Compelling case for Iraq war crime tribunal

The Age of Deception: Nuclear Diplomacy in Treacherous Times by Mohamed ElBaradei

Reviewed by Kaveh L Afrasiabi

This book, eloquently written by a former director-general of the International Atomic Energy Agency (IAEA), is a must read, both for the wealth of information it provides on the contentious issues of global nuclear diplomacy as well as for the passionate and compelling case that it presents for a war crime tribunal to  prosecute United States and British leaders who instigated the calamitous invasion of Iraq in 2003 on the false pretext of weapons of mass destruction.

In blunt yet sincere language steeped in international law, ElBaradei writes that in light of the US's complete "disdain for international norms" in its invasion of Iraq, the United Nations should request an opinion from the International Court of Justice (ICJ) as to the legality of the Iraq war.

Convinced that the overwhelming weight of evidence favors a negative verdict if the ICJ ever braved such an initiative, ElBaradei then makes a case for the International Criminal Tribunal to "investigate whether this constitutes a war crime". (pg 87)

Irrespective, ElBaradei is so morally outraged by the blatant pulverization of a sovereign Middle East country by a Western superpower and its allies that he also advises the Iraqis to demand war reparations - that is sure to amount to tens of billions of dollars.

If for nothing else, this book's value - in putting self-righteous Western powers on the defensive and depicting them as essentially rogue states that have caused a new global anarchy by their willful exercise of power without much regard for the rights of others - is indispensable.

Divided into 12 chapters with a useful conclusion on the future of nuclear diplomacy, the book covers nearly three decades of the author's involvement with various cases, ie, Iraq, North Korea, Libya and Iran, the notorious "nuclear bazaar of Abdul Qadeer Khan" in Pakistan, as well as nuclear asymmetry and the hypocrisy and double standard, not to mention outright deceptions, marking the behavior of US and other Western countries (along the familiar North-South divide).

In the chapters on Iraq, ElBaradei defends the cherished record of his agency in refusing to act as a sounding board for post 9/11 warmongering US policies, which earned him the occasional venom of US media that questioned his integrity. In fact, ElBaradei is equally critical of the compliant Western media that often act as indirect apparatuses of state despite their wild claims of neutrality and objectivity.

Although much of what ElBaradei writes about the US-British deceptions to go to war in Iraq is already well-known, it is instructive to revisit those "grotesque distortions" - as he puts it - from a reputable source who for years was caught in the maelstrom of contesting politics of non-proliferation.

With respect to the British role under premier Tony Blair, whom he accuses of a false alarm on Iraq's chemical weapon capability, ElBaradei actually underestimates the degree to which London influenced Washington on Iraq, characterizing this instead as a "one-way street" with the British "acting as apologists for US". (pg 67).

But, ElBaradei is not a foreign policy expert and his shortcoming, in detecting the American foreign policy elite's vulnerability with respect to British political influence, is forgivable. This is a minor defect in a solid contribution that sheds much light on how the US manipulated the UN atomic agency as "bit players" in its scheme to invade Iraq.

It shows the Pandora's box opened by the IAEA when it agreed to receive foreign intelligence from member states spying on others, thus opening the door to calibrated disinformation often beyond the ability of the agency and its meager resources to authenticate.

As a result, today the IAEA has turned into a de facto ''nuclear detective agency" that constantly receives tips from Western clients targeting specific countries. Sooner or later, either this unhealthy situation is rectified or we must expect more gaping holes in the agency's credibility.

With respect to North Korea, which has exited the nuclear Non-Proliferation Treaty (NPT) and proliferated nuclear weapons without much international backlash, ElBaradei blames the US's failure to live up to its agreed commitment and the fallacy of "attempts to contain proliferation ambitions through confrontation, sanctions, and isolation". (Pg 109)

He also writes about Libya's voluntary disarmament in 2004, a decision that the late Muammar Gaddafi now regrets in his grave, given the likelihood that the North Atlantic Treaty Organization (NATO) would have thought twice about attacking Libya under the guise of "responsibility to protect", thus making a mockery of the UN, if Tripoli had retained a nuclear shield.

For sure, this issue must loom large on the mind of many developing nations that have clashing interests with the (increasingly bullying) Western powers.

ElBaradei has devoted a whole chapter to the subject of nuclear double standards that discusses, for instance, how South Korea's clear evidence of non-compliance was shoved under the rug by the US in 2004 simply because it is a US allay.

The US and other privileged nuclear-have nations have been derelict in their NPT obligations to move toward nuclear disarmament, some, like France and Britain, modernizing their arsenals, while at the same time having the audacity of taking the moral high ground against countries suspected of clandestine proliferation.

ElBaradei writes that in the Middle East, "The greatest source of frustration and anxiety was the regional asymmetry of military power symbolized by Israel's arsenal." (pg 223) And yet, Israel, which since its bombardment of Iraq's nuclear facility in 1981 has been mandated by the UN Security Council to place its nuclear facilities under the IAEA inspections, has evaded this obligation with impunity.

Regarding Iran, extensively dealt with in four chapters, ElBaradei seeks to present a balanced account that pinpoints the chronology of events, interactions and negotiations that are still ongoing as of this date, thus making the book an indispensable tool for those who follow the developments in the Iran nuclear crisis.

Since his retirement from the IAEA, ElBaradei has repeatedly gone on record to state that during his tenure at the agency he never saw any evidence that Iran was proliferating nuclear weapons.

What is more, he informs readers that after the 2007 US intelligence report that confirmed that Iran's program had been peaceful since 2003, "I received a follow-up briefing by US intelligence. They did not show the supposed evidence that had let them to confirm the existence of a past Iranian nuclear weapon program, other than to refer to the same unverified set of allegations about weaponization studies that had already been discussed with the agency." (pg 269)

He also writes, "The Americans did acknowledge - as in most previous intelligence briefings - that there was no indication that Iran had undeclared nuclear material." (pg 262) Indeed, this is important information, given that in more than a dozen reports on Iran the IAEA has repeatedly confirmed the absence of any evidence of military diversion of "declared nuclear material".

In Chapter 11, on the "squandered opportunities" with Iran, the author writes about Iran-IAEA cooperation through a workplan that resulted in the successful resolution of the "six outstanding" issues that had led to the IAEA's referral of Iran's file to the UN Security Council.

Missing in this book is any mention of that workplan's concluding paragraph that stipulated the agency's treatment of Iran's nuclear file as "routine" once those issues were resolved. That this did not, and as of today has not, happened is solely due to the US-led disinformation campaign that burdened the IAEA with new data coming from a stolen Iranian lap top, even though ElBaradei readily admits that "the problem was, no one knew if any of these was real". (pg 281).

He discretely blames his deputy, Ollie Heinnonen, now turned into a valuable US asset from his recruitment by Harvard University, of buying "into the US accusations" (pg 281), and laments the fact that on a number of occasions the US scuttled meaningful negotiation with Iran by "refusing to take yes for an answer".

Questioning the US's negotiation strategy toward Iran, in a memorable passage that rings relevant to today's context of new multilateral talks with Iran, ElBaradei writes: "It was naive to ask Iran to give up everything before the start of the talks and expect a positive response. But the problem was familiar, nothing would satisfy, short of Iran coming to the table completely undressed." (pg 313)

In a clue to the direct relevance of this book to the Iran nuclear talks this weekend in Istanbul, where the US has put its foot down by demanding Iran's suspension of its 20% uranium enrichment, ElBaradei readily admits that under the NPT, Iran has the right to possess a nuclear fuel cycle, like "roughly a dozen countries" around the world. Moreover, he reminds us of the absence of a legal basis for the US's demand, in light of the fact that "many research reactors worldwide also use 90% enriched uranium fuel for peaceful purposes, such as to produce medial radioisotopes". (pg 14)

As he puts it in the final chapter, on the quest for human security, this cannot be a selective, or rather elitist, process that benefits some while depriving others. In today's increasingly interdependent world, the idea that the threat of nuclear proliferation can be contained while the asymmetrical nuclear-have nations hold onto their prized possessions and even use them to threaten the non-nuclear nations, is simply a chimerical dream that has a decent chance of turning into a nightmare. This is the core message of ElBaradei's timely book that cannot be possibly ignored.

The Age of Deception: Nuclear Diplomacy in Treacherous Times by Mohamed ElBaradei. Metropolitan Books, Henry Holt and Company, New York, 2011. ISBN-10: 0805093508. Price US$27, 322 pages with index 340 pages.

Kaveh L Afrasiabi, PhD, is the author of After Khomeini: New Directions in Iran's Foreign Policy (Westview Press) . For his Wikipedia entry, click here. He is author of Reading In Iran Foreign Policy After September 11 (BookSurge Publishing , October 23, 2008) and Looking for rights at Harvard. His latest book is UN Management Reform: Selected Articles and Interviews on United Nations CreateSpace (November 12, 2011).

(Copyright 2012 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

Civil Aviation in India

India mulls over 49% overseas share in airlinesBy Raja Murthy

MUMBAI - The Indian government on April 12 postponed to this week an eagerly awaited decision to allow foreign airlines own up to 49% stake in Indian carriers. But overseas funding alone is unlikely to rescue India’s struggling US$12 billion civil aviation industry.

It's more a case of mismanaged potential that has caused five out of the six Indian carriers, except Indigo, to have accumulated losses of nearly $2 billion in the past two years. India, the world's ninth largest civil aviation market, had passenger traffic doubling  to over 150 million in 2011, from about 73 million in 2005-06.

India aims to be among the world's top three aviation markets within a decade. In between are mountains to climb and some strange oddities to correct - such as building multi-billion dollar luxury airports in an industry dominated by low-cost airlines.

The foreign direct investment (FDI) move, if it materializes as part of the mountain climbing process, could give desperately needed survival cash and breathing time to nearly dead flying companies like Kingfisher Airlines. The Vijay Mallya-promoted carrier is drowning in a debt of $1.3 billion, with no new loans forthcoming, with over 60% of its aircraft fleet grounded and its employees receiving salaries for December 2011 only on April 9.

The state-owned carrier Air India has similar mismanagement woes, but continues to receive public money to bankroll it. On April 12, the government approved 300 billion rupees (US$5.7 billion) as bailout and part of a revival plan for Air India across the next eight years. This after Civil Aviation minister Ajit Singh informed parliament that Air India incurs losses of $1.9 million every day, or over $700 million annually.

Whether Air India would fare better without government ownership is as moot a question as whether more funding, including FDI, could only be more investment down the drain. Waiting to be surgically treated are roots of the problem such as unviable operating costs for airlines.

Unfairly high taxes on aviation fuel have long been a major complaint for India's airline industry. Aviation Turbine Fuel (ATF) continues to be over 50% costlier in India than in Singapore and Malaysia. Fuel costs contribute about 45% of the operational costs of India's airlines.

Yet India's state-owned oil companies sell jet fuel cheaper to international airlines than for domestic flights in Indian airports. Indian Oil, for instance, sells jet fuel at $1,010 per kilo liter for international airlines in Mumbai (March 1, 2012 prices), while domestic airlines pay a pre-tax cost of $1,316.77. International airlines are free from sales tax on aviation fuel, while domestic airlines pay an additional 26% sales tax that local state governments levy.

Instead of the obvious step of reducing aviation fuel taxes to reasonable levels - or to only at least 25% above international levels - the Indian government earlier this year allowed domestic airlines to directly import aviation fuel. That seems as bizarre as asking an impoverished dying patient to go overseas to buy medicine available down the street.

Even more peculiar is that India exports nearly half its production of aviation fuel. According to Ministry of Petroleum data, India exported 4.478 million tonnes of aviation fuel in 2010-2011, out of total aviation fuel production of 9.570 million tonnes,

Fuel costs are only part of the problem. Aviation infrastructure growth appears heading in a direction different from requirements for industry growth. Privatization of metropolitan airports, for instance, resulted in multi-billion dollar upgrades for the Mumbai and Delhi airports, and new airports for Bangalore and Hyderabad. The impressive new airports though are driving up operational costs for a budget airline industry that critically needs low-cost infrastructure.

The spectacular new Terminal 3 of New Delhi's is itself both solution and problem. Built and operated by the Delhi International Airport (P) Ltd (DIAL) - a joint venture consortium of global infrastructure company GMR Group, Airports Authority of India, Fraport and Malaysia Airports Holdings Berhad - Terminal 3 makes Indira Gandhi International Airport (IGI) one of Asia's largest public buildings and the world's second-largest integrated airport, after Beijing Capital International Airport.

The $6 billion Terminal 3, spread along 4 kilometers and with a roof area of 45 acres (18.2 hectares), serves as future investment for Delhi having the world's fastest growing airport passenger traffic. According to the Montreal-based Airport Councils International, Delhi registered passenger traffic growth of 21.77%, faster than Jakarta's 19.2% and Bangkok's 12% growth. This compares impressively to the 1.8% air passenger traffic growth in North America.

But India's airlines and passengers are being asked to pay more airport fees and taxes to recover the multi-billion dollar costs for the new airports. Both Air India and Kingfisher Airlines alone owe the Delhi airport $100.4 million in airport fees. So airport employees are also suffering salary delays.

International carriers are too feeling the pinch. Malaysia's Air Asia, the continent's leading budget airline, announced termination of its flights out of the Delhi and Mumbai airports from March 24 this year, citing excessively high airport and handling fees and aviation fuel costs at these airports. Air Asia continues to fly from five other cities in South India.

The Airports Economic Regulatory Authority has proposed a 280% increase in landing and parking charges at Delhi airport, while the airport operator DIAL wants a 700% increase. Not just low-cost airlines, but Lufthansa, Air France, KLM and British Airways have announced putting on hold expansion plans in India due to the huge hike in operational fees at IGI Terminal 3.

Such headaches were not quite anticipated when an Air Deccan 48-seater ATR turbo-prop aircraft took off from Hyderabad to Vijayawada on September 26, 2003, to unofficially launch low-cost airlines in India. Since then, a heavily loss-making Air Deccan was bought by Kingfisher in 2007, and now a heavily loss-making Kingfisher is looking to sell itself to a foreign carrier.

The pending 49% FDI decision on the governmental anvil is actually a throwback to over six decades ago. In 1951, the government bought a 49% stake in Air India, founded and owned by the Tata Group. The government retained an option to buy another 2% stake and became owner. It did so under the Air Corporations Act of 25 August 1953 that nationalized all private airlines.

Air travel was booming in India in the 1950s, with cheaply available World War II surplus aircraft and India having bountiful skilled air pilots and maintenance crews after the war. The 26-page "Official Airline Guide" of July 1952, published by the Air Transport Association of India, lists schedules for about nine domestic airlines: Air India Ltd (also called The Tata Airline), the Air Services of India (also called the Scindia Airline), Airways (India) Ltd, Bharat Airways (also called the Birla Airline), Deccan Airways, Himalayan Aviation, the Indian National Airways, Kalinga Airlines and Air India International.

In 1953, India had over 20 private airlines, with unstructured growth without proper infrastructure creating market problems similar to the current woes of some domestic airlines. JRD Tata (1904-1993), called the father of civil aviation in the subcontinent, predicated an industry disaster. One of the reasons why the government nationalized the entire airline industry in 1953 was apparently to ward off many private airlines going bankrupt.

Now with Air India saved from bankruptcy with a $5.7 billion gift of public money, the government may as well consider re-privatizing Air India, and selling 49% of the stock back to its original owners the Tata Group.

The $5.7 billion bailout and the 49% FDI decision for overseas investors have better chances of working only if the government ensures there being low-cost operational costs to support low-cost air travel.

(Copyright 2012 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

Possible Options for the Euro

The single currency has arrived at a three-pronged fork in the road

There are three possible ways out of the eurozone crisis: austerity, investment or the route taken by Argentina in the 90s

• 
• • Larry Elliott
  • guardian.co.uk, Sunday 15 April 2012 18.28 BST 
  • 
    

Greeks protest outside the headquarters of the Bank of Greece in Athens. Photograph: Simela Pantzartzi/EPA

The next 12 months will decide the fate of the eurozone. The single currency's problems have not gone away and will again dominate this week's meeting of the International Monetary Fund in Washington. Every one of those attending knows that the crisis could erupt again at any moment; last week's selloff in Spanish and Italian bonds was like the puff of smoke billowing out of a volcano getting ready to blow.

Here's a summary of how things stand. The euro was constructed on the false premise that monetary union would lead to a harmonisation of economic performance across member states. Greece would become like Germany; Portugal would be similar to Finland. Instead, the euro has led to a widening gulf between rich and poor, and this has been brutally exposed by the financial crisis and its aftermath.

It became clear that the countries on the periphery of the eurozone had a cocktail of problems. Their economies were much less productive than those at the core, so they were gradually becoming less competitive. They had shaky banking systems. And they had weak public finances. Investors, unsurprisingly, came to believe that holding Greek, Italian or Spanish bonds was risky, and demanded higher interest rates for doing so. This added to the pressure on banks and governments, and by pushing up borrowing costs, affected growth prospects as well.

By late last year the eurozone was on the brink of meltdown. At that point, the European Central Bank stepped in and announced long-term refinancing operations (LTROs). These pumped unlimited ultra-cheap money into the eurozone banking system to satisfy the funding needs of banks for three years.

The idea was to kill two birds with one stone. Banks would have more cash and could use it to buy government bonds in their own countries, thus driving down interest rates and so boosting growth.
This was a high-risk strategy that depended on the crisis-affected countries quickly returning to steady and robust growth. If they didn't, their banks would be loaded up with government bonds and vulnerable to a selloff in the markets.

In the past couple of weeks this possibility has dawned on markets. They have started to mull over a scenario in which a deepening recession in Spain leads to the government missing its deficit-reduction targets, prompting rising bond yields and eventually necessitating an international bailout.
There is much talk in European circles about how Greece was a one-off. Few in the markets believe that.

In the very worst case the euro will break up entirely, leaving the ECB nursing big losses and ruing the day when it embarked on an expansion of the money supply.

As George Soros noted last week, the Bundesbank perceives the risk, which is why it is campaigning hard against any further LTROs. The message from Germany, and from other core countries, is that it is time for Spain, Italy, Greece and Portugal to start delivering on their promised structural reforms.
All that explains why Christine Lagarde, managing director of the IMF, keeps insisting that Europe has bought itself just a little time to sort out its problems. Lagarde is absolutely right about that: the single currency has arrived at a three-pronged fork in the road.

Route number one is Austerity Avenue. The eurozone continues on the same road, the poorer countries on the fringe making themselves more competitive by what is known as internal devaluation. This involves driving down production costs via wage and welfare cuts, and state assets selloffs. Living standards take a big hit for a prolonged period, but eventually countries such as Greece bridge the gap between themselves and Germany.

Economic and political problems beset this route. Austerity is killing growth, making it harder to reduce government borrowing, and it inflames populations unhappy at the prospect of falling living standards year after year. It's a bumpy road; it could also prove a short one.

Next up is the High-Investment Highway. The premise for this route is that the single currency can survive but only if measures are taken to stimulate growth. Soros proposed a plan last week in which all countries could refinance their debts at the same rate – but, as he admitted, this would never get past the Bundesbank.

Another idea, suggested by the former Labour MP Stuart Holland, is bond-financed investment programmes modelled on Roosevelt's New Deal. This would have two components: Union bonds, under which a country could convert up to 60% of its national debt into non-traded Union bonds; and Eurobonds, which would be traded and actively marketed to fast-growing countries of the emerging world wanting an alternative to dollar reserves.

The idea, which caught the interest of France's socialist presidential candidate, François Hollande, would be to use Union bonds to stabilise debt and Eurobonds to finance investment.

As with the Soros plan, this would no doubt run into stiff opposition from Germany. It would also involve a much higher degree of fiscal integration. But if Austerity Avenue is a dead end and High-Investment Highway a road to nowhere, that really leaves only one other exit: Buenos Aires Boulevard.

A paper published last week by Capital Economics described the similarities between the struggling eurozone countries today and Argentina in the late 1990s. Argentina had fixed the peso against the dollar irrevocably at the start of the 90s but, after a few good years of strong growth and low inflation, by the end of the decade was under severe strain.

The solutions tried now in Greece – austerity, debt rescheduling, IMF programmes – were tried in Argentina to no avail. Indeed, output crashed, making the country's debt position even worse. Eventually the pressure was too much and Argentina devalued and defaulted.

But far from the sky falling in, which was what the IMF and the other proponents of orthodoxy predicted, Argentina's growth averaged 9% a year from 2003 to 2007.

As Andrew Kenningham, of Capital Economics, accepts, Greece would not be expected to do nearly as well as post-crisis Argentina, which benefited from rising commodity prices and did not have to cope with the inevitable contagion effects arising from a country leaving a single currency. But, he says, Argentina's example offers a "painful but viable" exit from the crisis that the current deflationary policies do not. And unless policymakers in Europe can offer their citizens somethingmore enticing than endless austerity, a stroll down Buenos Aires Boulevard will look increasingly enticing.

The Great Indian Hope Trick - Brazil and India

In the late 1800s, the story of a startling magic trick emerged from India and spread. In its fullblown version, the story describes a street performer who begins to play his flute over a coiled rope, which climbs dancing like a cobra to a great height. The boy assistant scrambles to the top of the rope and disappears. The magician calls for the boy, grows impatient, grabs a large knife and scrambles up the rope, vanishing too. Then limbs, a torso, and a head fall out of the sky. The magician reappears, reassembles and covers the body parts, and from under a bloody sheet the boy reappears , grinning. It would be one hundred years before "the great Indian rope trick" was fully exposed as a hoax: a composite pasted together in the imagination of Western visitors from the full menu of tricks performed by Indian street magicians. Magic societies offered rewards, but no one ever performed "the world's greatest illusion."

In recent years visitors have been returning from India in a similar state of awe, overwhelmingly impressed by the nation that perhaps has been most deeply transformed by the emerging-market levitation act of the last decade. But India now risks falling for its own hype, based largely on the assumption that it is repeating a trick pioneered by China - a seemingly endless stretch of 8 to 9 percent growth - and is therefore destined to be the fastest-growing economy over the next decade. At least until the last months of 2011, when growth forecasts dipped below 7 percent and rattled investor confidence, the Indian elite seemed more focused on how to spend the boom's windfall than on working to make sure the rapid growth actually happens.

The best example of this rosy thinking was the way the ongoing baby boom in India has been transformed from a "population time bomb" into a "demographic dividend" . Until the 1990s the Indian government was still working hard to rally the nation against the dangers of overpopulation, but that fear has melted away, based on the argument that a baby-boom generation of newworkers helped fuel China's rise and will do the same for India. India's confidence ignores the postwar experience of many countries in Africa and the Middle East, where a flood of young people into the labor market produced unemployment , unrest, and more mouths to feed. I put the probability of India's continuing its journey as a breakout nation this decade at closer to 50 percent, owing to a whole series of risks that are underappreciated, including bloated government, crony capitalism, falling turnover among the rich and powerful, and a disturbing tendency of farmers to stay on the farm.

The next decade is full of bright spots, but you can't find them by looking back at the nations that got the most hype in the last decade, and hope they will hit new highs going forward. The stars of this decade will be the breakout nations, by which I mean the nations that can sustain rapid growth, beating or at least matching high expectations and the average growth rates of their income class; for the richer emerging markets with average incomes of $20,000 to $25,000 (like the Czech Republic or South Korea) breaking out will mean 3 to 4 percent growth in GDP, while for China, in the class of $5,000 and less, anything less than 6 to 7 percent will feel like a recession. Similarly, it makes no sense to think of India ($1,500 per capita income, with a high-growth population) in the same way as Russia ($13,000, with a shrinking population ). The richer the country the tougher the growth challenge.

The growth game is above all about expectations. People are always asking me, "So what if India slows from 9 percent to 6 to 7 percent - that is still three times faster than growth in the West, right?" Well, for India that slip would initially feel like a recession, because it is one of the poorer nations in the low-income group - the economies with per capita income under $5,000 - and every Indian has come to enjoy the levitating sensation of rising fast from a low base. Last year, New Delhi built its budget based on the revenue it could expect at 9 percent growth, and the prices in the Mumbai stock market were based on what Indian companies would be worth down the road if the economy continued to grow at a pace of at least 8 percent. In 2011, therefore, a growth rate of 7 percent was enough to trigger a bear market in Indian stocks.

India's 'Silent Cal'

Signs of an unraveling have begun to emerge under the administration of Prime Minister Manmohan Singh, but not really because of it. When Singh was tapped to become prime minister in 2004, many hoped that he could continue to push reform, but in reality he became more of a figurehead, presiding over an economic boom unleashed by global rather than local forces, particularly the tide of easy money that was flooding out of the United States, stirring an unprecedented boom across all emerging markets.

Singh could not force reform on a political class and culture that had grown deeply complacent, and he now reminds me of U.S. President Calvin Coolidge, the nondescript leader who was in office during the boom of the 1920s but did not use his power to correct fault lines that would bring down the U.S. economy in the 1930s. A man of few words, Coolidge earned the moniker "Silent Cal," and Singh too is known for keeping his mouth shut..

Brazil, Not China

China is not the only possible model for India. Culturally and politically India has far more in common with the confusion of modern Brazil than with the command-and-control environment that defines China.

Both India and Brazil are "highcontext" societies, a term popularized by the anthropologist Edward Hall to describe cultures in which people are noisy, quick to make promises that cannot always be relied on, and a bit casual about meeting deadlines. These societies tend to be built on close ties built over long periods of time, creating an environment in which a lot goes unsaid-or is said very briefly-because much is implicitly understood from context. The spoken word is often flowery and vague; apologies are long and formal. Such societies believe deeply in tradition, history, and favoring the in-group , whether it is one's family or business circle, and thus they are vulnerable to corruption.

"Low context," in contrast, describes societies like the United States and Germany in which people are individual oriented, care about privacy, and are more likely to stick to timelines and their word. People tend to be on the move, to have many brief relationships, and thus rely on simple, open communications and codified rules to guide behavior.

The most popular soap opera in Brazil in recent times has been A Passage to India, a Brazilian-Indian love story filmed in the Indian cities of Agra and Jodhpur in which Brazilian actors play the Indian roles and pass easily for North Indians. To Indians who have seen it, the show is a dead ringer, in terms of look and mood, for the style of the Indian producer Ekta Kapoor, who has turned out some of the most popular serial dramas in Indian TV history.

In politics there is also a distinct Indo-Brazilian connection: a desire for state protection from life's risks - social welfare for the nation as one big in-group-to a degree rarely found in other highcontext societies. The political elites of India and Brazil are fond of welfare-state liberalism, and both populations demand high levels of income support even though the economies do not yet generate the revenue to support a welfare state. Per capita income is about $12,000 in Brazil and $1,500 in India.

It was easy for India to increase spending in the midst of a global boom, but the spending has continued to rise in the post-crisis period. If this continues, India may meet the same fate as Brazil in the late 1970s, when excessive government spending set off hyperinflation and crowded out private investment, ending the country's economic boom.

Crony Capitalism

Crony capitalism is a cancer that undermines competition and slows economic growth. That is why the United States moved to take down the robber barons by passing anti-trust laws in the 1920s. Ever since, the American economy has seen constant change in its ranks of the rich and powerful, including both people and companies. On average , the Dow index of the top-thirty U.S. industrial companies replaces half its members every fifteen years. India's market used to generate heavy turnover too, but in late 2011, twenty-seven - 90 percent - of the top-thirty companies tracked by the benchmark Sensex index were holdovers from 2006. Back in 2006 the comparable figure was just 68 percent. Further, the top-ten stocks on the Sensex now account for twothirds of the total value, while the top ten on the Dow account for just half the total value, showing a higher concentration of corporate wealth in India.

Like most emerging nations India celebrates when its companies "go global," but this is not necessarily a good sign. To hit its 8 to 9 percent growth target India needs its businesses to reinvest at home, but they are looking abroad. Investment by Indian businesses has declined from 17 percent of GDP in 2008 to 13 percent now. Overseas operations of all Indian companies now account for more than 10 percent of overall corporate profitability, compared with just 2 percent five years ago. Given the boom in the Indian middle class, Indian companies should see huge opportunity at home: they are leaving because of the growing resentment against the domestic operating environment.

In the global media India is closely associated with its dynamic technology entrepreneurs, who often grace the covers of international magazines. But this misses the retreat inward, the high-context side of India. Lately the enterprising moguls are getting replaced on the billionaire list by a new group: provincial tycoons who have built fortunes based on sweetheart deals with state governments to corner the market in location-based industries like mining and real estate. India has always been top-heavy with billionaires, which is partly a function of the way ingroups work to horde the economic pie for themselves.

Political Chameleon

India's boom has also sparked a rise in inequality, which to some extent is natural in the early stages of economic development; however, inequality can stall growth if it goes unchecked. Over the last decade, consumption levels have grown dramatically for all Indians, but 6 percentage points faster per year for the richest 10 percent than for the poorest 10 percent. Political leaders have been working to contain social tensions, mainly by increasing government handouts rather than by widening business and job opportunities. The Gandhi family has continued to show its trademark sensitivity to the poor, but in ways that may backfire against economic growth by running up deficits.

This habit - deficit spending in good times as well as bad - was a major contributor to the current debt problems in the United States and Western Europe, and India can ill afford it. What's more, welfare schemes such as the rural employment guarantees create a perverse incentive for villagers to stay on the farm. China was able to convert its growing labor force into an economic miracle by encouraging a rapid mass migration of inland farmers to the more productive coastal cities. Over the past decade the share of the Chinese population living in urban areas rose from 35 to 46 percent. During the same period India's urban population grew much more slowly-from 26 percent to 30 percent of the whole.

Why it is 50-50

No other large economy has so many stars aligned in its favor, from its demographic profile to its entrepreneurial energy and, perhaps most important, an annual per capita income that is only onefourth of China's . But Indian policy makers cannot assume that demographics will triumph and that problems such as rising crony capitalism and increased welfare spending are just sideshows instead of major challenges . These are exactly the factors that have prematurely choked growth in other emerging markets.

The wild card for India is its freewheeling democracy, an environment in which the zeitgeist can change very quickly. It was only in the last decade that India came to see itself as the next China, and came to see its growing population as a competitive advantage rather than as a threat. The recent case of national overconfidence could give way just as fast to a healthy sense of urgency, with new state-level leaders who see the complex picture of India for what it is.

The great Indian rope trick may be impossible, in its mythical form, but Indian leaders don't need to come up with something that dazzling. An economy with low per capita income is relatively easy to levitate. And lesser versions of the rope trick - with no one disappearing into the sky and no falling body parts - are still impressive enough to keep audiences riveted to the show.



Excerpts from Ruchir Sharma's new book, Breakout Nations: In Pursuit of the Next Economic Miracles, published by Allen Lane/Penguin. The author is head of Emerging Markets and Global Macro at Morgan Stanley Investment Management

When is poor form just randomness?

Ed Smith in Cricinfo

There is a nasty moment in the career of every coach or captain when he looks around the dressing room during one of his own team talks and asks himself the startling but pertinent question, "Who am I talking to? These words, these exhortation, these commands - who are they aimed at? Who do I want to be listening? Is anyone? And should anyone be listening, even to me?" 

And yet all captains were once themselves in the ranks, so they must still remember the days when they were among the non-listeners rather than the un-listened to. One colleague of mine kept a newspaper crossword (unobtrusively placed next to his left thigh) to look at during every team talk. As the coach yelled and blamed players, my team-mate would nod sagely, as if in agreement. But he wasn't nodding about the team talk at all; he was nodding in satisfaction at having cracked nine across.

And I don't blame him. In fact, the ability to tune out of team talks is a vital preliminary for preserving your sanity as a player. Why? Because cricket is a very difficult game to generalise about and because it is very rare that all the components of a team underperform simultaneously. Far more often - after any day's play - the dressing room contains a wide variety of individual performances. So why should a player who has prepared optimally and performed admirably allow his mood to be ruined by a team talk that is aimed entirely at someone else? Cricket is famously a team game played by individuals - a fact it is all too easy to forget when you are speaking to the whole team.

Look at England's performances in Test matches this winter and ask yourself what changed between the abject failures of Pakistan and the superb victory of the second Test in Colombo?

The bowling? No change - it was excellent throughout. The wicketkeeping? No change. The fielding? No change. The body language? A symptom rather than a cause. The team mentality? No change that I could discern. The effort and discipline? No change that I could pick up.

The difference was very simple: England succeeded in getting runs in Colombo where they failed to get runs in the UAE and in Galle. Only one element of their game had been problematic. And once England's batting was fixed - or fixed itself - the team returned to winning ways and preserved their status as the No. 1-ranked Test team in the world.

It is alarmingly simple. All that disappointment and suffering - the defeats, the soul searching, the media criticism, the frankly baffling idea that Andrew Strauss ought to be sacked as captain, and the barking mad suggestion that Kevin Pietersen was no longer good enough - it was all caused by something utterly straightforward: England's six frontline batsmen simply weren't scoring enough runs.

How can we explain the fact that so many good players were out of form simultaneously? The coach, Andy Flower, was typically self-critical in blaming the team's preparation for the batting failures earlier this winter. I have a different theory. England's collective batting woes did not necessarily have a direct "cause" of the sort that journalists and fans like to believe must always exist. It may not have been a question of effort or preparation or even collective mood.

Team batting failures are sometimes caused by the simple fact of randomness. What do I mean by randomness? Imagine the career scores of each batsman in the team printed in sequence on a piece on paper. It would look like a cardiogram - the upward spikes are the hundreds, the lowest points are the zeroes. Now imagine six of these cardiograms - one for each of the team's batsmen - laid one above the other on the same page.

	England's collective batting woes did not necessarily have a direct "cause" of the sort that journalists and fans like to believe must always exist. It may not have been a question of effort or preparation or even collective mood

If the same batting team stays together for a long enough period of time - and England's selection policy is very stable - there will inevitably be a time at which all six of the cardiograms are at a low point. Obviously this is a catastrophe for the team: no one is getting any runs! But it does not follow that the batsmen are slacking or the coaches are useless or the tactics are flawed. It really is just one of those things.

The question, and it is a hugely problematic one, is: how can we know if it really was random rather than "caused" by errors of approach and application? There is no complete answer to that. It is a question of judgement; and good judgement is what singles out the top coaches and captains.

The best coach I've ever worked with constantly used to ask if what everyone else was calling "form" was in fact randomness. When my team was bowled out for a low score, he'd say, "Did you actually bat badly? Or did you just nick everything?" He meant that sometimes the ratio of edges to plays-and-misses is unusually high. The underlying logic is important: it is a sign of wisdom not to draw too many conclusions from a small sample of outcomes.

If this coach sounds like a soft touch, don't be fooled. He sometimes asked the same question in reverse form when we won. He would shock me by saying, "You won, but for much of the game you were outplayed. I think you need to consider changes." The point - a point that most students of sport entirely miss - is that the foundations of lasting success are built on the correct assessment of a team's fundamentals: its ability, its cohesion, its discipline and preparation. Those fundamentals change slowly, and it is easy to misinterpret a random fluctuation as a fundamental crisis.

Look at other sports. Last autumn, after a string of defeats, Arsenal languished at the bottom of the Premier League. There was a clamour for Arsene Wenger, their superb manager, to be sacked - despite his stellar record of producing successful teams while also balancing the budget. Does anyone now believe that Arsenal would have recovered so brilliantly (they are third in the table and set for yet another year of qualification for Europe) under a different manager? No, what was required was for Arsenal's board and fans to hold their nerve instead of over-react to a small sample of poor results.

The same applies to this England team. They had a shock this winter. They are right to ask themselves tough questions about how such a good team lost four consecutive Test matches. But they would be wrong to think it is because they are picking the wrong players or have the wrong captain.

Post Soviet Privatisation - A policy of mass destruction

http://www.cam.ac.uk/research/news/a-policy-of-mass-destruction/

A new study reveals how a radical economic policy devised by western economists put former Soviet states on a road to bankruptcy and corruption.

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A new analysis showing how the radical policies advocated by western economists helped to bankrupt Russia and other former Soviet countries after the Cold War has been released by researchers.

The study, led by academics at the University of Cambridge, is the first to trace a direct link between the mass privatisation programmes adopted by several former Soviet states, and the economic failure and corruption that followed.

Devised principally by western economists, mass privatisation was a radical policy to privatise rapidly large parts of the economies of countries such as Russia during the early 1990s. the policy was pushed heavily by the International Monetary Fund, the World Bank and the European Bank for Reconstruction and Development (EBRD). Its aim was to guarantee a swift transition to capitalism, before Soviet sympathisers could seize back the reins of power.

Instead of the predicted economic boom, what followed in many ex-Communist countries was a severe recession, on a par with the Great Depression of the United States and Europe in the 1930s. The reasons for economic collapse and skyrocketing poverty in Eastern Europe, however, have never been fully understood. Nor have researchers been able to explain why this happened in some countries, like Russia, but not in others, such as Estonia.

Some economists argue that mass privatisation would have worked if it had been implemented even more rapidly and extensively. Conversely, others argue that although mass privatisation was the right policy, the initial conditions were not met to make it work well. Further still, some scholars suggest that the real problem had more to do with political reform.

Writing in the new, April issue of the American Sociological Review, Lawrence King and David Stuckler from the University of Cambridge and Patrick Hamm, from Harvard University, test for the first time the idea that implementing mass privatisation was linked to worsening economic outcomes, both for individual firms, and entire economies. The more faithfully countries adopted the policy, the more they endured economic crime, corruption and economic failure. This happened, the study argues, because the policy itself undermined the state’s functioning and exposed swathes of the economy to corruption.

The report also carries a warning for the modern age: “Rapid and extensive privatisation is being promoted by some economists to resolve the current debt crises in the West and to help achieve reform in Middle Eastern and North African economies,” said King. “This paper shows that the most radical privatisation programme in history failed the countries it was meant to help. The lessons of unintended consequences in Russia suggest we should proceed with great caution when implementing untested economic reforms.”

Mass privatisation was adopted in about half of former Communist countries after the Soviet Union’s collapse. Sometimes known as “coupon privatisation”, it involved distributing vouchers to ordinary citizens which could then be redeemed as shares in national enterprises. In practice, few people understood the policy and most were desperately poor, so they sold their vouchers as quickly as possible. In countries like Russia, this enabled profiteers to buy up shares and take over large parts of the new private sector.

The researchers argue that mass privatization failed for two main reasons. First, it undermined the state by removing its revenue base – the profits from state-owned enterprises that had existed under Soviet rule – and its ability to regulate the emerging market economy. Second, mass privatization created enterprises devoid of strategic ownership and guidance by opening them up to corrupt owners who stripped assets and failed to develop their firms. “The result was a vicious cycle of a failing state and economy,” King said.

To test this hypothesis, King, Stuckler and Hamm compared the fortunes between 1990 and 2000 of 25 former Communist countries, among them states that mass-privatised and others that did not. World Bank survey data of managers from more than 3,500 firms in 24 post-communist countries was also examined.

The results show a direct and consistent link between mass privatisation, declining state fiscal revenues, and worse economic growth. Between 1990 and 2000, government spending was about 20% lower in mass privatising countries than in those which underwent a steadier form of change. This was the case even after the researchers adjusted for political reforms, other economic reforms, the presence of oil, and other initial transition conditions.

Similarly, mass privatising states experienced an average dip in GDP per capita more than 16% above that of non mass-privatising countries after the programme was implemented.

The analysis of individual firms revealed that among mass-privatising countries, firms privatised to domestic owners had greater risks of economic corruption. Private domestic companies in these countries were 78% more likely than state-owned companies to resort to barter rather than monetary transactions. This was revealed to be the case after the researchers had corrected the data for firm, market and sector characteristics, as well as the possibility that the worst performing firms were the ones privatised.

The study also revealed that such privatised firms were less likely to pay taxes – a critical factor in ensuring the failure of the policy, which western economists predicted would generate private wealth that could be taxed and ploughed back into the state. However, firms that were privatised to foreign owners were much less likely to engage in barter and accumulate tax arrears.

“Our analysis suggests that when designing economic reforms, especially aiming to develop the private sector, safeguarding government revenues and state capacity should be a priority,” the authors add. “Counting on a future burst of productivity from a restructured, private economy to compensate for declining revenues is a risky proposition.”

Shouldering the pain of throwing

Andrew Leipus in Cricinfo

Able to bowl but not throw because of shoulder pain? Or maybe you have lost power in your throw? Have to throw side-arm? Does your whole arm go "dead" for a few seconds after you release the ball? Or you are now experiencing a click, crunch or clunk when you lift the arm? These are just some of the many symptoms and behaviours that can be present in the cricketer's shoulder and which can help clinicians diagnose what your underlying problem might be. 

There can't be a shoulder discussion without a brief anatomy lesson. In terms of understanding the basics, the glenohumeral joint is a shallow ball-and-socket design, allowing a huge amount of mobility yet remaining as stable as possible. It also has to tolerate massive torques or rotational forces generated. Some people equate the head of the humerus (HOH) and its relation to the scapula with a golf ball sitting on a tee, i.e. easy to topple over. But it is actually more like trying to balance a soccer ball on your forehead, with both the ball and the head/body constantly moving to maintain "balance" and stop the ball from dropping off. It is this balance between the socket joint and the scapula position which we need to consider in the cricketer's shoulder as it is where a lot of problems begin and where a lot of rehab programmes fail.

As is the case with all injuries, the anatomy often lets us down by not being able to cope with the functional demands. Some injuries develop acutely, such as occurs with one hard throw when off balance, and some develop over a period of time through lots of high repetition - degenerative type injuries. The two most commonly injured structures in cricket are the infamous rotator cuff and the glenoid labrum.

The cuff is a group of small muscles acting primarily to pull and hold the HOH into its glenoid socket. The long head of biceps tendon assists the rotator cuff in this role. The labrum is a circular cartilage structure designed to "cup" or deepen this socket and provide attachment for the biceps tendon.

An injury to the labrum results in the HOH having excess translatory motion and not staying centred in the glenoid. The cuff then has to work harder to compensate for this structural instability. This translation often results in a "clunky" shoulder or one which goes "dead" when called upon to throw at pace. Anil Kumble's shoulder had a damaged labrum due to his high-arm legspin action. Years of repetitive stress had detached his labrum from the glenoid, resulting in the need for surgery. He's not alone. Muttiah Muralitharan and Shane Warne also had shoulder surgeries in their careers. And it's not just spin bowling, as many labral compression injuries occur during fielding when diving onto an outstretched arm.

Injury to the cuff, however, also results in a dynamic instability, whereby the HOH is again not held centred, and subsequently over time stresses both the labrum and cuff. Impingement is a common term used to describe a narrowing of the space in the shoulder that can result from this loss of centering. The cuff doesn't actually need to be injured for this to occur - repetitive throwing can tighten the posterior cuff muscles and effectively "squeeze" the HOH out of its normal centre of rotation in the glenoid. It really is a vicious circle and cricketers compound any underlying dysfunction by the repetitive nature of the game. They might not throw much in a match but when they do it is usually with great speed. The bulk of the throwing volume occurs during their practice sessions.

And when talking about shoulder mechanics we need to also understand critical role of the scapula. In order to ensure that the HOH remains remain centred in the glenoid, the scapula must slide and rotate appropriately around the chest wall (that soccer ball example). Any dysfunction in scapula movement is typically evidenced by a "winging" motion when the arm is elevated or by observing the posture of the upper back. Whether the winging comes before the injury or as a consequence is hotly debated. Either way it needs to function properly. And to complicate things even further, the thoracic spine also needs to be able to extend and rotate fully to allow the scapula to move. Kyphotic or slouched upper backs are terrible for allowing the arm to reach full elevation and is a big contributor to shoulder problems.

It should be clear that in order for a cricketer's shoulder to be pain-free, there needs to be a lot of dynamic strength and mobility of the upper trunk and shoulder girdle. But throwing technique is equally critical to both performance and injury prevention. Studies have shown that the shoulder itself contributes only 25% to the release speed of the ball. To impart this 25%, the angular velocity of the joint can reach 7000 degrees per second. However, what is interesting is that a whopping 50% is contributed by the hips and trunk when the player is in a good position for the throw (allowing for a coordinated weight transfer). But when off-balance and shying at the stumps, as often occurs within the 30-yard circle, the shoulder alone can be called upon to produce more than its usual load. Thus it is important to remember that throwing should be considered as a whole body skill.

	Injury to the deep joint capsule ligaments and biceps tendon are difficult to diagnose but can account for that "problem" shoulder © Getty Images Enlarge

Often a player will be able to bowl without experiencing symptoms, but will struggle to throw. In these cases, it is common to find pathology involving the long head of biceps or where it anchors superiorly onto the labrum. The latter is also commonly known as a SLAP lesion. In the transition from the cocking to acceleration phase of throwing, the shoulder is forcefully externally rotated. The biceps is significantly involved in stabilising the HOH at this point and often pulls so hard that it peels the labrum off the glenoid, giving symptoms of pain and instability. The overhead bowling action, however, does not put the shoulder into extremes of external rotation and hence symptoms do not usually occur. If pain is experienced during the release phase of throwing then there is a good chance that technique is again at fault. In order to decelerate the arm after the ball is released, the trunk and arm need to "follow through", using the big trunk muscles and weight shift towards the target. Failure to do this results in a massive eccentric load on the biceps tendon, also potentially tugging on its anchor on the glenoid. Throwing side-arm to avoid extremes of external rotation and pain is a common sign that all is not well internally.

As you can see, an injury to the shoulder is not a simple problem. And there are many other types of pathology found. It requires thorough assessment and management of a host of potential contributing factors which are mostly modifiable when identified. And whilst a lot can go wrong in a cricketer's shoulder, there is a lot that can be done to make sure it stays strong and healthy. Because prevention is always better than surgery in terms of outcomes, next week I'll discuss some shoulder training and injury prevention tips used by elite cricketers.