Reckless Rhetoric: Tanks no Answer to Terrorism

27 December 2001
The Times of India

Reckless Rhetoric
Tanks no Answer to Terrorism

SIDDHARTH VARADARAJAN

TWO weeks on and the war rhetoric we've been hearing since the December 13 terrorist attack on Parliament has not abated. For all the prime minister's protestations about war being ''forced'' on him, the loose talk about a 'military option' on this side of the border suggests there is no shortage of people in government itching for action. Strike forces on both sides are taking up forward positions, missiles are said to be in position and the ugly smell of war lust has begun to pervade the atmosphere.

Mr Vajpayee's remark about a war to ''end the problem of terrorism once and for all'' might well have been aimed at goading the international community to tighten the screws on Islamabad. But words have a way of taking on a life of their own. Media speculation about weapons deployment is further ratcheting up the military temperature, with each side responding in kind to unconfirmed reports about the other already having acted.

By my reckoning, we are still some distance away from that proverbial 11th hour after which one foolishly conceived military provocation will lead us ineluctably towards a disastrous war. There is still time to pull back from the brink. Our politicians may not be unduly worried about the human cost of armed conflict but they must at least realise that for India to initiate a 'limited war' against Pakistan would be not just military folly but a strategic and political blunder of monumental proportions. It will not curb the menace of terrorism but will only further cement the role of the US as the guarantor - and enforcer - of security in South Asia.

The world may have changed since September 11 but the ability of a country to get away with the unilateral use of force still depends on the asymmetry of military might. Simply put, India is not the US or Israel - and Pakistan is not Afghanistan or Palestine. Above all, the government has to grasp the single most important outcome that the Afghan war has produced: The US is now a South Asian military power with a significant and more or less permanent armed presence in our region. Even as our analysts are dreaming 'limited war' scenarios, the US is building air-conditioned barracks for its soldiers at the Pakistani air base of Jacobabad. Whether Osama bin Laden is caught or not, the US is unlikely to abandon its first-ever military beachhead in the subcontinent.

No country which has given basing rights to the US has ever been attacked by a third country. The only time this happened, arguably, was South Korea, and the US went to war to defend its ally. The US will not go to war to defend Pakistan from an Indian attack - limited or otherwise - but there is no way it will allow its forces stationed there to be placed in harm's way.

Some Indian analysts believe the Bush administration has extended tacit support to military action by India provided this is confined to the part of Kashmir occupied by Pakistan. But even though General Musharraf has been doing Washington's bidding so far, the Pentagon cannot be sure a local clash in Kashmir will not escalate into all-out war. Any military action by India, therefore, is more than likely to trigger a US-sponsored Chapter VII ceasefire resolution in the UN Security Council which Russia will not veto and which India can ignore only at its peril.

Even if the US does not intervene, it is worth asking what Indian military action can accomplish in terms of the officially stated rationale for going to war: Ending terrorism. Pakistan has probably already dismantled or shifted the training camps it helps run so there will be no terrorist targets for the Indian Air Force to hit. Indian forces are not in a position to conduct an Israeli-style 'snatch' operation to arrest and bring back terror suspects. And capturing and holding Pakistani territory would be a pointless military venture to embark upon. In any case, each of these scenarios will definitely provoke a military response from Pakistan, and matters could rapidly escalate. India will either have to back off or go for broke, a full-scale war. Pakistan, which has not abjured the right to use nuclear weapons first, could then consider itself at liberty to do the unthinkable.

The irony is that the Vajpayee government is prepared to countenance such a dramatic upping of the ante at a time when the groups engaging in terrorism against India are actually at their weakest and public support for them in Kashmir at its lowest. More than anything, the dramatic attack on Parliament is a sign of the growing desperation and isolation of the Jaish-e-Mohammed and Lashkar-e-Taiba. Vigilant security and intelligence-gathering, coupled with imaginative diplomacy, are more than enough to deal with the problem.

The problem with the diplomatic steps the Vajpayee government has taken against Pakistan so far is that they are essentially aimed at drawing the US in as enforcer. Certain other 'diplomatic' measures being contemplated - such as abrogating the Indus Waters Treaty - are so dramatic
they will establish a point of no return after which any semblance of bilateral normality will be impossible to establish without third-power intervention. Such a step would also kill the Iran gas pipeline project for all time to come, for if India can contemplate using water as a foreign policy instrument, Pakistan would be within its rights to use gas.

Rather than the Security Council intervening on its terms to demand restraint or a ceasefire, India should seriously consider registering a formal complaint at the UN against Pakistan for being in breach of Resolution 1373. That resolution makes it mandatory for countries to take
legal action against terrorist groups in their jurisdiction. India should prepare a dossier on the involvement of Pakistan-based groups and individuals in specific acts of terrorism in India and ask the Security Council to force Pakistan to act.

Of course, the US - which was the prime mover behind UNSCR 1373 and which has been known to harbour persons wanted for terrorist crimes in countries like Cuba, Haiti and Chile - did not intend the resolution to be an instrument that other countries can freely invoke. But if the Vajpayee government is so confident of US support, it should demand a demonstration of that support at a multilateral, legally-binding forum like the UN rather than through unilateral demands conveyed by Washington to Islamabad behind closed doors.

Read more

Japan's Lost Decades: An interview with Prof Makoto Itoh

December 12, 2001
The Times of India

Japan's Lost Decades

Tokyo: One of Japan’s most insightful economists, Makoto Itoh has written extensively on the world economic crisis and the problems of Japanese capitalism. in an interview with Siddharth Varadarajan at his office in Kokugakuin University, Tokyo, he explains the genesis of the current recession in Japan and Asia and argues that neither neoclassical nor Keynesian policies offer a way out of the impasse.

How would you characterise the present crisis of the Japanese economy?

The Japanese economy has been in continuous crisis since the collapse of the 1990 bubble. The 1990s were a ‘lost decade’ and the same situation is continuing. Many economists and policymakers believe the problems came from the financial difficulties faced by our banks. While there have been lots of bad loans which create a vicious cycle of deflation, it is the depressed situation of the masses of people which lies at the root of the current crisis. This is manifested in the downturn of consumption demand. This may be closely related to the process of rationalisation of Japanese industry, its hollowing out. Since the Meiji restoration in 1868, economic growth in Japan was pushed forward by secondary industry — manufacturing, construction — whereas for the first time in a peace period, we have been experiencing an absolute decline of the work force in this sector since 1993. That is why unemployment is at an historically high rate. Officially it is five per cent; but the real figure is more like 10 per cent if we count latent unemployment, irregular employment.

Today, virtually every employee is facing a cut in real wages, bonuses, overtime. many big companies where employees believed themselves to be very safe have been thrust into uncertainty under the process of restructuring and multinationalisation. there is pressure on pensions too. When so many people in Japan today are worried about their future, how can they spend more? And since consumption — which forms more than 60 per cent of Japanese GDP — is depressed, how can investment be revived?

What are some of the structural shifts that have taken place in Japanese capitalism which have accentuated this crisis?

In the process of the repeated economic crisis in japan since the 1970s, our big corporations strived to rationalise their financial and accounting positions. earlier, they used to be very big borrowers, using household savings to generate new plant and equipment. This was the German-Japanese type of industrial finance. The Anglo-American system of direct financing through the stock market was not favoured here. But since 1973, big Japanese corporations retreated from borrowing money. Since they did not have wide opportunities to invest, many big companies tended to be increasingly self-financing. As a result, big financial institutions like private banks lost their biggest borrowers. However, even though the rate of economic growth declined, the household savings rate continued to be high. Banks could not use that money in relation to growing firms. So they tended to use that money for risky, speculative operations on an international scale. They also started lending money to small and medium firms, real estate ventures etc. Finally, the government tended to borrow more money and accumulated huge debts.

And this trend continued till the early 1990s?

By the end of the 1980s, this process had brought about a change in the relative strengths of the three major actors in the Japanese economy:

• Big corporations were in a financially strong position. They became net lenders in the process of the continuing crisis of Japanese economy. They also issued joint stock and convertible bonds in the 1980s to absorb idle money.

• Working people and households suffered from stagnant or depressed income. More housewives started working to sustain family income.

• State finances started suffering because of cumulative debt. This raised further public fears about state support for pension, health and education. For example, university tuition fees were raised dramatically. By the end of the 1980s, the worsening health of the household sector infected the rest of the economy and the exchequer was also in crisis.

What is the scope for Keynesian-style economic policies in such a situation?

Today, Keynesian policies cannot revive the economy. despite repeated increases in government expenditure, the Japanese economy could not revive because government expenditure could not revive consumption for the mass of workers. The bulk of public expenditure went for construction, highways (almost 10 per cent of GDP). Japan’s rate of public expenditure is probably three times that of Germany’s, twice that of the US. but still it is not working.

Is this because of the peculiarities of the Japanese economy?

Most of the public expenditure went into construction — to buy capital-intensive, heavy construction machines and to buy land from landowners. In fact, I think more than 80 per cent of the increase in government expenditure was used to buy land. So it didn’t revive consumption, or employment. In my view, the government should engage in more consumption-oriented expenditure. If people are better supported by public services — baby care, for example — they can work longer, easier, can feel safe for their careers, education, health. At present, health, education etc cost too much. Do you know the fertility rate (the number of children a woman will bear in her lifetime) in Japan has come down from 2 to 1.34 in just one decade?

If this trend continues, the Japanese population will halve by the end of the 21st century. How can the economy revive in such a shrinking society?

I firmly believe that without giving the Japanese people a safe future, the Japanese economy cannot be revived. Quantitative government expenditure in the Keynesian style will not work. It has not worked and may even worsen the problem. What is required is a qualitative change in the composition of government expenditure — for local government to support the mass of people, to give them a safer sense of life.

What about the restructuring reforms launched by Prime Minister Koizumi?

Will the so-called ‘Koizumi shock’ help revive the Japanese economy? in 1997, Hashimoto failed to revive the economy and only worsened it by higher consumer taxes and a higher medical burden. this was a big shock. the Japanese economy, which had shown some slight signs of reviving, turned down again. of course, the asian downturn may also have been a factor. I’m worried about Koizumi’s restructuring. he is tightening expenditure and does not care about increasing unemployment, saying it is a necessary sacrifice for restructuring the economy on a sounder basis. I can’t understand how koizumi is still so popular. It could be because he attacks the traditional bureaucratic system. The majority of people in the private sector have suffered so much through restructuring while the bureaucracy remained untouched. many people are envious of that. there have been so many scandals about the bureaucracy and the mass media is saying the bureaucracy is the target of Koizumi reforms. however, his policy in the field of economic reforms is failing to revive the Japanese economy.

Read more

The Tokyo Trap

8 December 2001
The Times of India

The Tokyo Trap

Siddharth Varadarajan

Tokyo: The Bush administration may have killed the Comprehensive Test Ban Treaty but when Prime Minister Vajpayee arrives here this week, he will still be politely asked to sign it.

Four years after New Delhi stunned the world with its nuclear tests, the Japanese government and strategic community have not been able to reconcile themselves to the idea of a nuclear-armed subcontinent. Though Tokyo appreciates what it says is the restraint india has shown in terms of nuclear doctrine and posture, it is keen for India legally to commit itself to a ban on further nuclear tests. ‘‘Since Vajpayee told us India will not test until the CTBT comes into force, this means India is saying it will never test again. So why not sign the treaty?’’, a senior foreign ministry official told this writer.

A number of Japanese analysts working on nuclear issues also conveyed a similar demand. To the extent to which the Japanese perspective is driven by fears that India may test again, such a view is understandable. But what is difficult to understand is the tenacity with which Tokyo is clinging to the discourse of ‘non-proliferation’ built around the CTBT and Fissile Materials Cut-off Treaty — even as the US missile defence programme is forcing ardent believers in nuclear theology to turn apostate. Emotionally and officially, Japan is still wedded to the goal of universal nuclear disarmament but it is unable to resist the drive towards a new arms race that the US is imposing on the world.

With a new class of offensive ‘defensive’ weapons being developed in the first step towards the militarisation of outer space, one would have thought opposing the US missile defence programme is a far more pressing goal than getting India to sign the CTBT. Yet, many analysts here seem to accept not just the rationale of the programme but also Japan’s participation in it.

Whatever its misgivings about the impact of the larger national missile defence (NMD) programme on strategic stability — Tokyo only abstained on a draft Russian-Chinese resolution on the anti-ballistic missile treaty at the UN last year rather than voting against it — the Japanese government is assisting the US in research on the more limited theatre missile defence (TMD) system to protect itself from the threat of ‘low density’ missile attacks.

Prof Satoshi Morimoto, a former diplomat and air force officer, supports Japan’s cooperation with the US especially because of North Korea’s Taepodong missiles. ‘‘Of course, if the US, Japan and Taiwan are linked together in missile defence, this would alarm China’’. He believes China will try and develop a land-based system but does not rule out Beijing ending its moratorium on nuclear tests. ‘‘This depends on how Washington handles the US-China relationship. The Peoples’ Liberation Army is very nationalist and anti-American. So if pushed, they could react to US pressure by testing. But the Chinese political leadership has no such intentions’’.

Mr Morimoto concedes that the impact of the NDM/TMD programmes in East Asia would have a bearing on South Asia. ‘‘China’s nuclear development is the key. The Indian programme will be based on how to react to the Chinese threat. And Pakistan’s on India’s’’. However, Masahiro Omura, research director at the Japan Institute of International Affairs, feels Japan’s participation in TMD would have no wider repercussions. ‘‘We want to protect Japan from the mishandling of missiles by North Korea. We are not even talking about a system to defend ourselves from China’’, he says. ‘‘For this reason, China need not be alarmed. That is why we are encouraging the US to have a dialogue with China, to help address its concerns’’.

This confidence about missile defence not triggering an arms race is shared by Ambassador Ryukichi Imai of the Institute for International Policy Studies. ‘‘China has never been in an arms race with the US’’, he says. ‘‘I am not very convinced about their technological capabilities. I don’t think China has a great capacity to build missiles to reach the US’’. At the same time, Mr Imai is not very convinced about the TMD rationale. ‘‘I don’t think North Korea has nuclear weapons. They don’t have more than a kilo of plutonium’’. According to Mr Imai, the Japanese government’s emphasis on a (sea-based) TMD system ‘‘has probably more to do with the politics of the budget of the three services since the navy is due for a big project’’.

For Prof Mitsuru Kurosawa of Osaka University, a specialist on disarmament affairs, the NMD is fraught with destabilising potential in part because it means unilateral US defence of its homeland. As for TMD, he feels this is of limited value. ‘‘A better way to deal with our Korean concerns is for US, Russia, Japan and China to work together in projects like the Korean peninsula Energy Development Organisation (KEDO)’’ devised in 1994 to deal with fears of a North Korean nuclear weapons programme. Unfortunately, says Mr Kurosawa, far from pursuing the cooperative security framework established by Mr Clinton, the Bush administration is undermining the inter-Korean dialogue process.

Mr Kurosawa is also not impressed with US claims that missile defence is needed to deal with so-called ‘rogue states’. ‘‘The system will take more than 10 years to develop so obviously it is aimed at China and Russia. The aim is clearly to dissuade Beijing from increasing the number of its missiles. The US wants to be top of the world, a hegemon’’. By linking NMD with TMD, the US hopes to win over Europe and Japan, feels Mr Kurosawa, but strategic stability will still be affected. ‘‘One of the biggest problems we face is the unilateralism of the US. Its stand on the CTBT is based on its perception of whether the treaty ensures the technological superiority of the US arsenal or not. On afghanistan, it did not want a UN mandate because that would limit its freedom to operate. Even on reducing the number of strategic missiles, Mr Bush wants to act unilaterally rather than reach a transparent, irreversible and verifiable agreement with Russia’’.

Even though under some scenarios, Japan’s own security interests might be compromised, most Japanese analysts do not expect Tokyo to play much of a restraining role vis-a-vis Washington. ‘‘Institutionally’’, said one senior japanese official who did not wish to be identified, ‘‘people build their careers in the foreign ministry on the basis of the centrality of the US-Japan security relationship. This is the basic infrastructure and it is not to be disturbed or changed’’.

Read more