CURRENT NATIONAL AFFAIRS: JUNE 2009

New SEZs cleared

On June 2, 2009, the Union government approved ten special economic zones and
allowed one-year extension to four projects, including Reliance Industries'
Mukesh Ambani-promoted Rewas Ports, for land acquisition.

The Board of Approval (BoA) in the Commerce Ministry gave formal approvals to
eight proposals, including those of Gulf Oil Corporation, Emmar MGF and Larsen
and Toubro. Two other proposals were also given 'in-principle' approvals.

The board also allowed DLF to withdraw four of its IT/ITeS tax-free enclaves,
asking the realty major to refund Rs 6-7 crore worth of fiscal sops the company
would have availed of. DLF had cited economic downturn as reasons for seeking
withdrawal.

However, the BoA outrightly rejected the proposals of Videocon Realty and
Writers and Publishers for SEZs in Indore, on the ground that the promoters have
not acquired "even an inch" of land.

The two proposals that have got in-principal approval include: Krishnapatnam
Infratech in Kota Mandal (Andhra Pradesh) and Maharaja Multitrade in Nashik
(Maharashtra), for multi-product and multi-services SEZs, respectively.
Since 2006, when the SEZ Act was notified, formal approvals have been granted
for setting up 568 SEZs, of which 315 have been notified.

Yashpal panel report on Education sector

The beginning of bold reforms in the higher education sector was made on June
24, 2009, with the 24-member Yashpal committee—constituted last year to
suggest revamp measures—scripting the end of regulatory mechanism era in
India and rooting for university autonomy. In its report submitted to the
government, the panel favoured vesting universities with full academic
responsibility by allowing them the freedom to self regulate, choose the courses
they want to offer and even design them.

The panel said institutes of excellence like the IITs and the IIMs should function
like world-class universities, offering a range of courses in science, astronomy,
management, psychology and philosophy in line with the global trends of inter-
disciplinary approaches.

On the regulatory mechanism front, the panel’s report, “Renovation and

Rejuvenation of Higher Education”, said the UGC, AICTE and MCI should not have
a regulatory role and could be merged with the new National Commission for
Higher Education and Research, which the committee recommended.

It called for a constitutional amendment to create the seven-member panel,

which would function like the Election Commission. The Prime Minister, Leader of
the Opposition and Chief Justice of India would select the members.

The commission would work as a facilitator to higher education institutes, which

would be armed with the necessary legal mechanisms to offer courses of their
choice. Notably, the commission is a part of the UPA’s promises and was
mentioned by the President in her June 4, 2009 address to the Parliament. To
bring it to life, the government would now have to bring a draft Bill.

On UGC and AICTE, Yashpal said a new commission could not be created unless
old structures were removed. His report takes note of the delays, excessive
inspection and corruption in the universities’ dealing with governments.

President’s address to the Parliament

More than six months after the Mumbai terror attacks, India, on June 4, 2009,
extended olive branch to Pakistan with President Pratibha Patil asserting that the
new UPA government would reshape the relationship with Islamabad provided
the neighbouring country sincerely dealt with terrorist groups acting against India.
Emboldened by a reasonable participation by the people in the recent elections in
Jammu and Kashmir, she also declared the UPA government’s resolve to
constructively engage with all groups that abjure violence in the State, as also in
North-East and other parts of the country.

Laying the road-map for the new UPA government in an address to the joint
session of Parliament, President Patil announced that the government would
maintain utmost vigil in the area of internal security by pursuing a policy of zero-
tolerance towards terrorism, set up a national counter-terrorism centre to take
anti-terrorism measures and seek an early approval of the bill for the prevention
of communal violence.

As the first woman President of the Republic addressed the members from the
two Houses in the Central Hall of Parliament, seated on her left was another
woman—Meira Kumar—who made history a day before by becoming the first
woman Speaker of the Lok Sabha.

Noting that creativity, innovation and enterprise held the key to people and
nations realising their potential, the President observed that the ‘dreary desert
sand of dead habit’ must be left behind. The young people were tearing down the
narrow domestic walls of religion, region, language, caste and gender that
confined them. “My government will ensure that its policies for education and
science and technology are imbued with a spirit of innovation so that the
creativity of a billion people is unleashed,” she said, declaring that the next ten
years would be dedicated as a ‘Decade of Innovation’.

Describing the armed forces as the nation’s pride, she announced that they would
be fully enabled with modern technology to repel any threat from land, sea or air.
To enhance combat efficiency as also to address the requirements of modern day
warfare, a number of steps were under way.

The address to Parliament also talked at length on the government’s pro-poor

policies, and moves to strengthen welfare schemes and boost the economy.
There were promises to enlarge the scope of NREGA, which has proved to be an
effective social protection measure; introduce a new right to food Act; address
the challenges in the health sector such as infant mortality, nutrition and pre-
emptive cure; make quality education a right through the enactment of a new
law; set up a national literacy mission for women; raise the target of rural housing
for the next five years to one lakh twenty crore units; introduce a major housing
scheme for the urban poor; and take up initiatives for skill development.

India-Bahrain pact to protect workers

India and Bahrain have inked a key agreement to ensure protection for Indian
workers against unscrupulous employers. The agreement included housemaids
who were not covered by Bahrain’s Labour Law and was signed during the visit of
Overseas Affairs minister, Vayalar Ravi in June 2009. As per the agreement, a
committee will be constituted to ensure that directives in the agreement are
implemented and will consist of officials from Bahrain’s Labour Ministry and
Indian Overseas Affairs Office. Employers who want to recruit Indian workers will
now have to specify the nature of the work they will be doing and the required
professional skills. Other required details include the duration of contract, an
agreed salary and end-of-contract benefits, health services and holidays.
Prime Minister Manmohan Singh meets Pak President

A significant meeting between Prime Minister Manmohan Singh and Pakistan

President Asif Ali Zardari, held at Yekaterinburg, Russia on June 16, 2009, sent out
a clear message that India and Pakistan were edging towards the normalisation of
bilateral ties, nearly seven months after the Mumbai terror attacks. They directed
their foreign secretaries to meet within the next one month and discuss the
“primary issue of terrorism” before the two leaders meet again on the margins of
the NAM Summit in Egypt on July 15-16.

“I am pleased to meet you, His Excellency, I have a limited mandate to tell you
that the territory of Pakistan should not be allowed to be used for terrorist acts
against India,” Manmohan Singh firmly told the Pakistani leader right at the start
of their 40-minute meeting. President Zardari was virtually rendered speechless
for a while as neither he nor any member of his delegation expected such strong
words from the Prime Minister.

The three conditions laid by Manmohan Singh for the resumption of dialogue
were: Pakistan must take strong and effective action against forces representing
terrorism, act against the perpetrators of terror attacks in India and dismantle the
terrorist infrastructure. He also conveyed to Zardari India’s disappointment over
the release of Hafiz Saeed, chief of the Jamat-ud-Dawa (Jud), one of the key
plotters of the Mumbai carnage.
The beleaguered Pakistan President, who is facing the heat from the Pakistan
Army, as well as the ISI back home, explained to Manmohan Singh the steps being
taken by Pakistan to tackle terrorism and the problems the country was facing to
deal with the menace.

Maoists banned

The Cental government, on June 22, 2009, formally listed CPI (Maoist) as a
separate terrorist outfit under the Unlawful Activities (Prevention) Act. Though
the decision will make little difference on the ground as the ban on CPI (Maoist)
was already in effect by virtue of its constituents—CPI(ML), People’s War Group
and MCC, along with all their formations and front organisations—featuring in the
list of terrorist outfits under the UAPA, it is aimed at clearing any ambiguity
regarding the illegal status of CPI (Maoist).

The CPI (Maoist) is the 35th organisation to be listed as terrorist outfit under
UAPA.

It was formed by the merger of CPI (ML)-People’s War Group and MCC in
September 2004. The question of a separate ban on CPI (Maoist) had come up
soon after the merger, but the law ministry then took the view that there was no
need for such ban as the UAPA clearly listed the formations and front
organisations of CPI (ML)-People’s War Group and MCC as terrorist outfits, thus
also including in its ambit CPI (Maoist). Besides, there were some differences
within the constituent Naxal outfits regarding the acceptability of the merger—
the Maoists in Nepal had at the time refused to recognise the merge—leading the
Centre to settle for status quo.

The question of a separate ban on CPI (Maoist) cropped up again when Union
Home Minister P. Chidambaram took a closer look at status of Naxalite outfits
under UAPA. The minister is said to have insisted on a fresh ban on the merged
outfits, CPI (Maoist), under which the Left-wing extremists were now operating in
most States.

The Criminal Law Amendment Act, 1908, empowers the State government to
declare an association as “unlawful.” Accordingly, while Orissa, Jharkhand and
Tamil Nadu have declared CPI (Maoist) as an unlawful association, Bihar has listed
MCC and CPI(ML)-PW as unlawful. Andhra Pradesh, MP and Chattisgarh have
enacted their own separate State legislations declaring the CPI (Maoist) as an
unlawful outfit. Under UAPA, last amended in December 2008, the Centre is also
empowered to declare an association as unlawful.

The Act also defines a terrorist organisation in Section 2(1)(m), which are then
specifically listed in the Schedule to the Act.

Security forces take control of Maoist-controlled areas in West Bengal

On June 30, 2009, security forces took control of Kantapahari, setting up a police
camp after four years in the hub of Maoist-backed tribal agitation, with the West
Bengal Government claiming that 95 per cent of the areas have been wrested
from the ultras in West Midnapore district. Around 1,600 personnel of
paramilitary forces, police and COBRA, the special anti-Naxal force, reached
Kantapahari from both Lalgarh and Ramgarh ends as a helicopter kept an aerial
vigil.

The Maoists set off a landmine and fired at the security forces in a forested area
between Pirakata and Lalgarh but the troops retaliated. In Kolkata, Chief Minister
Buddhadeb Bhattacharjee said the joint forces had been able to liberate nearly 95
per cent of the areas. The operations had been bloodless with no major
encounter.

Earlier, the Maoists had gone on a rampage, targeting ruling CPM cadres and
offices and had virtually taken control of a large area in West Midnapore district
after driving away the police and paramilitary forces.

Today’s Bengal is a throwback to the Naxalbari uprising of the 1960s after tribals
killed a police sub-inspector. The year was 1967, and the Left-led United Front
was in power in the State. The recent Maoist violence has also ignited memories
of the Sainbari killings in Burdwan in 1969 where CPM laid a siege. Forty years
later, the State seems set for another round of bloodletting with the main
opposition, Trinamool Congress, adopting the same tactic as the Left in the ‘60s:
upstaging the ruling party on people’s insecurity. Ballot and bullets have ruled
these parts since 1999 with rival groups in far flung pockets in West Midnapore,
Bankura, Purulia, Birbhum and Hooghly fighting protracted gun battles. Violence
and counter-violence are a major tactic of political parties to command support in
the villages.

Babus to be insulated from netas

The end of the transfer/posting raj is in sight. Bureaucrats are set to get a new
deal with the Centre readying a legislation that will not only assure babus of fixed-
tenure postings but also protect them from political interference in their day-to-
day functioning. Besides, all bureaucratic appointments, transfers and postings
will be subject to Parliamentary scrutiny. As a consequence, IAS and IPS officers in
the country will no longer be at the mercy of the whimsical transfer regime that
operates currently.

However, along with these comforts will come added responsibility. The
government plans to bring in a new public service code that will lay down a strict
performance evaluation regime for promotions and postings of babus. All these
provisions are expected to be part of the Civil Services Bill, 2009, a draft of which
is being fine-tuned.

The Bill, which incorporates various suggestions of the second Administrative

Reforms Commission, envisages setting up of a new Central Public Service
Authority which will not only professionally manage civil services but also serve
the interests of babus and citizens alike through checks and balances.
The Civil Services Bill moots: fixed tenure of three years per posting for all IAS and
IPS officers; a new agency, Central Public Services Authority, to work as a
watchdog against political interference in the bureaucracy. It will also keep a
watch on performance of babus; Postings to be strictly on basis of performance
evaluated on a number of tasks assigned to bureaucrats over the years.

CURRENT INTERNATIONAL AFFAIRS

Iran’s Presidential polls

On June 14, 2009, hardline President Mahmoud Ahmadinejad was declared

winner of the Presidential election held on June 12. The result was, however,
bitterly contested by the opposition candidate Mir Hossein Mousavi. Ruling out
any recounting of votes country’s supreme leader Ayatollah Ali Khamenei said
President Mahmoud Ahmadinejad’s re-election victory was credible and insisted
that the Islamic republic’s election mechanisms allowed no cheating. He said the
street protests to pressure for change were not acceptable.

Khamenei insisted the elections showed off the country’s religious democracy for
the world to see, shrugging an unprecedented challenge to the country’s ruling
clerics by opposition supporters, who claimed the June 12, 2009 Presidential
election was rigged. He said there was “definitive victory” and no rigging in the
disputed Presidential elections.
“There is 11 million votes difference, Khamenei said. “How one can rig 11 million
votes?” “The enemies (of Iran) are targeting the Islamic establishment’s
legitimacy by questioning the election and its authenticity before and after (the
vote)”.

On June 14, 2009, the Iranian police clashed with people protesting in Tehran
against the re-election of hardline President Mahmoud Ahmadinejad. The unrest
that rocked Tehran and several other cities was the sharpest expression of
discontent against Iran’s leadership for years. Supporters of defeated moderate
Mirhossein Mousavi, who dismissed Ahmadinejad’s triumph as a “dangerous
charade”, gathered in central Tehran, chanted his name and threw stones at
police.

The scale of Ahmadinejad's triumph upset widespread expectations that the race
would at least go to a second round, and his victory is unlikely to help unblock a
standoff with the West over Iran's nuclear programme. Interior Minister Sadeq
Mahsouli, an ally of hardliner Ahmadinejad, declared that the President had been
re-elected to a second four-year term with 62.6 per cent of the vote, against 33.7
per cent for Mousavi, in a record 85 per cent turnout.

The bitter election campaign generated strong interest around the world and
intense excitement inside Iran. It revealed deep divisions among establishment
figures between those backing Ahmadinejad and those pushing for social and
political change. Ahmadinejad accused his rivals of undermining the Islamic
Republic by advocating detente with the West. Mousavi said the President’s
“extremist” foreign policy had humiliated Iranians.

The three-week election campaign was marked by mudslinging, with

Ahmadinejad accusing his rivals of corruption. They said he was lying about the
economy. Inflation, officially put at 15 per cent, and unemployment were core
issues in the debate.

On June 22, locked in a continuing bitter contest with Iranians who were of the
view that the Presidential polls were rigged, the authorities finally acknowledged
that the number of votes cast in 50 cities exceeded the actual number of voters.
But the authorities insisted that discrepancies, which could affect three million
votes, did not violate Iranian law and the country’s influential Guardian Council
said it was not clear whether they would decisively change the election result.
Iran’s top election body, however, ruled out cancelling the disputed Presidential
vote as the world voiced increasing alarm at the violent crackdown on opposition
demonstrators, posing the most serious challenge to the Islamic regime in 30
years.

Israeli PM endorses Palestinian Statehood

Under pressure from the US President Obama’s administration, Israeli Prime

Minister Benjamin Netanyahu has for the first time endorsed a two-State solution
in the Middle East, drawing praise from the West but flak from Palestinians who
rejected the offer citing the tough conditions attached.
In a policy speech on June 15, 2009, that came a week after US President Barack
Obama’s address to the Muslim world, Netanyahu said the “Palestinian State”
would have to be demilitarised and recognise Israel as a State of the Jewish
people.

The hardliner Israeli Premier had resisted agreeing to a two-State solution to the
Israel-Palestinian conflict all through his political career and his veiled acceptance
was couched under several other conditions, including refusal to allow Palestinian
refugees to settle in Israel and keeping united Jerusalem the capital of Israel.
The address at Bar Ilan university, considered the bastion of Israeli right, came in
the wake of Obama’s insistence that Israel impose a complete freeze on West
Bank settlement construction and recognise the two-State solution.

President Obama welcomed the speech as an “important step forward” while the
European Union described it as “a step in the right direction”.

However, the Palestinians were skeptic and angry. “Netanyahu’s remarks have
sabotaged all initiatives, paralysed all efforts being made and challenges the
Palestinian, Arab and American positions,” said Nabil Abu Rdeineh, a close aide to
Palestinian Authority (PA) President Mahmoud Abbas. Reacting angrily to
Netanyahu’s assertions that Palestinian refugees will not be allowed to settle in
Israel and undivided Jerusalem will stay its capital, Rdeineh said, “this will not lead
to complete and just peace”.
Nepal revokes army chief’s sacking

In order to avoid possible tussle between President Dr Ram Baran Yadav and
Prime Minister Madhav Kumar Nepal, the newly formed Cabinet decided to
uphold Yadav’s decision to retain the sacked Chief of Army Staff Rookmangud
Katawal to his post.

The Cabinet has also nullified the controversial decision taken by the Unified
Communist Party of Nepal–Maoists (UCPN-M)-led government to appoint Lt. Gen
Kul Bahadur Khadka as the acting Chief of army.

After receiving pressure from the party rank and files, including the commanders
of the Maoists combatants, the then Prime Minister and UCPN-M chairman
Prachanda’s cabinet, on May 3, 2009, had sacked Katawal unilaterally and
appointed Khadka as acting chief. As a result it had invited serious political and
constitutional tussle between the President and the then government that finally
forced the Maoist chairman Dahal to step down on May 4.

The meeting has annulled the May 4 Cabinet decision where the Dahal-led
Cabinet’s last meeting had dubbed the President’s move to retain sacked army
chief Katawal as “constitutional coup” and asked President Yadav to correct his
unconstitutional move to uphold the civilian supremacy. However, Yadav had
refused to do so saying that whatever he had done was based on good faith and it
was his responsibility to protect the constitution as Head of the State and avoid
possible rift within the national army as its patron.
Burqa not welcome in France

The Islamic burqa is “not welcome” in France because it is not a symbol of religion
but a sign of subservience for women, as per a statement by President Nicolas
Sarkozy. “We cannot accept to have in our country women who are prisoners
behind netting, cut off from all social life, deprived of identity,” he said.

“It will not be welcome on the territory of the French republic,” Sarkozy told a
special session of Parliament. He further added that he was in favour of holding
the inquiry sought by some French lawmakers into whether Muslim women who
cover themselves fully in public undermine French secularism and women’s
rights.

But the president added “we must not fight the wrong battle; the Muslim religion
must be respected as much as other religions in France”.
The proposal to hold an inquiry has won support from many politicians from both
the Left and Right, but France’s official Muslim council accused lawmakers of
wasting time focusing on a fringe phenomenon.

In France, the terms “burqa” and “niqab” often are used interchangeably. The
former refers to a full-body covering worn largely in Afghanistan with only a mesh
screen over the eyes, whereas the latter is a full-body veil, often in black, with
slits for the eyes.

France had enacted a law in 2004 banning the Islamic headscarf and other
conspicuous religious symbols from public schools, sparking fierce debate at
home and abroad. France has Western Europe's largest Muslim population, an
estimated five million people.

One billion go hungry world over

One in six people in the world or more than one billion are now hungry, a historic
high due largely to the global economic crisis and stubbornly high food prices,
according to Food and Agriculture Organization (FAO). Compared with 2008,
there are 100 million more people who are hungry, meaning they receive fewer
than 1,800 calories a day, FAO said. Almost all the worlds undernourished live in
developing countries, where food prices have fallen more slowly than in the richer
nations, the report said. Poor countries need more aid and agricultural
investment to cope, it said.

The silent hunger crisis, affecting one-sixth of all of humanity, poses a serious risk
for world peace and security, said the Director-General of FAO, Jacques Diouf.
Soaring prices for staples, such as rice, triggered riots in the developing world in
2008. Hunger increased despite strong 2009 cereal production, and a mild retreat
in food prices from the highs of mid-2008. However, average prices at the end of
2008 were still 24% higher in real terms than in 2006.

Globally there are now about 1.02 billion people hungry, up 11% from 2008’s 915
million. The estimates are based on analysis by the US Department of Agriculture.
Asia and the Pacific, the world’s most populous region, has the largest number of
hungry people at 642 million. Sub-Saharan Africa has the highest hunger rate,
with 265 million under-nourished, representing 32% of the region’s population.

G-8 nations see signs of economic stability

Citing “signs of stabilisation” in their economies, G-8 Finance Ministers have

decided to ensure that such trends emerging in the global economy should be
nurtured and asked the IMF to study exit strategies to “unwind” their hefty
stimulus packages. On macroeconomic conditions, the Ministers recognised that
the coordinated policy action implemented so far has borne some fruit, citing a
recent rise in stock prices, a decline in interest rate spreads, and improved
business and consumer confidence. “There are signs of stabilisation in our
economies,” said a joint statement of the ministers from the G-8 countries—
Britain, Canada, France, Germany, Italy, Japan, Russia and the United States—
after their two-day meeting in Lecce, Italy, in June 2009.

The G-8 ministers said they discussed “appropriate strategies” on how to find a
way out of big fiscal spending once their economies recover. They, however,
noted that the framework for unwinding the unusual measures taken so far to
fight the global economic crisis should “vary from country to country.”

US treasury secretary Timothy Geithner warned after the meeting that nations
should not implement policy restraint too early as the global economy has yet to
enter a recovery phase despite recent signs of improvement. But he echoed the
G-8 statement’s call for charting the future course for the restoration of fiscal
balances, saying financial and economic recovery “will be stronger and more
sustainable if we make clear today how we get back to fiscal sustainability when
the storm has finally passed.”

The ministers also reaffirmed the importance of combating all forms of money
laundering and the financing of terrorism. In addition to macro-economic issues,
major items on the meeting agenda were climate change, food security, financial
regulation and strengthening the lending capacity of international organisations
to assist developing countries.

IMF bond plan attracts emerging nations

The International Monetary Fund's plan to issue bonds for the first time has
attracted several large emerging countries looking to diversify investments to the
detriment of the dollar, whose lustre is dimming under the mushrooming US
budget deficit.

After the G-20 major developed and emerging market countries pledged in April
2009 to boost the IMF's resources by $500 billion, each country must determine
just how to deliver. To help gather such a colossal sum, the 185-nation IMF has
decided to take the unprecedented step of issuing bonds.

Three countries lined up for the notes in the space of two weeks: Russia, China,
then Brazil. Both Russia and Brazil are in the market for $10 billion worth, while
China is aiming for $50 billion. Other G-20 members could follow, such as India or
Saudi Arabia.

The new bonds will be offered in the IMF accounting unit, Special Drawing Right
(SDR), whose value is based on a basket of currencies, re-balanced daily, in which
the dollar represents only a 41% share. It is the dollar's relative weakness in SDRs
that has raised market concerns that some countries are seeking to distance
themselves from the greenback, the world's reserve currency.

For some, the announcements by Russia, China and Brazil are troubling rumbles
for the US. "It is a clear sign that these countries are not comfortable with their
large dollar holdings and should be read by the US as an additional signal of
market unease about their large budget deficit," said Desmond Lachman of the
American Enterprise Institute, a Washington think tank.

Green energy investments in developing nations rise 27%

The global economic crisis hasn’t deterred the developing countries from their
green energy investments, which surged 27% in 2008 to $36.6 billion. According
to a recent report of United Nation Environment Programme (UNEP) on Global
Trends in Sustainable Energy Investment, 2009, global investment in clean energy
witnessed a four-fold increase in 2008, compared to 2004.
Of the $155 billion invested in 2008 in clean-energy companies and projects
worldwide, China, India, Brazil and African countries, among others, contributed
almost a third of the amount. While China led investments in Asia with an 18%
increase over 2007 to $15.6 billion, green energy investments in India grew 12%
to $4.1 billion in 2008.

However, growth in clean energy sectors stalled in developed countries, said the
report, which is being jointly prepared by the UNEP and global information
provider New Energy Finance.

The total transaction value in the sustainable energy sector—including corporate

acquisition, asset refinancing and private equity buyout— during 2008 was $223
billion, an increase of 7% over 2007. However, the capital raised via stock markets
fell 51% to $11.4 billion as share prices of clean energy companies lost 61% of
their value during 2008.

According to UNEP estimates, the world needs $750 billion to finance a

sustainable economic recovery by investing in the greening of five key sectors:
buildings, energy, transport, agriculture and water.

Pak diverted US aid to N-programme

Pakistan diverted a whopping sum of over $5 billion provided as aid by the US to

fight Taliban militants into its nuclear programme, according to a report by
security expert Andrew Cockburn. "Most of the aid we've sent them over the past
few years has been diverted into their nuclear programme," the report published
in 'Counter Punch' quoted a senior national security official in the Obama
administration as saying.

Most of this 'diverted aid' was officially designated "Coalition Support Funds" for
Pakistani military operations against the Taliban.
The report said the US allowed Pakistan's nuclear programme to continue in
violation of its policy of non-proliferation, as it needed its help in defeating the
Soviets in Afghanistan, among other things, and even the Obama administration
has not changed this policy.

Pakistan has also misused a substantial amount of military aid from the US, meant
to fight terrorism, to build up its army with modern weapons and equipment for a
conventional warfare against India, according to released Pentagon documents.
All this was done with the knowledge of the then Bush administration, which not
only provided $1.9 billion in Foreign Military Financing (FMF), but also signed
agreements with Pakistan for military sales worth nearly $5 billion during the
period.

While the Taliban and Al-Qaida gained ground in the tribal areas of Pakistan
bordering Afghanistan, Islamabad bought eight P-3C Orion maritime patrol
aircraft and their refurbishment worth $474 million. It also placed orders for
5,250 TOW anti-armour missiles worth $186 million.
Besides buying more than 5,600 military radio sets worth $163 million, Pakistan
bought six AN/TPS-77 surveillance radars worth $100 million and six C-130E
transport aircraft and their refurbishment worth $76 million.
Under the Excess Defence Articles (EDA), it was granted 20 AH-1F Cobra attack
helicopters, which were then refurbished.

Pakistan also used a substantial chunk of America’s FMF to purchase up to 60

mid-life update kits for F-16 A/B combat aircraft valued at $891 million. Of this, it
paid $477 million from the FMF funds given by the United States.

Similarly, of the $87 million worth order for 115 M-109 self-propelled howitzers, it
paid $53 million from FMF. And all this happened while Pakistan’s economic
situation deteriorated.

US President Obama calls for a new beginning between Islam and West

On June 4, 2009, extending a hand of friendship to the Muslim world, US

President Barack Obama called for a “new beginning between the United Sates
and Muslims around the world,” saying together they could confront violent
extremism across the globe and advance the timeless search for peace in the
West Asia. “This cycle of suspicion and discord must end,” he said.

In a speech that was littered with references to the Quran, Mr Obama, who has
been trying hard to repair ties with the Muslim world that has been alienated by
US policy, rolled out his plan for engaging with the Muslim world. The President
also used his own Muslim roots to push across the message that the US was not
against Islam or the Muslim world.
President Obama started his highly anticipated Cairo speech by going back in
history and tracing tensions that were rooted in history. “The relationship
between Islam and the West includes centuries of co-existence and cooperation,
but also conflict and religious wars,” he said. After going into history, he also
touched on the main sources of current tension including the situation in West
Asia, Afghanistan and the nuclear stand-off with Iran.

On West Asia, the US President said that he understood both the Israeli and
Palestinian position. Expressing sympathy for the Palestinian cause, he supported
an independent Palestinian State that co-existed peacefully with Israel. Saying he
would not see the conflict from just one side, he said that Israelis must
acknowledge that just as Israel’s right to exist cannot be denied, neither can
Palestine’s and that Israel must live up to its obligation to ensure that Palestinians
can develop their society.

On Afghanistan, he said the US had gone to Afghanistan out of necessity after the
9/11 attacks in which the al-Qaeda killed 3,000 people. He further said the US did
not want to keep troops in Afghanistan. “We would gladly bring every single one
of our troops home if we could be confident that there were not violent
extremists in Afghanistan and Pakistan determined to kill as many Americans as
they possibly can. But that is not yet the case,” he said.

Finally on Iran, President Obama said the US has made it clear to the Iranian
leadership that it is prepared to move forward. He said he understood the protest
that some countries have weapons that others do not. “No single nation should
pick and choose which nations hold nuclear weapons. That is why I strongly
reaffirmed America’s commitment to seek a world in which no nations hold
nuclear weapons.” He said that any country, including Iran, had the right to access
peaceful nuclear power if it complies with its responsibilities under the nuclear
Non-Proliferation Treaty.

All in all, his speech was largely well-received and there was anticipation that this
could set the stage for an easing of tension between the US and Muslim world.

SCO and BRIC nations meet at Yekaterinburg

Participating in back-to-back SCO (Shanghai Cooperation Organisation) and BRIC

(Brazil-Russia-India-China) summits at Yekaterinburg, Russia, in June 2009, Prime
Minister Manmohan Singh called for greater global cooperation to defeat
terrorism and reform of international financial institutions.

Delivering his first speech at an international forum during his second term as the
Prime Minister, he told the SCO Summit that terrorist crimes today were
transnational in nature, adding "it is imperative that we genuinely cooperate with
one another and on a global scale to resolutely defeat international terrorism."

India, along with Iran, Pakistan and Mongolia, participated as an observer at the
summit of the SCO, a six-nation regional grouping that brings together Russia,
China and the Central Asian Republics of Uzbekistan, Tajikistan, Kyrgyzstan and
Kazakhstan.
This was the first SCO summit at which an Indian Prime Minister participated. The
SCO leaders had decided to include observer countries in full-format discussions
at their last summit in Dushanbe.

Prime Minister Manmohan Singh later attended the first BRIC Summit along with
the Presidents of Russia, China and Brazil. In a joint statement adopted by the
BRIC leaders, the four nations strongly demanded reforms of international
financial institutions to reflect changes in the world economy. "The emerging and
developing countries must have a greater voice and representation in
international financial institutions, and their heads and senior leadership should
be appointed through an open, transparent and merit-based selection process."

On the global economic situation, the BRIC leaders emphasised that the poorest
countries had been hit the hardest by the financial crisis. “The international
community needs to step up efforts to provide liquidity for these countries. The
international community should also strive to minimise the impact of the crisis on
development and ensure the achievement of the millennium development goals."

The four nations called for strengthening coordination and cooperation among
BRIC States in the field of energy, including among producers and consumers of
energy and transit states, in an effort to decrease uncertainty and ensure stability
and sustainability. They also underlined the need for a more democratic and just
multi-polar world order based on the rule of international law, equality, mutual
respect, cooperation, coordinated action and collective decision-making of all
States.

The BRIC nations condemned terrorism in all its forms and manifestations and
reiterated that there could be no justification for any act of terrorism anywhere
or for whatever reasons.

Pak among top 10 failed States

Pakistan, split in the middle with terrorist attacks and facing an economic crisis,
remains among the top 10 failed States, says an index prepared by the Fund for
Peace, an independent research organisation. The country, placed ninth among all
countries in 2008, in terms of its overall achievement, has improved its position
only by a notch—it was placed 10th in the index for 2009. The annual exercise,
now in its fifth year, ranks countries on the basis of the following factors:
demographic pressure, refugees/internally displaced persons, group grievance,
uneven development, and economic decline, de-legitimisation of the State, public
service, human rights, factionalised elites and external intervention.

The top 10 failed States in the latest list are: Somalia, Zimbabwe, Sudan, Chad,
Democratic Republic of Congo, Iraq, Afghanistan, Central African Republic, Guinea
and Pakistan.

India is placed 87th among the 177 countries under study, with its score showing
an improvement over 2008.
Extra - GK
Singapore’s civil servants are the most efficient among their Asian peers,
according a business survey on 12 economies, but they tend to clam up
unhelpfully when things go wrong. India’s “suffocating bureaucracy” was ranked
the least-efficient by the survey, which said working with the country’s civil
servants was a “slow and painful” process. The survey ranked Hong Kong second.
Thailand was ranked third. China was ranked 9th.

In the first month of 2009-10, the six core industries together clocked the fastest
growth rate in 10 months. Power, crude oil, refinery products, coal, cement and
finished steel grew 4.3% year-on-year, recovering from a low of 1.1% in December
2008.

The Bandra-Worli sea link in Mumbai, seen as an engineering marvel, weighs

equivalent to that of 50,000 African elephants! The steel wire used is equivalent
to the circumference of the earth. The 5.6 kilometre-long cable stayed bridge is
63 times the height of the Qutub Minar. It has consumed 90,000 tonnes of
cement, which would suffice to make five ten-storied buildings. The eight-lane 5.6
km-long Sea Link is India’s first bridge to be constructed in open sea conditions
with a 4.7 km, twin, 4-lane carriageway. It has been decided to name the link as
Rajiv Gandhi Setu.
Ram Pradhan Committee was formed to probe the 26/11 terror attacks.

An Indian Army regiment based in Western Assam district of Dhubri is set to

enter in Guinness Book of World Records after it has planted 4.48 lakh saplings
within a span of 24 hours in a massive plantation drive conducted in coordination
with the Assam Forest Department on June 13, 2009. About 300 personnel from
21 Jat Regiment of Indian Army set out on a plan to plant 5 lakh saplings on an
area of 180 hectares on a denuded forest land in Dhubri district at 3-30 p.m. on
June 12 and ended up planting 4.5 lakh saplings at 3.30 p.m. on June 13, thereby
toppling the current world record held by the Mexico Forest Department that had
planted 3.40 lakh sapling in 24 hours.

Qualified Institutional Placement (QIP) is a capital raising tool, whereby a listed

company can issue equity Shares fully and partly convertible debentures, or any
securities other than warrants, which are convertible into equity Shares, to a
Qualified Institutional Buyer (QIB). Apart from preferential allotment, this is the
only other speedy method of private placement for companies to raise money. It
scores over other methods, as it does not involve many of the common
procedural requirements, such as the submission of pre-issue filings to the market
regulator. The specified securities can be issued only to QIBs, who shall not be
promoters or related to promoters of the issuer. The issue is managed by a SEBI-
registered merchant banker.
India's external debt rose by 2.4 per cent at $230 billion during 2008-09 due to an
increase in commercial borrowings and short-term debts. With a rise of $5.3
billion over the previous fiscal, the external debt rose to 22 per cent of the GDP
from 19 per cent in 2007-08. On the positive side, India's debt service ratio was
the third lowest, above China and Malaysia. Of the total external debt, the share
of commercial borrowings was the highest at 27.3 per cent, followed by the short-
term debt at 21.5 per cent. Non-Resident Indian deposits accounted for 18.1 per
cent, while multilateral debt was 17.2 per cent of the total debt. The debt service
ratio declined to 4.6 per cent at the end of March 2009. In terms of international
comparison, India was the fifth most indebted country after China, Russia, Turkey
and Brazil.

Section 377 of the IPC criminalizes homosexuality. There is a debate going on

within and outside government to repeal this section of IPC.

Former Indian cricket captains Sunil Gavaskar and Saurav Ganguly, and former
ICC President Jagmohan Dalmiya have been invited to give lecture at the
University of Oxford, England, as part of ICC centenary celebrations.

The Eastman Kodak Company has decided to retire its most senior film
Kodachrome, which became the world’s first commercially successful colour film
in 1935, spent 74 years in Kodak’s portfolio. It enjoyed its heyday in the 1950s and
’60s but in recent years has nudged closer to obscurity.
Union HRD Minister Kapil Sibal has been nominated as member of the honorary
senate of the Lindau Foundation, which supports the annual Nobel Prize winners
meetings at Lake Constance in Germany. The foundation was created in year
2000, on the initiative of Nobel Laureates. The annual Nobel Prize winners’
meetings enable young researchers’ to interact with Nobel Laureates, besides
allowing transfer of knowledge between the Laureates themselves.

After the Kullu shawl, Kangra tea and the Chamba “rumaal”, it is now the turn of
the Kinnauri shawl to acquire a patent and a GI (Geographical Indication) stamp, a
hallmark for quality and authenticity. Threatened with the loss of its
distinctiveness to the machine-made Ludhiana shawls, the traditional Kinnauri
shawl will be community patented, paving way for its marketing in the
international market. With the Kinnauri shawl being registered under the
Geographical Indications Act, 1999, the product made on wooden looms in
practically every home of the tribal district of Kinnaur, will be protected from
being lost in the race for modernity. Moreover, with the GI stamp on it, the
product, it is hoped, would fetch handsome prices. The Kinnuari shawls have
religious significance as the range of colours used in designs symbolise
mythological background. The unique wrap made out of wool, pashmina and
angora are known for their intricacy and finesse in weaving.

Biobin, India’s first biodegradable bags meant as an alternative to non-bio-

degrable plastic bags, a main source of environment pollution, has been
introduced in Tamil Nadu. This is the first time in India that bio-degradable bags
with disinfectant properties and fragrance have been launched. These bags have
special characteristics that help them degrade faster. The Sunstar Trading
Corporation, jointly with Exnora International, has designed and launched the
biobin bags.

The State Bank of India has launched car loan scheme “SBI Ezee” for financing
new cars at interest as low as 8 per cent for the first year.