What did the currency reform intend to do?

Countering terrorism, counterfeit currency, unaccounted wealth, unaccounted income…?

Anupam Manur and I have a brief analysis of what the currency reform (popularly, and inaccurately, known as demonetisation) might have been intended to do, in the eight following slides.

India's Currency Reform 2016 from The Takshashila Institution Click on the slide to enlarge.

ISI’s change of course and other stories

Pakistan’s military-jihadi complex will need more then the prospect of diplomatic isolation to change its policies.

Cyril Almeida’s report reads too good to be true.

Facing international isolation—read lack of support from the United States and even China—Pakistan’s civilian leaders confronted the ISI chiefand got him to permit action against the Lashkar-e-Taiba and the Jaish-e-Mohammed, and their respective leaders. Not only did they say this to the general’s face, but even more surprisingly, the general tacitly consented to law enforcement action against the groups. That’s not all, he agreed to visit every province, meet the local political, military and ISI leaders there, and persuade them to change course.

The appropriate reaction to this report is: yes, and teenage hippos rollerblade.

Yet, the fact that such a report made it to the press is interesting. Taken at face value, it does suggest that the strategy of persuading Pakistan’s supporters might be working. [I have argued for this before, on Yahoo! and WSJ]

However, it would be credulous to believe that the Pakistani military establishment has decided to change course merely on account of the prospect of international diplomatic isolation. Rawalpindi & Islamabad are masters are exploiting fissures in the world order to survive and promote their interests, and at a time when there are so many growing fissures in the international system, they shouldn’t find it hard to do so. The isolation explanation, by itself, is not convincing enough.

What is more likely is that the military establishment is playing for time ahead of a leadership transition as Gen Raheel Sharif retires next month. All his potential successors need all potential allies within the political system, and at this time, it is unlikely that any of them would want to antagonise their nominal political leaders. Gen Raheel himself might calculate that he needs friends to ensure that he enjoys his retired life.

Ergo, Mr Almeida’s report should not rouse great hopes in India. In any case, what matters are results on the ground; not official statements or unofficials leaks to the media. Worse, if the Pakistani army wishes to retalitate to an Indian surgical strike (that it says did not happen) with a similar strike of its own, for the sake of pyschological parity, then a report like this is just the kind of thing to leak.

What to make of India’s surgical strike?

India’s punitive strike across the Line of Control could set a new norm

Whatever might be the consequences, it is clear that the Indian Army’s operation across the Line of Control in retaliation to a militant attack on its Uri camp is a landmark development. Now, it is common knowledge that both the Indian and Pakistani armies cross the LoC for tactical operations, and have been doing so for a long time.

Such operations, usually, have three characteristics: limitations in the depth of incursion, the extent of damage they cause and the level at which they are officially admitted. While we do not have all the details as of now, last night’s operation appears to have been deeper and more damaging. What distinguishes it from other tactical incursions along the LoC is the level at which they have been admitted: perhaps for the first time, New Delhi has officially announced that Indian troops carried out an attack authorised by the highest political authority.

This is significant because it changes the norm to one where India will use military force across its frontiers to respond to aggression by Pakistan’s proxies. Depending on the Pakistani reaction, the act might vindicate the arguments made by some strategists that India does have space for such punitive operations, within the escalation framework. If so, an important Pakistani bluff — that nuclear weapons will shield its terrorist proxies — will be called. [Related: See this detailed analysis of the India-Pakistan conflict escalation framework]

This, however, is only the story so far. The ball now is in Pakistan’s court. If the Pakistani military establishment continues to hold the position that there was no ‘surgical strike’ at all, and just the usual cross-border firing, then New Delhi would have succeeded in setting a new norm. However, if the Pakistani army decides that it cannot let this insult go unpunished, and responds tit-for-tat — operationally and in public posturing — then it will be up to the Modi government whether it wants to up the ante. There are good reasons for either course of action.

The Pakistani army’s initial reaction is what it is, an initial reaction. It could be used to obfuscate matters to cover a retaliatory attack. Or it could be a signal of not wanting to escalate the situation. At this time, therefore, it would be prudent for the Indian government and media to hold off excessive triumphalism.

On Hollande’s mind

Indeed, a closer relationship with New Delhi is vital to France’s continued standing as an important global power in the twenty-first century. It was far sighted on behalf of the French to initiate a strategic partnership with India in 1998. From the Cold War era to recent times, New Delhi has had in France an independent-minded partner unhesitant to buck the Western consensus on defence, space and atomic energy issues. It is for the Modi government to build on that relationship and enlist France as a partner to extend India’s own geopolitical profile.

What the French president might encounter in India

This is the English version of a piece that appeared in BBC Hindi today

When President Francoise Hollande arrives in New Delhi next week as the chief guest on India’s Republic Day celebrations, he will be taking a short, partial break from his two main preoccupations: how to reduce unemployment in France ahead of the 2017 presidential elections and how to ensure that the threat from home-grown Islamist terrorists is contained.

In addition, he will no doubt be concerned about the economic trajectory of the euro zone, the prospects of long-term instability in Syria and the Middle East and, ultimately, of the risks to France’s geopolitical standing in the twenty-first century.

The honour, symbolism and pageantry apart, where does India register in President Hollande’s agenda? The immediate, tangible prize is to bring the long-drawn negotiations over fighter aircraft and nuclear reactors to fruition, which might together be worth $30 billion or more. The devil, as usual, is in the detail, and an agreement might prove elusive until the last minute. These deals matter for Mr Hollande not only because it will help him stay on the right side of politically powerful business interests, but also because they could create thousands of skilled jobs.

Mr Hollande had pledged not to stand for re-election if he “failed on growth, failed on unemployment, failed on the recovery of the country”. So a boost in jobs, investment and growth is important to his own political prospects. Given that unemployment rose to from 9.7% to 10.1% during his term, disproportionately affecting younger people, it is small wonder that he declared an economic emergency earlier this month.

If these important defence and energy deals are what Mr Hollande hopes he can take back with him, he would do well to explore how India is tackling its own employment creation challenges.

In fact, France and India have common problems on this front, in terms of restrictive labour laws, choke-hold by trade unions and a skills gap. Indian businesses like TeamLease Services, Ma Foi Randstad and others have developed experience in creating employment in an environment where there are powerful regulatory and political-economic disincentives for direct hiring. (Disclosure: Manish Sabharwal, co-founder of TeamLease is a donor to my institution). If Mr Hollande were to spend some of his time meeting Mr Modi’s officials dealing with skills and employment generation, he might carry home some good ideas in addition to the good deals.

While France and India share some similarities in the internal security context, the nature of the threat is different: for France it comes from its own citizens disgruntled with its foreign policy; for India it emanates from across its borders. Therefore even if the Paris attacks and 26/11 appeared similar, how they materialised is different. Therefore, while India and France could discuss counter-terrorism cooperation and better share intelligence, there are limitations to the extent they could go.

Similarly, India’s role in assuaging French worries over the Eurozone crisis is limited.

In recent years, France has increased its commitment to the security of the Indian Ocean. By virtue of its possession of islands of La Reunion and Mayotte, and their accompanying vast Exclusive Economic Zones, France considers itself a stakeholder and power in the Indian Ocean. It also has bases in Djibouti and Abu Dhabi that support its military interventions in Africa, the Middle East and Afghanistan. In contrast, its capacity is limited east of the Malacca Straits.

Given that India’s own maritime footprint is significant in the Western Indian Ocean (including a diaspora in La Reunion) there is a degree of strategic contestation between the two powers in this part of the maritime space. On the other hand, shared interests in freedom of navigation indicate a scope for greater collaboration on the Eastern part of the ocean. Both Paris and New Delhi realise that this calls for closer dialogue between the strategic establishments of the two countries and regular exercises between their armed forces.

Indeed, a closer relationship with New Delhi is vital to France’s continued standing as an important global power in the twenty-first century. It was far sighted on behalf of the French to initiate a strategic partnership with India in 1998. From the Cold War era to recent times, New Delhi has had in France an independent-minded partner unhesitant to buck the Western consensus on defence, space and atomic energy issues. It is for the Modi government to build on that relationship and enlist France as a partner to extend India’s own geopolitical profile.

Osama bin Laden, the ISI and the USA

The ISI might have known about bin Laden. What did the United States know?

For the first time, a person close enough to the Pakistani military establishment—and often its unofficial mouthpiece—has suggested that the ISI might have known about Osama bin Laden’s whereabouts, and might have traded him in for US concessions in Afghanistan. Asad Durrani, retired ISI chief and regular television talking-head, said this in an interview to Al Jazeera at Oxford recently.

“I cannot say exactly what happened but my assessment […] was it is quite possible that they [the ISI] did not know but it was more probable that they did. And the idea was that at the right time, his location would be revealed. And the right time would have been, when you can get the necessary quid pro quo – if you have someone like Osama bin Laden, you are not going to simply hand him over to the United States.

He asserted that Bin Laden was, in his opinion, handed over in exchange for an agreement on “how to bring the Afghan problem to an end”. Asked by Hasan whether Bin Laden’s compound was an ISI safe house, Durrani responded:

“If ISI was doing that, than I would say they were doing a good job. And if they revealed his location, they again probably did what was required to be done.” [Al Jazeera PR]

This is exactly what The Acorn had argued in May 2011.

His death also means that the Pakistani military-jihadi complex gave him up. This will allow Barack Obama to declare victory and pull US troops out of Afghanistan and Pakistan. The Pakistani army can then orchestrate an post-US dispensation wherein its proxies first share power with the Karzai regime. And then, sometime in the near future, take over power. [The Osama card has been played]

In an INILive discussion analysing the possibilities around bin Laden’s killing, I had argued that the most likely explanation was that:

The Pakistani military leadership was on board. In fact, they might have given up Osama as it suits their interests at this time. President Obama can declare victory and pull US troops out of Afghanistan. The Americans will have to rely on Pakistan to ensure that the withdrawal is bloodless during an election year in the United States.

This is plausible. Contrary to popular imagination, it might have been done subtly. A gentle lowering of guard around Osama, a little clue here and there, and the US intelligence would catch up…it would only be a matter of time. The US would even believe that they did it on their own.[Bin Laden’s killing and implications for India]

My May 2011 Pax Indica column discussed this in more detail, linking the event to US domestic politics and the cost-benefit calculations of the Pakistani military-jihadi complex. In March 2014, the New York Times magazine published a report by Carlotta Gall, quoting unnamed Pakistani officials as saying that Lt Gen Ahmed Shuja Pasha, the ISI chief in 2011, was in the know.

Now, given his background and connections, Gen Durrani is by no means a Pakistani who is seeking exile in a Western country. His revelations raise an important question: why has the Pakistani military establishment decided to reveal that it (probably) knew about bin Laden all along? There are some indications to the effect that this might be an attempt to pre-empt more explicit revelations about the Pakistani army’s role. Whatever be the case, it is highly unlikely that Gen Durrani’s comments were on-the-fly. There has to be a purpose behind them.

Gen Durrani’s admission raises another question about the Obama administration’s role in the affair. What did the United States know and when?

Counter-posterism tactics

The mindgame of fighting terror

Earlier this week posters appeared in Pattan in Jammu & Kashmir’s Baramulla district, threatening to kill 13 persons for assisting security forces. Here is the poster by a group with a grand sounding title of “Al Mashterqa Lashkar-e-Taiba Hizbul Mujahideen”.

Al Mashterqa Lashkar-e-Taiba Hizbul Mujahideen's Poster

Here’s the Indian Army’s counter-poster.

In the first panel it says “Hey terrorists, why are you fighting these innocent people. Fight with the Army, your fight is with the Army.” In the second it tells the people “Don’t fear these terrorists because the army is with you. Call us for help.”

Now let’s see if the message gets through.

The Red Herring Dealers of Lahore

There’s more to the Mumbai terror alert than meets the eye

Yesterday, reports in the media indicated that a terror alert had been sounded in Mumbai and across many Indian airports: five terrorists of the Lashkar-e-Taiba had entered the country and planned to target petrochemical installations in Mumbai using the sea routes. These reports were similar to those a couple of days earlier, concerning Gujarat, where coastal police tightened watch over offshore islands and the petrochemical complex at Jamnagar.

Reports in today’s Pakistani newspapers reveal that three of the five alleged LeT terrorists are shopkeepers and a security guard from Lahore, who have sought police protection in the light of the Indian terror alert.

It’s easy to dismiss this as a goof-up by Indian intelligence authorities, citing Occam’s & Hanlon’s razors. To do so would be to ignore the little known fact that the Lashkar-e-Taiba has, in the past, used red herrings to befuddle and embarrass India’s intelligence agencies, including during one of the biggest terrorist attacks in recent times. It would also be to ignore the alacrity with which the three gentlemen from Lahore discovered their photographs, sought police protection and, according to one popular website that peddles a ‘nationalist’ line, were to address a press conference. All this within hours of the photographs appearing in the Indian media. Things do happen pretty fast in the internet age, but a mere three six hours to mobilise all this should raise eyebrows. (Gujarat police had put up the photographs across the state as early as May 6th). [See update below]

So what, other than incompetence, are the possibilities?

The first is that real terrorists used fake identities to enter India. If they have entered India, it means they are still around and might use the lowering of guard caused by this episode to strike. Also, the alerts indicated five terrorists. It is important, therefore, for the authorities and the media to treat the threat as ongoing and serious, and not drift into complacency.

Second, this was an information operation designed to embarrass India and the United States, and use it to show that India always makes false accusations against Pakistan. By implication, Hafiz Saeed and Lashkar-e-Taiba were victims of a ‘false flag’ operation by India (and the United States) to implicate Pakistan. The best time for this would have been when Hillary Clinton was on Indian soil. However, by accident, inefficiency or design, the terror alert was sounded after she left the country. In the event the grand expose in Lahore turned out to be a damp squib.

Be that as it may, the myth-making machines of Pakistan will turn this episode into a narrative of how Hafiz Saeed and Lashkar-e-Taiba are unfairly blamed by India and the United States. Even if its for domestic consumption, it’s still an effort that didn’t go waste.

We must, of course, consider the Occam & Hanlon razors. Did India’s intelligence agencies goof up? They could have erred in terms of the existence of the threat, the presence of terrorists and their identities. Each of these is a separate issue. That said, at this stage, we are better off if they raise an alert at the risk of looking red-faced rather than let the fear of embarrassment cause them to less on the ball.

Tailpiece: There’s also a chance that the Indian media put up the wrong pictures. How and why they’d end up publishing photographs of the three gentlemen from Lahore is a mystery.

Update: May 11th, 2012 Praveen Swami & Mohammad Ali report “late on Wednesday, shopkeeper Mahtab Butt said he had on a whim used Google to search for the word ‘India.’ The search led him to an India Today group site. There, he discovered a photo of himself, fellow storeowner Atif Butt and night guard Muhammad Babar, illustrating a story on the alleged Mumbai terror plot. Mr. Butt said he immediately called Pakistani television show host Mubashir Lucman — a controversial figure known for his dogged support of the religious right — with the news…Later that evening though, both Mr. Butt and Mr. Atif Butt provided The Hindu with a quite different version of events. The two men said they had learned of the report from a common friend, whom they identified as Khubaab.”

This increases the likelihood that India’s intelligence agencies were fed misinformation to either divert or embarrass them. We can only speculate the reasons for this. Embarrassing India during Mrs Clinton’s visit is enough of a motive. While it is unlikely that the ISI would wish to escalate tensions with India at a time when Pakistan’s relations with the US are close to breaking down, it would be inappropriate to dismiss the risk of a terrorist attack.

Jayant Choudhry on debating IT rules in parliament

Jayant Choudhry, the Rashtriya Lok Dal MP from Mathura was the only legislator who expressed in the Lok Sabha concerns raised by citizens against the draconian Information Technology Rules (IT Rules) that came into effect this year. (More about what’s wrong with these rules in my DNA op-ed, Sunil Abraham and M R Madhavan in Pragati)

Here’s a discussion with Mr Choudhry on the topic.

Lifting the AFSPA, by the numbers

The case for a step-by-step lifting of AFSPA from Jammu & Kashmir

(My op-ed in the Indian Express)

If war is politics by other means, counter-insurgency is even more so. Since the early 1990s, the national endeavour in Jammu & Kashmir has involved three battles: a military contest to crush jihadi militants by force, a political battle to defeat secessionism and a psychological one to ensure that it is India’s narrative that dominates the discourse.
Ending the insurgency requires us to win all three. One reason why the conflict has continued for so long is that we have not been able to simultaneously attain positions of military, political and psychological dominance. Now, after over two decades we have a chance to try and bring a painful, unfortunate chapter in our history to a close.

Consider. Militancy has dwindled. The Pakistani military-jihadi establishment is entangled in a face-off with the United States over Afghanistan and might not wish to scale up violence on its eastern borders. A few months ago, Jammu & Kashmir successfully conducted panchayat elections which saw record turnouts, putting curmudgeonly separatists to shame. In a year where even New York was not spared of public protests, Kashmir’s cities distinguished themselves by staying out of the news, not least due to Lieutenant General Syed Ata Hasnain’s enlightened approach to security management. Tourists got wind of all this, and more of them turned up in the first three quarters of 2011 than in any year in the last twenty-five.

What has not reduced, however, is the affective divide between those Kashmiris hurt by the consequences of insurgency and the rest of the nation. It is important to start bridging that now. Continuing to neglect this psychological aspect of strategy risks undermining hard-won successes in the military and the political battles.

A careful, judicious and step-by-step revocation of the Armed Powers Special Powers Act (AFSPA) can set off a virtuous cycle that will send a positive signal to the people of the state, strengthen the desirable political forces, put separatists on the backfoot, and take New Delhi a few moral notches higher. Such a move is seen as necessary by Omar Abdullah’s government. It is viewed favourably by many in the UPA.

The defence ministry has opposed it on the grounds that we cannot expect our army to fight with its hands tied behind its back. Other thoughtful analysts have argued that it is better to err on the side of caution and wait a few more years before considering lifting AFSPA. What should we make of these serious objections?

First, it is important to recognise that while the defence ministry’s opinion must be considered with the greatest seriousness, the final decision vests with the Union cabinet. No ministry or arm of government ought to be entitled to a veto. We might already have arrived at the point where further application of military force in populated areas of Kashmir will yield negative returns. Sure, the army must remain deployed along the Line of Control to prevent infiltration and keep a watchful eye on Pakistan, but its visibility in towns and villages where there is no militancy will only deepen resentment.

Second, revoking AFSPA does not mean the army’s hands are tied in the whole state. Rather, the provision can be lifted prudently in surgically chosen geographical areas — which can be smaller than districts — with an explicit caveat that it will be reimposed if violence rises. If the situation holds, the revocation can be extended to the next set of locations. If it gets worse, the Central and state governments can declare the areas disturbed and employ security forces as they do now.

Third, a number of steps have to be taken in tandem to manage the risks of an escalation in violence. The army and the security forces must be employed in a manner such that militants and malefactors cannot treat areas where AFSPA has been lifted as safe havens. State police and intelligence agencies must gear up to contain militant mobilisation and activity in such areas. Politically, the UPA and the Omar Abdullah governments must engage their respective opposition parties meaningfully to achieve a measure of bipartisanship.

So there are risks to making a carefully calibrated move towards the endgame now, but these can be managed. Our policy discourse is ill-served by framing the issue as “AFSPA vs no-AFSPA” and rehashing standard arguments. We would be much better off asking what the Central government, the army and the state government ought to do to ensure that lifting the AFSPA leads to the desired results.

Why not wait and see? Waiting has risks too. If the current window of opportunity closes, the UPA government might find itself with its back to the wall, compelled to revoke the AFSPA as a concession to separatists. Surely Kashmir has taught us that yielding from a position of weakness is a very bad idea.

Copyright © 2011. Indian Express. All Rights Reserved

Fighting terrorism, starting with the easy stuff

Manage grievances, improve social capital, take security seriously and get better ambulances.

This appeared in Saturday’s DNA.

It’s not difficult to set off a bomb blast in Mumbai, or for that matter in any Indian city. It doesn’t require the person to be highly trained, it just requires the person to be motivated enough to want to do it. It doesn’t even need foreign terrorists to use inflatable rafts to land on isolated beaches, or trek across high Himalayan terrain. It just needs local individuals with greed, grievance, or sheer malice to be persuaded to use locally available material — with some help from those who know who to rig up explosives — to plant a bomb or three.

If our cities don’t suffer terrorist attacks more regularly, it is, to some extent, because our much-maligned police forces manage to foil some conspiracies. The main reason might well be that not too many people want to commit terrorist attacks. If they did, we would see terrorist attacks become as common as other acts of serious crime.

Tackling terrorism, therefore, requires us to ensure that terrorism doesn’t become more attractive. The greedy and the malicious can be deterred by raising their costs: if would-be terrorists are exposed, caught and punished, such people might not want to take the risk. Those with grievances can be harder to deter, so we need to ensure that we address them and don’t create new ones. It is impossible to completely erase grievances, but we can manage them. One way to do this is to strengthen social capital. It’s hard to do this in Mumbai, a city given to outpourings of selfless public-spiritedness during crises but abjectly lacking a public ethic otherwise, but it has to be attempted. Mumbai needs to link its social islands together more urgently today than at any time in its history.

We cannot stop a really motivated terrorist, but we can make it hard for him to succeed. Our shopping malls, office buildings, car parks, bus stands and railway stations have installed metal detectors and the like and appointed security personnel to operate them. Let’s be honest: most of the time, it’s just a charade engaged in by both sides. The security people pretend to be checking us, and we play along. How many times have security guards asked to inspect the boot of your car without even bothering about what’s on the back seat?

The places for the rich and powerful — five-star hotels, government buildings and upmarket offices — are veritable fortresses. Most other places at most times just cheat. Yes, it’s not practical for a solitary metal detector to screen a crowd fast enough. That suggests we install more detectors or devise sophisticated methods to screen some people. In any case, the dishonest business of going through the motions has to stop. Do we introspect on our own lack of diligence with a tenth of the energy we use to, quite rightly, blame the government for failing to prevent a bomb blast?

Similarly, does it register in our collective mind that our emergency services are pathetic? After Wednesday’s bomb blasts, bodies and survivors were carried to hospitals in appalling conditions. Why do we have such poor and so few public service ambulances? Is our fire brigade really equipped to handle a city of over 13 million people? Why, do we give way to emergency vehicles while driving everyday? If we cannot prevent diabolical terrorists from trying to kill people indiscriminately, we can certainly try to mitigate the damage. At Thursday’s press conference, reporters asked questions about such things as intelligence failure and what India might do if the plotwere traced back to Pakistan. No one asked why it is that in the richest city of a country with claims to be a global power, survivors had to be bundled in the back of rusty cargo vans to be taken to hospital.

Preventing terror attacks is very tough. Much of it is not in our hands. But making sure we take security procedures seriously is in our hands. So too is insisting that Mumbai have an adequate number of decent ambulances. It’s important to get the simpler things right first.

The author is founder and fellow for geopolitics at the Takshashila Institution and editor of Pragati — The Indian National Interest Review

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