The Whatsapp Scandal

Alfredo Lopez

Since adding the feature in April, 2016, the Whatsapp app (or really its parent, Facebook) has paraded its “end to end encryption” as the reason to use it above all other smartphone message applications. It can handle calls, messages, video, files and just about everything any computer can and, because it’s encrypted end to end, nobody can read, see or hear any of it unless you want them to.

The pitch has worked; over a billion people now use the app and it is particularly prominent among people who need encryption — the computer protocol that makes reading your message impossible for anyone but the person you’re sending it to.

Activists, particularly, use Whatsapp to communicate everything from places for emergency demonstrations to important announcements to the latest information about their personal lives. Whatsapp is, in effect, a universe of communications for a billion people. It does everything and everything it does is encrypted. With Whatsapp, they’ve been saying, you are safe from intrusion and spying.

The problem is, you’re not safe at all; the encryption can easily be broken. That news, first made public in the Guardian, has provoked a public gasp and a joust between developers and activists covered by journalists who, anxious to provide both “sides”, cloud the issue more than clarify.

Unlike many other debates, there aren’t two sides to this story. Whatsapp is not safe because its encryption has a huge exploit (or weakness): a product of what the company says is an attempt to make life a lot simpler for its users. Basically, it rewrites the keys used for encryption without telling you and that means a third party (like the government) can decrypt what you’ve written.

This takes a bit of explanation. First, the basics…

Encryption uses keys — long, random strings of numbers and symbols and letters that make no sense and cannot be guessed. You get two: a public key and a private key. When you send me an encrypted message, the encryption program garbles it beyond comprehension using my public key, which your email client downloaded (and saved) before sending me your first message.

When I get the email, I use my private key to decrypt it. If I don’t have the private key, the email from you is unreadable: the garble the program turned it into. I apply my key and your message to me is magically transformed to human language. Unlike my public key that is all over the place, my private key is on my computer (or phone) and nowhere else.

That’s the security and that’s how the keys work in encryption.

Whatsapp works the same way except for one thing. When using an encryption program (like Signal) on my phone, when I change keys, I know the keys have been changed. When you change yours, I’ll get a notification the moment I try to send you a new email because it detects the key change and sends the warning.

With Whatsapp, if you turn off or break your phone, Facebook holds any messages sent to you. Then, if your phone comes back with a new key, Facebook sends a request to anyone who sent you a message asking them to re-encrypt the message to the new key.

But here’s the problem. Say I sent you a bunch of messages using your old key while your phone is turned off. Those messages are stored by Whatsapp and not delivered until you to turn the phone on. When you do that, and the new key is generated, the messages are decrypted by this new key. In other words, the message I sent to your original key (which I know was yours) is now picked up and decrypted by this other key that I don’t know and haven’t verified.

What’s more, Whatsapp doesn’t tell you it did this on your phone unless you turn on the notification (which people rarely do) and even then it tells you after it’s generated the new key and sent the old messages with it. You learn you’ve been hacked after they hacked you. Privacy advocates are crying blooding murder: Whatsapp has touted its end to end encryption and now we find that it has a “backdoor” (a way of getting into the app without using normal passcode protection).

Why is this important? Because it’s not secure enryption.

The federal government and its spying agencies like the National Security Agency and the FBI have a history of demanding that companies that store data decrypt it when a user’s data is encrypted. This is what happened with Apple computer in February, 2016. The government wanted it to decrypt the cell phone of the suspect in the San Bernadino terrorist attacks and Apple said it couldn’t break the encryption. The government found a way to do it but, up to then, it had been pressuring Apple to get its developers to develop a decryption method.

That dispute went to court. This time, were a demand made on Facebook for Whatsapp info, there would be no such defense. Facebook has a way of decrypting these messages. All if has to do is generate a new key for a phone and share it with a government spy and wait until the phone is turned off. In fact, cellphones can be disrupted and forced off remotely. The data isn’t safe.

Would such a thing happen? That’s been one of the two issues being hotly debate over the Internet by the app’s developers and just about everyone else.

The debate’s been clouded by the developer’s assertion that this isn’t a backdoor at all. They knew exactly what they were building into the app and did so to make encryption easier: a worthy goal given how complicated encryption can be for the average user.

WhatsApp itself issued a statement to the Guardian: “WhatsApp does not give governments a ‘backdoor’ into its systems and would fight any government request to create a backdoor.”

The problem says my colleague and comrade Jamie McClelland in his superb blog “Current Working Directory” is that the government doesn’t have to ask. The backdoor’s already there. “…using the default installation, your end-to-end encrypted message could be intercepted and decrypted without you or the party you are communicating with knowing it,” he explains. “How is this not a back door?”

But McClelland, and many others, point out something even more disturbing: the complete lack of warning when keys are changed. “Why in the world would you distribute a client that not only has the ability to suppress such warnings, but has it enabled by default?”

That addresses the developers’ second argument. The issue, they say, isn’t what “could” happen but what “would” happen. Facebook insists that, were the government to demand its data, it would refuse.

It’s a laughable contention because Facebook is one of the most intercepted and data-captured protocols in the world. The government captures Facebook data regularly and it admits as much. Facebook doesn’t protest, claiming that its social media application is public and so protecting it makes no sense. So why in the world would it take a different position here when the circumstances are basically the same and, as Jamie points out, why would you enable the suppression of those warnings by default in the first place? Who, exactly, are you keeping in the dark?

What’s more, they may not need cooperation from the company. Government hackers and criminal data thieves are notorious for successfully hacking systems that have vulnerabilities without any permission. And Whatsapp, by all accounts, now has a big one.

Given what we already know about the blanket, constitution-dismissing surveillance under the Obama administration and what we can expect from the Presidency of a rights-dismissive, paranoid crypto-fascist like Donald Trump, do you really want to use this app on your phone?

While not as robust in features, an app like Signal can encrypt text reliably and should in the toolbox of every activist (or person for that matter) using a cellphone. Whatsapp should not.

Obama’s Hidden Role in Worsening Climate Change

Stansfield Smith

It should be a scandal that leftists-liberals paint Trump as a special threat, a war mongerer – not Obama who is the first president to be at war everyday of his eight years, who is waging seven wars at present, who dropped three bombs an hour, 24 hours a day, the entire 2016. Here is some of the worst of this anti-Trump hysteria propagated by mouthpieces for liberal Democrats – calling Republicans “fascist” is a favorite left-liberal sport.

It is probably true Trump represents “a regime of grave danger,” an “immoral peril to the future of humanity and the earth itself,” by his denial of global warming. Yet Obama was also clearly a grave peril, one many progressives chose not to see clearly. Obama owns a long pattern of feel-good rhetoric and empty promises followed with no delivery. While many progressives got angry at his hypocrisy, many still were willing to turn the other cheek.

This helps explain why we don’t know that Obama, who says he recognizes the threat to humanity posed by climate change, still invested at least $34 billion to promote fossil fuel projects in other countries. That is three times as much as George W Bush spent in his two terms, almost twice that of Ronald Reagan, George HW Bush and Bill Clinton put together.

Obama financed 70 foreign fossil fuel projects. When completed they will release 164 million metric tons of carbon dioxide into the atmosphere every year – about the same output as the 95 currently operating coal-fired power plants in Ohio, Pennsylvania and Oklahoma. He financed two natural gas plants on an island in the Great Barrier Reef, as well as two of the largest coalmines on the planet.

Obama did have his Clean Power Plan for the US, estimated to reduce carbon emissions by 2.5 billion tons over 15 years. But the foreign projects he approved will produce about the same carbon emissions as the Clean Power Plan savings. These foreign emissions increases financed by Obama aren’t counted toward US totals, but the impact on climate change is identical regardless the place of origin.

Moreover, under Obama has reversed the steady drop in U.S. oil production which had continued unchecked since 1971. The U.S. was pumping just 5.1 million barrels per day when Obama took office. By April 2016 it was up to 8.9 million barrels per day. A 74% increase! In 2015, the U.S. pumped the most oil in 43 years. The U.S. is now the world’s No. 1 petroleum producer if we include both crude and natural gas. In oil production itself, the U.S. ranks No. 3, just behind Russia and Saudi Arabia.

If Bush had this record, it would be jumped on to expose him all the more as a tool of the oil companies. Different standard for Democrat Obama. His administration accelerated the destruction of the earth, and many environmental groups and liberal-leftists soft pedaled or even covered it up.

On top of this, in 2010 Project Censored called the US military the biggest polluter on the planet. What measures did Obama take? He exempted it from climate change regulation!

“The Pentagon [which accounts for 80% of US government fuel usage] is also exempt from an executive order by President Obama requiring other federal agencies to reduce greenhouse gas emissions by 2020.”

Obama proudly said in 2012, quoted in the film This Changes Everything:

“Over the last three years I’ve directed my administration to open up millions of acres for gas and oil exploration across 23 different states. We’re opening up more than 75% of our potential oil resources offshore. We’ve quadrupled the number of operating rigs to a record high. We’ve added enough oil and gas pipelines to encircle the earth and then some. So, we are drilling all over the place, right now.”

Drill, baby, drill!

Yet this is how Obama scammed us in his feel-good farewell speech – though many liberals like how he makes them feel good, and often don’t want to hear about the reality:

“Take the challenge of climate change. In just eight years we’ve halved our dependence on foreign oil, we’ve doubled our renewable energy, we’ve led the world to an agreement that has the promise to save this planet.”

In calling out Obama on his criminal record against the planet we must also call out our left-liberal and environmentalist friends who helped downplay it. And this struggle takes new form today in this broad anti-Trump coalition, which left-liberals will try to use to herald in a new Obama in 2020.

Drone Proliferation Ramps Up

Charles Pierson

And thick and fast they came at last,
And more and more and more—

— Lewis Carroll, “The Walrus and the Carpenter” (1871)

Over 75 states possess unmanned aerial vehicles (UAVs), commonly called drones.  We know of fifteen states which possessed armed drones at the end of 2016.  They are the US, UK, China, Pakistan, Iran, Iraq, Israel, Italy, Jordan, Myanmar, Nigeria, Saudi Arabia, Somalia, South Africa, and Turkey.

Deadly Toys

As you read this, ISIS drones are dropping bombs on the Iraqi city of Mosul.  ISIS has had surveillance drones at least since 2014.  On August 23, 2014, a video was posted to YouTube which showed aerial footage of a Syrian army base.  An on screen caption proclaimed “From the drone of the army of the Islamic State.”

Now ISIS has armed drones.  The New York Times reported that in October 2016 Kurdish forces in Iraq shot down an ISIS drone “the size of a model airplane.”  The drone exploded on examination, killing two Kurdish troops.  The Times said this was “believed to be one of the first times the Islamic State has successfully used a drone with explosives to kill troops on the battlefield.”

ISIS has brought a new weapon into the world:  the “flying IED” (improvised explosive device).  Blake Baiers, writing at RealClear Defense, comments that “ISIS is mimicking the U.S. military’s multi-billion dollar drone program by using off-the-shelf hobby drones and plastic explosives.”  The DJI Phantom, one of the commercial drones ISIS uses, is a small quadcopter available on Amazon.  These lightweight DIY drones (the DJI Phantom weighs just a little more than two pounds) can only carry a small explosive such as a hand grenade.  That’s enough to do a lot of damage.  One technique, discussed by T. X. Hammes at War on the Rocks, is called “bringing the detonator.”  Even with no more than a small explosive charge, flying a drone into “a fuel truck, an ammunition dump, or the wing of an aircraft can set off a much greater explosion.”  Hamas possesses a similar weaponized DIY drone.

Hezbollah has used armed drones in the Syrian conflict.  The Hezbollah drones—obtained from Iran—are reusable and drop cluster bombs:  apparently Chinese-made MZD-2 submunitions.  The “kamikaze” drones used by ISIS and Hamas can be used only once, like Hitler’s V-1 “buzz bomb.”  Since these drones can be put together for no more than a couple of thousand bucks it doesn’t matter that they can be used only once.  Bullets can’t be used more than once, either.

DIY drones are unlikely to change the course of the war in Iraq and Syria, although they may prolong it, adding to the war’s cost both in treasure and in human lives.  Of greater concern, is the potential improvised IED’s have to be used in terrorist attacks against civilians in the US, Europe, and elsewhere.  A drone can fly over a security barrier or police cordon which would stop a human suicide bomber.

Can We Control the Spread of Killer Drones?

Some writers have discussed the possibility of a sort of “Geneva Convention for drones” to provide standards for the use of drones in combat and to reduce proliferation.  Others, looking to the example provided by the 1997 Landmines Treaty which prohibited the use of anti-personnel mines, call for a treaty which will ban armed drones altogether.

Whether the goal is reduction or elimination, a binding international treaty is not yet even in the negotiating stage.  In the meantime, we have the “Joint Declaration for the Export and Subsequent Use of Armed Strike-Enabled Unmanned Aerial Vehicles (UAVs).”  The one-page document was issued by the US State Department on October 28, 2016 and sets out five “principles” meant to regulate drone export:

+ Drones must be used consistently with international law, “including both the law of armed conflict and international human rights law.”

+ The human rights record of a potential transferee is to be taken into account in making the decision whether export will be permitted.

+ Export of drones must be made “in line with existing relevant international arms control and disarmament norms.”

+ Transfers of drones are to be publically recorded (an allusion to the UN Register of Conventional Arms) in order to ensure transparency. (This principle is watered down with an ocean of qualifications. Transparency measures, including recording of transfers, will be “voluntary” and will be pursued “with due regard to national security considerations.”)

+ States will continue to discuss measures to control drone proliferation. The principals to the Joint Declaration will hold their first meeting sometime this year.

The Joint Declaration extends to other nations the policy the US had previously adopted for itself.  In February 2015, the Obama Administration announced that it was easing restrictions on the sale of US-manufactured armed drones abroad.  Thus, the Joint Declaration attempts to fight the proliferation of killer drones by means of principles first adopted in order to facilitate US armed drone exports.  Does anyone else think this is a little incoherent?

Encouragingly, the February 2015 Obama policy did not open the floodgates to the export of armed US drones.  Before the Obama Administration promulgated its 2015 policy, only the United Kingdom, had been allowed to purchase armed drones from the US.  After adoption of the 2015 policy, the US has exported armed drone tech to only one other nation:  Italy.  Let’s hope the US maintains this level of self-restraint.

The Joint Declaration’s flaws are many.  For starters, does the US itself observe these principles?  The US drone assassination program overseas is too notorious to need relating here.  In addition, the US has long been arms dealer to the world.  The bombs which Saudi Arabia drops on Yemen were supplied by the US.  Nor does the Joint Declaration say anything about penalties for violations, how violations will be determined, or who decides whether a violation has occurred.

One deficiency dwarfs all others.  Over fifty nations, including the US, signed the Joint Declaration.  It’s nice that Luxembourg and the Seychelles signed on, but a bit troubling that the world’s two biggest exporters of military drones, Israel and China, did not.  Israel alone has accounted for 60% of the world market for drones since 1985 (data from 2015).  Any drone anti-proliferation regime without Israel and China is unlikely to succeed.

Enter Trump

Yes, but what about Donald Trump?  Trump has said little about drones.  We do know that Trump wants drones to patrol the Canadian and Mexican borders.  That’s pretty tame by Trump standards.  The excitement Trump watchers yearn for returned in December when the Chinese intercepted a US submersible drone in international waters.  Outraged over this indignity to our oversized bath toy, Trump tweeted that the Chinese had stolen the drone.  The Pentagon thought so, too, and it is hard to disagree.  A Chinese ship plucked the drone out of the South China Sea mere moments before it would have been retrieved by a US Naval research ship which was standing just yards off.  Later, Trump tweeted that the US should refuse to take the drone back and that the Chinese should “Keep it.”  (The Chinese returned the drone—and with a full tank of gas, too.)

Trump told the British Daily Mail that he would continue Obama’s drone strikes on terrorists.  Of course he will.  Trump has promised to “Bomb the shit out of ISIS.”  And their families.  Terrorists care about their families, Trump told “Fox and Friends” in December.  Kill their families and ISIS will turn from its evil ways.  Me, I would have thought this would create still more radicals, but what do I know.  In any event, whether the target be ISIS chieftain Abu Bakr al-Baghdadi or al-Baghdadi’s grandma, many of those bombs will be dropped from drones.  Fascinating to relate, a voice of sanity comes from Trump’s pick for National Security Adviser, General Michael Flynn.  General Flynn has expressed the impeccably left-wing opinion that drone strikes do more harm than good.

On the other hand, bombing the shit out of terrorists conflicts with Trump’s declared preference for capturing, not killing high-level terrorists (and then waterboarding them, a tactic Trump enthusiastically endorses).

Those are Trump’s significant utterances (or tweets) on drone warfare.  I have not found any Trump statements on drone proliferation.  We do know Trump’s feelings about proliferation of nuclear weapons.  Given Trump’s nonchalance towards nuclear proliferation, proliferation of mere drones shouldn’t trouble him a bit.

With so little to go on, anyone is entitled to a guess what position the Trump Administration will take on US drone exports.  Here’s mine.  Two of the most prominent features of Trump’s Presidential campaign were Trump’s promise to revive American manufacturing and Trump’s animus toward China.  Trump threatens a trade war with China.  Trump’s Secretary of State nominee Rex Tillerson doesn’t stop there.  During his Senate confirmation hearing, Tillerson hinted at the possibility of an actual shooting war with China over the miserable Spratly Islands.

Trump can unite his two obsessions, China and American manufacturing, by increasing US exports of drones, including armed drones.  That could cut into China’s share of the world drone market while simultaneously giving a shot in the arm to US manufacturers, specifically those manufacturers euphemistically labelled “defense” contractors.

An exciting four years lie ahead.

Yemen: Obama’s Parting Gift To Terror

Thomas C. Mountain

Barack Obama saved his parting gift to terror, his worst crime, for last, the War on the Yemeni People. Obama’s last war has institutionalized a failed state and which will continue to inflict terror and suffering on 25 million Yemenis for generations to come.

When the Saudi army began its aggression against Yemen, Obama seemed only a reluctant partner, but behind the scenes the military support by the US quickly showed otherwise.

Thanks to SaudiLeaks amongst others, we know that Obama was behind the invasion in the first place for what US President could allow a government allied to Iran to take over one side of the strategic choke point Baab Al Mandeb, the straights between the Indian ocean and the Red Sea.

Asia and Europe are the biggest trading partners on the planet and control of the shipping lanes through the Baab Al Mandeb through which their trade must pass is a strategically critical necessity for the USA in its continued quest for international dominance. The day the USA loses control of the Baab Al Mandeb marks the beginning of the end for Pax Americana.

Opposite Yemen across the Baab Al Mandeb lies the Eritrean coast, some 1,000 kilometers of it heading north. South lies Djibouti, and what is left of the once great Pan Africanist country of Somalia, now Puntland, Somaliland and Somalia.

Historically, the USA opposed Eritrean independence and continues to be hostile towards the Eritrean government, having pushed sanctions through the UN after accusing Eritrea of “Support for Terrorism in Somalia/Al Shabab”, something Wikileaks has exposed as a fabrication.

Obama and his cronies could not stand by and watch as both sides of the Baab Al Mandeb saw the loss of US military dominance. So the Saudis were given the green light and seeming infinite supply of western military hardware as well as massive logistic support, including aerial refueling to maintain the bombing campaign of terror against the Yemeni People.

Since the Saudi aggression the lives of the Yemeni people, already desperate for a large minority, have seen the majority of Yemeni children now suffering from malnutrition due to the aid blockade and bombing of vital infrastructure.

All of this being armed and provisioned by the USA and its international minions.

The so called “Saudi Led Coalition” that has invaded Yemen includes the United Arab Emirates, which has pretty much stopped fighting the Houthi/President Saleh coalition and is now focusing its efforts to defend itself from Al Queda on the Arabian Peninsula and Da’esh (ISIS).

The UAE’s war against Da’esh and Al Queda is receiving logistical support from Eritrea in the form of use of the Port of Assab and its environs, next to the Baab Al Mandeb.

Saudi Arabia is stuck in a quagmire in Yemen, Saudis Vietnam. Egypt’s refusal to join the Saudi invasion of Yemen comes from the early 1960’s and Egypt’s eventual defeat there and has been an important factor in the recent rift between Egypt and Saudi.

With the collapse of the US/Saudi imposed Hadi regime in Yemen conditions grew ripe for the AQAP and Da’esh to rush into fill the power vacuum in the South. AQAP and Da’esh in Yemen are made up mainly of Saudi fanatics driven out of their home country by the House of Saud into exile in Yemen where with quiet Royal Family support they have survived amongst the southern, Sunni based secessionists.

The new Godfather being coronated in the USA has called for the fight against ISIS etc. to be a priority so maybe Trump’s Capo’s in Defense and the State Department/CIA may intervene more directly than under Obama. US troops are already on the ground in Yemen “fighting terror” so an escalation could easily be forthcoming from the Pentagon and Foggy Bottom.

Today, the war against the Yemeni People rages on, and thousands of Yemen children have died of starvation while scattered by war across their country. Never knowing when their mothers will be slaughtered when the USA made bombs rain down on a village market, or the slow, hopeless terror of starvation. Obama has saved his worse gift to terror for last in Yemen.

Yemen War Death Toll Reaches 10,000

Abdus Sattar Ghazali 

The UN envoy to Yemen, Ismail Ould Cheikh Ahmed, has said that the death toll in the Yemeni war had reached 10,000, up from the previous figure of 7,000.

The UN envoy’s statement came after his talks in Aden with the Yemeni President Abd Rabbuh Hadi who rejected the UN peace plan.

“A peace agreement, including a well-articulated security plan and the formation of an inclusive government, is the only way to end the war that has fuelled the development of terrorism in Yemen and the region,” Ould Cheikh Ahmed said in a statement.

Under the proposal, Hadi’s powers would be dramatically diminished in favor of a new vice president who would oversee the formation of the interim government that will lead a transition to elections.

Houthi rebels and forces loyal to former president Ali Abdullah Saleh, who control the capital, Sanaa, have faced a military campaign by the Saudi-led coalition to restore President Hadi as the recognized government.

Indiscriminate air strikes have been unable to dislodge the Houthis from the capital and their strongholds in the north of the country. The airstrikes have been criticized for causing widespread civilian casualties and destruction of infrastructure.

An air strike by the Saudi-led coalition on a primary school in militant controlled northern Yemen on January 10, killed five people including two children, according to medical source.

The headmaster and two other staff members were among those killed in the air raid in the district of Nihm, northeast of the capital Sanaa, which also left 13 wounded. A medical source at Kuwait Hospital in Sanaa confirmed the casualty toll.

Human Right groups have repeatedly criticized the coalition over the civilian casualties inflicted by its air strikes on ‘rebel’-held regions.

In August last, an air strike on a Quranic school in the northern Saada province killed 10 children and wounded 28 others, prompting a UN call for a swift investigation.

A Saudi strike in October last on a funeral in Sanaa killed some 140 people and wounded over 600.

The higher toll “underscores the need to resolve the situation in Yemen without any further delay”, said UN spokesman Farhan Haq in New York. “There is a huge humanitarian cost.”

Jamie McGoldrick, humanitarian coordinator of the UN Development Program, said the latest death toll is based on lists of victims gathered by hospitals and the true figure could be higher. McGoldrick said up to 10 million Yemenis were also in urgent need of humanitarian assistance.

“This is one of the world’s worst humanitarian crises. People’s access to food is rapidly worsening and urgent action is needed,” said Salah Hajj Hassan, FAO Representative in Yemen.

Virtually all of Yemen faces severe food shortages with millions of people in an “emergency” situation, UN agencies warned in June last.

Many are afflicted with Severe Acute Malnutrition (SAM), which makes them especially vulnerable to otherwise preventable illnesses like diarrhoea and pneumonia.

The war has also taken a heavy toll on the country’s health facilities. A number of hospitals and clinics have been bombed, while others have had to close their doors because of the fighting.

Less than a third of Yemen’s 24 million people have access to health facilities, according to UNICEF, which says at least 1,000 Yemeni children die every week from preventable diseases.

India’s demonetisation scheme causing mass hardship

Kranti Kumara 

The Indian government’s “shock and awe” scheme to demonetise more than 85 percent of the country’s currency has severely disrupted economic life across India and continues to inflict great hardship on the working class and rural toilers more than two months after its sudden imposition.

Conceding that demonetisation has forced farmers to accept ultra-low prices from wholesalers, depressed consumer demand, and led cash-short employers to lay off workers, both the World Bank and IMF have sharply scaled back their 2017 economic growth projections for India.

In a report issued this week, the IMF said that it now expects the Indian economy will grow by 6.6 percent in the fiscal year ending March 31, 2017—a full one percent less than its previous forecast—and by 7.2 percent in 2017-18 or 0.4 percent less. Indian political leaders have repeatedly said the country needs 8 percent annual growth if the economy is to be able to absorb the ten million youth who join the labour force each year.

However, a sample survey that the All India Manufacturer’s Organization (AIMO) conducted of 73,000 of its more than 300,000 members indicates the adverse impact of demonetisation may be larger, indeed much larger, than is being anticipated by the IMF or, for that matter, the Indian government.

According to the AIMO survey, during the first 34 days following Prime Minster Narendra Modi’s November 8 demonetisation announcement, micro and small industries (that is family-owned firms employing no more than a handful of workers) slashed employment by 35 percent and suffered a 50 percent fall in revenue.

While the micro and small industry sector was hardest hit, the AIMO survey found that medium and large enterprises also experienced sharp revenue drops, ranging from 20 to 50 percent, and slashed jobs wholesale. The medium and large manufacturers surveyed had reduced employment by 5 percent. Those that specialize in infrastructure projects, such as road-building, had laid off a third of their employees on average.

The AIMO is projecting that the slump will continue in the coming weeks and forecasts that by March the job losses in the micro and small industry sector will rise to 60 percent, while tripling in the medium and large manufacturing sector to reach 15 percent.

The authors of the AIMO study were themselves stunned by their findings. “While [the] AIMO understands,” they wrote, “certain immediate repercussions of such a bold step (demonetisation) by the government, it did not anticipate or was prepared for such a jolt to industries even after one month.”

In December, AIMO leaders made repeated attempts to meet with Commerce Minister Nirmal Sitharam and Finance Minister Arun Jaitley, but they were given the cold shoulder. This prompted AIMO President K.E. Raghuram to exclaim, “It is high-time the Indian government …. wakes up. By March 2017, large numbers of small and medium units might close down. Small and micro industries cannot bear the losses, not even for more than a month.”

According to the Ministry of Micro, Small, and Medium Enterprises, such enterprises provide employment to 81 million Indians including large numbers of financially vulnerable self-employed artisans.

The social dislocation caused by the Bharatiya Janata Party (BJP) government’s demonetisation scheme is further indicated by the sharp spike in destitute rural workers seeking to exercise their right to temporary employment under the central government’s Mahatma Gandhi National Rural Employment Guarantee (NREGA) program.

Adopted in 2005 by the Congress Party-led, Stalinist-supported, United Progressive Alliance (UPA) government in order to provide political cover for its pursuit of pro-investor reforms and a “global strategic partnership” with Washington, the NREGA guarantees 100 days of poorly paid, manual labor per annum to every rural household.

According to an analysis published by the Indian Express, from last July through November three million workers sought NREGA employment daily. Then in December, the first full month after demonetisation, the daily average spiked to 5 million. And by the end of the first week of this year, the daily average had swelled to 8.4 million, well over two-and-a-half-times the pre-demonetisation average.

The average daily wage paid under the NREGA, according to the government’s own figures for the current 2016-17 fiscal year, is just 161 Rupees (about US $2.40).

Modi and his Hindu supremacist BJP have claimed that the sudden demonetisation of India’s 500 and 1000 Rupee notes was a “surgical strike” against “black money”—that is assets that were illegally obtained and/or held outside the scrutiny of the tax authorities.

This is a fraud. The vast majority of India’s “black money” is in the form of real estate, gold, foreign currency, and overseas bank accounts, not Indian currency, and it is in the hands of India’s corporate bosses, real estate developers, other rich and super-rich, and corrupt politicians, not the workers and toilers who are bearing the burden of demonetisation.

Preliminary figures show that a very large portion of the demonetised notes have been deposited in the country’s banks, which strongly suggests that the government’s own estimates of the amount being held as “black money” were highly inflated.

Be that as it may, the real purpose of the government’s demonetisation scheme is to shore up India’s ailing banks and government finances at the expense of working people.

By compelling the population to exchange their cancelled old bills for valid new ones through the banking system, the government is hoping to give the banks, which are hobbled by unpaid business loans, a desperately needed cash-injection. The longer-term aim is to dramatically raise the proportion of everyday financial transactions made through the banking system, so as to make them a potential source of revenue for the banks and bring them within the purview of the tax system.

Not surprisingly, Modi’s pro-investor government has proven callously indifferent to the massive social dislocation caused by its demonetisation scheme. In a speech at the end of last month Modi claimed that he had “saved the country” by taking a stand against “black money” and “terrorism,” and said any hardship would soon pass. In his New Year’s address, he took a somewhat different tack. He claimed that the “pain” Indians have borne in fighting corruption “will be an example for generations,” urged the banks which have “had a huge influx of wealth” to prioritize the middle class and poor, and announced that a handful of “relief measures” would be included in next month’s budget, especially for farmers who desperately need cash so that they can proceed with planting.

A few days later, President Pranab Mukherjee, who was himself a finance minister under the UPA and supports demonetisation, said he feared the poor cannot “wait.” In an address to India’s governors and lieutenant governors, Mukherjee praised Modi’s New Year’s address for providing “some relief,” but signaled his concern that it will prove woefully inadequate in preventing social unrest. Declared Mukherjee, “We all will have to be extra careful to alleviate the suffering of the poor … They need to get succour here and now.”

For its part, the rightwing Indian Express published an editorial titled, “Heed the President: Government should listen to his warnings about a looming crisis in rural India.”

Thus far the opposition parties have proven incapable of capitalizing on popular anger over demonetisation and more generally the Modi government’s ultra-rightwing, pro-big business agenda, which includes aligning India ever more completely with Washington’s war drive against China. This is because the entire opposition, from the Congress Party through the Stalinist Communist Party of Indian (Marxist) or CPM, have themselves assisted in the implementation of this agenda. For two decades, from 1989 to 2008, the CPM sustained in office a succession of rightwing governments, most of them Congress-led, which did much of the heavy-lifting in the drive to make India a cheap labor haven for global capital and a satrap for Washington.

Cyprus reunification talks seek to curb Russian influence in Mediterranean

John Vassilopoulos

Greek Cypriot President Nicos Anastasiades and his Turkish Cypriot counterpart Mustafa Akinci began formal talks in Geneva last week aimed at reunifying the island. Also present were United Nations Secretary General Antonio Guterres, European Commission President Jean-Claude Juncker and UK Foreign Secretary Boris Johnson.

A request to attend by Russia, which has strong economic links to Cyprus and naval access to its ports, was not taken up.

Cyprus is located in the Eastern Mediterranean to the south of Turkey and is home to about 800,000 Greek Cypriots and 220,000 Turkish Cypriots. It has been split along ethnic lines since 1974 after Turkey invaded in response to a coup instigated by the Greek military junta, which sought political union with Cyprus (enosis).

Since the end of hostilities and the forced displacement that took place, a 180 kilometre-long ceasefire “Green Line” buffer has divided the island into a northern area inhabited by Turkish Cypriots and patrolled by 30,000 Turkish troops while Greek Cypriots live in the south alongside 1,000 Greek troops.

The Greek Cypriot state is recognised internationally but the Turkish Cypriot state only has formal diplomatic ties with Turkey. Greece, Turkey and the UK, as the former colonial power, comprise the so-called “guarantor powers” of Cyprus. The UK still maintains its geo-strategic military bases in Akrotiri and Dhekelia, which have been key staging posts in the US- UK-led bombing campaigns in Iraq and Syria.

The current talks are taking place a decade after a previous UN-brokered settlement plan to coincide with Cyprus’s accession to the EU in 2004 failed, following a “no” vote in a referendum by the Greek Cypriot south.

A key stumbling block has always been the issue of security. According to UN special adviser on Cyprus, Espen Barth Eide, who chaired the talks, “The Greek side maintains that they would prefer an end to the system of guarantees and an end to foreign troops in Cyprus, whereas the Turkish position has always been that a system of guarantees should be continued at least in order to see that this new federal structure works because they feel a certain responsibility for the Turkish-Cypriot community.”

Another obstacle is the extent of territory that the Turkish Cypriot side would have to cede as part of the settlement in order to allow displaced Greek Cypriots to return to their former homes. Both sides have exchanged territorial maps outlining their proposals, but as yet there is no agreement. Johnson said that the UK is prepared to cede up to half of the territory occupied by its two bases—around 3 percent of the island—in order to ease negotiations.

The first round of talks ended in stalemate last Thursday after Greek Foreign Minister Nikos Kotzias demanded the fast and full withdrawal of Turkish troops, declaring, “A just solution [to division] means, first of all, eliminating what caused it, namely the occupation and presence of occupation forces.”

In response, Turkish President Recep Tayyip Erdogan said, “It is out of the question for Turkish soldiers to pull out completely. … If something like this is being considered, then both sides should pull their troops out of there.” Erdogan added, “We have told Cyprus and Greece clearly that they should not expect a solution without Turkey as guarantor. We are going to be there forever.”

However, Eide warned that “Larger political developments in the neighbourhood remind us that one should not lose any time”—a reference to Russia’s increasing influence in the Middle East and Eastern Mediterranean, which is cutting across US plans to dominate the region. This is most pronounced in the recent Russian-brokered ceasefire in Syria, which undermined US-led plans to oust Syrian President Bashar Al Assad. Eide’s statement was a warning of the implications of Russia’s increased economic presence.

At the end of last year, Russian state-owned energy company Rosneft signed a deal with Italian energy giant Eni to buy a 30 percent stake in the Zohr natural gas field off the Egyptian coast for $1.6 billion. Egypt’s Zohr field contains 30 trillion cubic feet of natural gas—the largest in the eastern Mediterranean, almost double the size of Israel’s Leviathan field and around three times the size of Cyprus’s Aphrodite field.

Russia also has built up a huge commercial relationship with Cyprus. In 2012, it offered to help the country with a multibillion-euro bank bailout, leading to the German daily Die Welt accusing Cyprus of playing a “double game with Russia and the EU.”

Today, the island, which has the lowest non-offshore taxes in the European Union (EU) and the lowest non-offshore corporate taxes in the world, has become the top destination for direct investment out of Russia and the largest source of foreign investment into Russia. In 2015, the two countries signed a military cooperation agreement which allows Russian naval ships to dock in Cypriot ports in emergencies—a move strongly criticised by the US and EU.

In this context, a settlement to the Cyprus problem to the advantage of the US and EU is seen in Western ruling circles as a decisive counterweight to Russian influence in the region. Washington has been pushing hard for a settlement, with the State Department’s Victoria Nuland visiting the island last year. According to one report, Nuland’s visit was preceded by “hints from senior Cyprus officials that the US has been pressuring Anastasiades to accept Turkish military occupation of northern Cyprus under a NATO flag.”

Geopolitical tensions over Cyprus erupted this week when Russia’s Ambassador to the EU, Vladimir Chizhov, reacted angrily to a Politico.eu article that blamed Russia for the ongoing stalemate.

The article cited a source “close to” Anastasiades, who said, “The government is aware of Russian activities and monitoring the situation.” Continuing its anti-Russian agenda, the article declared, “The concern comes amid reports of the Kremlin intervening in US and European elections with cyber-attacks, ‘fake news’ propaganda and support for populist and anti-establishment movements.”

Addressing what is at stake for the EU and US in reaching a settlement, the article stated there is “the possibility that a united Cyprus could be pressured into joining NATO, the potential for Turkey and maybe the EU to import new gas supplies along a [currently stalled] pipeline from Cyprus and Israel, and the diplomatic success reunification would deliver to both the EU and the US. As long as Cyprus remains divided by a UN buffer zone, Turkey and the Anastasiades government don’t recognize each other. As a result, Turkey hampers NATO efforts to cooperate with the EU, Greek and Turkish relations in NATO remain tense, and Turkey remains reliant on gas deliveries from Russia’s Gazprom. The EU and Turkey are Gazprom’s top two customers.”

Chizhov responded, “Anti-Russian hysteria is becoming contagious. Overzealous fighters of the (dis)information front are working day and night trying to implicate Russia in all sorts of problems, including those that are the direct result of short-sighted and arrogant policies of others.”

There can be no viable solution to the division of Cyprus under capitalism. Any settlement reached as a result of the Cyprus talks will not lessen tensions in the region but heighten them by providing another potential flashpoint in the US-led drive to war against Russia. A peaceful solution can only be achieved based on the island’s working people overcoming all religious and ethnic barriers in the struggle for a socialist Cyprus as part of the United Socialist States of Europe.

United States ends “Wet Foot, Dry Foot” policy for Cuban migrants

Alexander Fangmann

On January 12, President Barack Obama announced that, effective immediately, the US government would end the so-called “Wet Foot, Dry Foot” policy, as well as the Cuban Medical Professional Parole Program. In a joint statement detailing the changes in migration policy, the Cuban government agreed to accept Cuban nationals deported or returned by the US.

Through these programs, Cubans were extended preferential immigration status and a continued incentive to leave the country, which contributed to a “brain drain” of trained professionals and provided Washington and right-wing Cuban exiles the fodder for propaganda about state repression in Cuba fueling a constant stream of refugees.

Cubans will now be treated just as brutally as all other migrants and refugees to the United States, subject to an inhuman regime of incarceration and deportation built up by the Obama administration and soon to be administered by the even more virulently anti-immigrant Donald Trump.

Under the previous policy, Cubans who made it to dry land in US territory were permitted to enter the country and take advantage of the 1966 Cuban Adjustment Act, which allowed Cubans to claim permanent US residency after one year in the country. Cubans who were interdicted at sea by the US Coast Guard, on the other hand, were returned to Cuba.

The policy was introduced by Bill Clinton in 1994 to restrict Cuban immigration in the wake of the so-called balsero (rafter) crisis, which saw tens of thousands of Cubans leave the island during the economic collapse following the dissolution of the Soviet Union. Prior to this, Cubans making it either to the US or into the hands of the Coast Guard were allowed entry and a fast-track to residency and citizenship. In exchange for getting the Cuban government to accept its returned nationals, the US opened up an immigration lottery program giving 20,000 residency visas a year to Cubans.

The much newer but related program, the Cuban Medical Professional Parole Program, was put in place in 2006 by George W. Bush. It allowed doctors, nurses and other medical professionals to present themselves at any US embassy or consulate and receive a fast-track to US residency and citizenship. It was largely intended to undermine the Cuban economy and health care system by depriving it of personnel that are among the most expensive to train, and was taken advantage of by over 7,000 professionals. Much of the anger directed at the Obama administration by right-wing exiles in Miami is over the termination of this program.

A great deal of Cuba’s export earnings are derived from its medical professionals, with over 40,000 deployed around the world. Until recently, over 30,000 were in Venezuela providing medical care and training, for which the Cuban government received subsidized oil. Doctors and other professionals working abroad were paid more than their counterparts on the island itself—although still low by international standards—about $180 per month instead of about $23 per month.

While the sending of skilled Cuban doctors to impoverished countries served to boost the country’s image on the world stage, the program also provided a source of earnings for medical services. This was particularly the case in Venezuela, where the employment of doctors in the government’s medical programs for the poor was compensated with cheap oil. Groups like the Cuban American National Foundation hysterically denounced this program as a form of “slavery” or “indentured servitude.”

The end of these preferential immigration programs is the logical outcome of the resumption of diplomatic relations between the United States and Cuba. Indeed, since the announcement of a rapprochement in December 2014, there has been a dramatic rise in the number of Cuban immigrants and refugees reaching the United States. Since 2012, around 118,000 Cubans have entered the US, with over 55,000 reaching the country in 2016 alone.

The sudden shift in policy has stranded thousands of Cuban migrants who were making their way to the US borders, particularly through Central America and Mexico, many with the aim of reuniting with family members residing in the US.

The restriction of Cuban immigration is of a piece with Obama’s anti-immigrant policies that have earned him the moniker of “deporter-in-chief” in immigrant communities. Obama’s statement ominously notes, “By taking this step, we are treating Cuban migrants the same way we treat migrants from other countries.” In other words, Cubans will now be subject to the same monstrous policies as other immigrants and refugees, which have seen around three million deported since 2008 and hundreds of thousands per year incarcerated in a vast network of over 200 detention centers.

Although Cubans will formally be able to apply for humanitarian asylum, as is the case with refugees from other countries, this is notoriously hard to prove. Additionally, once detained by immigration authorities, immigrants—even children—are routinely denied adequate legal representation.

Obama has created a system that can be seamlessly taken over by Donald Trump, who has promised to vastly expand the scale of deportations. In fact, though Trump has criticized Obama’s normalization of relations with Cuba, it is precisely because of its anti-immigrant stance that Trump is unlikely to reverse this latest measure by his predecessor.

For decades, US immigration policy provided preferential treatment to Cuban immigrants as part of Washington’s protracted campaign to undermine the Cuban government and as a means by both major parties to curry favor with the right-wing Cuban lobby in Miami. This policy grated particularly upon immigrants from Central America and Haiti, who have been summarily sent back to countries where they face real threats of persecution.

Nonetheless, there is nothing progressive in the Obama administration’s decision to now subject Cubans to the same terrible conditions facing other immigrants and refugees. The policy of the working class must be to uphold the rights of workers to live where they choose.

Unanimous US Supreme Court insists on broad immunity for police

Tom Carter

On January 9, the US Supreme Court issued a unanimous summary ruling reversing a decision by the Tenth Circuit Court of Appeals and upholding qualified immunity for a police officer who shot and killed Samuel Pauly in an attempt to investigate a traffic incident near Santa Fe, New Mexico in October 2011.

Prior to the shooting, Samuel’s brother Daniel was involved in a non-violent road-rage incident in which he stopped his car and confronted two women who he claimed had been tailgating him. Daniel subsequently drove home, where he lived with Samuel. Samuel was at home playing video games and had not been involved in the confrontation. Meanwhile, the occupants of the other vehicle called the police, who were able to locate the house where the brothers lived.

At that point, no crime had been committed and there was no legal justification to arrest anyone or to enter or search any house. While the frequency of “road-rage” incidents is not a healthy sign, they do constitute a fairly common occurrence in American social life.

According to Daniel, when two police officers arrived at the brothers’ house they failed to identify themselves. Not realizing that it was the police, and believing that they were being burglarized, the brothers armed themselves with weapons. The brothers warned, “We have guns!” The encounter escalated and there was an exchange of gunfire in which no one was struck. Then a third officer arrived and, without warning, shot Samuel dead.

The phrase “qualified immunity” refers to a judge-made doctrine that has no basis in the text of the US Constitution, notwithstanding the claims by various Supreme Court justices to be handing down the Constitution’s “original” meaning. In recent decades, this doctrine has quietly been built up to huge proportions within the judicial system, largely without significant media commentary or public discussion. It now plays an important role in blocking civil rights cases and encouraging the ongoing epidemic of police brutality.

According to this authoritarian and anti-democratic doctrine, a judge can unilaterally decide a case in favor of a police officer—even if the officer’s conduct violated the Constitution—if the judge determines that the police officer acted “reasonably” in light of previous Supreme Court decisions. If qualified immunity is awarded to the police officer, the case can be thrown out of court, never going before a jury, and costs can be imposed against the victim or the victim’s survivors.

During American election campaigns, it is often claimed by liberal commentators that the election of a Democratic president is necessary to ensure that the Supreme Court is not stacked with ultra-right judges. The fact that the decision in the Pauly case was unanimous highlights the role of both official parties and the judiciary as a whole in the abrogation of democratic rights and the drive towards a police state.

The Tenth Circuit Court of Appeals declined to award immunity to the officers, instead opting to let a jury decide whether their conduct was appropriate. The Supreme Court reversed that decision in an unsigned eight-page opinion joined by all of the sitting justices, including Obama appointees Elena Kagan and Sonia Sotomayor. While the court normally has nine justices, the vacancy left by the death of Justice Antonin Scalia last year has not yet been filled.

The text of the Supreme Court’s opinion underscores the stunningly irrational character of the doctrine of qualified immunity as it is applied in practice. The Supreme Court held that the officer who killed Samuel “did not violate clearly established law” because “existing precedent” had not “placed the statutory or constitutional question beyond debate.”

In other words, there had not been a nearly identical case decided against a police officer in the past, so the conduct of the officer in this case could not be the subject of a lawsuit. However, since the doctrine of qualified immunity prevents this case from being decided on the merits, the Supreme Court’s Kafkaesque logic ensures that the outcome will be the same in every future case.

Moreover, the Pauly case has far more sinister implications then might be apparent from the facts of this particular case. In the written opinion, the justices went out of their way to complain that the lower courts were not granting qualified immunity to police officers often enough.

The justices noted bitterly, “In the last five years, this Court has issued a number of opinions reversing federal courts in qualified immunity cases.” In other words, while the Supreme Court has been routinely granting immunity to police officers, some lower federal courts have not kept pace. The Supreme Court is signaling the lower courts that they must fall into line.

With the full support of the Obama administration, the Supreme Court over the past five years has routinely insisted on broad immunity for police officers in civil rights lawsuits based on police misconduct. In its May 2014 decision in the case of Plumhoff v. Rickard, the Supreme Court—once again unanimously—awarded immunity to three Arkansas police officers who fired 15 bullets at two unarmed people who were trying to escape in a car. Both the driver and the passenger were killed.

In November 2015, the Supreme Court granted qualified immunity in the case of a Texas trooper who climbed on an overpass and used a rifle to assassinate a motorist who was being pursued by other officers, even after his supervisor told him not to do it.

After killing his victim, the Texas trooper boasted, “How’s that for proactive?”

In its decision last week in the Pauly case, the unanimous Supreme Court emphasized the significance of the doctrine of qualified immunity, writing, “The Court has found [that] qualified immunity is important to society as a whole.”

While more than 1,050 people were killed by the police in America in 2016, the unanimous Supreme Court thinks it is “important to society” for the federal courts to ensure that more police officers enjoy immunity from legal actions that base themselves on fundamental democratic rights.

Nepal-China military exercises: Another sign of rising geo-political rivalry

W.A. Sunil 

Nepal’s joint military exercises with China, announced in December, underscore the strategic rivalry in South Asia between Beijing and New Delhi. The drill, known as Pratikar 1 and scheduled for February 10, will be the first such exercise with China. Its stated aim is to deal with “hostage situations involving international terrorist groups.”

The planned exercise is relatively minor compared to India’s long-standing military relations with Nepal and history of joint exercises. India has been the largest supplier of arms to the Nepalese army and under the 1950 Treaty between the two countries has virtual veto power over Nepal’s purchase of military hardware from other countries.

Nevertheless, India fears any loosening of its grip over Nepal. While India’s State Minister for External Affairs V. K. Singh has said that the drill “would not create any rift” in relations between India and Nepal, the Indian media and strategic commentators have expressed concerns.

New Delhi-based strategic analyst Jayadeva Ranade told Voice of America: “Any increased Chinese presence in Nepal brings China right up to [India’s] border, which is very porous.” He added: “We [India] look at Nepal as part of our strategic space, so there is a bit of a contest taking place.”

Similarly, a senior researcher at Jawaharlal Nehru University, Anuradha Rai, wrote in the Eurasia Review on January 4: “China is looking much beyond its trade relations and it is eyeing Nepal as a centre to promote its ambitions in the South Asian region…

“The situation is getting worrisome for India because from mere words in the past, Nepal has now started to develop its economic and political ties with China. In the recent past, China has also showed similar eagerness to provide an alternative to India for Nepal by providing new trade routes and developing its strategic ties. The recent development to have joint military exercises is one such measure.”

Attempting to assuage Indian concerns, Nepal’s ambassador to India, Deep Upadhyay, told the media that the drills would be “small scale.” He added: “There’s really not much in it. Whichever way you look at it, Nepal has a special relationship with India and that’s not going to change because of any such exercise.”

China’s state-owned Global Times dismissed Indian concerns, writing: “Indian officials, media and academic circles should not read too much into the two countries’ security cooperation. It will only enhance the bilateral relations. India should understand and adapt to this trend.”

These developments are taking place amid sharpening geo-political tensions in the region, exacerbated by US efforts to isolate China diplomatically and encircle it militarily. President-elect Donald Trump has already made clear that he will intensify the confrontation with Beijing that began with the Obama administration’s “pivot to Asia.” The US regards India as central to its drive against China.

India, under the current government of Prime Minister Narendra Modi, has been rapidly developing closer military-strategic ties with the US. India is also seeking to expand its own strategic influence throughout South Asia and the broader Asia region, further heightening tensions, particularly with its longstanding rival, Pakistan, which has close relations with China.

India is planning to deploy a 90,000-strong Mountain Strike Force along its disputed northern border with China—a move that can only generate greater friction with Beijing.

Nepal, which borders both China and India, has become a major arena for growing strategic competition between New Delhi and Beijing. China has made a concerted effort to boost ties with Nepal, particularly since the ousting of King Gyanendra and the abolition of Nepalese monarchy in 2008.

Relations between India and Nepal became very strained after New Delhi’s support for protests by ethnic Madhesi parties in Nepal demanding greater autonomy, which became a de facto economic blockade of the land-locked country, including of vital energy supplies. The government led by Prime Minister K. P. Oli turned to China and signed a deal in October 2015 to import Chinese petroleum products.

Beijing took advantage of Nepal’s standoff with India to strengthen ties with offers of financial aid. Oli made a week-long official visit to China in March 2016 where he signed 10 separate deals which increased the number of transit points between the two countries, improved road and rail connectivity and provided for building a new international airport at Pokhara. In doing so, Nepal reduced its dependence on India and facilitated Nepalese exports and imports.

Military relations also developed. In the same month, General Fang Fenghui, a member of China’s Central Military Commission declared that China was “willing to expand bilateral defense and security cooperation, strengthen strategic communication and exchange at all levels between militaries of the two countries.”

Oli was ousted last July in a regime-change operation backed by New Delhi because of his increasing tilt towards Beijing. On coming to power, Maoist leader K.P. Dahal announced that his government would maintain a balance between India and China. He sent a special envoy to both India and China to explain his attitude.

However, Dahal made his first visit to India for the purpose of mending damaged relationships and, in early November, Indian President Pranab Mukherjee visited Nepal—the first by an Indian president in 18 years. After the visit and delays in implementing the deals signed with China by Oli’s government, Chinese President Xi Jinping expressed Beijing’s displeasure by cancelling his planned trip to Nepal in October.

China is working to boost its influence in Nepal, mostly with offers of financial aid. In December, Beijing pledged a grant of one billion yuan ($US146 million) for post-earthquake reconstruction and road construction to the Chinese border.

While trying to balance between India and China, the Nepalese government appears to be tilting towards New Delhi and Washington. Maoist Prime Minister Dahal “heartily congratulated” Trump on his election victory even as Trump indicated his determination to confront China diplomatically, economically through trade war measures, and militarily.