The Tribune - Spectrum



Sunday, April 9, 2000
Time Off


Proxy war turns fake
By Manohar Malgonkar

HOW to say it? — for it seems so rude — that the financial wizards who are in charge of the nation’s economic well-being are often hopelessly wrong.

Remember how, as late as only ten years ago our airport customs officials used to go pop-eyed with rage if they suspected that some passenger had brought gold ornaments? — so that to declare that you were carrying a heavy gold cigarette lighter and a necklace in your hand-baggage was like declaring that you had brought in a bag of heroin or a primed hand-grenade?

On a book-promotion tour in America, I took a day or two off to stay with friends in a place called Attleboro, near Boston: What Detroit is to the motor-car industry or Pittsburgh to steel, Attleboro is to the manufacture of jewellery. I stayed with L.G. Balfour who owned the biggest of these factories. He was so important in the district as to be nicknamed Mr ‘Attleboro’! My other friend, who also owned a jewellery-making factory, was William Sweet, a name then high up in the hierarchy of the National Rifle Association, which has since become synonymous with the gun lobby. Both were multi-millionaires. Balfour gave me the cigarette lighter which looked like a gold nugget; Sweet gave me a necklace for my wife.

  That necklace, I managed to get rid of in America itself — don’t ask me how — and the lighter I unloaded on a friend in London. It was inscribed with my name, but that did not reduce its intrinsic value. When I returned home, I breezed through the green channel, ‘clean’.

At that, having had to give away my gifts because of some crazy fad of the government’s prodded me into seeking answers from my economist friends. But why? — I kept asking. How is gold any different from, say a music system or a cordless phone, both of which you allow on payment of duty? Both will stop working in a year or two and be thrown away. Gold, in contrast, is all but indestructible. It’ll last for ever. An asset, indeed a medium of exchange; gold is like dollars and yens. Why stop it from coming in?

They shook heads in despair. "Bringing in gold is sabotaging the nation’s economy. A crime. For god’s sake don’t say such things in public. OK, you’re an economic ignoramus!... but you don’t have to flaunt it."

They had all the answers; I only the questions. And then in the nineties, they abolished the ban on gold. Nowadays, so I’m told, customs officials all but garland you for bringing in a handful of gold biscuits — provided that you declare them and pay duty.

And what can be fairer?

So it turned out that I who know nothing, was right; the pundits, wrong, and the country had been done out of hundreds of tonnes of gold which would have been brought in by passengers from Dubai to shore up its languishing economy.

I have a feeling that the same head-in-the-sand attitude governs our policy towards the dumping of fake currency notes into the country by Pakistani agents.

In fact my thinking on this issue is so out of step with that of the authorities that I must explain my reasoning.

For a start, printing currency notes of any country is not at all difficult if you have an efficient printing press and the right kind of paper. Then again, this business of one country’s secret service dumping fake currency notes into another is quite old hat. Hitler tried it in the World War II and so did both the Japanese and the Chinese. The last known instance was the printing of US dollar bills in the war-torn border between Lebanon and Syria which were so good that even bank tellers could not tell that they were fake. The US government is tight-lipped about it, but this fake currency is believed to be the reason behind their recent design-change of the 100-dollar note.

But as a weapon of war it has been a failure, no more than of nuisance value. There is absolutely no danger of India’s economy being ‘destabilised’ by the Pakistani dumping of Indian currency notes into Kashmir and along the border. O.K. our economy is not all that sound; at that, its sheer vastness is daunting. To make even a minor dent in it, Pakistan will have to print Indian currency notes by the wagonloads and devise methods to put them in circulation in India.

Ironically, Pakistan itself is far more vulnerable to this particular weapon of secret service warfare:it has a much, much smaller-sized economy, and that economy is famously in bad shape. If India too were to take it into its head to retaliate in kind and flood Pakistan with fake currency notes, that economy might well be put on the skids.

But even so it would not do any lasting damage, which just shows up the limitations of the weapon, and why the countries which have tried it in the past have not persisted with it.

But then it also shows up how fossilised the ISI’s think-tank has become.

All countries have their secret service organisations and those services have their ‘dirty-tricks’ cells. Some of these organisations, such as Israel’s Mossad, are brilliant, but the ISI is not one of them. It is formed by a bunch of career officers who, like officers of all armies are only focused on career advancement which in Pakistan has little to do with professional competence, but depends on the sect you belong to, whether Sunni or Shia, whether you are of the soil or a Mohajjir (from India) and, above all, whether you’re a Punjabi. The top positions have always been a Punjabi preserve. In this trade union, General Musharraf, a Mohajjir and Urdu-speaker, is himself a disturbing cuckoo, and has had to back down in confrontations with two of his immediate deputies who are Punjabis.

The ISI has always regarded itself as a supernational entity not answerable to the government. In a culture fed on strong doses of religious fervour it’s strongest appeal to popular acceptance and esteem has been its single-point agenda, Kashmir, only Kashmir, and its obsession with Batman-type operations.

As Benazir Bhutto has just revealed, she had vetoed the Kargil adventure in 1996. It is clear that, in 1999, the ISI bulldozed Mia Nawaz Sharif into sanctioning it, and when it backfired, lost no time in getting rid of Sharif-Mia, making him a scapegoat for it.

Since then, under the military regime, there has been the hijacking of the Indian Airlines plane, which, for the ISI, was something to celebrate, but the whole operation left such a well-marked trail of ISI’s tradecraft, that the end result was negative, drawing international condemnation for the country for aiding and abetting — if not actually planning and executing — an act of piracy and terrorism.

And now the dumping of fake currency notes in the border areas and in Kashmir.

During World War II, Britain’s secret services perfected as tactic which they named XX, or the Double Cross. Enemy agents who were found were not arrested and imprisoned but allowed to go on and their work closely monitored, and many of them were actually recruited into the British spying system.

Surely, that is how we should deal with this amateurish operation of the ISI. Our own intelligence networks should turn the weapon against its operations? While keeping a close watch on the dumping, we should go on pretending how well it is serving its purpose of destabilising our economy and causing alarm in banking circles so that more and more currency notes are sent in. All our financial authorities have to do is to destory used currency notes of equal value.

In effect, make Pakistan the free supplier of a large part of our hundred rupee notes, so that our own note-printers can get busy only on the lower denomination notes. What a feat of double-cross that would be?

This feature was published on March 26, 2000

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