad, said he was not aware of oil being smuggled to Jordan, but conceded that Isis was still managing to export crude to Turkey via Syria. “We are pressing Turkey to stop this trade because it strengthens Isis,” Jihad said.

In June, US reconnaissance drones flying above northern Iraq spotted large numbers of oil tankers crossing unhindered from Isis areas into the Kurdistan region. At the time, Kurdish peshmerga fighters were facing off against Isis on a new and fragile frontline. American commanders presented Kurdish officials with satellite imagery and pressured them to crack down. US planes destroyed seven tankers, with Iraqi aircraft hitting similar targets last month.

Militants outside an oil refinery in Baiji, north of Baghdad. Isis was quick to make the oilfields it captured operational. Photograph: Uncredited/AP

Detailed Study and Analysis of ISIS

November 19, 2014

Richard Barrett of The Soufan Group in New York City has produced an excellent 66-page unclassified report on the Islamic State (ISIS) insurgency/terrorist organization in Iraq and Syria.

The report covers the history of ISIS, its Objectives and Ideology , its organization structure and leadership, its military operations, civil administration in the captured territories, the organization’s finances, and perhaps most importantly, the ISIS Media Operations.

The report can be accessed here.

Assessing a Deal or Non-deal with Iran

By Anthony H. Cordesman

NOV 20, 2014 

http://csis.org/publication/assessing-deal-or-non-deal-iran

The Critical Issue of Iran’s Progress in Weapons Research, Development, and Production Capability 

It now seems unlikely that the P5+1 countries of the United States, Russia, China, the United Kingdom, France, and Germany can reach a comprehensive agreement with Iran by the end of November. A final agreement remains a possibility, but it seems far more likely that if an agreement is not reached, the negotiations will be extended rather than abandoned all together. The question then arises as to how to judge the outcome of this set of negotiations, be it an actual agreement, an extension, or the collapse of the negotiations.

So far, most analyses of the negotiations have focused on the key features of Iran’s various enrichment efforts and its ability to acquire fissile material. These include: 

• The number of centrifuges, 

• The development of more advanced centrifuges, 

• The level of Uranium enrichment and the size of Iran’s stockpiles, 

• The potential use of the new reactor at Arak to produce Plutonium, 

• How soon Iran could use any of these to get enough material to produce a nuclear device, 

• The extent to which any agreement dealing with all of these issues is enforceable, 

• How long an agreement will be in force, and

• The incentives to Iran for reaching an agreement, especially the extent to which UN, US, and EU sanctions will be lifted, and the timing of such action.

Islamic State: Prospects in Pakistan

Sushant Sareen

Senior Fellow, Vivekananda International Foundation

17 November 2014

Source Link

In recent weeks, there has been a lot of activity taking place in various parts of Pakistan in the name of the abominable, but also ineluctable, Islamic State (IS). Apart from some senior commanders of the Mullah Fazlullah-led Tehrik-e-Taliban Pakistan (TTP) faction who have announced their allegiance to the IS’ Caliph Ibrahim a.k.a. Abu Bakr al-Baghdadi, there are reports of other smaller groups of militants who have cast their lot with the pestilential IS. Graffiti and posters of the IS have appeared in Karachi, Peshawar, Lahore, Bannu, Balochistan, Gilgit-Baltistan, Wah, Hangu, Kurram, Bhakkar, Dera Ismail Khan and other towns and cities of the country. 

While these developments have caused a flutter in the media, official circles are quite nonchalant about the IS’s presence in Pakistan at present, or even its potential for establishing a presence in the future. Despite a classified report of the Balochistan government about the ‘growing footprint’ of IS, Federal Interior Minister Chaudhry Nisar has confidently claimed that the IS doesn’t exist in Pakistan. 

Considering that just a few days after Nisar declared that there was no danger of terrorism in Islamabad an attack was launched on Islamabad courts and the city’s vegetable market, he shouldn’t be taken seriously. Although there is no sign of a major presence of the IS in Pakistan, the threat of the IS establishing itself is very real. There are eerie parallels that can be drawn between how the IS is registering its presence in Pakistan with how the Taliban network was established in the country. In the mid-1990s, more so after the Taliban captured Kabul, there were a spate of gangs and groups, especially in the Federally Administered Tribal Areas (FATA), who declared themselves local representatives or chapters of the Taliban movement.

The sort of graffiti that today proclaims the arrival of the IS had back then done the same for the Taliban. No one had imagined at that time that the Taliban would manage to establish such a robust presence in the country or attract so many fighters, supporters and sympathisers for its cause. More importantly, at that time, hardly anyone outside the liberal fringe in Pakistan believed that the Taliban would be able to occupy the mind space of Pakistanis the way they did. Today, there are people from all walks of life in Pakistan –traders, soldiers, politicians, journalists, doctors, teachers, labourers and techies – who identify with the Taliban. It is therefore not too farfetched to imagine that something similar may happen with the IS, more so given the manner in which this ghoulish outfit has managed to strike resonance among certain sections of Muslims around the world and become a magnet for them, much more than the Taliban or their predecessors in Afghanistan had managed to do ever since violent jihad became fashionable. 

A Look Inside a Secret US Air Force Intelligence Center

Marcus Weisgerber 

November 18, 2014 

Source Link

LANGLEY AIR FORCE BASE, Va. – While there might not be any American combat boots on the ground in Syria, dozens of manned and unmanned aircraft dot the skies above gathering video and other types of intelligence about the movement of Islamic State militants. The images collected by those aircraft are streamed by satellites in near real-time thousands of miles away to Langley Air Force Base in southern Virginia. 

Marcus Weisgerber is the global business reporter for Defense One covering the intersection of business and national security. Previously, Marcus was the senior Pentagon correspondent for Defense News, an international newspaper that focuses on military procurement and operations, for nearly four ... Full Bio Here in a dimly lit room about the half the size of a football field, airmen — some not even old enough to legally drink alcohol — stare at computer screens interpreting people’s movements and producing intelligence reports that could ultimately be read by President Barack Obama. And without those soldiers on the ground in Syria and Iraq providing context, it’s largely up to these intelligence analysts to distinguish the good guys from the bad guys.

“If you’re looking at the ground and you’re watching folks moving on the ground, to tell a Shia from a Sunni is pretty hard to do,” Gen. Hawk Carlisle, the head of Air Combat Command, said Monday. “Unless ISIS is actually flying a flag that says ‘ISIS’ across the top of it, then it’s sometimes more difficult to tell … where those folks fit on whether they’re combatants or not.”

With no ground forces to identify targets for air strikes, the airmen here at the 480th Intelligence Surveillance and Reconnaissance Wing headquarters, have to process information quickly and accurately, said Col. Timothy Haugh, the unit’s commander. In Afghanistan, for example, a ground commander brings context to pictures gathered from the sky. So if an intel analyst has a question, he or she could give a call to a colleague on the ground for clarification.

Support: Ukrainian Civilians Stop The Russians With Facebook

http://www.strategypage.com/htmw/htcbtsp/articles/20141119.aspx

November 19, 2014: The fighting in Ukraine found the Ukrainian Army lacking many combat support services. These were never abundant during the Soviet period because the Soviets did not believe in a lot of that. Not much money was spent on such things after Ukraine became independent in 1991. When the Russian aggression began in early 2014 many civilian organizations formed, often spontaneously, to provide needed support for Ukrainian troops sent to fight. One of the biggest of these aid groups was “Help the frontline.” This group was founded by Ukrainian patriots (and Maidan activists who had recently ousted the pro-Russian government) from Lugansk. This was one of two major cities controlled by “separatists” in Donbas. The organizers met on Facebook. It began with a request for help to transport a power generator to the frontline troops. A larger organization grew from that seemingly trivial event. That is how many other volunteer organizations were founded so it was not really that unusual. Social networks on the Internet made it happen faster. 

Similar groups soon formed to carry out a wide range of activities. Using cell phones and the Internet, the volunteers get information about what the troops need from local commanders or the troops themselves and then seek ways to implement the requests. One area where the volunteers were quickly effective was in medical care. The hospitals near front line always had problems with a lack of supplies. When a lot of wounded soldiers and civilians began showing up one thing the volunteers were able to deal with was the need for more sheets. They did this by collecting used sheets and delivering them to the hospitals. Clean sheets were needed in large quantities because of all the casualties. The hospitals nearest all the fighting were only able to provide basic medical treatment before the badly wounded could be moved to other hospitals for more advanced care. Volunteers often helped with transport and looking after the wounded while they were being moved. 

Volunteers also helped house and feed reservists further west while they trained to regain (or obtain) combat skills. Soon there were “Help The Troops” groups forming throughout Ukraine and these were often ready to handle any problem the soldiers were having. Given the shabby shape the military was in, after two decades of low budgets, there was a lot of take care to ready troops for combat. The one thing the volunteers could not help with was obtaining weapons and ammunition, but some volunteers were expert mechanics or even with experience maintaining firearms. These experts helped get a lot of weapons in shape. 

One of the least talked about volunteer tasks was helping negotiations for the release of captured soldiers, often in exchange for captured rebels and Russian soldiers. This is really delicate work and there were a number of volunteers, especially ethnic Russians, who stepped in and helped make things happen. 

Establishment of NDB and AIIB: Shifting Economic Base from West to East

by Hari Bansh Jha

http://www.southasiaanalysis.org/node/1658

The recently established New Development Bank (NDB) by BRICS member countries and Asian Infrastructure Investment Bank (AIIB) by 21-member Asian countries with their headquarters in China herald a shift in economic power from the West to the East. It is speculated that these two monetary institutions would dwarf the size of West-supported World Bank (WB) and the Asian Development Bank (ADB).

Only time will tell how NDB and AIIB emerge as alternative source of funding in the international financial market. But it has almost become certain that the era of West's control over the international financial resources has started eroding.

The first jolt to the international financial institutions like the WB and IMF was exhibited when the five BRICS countries, including Brazil, Russia, India, China and South Africa made an agreement for the establishment of the long awaited NDB with its headquarters in Shanghai, China in July 2014. NDB would have capital of $100 billion. Lending from this bank will start in 2016. China would contribute $41 billion in this bank; while India, Russia, Brazil each would pay $18 billion and South Africa would pay $ 5 billion.

Need for the creation of NDB was felt because of the discriminatory attitude of the West towards the developing countries. The BRICS member countries accounting for almost half of the world's population and about one-fifth of global economic output have only 11 per cent of the votes at international financial institution like the IMF. Both the WB and the IMF are based on weighted voting system, which provide the rich countries a big say in the management. There are informal arrangements whereby the American is always at the top in the WB; while the European is in top position in IMF. In those monetary institutions, the developing countries don't have enough voting rights.

Expectation is that the NDB with its total capital of $100 billion would meet short term liquidity requirement of the member countries. An effort has been made to avoid China's dominance on the bank; for which India is made president of the bank for the first six years and after this Brazil and Russia would have turns with five years each.

Hacking The Ayatollahs: Countdown To Zero Day — And, The Age Of Cyber Warfare

by Fortuna's Corner

November 17, 2014 

http://www.fortunascorner.wordpress.com

Hacking The Ayatollahs: Countdown To Zero Day — And, The Age Of Cyber Warfare

Garbiel Schonefeld, a Senior Fellow at the Hudson Institute; and, the author of “Necessary Secrets: National Strategy, The Media, And The Law,” has a review of Kim Zetter’s/Wired.com new book, “Countdown To Zero Day,” just out from Crown Publishers — in today’s (Nov. 17, 2014) Wall Street Journal. Ms. Zetter’s new book takes an in-depth look at the first known use of a “digital missile,” – the Stuxnet cyber virus that was inserted into the Iranian nuclear facility at Natanz, back in early 2010. Mr. Gabriel writes that “early in 2010, inspectors from the International Atomic Energy Agency noticed a problem: centrifuges employed to separate enriched uranium — the precursor to bomb-grade material — from uranium hydro-fluoride gas were breaking down at a startling rate. What the inspectors did not know was that the facility was under attack by Stuxnet, a computer virus designed by American and Israeli intelligence agencies under the code-name, “Operation Olympic Games.” 

“Countdown to Zero Day,” by Wired.com’s Kim Zetter, “gives a full account of this “hack of the century,” as the operation has been called,” Mr. Schonefeld writes. He adds, “the book goes well beyond the ostensible subject, to offer a hair-raising introduction to the age of cyber warfare.” “Among much else,” he adds, “Ms. Zetter chronicles just how the world came to learn of Stuxnet. Obscure computer-security firms in locations like Belarus and Slovakia, first detected the virus in 2010. Before long, it began appearing on thousands of computers worldwide, including powerhouses like antivirus firm Symantec set to work trying to solve the riddle posed by the mysterious code.”

Most “conventional [computer] viruses aim to steal passwords, or accomplish some other criminal purpose,” Mr. Schonefeld argues. But, “Stuxnet was different,” he contends. “Despite its complexity, it appeared to do nothing at all…beyond attempting to spread and replicate itself. After the digital sleuthing of far-flung investigators, it emerged that the code was narrowly tailored to come to life — only when it encountered certain industrial-control devices, containing proprietary software produced by the German firm — Siemens. The devices running that software were installed in only one location; the heavily fortified Iranian [nuclear] facility at Natanz,” Mr. Schonefeld notes.

Hacker Lexicon: What Is The Dark Web? Hiding In Plain Sight On The Internet Isn’t As Easy, Or Foolproof As You May Think

by Fortuna's Corner 

November 20, 2014 

http://www.fortunascorner.wordpress.com

Hacker Lexicon: What Is The Dark Web? Hiding In Plain Sight On The Internet Isn’t As Easy, Or Foolproof As You May Think

Mr. Greenberg, writing in the November 19, 2014 edition of Wired.com, says, “with the rise and fall of the Silk Road, — and, then its rise and fall again — the last couple of years have cast new light on the Dark Web. But,” he observes, “when a news organization as reputable as 60 Minutes [they once were that reputable - but, not anymore in my book] describes the Dark Web as “as vast, secret, cyber “underworld,” that accounts for “90 percent of the Internet,” — it’s time for a refresher.”

“The Dark Web isn’t that particularly vast, it’s not 90 percent of the Internet,” Mr. Greenberg argues, “and, it’s not even particularly secret. In fact,” he writes, “the Dark Web is a collection of web sites that are publicly visible, yet hide the IP addresses of the servers that run them. That means anyone can visit a Dark Web site; but, it can be very difficult to figure out where they’re hosted — or, by whom.”

Hiding In Plain Sight 

“The majority of Dark Web sites use the anonymity software Tor, though a smaller number also use a similar tool called I2P. Both of those systems encrypt web traffic in layers, and bounce it through randomly-chosen computers around the world, each of which removes a single layer of encryption…before passing the data on to its next hop in the network. In theory,” Mr. Greenberg writes, “that prevents any spy — even one who controls one of those computers in the encrypted chain — from matching the traffic’s origin with its destination.”

“When Web users run for Tor, for instance,” Mr. Greenberg argues, “any sites they visit can’t easily see their IP address. But, a Web site that itself runs Tor — what’s known as Tor Hidden Service — can only be visited by Tor users. Traffic from both the user’s computer; and, the web server takes three hops to a randomly chosen meet-up point in the Tor network, like anonymous bagmen trading briefcases in a parking garage.”

“Just because the IP addresses of those sites are kept hidden, however, doesn’t mean they’re necessarily secret,” Mr. Greenberg correctly asserts. “Tor hidden services like the drug-selling sites Silk Road, Silk Road 2, Agora, and Evolution,” he adds, “have had hundreds of thousands of regular users; Anyone who runs Tor; and, knows the site’s url, which for Tor hidden services ends in “.onion,” can easily visit those online ['black'] marketplaces.” 

Not To Be Mistaken With The Deep Web

Odierno: I Need More Money and Troops for Today’s Threats

Ben Watson 

November 19, 2014 

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Army Chief of Staff Gen. Ray Odierno is prepared to make his case to Congress that the constraints of sequestration reflect a completely different world than the one Pentagon planners see today and into the future. 

Ben Watson is news editor for Defense One. He previously worked for NPR's “All Things Considered” and “Here and Now” in Washington, D.C. Watson served for five years in the U.S. Army, where he was an award-winning combat cameraman and media advisor for southern Afghanistan's special operations

There were 510,000 active duty soldiers under the four-star general’s watch as recently as late September. But Odierno could see those numbers decline to levels not seen since 1940 if Congress keeps the 2011 Budget Control Act in place through 2016.

“When we developed the new defense strategy back in 2012, we all agreed to 490 [thousand] was the right strength to execute the defense strategy,” Odierno said Wednesday at the Defense One Summit in Washington, D.C.“We made assumptions that we wouldn’t be using Army forces in Europe the way we used to. We made assumptions that we wouldn’t go back into Iraq. We are back in Iraq. Here we are worried about Russia again. So I think we should be very careful and mindful of the decisions we’re making.”

Odierno said the U.S. has 1,500 soldiers in Iraq now, with “another 1,600 that will go within the next 30 to 45 days and we believe that’s something that will go on for quite some time—years, not months… So I think it’s time to have a real discussion about what we think we’re going to be doing over the next five or 10 years.”

Dempsey: US Strategy in the Middle East Is Sound, But Expect It To Change

Gordon Lubold 

November 19, 2014 

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The nation’s top military officer told an audience at the Defense One Summit in Washington that the U.S. strategy in Iraq and Syria is sound but like any good one, it’s likely to change - and regularly.

Gordon Lubold is a senior military writer for Defense One. Before that, he was a senior national security writer for Foreign Policy magazine and foreignpolicy.com, where he launched and authored the widely-read Situation Report newsletter, sent to 150,000 readers in the foreign policy and national.

Joint Chiefs Chairman Gen. Martin Dempsey, who returned from the Middle East on Sunday, said he was “encouraged” by what he saw during his trip to Baghdad. But amid concerns that the Obama administration lacks a coherent war strategy or is scrambling to build a better one against the Islamic State, Dempsey said the U.S. has a solid strategy but it will adapt accordingly. For now, it’s sound.

“Here’s what I’ll tell you about that strategy – it will change, it will change often,” he said. But at any one time it needs to be assessed and re-assessed. “I’m not obsessing so much about what’s in the middle.”

Dempsey met with senior Iraqi political and military leaders. “I was encouraged, but I’m also pragmatic,” he said. The Iraqi leadership, he said, is more inclusive and is cognizant of many of the things it must do to degrade the Islamic State. But the new leaders inherited “deep structural disadvantages” and they’ll need “courage, luck and leadership” to overcome them, Dempsey said.

David Kilcullen On Iraq/Syria and The Threat Of The Islamic State

David Kilcullen

November 17, 2014 · 

Mr. Kilcullen is the author of “Out of the Mountains: The Coming Age Of The Urban Guerrila

David Kilcullen: It’s different in three major ways. Firstly, it is much bigger and more militarily capable than al-Qaida ever was. It has tanks, it has helicopters, it’s got very large numbers of artillery pieces, it’s got more than 30,000 fighters, so it’s significantly larger and more militarily capable. Secondly, it controls about a third of Iraq and about a third of Syria, including a network of very connected cities, economic installations that make it about between $2 million and $3 million a day in terms of revenue, and it’s really building a significant territorial state in the Middle East, which is something that al-Qaida was never able to do. Thirdly, and, actually, I think most importantly for people in Australia and New Zealand, it’s having a very significant reinvigorating effect on regional groups in South-east Asia, in Africa and the Middle East. That’s really taking us back almost to square one in terms of re-energizing a global jihad against the West. So I think all those three things adding up together, it’s really a very, very significant threat that’s somewhat larger than what we’ve really ever seen from al-Qaida.

Lisa Owen: Now, you were in Iraq with General Petraeus and helped to mastermind the troop surge there. That seemed to bring a level of stability, so why do you think we now find ourselves in this mess that we’re in?

Well, it’s actually very simple. There are two reasons, and you’re right, we did successfully stabilize Iraq, and we successfully destroyed al-Qaida in Iraq, which is the predecessor organization to ISIS, down to the point where it had less than 5 percent of its fighters left. But then the first reason is we pulled out too quickly. We essentially cut the cord and left at the end of 2011 and put the Iraqis in a position where a lot of the deals that were put in place as part of stabilizing Iraq between 2007 and 2010 just weren’t followed through on, and different parties in Iraq felt that the others weren’t acting in good faith, and the whole deal really fell apart, and that’s allowed the reinvigoration of ISIS. The second very significant reason is the Syrian civil war. So even though we had gotten ISIS down to a shadow of its former self, when the war broke out in Syria and lots of different groups turned against the Assad regime, Abu Bakr al-Baghdadi, at that time the head of ISIS, sent a number of his fighters into Syria to join that fight. And by their success on the ground against the Syrians, they’ve generated a lot of support within Syria. So we’ve seen two big groups-

Can we now say looking at this that the West’s intervention in Iraq was a failure?

No, I think that if you do something and it works and then you stop doing and things go bad, that means that what you did was working, not working. What I think it tells us is that our whole approach since 9/11, which has essentially been to pick the most dangerous military aspect of Islamic jihadism worldwide and focus military effort on that has been short-sighted. And I’m worried that we’re about to make the same mistake again by switching targets from al-Qaida to ISIS, which is the next, sort of, crocodile to the canoe, if you like, instead of sitting back a little bit and saying, ‘What is it about these groups that makes them so appealing to people in our own societies, and how can we deal with that threat without, in the process, turning our own countries into police states?’ I think that’s really the question that everyone needs to be engaging on now. The military bit is important, but it’s not the forefront.

Okay, I want to come to that a bit later, but I’m wondering – is it now time to start thinking about a radical rejig in Iraq? Do we need three separate states there – Sunni, Shiites? You know, do we need to be thinking about that direction?

The Warrior Ethos At Risk: H.R. McMaster’s Remarkable Veterans Day Speech

by Fortuna's Corner

November 19, 2014

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The Warrior Ethos at Risk: H.R. McMaster’s Remarkable Veterans Day Speech

Lieutenant General H.R. McMaster, director of the Army Capabilities an Integration Center and deputy commanding general of futures for the U.S. Army Training Doctrine Command, speaks at Georgetown University’s Veterans Day ceremony. (Georgetown University Office of Communications)

Lieutenant General H.R. McMaster, director of the Army Capabilities an Integration Center and deputy commanding general of futures for the U.S. Army Training Doctrine Command, speaks at Georgetown University’s Veterans Day ceremony. (Georgetown University Office of Communications)

Dr. Degioia, faculty, administrators, students, guests-and especially veterans. On November 11, Lieutenant General H.R. McMaster, Director of the Army Capabilities Integration Center (ARCIC) of U.S. Army Training and Doctrine Command, gave the keynote address at Georgetown University’s Veterans Day ceremony. His message was simple and powerful: the study of war should not be confused with its advocacy; today’s stakes are higher than ever; the warrior ethos is threatened by both tech evangelists (who believe all conflict might be resolved at a safe distance) and a growing gap between the U.S. military and civil society. It’s a remarkably lucid speech by one of the Army’s most energetic leaders. You can read the whole text below:

Good afternoon. It is a great honor for me to participate in this celebration. My thanks to Georgetown University and the Student Veterans Association and the Hoya ROTC battalion. It is a particular privilege to celebrate Veterans Day at an elite university that has both educated and been shaped by our nation’s veterans. I would like to begin by thanking, on behalf of all veterans, the university leadership for making Georgetown the top-rated college for veterans.

Our military is a living historical community and those of us serving today are determined to preserve the legacy of courageous, selfless service that we have inherited from the veterans who have gone before us. We might remember that we are commemorating Veterans Day in the year marking the 100th anniversary of the beginning of The Great War. We celebrate on this day because on the 11th hour of the 11th day of the 11th month in 1918, World War I ended. Though much has changed in the character of armed conflict since the early twentieth century, there are also clear continuities in the nature of war and especially in the character, commitment, and ethos of those who have served in our Armed Forces. I thought that we might consider two ways of honoring our veterans for which those connected to Georgetown University are particularly qualified. First, to study war as the best means of preventing it; and second, to help the American military preserve our warrior ethos while remaining connected to those in whose name we fight.

SPECIAL WARFARE: THE MISSING MIDDLE IN U.S. COERCIVE OPTIONS

Dan Madden, Dick Hoffmann, Michael Johnson, Fred T. Krawchuk, John E. Peters,Linda Robinson and Abby Doll

November 20, 2014 

http://warontherocks.com/2014/11/special-warfare-the-missing-middle-in-u-s-coercive-options/

In the face of adversaries exploiting regional social divisionsby using special operations forces and intelligence services, and dwindling American appetite for intervention, the United States needs to employ a more sophisticated form of special warfare to secure its interests. Special warfare campaigns stabilize or destabilize a regime by operating “through and with” local state or nonstate partners, rather than through unilateral U.S. action. Special operations forces are typically the primary U.S. military forces employed, but successful campaigns depend on bringing to bear a broad suite of U.S. government capabilities. The figure below differentiates special warfare from more familiar forms of conflict. Special warfare has particular relevance to the current global security environment as policymakers seek options short of large-scale intervention to manage both acute crises (e.g., ISIL, Ukraine) and chronic challenges (e.g., insurgency in the Philippines).

Special warfare fills the missing middle for exerting influence between the costly commitment of conventional forces and precision-strike options provided by drones, aircraft, missiles, and special operations forces’ direct action. The potential for escalation associated with precision-strike capabilities may render them too risky to employ in some circumstances, while in cases where the targeted regime’s core interests are involved, precision-strike options may be too little to compel desired changes in behavior. Despite policymaker antipathy toward the costs and risks of intervention, observed and forecasted instability around the world will continue to create situations in which policymakers are forced to act to protect U.S. interests. Special warfare provides these decisionmakers with an additional option that can help protect American interests and manage risks in some important cases.

THE COUNTERINSURGENCY PARADIGM SHIFT

Justin Lynch

November 20, 2014

It has been a challenging year for the Department of Defense. For more than a decade, Operation Iraqi Freedom and the ongoing conflict in Afghanistan highlighted the need for a modern military to be able to operate in complex human terrain. But even as the military continued to fight in Afghanistan, it also faced the budgetary uncertainties of sequestration. In this fiscally constrained environment, even given current events, counterinsurgency may return to a low priority. The DoD has reached a decision point; it is undergoing a paradigm shift, deciding what its capabilities will be in the aftermath of the wars in Iraq and Afghanistan. The military will either resource the training required to be capable of conducting counterinsurgencies, or focus almost exclusively on conventional operations. Given today’s operational environment, the military must retain and improve upon the counterinsurgency lessons learned in Iraq and Afghanistan. If not, the United States will not have the competencies needed to accomplish its policy objectives.

Paradigm Shifts

Thomas Kuhn published “The Structure of Scientific Revolutions” in 1962. In it, he described how intellectual communities change their worldview, or shift paradigms. Kuhn traces the notion of paradigm through five phases. The first phase is pre-paradigm, when there is no broadly accepted set of assumptions for inquiry and dialogue. The second phase is normal science, when participants collect, view, and resolve evidence using a common set of assumptions and methods. The third phase is the crisis, when evidence emerges that cannot be resolved using the paradigm that served during the second phase. During phase four, the revolution, members of the intellectual community challenge and replace existing assumptions and methods. They then reexamine both the new evidence that caused the old paradigm to fail and old evidence, generating new results. Phase five is the post-revolution phase, when the intellectual community accepts the new paradigm and returns to normal science. Eventually the cycle repeats.

The Military’s Paradigm Shift

WINNING BATTLES, LOSING WARS

By Lt. Gen. James M. Dubik, U.S. Army retired

NOVEMBER 18, 2014 

Col. Harry G. Summers Jr. begins his book, On Strategy: The Vietnam War in Context, by relaying the following conversation: “‘You know you never defeated us on the battlefield,’ said the American colonel. The North Vietnamese colonel pondered this remark a moment. ‘That may be so,’ he replied, ‘but it is also irrelevant.’”

As much as we may not want to admit it, in this sense, our current war against al Qaeda and their ilk resembles that of Vietnam. In fighting our post-9/11 wars, we have won nearly every battle but are far from winning the war. How can this be? The answer lies largely in the civil-military nexus that underpins how America wages war.

Waging war involves selecting proper war aims; identifying initial military, nonmilitary, U.S. and coalition forces, strategies, policies and campaigns that, if successfully executed, will achieve those aims; constructing execution mechanisms and coordinative bodies to translate the plans into action and then to adapt as the war unfolds; and maintaining the war’s legitimacy from start to finish. These war-waging responsibilities are civil-military responsibilities shared by the set of senior political leaders of the executive and legislative branches and selected senior military leaders. Even a cursory look at these elements reveals that our war-waging proficiency has simply not been up to the task.

Selecting proper war aims. The aims of the George W. Bush administration’s war on terror—against nations, organizations and people who perpetrated the 9/11 attacks and those who harbored them—were expansive and unachieved. Our haste to respond to the 9/11 attacks, while viscerally understandable, did not allow sufficient dialogue on whether these aims could actually be achieved or about the resources that would be necessary to achieve them. There is evidence that some officials did not even want such a dialogue.

In 2009, the Obama administration altered the aims, vowing to “disrupt, dismantle and defeat” al Qaeda in Afghanistan and Pakistan and prevent its capacity to threaten America and our allies in the future. These aims were equally expansive and unachievable. The reality is that the U.S. alone cannot achieve success against al Qaeda, the Islamic State and other radical jihadi groups. A real coalition has to be formed, and the U.S. must lead it. In response to the threat in Syria and Iraq, the U.S. has moved a step in the right direction, but the coalition we are forming must become more than a multinational posse following the U.S. sheriff in pursuit of the bad guys.