International Monetary Fund discussed forcing Greek debt default

John Vassilopoulos

A leaked transcript published April 1 by WikiLeaks of a March 19 teleconference between leading International Monetary Fund (IMF) officials Delia Velculescu, head of the IMF Representative Mission to Greece and Poul Thomsen, director of the IMF’s European Department, lifts the lid on the underhand and criminal methods employed to enforce austerity on the Greek working class.

The leak was timed just before the commencement of talks on April 4 between Greece’s pseudo-left Syriza government and the “quartet” of its creditors—the European Commission, European Central Bank, IMF and the European Stability Mechanism. The purpose of the talks is to agree on further austerity measures to be implemented by Syriza and its xenophobic coalition partners, the Independent Greeks, in return for its next loan tranche worth €5.7 billion.

The discussion between Thomsen and Velculescu centered on differences between the European Union (EU) and IMF regarding how to enforce the terms of Greece’s third austerity package, signed by Syriza Prime Minister Alexis Tsipras last August.

Referring to German Chancellor Angela Merkel, Thomsen is quoted as saying, “Look you, Mrs. Merkel, you face a question. You have to think about what is more costly: to go ahead without the IMF, would the Bundestag say ‘The IMF is not on board’?—or to pick the debt relief that we think that Greece needs in order to keep us on board?”

The German government, leading the rest of the EU behind it, is opposed to a “haircut” of Greece’s €300 plus billion debt, given that it holds the biggest portion of it. Following a meeting with IMF chief Christine Lagarde on April 5, Merkel reiterated this position by claiming that a Greek haircut “is legally not possible in the Eurozone.”

The IMF has long stated that its participation in Greece’s third Memorandum is conditional on a partial write-down of the debt, in return for even more draconian austerity measures than those currently being imposed.

On the conference call, Velculescu complained that the EU is “backtracking” on the issues “of pension reform, income tax credit, VAT and the wage bill,” while Thomsen stated that “if [Greece] come around to give us 2.5 percent [of GDP in tax hikes and pension-wage-benefits cuts]... we should be fully behind them.”

Thomsen and Velculescu expressed concerns that the prospect of resolving differences over Greece could be long and drawn out and further exacerbated by the June 23 “Brexit” referendum called by the British government on whether the UK remains in the EU.

According to Thomsen, “The Europeans are not going to have any discussions for a month before the Brexits and so, at some stage they will want to take a break and then they want to start again after the European referendum.”

To avoid this scenario, Thomsen and Velculescu expressed the need for a credit “event” to force the EU and Greece to accept the IMF’s line and avoid prolonged negotiations. The transcript states:

Thomsen: …What is going to bring it all to a decision point? In the past there has been only one time when the decision has been made and then that was when they were about to run out of money seriously and to default. Right?[Emphasis added]

Velculescu: Right!

Velculescu then states the IMF could put an ultimatum to Germany in April, motivating this exchange:

Thomsen: But that is not an event. That is not going to cause them to… That discussion can go on for a long time. And they are just leading them down the road… why are they leading them down the road? Because they are not close to the event, whatever it is.

Velculescu: I agree that we need an event, but I don’t know what that will be. But I think [Jeroen] Dijsselbloem [president of the Eurogroup] is trying not to generate an event, but to jump start this discussion somehow on debt, that essentially is about us being on board or not at the end of the day.

This extraordinary exchange is an expression of the gangster-like modus operandi of the financial elite, who will stop at nothing to preserve their wealth and stranglehold over society—even if it means bankrupting and destroying an entire country. It gives the lie to the claim that blind market forces dictate the fate of the Greek economy, as opposed to conscious policy decisions designed to assert and preserve the class rule of the global financial aristocracy.

The public outcry in Greece following the revelations was not matched by Syriza. In a letter to Lagarde, addressed “Dear Christine”, Prime Minister Alexis Tsipras tamely asked whether Thomsen’s and Velkulesku’s position “reflects the official IMF view” and whether “ Greece can trust, and continue negotiating in good faith with IMF officials who express views such as those expressed in these publications.” He concluded his letter by groveling, “As always, I would be happy to talk to you any time on these issues, as I am sure your share my concern.”

In reply Lagarde claimed that “any speculation that IMF staff would consider using a credit event as a negotiating tactic is simply nonsense.”

Without a shred of evidence, she essentially blamed the Greek government for the transcript being made public and demanded the “[Greek] authorities ensure an environment that respects the privacy of [the IMF team’s] internal discussions and take all necessary steps to guarantee their personal safety.”

Anxious to comply with Lagarde’s diktat, Tsipras’ government sent 15 armoured police vans and riot police to surround the Hilton hotel in Athens where officials of the quartet were meeting with the government’s economic team. This was in response to a small 300-strong protest, organised by public sector trade union federation ADEDY with the participation of pseudo-left outfits Popular Unity and Antarsya.

Alongside its private sector counterpart, GSEE, ADEDY has called countless one-day general strikes over the last six years in order to dissipate workers’ anger, while one austerity package after another has been forced through the Greek parliament. This treachery culminated in their endorsing a “Yes” vote in last July’s referendum, in opposition to the overwhelming “No” vote by the population against, on whether Greece should accept a third memorandum of austerity.

The talks are continuing this week in Athens. Germany is anxious to prevent any “wrong signals” being sent regarding a let-up in continent-wide austerity, with Greece at its epicenter, while the US-led IMF is anxious to maintain its tough stance globally. Speaking to Bloomberg, Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics in Washington, said, “The IMF is gearing up for new clients in the emerging economies. That is not best done by being soft on Greece.”

Syriza, which came to power in January last year on a mandate to oppose austerity, is now despised by many who voted for it. According to a poll published by the University of Macedonia April 1, it trails the conservative New Democracy by eight points.

Syriza is keen to demonstrate to the creditors it will do all required to continue austerity and fulfil a €15 billion privatisation programme. Last Friday, Syriza announced the government had sold a controlling stake in the country’s largest port, Piraeus, for €368.5 million to Cosco, the Chinese state shipping group.

The Financial Times noted, “Tsipras opted to host the signing ceremony at his own office, underlining his government’s newfound enthusiasm for infrastructure deals with foreign investors.”

While the deal was being signed, hundreds of Piraeus port workers protested and were attacked by riot police in a park close to Tsipras’ office.

IMF to meet amid worsening stagnation and rising geo-economic tensions

Nick Beams

The spring meetings of the International Monetary Fund (IMF) and World Bank will convene in Washington later this week amid reports pointing to deepening stagnation in the world economy and warnings that the negative interest policies of major central banks are worsening the situation.

The latest update from the Brookings Institution-Financial Times tracking index said the world economy was characterised by “tepid growth” growth, with world recovery “weak, uneven and in danger of stalling yet again.”

“A common theme, from the best performing economies to the worst, is that the growth of physical capital investment is sluggish, industrial production is negative or, at most, weak, and business confidence is falling,” it said.

For some time the US economy has been touted as a “bright spot,” with continuing employment growth and rising consumer spending. However, the tracking index update said “weak business confidence and minimal increases in investment, despite large corporate profits and stashes of cash, portend a growth pattern that is uneven and of questionable durability.”

Evidence of that conclusion has come in the latest forecast from the Atlanta Federal Reserve, which put US growth for the first quarter of this year at just 0.1 percent, compared to a previous estimate of 0.4 percent.

In the euro zone, the update said industrial production and employment were registering “modest growth” but “investment, retail sales and consumer confidence remain weak across the euro zone, raising concerns about the sustainability of the recovery.”

In Japan, growth had plateaued at a positive but low level. Industrial production, however, had turned negative and retail sales continued to decline. China’s growth had continued to slow but at this point a “hard landing” appeared to have been averted.

In the recent period, India has been hailed as a major source of global growth, possibly even replacing China at some point in the future. But the Brookings Institution-FT report said its headline growth of 7 percent “glosses over many problems beneath the surface.” While lower oil prices had been a boon for the Indian economy “investment growth has fallen sharply and industrial production is actually contracting, raising questions about the durability of India’s rapid growth.”

The report pointed to the deep recessions in Brazil and Russia. In both economies “virtually every indicator of economic activity continues to decline.” Other emerging markets were “mostly a picture of gloom. While some had little room to manoeuvre in trying to revive growth, others were trying to deal with both economic and political instability.”

In the light of these developments, the IMF is expected to revise down its estimates for global economic growth in its World Economic Outlook due to be released later today, continuing a pattern that has marked the last several years.

There are also growing concerns that the negative interest policies being pursued by a number of central banks, including the European Central Bank (ECB) and Bank of Japan (BoJ), instead of providing a stimulus to the world economy may be having the opposite effect.

Pointing to the spread of the negative interest rates regime, the Financial Times noted that in less than two years negative interest rates “have gone from being a subject of fireside speculation to a reality for nearly a quarter of the global economy.”

A blog posted by key IMF economists on Sunday “tentatively” concluded that while, overall, negative rates may have been helpful in providing monetary stimulus and easier financial conditions, “there are limits on how far and for how long negative interest rate policies can go.”

They noted that the interest rate margins of banks appear to have been “squeezed by the combination of negative rates and quantitative easing.” If low or negative interest rates persisted “they could undermine the viability of life insurers, pensions, and saving vehicles.” Low rates made it difficult for insurers to meet guaranteed returns and “this will eventually force losses on life insurance policy holders.”

The IMF blog echoed criticisms from key financial interests. In a note to shareholders this week, the chief executive of the giant hedge fund BlackRock, Larry Fink, said instead of boosting the economy, low rates could be leading to a decline in consumer spending as savers were forced to divert money from current expenditure to try to cover the costs of their retirement.

“This reality has profound implications for economic growth: consumers saving for retirement need to reduce spending. A monetary policy intended to spark growth, then, in fact, risks reducing consumer spending,” he wrote.

Writing in the Financial Times last week, Scott Minerd, the chief investment officer at Guggenheim, said the world was in a “global liquidity trap” for the first time since the Great Depression. This refers to a situation where economic prospects are so poor that lowering interest rates fails to produce any increase in investment in the real economy—a situation sometimes likened to pushing on a piece of string.

Minerd noted that some of the “unintended consequences” of negative interest rates included deflationary headwinds and slower growth—exactly the opposite of what is needed. “But when monetary policy is the only game in town, negative rates are likely to beget even more negative rates, creating a perverse cycle.”

The IMF warnings about the limitations of negative interest rates are part of a push to have governments adopt measures to boost spending in a coordinated global response to the worsening economic stagnation. Those proposals have so far fallen on stony ground, however, because of divisions among the major economic powers. The IMF made this call in advance of the recent G-20 meeting but it was not even seriously discussed.

Since then the tensions have grown. Earlier this month, the Japanese government warned it could take action over the rising value of the yen in the face of the quantitative easing and negative interest rate policies of the BoJ, which had been expected to lower the currency’s value and provide a boost to Japan’s exports.

This was followed by extraordinary comments by German Finance Minister Wolfgang Schäuble, laying some of the blame for the rise of the right-wing Alternative for Germany (AfD) party on the ECB’s quantitative easing policies.

In remarks reported by Dow Jones, he told an audience: “I said to Mario Draghi [ECB president] … be very proud: you can attribute 50 percent of the results of a party that seems to be very new and successful in Germany to the design of this policy.”

Schäuble said there was a growing understanding that “excess liquidity had become more a cause than a solution to the problem.” German Transport Minister Alexander Dobridt said low interest rates were robbing savers of retirement income and the ECB was following a “very risky course.”

These conflicts will most likely be carefully “managed” at the IMF meeting but they will not be far underneath the surface of official proceedings.

Life expectancy gap between US rich and poor widens

Jerry White

A study published Monday in the Journal of the American Medical Association(JAMA) provides more evidence that life expectancy in the United States is chiefly determined by economic class. Higher income is the most critical factor in longevity, the study found, with the gap between the richest one percent and poorest one percent of individuals averaging 14.6 years for men and 10.1 years for women.

The study was based on income data derived from 1.4 billion tax records between 1999 and 2014 of individuals aged 40 to 76, and death records obtained from the Social Security Administration. It found that men in the top one percent had an expected age of death of 87.3, compared to 72.7 years for the poorest one percent. The richest women on average lived 88.9 years, while the poorest lived only 78.8 years.

“Men in the bottom 1 percent of the income distribution at the age of 40 years in the United States,” the study noted,” have life expectancies similar to the mean life expectancy of 40-year-old men in Sudan and Pakistan.” US men in the top one percent of income distribution have “higher life expectancies than the mean life expectancy for men in all countries at age 40 years,” the study found.

Writing on the findings, which were obtained by a research team led by Stanford University economics professor Raj Chetty, the Stanford University News commented, “Being richer was associated with living longer at every level of the income distribution. And the gap between the richest 1 percent and the bottom 1 percent in the nation was vast.”

The study is only the latest report highlighting the pervasive impact of social inequality on every aspect of life in America. A study released late last year by two Princeton University economists showed that the mortality rate for white, middle-aged working-class Americans has risen sharply over the past fifteen years, largely due to a dramatic rise in the rate of deaths from suicide, drug abuse and alcoholism.

Another recent study showed that all net full-time job growth in the US between 2005 and 2015 was accounted for by “alternative work arrangements,” i.e., people working as independent contractors, temps, through contract firms or on-call.

These reports provide a glimpse of the grim reality of social life for broad masses of American workers and youth, a reality that is concealed by the media behind complacent and self-satisfied portrayals of an economy rebounding from the financial disaster of 2008. The political establishment is indifferent to the economic and social deprivation facing tens of millions of Americans. President Barack Obama summed up the combination of contemptuousness and cluelessness of the ruling elite when he hailed the jobs report for February with the boast, “America is pretty darn great right now.”

This social crisis is the source of the immense anger and hatred for the political establishment revealed in the 2016 election campaign. The worsening plight of workers—occurring side-by-side with record corporate profits and stock prices—underlies the convulsive character of the presidential contest.

The Republican front-runner, billionaire real estate speculator Donald Trump, has sought to tap into popular anger in order to divert it along the reactionary path of anti-immigrant chauvinism and militarism. But the broader phenomenon, reflected in the widespread support for self-described “democratic socialist” Bernie Sanders, is the growth of anti-capitalist sentiment. The political radicalization of the working class is taking the initial form of backing for a candidate who is seeking the Democratic presidential nomination by presenting himself as an opponent of social inequality and the “billionaire class.”

The Stanford study underscores that the essential division in the United States is not race, but class. In America, how long you live is determined above all by what social class you belong to.

Between 2001 and 2014, life expectancy in the United States increased by 2.34 years for men and 2.91 years for women in the top five percent of income distribution, but by only a negligible 0.32 years for men and 0.04 years for women in the bottom five percent. The increase in longevity for the richest Americans, the study noted, is equivalent to eliminating all cancer deaths in the US.

The advances in medical science and life-extending technology have largely bypassed large sections of the population. The disparity is worse in areas hit hardest by deindustrialization and rural poverty.

Of the states with the lowest life expectancy in the bottom income quartile (25 percent), eight form a geographic belt from Michigan to Kansas (Michigan, Ohio, Indiana, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas). Nevada, Indiana and Oklahoma had the lowest life expectancies (<77.9 years) when men and women in the bottom income quartile were averaged.

When broken down further into so-called commuting zones—urban areas and surrounding counties that share common economic characteristics—five of the zones with the lowest life expectancies were clustered in the industrial Midwest states. Among the cities where the poorest sections of the population live the shortest lives were: Louisville, Kentucky (77.9); Toledo and Cincinnati, Ohio (77.9); Detroit, Michigan (77.7); Indianapolis, Indiana (77.6), Tulsa and Oklahoma City, Oklahoma (77.6), and Las Vegas, Nevada (77.6).

The worst in the nation is the economically depressed steel town of Gary, Indiana, where the mean life expectancy for both sexes is 77.4 years, and for men, 74.2 years. The gap in life expectancies between the richest and the poorest quintiles is 7.2 years in Gary, where more than 40 percent of the population lives in poverty. The gap in life expectancies is far higher, however, in several other cities, including Madison, Wisconsin (8.1 years), Detroit (8.2 years), Salt Lake City, Utah (8.3 years), and Louisville, Kentucky and Cincinnati, Ohio (8.4 years).

Between 2001 and 2014, average life expectancy in the bottom income quintile fell in several commuting zones. In Florida, this included Cape Coral, Miami, Tampa and Pensacola. Other areas seeing a decline were Albuquerque, New Mexico; Tucson, Arizona; Des Moines, Iowa; Bakersfield, California; and Knoxville, Tennessee.

While the Stanford study does not point to the contributing factors in the growing disparity in life expectancy, there is little question that they include access to good nutrition, decent housing, a healthy environment and lower levels of stress. A study last year by researchers from Harvard Business School and Stanford University found that stressful workplaces, caused by the probability of being laid off, long working hours, work-family conflicts and the lack of employer-paid health care, contributed to lower life expectancy. Researchers concluded that 10–38 percent of the difference in life expectancy across demographic groups can be attributed to disparate job conditions.

The American Psychological Association’s annual stress report issued last month found that more than one-quarter of adults reported feeling stressed about money most or all of the time. Nearly one-third (32 percent) said their finances or lack of money prevented them from having a healthy lifestyle, and one in five said they had either considered skipping or had skipped going to the doctor in the past year when they needed care because of financial concerns.

Are Sex Offenders White?

Judith Levine & Erica Meiners

There’s a striking difference between the sex offender featured in most journalism, activist campaigns and popular media and the guy who’s usually the focus of criminal justice attention. The latter is usually a person of color. The sex offender is portrayed as white.

But is the sex offender really white?

Yes, this group is more racially proportionate to the general population than, say, drug offenders. But like every other criminal population, people convicted and punished for sex crimes are disproportionately African-American.

Six in 10 people in prison are nonwhite. But two-thirds of convicted sex offenders are white. In other words, sex offenders comprise the only criminal population in which white people are represented roughly in proportion to their numbers in the general population. Among those who are publicly listed on the registries, more than two-thirds are also white, according to an ongoing analysis by Alissa Ackerman and colleagues of over 445,000 publicly registered sex offenders in all 50 states, the federal government, and the U.S. protectorates.

Still, the analysis found, black people are disproportionate represented on the registries. African Americans account for 22 percent of publicly listed registered sex offenders nationally; they make up just 13 percent of the U.S. population.

Limited data are available on race and juvenile sex offenders (JSOs). But preliminary research published in 2015 by Rebecca L. Fix and colleagues in Sex Abuse: A Journal of Research and Treatmentsuggests a similar pattern. Looking at a sample of juvenile offenders in Alabama, the study found that while the state’s juvenile population is 32 percent African-American, 41 percent of JSOs and 67 percent of non-JSOs were African-American. “African American youth were overrepresented among confined JSOs and non-JSOs,” the authors write, “yet African Americans were significantly less overrepresented among JSOs compared with non-JSOs.” The same is true for adult criminal populations.

Adding to the skewed numbers, like other arrestees, defendants, and inmates, people convicted of sex offenses move through criminal justice systems structured by racial bias. Prosecutors are more likely to charge a man of color with rape, and juries are more likely to convict.

Racialized assumptions are also built into sex crimes policy and forensic practices, from the statute defining an offense’s seriousness—and therefore the severity of its penalty—to the instruments used to assess a person’s risk of reoffending. For instance, assessment tools such as the Static-99 give higher risk “points” to the sexual assault of a stranger—a crime for which African-Americans are convicted more than whites—than they do to incest, which is more likely to be reported by white families. Risk points are also added for prior convictions, whether for sexual or nonsexual crimes—another disadvantage to people of color disproportionately arrested, charged and convicted.

Sex offenders may be “whiter,” but it is likely that non-white sex offenders receive more significant charges and face more prison time and more rigid terms of parole and probation than white sex offenders.

Black lung disease reemerges in Australian coal mines

Richard Phillips

Thirty years ago mining companies claimed that coal workers’ pneumoconiosis (CWP) or “black lung” had been eradicated in Australian mines. In the past four months, however, eight Queensland coal miners, most of whom worked in the state’s Bowen Basin, have been diagnosed with the disease.

The reemergence of black lung is a result of company cost-cutting and the drive to boost production, combined with inadequate ventilation and dust-testing standards and delays in the proper analysis of miners’ x-rays.

The disease is caused when dust particles accumulate in parts of the lung, causing inflammation and scarring, reducing oxygen/carbon dioxide exchange and overwhelming the organ’s natural defence mechanisms. Continued dust exposure eventually leads to scleroderma, chronic bronchitis, heart problems, lung failure and a painful death.

There are currently two government inquiries into black lung in Australia—one by the Queensland state government, which will be completed in June, and the other by a federal Senate committee.

Testimony to the Senate hearing last month from black lung victims highlighted the dangerous conditions in which they worked. Percy Verrall, 73, who worked in the industry for 29 years, was the first person diagnosed with black lung in Australia in the past three decades.

Verrall said he was never supplied with masks to protect him from coal dust. “I don’t want to see any other young blokes in that condition,” he said. “It’s got to be fixed up so they’re not going to get like all the other miners with black lungs. They could finish up just the same way as me, or walking around with an oxygen bottle hooked up to them all the time.”

Ian Hiscock, another victim, said mine ventilation was poor and dust-suppression systems constantly blocked up. “The dust mitigation is inadequate in the coal mines. In this day and age of technology, a $100 million long haul to use a one inch hose to try and suppress dust is insufficient,” he said.

“The bane of the coal mine worker at the start of every shift is we always say we want more air, we need more air, and we’re not getting it, because the act and regs [regulations] say, ‘This is what you need to work to’ and the companies supply the minimum amount of air. But it’s not enough.”

There is no cure for black lung. The only way to prevent the disease is by minimising exposure to coal dust. This means rigorous and constant testing of mine sites and the use of high-quality ventilation systems and other methods to keep the dust below occupational exposure standards. Workers and retired miners need to be regularly tested for early signs of the disease and provided with adequate medical treatment.

While coal mining has been one of Australia’s largest export earners, directly employing more than 30,000 workers, the industry has no uniform coal dust standards—guidelines vary from state to state. In addition, there is no nationally-coordinated black lung testing regime and not enough specialised radiologists and qualified respiratory disease experts employed to examine miners’ legally mandated x-rays.

In Queensland, the allowable level of dust exposure for a single shift is 3 milligrams (mg) per cubic metre of air. In NSW it is 2.5 mg. These standards are well above what is regarded as “safe levels” in the US and Britain.

The official level in the US is 1.5 mg per cubic metre of air, with mines supposed to be monitored 45 times per month and during 80–100 percent production levels. These standards, of course, are rarely followed. Black lung in the US continues to rise and is currently at the highest levels in four decades.

Dust monitoring in Queensland is left to individual mining companies without independent checks. Companies, moreover, are only required to conduct dust monitoring 15 times per month. This can occur during maintenance and slow-production periods, when coal dust is obviously at a minimum.

The Queensland and Senate investigations have focussed on coal mining in Queensland, where underground mining companies have routinely exceeded allowable dust limits.

In the state’s Bowen Basin, where most of those recently diagnosed with black lung have been employed, Anglo American-owned Grasstree and Grovernor mines and the Brazilian-owned Carborough Downs mine have regularly recorded dust levels above the state’s “safe” 3 mg standard.

Evidence presented to the Senate hearing revealed that eight of 10 Queensland coal mines between 2012 and 2015 operated well over the standard, with one recording 6.5 mg. No action was taken by the Queensland or federal governments against any of the mine operators.

All Queensland coal miners have been legally required since 1993 to undergo chest x-rays before employment and at least once every five years after being hired. The x-rays are sent to the Department of Natural Resources and Mines (DNRM) for review. The department recently admitted, however, that up to 150,000 of these x-rays had not been checked, due to a lack of qualified specialists.

Black lung sufferer Keith Stoddard told a Senate hearing that only one of the seven x-rays taken of his lungs could be located by the DNRM. Shortness of breath forced Stoddard to leave the Grasstree mine six months ago. He sought medical advice and was informed that he only had 50 percent lung function.

Queensland’s Department of Natural Resources and Mines director-general James Purtill admitted at the hearing that some of the “nominated medical advisors”—appointed to provide and examine x-rays and make medical assessments of coal miners—were paid by mining companies.

This alarming admission was underlined by Monash University Professor Malcolm Sim. He said the current medical data was “inadequate” because a large number of “nominated medical advisors” were general practitioners, not radiologists, and most were located “well away from mine sites.”

Others appearing at the hearings included the Anglo American Coal head of safety Mike Oswell, who denied any problem with dust control measures at the company’s Bowen Basin mines. The Queensland Resources Council (QRC) submission claimed the current monitoring system was adequate and urged the hearing to be “wary of alarmist comments.”

A submission from the Construction, Forestry, Mining and Energy Union (CFMEU) called for national dust-monitoring standards and an independent statutory body to publicly name mines that violated dust standards. It also proposed a national black lung health monitoring system for current and former miners, and long-term care and support for those suffering from the disease.

Mining union officials told the media proper examination of miner’s x-rays by qualified respiratory experts could reveal over 1,000 coal miners suffering from black lung disease.

Notwithstanding CFMEU warnings about black lung, the obvious question is what has been the union’s role in allowing the emergence of the working conditions that produce this debilitating and ultimately fatal disease.

In 2014, Andrew Vickers, general secretary of CFMEU’s Mining and Energy Division, boasted: “The CFMEU has been instrumental in ensuring some of, if not the world’s, best health and safety laws in the coal industry. Indeed, at a time that pneumoconiosis—also known as ‘black lung disease’—is again on the rise, Australia has not had a reported case since the early 1970s.”

In fact, the union has been instrumental in undermining health and safety standards in the coal industry. In the name of maintaining “international competitiveness,” the CFMEU has worked hand in glove with the mining corporations to cut costs and increase productivity. This has involved endorsing and imposing workplace agreements that extended work shifts, increased the use of contractors and part-time labour, and eroded hard-won working conditions, including those related to health and safety.

After rubber-stamping company attacks on jobs and conditions, the CFMEU has decided to call for legislation to combat black lung, in order to deflect attention from its collaboration with the corporations in imposing the very conditions that have produced a resurgence of the disease.

UK White Paper paves way for the destruction of public education

Tania Kent

The UK Conservative government’s White Paper on education, launched on March 17, has been met with widespread opposition among thousands of teachers across the country.

The White Paper, “Educational Excellence Everywhere”, is not just a continuation of the right-wing offensive launched against education over the past 20 years. Its central aim is the complete privatisation of state education.

The paper demands that all schools are converted into academies—which are state funded but privately run—by 2022. Along with handing over statutory education fully to the private sector and abolishing local authority control, the wages and conditions of teaching staff will no longer be determined by national contracts and the state will no longer take responsibility for the training of teachers.

The announcement was met with shock and anger by masses of teachers. Within two days, over 140,000 teachers signed a petition of protest. Rallies were held across the country in opposition to the White Paper. The two largest teaching unions, the National Union of Teachers (NUT) and the National Association of Schoolmasters Union of Women Teachers (NASUWT), which held their national annual conferences immediately following the publication of the White Paper, announced strike ballots and called for industrial action to be held in the summer and autumn terms.

No confidence should be placed in the teaching unions whatsoever! The education system has reached this juncture precisely due to the complicity of the teaching unions with every single attack by both Labour and Conservative governments over the past two decades.

The vast majority of state schools will be forced to join “multi-academy trusts”, charitable bodies which run chains of schools. There is no evidence that academies have improved pupil performance. Rather, much evidence exists establishing that academies in poorer communities do worse than they did under state control. Over 80 percent of local authority schools are rated good or outstanding by Ofsted.

Sir Michael Wilshaw, Her Majesty’s Chief Inspector of Education, Children’s Services and Skills, along with the Education Select Committee and the Sutton Trust’s Chain Effects report, all demonstrate that academy status not only does not result in higher attainment but that many chains are badly failing their pupils. Several leading figures in the flagship academies are under investigation for financial irregularities as well as corruption charges, and have lost control and been handed over to other academy trusts.

The first academy was created in 2002 under the Labour government. Under the Tory-led coalition with the Liberal Democrats, academies became a significant part of schools provision. When Michael Gove was removed as education secretary in 2014, there were around 4,000 academies, nearly 20 times the number when he took office in 2010. Currently, 59 percent of secondary schools and 17 percent of primary schools are academies. There are only 16,000 schools that are still run by local authorities.

The White Paper will also end the requirement for Qualified Teacher Status (QTS), which is a university-accredited teacher training programme involving a year of in-school training. Instead, the decision on whether to accept that a teacher is qualified will be made at the discretion of a head teacher. This could mean teachers working years for low pay before someone in charge of the school budget decides to accept they have qualified. It means that non-teachers can be brought into schools to take classes at the discretion of the head, based on the supposed benefits they bring. In addition, it will impact the international portability of England’s teachers’ qualifications, which will have no recognised status outside of the country.

The government also intends to remove the requirement for governing bodies to have parent governors. Multi-academy trusts will be allowed to close down the governing bodies of individual schools. Once in a multi-academy trust, there is no way for a school to leave. It will create the conditions where there is no public accountability or scrutiny. All decisions will be made by highly paid chief executives.

The response to this unprecedented assault by the teaching unions has been to promote alliances with the Labour Party and to foster illusions in petitions and protests to pressure the government to stop its policy. The NUT conference was addressed by Labour leader Jeremy Corbyn to rapturous applause. Corbyn, who is a member of the party that first launched the academy agenda, while stating that a Labour government under his leadership would rescind the Conservative government’s anti-union laws, did not make any such promises on the abolition of academies.

Labour Shadow Education Secretary Lucy Powell merely called for a “pause”. Kevin Courtney, deputy secretary of the NUT and a member of the Socialist Alliance of Teachers stated, “We agree with Lucy Powell’s call for a ‘pause’ and we intend to work with all possible allies, including, importantly, parents and governors, to seek to defeat this White Paper.”

These allies will include leaders of the Conservative, Labour and Liberal Democrat parties in local government, who joined together to urge the government to rethink the proposals. Nicky Morgan, the Conservative Education Secretary, rejected such appeals and made clear in a statement to the NASUWT conference that “there is no reverse gear when it comes to our education reforms.”

The NASUWT issued an evasive statement declaring that it will “carefully consider the proposals”.

“All of the proposals contained in the White Paper will need to be carefully examined and teachers will expect the Government to avoid rushing into implementation of ill-considered or poor policy ideas which will fail to deliver excellence for all pupils,” it declared. The NASUWT would consider industrial action “in cases where academies fail to protect conditions of service and advance decent working conditions for members” and if they link teachers’ pay to test results, pupils’ progress or schools’ inspection results.

What this means in reality is that there will be no coordinated national opposition to the White Paper, only isolated action against an individual academy school—and then only when teachers’ anger prevents the unions from suppressing opposition.

The only concern of the unions regarding the White Paper is that they will be left out in the cold. The break-up of national pay structures could impact their negotiating rights with the government and, through this, their privileged positions as enforcers of labour discipline on behalf of the ruling elite.

The White Paper is an historic attack and will set back the education system decades if implemented. It necessitates the political mobilisation of teachers, along with broad sections of the community and students, in opposition to the dismantling of public education. The unions are hostile to such a struggle, as has been demonstrated time and again, year after year. Their “fight” against the White Paper will only ever go the same way as their “fight” in defence of public sector pensions or any other attack on teachers: To defeat via the road of betrayal.

Teachers must organise meetings in every school, independently of the unions, to discuss the implications of the government’s White Paper and the privatisation agenda, and organise rank-and-file committees in defence of public education. These must form links with other sections of workers, such as the junior doctors who are engaged in a struggle against a work contract meant to pave the way for the further privatisation of health care. The Socialist Equality Party is ready to lead such a fightback.

Major Australian companies implicated in Panama Papers

Mike Head

Australia’s big four banks and some prominent companies are named in the so-called Panama Papers, along with about 1,000 Australian residents, according to media analyses of the material issued last week by the US-based International Consortium of Investigative Journalists (ICIJ).

Among the Australian entities identified so far are BHP Billiton, the country’s largest resources giant, and Wilson Security, a firm awarded lucrative contracts by the federal government. Also identified are the owner of Hutchison, the Hong Kong-based company that operates ports and telecommunications in Australia, and an heir to the Multiplex construction empire.

These revelations point to the close involvement of the Australian corporate elite in the worldwide schemes employed by transnational corporations and the super-rich, to minimise taxes and avoid scrutiny of their business operations by setting up offshore shell companies.

On an international scale, the 11.5 million documents from Panamanian law firm Mossack Fonseca link thousands of individual and corporate entities to tax havens used to conceal profits, hide wealth and evade taxes. They reportedly implicate 140 public officials around the world, including 12 current and former heads of government, as well as 29 billionaires.

So far, no member of Australia’s political establishment has been exposed. That may be because the ICIJ has released only a fraction of the names of more than 214,000 offshore entities set up by Mossack Fonseca. The ICIJ promises to divulge the names next month, but it does not intend to make the database available to the public. Instead, the ICIJ says it is working through the documents with its media partners to find stories of “public interest.”

According to the Australian Financial Review, Australia’s four major banks feature in the files. The newspaper reported that ANZ bank appears in 7,548 documents, reflecting “the bank’s extensive work in New Zealand, the Cook Islands, Samoa and Jersey”—some of the tax havens where Mossack Fonseca operates.

Of the other three banks, the newspaper said Westpac appears in 995 documents, National Australian Bank in 261 and Commonwealth Bank in 164. This is only a partial view, because Mossack Fonseca is only one of the five biggest law firms known to be involved in “the offshore world.”

Most of the mentions of Australia’s banks refer are to clients’ bank accounts or reference letters written for their clients when they bought a Mossack shell company. In 2013, for example, a Mossack executive reported meeting an ANZ official in Hong Kong who said “she would love to assist me to go through with some cases.”

Such discussions highlight the key role of banks in the secretive offshore schemes, which all require bank accounts. A bank is meant to only open an account if it knows the name of the company’s real owner.

The Australian Financial Review also revealed that five BHP Billiton finance companies were registered in the British Virgin Islands (BVI) and moved billions of dollars through the tax haven, in an operation organised from London. BHP Billiton also used Mossack Fonseca as its BVI agent for companies linked to its diamonds, steel and aluminium businesses.

BHP Billiton’s use of Mossack Fonseca’s services is only part of its tax minimisation strategy. In February, the Australian Financial Review revealed that the company secured $US5.7 billion in tax-free profits from 2006 to 2014 in its Singapore marketing hub. This triggered public anger, but the only result was a “top-up” tax payment to the Australian Tax Office of $A945 million for the eight years involved—about a half of the company’s bill if the profits had been taxed in Australia.

Mossack Fonseca helped conceal the identities of the directors of Wilson Security, according to last week’s “Four Corners” program produced by the Australian Broadcasting Corporation’s, one of the ICIJ’s collaborators. In recent years, Wilson Security has received federal government contracts worth more than $400 million to guard Australia’s offshore refugee detention camps, the Defence Department and the Tax Office.

The address for Wilson Security’s holding company on a courier envelope was the same address for Mossack Fonseca’s headquarters in the BVI. Among the files were the names of Wilson’s holding company’s original directors, which included a Hong Kong billionaire who had been legally barred from serving as a company director.

The Panama papers also link Tim Roberts, whose Perth-based family founded the construction giant Multiplex, to a string of companies in the BVI. Roberts’ personal wealth enabled him to order $US293 million worth of aircraft in 2012.

The documents show that Hong Kong’s richest man, Li Ka-shing, who runs the global Hutchison conglomerate, is a Mossack Fonseca client. His company Cheung Kong Infrastructure has a major stake in Australia’s privatised electricity market. This company, or CKI Holdings, is listed on the Hong Kong stock exchange but is incorporated in the tax haven of Bermuda.

The Australian Tax Office took two CKI-related companies to court in 2013, arguing that each company owed almost $400 million in back taxes and penalties on their electricity business. But the Tax Office settled the case last year, reportedly for less than one tenth of the original claim. Deputy Tax Commissioner Mark Konza told “Four Corners” he could not discuss the settlement, because of laws guaranteeing the confidentiality of corporate taxpayers.

This settlement, like the deal the Tax Office struck with BHP Billiton, demonstrates the fraud of the Turnbull government’s claims, in response to the Panama Papers, that it is cracking down on multinational tax avoidance. These cases point to the way in which major firms are treated with kid gloves and offered attractive deals that substantially discount their tax liabilities.

The Tax Office announced last week that it was investigating 800 Australian residents named in the Mossack Fonseca files. Yet the outcomes are likely to be similar. The tax legislation is full of loopholes to facilitate tax avoidance by the wealthy elite. Any breaches of the law are treated as minor civil, not criminal, offences.

Treasurer Scott Morrison, who is in charge of the Tax Office, defended the government’s record of “legislation and action.” Without naming a single offender, he claimed that a government crackdown had raised “some $400 million in revenues over the last few years.” As BHP Billiton’s activities indicate, this is a drop in the ocean.

Last week Opposition Labor Party leader Bill Shorten put on a show of outrage over the Panama Papers scandal, saying: “I think they’re [average Australians] white-hot angry that somehow we see large multinationals shoving their profits into other jurisdictions to pay minimal tax.”

But Labor’s proposals to make multinationals pay “their fair share” of tax would generate just $1.9 billion over four years, even if implemented. Labor is equally responsible for the rich and powerful being able to evade taxes with impunity. Successive Labor and Coalition governments have facilitated the tax rorts, while repeatedly lowering the corporate tax rates and top income tax rates to try to outbid other countries in attracting foreign investment.

While shielding the financial elites, politicians insist there is no money to pay for public health, education and other essential social services. The wealthy are allowed to minimise and dodge taxes but workers are constantly told they must pay the price and accept deeper austerity.

India's Air Power Crisis

Abhijit Iyer-Mitra

Troubles, They come in Battalions is the latest report by the Carnegie Endowment for Peace on the Indian Air Force (IAF). The substance of the report is divided into five sections, dealing with the supposedly aggravating threat environment, a worsening internal situation of the air force with falling numbers, and finally looks at the three categories of fighters the IAF wants to induct – heavy, medium and light.

Assessing the threat environment Dr Tellis points out that the Indian Air Force has traditionally always had an edge over the Peoples Liberation Army Air Force (PLAAF) in the high-end spectrum. This however is changing with the PLAAF’s high-end component alone, set to exceed the total strength of the IAF. This imbalance is exacerbated by the presence of a large fleet of UAVs for persistent surveillance and cruise missiles for saturation attacks on Indian targets capable of overwhelming Indian air defences. He also points to the strength of China’s aircraft design and production and the Indian leaderships lack of attention to air warfare. He does however point out some weaknesses in PLAAF infrastructure as well as the need to keep large reserve forces given the several adversaries China faces across its periphery – meaning the full force of the PLAAF probably cannot be brought to bear against one adversary. He then goes on to survey the Pakistan air force and assess what India will be up against in a 1.5 and 2-front war, settling on a 60-squadron air force to comprehensively combat both adversaries or a 42-45 squadron air force in an environment with more limited aims.

The second part of the report goes into the usual rants about the acute numbers shortage the Air Force is facing, putting this down rather crudely to the mismatch of defence needs and the defence budget. The usual arguments are regurgitated - how current force numbers are much lower than it appears on paper, money is not being sanctioned for new projects and how unforeseen expenditures like One Rank, One Pension (OROP) have taken a further toll. It does however acknowledge how much of the problems stems from India’s own internal problems and the inability of the higher defence management system to plan systematically into the future. This leads into the IAF’s own logistic problems of an excessively diversified Air Force of far too many fighter and support aircraft varieties.

The author then in tabular form analyses the current light, medium and heavy fighters serving with or under active consideration by the IAF, looking at empty weight and maximum take-off weight (MTOW). He analyses the current light aircraft scenario, pointing out accurately that the expensive upgrades to the Mirage 2000 and MiG-29 could have been avoided if the IAF had committed to immediate retirement of the MiG-21 fleet. The monies saved he opines could have then been diverted to the procurement of a brand new 4.5 generation aircraft in the light end of the spectrum, which was scuttled by domestic opposition in favour of the HAL Tejas. Savaging the Tejas – he points out accurately the notion of cost savings the Tejas brings is illusory and how competing aircraft on the market bring much more to the table at comparable prices.

The analysis of the medium weight category starts with some considerable incredulity (not misplaced) on the authors part, pouring scorn on the choice of the Rafale and the Medium Multi-Role Combat Aircraft  (MMRCA) process. Sadly this comes across as a case of sour grapes - given that his previous report Dogfight basically said the MMRCA process was well thought out – a report that the Air Force used to validate the process politically in India. Irrespective, he then engages in some highly suspect financial comparisons to the costs of US aircraft that cannot be supported by facts – at least with regards to foreign purchases. He goes on to analyse various medium fighters on their capabilities (though less intensively than the light category). His analysis of the Advanced Medium Combat Aircraft (AMCA) rests on much more solid ground, pointing out some critical flaws in the thinking behind the programme.

Finally, the author analyses the heavy segment. He cogently analyses problems with the Sukhoi fleet in terms of costs (both procurement and maintenance and in terms of their operational effectiveness given that China operates the same type, albeit inferior version, with Russia willing to transfer increasingly more sophisticated technology to China). This dovetails neatly into his accurate and balanced criticism of the Indo-Russian PAK-FA programme as well as some analysis of the electronic support fleet – specifically the Airborne Warning And Control System (AWACS) aircraft.

On balance the reports several strengths are overshadowed by its weaknesses. For starters', the author falls into the IAF trap of numerical comparisons shorn of intended effects, failing to account for the fact that Western quality with its attendant costs was meant to overcome eastern quantity.   In effect he makes the very worst case – of “great quality in great quantity.” Essentially he scores an own goal – because he cannot demonstrate how Western quality will allow a reduction in total numbers procured. He fails to reconcile his numerical recommendations with the fiscal reality of what India is willing to spend on defence and tellingly avoids a ball park figure on what his recommendations will cost. Perhaps the greatest flaw of the report is that he tends to place far to much blame of the DRDO, the government, and the “higher defence management” while absolving the IAF of grave culpability in its own travails. While his recommendations at the beginning of the report are exceptionally far-sighted, the substance of the report does not do full justice to the last and most salient of his recommendations – that of internal reform and focussing on the secondary aspects of the fleet such as training and infrastructure – instead of mere procurement.

China’s Nepal Game: Oli’s Visit and Thereafter

Bhartendu Kumar Singh


It is not economic but strategic considerations that propel China’s policy towards Nepal. This hypothesis was  reaffirmed when Nepalese Prime Minister KP Oli visited Beijing recently between 20-27 March 2016. During the visit, although China doled out attractive economic packages to Nepal, beneath the benevolence, China seems to have strategic designs meant to give it long-term advantages.

The contextual environment of Oli’s visit to China was quite important. Nepal has just adopted a new constitution, which is not acceptable to the Madhesi people in the Terai region. The protesters blocked the import of goods from India, thereby creating an economic crisis in the landlocked country. Nepal had been looking to China for help. Two mainstream political parties with left leanings have been clamouring for a tilt towards China. There were expectations that China would exploit the situation to its advantage and lend a shoulder to Nepal. China has indeed, as the outcome of the visit reflected in the joint statement and a series of bilateral agreements between the two countries. 

The transit deals for ports promises better road connectivity both within Nepal and near the Sino-Nepal border, which are advantageous propositions for Nepal. China has also promised to provide more money as grant assistance in the next three years to complete as many as 25 infrastructure projects. China’s promise to reduce Nepal’s trade deficit in bilateral trade as well as explore the possibility of a Free Trade Agreement (FTA), apart from promoting various other projects under the ‘One Belt One Road' and the ‘Silk Road’ initiatives, also sound very attractive to Nepalese policy-makers. China has also decided to train 200 Nepalese as Chinese translators and send planeloads of tourists to various parts of China to boost Nepal tourism. 

From the Chinese perspective, these are small investments, despite the fact that Nepal is not a big market or has a thriving population with a healthy purchasing power. Nepal, however, is too dependent on its southern neighbour. China would like to reverse this dependency and pull Nepal northwards. In return, China would extract a political dividend from Nepal through strategic accommodation and greater support for Chinese policy towards the South Asian sub-continent. 

The highlight of the visit was China’s decision to help Nepal in the development of internal rail lines as well as the extension of the Qinghai-Lhasa-Shigatse rail line to Nepal’s border. The rail link from Lhasa to Shigatse has already been completed and it is being extended further up to Gyirong, near the Nepal-Tibet border. The Chinese side feels that extending it towards Nepalese territory would not be a problem. Economically, it may not make sense since there would be little economic returns from the endeavour. Also, it may not ease up Nepal’s problem of cheaper imports via Chinese transit routes since the transportation costs would be simply too high. 

However, China may not look at financial benefits of the proposed rail line and may take up the project in the next few years for certain strategic reasons. First, China's involvement in so many rail projects along with other capacity-building projects provide it a visible presence in Nepal right up to the Terai region. China has already started a feasibility study on a 171 km Kathmandu-Pokhara rail line. The number of Chinese technicians and project workers is already quite high and is likely to increase in the near future. China could leverage this position and indulge in large-scale prying in and around the southern cities of Nepal. Nepal’s porous border in the south only makes China’s task easier. 

Second, the railways will bring new connectivity between the two countries, making Nepal an attractive destination for Chinese tourists. Even today, one can easily find many Chinese tourists roaming around border cities like Janakpur, Birgunj and Biratnagar. Third, Chinese strategic and logistics consolidation in Tibet, aided and abetted by possible rail corridors from north to south, will only increase the possibility of a Chinese military advance through Nepal towards the Gangetic plains in case China wants to take the shortest route, since the Indo-Nepal border is completely open and poorly secured.  

A major disadvantage for China is the socio-cultural affiliation of a large segment of Nepalese population with India. Nepalese are scattered across India: schools, colleges, universities, technical institutions and even government. They form a major source of labour supply and foot soldiers through the famed Gorkha regiments. Nepalese citizens have free movement across India and virtually enjoy semi-citizenship. China is not in a position to replicate Indian benevolence, at least in the near future, and it will take courage and conviction to provide similar privileges. With or without Chinese investments in rail and other infrastructure projects, Nepalese citizens would continue to look towards India. Can China overcome this dependence and lure Nepal into its complete sphere of influence? That’s perhaps the biggest strategic challenge for China.

Ashton Carter’s India Visit: What is the Agenda?

Vivek Mishra

An enviable consistency has come to characterise Indo-US relations for some time now, with the bilateral defence relationship spearheading other areas of cooperation between the two countries. The US Defense Secretary Ashton Carter's three-day visit to India that started on 10 April, which will climax with a widely anticipated joint statement on 13 April, is a significant step in fostering the acquired momentum between the two sides.

On the eve of his visit to India, Carter told the Council on Foreign Relations at New York that he will talk about "exciting new projects" during his visit to India. The visit is being held as ‘high-profile’ given the expectations with regards to final breakthrough announcements in the joint statement. The media contingent travelling with Secretary Carter has also fuelled this outlook.

Assessing the Likely Deliverables
From less than a week before his visit, when the Pentagon was still teetering on the final date of Carter’s visit to India, the three-day programme has certainly been precipitated to coincide with immediate goals. The US seems to have taken full cognizance of India’s hunt for fighter jets, which is still on the fence. One of the likely accomplishments of the visit seems to be in the deal to produce American fighter aircraft in India under the Make in India initiative. While Boeing is expected to manufacture the F16 'Super Viper', Lockheed Martin will make a customised F/A 18 'Super Hornet'.

The speculations regarding an aircraft deal find themselves further validated when looked at with the meeting between the two US companies, Pentagon's Director for International Cooperation Keith Webster, and top Indian officials, in the preceding week. The deal that is likely to take the Foreign Military Sales (FMS) route is expected to meet both indigenous requirements as well as exports in the long term, thereby giving a boost to realising the co-production and co-development clause under the Defense Trade and Technology Initiative (DTTI).

While the fighter aircraft deal has hogged the limelight because of the economic stakes involved and its consequential employment opportunities in India, there are three ‘foundational’ agreements which, if reached, would further entrench India-US defence relations: Communications and Information Security Memorandum of Agreement (CISMOA), the Logistics Support Agreement (LSA), and the Basic Exchange and Cooperation Agreement (BECA) for geospatial intelligence. The underlying purpose of all the three agreements is to bolster interoperability between the armed forces of the two countries through various means and under different circumstances. For instance, the LSA would allow both the countries to access supplies, spare parts and services from each other’s land facilities, air bases, and ports in return for payments.

India has so far been very circumspect, allowing cooperation in these areas only a 'case-by-case' basis. The CISMOA intends to make communications between the two countries secure through the supply of encrypted communications equipment from the US. And BECA would facilitate passing on of topographical and aeronautical data and equipment from the US to India improving targeted strikes and better navigation.

The two sides are also likely to announce new mechanisms to improve service-to-service relations in order to promote better understanding of acquisitions, technology pooling, and developments. As the two countries have more than 50 bilateral exercises annually between them, service-to-service exchanges will also smoothen efficient interoperability.

That Carter has described the US-India relationship as a “strategic handshake” is itself important. To say the least, in the present context it means a give-and-take relationship with possible trade-offs for either side. So, while the US would stand to benefit more from agreement such as the LSA, given its reach in the Indian Ocean, the Indo-Pacific and the South China Sea, India is likely to benefit immensely through CISMOA, if signed, vis-à-vis terror activities from across its borders. However, challenges remain between the two sides on other agreements such as the End Use Monitoring Agreement (EUMA) and the Enhanced End Use Monitoring Agreement (EEUMA). Since these agreements require monitoring equipment even after sale by the supplier and hence access to these equipment, India has kept away from bringing them up and a discussion during this visit is unlikely.

Beyond Defence
Secretary Carter has summed up the purpose of his India visit as having a “whole global agenda.” The attempt to move beyond specifics of bilateral relations towards a grand strategy in the region has not seemed overstated, at least in the recent past. Some of the defence agreements cited above, which the US is pushing for, would assist in locating more bilateral convergences in the policies of two sides. India’s Act East policy and the US rebalance have already coalesced in the Indo-Pacific. With every high profile visit, the two countries appear to move a step closer in forming a regional grand strategy.

During President Obama’s visit in January 2015 the two countries announced the crucial, "US-India Joint Strategic Vision for the Asia-Pacific and Indian Ocean Region." For the first time, India stood with the US in arguing for the freedom of navigation and over flight in the South China Sea. More recently, the US-India Defense Technology and Partnership Act has already been introduced in the US Congress to elevate India-US relationship to a special status. However, it remains to be seen if Secretary Carter and Indian Defence Minister Manohar Parrikar will extend the contours of a rapidly shaping grand strategy in the region, largely riding on the bilateral defence relationship.

Lahore Attack: An Expansion of the TTP's Target Profile?

Riffath Khaji


On 27 March 2016, a suicide  attack by the Jamaat-ul-Ahrar (JuA), a Tehreek-i-Taliban (TTP) faction, at Gulshan-i-Iqbal Park in Lahore killed 70 people and injured 250, The JuA spokesperson, Ehsanullah Ehsan, reportedly claimed that the target was Pakistan's minority Christian community, many of whom had gathered in the park to observe Easter.

The TTP has been known to target religious minorities in Pakistan. Christians in Pakistan comprise less than two per cent of the total population and are the second largest minority community after Hindus. The Christian community lives primarily in Karachi, Punjab, Lahore, Faisalabad and Khyber Pakhtunkhwa.

The Gulshan-i-Iqbal attack highlights the evolving and expanding strategy of the TTP. The Pakistani Taliban has always been a well networked organisation with huge manpower at its disposal. Ever since its formation in 2007, it has primarily been launching violent attacks at a steady frequency, targeting state establishments and law enforcement agencies. In the last few years, they seem to have expanded the scope of their targets. In the beginning, they did not target the public - their focus was on the military and associated establishments and personnel. Now, their strategy seems to be changing. In the recent past, mosques, tribal jirgas (councils), public spaces, and now, religious minorities, have been targeted as well.

The TTP is now going for soft targets that include schools and colleges - examples include the Peshawar school attack in 2015 and the Bacha Khan University attack in 2016. Does this show a weakness within the TTP? Or are they expanding their focus areas?

The leadership tussle within the TTP is also to be taken into account while trying to understand the target expansion. Mullah Fazlulah, formerly the leader of the Tehreek-e-Nafaz-e-Shariat-e-Mohammadi (TNSM), assumed leadership of the TTP in 2013 and has been trying to consolidate his position. There have been a few splits within the TTP and Fazlullah is perhaps under pressure to carry out stronger attacks with greater magnitude to assert his control and the group’s ability to strike the state. There are Pakistani news reports that claim Fazlullah was killed in a drone strike in January 2016.

An obvious question that needs addressing also is the linkage between the TTP and the Afghan Taliban in some of these high profile attacks within Pakistan. Though the Afghan Taliban is believed to be on friendly terms with the Pakistani military, they seem to not have influence in controlling the TTP.

However, all these organisations active in the region have organic relations based on their shared history and ideology. The Taliban - whether Afghan or Pakistani - seem to have a common perspective when it comes to certain issues. These include their goal of complete ouster of the US' presence, stopping drone attacks, withdrawal of Pakistani military personnel, and above all, the imposition of Sharia. Despite having different factions, there appears to be a larger umbrella understanding amongst the different groups within the Taliban fold. The state in Pakistan has not succeeded in challenging this, nor do they have a strategy to tackle it.

Finally, despite the factional differences within the TTP, Fazlullah appears to be calling the shots. It seems that the splits have not reduced the TTP's lethality. Factional differences within the TTP emerged after Fazlullah assumed power in 2013, resulting in the emergence of four important groups - Ahrar-ul-Hind, TTP South Waziristan, the Jamaat-ul-Ahrar and the Sajna group. But this has not undermined the TTP's reach.

The Lahore attack also shows the TTP’s strength in carrying out attacks in major Pakistani cities. Lahore has normally been more peaceful than the other, more volatile cities in Pakistan. Lahore has also remained truly cosmopolitan in its spirit when compared to the others.

The Lahore attack will also highlight the expanding profile of the TTP’s targets. In 2013, a suicide attack in a church killed 15 people. Jamaat-ul-Ahrar carried out another attack in Wagah in November 2014, where 60 people died and over a 100 were injured.

The current attack is also aimed at the political base of Punjab, and as a strike against the incumbent Prime Minister of Pakistan, Nawaz Sharif. Ehsanullah Ehsan, spokesperson of the JuA, said, “We want to send this message to Prime Minister Nawaz Sharif that we have entered Lahore. He can do what he wants but he won’t be able to stop us. Our suicide bombers will continue these attacks."

The Punjab government ordered the closure of all public parks and declared three days of mourning. But is this enough? There has to be a proactive strategy in all the provinces (and not just in Khyber Pakhtunkhwa and the Federally Administered Tribal Areas) to fight the militancy, the TTP, and its supporters. The TTP is expanding its base, and the security forces must also expand their operations against them.