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SOUTH ASIA WEEKLY REPORT
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Vol. V Issue. 38
Maldives: Airport row can put off other investors too
N Sathiya Moorthy
21 September 2012

Analysis

The sudden and inexplicable way in which an 'investor-row' involving the Indian infrastructure group, GMR, is getting a new twist in recent days in Maldives, if unchecked, has the potential to rock the bilateral relations. Coming just days after the successful visit of Indian Defence Minister A K Antony to the atoll-nation, the demands for the 'nationalisation' of the Ibrahim Nasir International Airport (INIA) in Male has left a bad taste. The larger questions, however, concern the internal political dynamics of Maldives, whose emerging international economic image could impact on the investment-climate, when the nation can ill-afford any reversal in FDI inflows.

It was Antony's second visit to Maldives in three years as Defence Minister, and he was also the only one from another nation holding the post to have visited Maldives in recent history, thus. It was also the first visit by an Indian Minister after the regime-change in Male in February this year. Going by the joint statement issued on the occasion, the visit and the discussions reportedly were productive for both sides, indicating a greater level of security cooperation between the two South Asian neighbours. Among others, India has promised a new Defence Ministry building, an additional helicopter for the fledgling air arm of the Maldivian National Defence Force (MNDF) and naval personnel to help with the maintenance of the Maldivian fleet.

Minister Antony used the occasion to inaugurate the India-aided military hospital in Male with expert personnel on hand, and also laid the foundation for a police training school. There is an acknowledged need for greater professionalisation of the Maldivian security forces. It has become necessary in the light of the events of the past years and more, when it became clear that the bifurcation of what once used to be known as the National Security Service (NSS) has not served the purpose. In a fledgling multi-party democracy, the uniformed forces came to a burden to transition even after electoral changes had effected a quiet political transition three years ago.

Maldives also wants military hospitals in the atolls, which could then be thrown open for serving the common man in the remote islands. Given the increasing levels of bilateral security cooperation between the two countries, New Delhi will also be posting a Defence Attache at the Indian High Commission in Male. At present, the Indian Defence Attache at Colombo, Sri Lanka, is also in charge of India's specific security interests in Maldives.

Increasing relevance of sea-lines

The Indian initiatives come in the wake of the bilateral, bi-annual Dhosti-XI Coast Guard exercises that were put in place after the coup bid in 1988, which was aborted after India rushed immediate military help. This year's edition of the exercises also involved neighbouring Sri Lanka, considering that all three nations face shared threats to peace and tranquillity of their shared Indian Ocean waters. Indications were that extra-territorial nations had shown an interest in these maritime exercises, which were promptly kept out, given the immediacy and relevance of the issues, like 'Somali piracy' in the shared neighbourhood.

The realisation in India and Maldives for increased offshore military cooperation flows from the increasing relevance of the Indian Ocean sea-lines to the overall geo-strategic concerns of the global community, starting with 'energy security'. It has been equally reflected in on-shore policy and decision-making in New Delhi, which used to be reciprocated in more than a full measure in Male over the past decades. In recent times, however, the non-security centric Indian interests and concerns in Maldives have seen enough ups and downs, threatening to unsettle the process, time and again.

This has often resulted in the Governments and policy-makers of the two countries having to start clearing the mess already generated before they could start off on something new. This has had the potential to put the clock back on bilateral cooperation. The delays often get attributed to India, particularly the institutionalised democratic decision-making processes inherent to the Westminster model of parliamentary democracy. Oftentimes, the reverse may be true. The current criticism and opposition to the INIA project, coming as it does from most partners in the Government of President Mohammed Waheed, is only the latest in the series, but it also has the potential to rock the boat more violently than in the past, for a variety of reasons.

One agreement, multiple crises

All this does not mean that the Government, polity and people of Maldives may not have reservations about the 'INIA agreement', which essentially is a lease deed with elements of large-scale investments for modernisation, thrown in, for the tourism-driven economy to upgrade the Male airport to international standards. Some of the issues being flagged two years after the signing of the agreement - and after substantial progress has been made on the ground -- are factors the likes of which are involved in any private sector investment in any country. It would be more so when those investments are of overseas origin. Maldivian political parties that were opposed to the airport contract, when signed, are in power at present. If nothing else, their constituencies would expect them to review the policy that they had derided when in the Opposition.

In the Indian context, the 'civilian nuclear deal' with the US, and the on-going Opposition protests against the sanctioning of 'FDI in retail trade', can be parallels. If any or many of them is/are to return to power on a future date, the political Opposition in the country would be called upon to revisit their positions on such issues. Either they accept the ground realities as they existed at that time, or revise the Government policy on issues of the kind. These are different from other charges of corruption, for these ones do not involve any complaints of fiscal wrong-doing or loss to the Government, per se.

Unlike in India, on the airport deal in Maldives, policy issues, allegations of procedural violations, possibilities of other wrong-doing and loss to the Government have all been aired already. Some of them, like the charge that the previous Government had circumvented constitutional mandates and legal provisions in the process, or had not acted with care on the prioritisation of contractual conditions and obligations all relate to the domestic front. What they may have to deal with the foreign investor, India's GMR in this case, are something flowing from the former, but are also independent of the same.

The current phase of the protests owe to President Waheed Hassan's letter to all parties participating in his Government for their views on the matter, for the Government to put the inherited problem in the backburner to the mutual satisfaction of all stake-holders. At the end of the day, the airport deal is huge and unprecedented in procedural and financial terms for the country. There is also a need to evolve national consensus on issues and procedures in particular if a successor government has to uphold the national commitments made by a predecessor.

It should in context involve the Opposition Maldivian Democratic Party (MDP) of predecessor President Mohammed Nasheed at some stage, if 'consensus-building' has to make sense to the domestic constituencies and means commitment for the investor company from overseas, from whichever part of the world they come from. It was in the absence of such a consensus when the Nasheed Government cleared the deal that the entire issue has been raked up all over again by a successor-Government. 'Due diligence' became a possibly casualty to political expediency, all round.

The result is that the same agreement has come to be played out politically for a second time in as many years. Earlier, when the agreement was ready for signing, it brought together the divided Opposition parties on the same firing-line against the Government. They cited various violations of laws and procedures. The after-thought of a parliamentary legislation, directing prior legislative clearance for 'transfer of national assets' to private parties, led to the Government of the day crying foul, and all 13 nominated members of the Cabinet quitting in haste.

Today, when all those parties are in Government together, the revival of the issue has threatened the Government. One of the Government partners, namely, the Dhivehi Rayaththunge Party (DRP) has argued that the Government would not have the kind of moneys required to pay back the contractor if the deal was rescinded. A few others have called for the 'nationalisation' of the airport while some have described it more clearly and carefully as 'taking it back'. In the process, attributing motives to the DRP leadership and the questioning of their 'nationalism' have begun threatening the stability of the Government.

That the inherent differences within the ruling coalition cannot but come out in the open once the common adversary in President Nasheed and his MDP had been neutralised was known even to a casual observer of coalition politics the world over. It is written into any coalition arrangement. In Maldives, it reflects a perception of lessening political challenge posed by the MDP, among the partners in the ruling alliance. Such perceptions and decisions based on such perceptions can come to trouble the alliance, just as a perception of a 'social alliance' that the MDP thought it had at its disposal when in power failed the party when and where it mattered.

Not different from tourism FDI

This is not the first time that Maldives is faced with policy issues pertaining to overseas' investments. FDI has been at the centre of the resorts-driven tourism industry, which in turn continues to be the backbone of Maldivian economy over the past decades. The country is yet to find a substitute or a supplementary to the same. So dependent has the economy been on tourism that every global meltdown and every tsunami-like natural catastrophe has upset the Maldivian apple-cart, thankfully to revive in good time and through innovative approaches.

Yet, when the tourism economy evolved, the policy involved long-term lease of individual islands/islets for the foreign investor to build his resort, market it mostly to foreigners, and also repatriate his profits in dollars, and without going through the Maldivian banking system. There were no tabs or restrictions other than the payment of 'bed tax' on a pro rata basis to the Maldivian Government. The policy has paid very rich dividends to the economy of Maldives, changed the face of the country and has inspired individual Maldivians to aspire for more.

The evolution and implementation of the nation's tourism policy owed mainly to the presence of a strong and single leadership at the helm through those formative years of what should be acclaimed as the modern, Maldivian economic success story. President Maumoon Abdul Gayoom's three-decade long rule also helped reach out modern education and healthcare across the atolls, but through the State system. The Gayoom regime adopted a combination of divergent economic policies that benefited the nation on the fiscal front and the people on the socio-economic front.

Through the Gayoom initiative, an imaginative mix of overboard globalisation in the South Asian region of the times at the level of revenue-generation and the socialistic pattern of distribution of the nation's income made wonders. Neighbouring Sri Lanka was the closest (in terms of geography) and immediate (chronologically) neighbour to experiment with market capitalism. Yet, close to 35 years down the line, the results of the combination are mixed at best in Sri Lanka. In Maldives, however, it has been an unqualified success.

Under the Maldivian scheme, tourism industry, structured as a policy and product of the norms of market economy generated funds for the Government to take the benefits of education and healthcare to the largest, yet, dispersed sections of a dis-spirited society. The benefits in terms of national growth and individual's development have all occurred in front of the present-day generation, and they have relished and cherished them, too. It is the model that could be said to have been applied to the airport modernisation lease contract, too, though on details of procedure and benefits, there could be differences, both of concepts and of consequent opinions.

In a limited way at least, the airport development and long-lease of the existing reconstruction and accompanying reimbursement of the investment should thus be seen as an extension of the previous policy that the Nasheed Government had inherited and explored for further exploitation for the medium and long-term benefits of the people at large. On a related issue, of course, the Nasheed Government may have departed from the set norms and practices that did rise the hackles then as now. Included in the list was the decision to grant resort licenses in 'inhabited islands', interfering with local culture and also the Islamic tenets against sale and consumption of liquor.

'Nationalism' and 'nationalism'

It is in this context a closer look needs to be given to the demands for the 'nationalisation' of the airport. For starters, INIA continues to be owned by the Maldivian State and Government, the GMR has been given only a long lease of the same. To demand 'nationalisation' would thus be a travesty of the truth, and challenges the nation's inherent and inalienable right - which anyway has not been alienated. In a nation where the State owns all the land, such a construct could also hit at (though not at all in the legal sense) later claims for a return of the property to the State when due. If nothing else, it could create a mood of resignation, not just of reservation if only over decades, which in turn is at the heart of the current protests, instead.

GMR at no point in time is known to have demanded ownership of the airport, to begin with. It is thus clear that the State cannot nationalise what it already owns, and continues to own. Worse still, given the traditional meaning attaching to a terminology like 'nationalisation', street-demands for the same in the context of INIA could sent jitters down the spines of all those who have already invested hugely on the resort-islands, benefitting all stake-holders in the process.

Unless otherwise proscribed, what may apply to other lessees of islands should apply to whichever lessee of the airport islands, be - as long as it is for development against the payment of lease money and on prescribed conditions for a fixed period of time. The reverse should also be true the same way - what is sought to be applicable to the single largest investor in the nation's history could be applied to lesser mortals without anyone being wiser of any unforeseeable situation when an agreement is signed or a situation is created, later.

It is not unlikely that there may still be a need for the Maldivian Government to revisit the lease-policies as a whole and applying the yardstick to the GMR deal too. Whether such changes could be specific to a particular project or agreement, or can have retrospective effect is a question that needs to be agitated in the context of the individuality or otherwise of individual agreements involved. However, responsibility needs to be restored to the national dialogue and clarity evolved through a consensus process, lest any foreign investor - existing one or a future one - would have doubts of his own on entry-exit terms and timelines.

Product of sweat and toil

All this does not preclude the present-day sentiments attaching to what has since been rechristened as INIA in the living generation of middle-aged Maldivians and above, particularly so those in Male. The airport was a product of their sweat and toil, and literally so. As students and youth in their growing-up years, they had contributed physical labour and whatever a poor nation could afford for the up-gradation of the airport in the mid-Seventies. Both sentimentally and politically, it had contributed in some ways to the Independence of the Maldivian Protectorate from the British 'Protector'. The airport is thus of a sentimental value to many grown-up in the country.

All this should not mean that the 'sovereignty' of the Maldivian State and the security of its territory should be reduced to be identified with the airport near-exclusively in parlour discussions, if not national discourses. If the argument is that the INIA is a tool for defending the sovereignty of the nation and its territorial integrity, there are other, smaller airports across the country, including those for the dozens of hovercraft dotting the lower skies, which are all vehicles of economic growth, not military-threat. So has been INIA, barring the one occasion, when the Indian Air Force (IAF) was called upon to defend the airport and the nation through it, from marauding mercenaries in 1988.

Yet in the new millennium for those who made the airport possible in the first place, and their younger generation to confuse 'nationalism' with 'sovereignty', raising arguments based on such perceptions would not help the nation, after a point. The spirit and phraseology are not inter-changeable, nor can they be inter-mingled in legal and commercial terms, either. Arguments thus based on non-existent linkages could make for good politics, but would not contribute to good policy. They have to be separated and addressed as individual aspects - but addressed they should be.

Despite a further expansion and growth of resort-tourism in the country, the limitations for the future are being systematically exposed. Maldives does not have answers to the ever-increasing demands on the economy, whose expansionist pace is slowly coming to a grinding halt. With no scope for unlimited advent of manufacturing or even the services sector, as a money-spinner and/or forex-earner, the country would have to look at infrastructure as a source for attracting investments and creating the kind of jobs that the average Maldivian youth will be happy with, and paid for, too, in full measure.

Reviewing investment policy is one thing, but revisiting an individual contract is another. The twine shall not meet - and the nation cannot afford it, if allowed to drag on or hang out, either. The alternative should be to learn from the mistakes, if any, and apply correctives, where possible, to the issues on hand - and also in revisiting the policy for the future. That should help - and that alone would help.

Profitability, vulnerability

It is in this context investments from across the world have to be assessed for their overall profitability for the Maldivian people and economy, and the relative vulnerability that such arrangements could throw the nation into. In the current phase of the expansion of the Maldivian economy and growth, small-time investments in international/regional relevance would not suffice, as used to be the case for the funds requiring for putting up a resort or two. Either foreign governments or international agencies will have to put in the money, which will be in the form of repayable credit, even if at a low rate of interest and over the long term.

The alternative, which comes without any political or fiscal tag, over the medium and the long-term, is to encourage FDI, particularly in the infrastructure sector, where the foreign investors' perceived propensity for political mischief over time would be minimal, as against their investments in the stock market, for instance. There are no repayment-tags attaching to such investments, but for the licensed fees, which however have to be negotiated with care and foresight.

Over time, the experiences of other nations have shown that investor-nations have often used their investments and repayments to muscle their political way in the host-nation, through the short, medium and long-terms. In their case, the repayment terms and schedules hang over the nations' head like the Damocles' Sword. Against this, overseas-investor has often been seen as a friend and advocate of the host-nation in his native land, in political, economic and security terms. The lessor-nation does not have to repay him with interest, with profligacy and bad-planning in the interim adding to the fiscal and economic vows of Governments as mightier nations have been over the past years.

In its place, a carefully-negotiated lease agreement provides for his recouping his investment-cost with interest over in a calibrated time-period. What may thus be required at the moment is re-negotiation of the INIA agreement on the one hand, and the need for the Maldivian Government and Legislature to fix certain loopholes that they might have found in their existing policies and procedures, possibly with the view to evolving a consensus approach, which had eluded the nation on this score in the past. Therein may lie the solution now to the Maldivian airport row, too - not elsewhere or otherwise!
(The writer is a Senior Fellow at Observer Research Foundation)

Myanmar: Concerned about territorial integrity?

Sripathi Narayanan
For the better part of this year (2012), Myanmar has been making international headlines for reasons that are either trivial or those that have been trivialised. In this context, the focus on this nation has been limited to a few broad issues that can be collectively clubbed as the moral values of the comity of nations. However, a closer look at the domestic issues and developments of Myanmar could hold the secret to what's in store for the future, going beyond the rhetoric.

For a start, Myanmar has been viewed from a narrow prism of democracy, human rights and a military junta. These are indeed issues that are of importance for the international community and are a cause of concern for any Sate. However, in the Myanmarese context, these issues take a back seat, not because the regime in power can care less but their priorities are different.

The primary issue that is a concern of the Nay Pyi Daw is the territorial integrity of the nation -- not in terms of external aggression but from the possibility of an internal collapse. It is on this issue that Myanmar has been focussing all these years. Even the evolution of the current administration structure has been based on the same.

Thus the on-going democratic reforms in some sense could be sceptically viewed -- not as a process of change or reformation but as a means of adaptation to the times. This can be quite evidently understood from the changes that have been taking place in what is otherwise a closed nation for the past two decades and a half. The marker for this can be attributed to the '8888 Uprising' in 1988. It was the '8888 Uprising' that paved the way for the fateful elections of 1990 that was accompanied by two decades of repression.

At the same time, this political activism was also accompanied by a change of guard within the regime. Gen Saw Maung eased his way into power by deposing the 'old man', Gen Nu Win. However, he had to make way for Gen Than Shwe. It is also to be noted that Than Shwe's prodigy is the current-day reformist - namely, the former Army man, President Theine Sein. Despite these changes within the corridors of power, Myanmar as a nation did ensure that the system through all its cosmetic changes has survived the pressures of the times. Thus the on-going reforms that have been unveiled at breakneck pace could be in continuance of the past practices.

It is on this note that the international community would have to revisit and revise their policies towards what once used to be known as the 'bread basket of Asia'. Myanmar, despite all the romantic struggle and conflict-ridden image, is a nation that is closed and reserved when it comes to its engagement with the outside world. At the same time, the power-structure that exists now is grounded on a strong foundation provided by the Tatmadaw (Army).

Thus the unfocused attention that has been paid to Daw Aung San Suu Kyi in ways that can be accepted by the civilised world could become the undoing of reforms after a point. The reception that Suu Kyi received during her first international visit in over two decades to Thailand in June this year was not to the liking of Pyi Daw. President Theine Shew rescheduled his official visit to Thailand, stating other reasons but not the obvious. However the Suu Kyi's whirlwind tour of Europe was different, since both the State and the icon of democracy understood the tricks of the game, called international relations and media management.

The facilitation that she has received in the capitals of the world is indeed a testimony to the democratic struggle of the people of Myanmar. Nevertheless this should not derail or cloud the image and opinion of the world towards Myanmar. Aung San Suu Kyi's might be the embodiment of the democratic changes that have been initiated in the nation. She however does not as yet represent the image of true change that goes beyond immediate democracy, to include plurality and socio-economic upliftment. In this regard, President Thien Shew, instead, carries the torch of enlightenment and political transformation.

Aung San Suu Kyi is an icon of democracy and non-violent political struggle in the 21st century, but it is time for her to bury her image of a 'Mahatma' and take the reins of active politics with all its perks and ills, as a neta, or leader (both terms are in Hindi). Among other things, the changing Myanmar would have to address the ethnic question and associated culture of militancy. This would demand an experienced politician with a feel for ground realities and touch of administrative confidence, if not outright excellence. A political icon can capture the imagination of the western world, and that of supporters and one-time sufferers nearer home. Suu Kyi has the potential to administer from the back, just as she has displayed the qualities to lead from the front. She however has to get and take the opportunities when they come their way, and hone their skills as she and the nation proceeds along the path of multi-party democracy and people-sensitive administration.

The big question is, will Suu Kyi fit into the uniform of Gen Aung San and lead the nation as acceptable to those in Myanmar (the people, the ethnicities and the Tatmadaw), or will she fritter away her initial successes. The present-day decorations like the Nobel Peace Prize and the US Congressional Gold Medal are her past contributions to democracy. Her future rewards would have come from the Myanmarese people, who would from now on be called upon to judge her leadership by performance at the helm. It would be more so, if and when she is elected to power, as recent election results have indicated - and from which her leadership has to draw inspiration for leading the nation and the people.

(The writer is a Research Assistant at Observer Research Foundation)

Country Reports

Myanmar

Suu Kyi in US

Myanmar's democracy leader Aung San Suu Kyi is on a 20-day trip of the US. On September 19 she was awarded the US Congressional Gold Medal at a ceremony in the Capitol.

US Secretary of State Hillary Clinton, Sen. John McCain, former first lady Laura Bush, Sen Mitch McConnell, House Speaker John Boehner and Senate Majority Leader Harry Reid among others praised Suu Kyi for her iconic contributions to Myanmar's democracy movement. She also called on President Barack Obama at the Oval Office, which is normally reserved for visiting Presidents and Prime Ministers.

Simultaneously, the US lifted the travel sanctions on Myanmar President Thein Sein and Parliament Speaker Thura Shwe Mann. As individuals, both were on the US Treasury's list of 'specially-designated nationals', mentioned thus for links to terrorism, narcotics or other illegal activities.

Source: worldnews.nbcnews.com, September 19, 2012; channelnewsasia.com, September 20, 2012

Amnesty for 500 prisoners

In a general amnesty, the Government has freed 500 prisoners on "humanitarian" grounds. The State Television news reported that President Thein Sein has given amnesty for a total of 514 prisoners. The report said that the released individuals included "foreign prisoners from the prisons around the country".

This list includes 60 political prisoners, including a member of the National League for Democracy (NLD). However according to the party, there are about 300 political prisoners still under detention.

Source: channelnewsasia.com, September 17 and 18, 2012

Satellite with Japan's help

Myanmar is looking at the possibility of launching a small earth-observation satellite with Japan's Marubeni Aerospace Corp. has been conducting a feasibility study for the Myanmar government on satellite launch

Myanmar's Minister for Transport Nyan Tun Aung met with a regional representative of the Marubeni Corp, and plans to prepare to hold a workshop on the same lines in the second week of October.

Source: straitstimes.com, September 13, 2012

Nepal

Parties agree to go for polls

The major political parties have decided to go for fresh Constituent Assembly (CA) elections. This has ended nearly four months of confusion that began after the unilateral dissolution of the CA by the Baburam Bhattarai-led Government on May 27.

The United CPN (Maoist), Nepali Congress (NC), CPN-UML and United Madhesi Democratic Front (UDMF) -- an alliance of four Madhes-based parties -- at a meeting ruled out the possibility of reviving the CA as they failed to resolve contentious issues relating to federal provinces.

The chapter is now closed on CA revival and the formation of a national consensus government for holding the elections will be the second step to move ahead.

However, the election date is yet to be decided. The Election Commission has ruled out the possibility of holding polls on November 22, the date suggested by Baburam Government. In all likelihood, the polls can be held only in April next year at the earliest.

Meanwhile, the CPN-Maoist party, led by Mohan Baidya, has criticised the decision to go for polls. The CPM-Maoist leaders have said that only round table talks and formation of consensus government are the best options to forge consensus on disputed issues.

Source: myrepublica.com, ekantipur.com, September 19-21, 2012

Investment down by 7 pc

Deepening political uncertainty compounded by persisting labour problems have dragged down new investments in the industrial sector by almost seven per cent during the fiscal year 2011/12 compared to last year.

Crucial sectors such as tourism, services, energy and agro-based industries suffered the decline in new commitment for investments. Statistics reveal that the total new investment, including foreign and domestic, was just Nepali Rs 84.42 billion during this fiscal year.

New investment in the energy-based industries dropped by around 18 per cent to Nepali Rs 55.01 billion during the fiscal year 2011/12 compared to a year earlier. Similarly, the fall was around 19 per cent in service sector to Rs 9.59 billion and farm-based industries also suffered a loss of an alarming 69 per cent.

On the back of slowing investment, the government is trying to get the new Special Economic Zone (SEZs) bill, Industrial Enterprises Act (IEA), Foreign Direct Investment and One Window Policy endorsed to lure more investment from foreign as well as domestic investors.

Source: myrepublica.com, September 20. 2012

Flood displaces 600 families

More than 600 families have been displaced due to floods in different rivers in Kanchanpur district following continuous downpour for four days beginning September 18. The floods also swept away rice crop and maize crop planted on hundreds hectares of land. Mostly, Doda, Sunbora and Syali rivers have made heavy destruction.

News reports have said that the Indian side prevented movement at Sharada Barrage after water level in Mahakali River increased following continuous rainfall in the hilly district of the far-western region. Movement is usually stopped after water level is above the point of danger. At present the water level is said to be 255,000 cusec.

Media reports also said that the Indian side has opened all the floodgates of the barrage on Nepal side.

Source: Rastriya Samachar Samiti, September 19, 2012

Pakistan

Zardari case to be reopened: PM

Prime Minister of Raja Pervez Ashraf has agreed to reopen graft investigations into allegations that President Zardari took kickbacks from a Swiss firm in the 1990's when his wife Benazir Bhutto was the Prime Minister.

In 2008, the then- President Pervez Musharraf had asked the Swiss authorities to drop the case against Zardari, as he was officially pardon by him. It is believed that, such a move by the Prime Minister Ashraf could reduce tensions between the country's judicial and executive branches.

Source: online.wsj.com, September 18, 2012

YouTube blocked

The Prime Minister of Pakistan has ordered the YouTube to be blocked after the site "refused to heed to the advice of the government of Pakistan to remove blasphemous film from its site,'' statement from his office said.

In the main north-western city of Peshawar, thousands of students chanted anti-US slogans and burned US flags.

The film, Innocence of Muslims, produced by a small group of extremist Christians, has led to protests outside US embassies in at least 20 countries.

Source: aljazeera.com, September 18, 2012

A Q Khan blames Benazir

A Q Khan, the 'father' of Pakistan's nuclear bomb, has claimed that former Prime Minister Benazir Bhutto had forced him to sell nuclear secrets to other nations. Khan had supplied centrifuge technology to North Korea, Libya and Iran in exchange of money.

"The then Prime Minister Benazir Bhutto summoned me and named the two countries which were to be assisted,'' Khan said in an interview with the Jang media group. The Government and the Pakistan People's Party officials have rejected such claim that she or her Government - were involved in nuclear proliferation.

The US has repeatedly asked the Government to question him about his role in selling nuclear secrets to other nations but such demands have been rejected.

Source: nydailynews.com, September 17, 2012

Trade with North Korea

During the meeting held between the North Korean Ambassador Ro Kyong Chol and President of Islamabad Chamber of Commerce and Industry Yassar Sakhi Butt, discussed bilateral trade relation that has still not been addressed despite of having good diplomatic and economic relations between the two countries.

Butt suggested that cooperation could be improved in petroleum, energy, agro, tourism, surgical, textile, pharmaceutical, sports goods and marble sectors. While the Ambassador Chol informed that the North Korea has abundance of natural resources like steal, coal, limonite, graphite and lead and also said that the country has largest open-air iron mine and offer lucrative incentives to foreign investors.

Yassar Sakhi Butt believes that exchange of trade delegations and business communities could improve bilateral trade relation between the two countries.

Source: nation.com, September 19, 2012

Sri Lanka

India raises Tamils' plight with Rajapaksa

Indian Prime Minister Manmohan Singh on Thursday raised the issue of devolution of power in Sri Lanka with visiting President Mahinda Rajapaksa in order to allow the Tamil population "to look forward to a future where they can live with dignity and respect". The meeting saw Rajapaksa and Singh having their first detailed discussion on all substantive issues since June, 2010.

Official sources said that Rajapaksa noted during the discussion over the Tamil issue that provincial elections were held in three provinces and that administrative and other steps are underway so as to hold polls in Northern Province too next year. Talks between the Lankan government and Tamil National Alliance have remained suspended since January, with Rajapaksa insisting that Tamil parties join a Parliament Select Committee to take the dialogue process forward.

"Singh also emphasised on the need to treat fishermen humanely in cases where they may stray across maritime boundary. Both agreed that it would be best for fishermen associations to meet and discuss these issues further," said a government source.

He added that both the leaders also took note of the momentum of economic ties and assessed the growth of commercial relations positively. Rajapaksa also thanked Singh for allowing the sacred Kapilavastu relics to travel to Lanka. He said that more than three million Lankans were able to pay their respects and that it signified the strong cultural ties between the two nations. Before his meeting with Singh, Rajapaksa also called on President Pranab Mukherjee.

President Rajapksa's visit to India, when he also participated in the foundation-laying ceremony of an international Buddhist university at Sanchi in the central Indian State of Madhya Pradesh, was marked by wide-spread protests in Tamil Nadu and by Tamil Nadu leaders, elsewhere. MDMK's Vaiko led a few hundred party cadres up to the Maharashtra-Madhya Pradesh border, where he was denied permission to proceed to Sanchi, and were detained after their day-long refusal to disperse.

Source: Times of India, September 21, 2012

'ISI recruiting island Tamils to spy on India'

Agents of Pakistan's Inter-Services Intelligence (ISI) are actively attempting to recruit Sri Lankan Tamil refugees who have returned to the island nation after the end of the Eelam war, the Tamil Nadu state intelligence has informed the Centre's Intelligence Bureau.

Thamim Ansari, a Thanjavur man who was arrested recently for suspected links to the ISI, was in Sri Lanka when ISI operative Haji made contact with him.

Intelligence sources say the ISI is hiring the refugees because they are familiar with India and can collect information from the country without raising suspicions.

Sleuths of the 'Q' branch of the state police, who have been monitoring Sri Lankan Tamils, said they have registered a case against ISI operative Haji, his associates Shaji and Amir Zubair Siddiqui , who works as the counsellor in the visa section of the Pakistan high commission in Sri Lanka. "We have named the accused in the first information report based on Ansari's statement," a police officer said.

State intelligence officials have sought police custody of Ansari for one week to collect more information. A judicial magistrate's court in Trichy has granted police custody of Ansari for one day so investigators can interrogate him.

Inspector-General of police (internal security) Abash Kumar and other senior officials will question Ansari. Police will produce Ansari before the magistrate's court on Saturday seeking that he be remanded in judicial custody.

Source: Times of India, September 21, 2012

Afghanistan

12 killed in suicide-bombing

At least 12 people were killed in suicide bombing in Afghanistan. The Islamic militants involved, said that they were angry over an anti-Islam video that was made in the United States. The militants have called for attacks on US diplomats and facilities in North Africa.

During the anti-Islam video protests all over the world, 28 people have been killed in violence, including U.S. Ambassador Christopher Stevens and three other Americans during the attack on US consulate in Benghazi, Libya. The casualties also include 12 protesters killed in riots over the film last week.

Source: telegraph.com, September 19, 2012

Governors sacked

Afghan President Hamid Karzai has sacked five provincial governors that include a key western ally. The reason for such a move, according to the government was to bring about reform and fight corruption in the country. But the dismissal of volatile Helmand province Governor Gulab Mangal could create rifts between the Karzai government and its allies Britian and U.S. because they support Mangal as their important partner in fight against Taliban.

According to a senior official in the President's office, Mangal was sacked for "political reasons.'' In July this year Mr Karzai did admit that his government was corrupt and gave directions for reform ahead of the withdrawal of international troops in 2014. The government officials said that they would bring more reforms to do away with nepotism and corruption.

Source: tribune.com.pk, September 20, 2012

Bangladesh

Election with dissolved Parliament

Prime Minister Sheikh Hasina this week said that next parliamentary elections, scheduled for early 2014, would be organised in accordance with the President's directions and Parliament would dissolved when they are held. Hasina said that the elections are not supposed to be held keeping Parliament alive. She further added that as the head of the government she will propose a timeline for the elections and the President will give directions to this end. Prime Minister made this observation during a question-answer session in Parliament.

Hasina's comment is very significant as different political quarters have been criticising the constitutional provision which suggests that the elections should be held without the dissolution of Parliament and the Bangladesh Nationalist Party (BNP), the main opposition party, has been mobilising public support for restoration of a non-party caretaker administration for ensuring credible oversight of the general elections.

Sheikh Hasina, whose Awami League-led 14-party alliance Government has repealed the constitutional provision of a non-party administration, turned down the Opposition's demand, saying that the elections would not be held under any unelected government.

Source: The Independent, September 20, 2012

Single fencing on border

In a major development, India proposed to erect single row fencing instead of double row fencing in several areas along the border with Bangladesh. Officials of India's Border Security Force (BSF) this week handed over the proposal of single row fencing to their Bangladesh counterparts. The Border Guards Bangladesh is expected to forward the proposal to their government for approval. Senior officials of BGB and BSF would soon jointly visit the areas where the single row fencing would be build.

Almost 80 per cent of the 856-km long India-Bangladesh international border in Tripura has been fenced with double rows. However there are some 61 patches in the Tripura sector which could not be fenced following objections by villagers. to check trans-border movement of militants, prevent infiltration, and curb border crimes. Bangladesh has been objecting to the fencing at the zero-line.

India is erecting a barbed wire fence and putting up floodlights along the 4,095-km India-Bangladesh border in West Bengal, Tripura, Assam, Meghalaya and Mizoram to stop trans-border movement of militants, check infiltration, and curb smuggling and various border crimes.

Source: The Assam Tribune, September 19, 2012

YouTube blocked

The Government has blocked YouTube to prevent people from seeing an anti-Islamic video produced in the US. On September 16 the Government sent a letter to Google, the company which owns YouTube, urging it to remove the video.

The video has sparked strong reaction across the world and violent protest took place in countries like attack Libya, Egypt, Indonesia and India.

It can be recalled that Bangladesh is a Muslim-majority nation of 160 million people but the country is known for its liberal religious outlook.

Source: Associated Press, September 18, 2012

Bhutan

PM's visits Indian State

Bhutan's Prime Minister Jigmi Yoezer Thinley was in the Indian city of Bhopal, in Madhya Pradesh State, for the foundation-laying ceremony of International Buddhist University at Sanchi. He was accompanied by Sri Lankan President Mahinda Rajapaksa.

Source: dnaindia.com, September 20, 2012

Diplomatic ties with Slovenia

Bhutan's Ambassador to the United Nations Lhatu Wangchuk and the Slovenian Ambassador to the UN, Sanja Stiglic signed a joint statement establishing diplomatic relationship between the two nations.

The Kingdom of Bhutan has become the 185th country to forge diplomatic ties with Slovenia.

Source: daijiworld.com, September 18, 2012

BUSDP claim responsibility for bomb blast

The Bhutan United Socialist Democratic Party (BUSDP), a militant organisation based in Jhapa, Nepal, has claimed responsibility for the September 18 explosion that occurred at Nichula Gewog, Lhamoizingkha Dungkhag, in the south central district of Dagana.

On the night of September 18, an improvised explosive device (IED) went off under the Hodrungzampa, a suspension bridge over Sunkosh River, in Nichula Gewog.

The explosion did not damage the bridge that connects the Gewog with the rest of the Dungkhag. The police investigation team found that a 12-volt battery connected to a flexible wire triggered the IED from a distance of about 15 meters. At the blast site, police found a leaflet belonging to the BUSDP.

Source: kuenselonline.com, September 21, 2012

Trade fair with Nepal

President of the Nepal's Cottage and Small Industry, Suresh Pradhan, is leading a 19-member delegation to take part in the third edition of Bhutan International Trade Fair.

It is expected that the delegation will interact with the Bhutan Chamber of Commerce and Industry that can facilitate in establish relations of trade between besides promote the Nepali products. The Fair is from September 19 to 23.

Source: thehimalayantimes.com, September 17, 2012

India

Mamata pulls out of Centre

Trinamool Congress boss Mamata Banerjee on Tuesday delivered a stunning blow to the UPA Government by withdrawing support in protest against the hike in fuel prices and decision to allow FDI in multi-brand retail, reducing the regime to a minority and critically dependent on fickle-minded and ultra-pragmatic players like the SP and the BSP.

Source: The Times of India, September 19, 2012

FDI in retail, aviation

India threw open its retail and aviation industries to foreign investment as a newly assertive government bids to shake off a sense of crisis over the slowing economy and a stalled agenda, risking a political backlash.

In the biggest policy push of Prime Minister Manmohan Singh's's second term, proposals to allow overseas retailers like Wal- Mart Stores Inc. and Carrefour SA to own 51 per cent of supermarket chains, shelved last year after alliance partners threatened to revolt, have been enforced, Commerce Minister Anand Sharma said. Overseas airlines are allowed to own 49 per cent of Indian carriers, he said.

A week after the Government's decision was known, after failing in their efforts at a roll-back of the decisions, the Opposition across the country called for a nation-wide bandh on September 20, which they claimed was successful in most parts of the country. The bandh was noted for the cooperation among the ideologically divided parties like the BJP and the CPM sharing the same dais, indicating the possible emergence of cooperation on the electoral front.

Source: www.sfgate.com, September 14 & 21, 202

Sale of four PSUs approved

The Cabinet approved stake sales in four state companies on Friday, restarting a stalled divestment programme as part of a broader push to revive a reform agenda aimed at kick-starting economic growth and shoring up public finances.

The Cabinet approved the sale of 9.5 per cent in Hindustan Copper Ltd, 12.15 per cent in National Aluminium Co Ltd, 9.33 per cent in trading firm MMTC Ltd and 10 per cent in explorer Oil India Ltd, minister of trade and industry Anand Sharma told reporters. At current market prices, the stake sales would raise about $2.6 billion for the Government.

Source: www.reuters.com, September 14, 2012

BJP to quit JPC on 2-G spectrum scam

The BJP has made up its mind to exit the Joint Parliamentary Committee examining the 2G spectrum scam on the ground that it does not expect the panel to unearth the truth with a biased Chairman P. C. Chacko.

Source: The Hindu, September 19, 2012

Anna Team splits

Eighteen months after they came together to launch their anti-corruption movement, Anna Hazare and Arvind Kejriwal officially parted ways today, Hazare barred them from using his name or photograph.

Source: The Indian Express, September 20, 2012

Maldives

Call for belt-tightening

Minister of Finance and Treasury Abdulla Jihad has said the state must brace to enact austerity measures in the long-term if authorities are to address the country's fiscal deficit - with further budget cuts anticipated in all government departments over the next 12 months.

Jihad has told Minivan News that previous commitments by government institutions to cut their budgets by 15 percent would need to be followed by further reductions to state and civil service spending in next year's budget, regardless of financial assistance secured from China and India.

The Minister's comments were made as Parliament's Finance Committee - reconvening for the first time since July - agreed this week to provide an additional MVR 12 million (US$780,000) in budget to the Auditor General's (AG's) Office, according to local media.

Auditor General Niyaz Ibrahim said that under the existing State budget, an agreement was reached that an additional MVR 58.8 million ($ 3.8 million) would be provided to the AG's Office, though it was decided to request a smaller proportion of these funds. However, Jihad claimed that the decision to provide the extended budget was a "concern'' considering the state was not getting enough direct revenue at present to justify its spending.

Source: Minivan News, September 20, 2012

Call to solve problems internally

Minister of State for Foreign Affairs Dunya Maumoon has said that Maldives' problems must be solved through discussions between the relevant authorities in Maldives, and that foreign groups can give advice, but it is not advisable for them to directly intervene in the internal conflicts of a country.

When asked about former President Mohamed Nasheed's request that Maldives remain on the agenda of the Commonwealth Ministerial Action Group (CMAG), she said that Nasheed made this statement because he is losing foreign support.

"The former President says opposing things all the time. I saw him calling for the removal of Maldives from CMAG's agenda as well. The reason behind his recent statement is that he has lost all foreign support, and his only remaining hope is CMAG,'' she said.

She expressed belief that Nasheed's comments will stop once the Maldives is removed from CMAG's agenda of CMAG.

Source:Haveeru, September 20, 2012

Contributors:

Afghanistan & Pakistan: Kunkhen Dorji;
Bangladesh: Dr.Joyeeta Bhattacharjee;
Bhutan and Myanmar: Sripathi Narayan;
India:Dr.Satish Misra;
Nepal: Akanshya Shah;
Maldives & Sri Lanka: N Sathiya Moorthy;