Archive for the ‘ International Affairs ’ Category

World Shudders Yet Again

On Friday, August 5th, 2011, Standard & Poor, one of the three credit rating agencies have downgraded sovereign rating of United States of America.

The sovereign credit rating downgrade from the top most AAA rating to AA+, for the first time, was culmination of what S&P termed “political brinkmanship” that made the US governments ability to manage its finances “less stable, less effective and less predictable”.  In the  run up to the announcement newspapers around the globe had reported that the US treasury was just about broke. Down to US$ 58.6 billion in cash and US$ 130.5 billion in available credit, the Obama Administration had to go on its knees with the Republican controlled Congress to raise the debt ceiling.

Announcing the unprecedented move the S&P officials said it considers the administrations efforts to tackle soaring debt levels as inadequate”. It also mentioned that US will not regain its top credit rating soon. It warned of further downgrading to AA level. (The AAA rating represents the highest level of confidence given to an economic entity’s ability to meet its financial obligations)

The other two global rating agencies – Moody’s and  Fitch that had retained their AAA ratings of the US following the debt ceiling restructuring last week, now may not have options, but to follow suit as S&P. On the face of it, what this rating downgrading by S&P simply means is that this would make the debt ridden US’s borrowing costlier.

The Obama Administration reacted with indignation, noting that S&P had made a significant mathematical mistake in a document that it provided to the Treasury Department on Friday, overstating the federal debt by about $2 trillion.

But the fact remains that US government operates in deficit. That is, the money it collects in the form of taxes (among other sources of income) is less than the money it owes to suppliers, its citizens (social security), its employees and the banks from which it borrowed money. The gap between how much money flows into its coffers and how many needs to come out of it is the ‘size’ of this deficit.

What is the size of the US’s deficit?

The cash inflow of the US government is short of its outflows by about US$ 1 trillion every year. The deficit figure is most likely more and it sure is ‘BIG’.

The cat has now been belled but fears are ripe of another recession in the US and a debt crisis in Europe, which could result in another global financial meltdown. Within days the repurcussions are felt across the globe. For once it has pull down the bourses across the globe and sent the West Asian markets in a tailspin. US$ 2.5 trillion was wiped off the investors wealth in matter of hours.

The Indian market has also been severely affected with a loss of Rs. 4 lakh crore in 4 hour of trading session. As one of the 15 largest foreign creditors to the US, India’s exposure is estimated at US$ 41 billion (Rs. 1.83 lakh crore).  The Indian IT Industry is surely expected to take the brunt. The US accounts for 60 per cent of the revenues for the US$ 60 billion Indian IT Industry. The downgrading will also lead to further appreciation of rupee against the dollar thereby blunting the Indian IT industry’s competitive edge too.

This time China as the single largest holder of US treasury securities, with US$ 1.5 trillion, is expected to also take the brunt.  The World Leaders are huddled up to discuss ways and means to tackle the situation. The situation is unprecedented. It is still early days to know what is in store for the days to come.


Watch the Video for a simple explanation of Uncle Sam’s Debt Crisis

Video : Courtesy YouTube

In defence of a journalist Julian Assange

Hillary Clinton recently made a little joke about WikiLeaks during the Kennedy Center Honors. Clinton said she found it extraordinary to greet so many talented people. She then said: “I am writing a cable about it, which I’m sure you’ll find soon on your closest website.”

At one level the United States leadership is trying to trivialize the Secret US Embassy Cable leak by the whistle blower website WikiLeaks but at another level, living in a pretense, that it has nothing to do with the arrest of WikiLeaks editor-in-chief Julain Paul Assange, in London. But I am amazed at the backboneless response of the American and world media against the arrest of Assange. On the contrary the American media is filled with all sorts of stories about Assange. This is the same media houses that had fought for TRPs in the run up to the war in Iraq and Afganistan and had egg on their face when Assange published his story about US involvement in the Wars earlier this year.

Some of the stories that is doing round are really ridiculous and have no relevance to facts about his arrest. The 39 year old Assange, born in Australia, apparently had a ‘sad childhood’ as his mother had an abusive second marriage. She had to run away from her second husband along with his half brother to protect them from abuse and custodial battle. Assange moved  schools through his childhood because of this.

In 1987, after turning 16, Assange began hacking under the name “Mendax” and he and two other hackers called themselves the “International Subversives”. Surprisingly no mention is made that Mendex means “nobly untruthful”. There was also no mention of the fact that Assange wrote down the early rules of the group: “Don’t damage computer systems you break into (including crashing them); don’t change the information in those systems (except for altering logs to cover your tracks); and share information”. And most ridiculous of all is that Assange basically is a “reckless and dangerous” computer hacker and “not a journalist”.

Assange founded the website in 2006 and serves on its advisory board. After Amazon refused to host the WikiLeaks website he set up his server in a wartime bunker in Sweden to broadcast his scoops. Since 2006 Assange has lived a nomadic life, living out of his bag and moving from one country to another.

He has been involved in publishing material about extrajudicial killings in Kenya, for which he won the 2009 Amnesty International Media Award. He has also published material about toxic waste dumping in Africa, International Federation of Pharmaceutical Manufacturers & Association influencing policy making decisions of the WHO, insider trading program at JP Morgan, Guantanamo Bay procedures etc. Earlier this year he published Iraq War Logs and Afghan War Diary, classified details about United States involvement in the wars in Iraq and Afghanistan.

Then, on 28 November 2010, WikiLeaks and its five media partners began publishing secret US diplomatic cables.  This sure effected the diplomatic grandstanding that US is used to and US today accuses Assange of jeopardising its national security by releasing a flood of confidential diplomatic documents.

As I write this article Assange has been transferred to the segregation unit of Wandsworth prison, south London, where the authorities are planning to give him limited access to the internet and is awaiting extradition to Sweden in connection with four allegations made by two women – complainants identified as Miss A and Miss W.

The complainants Miss A and Miss W were volunteers who worked with WikiLeaks and there are 4 charges filed against Assange in Swedish Court.

  • The first charge Miss A alleges that she was victim of “unlawful coercion” on the night of August 14 this year in Stockholm.
  • The second charge alleged Assange “sexually molested” Miss A by having sex with her without a condom when it was her “express wish” one should be used.
  • The third charge claimed Assange “deliberately molested” Miss A on August 18 “in a way designed to violate her sexual integrity”.
  • The fourth charge accused Assange of having sex with a second woman, Miss W, on August 17 without a condom while she was asleep at her Stockholm home.

Am sure these are serious charges against Assange. But wait a minute the two volunteers claim that the sex was consensual (not rape) and their charge against him is on the use of condoms. Oh My God so now it is their word against Assange’s on the use of protection during consensual sex.

I believe, journalism must empower and educate, not titillate and trivialize. Having said that I am also not a big fan of “Mendax” Julian Assange but firmly believe he sure has the “nose for news” that journalists are trained for. I am confident every journalist across the globe would have loved get their hands on the WikiLeaks documents and videos.

Few things that still beats me how is it that a team of 5 and few volunteers have managed to release to the public domain more suppressed information, at that level, than the rest of the world press combined. And also why US, the unipolar super power, which boasts of being in the leadership position of the Free World, should hunt down someone who has released information, though classified, when you, as a country could not protect it in the first place.

Photo: Courtesy Getty Images

Recommended Video :

India misses Pipeline of Prosperity

After fourteen years of delayed negotiations over what started as the Iran – Pakistan – India (IPI) cross boarder gas pipeline project, Pakistan and Iran have finally signed a $ 7.6 billion agreement in Tehran on May 20, 2010. The project termed as the ‘peace pipeline’ by officials of both countries, has been signed in presence of Pakistani President Asif Ali Zardari and Iranian President Mahmoud Ahmadinejad on the sidelines of the tripartite summit on Afghanistan Security in Tehran. The gas pipeline once operational, is expected to take care of as much as 20 per cent of Pakistan’s energy needs.

According to the initial plan, the 2700 kilometer long pipelines would cover around 1100 kilometers in Iran, 1000 kilometers in Pakistan and around 600 kilometers in India, and the size of the pipeline was estimated to be 56 inches in diameter. The estimated project completion time was estimated to be 5 years. The pipeline will deliver 750 million cubic feet of natural gas a day to Pakistan within four years. The pipeline will connect Iran’s giant South Pars gas fields with the troubled Pakistani provinces of Baluchistan and Sindh.

The IPI project was conceived in 1995 and after almost 13 years India finally decided to quit the project in 2008 despite severe energy crisis in the country. Security consideration and inability to come to an understanding with Pakistan over transmission charges saw India waver time and again over joining the project amid speculation that New Delhi is coming under Washington pressure not to do business with Tehran. Delhi has been reluctant to join the project because of its long-running distrust of Islamabad, having fought three wars since independence in 1947.

News paper reports say Pakistan too was facing severe criticism from the US over any kind of economic deal with Iran. The deal was speculated to be not welcomed by the US – because of Tehran’s suspected ambitions to build nuclear weapons. But the sudden change of stance from Pakistani government is seen as softening of stance by the US. This is perhaps the greatest diplomatic coup d’état Pakistan has pulled off in the recent past.

In the aftermath of signing the landmark civilian nuclear deal between President George Bush Junior and Prime Minister Manmohan Singh in 2008, Pakistan too argued that it too should make a similar deal with US, but Washington had not shown much enthusiasm. But now Pakistan has cheaper source of power compared to India’s investments in civilian nuclear reactors to help fulfill its increasing energy demand.

Photo : Copyright with BBC