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MARCH 2006 Country Archive



The upcoming visit of President GW Bush highlights the newly recognised importance of INDIA to the United States. Of course it is a vast market. If it has not already - population censuses here are notorious for underestimates - it is set fair to overtake even Chinas's teeming masses, if only because China has worked hard on a birth control policy and INDIA has not. It is also a fast expanding economy impinging on the world's consciousness. Having taken over the largest steel manufacturer in the US, Mittal Steel, now the largest in the world is currently bidding for the largely European owned number two in the world. In its domestic economy an enormous factor is the growth of its middle class which is spending big-time on all manner of consumer goods and services. But the very size of the middle class, now approaching two hundred millions, ensures the growth of the already large reservoir of well- educated young people, able to hold their own intellectually with any in the world. This is reflected in the massive importance of its home grown computer-based industries, notable now for initiating new technologies and innovating new software and as a result, attracting big scale international investment. 

Geopolitically, INDIA is obviously a counterweight in Asia to the growth of China, less in military terms although that cannot be dismissed - INDIA has serious armed forces - but neither are belligerent and both are pursuing headlong economic growth. Their significance is in terms of potential leadership as a regional power. There is another geopolitical factor normally never discussed, as we do below, which relates to its proximity to PAKISTAN. The only Islamic state to possess nuclear weapons with all the implications of that, since INDIA too is a nuclear armed power. 

This month we introduce the first of our reports on PAKISTAN, which takes our coverage up to 42 nations in transition. It is clear that although the president General Musharraf, has nailed his colours to the western mast, his policies depend on him remaining in power - our report discusses and clarifies this. There have been three assassination attempts in the past year and PAKISTAN's downside is that the nation includes some very far-out Islamic groups who undoubtedly have their tentacles reaching into different command levels of the armed services. More sinisterly this includes Inter Services Intelligence (ISI), independent of army, navy, and air force, whose role is not just military intelligence but also to be a kind of Pakistani equivalent of the CIA. In their time it was they who enabled the Taleban to emerge in neighbouring AFGHANISTAN when this policy suited PAKISTAN. Whilst much of the senior military are western orientated, others identify with Islamic causes and they are integrated in different echelons of the military and Intelligence. 

Not only the fate of PAKISTAN rests with Musharraf, as it can be seen that any Islamic based coup would put an irrational religious-based leadership in charge of an nuclear strike force- the very fear about neighbouring IRAN, although they are perhaps ten years off becoming a nuclear-armed power. Hence INDIA's other geopolitical value. As the nation most threatened by such a development - the two countries have fought several wars in the last six decades - and although with Musharraf relations are certainly improving, it has taken sixty years to get this far. The Kashmir disputes although calmed down considerably, could easily flare up once again. If what could be George.W.Bush's worst nightmare, to be woken up one morning to be told that there had been a successful coup by Islamists in PAKISTAN, that would transform INDIA's geopolitical situation. Unwillingly, for their own preservation, not at the behest of the USA, they would find themselves riding shotgun where PAKISTAN were concerned - a situation not too dissimilar to that of Israel in the Middle east and in relation to IRAN, because fanatic Islamists controlling Islamabad would pose a bigger threat to INDIA than to anyone. This makes INDIA a major player in the unfolding world of the 21st century and explains why the US quietly accepted their becoming a nuclear armed state. PAKISTAN meanwhile can be seen to have significance beyond its frontiers.

PAKISTAN's inclusion in our monthly reports means that we now report on every nation of geopolitical significance in Western Asia and beyond. From TURKEY eastwards to cover the three FSU Caucasus republics and across the Caspian Sea to include all five of the FSU central Asian 'stans. Southwards to AFGHANISTAN, PAKISTAN and IRAN. Across the Gulf to the Arab neighbours IRAQ and SYRIA. Between many of these nations their political interaction is of great significance in regional outcomes. South Asia too with the second report on BANGLADESH (once Eastern Pakistan), now included, has the key geopolitical states of the region under regular MONTHLY analysis for our readers. 

IRAN this month tells how the Ayatollah Khamenei has reined back the headstrong populist president, Ahmadinejad, in a discreet way by ruling that IRAN should have a separate commission to deal with nuclear policy. In a sense this has taken his finger off the nuclear button although it is probably ten years before there could be any such nuclear button available to IRAN. This months report examines the current situation there. It is also a success for former president Rafsanjani recently defeated by Ahmadinejad, whose counsel it seems the Supreme Leader listens to, as on this occasion. We also report how the oil industry IRAN's economic lifeline is the object of struggle between the current president's faction and broadly that of Rafsanjani, who has long held effective control over it.

Both of these are oil states, IRAN a leading light in OPEC and IRAQ, according to the conspiracy theorists, having such a desirable oil industry that it was the real cause of the invasion. As to that assertion, our IRAQ section includes a survey of the oil industry there - calamitous might describe it. But what they share, despite their oil-based economies is the situation that they both need to import gasoline for domestic consumption; IRAN 40% and IRAQ most of theirs. In both cases they may see it disappear. As we tell in this month's IRAQ report, their suppliers TURKEY, Kuwait and Saudi Arabia have all stopped supply for the old fashioned reason that the bills, TURKEY alone is now over a billion dollars, have not been paid. It is a mystery as to how these normal trading accounts can remain unpaid for so long, but corruption, if that is what is is, even on this scale should not surprise us.
IRAN's situation is different in that now those who wish to impose sanctions on them can hardly inhibit their oil exports when it is US ally Japan that would feel the pain, let alone the effect it would have on world prices, but stopping IRAN's gasoline imports - now there is a bird of a different feather.

IRAQ's Shia community are it seems, reacting exactly as the authors of the bombing of their mosques wish them to do. The calculation that the terrorists must have made is that civil war is the desirable way forward which points the finger less at the Sunni hold-outs than the al-Qaeda franchisee, so active there. In the new parliament, it is fascinating to see the leverage now exercised by Muqtada al Sadr, the violent young Shi-ite cleric and gang leader of a massive militia, the third generation political al-Sadr. Both his father and grandfather, leaders of the Shia community were in turn murdered by Saddam in his time. We forecast that in a year or two, or three, Muqtada al Sadr will be running IRAQ, maybe even without an armed coup. Give him a few years and it will be like Saddam is back.

Looking at democracy in retreat we turn to BELARUS where democracy has never been known, and where after this month's presidential election, we fear that this will not have changed. The last dictator in Europe, Alexandr Lukashenka, has prepared this ground well having made it clear that there will be no orange revolution nonsense in his bailiwick. Unlike the rulers displaced by the 'colour revolutions, 'GEORGIA, UKRAINE and KYRGYZSTAN, Lukashenka is completely sanguine about shooting his opponents and although brave souls will protest the inevitable outcome of a fixed election - we describe how it is being fixed - we cannot see the regime here giving way to anything so feeble as the will of the people, un-reinforced with firepower.

UKRAINE also has an important election this month to decide the new parliament, and it appears from the polls that the president's party is about to be smashed, the momentum of the Orange revolution so quickly having run into the sand. Even that outcome however is not the end of the story. UKRAINE is in play between parties and groups who appear equally suspect where big time corruption is involved. The outcome of the January 1st gas-shutdown was so quickly resolved in such a mysterious way and one of the extraordinary factors little commented upon, was that RUSSIA had earlier signed a supply contract (before the Orange events) which guaranteed the lower price until 2009. Why wasn't that invoked? The answer one is left with, suggests that this would have meant that the contract itself would then have come under scrutiny and that would have revealed the names of those receiving a percentage, replacing presumably the former president Kuchma. Be prepared for some surprising post-election deals between the big time politicians there.

GEORGIA is the epicentre of a continuing struggle with a RUSSIA whose territorial ambitions in Eurasia are little removed from those of the USSR, or indeed the Romanov czars. A policy that has its antecedents some four centuries back at least has the virtue of consistency. But one step forward for GEORGIA seems inevitably to be followed by a corresponding backwards movement. KYRGYZSTAN the newest alleged 'breakout,' has now completed a full year since its 'Tulip' event, which justifies a comprehensive stocktaking on our part.

KAZAKSTAN is such a disappointment, to all it seems except the White House, whose fulsome congratulations on the recent election result contrasted with the dismay of many observers. Of all the central Asian FSU states this one is easily the most successful in economic terms. Almost entirely due to oil to be sure but they have an awful lot of that and probably more yet to be discovered, as well as every mineral known to man. It is an enormous country, thinly populated, and there are many things to admire about it. But the president, Nazarbayev, has just been re-elected without any doubt with the usual fixing, (although he probably could have won without it) he had not previously earned a reputation as a monster unlike his UZBEKISTAN neighbour Karimov, has since the election, which establishes him effectively as president-for-life, turned decidedly ugly. A second top political opponent has just been professionally murdered, together with his driver and bodyguard, in addition to the murder of another former colleague, which we described in the February Update on this country. In that case a man shot in his home with three bullets shared between the brain AND the heart was cynically described as a suicide by this nation's top police investigators, so don't hold your breath about any further progress. Other previously senior figures in his administration have been railroaded to jail, as we describe. It appears that the Karimov family are consolidating their post-election power base by eliminating all potential, as well as actual opponents of the regime. It begins to look as though this former communist state has taken the model of Saudi Arabia for the future with its pre-eminent top family enjoying power and stratospheric riches, without any effective resistance from their lower orders.

NORTH KOREA of course fills that slot and we describe the latest events in this opaque regime, which always has a capacity to amaze, if not as of this time, terrify, but the NORTH KOREANS, like a 'higher authority' (which status they would not concede), move in mysterious ways.

The US has enough Far Eastern problems without the TAIWAN Straits re-emerging as an issue. but TAIWAN's President Chen Shui-bian has ratcheted up the tensions between mainland China and the Offshore republic in a way that is bound to irk not only Beijing, but also Foggy Bottom. We give the details.

Civil War? Attempted Coup? Presidential Ploy? Pre-emptive Strike?
The Philippines are under a State of Emergency. Presidential pronouncements refer to "communists and military adventurers'" in the same breath. At least one general is under arrest. So what IS going on? 
We give a comprehensive review of what is happening…and why, under the presidency of Gloria ARROYO.

LIBYA is having troubles from its province of Cyrenaica, NOT the strongest area of support for Colonel Qadaffi. Benghazi witnessed an 'Islamic' outburst against the Italian consulate there in the Danish cartoons episode, rather than their embassy in the capital, Tripoli. We explain the significance. 

The Danish cartoons incident played differently in Damascus, as few will be surprised to know. The implications of everything of significance here indicate the parallel agenda, of SYRIA's predicament vis a vis the West. Whatever the incident, this time the Danish cartoons, it plays back in a way which reverts to the Lebanon with some justification, to its alleged involvement with IRAQI terrorists, which we take another look at (and remain unconvinced), and to the spate of recent political assassinations, on which the jury is out

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