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B.RAMAN
A group of about 1500 Muslims staged an ugly demonstration outside the US Consulate-General in Chennai on the evening of September 14,2012, in protest against a derogatory film on Islam and its Holy Prophet produced by an unidentified person in the US.
2.A video clip from the film with Arabic sub-titles uploaded on to the Internet has led to a series of anti-US demonstrations by Muslims in some countries of the world, with the demonstrations taking violent form in some places.During a demonstration outside the US Consulate in Benghazi in Libya on September 11,2012, a small group of heavily armed Muslims launched a commando-style attack on the Consulate resulting in the death of the US Ambassador to Libya and three other US officials.
3. The involvement of the Ansar al-Sharia (Supporters of the Sharia), an affiliate of Al Qaeda, is suspected in the Benghazi attack.The Al Qaeda in the Arabian Peninsula (AQAP), based in Yemen, is also called Ansar al-Sharia. One does not know as yet whether the Ansar suspected in the Benghazi attack is the Yemeni branch of Al Qaeda orwhether it is a different organisation of Libyan roots.
4. The Bengaluru Police are presently interrogating 18 educated Muslim youths arrested in Bengaluru, Hubli, Hyderabad and Maharashtra on charges of conspiring to assassinate a number of Hindu personalities believed sympathetic to the Hindutva movement.According to the Bengaluru Police, the Muslim suspects in their custody were self-motivated by visiting the web site of AQAP in Yemen, also known as the Ansar al-Sharia.
5. Muslim fundamentalist organisations in Pakistan and West Asia , including the Jamaat-ud-Dawa, the parent organisation of the Lashkar-e-Toiba (LET), responsible for the 26/11 terrorist strikes in Mumbai, had called for world-wide anti-US protest rallies against the film by Muslims after the Friday prayers on September 14.Media reports indicate that there was some response to this call in Jammu & Kashmir. Surprisingly and disquietingly, some Muslims of Chennai appear to have responded to this call after the Friday prayers in a local mosque.
6. To quote from the report carried by "The Hindu" on the protest rally in Chennai: " A protest against controversial American film Innocence of Muslims turned violent on Friday when the US Consulate-General on Anna Salai here was attacked by hundreds of protesters who breached police security cordon with ease.A crowd of 1500 people from the Tamil Nadu Muslim MunnetraKazhagam (TNMMK) and a few other Muslim outfits targeted the mission. They pelted it with stones, burnt the American flag and pictures of President Barack Obama and damaged CCTV cameras, a police booth and instructions boards for visitors…. A large group raising anti-US slogans marched from outside New College in Royapettah towards the Consulate. Consulate security personnel shut the doors to bar their entry.Iron railings and paintings on the building's compound wall were ruined.A small group tried to scale the Consulate's wall on Cathedral Road and damaged the doors and glass panels of the security chamber."
7. "The Hindu" has further reported as follows: " The State Intelligence had communicated a specific input on the possibility of an attack on the US Consulate in Chennai. However, the attack on the Consulate caught the police unawares as it was planned and well-organised with the protesters deviating from the original route to reach the target and having come armed with stones. Preliminary investigation revealed that a sizeable number of protesters came from the Tambaram side to join the main group of TMMK agitators. After burning a couple of US flags, they ran towards the Consulate raising slogans and stoned the building. They were joined by a few more youths from the Thousand Lights area."
8. The details of what happened in Chennai disturbingly resemble what happened in the Azad Maidan in Mumbai last month and what took place in Benghazi on September 11.While a large number of Muslims were peacefully demonstrating or holding a meeting, small groups of violent Muslim youth entered the scene and tried to indulge in violence.While in Mumbai and Chennai, the Muslim youth who indulged in violence were armed only with stones, in Benghazi they carried rifles and rocket-propelled grenades resulting in fatalities.
9. South India has had a history of Islamic radicalism. A founding father of the Students' Islamic Movement of India (SIMI) was from Kerala.During the 1990s, a jihadi terrorist organisation called Al Umma was very active in Tamil Nadu and Kerala. It carried out a number of acts of terrorism in Tamil Nadu, including the serial blasts in Coimbatore in February,1998, coinciding with a visit of ShriL.K.Advani, the BJP leader, to that town.The Tamil Nadu Police managed to arrest the leaders of the organisation and prosecute them.It has become dormant as a terrorist organisation, but it is believed that some of those presently associated with the TNMMK were originally associated with Al Umma when it was active.
10. Ten years ago, the Tamil Nadu Police discovered an attempt by a Saudi Arabia based cadre of the Lashkar-e-Toiba (LET) to float a new jihadiorganisation in Tamil Nadu called the Muslim Self-Defence Force.It did not make much progress. It was reported that the investigations made by the Police in North India brought out that at least one training/motivational camp of the Indian Mujahideen was held in Kerala.
11. After the recent anti-Muslim violence in the Rakhine State of Myanmar and our Assam, an organisation based in Hyderabad , Andhra Pradesh, came to notice for disseminating exaggerated accounts of the violence with the help of morphed images. The recent exodus of a large number of our citizens from the North-East working and living in Bengaluru, Chennai and Hyderabad followed dissemination of motivated rumours warning of retaliatory attacks on people from the North-East. The people and cells behind this conspiracy have not yet been identified, arrested and prosecuted.And then, we had the arrest of 18 Muslim suspects with ideological vibrations for AQAP of Yemen.
12. The chain of developments outlined above indicate a web of Islamic radicalism in the South the full ramifications of which seem to have defied detection by the police and the central intelligence agencies. The well-organised and ugly protests outside the US Consulate in Chennai draw attention to the need to unravel and neutralise this web before it gets out of control and embarks on a path of AQAP style jihadi terrorism.( 15-9-12)
(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai, and Associate of the Chennai Centre For China Studies. E-mail: seventyone2@gmail.com Twitter @SORBONNE75)
B.RAMAN
The three important economic decisions taken by the Government of Prime Minister Dr.Manmohan Singh on September 13 and 14,2012, are not going to herald an economic miracle for tomorrow.
2. These decisions relate to a significant increase in the price of diesel and permitting foreign direct investment in the civil aviation and retail sectors.The decision on civil aviation was expected by the political class as whole, but that relating to the retail sector was not. The Government's earlier attempt some months ago to permit FDI in the retail sector had to be given up due to strong opposition from some constituents of the ruling coalition as well as from the opposition BJP.
3. Despite the persisting slide-down in the economy, the Government of Dr.Manmohan Singh was avoiding taking these important decisions till now due to fears of adverse political consequences.Such adverse consequences might have been in the form of a break-up of the ruling coalition and consequent mid-term polls.
4. Another reason for the earlier hesitation of Dr.Manmohan Singh was the lack of enthusiasm for the proposal to permit FDI in the retail sector and to increase the diesel price from ShriA.K.Antony, the Defence Minister, who is perceived to be close to Mrs.Sonia Gandhi and enjoys her total political support despite his lack-lustre performance as the Defence Minister.The strong backing reportedly enjoyed by him from Mrs.SoniaGandhi came in the way of the Prime Minister overruling him.
5. ShriPranab Mukherjee, former Finance Minister, had little access to Mrs.Sonia Gandhi and did not enjoy her confidence.He was, therefore, not in a position to impart strength to Dr.Manmohn Singh in overcoming Shri Antony's foot-dragging on important issues of economic reforms.
6. The induction of Sri P.Chidambaram, who is believed to enjoy the confidence of Mrs.Sonia Gandhi to the same extent as Shri Antony, has given new confidence to the Prime Minister that he might be able to push ahead with at least some of the economic reforms because Shri Chidambaram shares the Prime Minister's views on the urgent need for some economic decisions, even if they be controversial, and his views will carry conviction to Mrs.Sonia Gandhi.
7.The immediate significance of the three economic decisions taken are more political than economic. Firstly, the negative drag that Shri Antony used to exercise with the backing of Mrs.Sonia Gandhi has now been neutralised by Shri Chidambaram.
8.Secondly,the Government and the Congress have realised that the impression of policy and governmental paralysis was not only adding to the negative drag on the economy, but was also creating a very poor image of the Government and the party in India and abroad. The "Washington Post's" negative projection of a worse-than-Hamlet Prime Minister has given a healthy shake-up to the Government.
9. The Government can afford to ignore the negative assessment of the "Time" magazine which is often prejudiced against India. Moreover, "Time" does not enjoy the same attention and respect in international financial circles as the WP does. The WP's assessment cannot be dismissed lightly as of no consequence.
10.Thirdly, as a result of the shake-up, the Government and the Congress decided to re-launch the stalling economic reforms even if there are negative political consequences. The Government has decided that the fear of a mid-term poll should not be allowed to stand in the way of important policy decisions relating to the economy.
11. Taking the important decisions is only the first step. Going ahead with their implementation despite the demand for a roll-back from coalition allies will be a more important second step.Even in the past, the Government had announced bold decisions, but subsequently abandoned or diluted them because of the threats and demands from the coalition partners.When there is a surge of such threats and demands, the Congress party tries to exercise pressure on the Government to roll back.When faced with mounting pressure from the party, Mrs.Sonia Gandhi had in the past shown a tendency to succumb to it.If she and her Party do it again and pressure the Government to roll back, the resulting loss of face for the Government and the Party could have incalculable consequencesfor the economy and for the political fortunes of the Congress.
12. There is a lot of unwarranted euphoria on the likely economic impact of the decisions, particularly those relating to the FDI.It will take at least five years or more for the beneficial economic impact to be felt. There is unlikely to be any poll dividends for the Congress as a result of these decisions.
13.These decisions are required to reverse the economic slide-down in the medium and long-terms. The Government should show a determination to implement them in the national interest even if the political consequences for the Congress may not be beneficial.( 15-9-12)
(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai, and Associate of the Chennai Centre For China Studies. E-mail: seventyone2@gmail.com Twitter @SORBONNE75)
Citigroup's Chuck Prince will likely join Irving Fisher in the annals of market history for his now infamous "As long as the music is playing, you've got to get up and dance." Unlike Fisher's quote, however, which affirmed a permanent plateau of prosperity in 1929, Prince's faux pas may have been interpreted unfairly. History books will never record the context under which his statement was made, but what if instead of subprime-specific, Mr. Prince was referring to his job as a banker? What if he had rephrased his response to "It's the job of a banker to keep on lending"? Well now, that would be a different story altogether. Today, that quote would earn him a Medal of Freedom from President Obama at a White House gala! And so I suggest in this instance we don't take him at his literal word, but take him at his role as an ex-CEO of one of the world's largest banks and see just where that takes the lot of us – sovereign, institutional and individual investors who in combination comprise what we now call our global financial system – all $150 trillion or so of it.
Too much debt
Credit, of course, is what makes the global economy go. We wouldn't have gotten very far over the past several centuries despite Edison, Bell and Steve Jobs if barter was the accepted form of commerce. Even cash, serving as a medium of exchange and a disreputable store of value could not have promoted 3–4% real GDP growth in this gargantuan economy unless borrowers and savers were willing to exchange future promises – to utilize credit. Wimpy – in my oft-cited cartoon – said it best, "I'll gladly pay you Tuesday for a hamburger today." So McDonald's grew from a million to 500 billion served and Wimpy and his wimpalikes were delighted in the exchange, although their arteries and midsections inevitably came out a loser. Still, the point is that our modern financial system, levered and fragile as it is, has been a beneficial and productive component of prosperity. If it were otherwise, our global economy would resemble something out of the dark ages in the early 20th century. High fives, then, for the Princemeister and his alter ego Mr. Wimpy – they have made a great combo-platter. But in order to promote and indeed foster continuing symbiosis, both borrower and lender need to operate in a nutrient-rich environment, a "credit" petri dish of sorts which fosters strong bones and healthy lenders and borrowers in their adult years. That unfortunately does not seem to be the case.
Wimpy's weight-challenged midsection is an obvious testament to the overleveraged condition of today's globalborrowers. Too much debt leads to forced diets and delevering, a process which has been ongoing since Lehman 2008. Not only households, but financial institutions as well as many countries have reduced their caloric intake which in turn has promoted slow growth and in some countries near recession and/or depression. Borrowers are just not in a healthy place and if history is our guide, their restoration may be almost Biblical in terms of timing: seven years of fat followed by seven years of lean – perhaps even longer.
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