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Editorials | Article | Middle | Oped

EDITORIALS

Offensive against Naxalites
Time to take on them in all affected states
I
t is good that the much-awaited anti-Naxalite joint operation has been launched jointly by the Maharashtra Police and the paramilitary forces in the Maharashtra-Chhattisgarh border areas without waiting for the parliamentary elections to conclude.

Lure of gold
Investors rush to safe haven
T
he gold prices have risen sharply since November last year, touching Rs 15,220 per 10 gram on Tuesday. These have not yet reached the heights achieved in March, 2008, when the spot prices had exceeded $1,000 an ounce. The present rate of $950 an ounce may still have some upside left.



EARLIER STORIES

Appeasing the Taliban
February 18, 2009
Carry on, Pranab
February 17, 2009
More open to FDI
February 16, 2009
Pitfalls of democracy
February 15, 2009
One step forward
February 14, 2009
Amarinder’s expulsion
February 13, 2009
Violence in the House
February 12, 2009
Deaths in custody
February 11, 2009
BJP in two minds
February 10, 2009
Nuke Khan is set free
February 9, 2009


No to opinion polls
EC bid to ensure free and fair elections
T
hursday’s decision by the Election Commission on opinion and exit polls comes close on the heels of the Supreme Court’s ruling leaving the issue to its discretion to lay down guidelines till the Union Government frames regulations. According to the new guidelines, the commission has barred dissemination of opinion and exit polls by the print and electronic media 48 hours prior to the date of the Lok Sabha or Assembly elections in case of a single-phase election and a blanket ban on these surveys till the end of polling in the event of multi-phase elections.

ARTICLE

A.Q. Khan network
How US ignored N-proliferation activities
by G. Parthasarathy
T
he decision of the Islamabad High Court to release the "Father of Pakistan's Islamic Bomb," Dr A.Q. Khan, following a secret agreement between him and the Pakistan government has evoked widespread international concern. There are no takers for Pakistan’s stand that the A.Q. Khan affair is a “closed chapter”. The court decision constitutes direct and wanton defiance of American concerns about the danger his release poses to international security.

MIDDLE

A good turn gone awry
by Robin Gupta
A
s the aircraft circled over low mountains and green valleys around Bagdogra airport in Siliguri and as I was trying to locate my jeep parked at the edge of the runway, a youthful foreign lady in travelling gear with a troubled countenance leaned over with a request: “Will you help me to get issued a restricted area permit to visit Darjeeling?” She sadly added: “Or else I shall have to await further orders at the police station.”

OPED

Nuclear North Korea
It is ready to rule out fresh N-weapons
by Selig S. Harrison
W
ill North Korea ever give up its nuclear weapons? To test its intentions, I submitted a detailed proposal to Foreign Ministry nuclear negotiator Li Gun for a "grand bargain" in advance of a visit to Pyongyang last month. North Korea, I suggested, would surrender to the International Atomic Energy Agency the 68 pounds of plutonium it has already declared in denuclearization negotiations.

‘Buy Indian’, save jobs
by Jayshree Sengupta
V
isiting the Suraj Kund handicraft fair in Haryana this year was a different experience than in previous years because of the huge crowds that came and the interest people were showing towards crafts and handlooms of India. Is it possible that at last Indians are rediscovering their own heritage and beautiful crafts and textiles?

Boom time in Baghdad
by Patrick Cockburn
A
s the price of housing collapses in the rest of the world, it is soaring in Baghdad. “Property is the fastest way to make money here,” says Mohammed al-Hadithi, who runs a real estate office in the wealthy Yarmouk district of west Baghdad. “Over the past two years there has been a big rise in the market because the security situation is calmer.”


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EDITORIALS

Offensive against Naxalites
Time to take on them in all affected states

It is good that the much-awaited anti-Naxalite joint operation has been launched jointly by the Maharashtra Police and the paramilitary forces in the Maharashtra-Chhattisgarh border areas without waiting for the parliamentary elections to conclude. Killing of 15 policemen by Maoists in the Makegaon area on February 1 was the immediate provocation, though the debate has been on for some time for going ahead with a coordinated offensive against the growing Naxalite threat. The strategy is to first ensure the domination of the security forces in the areas in which nearly 3000 police personnel have been deployed. As has been their practice, Naxalites quietly disappear from an area where a drive is launched against them. They have their own intelligence network which helps them to outwit the security forces. To gain the upper hand, the authorities need to step up their operations.

There is need for such a campaign covering all the 13 states where the Naxalites have been causing death and destruction on a large scale. Once the “area domination” is ensured, under no circumstances should the Naxalites be allowed to stage a comeback and harm those who help the security forces. No campaign against these non-jihadi extremists can succeed without the local people’s help. The people will come forward with the necessary information about the Naxalites only when they are confident that no harm will come to them. This means that there has to be a massive presence of well-armed security forces in the affected areas for a long time to come. This is an expensive proposition, but it looks like the country may have to bear the cost.

The Naxalites pose a grave threat to peace and progress in large parts of the country. During the past five months they killed over 350 people, including 95 security personnel, in nine states. Chhattisgarh and Jharkhand remain the most Naxalite-infested areas, but they have been spreading their tentacles to other states also. This is a very disturbing scenario. These elements must be made to feel that they cannot get away.

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Lure of gold
Investors rush to safe haven

The gold prices have risen sharply since November last year, touching Rs 15,220 per 10 gram on Tuesday. These have not yet reached the heights achieved in March, 2008, when the spot prices had exceeded $1,000 an ounce. The present rate of $950 an ounce may still have some upside left. There are seasonal factors that push up gold prices such as weddings but the latest surge is attributed to the Russian central bank’s announcement that it will hold 10 per cent of its reserves in gold. Although there are reports of Indians queuing up to sell ornaments and Indian jewellers quoted in media reports also expect a dip in demand, the prices of the yellow metal may “continue to hold up well in 2009 and 2010” globally, according to a forecast by The Economist of London.

It is well known that Indians are the world’s biggest gold buyers and 65 per cent of the purchases are made by villagers, who have now proved to be more shrewd investors than financial wizards. Gold has given very attractive returns of 35 per cent in the past four months. Rising prices, however, have pulled down gold imports — from 50 tonnes a month to 2 tonnes in January, 2009. The ongoing recession in major economies, the financial turmoil driving banks to bankruptcy, plummeting stock and commodity prices worldwide have left few attractive options for fund managers and general investors other than gold.

For risk-averse people, gold has always appealed as a safe haven for investment. People usually buy gold coins, biscuits and jewellery. There are five gold exchange traded funds (ETFs) — Gold Bees, Kotak Gold, Quantum Gold, Reliance Gold and UTI Gold — which are traded like other mutual funds and their prices too fluctuate. For most Indians, however, gold ornaments have a sentimental value as these are passed from generation to generation and they do not part with these easily unless to meet an emergency. And even then not without sighs and tears.

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No to opinion polls
EC bid to ensure free and fair elections

Thursday’s decision by the Election Commission on opinion and exit polls comes close on the heels of the Supreme Court’s ruling leaving the issue to its discretion to lay down guidelines till the Union Government frames regulations. According to the new guidelines, the commission has barred dissemination of opinion and exit polls by the print and electronic media 48 hours prior to the date of the Lok Sabha or Assembly elections in case of a single-phase election and a blanket ban on these surveys till the end of polling in the event of multi-phase elections. There is no denying that opinion polls tend to influence the voter in the smooth exercise of his/her franchise. If free and fair elections are sine qua non of a democratic form of government, opinion polls set to sometimes negate this concept because these have the potential of either influencing or confusing the voting behaviour. More important, experience in the past few decades suggests that the opinion polls, based on small sample surveys, instead of reflecting the popular opinion, have misled the voters by projecting an unreal picture despite the best of intentions.

In January 1998, the commission had banned the telecast, publication or broadcast of exit polls during elections till the final phase of voting. However, this order was challenged in the Supreme Court. The question of law, which came up in the apex court in 1999, was whether the Election Commission had the power to impose such a ban and under which law. The court reminded the commission that a consensus at an all-party meeting did not provide the required legal sanction. Subsequently, the order was revoked.

The commission had recently asked the apex court to decide whether there should be a reasonable restriction on the opinion polls during certain specified periods during the election process. In October last, the Centre decided to amend the Representation of People Act, 1951, to curb opinion polls so that these do not influence the voters. Inaccurate opinion and exit polls can hardly help the democratic process. Essentially, the debate on the issue is focussed on two independent questions — how reliable are these polls? And how right is it to allow them during the electoral process? Unfortunately, the proponents of exit polls are yet to give cogent and credible answers to these questions.

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Thought for the Day

I have long been of the opinion that if work were such a splendid thing the rich would have kept more of it for themselves. — Bruce Grocott

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ARTICLE

A.Q. Khan network
How US ignored N-proliferation activities
by G. Parthasarathy

The decision of the Islamabad High Court to release the "Father of Pakistan's Islamic Bomb," Dr A.Q. Khan, following a secret agreement between him and the Pakistan government has evoked widespread international concern. There are no takers for Pakistan’s stand that the A.Q. Khan affair is a “closed chapter”. The court decision constitutes direct and wanton defiance of American concerns about the danger his release poses to international security.

Just after the court verdict, Dr Khan defiantly voiced his Islamist credentials, asserting: “I will always be proud of what I did for Pakistan. I am obliged only to my government, not any foreigners. Are they happy with our government? Are they happy with our Prophet? Never”. Khan’s religious bigotry is shared by not only many in the Pakistani military establishment, but also by his close associates involved in the Pakistan nuclear weapons programme.

The Islamic dimensions of Pakistan's nuclear ambitions were spelt out when Prime Minister Z.A. Bhutto noted that while the “Christian, Jewish and Hindu” civilizations had nuclear weapons capability, it was the “Islamic civilization” alone that did not possess nuclear weapons. He asserted that he would be remembered as the man who had provided the “Islamic Civilization” with “full nuclear capability”.

Bhutto's views on Pakistan's nuclear weapons contributing to the capabilities of the “Islamic civilization” were shared by Khan’s close associate for over three decades, fellow nuclear scientist Sultan Bashiruddin Mehmood, who, along with his colleague Chaudhri Abdul Majeed, was detained shortly after the terrorist strikes of 9/11. They were both charged with helping Al-Qaida to acquire nuclear and biological weapon capabilities. Mehmood openly voiced support for the Taliban and publicly advocated the transfer of nuclear weapons to other Islamic nations. Echoing Bhutto, Majeed described Pakistan's nuclear capability as the property of the whole “Ummah” (Muslim community).

Mehmood and Majeed also acknowledged that they had long discussions with Al-Qaida and Taliban officials. A "Fact Sheet" put out by the White House stated that both scientists had meetings with Osama bin Laden and Mullah Omar during repeated visits to Kandahar, with Al-Qaida seeking their assistance to make radiological dispersal devices. Documents recovered by the coalition forces in Afghanistan established that the two scientists were active members of an Islamic organisation, Ummah Tameer-e-Nau (UTN), engaged in securing information on biological weapons. Two other Pakistan scientists, Suleiman Asad and Al-Mukhtar, wanted for questioning about suspected links with Osama bin Laden then "disappeared" near Myanmar's borders with China.

Khan commenced his proliferation activities in 1987, when, with the approval of General Zia-ul-Haq, he offered assistance to Iran. This process continued through the 1990s with Khan supplying Iran with "inverters" — the equipment crucial for uranium enrichment — in 1994 through a Sri Lankan intermediary, Abu Tahir Syed Bukhary. Engulfed by economic bankruptcy, following the termination of American assistance, Pakistan turned to North Korea for what led to a missiles-for-nuclear-technology deal. This followed a Pakistan-China-North Korea agreement in January 1994 for cooperation in the manufacture of missiles and guidance systems.

Between 1994 and 1998, Khan paid over a dozen visits to North Korea. By 1998 aircraft of the Pakistan Air Force and the Air Force-run Shaheen Airlines were carrying missile components and nuclear-enrichment equipment and materials between Rawalpindi and Pyongyang.

Around the same time, Khan offered nuclear technology to Iraq and Libya. While Saddam Hussein was guarded in responding to the Khan offer, Libya's Colonel Qaddhafi had no such reservations and went full steam ahead with getting enrichment equipment and even nuclear weapons designs (of Chinese origin) from Khan. Moreover, in 1998, Saudi Defence Minister Prince Sultan was given unprecedented access to the A.Q. Khan Laboratories in Pakistan. This was followed by exchanges of visits between Khan and Saudi scientists to and from Saudi Arabia during 1998-1999. Saudi Arabia's King Fahd, in fact, told senior American officials around the same time that Riyadh would need a nuclear deterrent if Iran developed nuclear weapons.

Pakistan’s nuclear tests in May 1998 paradoxically marked the beginning of Khan’s decline, as the scientists and physicists led by his rival, Samar Mubarak Mand, carried out the tests. In the meantime, the CIA had infiltrated his network in Dubai and Geneva and gained access to its computers and global operations. General Musharraf was confronted with the evidence the CIA had collected.

Fearing that if he did not act against Khan, the Americans could well expose the crucial role the Pakistan Army had played in assisting Khan's activities, General Musharraf extracted a “confession” and “apology” from Khan that he had acted illegally, out of considerations of personal profit. But, like in their approach to Pakistani-sponsored terrorism, where they invariably give a clean chit to the ISI, the Americans have absolved the Pakistan Army, the ultimate villains in Khan's proliferation activities, of all responsibility for what had transpired.

The Americans have drawn attention to their operations in Geneva and Dubai revealing that Khan was peddling not only nuclear weapons designs that China had passed on to Pakistan, but also the Pakistani modified versions of these designs. Since he had passed on nuclear weapons designs to Libya, the presumption is that he has also done likewise to his contacts with Iran. But the Americans have also left several questions unanswered.

Khan was sentenced to four years’ imprisonment by an Amsterdam court in 1983 for illegally stealing nuclear weapons enrichment technology and centrifuge designs from the Netherlands-based Physical Dynamics Research Laboratory, where he worked between 1972 and 1976. This sentence was later overturned on a legal formality. Former Netherlands Prime Minister Ruud Lubbers revealed that his government was all set to arrest Khan in 1975 and 1986 but was advised against doing so by the CIA. Why was the CIA so keen then to let Khan off the hook? Was it part of an American policy, especially in the 1980s, to turn a blind eye to Pakistan's nuclear weapons programme?

If expedience led the Americans to permitting Khan to go scot-free two decades ago, with disastrous consequences, have they and their friends realised the dangers they could well face in the future by deliberately covering up the role the Pakistan Army and successive Army Chiefs have played in encouraging and indeed participating and facilitating nuclear proliferation worldwide? Have they also assessed the likely implications of the “See no evil, hear no evil and speak no evil” policies they have adopted on the role of the Pakistan Army and the ISI in promoting global terrorism? Diplomacy based on delusion and self-deception inevitably has disastrous consequences.

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MIDDLE

A good turn gone awry
by Robin Gupta

As the aircraft circled over low mountains and green valleys around Bagdogra airport in Siliguri and as I was trying to locate my jeep parked at the edge of the runway, a youthful foreign lady in travelling gear with a troubled countenance leaned over with a request: “Will you help me to get issued a restricted area permit to visit Darjeeling?” She sadly added: “Or else I shall have to await further orders at the police station.”

Then aged 25 and vested with the powers of the Executive Magistrate over Raiganj sub-division — a remote posting in rural Bengal — I asked Milly to hop into my jeep which I often described as a ceremonial corpse, for it had been painted to perfection, displayed an impressive insignia and would regularly break down, particularly during ceremonial sendoffs and welcomes.

By now I had undertaken to help the distressed foreigner and we travelled to Raiganj. As Milly had become a guest, I planned a welcome party that evening with elaborate dinner.

Like most westernised oriental gentlemen, my cook’s repertoire reflected Indo-Anglican cuisine put together by an old khansama who had worked in the magistrate’s kitchen for long. Dinner was preceded by variegated victuals propped up by crisp Indian savouries.

All gatherings, of disparate persons, are held together by drink and wholesome food. As the evening gathered momentum, there was talk of Milly settling down at Raiganj, by the side of the Circus Ground.

Delayed introductions followed. “Hey, what do you do for a living?” Milly asked the District Magistrate. “What do I do for a living?” repeated the stunned Deputy Commissioner. “ I am overall in charge here, I imagine.” “And you, fatso?” Milly addressed the Superintendent of Police crooking a finger into his protruding stomach. The Thakur adroitly steered the conversation enquiring whether she was bored. “BORED? Why should I get bored? There are young men, hip-hop music, plenty to drink — the works.”

“And Madam,” said the SP, “Are you a career lady?” “YEAH— I work at a bar in New York City and stand in for the night waitress when she has had too much.”

The Divisional Forest Officer, unsteadily, suggested that Madam be shifted to the Bird sanctuary Guest House.

At this juncture, the District Magistrate signalled me to follow him into the garden.

“You do realise Robin, this is a restricted area and you are presiding over a crime; get rid of your guest without delay.” Looking at the rage in his otherwise gentle eyes, I realised the futility of pleading with this copybook civil servant.

“And where shall I escort her to?” I timidly asked. The merciless answer came promptly — “Wherever you brought her from.”

“Doubtless, your orders will follow.”

Strangely, I did receive my orders the next morning and by a quirk of destiny as it were, the Bengal Governor’s orders read that I had now been appointed Executive Magistrate in Darjeeling district in charge of Siliguri — the northern capital of West Bengal.

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OPED

Nuclear North Korea
It is ready to rule out fresh N-weapons
by Selig S. Harrison

Will North Korea ever give up its nuclear weapons? To test its intentions, I submitted a detailed proposal to Foreign Ministry nuclear negotiator Li Gun for a "grand bargain" in advance of a visit to Pyongyang last month. North Korea, I suggested, would surrender to the International Atomic Energy Agency the 68 pounds of plutonium it has already declared in denuclearization negotiations.

In return, the United States would conclude a peace treaty formally ending the Korean War, normalize diplomatic and economic relations, put food and energy aid on a long-term basis, and support large-scale multilateral credits for rehabilitation of North Korea's economic infrastructure.

The North's rebuff was categorical and explicit. Its declared plutonium has "already been weaponized," I was told repeatedly during 10 hours of discussions. Pyongyang is ready to rule out the development of additional nuclear weapons in future negotiations, but when, and whether, it will give up its existing arsenal depends on how relations with Washington evolve.

Sixty-eight pounds of plutonium is enough to make four or five nuclear weapons, depending on the grade of plutonium, the specific weapons design and the desired explosive yield. Li Gun would not define "weaponized," despite repeated questions, but Gen. Ri Chan Bok, a spokesman of the National Defense Commission, implied that it refers to the development of missile warheads.

Faced with this new hard line, the United States should choose between two approaches, benign neglect and limiting the North's arsenal to four or five weapons.

Benign neglect would mean a suspension of ongoing efforts to denuclearize North Korea by providing economic incentives and moving toward normalized relations. But it would also mean avoiding the hostile policies initially pursued by the Bush administration with their implicit goal of "regime change."

The strongest argument for this approach is that the United States has nothing to fear from a nuclear North Korea. Pyongyang developed nuclear weapons for defensive reasons, to counter a feared U.S. pre-emptive strike, and U.S. nuclear capabilities in the Pacific will deter any potential nuclear threat from the North.

The purpose of this strategy would be to end the present bargaining relationship in which Pyongyang uses its nuclear program to extract U.S. concessions. It would be risky, though, because Pyongyang could well react with provocative moves to make sure that it is not neglected.

Under the second approach, the six-party denuclearization negotiations would be continued with the goal of limiting North Korean nuclear weapons to the four or five warheads so far acknowledged. This would require, first, U.S.-orchestrated arrangements to provide the 200,000 tons of heavy fuel oil that have been promised but not yet delivered to North Korea in return for its disabling the Yongbyon plutonium reactor, and, second, negotiating the terms for dismantling the reactor so that additional plutonium cannot be reprocessed.

The terms outlined to me in Pyongyang for dismantling the reactor are much tougher than those hitherto presented: completing the two light-water reactors started during the Clinton administration and conducting the broadened verification process envisaged by the United States, China, Russia, Japan, South Korea and North Korea in a statement last July.

This could require inspections of U.S. bases in South Korea to verify that the United States has removed its nuclear weapons, as announced in 1991, in parallel with inspections of North Korean nonmilitary nuclear installations. The inspections in North Korea would include taking samples at suspected nuclear waste sites, a key U.S. demand, but the "weaponized" plutonium would not be open to inspection.

While in Pyongyang, I found evidence that the hard-line shift in the North's posture is directly related to Kim Jong Il's health. Informed sources told me that Kim had suffered a stroke in August. While still making "key decisions," he has turned over day-to-day authority in domestic affairs to his brother-in-law, Chang Song Taek, and effective control over national security affairs to the National Defense Commission. I was not permitted to see several key Foreign Ministry officials identified with flexible approaches to the denuclearization negotiations whom I have regularly seen in previous trips.

The bottom line is that there is a continuing policy struggle in Pyongyang between the hard-liners in the National Defense Commission and pragmatists who want normalization with the United States. Continued U.S. engagement with North Korea leading progressively to economic and political normalization would strengthen the pragmatists.

If the United States can deal with major nuclear weapons states such as China and Russia, it can tolerate a nuclear-armed North Korea that may or may not actually have the weapons arsenal it claims. Just in case Pyongyang has, in fact, learned to miniaturize nuclear warheads sufficiently to make long-range missiles, the Obama administration should couple a resumption of denuclearization negotiations with a revival of the promising missile limitation negotiations that the Clinton administration was about to conclude when it left office. "If we can have nuclear negotiations," said negotiator Li Gun, "why not missile negotiations?"

— By arrangement with LA Times-Washington Post

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‘Buy Indian’, save jobs
by Jayshree Sengupta

Visiting the Suraj Kund handicraft fair in Haryana this year was a different experience than in previous years because of the huge crowds that came and the interest people were showing towards crafts and handlooms of India. Is it possible that at last Indians are rediscovering their own heritage and beautiful crafts and textiles?

If so, it would be very good news for boosting the slack demand faced by the market. With the polls just a couple of months away, no national leader is harping on jobs and the economy and no one has yet come up with a “Buy Indian” slogan.

But President Barack Obama already has — his latest economic stimulus package presses US firms to use American raw materials in public works. In a similar protectionist vein, H1-B visas have also been curbed.

It is a big change for a country which has for decades bought everything that it requires from the world and the US has as a result become the main market for developing countries.

If the US is turning protectionist, it is a bad sign and an example for others. Even Spain has declared that it will encourage the Buy Spanish goods slogan.

In the past, the US has benefited greatly from its cheap imports as it helped to keep inflation down. Everything one buys in America is either made in China or one of the other big exporters from South East Asia — Thailand, South Korea, Taiwan, Vietnam and, of course, Japan.

More and more goods made in Sri Lanka, Bangladesh, India and Pakistan can also be found in stores across the US. India has in the past sent around 15 per cent of its exports to the US but, unfortunately, export growth has been slackening in recent times and many export industries are facing unemployment. Handicraft exports are also facing a big slowdown.

Fortunately, many of these handicraft items are finding favour with domestic buyers who are getting weary of the high prices of branded goods after the rupee’s depreciation in recent times.

Also they are rather peeved at “duplicate” goods arriving through the Chinese route into local markets and almost every other person is sporting these goods around town.

Indian handicrafts are not only beautiful but also fit well into middle-class homes. Unfortunately, the so-called “top-of-the-line” designers with their stark and minimalist interiors prefer imported stuff but very few can actually afford such interiors.

Only the elite flaunt such modern homes. It is heartening to note that more Indians are finding decorative items for their own use in the “melas” and “haats” that are being organised frequently.

Since Indian clothing is still the preferred form of attire for the majority, innovative designs produced by local designers are catering well to the domestic market.

The weavers, tailors and embroiderers are benefiting from this robust demand and are constantly improving and innovating. Their goods are reasonably priced and since the sellers don’t have fancy outlets, they can operate on small margins.

If we reduce our non-oil imports, it would help to stem the foreign exchange outflows and also keep jobs in Indian enterprises – the main point which Obama has been insisting upon.

In India the small and micro enterprises employ 104 million people and they are specially vulnerable to the economic slowdown and their output accounts for 30 per cent of the GDP.

They are mostly poor, lacking education and capital and though they produce works of art, which is in line with our artistic heritage that is centuries old, they are not getting the recognition they deserve.

Their works are never sold at big auction houses and they can never dream of getting lakhs of rupees for any of their masterpieces while artistes who are not even very good, price their works in lakhs.

At least, these fairs are opportunities to showcase their goods which are reasonably priced because they include only the raw material plus a modest labour and transportation cost.

Buying goods made in India will also indirectly boost industrial demand because artisans and weavers, when gainfully employed, will demand more manufactured goods. Even in manufactures, India has been doing well except it cannot beat the cheap Chinese imports.

The Chinese imports of electrical and electronic goods are flooding the market daily and imports from China have increased by 60 per cent in the past one year.

While it is true that price is the main factor deciding on whether people would purchase an item or not, some sense of loyalty should be instilled in people’s mind. And there is no harm in it, especially when every country is doing so in these hard times.

It is true that Indians have long been denied the opportunity to buy foreign goods, which are now found in abundance in shops across India, and every one of us has enjoyed foreign goods from time to time. But the time has come that India has to do what the richest countries are doing so that domestic demand gets boosted.

As a result of export growth slackening by a small amount and because import growth has also slackened a little (due to the fall in crude oil imports), the trade deficit has shrunk a bit.

It is probably good to have a lower trade deficit during these times because higher deficit would mean more outflow of dollars that will put pressure on the rupee to depreciate against the dollar further.

In any case, a lower rupee value is not translating into higher export growth due to slow consumer demand abroad, a further depreciation will only make essential imports like crude oil, edible oil and important capital goods costlier.

If more people buy indigenous goods, foreign exchange would be saved for more urgent requirements like infrastructure equipment needed to create jobs. And buying handicrafts and handlooms will also keep our age-old tradition intact and give incomes to millions of rural families.

Similarly, buying Indian manufactured items will keep the jobs of factory workers. It will give a boost to the manufacturing sector whose growth has recently halved.

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Boom time in Baghdad
by Patrick Cockburn

As the price of housing collapses in the rest of the world, it is soaring in Baghdad. “Property is the fastest way to make money here,” says Mohammed al-Hadithi, who runs a real estate office in the wealthy Yarmouk district of west Baghdad. “Over the past two years there has been a big rise in the market because the security situation is calmer.”

Until recently anybody wanting to sell a house in Baghdad avoided putting up “for sale” signs because they were closely watched by gangs who would wait for the purchase to go through and then kidnap the seller or one of his children so they could demand the selling price as ransom.

House prices have risen by 50 per cent in many parts of central Baghdad during the past year, and rents have almost doubled. Mr Hadithi says that this is explained primarily by the end of the war. “Refugees are returning, but not to the places where they once lived,” he says. “A Shia who owns a new and expensive house in a Sunni area will want to sell it and buy a cheaper one in a Shia-majority district for safety reasons.”

Baghdad has become wholly divided into sectarian enclaves since the Sunni-Shia civil war of 2005-07. Long grey concrete walls snake through the city, cutting off neighbourhoods from each other. Exits and entrances are closely guarded. Checkpoints every few hundred yards create horrendous traffic jams. There is far less violence than two years ago, but there are still daily bombings and assassinations.

The property market reflects the outcome of the Sunni-Shia war, in which the Shia were by and large the winners. Baghdad is today probably about 75 per cent Shia. The Sunni – traditionally the richer community – have been pushed into smaller enclaves. “It is very well known that the majority of the Sunni areas, like Mansour, Yarmouk, Amariya and Khadra, are expensive in comparison with Shia ones,” says Mr Hadithi. “So the Shia living there think it is better to save their lives and buy a cheaper house in a Shia area like Palestine Street.”

Refugees who fled either to other parts of Iraq or abroad – mostly to Jordan and Syria – are beginning to return to the country. From the 4.2 million people who fled, the UN refugee agency expects that 500,000 will come back this year if the violence stays at present levels. This will have a disproportionate affect on Baghdad because, of the 1.6 million who became refugees after the al-Askari Mosque bombing in February 2006, some 63 per cent came from Baghdad.

The returning refugees will not find it easy to secure housing. Many never were rich and others have used their savings to wait out the war. A typical middle-class house in Yarmouk costs $340,000 (£240,000), while a similar one in Palestine Street costs $240,000, according to estate agents.

Even before the civil war Iraq was chronically short of housing. Ms Bayan Dezayee, the Minister of Construction and Housing, said last month that by 2015 the population of Iraq would be 39 million and there is a need for 1.9 million extra housing units. Very little has been built over the last six years.

The spectacular rise in house prices is not good news for the majority in Baghdad. Nadia Salem, a 42-year-old accountant at al-Rafidain Bank, says: “It is really hard for any employees to own a house in Iraq and Baghdad for many reasons, the most important of which is the impact of the new rich. These are the people who made money after the occupation, either because they stole from the banks in the week after the fall of Baghdad, or contractors who got millions and millions for construction, though in fact they built nothing.”

Mr Hadithi confirms that in central Baghdad businessmen and contractors “who won tenders from the Americans and the government became rich very fast”. They are buying up big houses in expensive areas like Mansur either to live in or as an investment, expecting embassies and foreign companies to start to return to Baghdad. There is also a rumour that the government will ask international companies to move out of the Green Zone, which means they will have buy or rent elsewhere.”

— By arrangement with The Independent

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