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Why Nepal’s Maoist finance minister is talking about legalizing black money?

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Despite being the oldest sovereign nation in South Asia, Nepal is also the most unstable nation of the subcontinent. For example since Nepal’s republican era of 2006, Nepal has got 12 Prime Ministers in 15 years. Even during multiparty democracy and constitutional monarchy from 1990 to 2006, Nepal saw 15 Prime Ministers in 16 years. This tendency is reflected even in times of nondemocratic and transitional periods of past. If constant political history is an indication, Nepal is prone to repeated governmental build-ups and break-ups.

Nepal’s volatile governments naturally mean volatile plans and policies, which is reflected in the budgetary announcements. Interestingly, it is only Maoist and Maoist-background Finance Ministers in Nepal who have introduced budgetary provisions making provisions whitewashing black money.

Recently, Janardan Sharma, the Finance Minister representing CPN (Maoist Center) party of the coalition government led by Sher Bahadur Deuba, the President of Nepal’s oldest surviving party Nepali Congress, introduced a controversial provision for black money. On 10 September, while presenting his replacement bill to replace budget announced by erstwhile Government led by KP Sharma Oli, Finance Minister Sharma said investments in mega projects  such as international airports, tunnels, roadways and railways do not necessarily require to disclose their sources of revenues.

Such provision, main opposition CPN-UML leaders and majority of Nepal’s economic experts say, would whitewash all black money assembled by Nepal’s power elites and comprador capitalists.  Nepal’s largest-selling English daily The Kathmandu Post has termed it the ‘Thief’s Route’.  Post editorial has talked about its domestic and international implications. It has written, ”this move comes at a time when the Asia Pacific Group on Money Laundering (APG), a regional, inter-governmental, anti-money laundering body of which Nepal is also a member…. The ramification can be disastrous for Nepal.”

This budgetary provision of incumbent Maoist Finance Minister Sharma has gained critical uproar from all quarters. However, this gains vocal support from Dr. Baburam Bhattarai, the Maoist ideologue and former Vice-Chair of Maoist who defected Maoist in 2015 to form his party. During his tenure as Finance Minister when the Government was led by Maoist’s Chair Prachanda for the first time in Nepal in 2008, Bhattarai has also introduced similar provision. He had legalized illegal property of individuals by self-declaring the worth of their property. This specific program was called ‘Voluntary Disclosure of Income Source’ (VDIS).

Though not implemented owing to widespread ire, Dr. Bhattarai had introduced plans of hydropower investments with no mandatory provisions of revenue source disclosure. Supporting the provision of his former comrade, Dr. Bhattarai has said, ”It is nice to legalize black money. Here is the tendency to do illegal works by black money. Whether it is black or white, it is right to invest in productive and employment-generating sector.”

It was the 180-degree departure in Maoist principle coined by its ideologue Dr. Bhattarai himself.  Before launching 10-year-long Maoist violent armed insurgency in 1996 which resulted in killing of more than 17 thousands Nepali, Bhattarai had handed over 40-point demand to the then PM Sher Bahadur Deuba on 4 February. In 39th. point, Dr. Bhattarai had written, ”Corruption, smuggling, black marketing, bribery and the practices of middlemen and so on should be eliminated.”

This starting demand opposing black money and ongoing defense of the same in the name of ‘productive investment’ displays how Nepali Maoist comrades have deviated from their own principles. Another coincidence is that they are the coalition partner of the Government led by the same Prime Minister Deuba to whom they have put forth their 40-point demand before launching violent Maoist armed insurgency before coming into mainstream politics in 2006.

Why Maoist and Maoist-background leaders are vocal supporters of black money?

Revenue nondisclosure provision mainly comes in tenures of Maoist Finance Minister like Janardan Sharma and Baburam Bhattarai. Other political parties have not vocally supported such malicious programs in Nepal.

Many suspects Maoist have huge illegal money grabbed in times of their 10-year-long violent armed insurgency when they did loot banks in capital Kathmandu and other economic centers of Nepal. Maoist had levied their ‘revolutionary tax’ to all working people and business activities in their vast swatches of base area. Forced donations and extortion further increased their revenues.  Bartil Lintner, a famed Swedish journalist-turned-author, in his Oxford University-published book titled ‘China’s India War’described Nepali Maoists as ‘one of the wealthiest rebel movement in Asia.’

Maoists, even after their entry into mainstream politics after Comprehensive Peace Accord of 21 November 2006 and terrorist delisting by State Department of the US on 6 September 2012, have not disclosed their party transactions. Nor there is any extensive research about net worth accumulated by Maoist during their underground violent armed insurgency in Nepal.

This legislation, if implemented, will force Nepal to sleepwalk towards money laundering, black money funneling and possibly terrorist financing. If big chunk of black money is invested in big income-making and employment-generating productive sections, its long-term impacts would be skyrocketed. This results in opaque financial activities.

 As an aid-dependent and remittance-receiving country from almost all economic powers of the world, legalizing black money  does not bode well not just for Nepal but also for its immediate giant neighbors-India and China. Nepal does not deserve to be the South Asian heaven of black investment and terrorist financing in the name of mega infrastructural projects.

Birat Anupam is the senior English language reporter at Nepal's official news agency-National News Agency. He mostly writes about tourism, diplomacy and the environment. His bylines have been appeared in Nepal's leading English daily like The Kathmandu Post, Republica, The Rising Nepal as well as Nepal's top online news portal Onlinekhabar and environmental news outlet Hakahaki . Internationally, he has contributed for The Diplomat of USA, The Third Pole of UK/India and the The Daily Star of Bangladesh.

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South Asia

India’s open invitation to a nuclear Armageddon

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Army chief General Manoj Mukund Naravane said that “India was not averse to the possible demilitarisation of the Siachen glacier ,  the world’s highest battleground and an old sore in India-Pakistan ties , provided the neighbour accepted the 110-km Actual Ground Position Line (AGPL) that separates Indian and Pakistani positions. Acceptance of AGPL is the first step towards demilitarisation but the Pakistan side loathes doing that”. He said, ‘The Siachen situation occurred because of unilateral attempts by Pakistan to change status quo and countermeasures taken by the Indian Army’ (Not averse to demilitarisation of Siachen if Pak meets pre-condition: Army chief, Hindustan Times January 13, 2022).

Reacting to the Indian army chief’s statement, Pakistan’s former foreign secretary Riaz Mohammad Khan reminisced that the Siachen could not fructify into a written agreement because India wanted Siachen and Kashmir to be settled together. India’s approach ‘nothing is agreed until everything is agreed’ scuttled the agreement. As for Kashmir, “a simultaneous effort was made through the backchannel …in what is commonly known as the Four-Point Formula” (Siachen recollections, Dawn January 16, 2022). Riaz laments Indi’s distrust that hindered a solution.

Shyam Saran, a voice in the wilderness

Shyam Saran, in his book How India Sees the World (pp. 88-93) makes startling revelations about how this issue eluded solution at last minute. India itself created the Siachen problem.  Saran reminisces, in the 1970s, US maps began to show 23000 kilometers of Siachen area under Pakistan’s control. Thereupon, Indian forces were sent to occupy the glacier in a pre-emptive strike, named Operation Meghdoot. Pakistani attempts to dislodge them did not succeed. But they did manage to occupy and fortify the lower reaches’.

He recalls how Siachen Glacier and Sir Creek agreements could not fructify for lack of political will or foot dragging. He says ‘NN Vohra, who was the defence secretary at the time, confirmed in a newspaper interview that an agreement on Siachen had been reached. At the last moment, however, a political decision was taken by the Narasimha Rao government to defer its signing to the next round of talks scheduled for January the following year. But, this did not happen…My defence of the deal became a voice in the wilderness’.

Saran says, `Kautliyan template would say the options for India are sandhi, conciliation; asana, neutrality; and yana, victory through war. One could add dana, buying allegiance through gifts; and bheda, sowing discord. The option of yana, of course would be the last in today’s world’ (p. 64, ibid.).

India’s current first option

It appears that Kautliya’s last-advised option,yana, as visualised by Shyam Saran, is India’s first option nowadays. Kautlya also talks about koota yuddha (no holds barred warfare), and maya yuddha (war by tricks) that India is engaged in.

Cartographic annexation

By unilaterally declaring the disputed Jammu and Kashmir its territory does not solve the Kashmir problem. This step reflects that India has embarked upon the policy “might is right”. In Kotliyan parlance it would be “matsy nyaya, or mach nyaya”, that is big fish eats the small one. What if China also annexes disputed borders with India?  India annexed Kashmir presuming that Pakistan is not currently in a position to respond militarily, nor could it agitate the matter at international forums for fear of US ennui.  

India’s annexation smacks of acceptance of quasi-Dixon Plan, barring mention of plebiscite and division of Jammu. . Dixon proposed: Ladakh should be awarded to India. Pakistan Occupied Kashmir (including Gilgit and Baltistan) should remain with Pakistan. Whole Kashmir valley should have a plebiscite with no option to independence. Jammu should be divided on religious basis. The river Chmab should be the dividing line. Northern Jammu (Muslims dominated) should go to Pakistan and Hindu majority parts of Jammu to remain with India.

In short Muslim areas should have gone with Pakistan and Hindu-Buddhist majority areas should have remained with India.

India’s annexation has no legal sanctity. But, it could have bbeen sanctified in a mutually agreed Kashmir solution.

India’s propaganda

India portrays the freedom movement in Kashmir as `terrorism’. What about India’s terrorism in neighbouring countries?

The world is listless to accounts of former diplomats and RAW officers about executing insurgencies in neighbouring countries. B. Raman, in his book The Kaoboys of R&AW: Down Memory Lane makes no bones about India’s involvement up to the level of prime minister in Bangladesh’s insurgency.

 Will the world take notice of confessions by Indi’s former intelligence officers and diplomats?B. Raman reminds `Indian parliament passed resolution on March 31, 1971 to support insurgency. Indira Gandhi had then confided with Kao that in case Mujib was prevented from ruling Pakistan, she would liberate East Pakistan from the clutches of the military junta. Kao, through one RAW agent, hijacked a Fokker Friendship, the Ganga, of Indian Airlines hijacked from Srinagar to Lahore.

India’s ambassador Bharath Raj Muthu Kumar, with the consent of then foreign minister Jaswant Singh, `coordinated military and medical assistance that India was secretly giving to Massoud and his forces’… `helicopters, uniforms, ordnance, mortars, small armaments, refurbished Kalashnikovs seized in Kashmir, combat and winter clothes, packaged food, medicines, and funds through his brother in London, Wali Massoud’, delivered circuitously with the help of other countries who helped this outreach’. When New Delhi queried about the benefit of costly support to Northern Alliance chief Massoud, Kumar explained, “He is battling someone we should be battling. When Massoud fights the Taliban, he fights Pakistan.”

Death of back-channel

In his memoirs In the line of fire (pp.302-303), president Musharraf had proposed a personal solution of the Kashmir issue.  This solution, in essence, envisioned self-rule in demilitarised regions of Kashmir under a joint-management mechanism.   The solution pre-supposed* reciprocal flexibility.

Death of dialogue and diplomacy

Riaz warns of “incalculable” risks as the result of abrogation of Kashmir statehood (Aug 5, 2019). Both India and Pakistan are nuclear powers. In the absence of a dialogue on outstanding issues, war, perhaps a nuclear one,  comes up as the only option.

Concluding remark

Sans sincerity, the only Kashmir solution is a nuclear Armageddon. Or, perhaps divine intervention.

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South Asia

Major Challenges for Pakistan in 2022

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Pakistan has been facing sever challenges since 1980s, after the former USSR’s invasion of Afghanistan. The history is full of challenges, but, being a most resilient nation, Pakistan has faced some of them bravely and overcome successfully. Yet, few are rather too big for Pakistan and still struggling to overcome in the near future.

Some of the challenges are domestic or internal, which can be addressed conveniently. But, some of them are part of geopolitics and rather beyond control of Pakistan itself. Such challenges need to pay more attention and need to be smarter and address them wisely.

Few key areas will be the main focus of Pakistan in the year ahead. Relations with China and the US while navigating the Sino-US confrontation, dealing with Afghanistan’s uncertainties, managing the adversarial relationship with India and balancing ties between strategic ally Saudi Arabia and neighbor Iran.

Pakistan has to pursue its diplomatic goals in an unsettled global and regional environment marked by several key features. They include rising East-West tensions, increasing preoccupation of big powers with domestic challenges, ongoing trade and technology wars overlying the strategic competition between China and the US, a fraying rules-based international order and attempts by regional and other powers to reshape the rules of the game in their neighborhood.

Understanding the dynamics of an unpredictable world is important especially as unilateral actions by big powers and populist leaders, which mark their foreign policy, have implications for Pakistan’s diplomacy. In evolving its foreign policy strategy Pakistan has to match its goals to its diplomatic resources and capital. No strategy is effective unless ends and means are aligned.

Pakistan’s relations with China will remain its overriding priority. While a solid economic dimension has been added to long-standing strategic ties, it needs sustained high-level engagement and consultation to keep relations on a positive trajectory. CPEC is on track, timely and smoothly progress is crucial to reinforce Beijing’s interest in strengthening Pakistan, economically and strategically. Close coordination with Beijing on key issues remains important.

Pakistan wants to improve ties with the US. But relations will inevitably be affected by Washington’s ongoing confrontation with Beijing, which American officials declare has an adversarial dimension while China attributes a cold war mindset to the US. Islamabad seeks to avoid being sucked into this big power rivalry. But this is easier said than done. So long as US-China relations remain unsteady it will have a direct bearing on Pakistan’s effort to reset ties with the US especially as containing China is a top American priority. Pakistan desires to keep good relations with the US, but, not at the cost of China. In past, Pakistan was keeping excellent relations with US, while simultaneously very close with China. When the US imposed economic blockade against China and launched anti-communism drive during the cold war, Pakistan was close ally with the US and yet, keeping excellent relations with China. Pakistan played vital role in bring China and the US to establish diplomatic relations in 1970s. Yet, Pakistan possesses the capability to narrow down the hostility between China and the US.

Pakistan was close ally with the US during cold war, anti-communism threat, war against USSR’s invasion of Afghanistan in 1980s, and war on terror, etc. Pakistan might be a small country, but, possesses strategic importance. As long as, the US was cooperating with Pakistan, Pakistan looked after the US interest in the whole region. In fact, Pakistan ensured that the US has achieved its all strategic goals in the region. Since, the US kept distance from Pakistan, is facing failure after another failure consecutively. The importance of Pakistan is well recognized by the deep state in the US.

US thinks that withdrawal from Afghanistan has diminished Pakistan’s importance for now. For almost two decades Afghanistan was the principal basis for engagement in their frequently turbulent ties, marked by both cooperation and mistrust. As Pakistan tries to turn a new page with the US the challenge is to find a new basis for a relationship largely shorn of substantive bilateral content. Islamabad’s desire to expand trade ties is in any case contingent on building a stronger export base.

Complicating this is Washington’s growing strategic and economic relations with India, its partner of choice in the region in its strategy to project India as a counterweight to China. The implications for Pakistan of US-India entente are more than evident from Washington turning a blind eye to the grim situation in occupied Kashmir and its strengthening of India’s military and strategic capabilities. Closer US-India ties will intensify the strategic imbalance in the region magnifying Pakistan’s security challenge.

Multiple dimensions of Pakistan’s relations with Afghanistan will preoccupy Islamabad, which spent much of 2021 engaged with tumultuous developments there. While Pakistan will continue to help Afghanistan avert a humanitarian and economic collapse it should not underestimate the problems that may arise with an erstwhile ally. For one, the TTP continues to be based in Afghanistan and conduct attacks from there. The border fencing issue is another source of unsettled discord. Careful calibration of ties will be needed — assisting Afghanistan but avoiding overstretch, and acknowledging that the interests of the Taliban and Pakistan are far from identical. Moreover, in efforts to mobilize international help for Afghanistan, Islamabad must not exhaust its diplomatic capital, which is finite and Pakistan has other foreign policy goals to pursue.

Managing relations with India will be a difficult challenge especially as the Modi government is continuing its repressive policy in occupied Kashmir and pressing ahead with demographic changes there, rejecting Pakistan’s protests. The hope in establishment circles that last year’s backchannel between the two countries would yield a thaw or even rapprochement, turned to disappointment when no headway was made on any front beyond the re-commitment by both neighbors to observe a ceasefire on the Line of Control.

Working level diplomatic engagement will continue on practical issues such as release of civilian prisoners. But prospects of formal dialogue resuming are slim in view of Delhi’s refusal to discuss Kashmir. This is unlikely to change unless Islamabad raises the diplomatic costs for Delhi of its intransigent policy. Islamabad’s focus on Afghanistan last year meant its diplomatic campaign on Kashmir sagged and was limited to issuing tough statements. Unless Islamabad renews and sustains its international efforts with commitment and imagination, India will feel no pressure on an issue that remains among Pakistan’s core foreign policy goals.

With normalization of ties a remote possibility, quiet diplomacy by the two countries is expected to focus on managing tensions to prevent them from spinning out of control. Given the impasse on Kashmir, an uneasy state of no war, no peace is likely to continue warranting Pakistan’s sustained attention.

In balancing ties with Saudi Arabia and Iran, Pakistan should consider how to leverage possible easing of tensions between the long-standing rivals — of which there are some tentative signs. With Crown Prince Mohammed bin Salman keen to use economic power to expand his country’s diplomatic clout by making strategic overseas investments, Pakistan should use its political ties with Riyadh to attract Saudi investment through a coherent strategy. Relations with Iran too should be strengthened with close consultation on regional issues especially Afghanistan. The recent barter agreement is a step in the right direction.

In an increasingly multipolar world, Pakistan also needs to raise its diplomatic efforts by vigorous outreach to other key countries and actors beyond governments to secure its national interests and goals.

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South Asia

Afghanistan: UN launches largest single country aid appeal ever

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Displaced families collect water during a harsh winter in Kabul, Afghanistan. © UNHCR/Andrew McConnell

The UN and partners launched a more than $5 billion funding appeal for Afghanistan on Tuesday, in the hope of shoring up collapsing basic services there, which have left 22 million in need of assistance inside the country, and 5.7 million people requiring help beyond its borders.

Speaking in Geneva, UN Emergency Relief Coordinator Martin Griffiths said that $4.4 billion was needed for the Afghanistan Humanitarian Response Plan alone, “to pay direct” to health workers and others, not the de facto authorities.

UN High Commissioner for Refugees Filippo Grandi called for $623 million, to support refugees and host communities in five neighbouring countries, for the Afghanistan Situation Regional Refugee Response Plan.

“Today we are launching an appeal for $4.4 billion for Afghanistan itself for 2022,” said Mr. Griffiths. “This is the largest ever appeal for a single country for humanitarian assistance and it is three times the amount needed, and actually fundraised in 2021.”

Needs could double

The scale of need is already enormous, both UN officials stressed, warning that if insufficient action is taken now to support the Afghanistan and regional response plans, “next year we’ll be asking for $10 billion”.

Mr. Griffiths added: “This is a stop-gap, an absolutely essential stop-gap measure that we are putting in front of the international community today. Without this being funded, there won’t be a future, we need this to be done, otherwise there will be outflow, there will be suffering.”

Rejecting questions that the funding would be used to support the Taliban’s grip on de facto government, Mr. Griffiths insisted that it would go directly into the pockets of “nurses and health officials in the field” so that these services can continue, not as support for State structures.

UN aid agencies describe Afghanistan’s plight as one of the world’s most rapidly growing humanitarian crises.

According to UN humanitarian coordination office OCHA, half the population now faces acute hunger, over nine million people have been displaced and millions of children are out of school.

Youngsters’ plight

Asked to describe what might happen if sufficient support was not forthcoming, the UN emergency relief chief replied that he was particularly concerned for one million children now facing severe acute malnutrition. “A million children – figures are so hard so grasp when they’re this kind of size – but a million children at risk of that kind of malnutrition if these things don’t happen, is a shocking one.”

But humanitarian agencies and their partners who will receive the requested funding directly can only do so much, Mr. Griffiths explained, before reiterating his support for the 22 December UN Security Council resolution that cleared the way for aid to reach Afghans, while preventing funds from falling into the hands of the Taliban.

“Humanitarian agencies inside Afghanistan can only operate if there’s cash in the economy which can be used to pay officials, salaries, costs, fuel and so-forth,” he said. “So, liquidity in its first phase is a humanitarian issue, it’s not just a bigger economic issue.”

Stave off disease, hunger

He added: “My message is urgent: don’t shut the door on the people of Afghanistan. Humanitarian partners are on the ground, and they are delivering, despite the challenges. Help us scale up and stave off wide-spread hunger, disease, malnutrition and ultimately death by supporting the humanitarian plans we are launching today.”

Highlighting the need to avoid a wider regional crisis emanating from Afghanistan, UNHCR chief Grandi, insisted that what was needed most, was “to stabilize the situation inside Afghanistan, including that of displaced people who are displaced inside their country. Also, to prevent a larger refugee crisis, a larger crisis of external displacement.”

Nonetheless, Afghanistan’s immediate neighbours had sheltered vulnerable Afghans for decades, Mr. Grandi explained, as he appealed for $623 million in funding for 40 organizations working in protection, health and nutrition, food security, shelter and non-food items, water and sanitation, livelihoods and resilience, education, and logistics and telecoms.

Decades of shelter

No-one should forget “that there is a regional dimension to this crisis, represented by the Afghan refugees but also Afghans with many other ‘stay’ arrangements in neighbouring countries in particular,” Mr. Grandi said, “especially in Pakistan and Iran that have hosted Afghans for more than 40 years, but also Central Asian States.”

Since the Taliban takeover last August, women’s and girls’ rights have continued to come under attack, OCHA noted in a statement, “while farmers and herders are struggling amid the worst drought in decades and the economy is in freefall”.

Rights reminder

On the issue of protecting fundamental rights, Mr. Griffiths underlined the fact that UN humanitarians were continuing to hold “conversations” with Afghanistan’s de facto authorities at a national and sub-national level, on issues such as aid and education access for all.

Echoing that message, UN refugee chief Mr. Grandi noted that humanitarians on the ground were well aware of the importance of stressing the need to protect the rights of minorities and other vulnerable Afghans.

“Our colleagues are there every day, and that’s what they talk about every day; they certainly talk about access, and delivery and needs, but they also talk about women at work, women in school – girls in school – rights of minorities, but it’s that space that we need to preserve.”

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