Sunday, November 11, 2007

Democracy in Pakistan: A Private Joke

I was reading this, and I fell off my chair laughing!

My first thought was "Who is Gerald Warner?" then I realised I really I don't really care to find out, he is just another idiot in the west trying to come up with a way to rationalise for the western audience the US policy with respect military dictators in Pakistan. The only thing decent about him is that he appears to have discovered there simply is none.

The fact remains that US and other Western nations cannot conceptualise a Pakistan without military rule. They fully realise that this completely contravenes everything they advertise domestically and internationally about their commitment to democracy and justice.

Gerald Warner is pointing out that this inability to comprehend Pakistan will not come in the way of "solving" the problem. By carefully resurrecting the spectre of "Al Qaida Nukes" anything can be sold as "pragmatic" and "firm" policy. Ofcourse if this excites people too much, then one can always make the obligatory big-talk about precision airstrikes on the Pakistani nuclear arsenal whose location most US officials admit to only having a vague idea about. How exactly a precision strike will be effective in an environment of ignorance is a question I suppose the public in the West is unlikely to ask.

Or perhaps that last bit about the "whole military caste feeling threatened" or "the diversionary war over Kashmir" is supposed to keep pesky questions about the accuracy of precision strikes at bay.

It all seems pretty clear really, now the only question in my mind which I can't seem to get my head around is ... what the devil is "running like wet hens".

23 Comments:

At 10:10 PM, Anonymous Anonymous said...

Hi M,

a wet hen symbolizes anger, "mad like a wet hen" ... "running like a wet hen" symbolizes frustration ...

Alok_N

 
At 6:09 AM, Anonymous kg said...

Hi Maverick:

Continuing our previous conversation. . .

Some years back, (2-3, can't remember exactly) you asked me to do a non-paper on what Uneven Steven was hiding in PaeeLand?

I couldn't find any thing then, but it's one of those things that stayed in the background, and that I'd look over every now and then.

I think I may have an answer. It may, also, answer the question of why the Fund managers want stability in PakLand so badly. This is the stuff I hope the Usual Suspects may want to have a look at . . . closely.

The last two comments I posted form part of the general background here. The issue of control is, of course, always vital. But it isn't the root. The root/real thing is, IMO, something like this:

During the Vietnam war, when the US economy began to crumble, but before Nixon closed the gold window, the US hit on a scheme to deliberately try and encourage what they used to then refer to as "flight-capital" to flow to the US. This is what essentially became the conflict economy cash that flows through New York and Miami banks.

From what I understand, the US deliberately targeted what was then almost the sole preserve of Swiss banks and was, designed to act as off-shore banking centers that could maintain confidentiality.

Weirdly enough, apparently the US got the idea from the Soviets! Little known fact: During the 50's the Russians wanted to have dollar bank accounts to pay for western trade, but didn't trust US banks of course. So they asked their banks in Europe to do hold dollar accounts, since the Europeans were their main partners anyway.

This was something completely new. A British bank for example would actually hold a dollar account without converting it into Sterling. Same with German and French bankers. Once it was done for the Russians, US companies found it convenient to do the same thing to avoid more stringent US banking rules at the time.

Remember this was when US companies dominated everything. Those dollar accounts were what were called "Eurodollars". Funny to think that the Soviets were responsible for one of the great financial innovations that would lead to US dominance!

When Vietnam starting to really hurt the US, killing their balance of payments, they hit on the idea of encouraging US banks attracting business away from the Swiss and tapping into what was by then large amounts of "flight-capital" i.e. conflict economy cash as well as Eurodollars.

Basically, they needed this money to flow *back* to the US into their govt bonds. With currency being backed by gold in those days, the Swiss dominated those type of financial flows and its currency was the worlds strongest in those days.

That's one of the reasons, btw, of the constant attacks, by US media, for a number of years on the "secrecy" of the Swiss banking laws and; the once regular accusations that the Swiss "stole" Nazi loot etc. The US had to undermine confidence in Swiss banking secrecy to get the flows moving towards them.

At any rate it worked. There are a lot more alternatives to Swiss banks these days. Most of them, coincidentally enough, in New York. Infact the US was desperate. The only way to prevent the outflow of gold was to ensure that money came back into the US again. How it came back was irrelevant.

Of course, it wasn't enough. But that was later, when they realised they could use debt as a form of monetary control and the gold window was closed. But by that time this was firmly established as one of *the* most profitable divisions of the US banks. And also by then the Culinary Institute folks had probably figured out it's utility in their day jobs, so it was left alone.

So what does this have to do with PakeeLand. Simple. My contention is that what the fund managers are worried about and what Uneven was hiding is in plain sight - Shri Shortcut.

No I'm not kidding. To me it makes total sense. I mean seriously who better than one of the Citi boys eh?

I think his main role is to keep an eye on and ensure that the flows are kept towards the US.

Look, currently, there simply is no other place better for managing *all* the cash/monetary aspects of these flows then PakeeLand. White powder flows, jihadi flows, smuggling, proliferation flows, human traficking, Saudi charities, all that plus more.

And *everything* monetary/cash associated with this, virtually the dominant part of the conflict economy, will keep on going through the US, and giving them the leverage that it does. The whole arc of crisis that goes from Pakistan to Morocco.

And Shortcut is right there, in the dead center, at one end of it, and *in charge*. It's not his job to look after the nukes etc. He ain't there to challenge PA privileges or look after the pakee economy.

He's there to look after the conflict economy money flows from the heart of Jihad Central.

The triborder region in South America is not even close to this. And recall all those humuorless lefties in control in S America these days.

One of the reasons the US money types hated the lefties was their penchant for interrupting and stopping this type of stuff. Fidel v/s Batista stuff in the old days. Chavez and his comprades these days. So Latin America is pointless.

But CA and Pakistan is pure gold. With 90% of the white powder flows right there. And that's the least of it. That also allows them to tap into the Khodorkovsky like folks in Russia who do their best to ensure capital flows to the West/US!

Which is why they're defended so hard by the Western Press. (Putin and his KGB pals have killed the part that threatened the Russian *state*. But they have, I think, pretty much left the rest alone.)

And like most of these things it works both ways. So this is, I think, what's at the heart of Pakee Leverage with the US.

That would explain how the Pakees can get away with what they did over the last few years. How they could brag in the Pakee Senate that they "paid" to have references to them from the *official* 911 report removed, to KS' absolute and open astonishment.

I realise I'm being presumptious here, but if any of the usual suspects have a little spare time, I hope someone looks/or has looked, into Shortcuts role in ensuring conflict economy cash flows to the US banks in Miami (white powder) and New York, which is I think critical.

The trick is to check the dollarised accounts and which of them regularly buy US govt bonds/debt. The other thing would be to check "round tripping", kind like some of our folk . . . errm . . . use Mauritius. The US does the same thing.

Or maybe an easier entry point maybe the large accounting firms. A lot of this stuff is inextricably interwined with normal business flows. You need some serious accounting expertise to keep things proper. Otherwise you end up broke and facing criminal charges like Arthur Andersen. (Yeah I know the whole Enron thing. But it's funny how often that lots name came up in strange places. Like an accounting version of BCCI!)

The role of Shortcut, the conflict economy cash, and the role it plays in Pakee/US relations is something that *has* to be looked at seriously.

What happens now in the current tamasha will be interesting. More importantly will be what role Shortcut plays in the next few weeks - or whether Benazir has guaranteed the Brits/US that she'll do her part there.

Underestimating Bibi's deal making would, I think, be dangerous. She's been around a lot. And from Gaddafi, to the good generals Beg and Babur, to the Dear Leader, and to Diesel, she knows how to "deal" with the Big boys.

She didn't have anything to sell before - but note what she's selling the west now - nothing less than *control* of Pakeeland.

I don't think we should make the mistake of the old Syndicate and underestimate "that woman". Mind, I'm not being blasphemous here, - I'm just saying there maybe a bit more to her than we can see.

kg.

 
At 6:10 AM, Blogger maverick said...

Ah.. thanks Alok,

I have never heard that used before, must be a scottish thing.

regards
Maverick

 
At 6:50 AM, Blogger maverick said...

Hi Kg,

That is very close to what Anonymous was saying - closing the wealth loop on Pakistan's main exports.

It must be a round-tripping scheme that makes this worthwhile for people. That would explain the rush to get people to "invest" in Pakistan and all the credit rating scams that are being perpetrated to boost investment in Pakistan.

If that is true, then big guns will boom when the demands in the media to do something to Musharraf grow a little too strong. Musharraf controls the flow right now, any shift there could create severe shortages inside the system and leave all sorts of people stranded. Already a dozen of the heavyweights and big guns have gone on the record to say that Musharraf is the boss. One of them even publicly apologised for something he did earlier and then quickly backed that up with words to the effect that Musharraf is a good guy. I was wondering who benchpressed whom here.

At the end of the day BB's and Asif's connections in the world is nowhere near Shortcut's position to move money. How she can advertise a greater strength in these matters than Miyan Musharraf's Company is a bit bewildering. I suppose if a major purchase comes through, like say the F-16s, then it is possible that several new channels will open up allowing either roundtripping or ... other wonderful things.

Fishing in muddy waters is extremely dangerous. It seems easier to sit back and watch who runs which way as the "BB v/s Musharraf" idea gains ground in the press. That itself will give us the answers we need.

 
At 7:03 AM, Blogger maverick said...

hi Kg,

Here is a "big picture" question - I, the ruler of a fictional land, have printed too many dinars. If I do not somehow mop up the extra paper money, the value of my currency internationally will fall uncontrollably. Given the globalised nature of the world economy, the rest of the world may just shrug that off but this sort thing will cause definetely cause my economy to stall. A stall economy will domestically spiral into unmanageable political problems for me.

What should I do to keep my economy from stalling? should I,

1) encourage the circulation of the dinar in the hands of the people internationally, i.e. deliberately promote price escalation? or

2) drive the dinars out of peoples' hands internationally and into banks where I can see them and the force banks to release cash at a measured/controlled rate back into my domestic economy or any other economy of choice? perhaps even allow certain parties to buy things I would not have otherwise sold.

3) forget about the dinar altogether, and simply buy whatever I can with the dinar - guns,bombs,rocket-ships,other currencies etc... and then let dinar float internationally, but then use the stuff I bought with the dinar in a barter trade to get whatever I want locally. Whatever happens internationally, well.. that is not my problem in such circumstances.

 
At 7:39 AM, Anonymous kg said...

Hi M:

I don't think she's advertising that - she's claiming she can stop PakeeLand going down the Iran/Shah path. That if she's given the tiller, regardless of who else is captain, navigator or does the fishing, the boat won't capsise.

Big claims those.

>> F-16s

I don't think the F-16's are relevant here. The price of a couple of dozen F-16s or even a couple of hundred is irrelevant here.

Monetary/cash flows don't have to go physicaly *through* Pakland. These are just accounting electronic entries that, I think, is designed to turn stuff lily white.

Far more important are the set of Pak state features. It is, all said and done, a major country, not a Cayman Island/Isle of Man type boondoogle.

With all the trappings of statehood, such as it's soverign link to the International Bank of Settlements, the various Central Banks, the International financial orgs, etc, but is entirely distinct from the US, so exposure is virtually non-existent.

Overseas branches of Pak banks working with a formal Patron link, say, to merchant and investment banks elsewhere in the world, agricultural banks, industrial banks - the possibilities are endless.

With Shortcut, you get access to Paks sovereign link into the global financial/banking system and therefore a central node to control the global conflict economy cash flows.

There aren't that many 60s/70s style dictatorships around anymore. At least not in a major country the US can access that could do what pak does for them.

Shortcut may have the contacts, but if Benazir agrees to let it all go on without interfering, as she did with Beg, plus keeps things in line, then she becomes a better bet than Shortcut to "partner" the PA for the US/West, doesn't she?

But what would be in it for the Pak Army?

kg.

 
At 7:48 AM, Anonymous kg said...

M;

I'd do 2.

Don't like 1. No control. I don't want to risk price escalation. My loyal subjects may riot, see.

I don't see a problem with 3, but choose 2 anyway because I figure why create nasty feelings for myself internationally?

See, if international people love me, or even don't give a fick about me or don't pay attention to me, or even if the watch me all the time, but are not annoyed at me, it makes it easier to slip a knife between their ribs or in between their shoulder blades.

Drawing attention to myself, or annoying people already watching me makes that harder.

So I go for 2.

kg.

 
At 8:20 AM, Anonymous Anonymous said...

Maverick,

I am the Anonymous that you referred to in your post to KG and like before I will take a stab at your question to KG.

You can try a variant of option 1:

Lets assume that in your fictional world, the international trade in an essential commodity is priced in and carried out using your dinars. Lets also assume that most of this essential commodity is sourced from a specific geographic region.

Now further assume that events transpire to cause massive geopolitical instability in that region to the extent that new unpredictabilities are introduced into the trade in that commodity. Then the pricing mechanism of that commodity will reflect this instability and unpredictability via a steep increase in prices.

Since this commodity is an essential one and trade in it is universally priced in and carried out via dinars, other countries have no short term option but to buy even more dinars than before to carry out trade in this commodity.

This way other countries will suck up the excess liquidity that you have sloshing around in your financial system.

A side benefit of this is that the countries which sell this commodity and which will eventually receive all your dinars from everybody else do not want their own currency exchange rate to change uncontrollably from the surge in influx of dinars. Also assume that these countries internally do not have well developed financial markets to manage the dinars and so have few options but to invest all those dinars by lending them back to you.

Of course, in true filmi style all of this is completely hypothetical and has no resemblance to reality.

 
At 9:19 AM, Blogger maverick said...

Hi Anonymous,

Suggest a name that I can refer to you by.

 
At 10:23 AM, Blogger maverick said...

Hi Kg,

I think that claim of her preventing the boat from capsizing is even less credible than the claim of her doing a better job than Shortcut.

If one is to ensure that a type 2 scheme works with a Pakistan-in-the-loop feature, then Pakistanis society can't be rattling around too much.

Unfortunately with the Pakistani population having exceed the ability of its economic and political resources to support, it seems to me that Pakistan will simply draw money away from the loop itself. Without fresh negotiations on IRSA the agricultural sector in Pakistan will collapse. Without additional power generation there will be no meaningful growth in industry. Without agriculture or industry, the feudal hold on restive populations is too absurd to put faith in.

This is why I find the claims of the rent-a-crowd types utterly bogus. Neither of these people have a vision for Pakistan and even if they did, over the last five years (esp. post Lal Masjid) Musharraf has pushed things so far down the road to collapse that none of the feudal shenanigans have a hope in hell.

I think the F-16s were a kind of foil. A way to keep the accountants occupied and then flood the place with unrelated transactions. Who on earth is going to waste his/her time searching out each and every tiny electronic transaction? The number crunchers and watchers would get overwhelmed and then the real business could begin.

From the PA perspective, BB's appeal is always the same. With a woman PM at the head of an "Islamic Nuclear Pakistan", the delicateness of the situation will be obvious to all and no one will try to push Pakistan around. The PA's problem with Bhutto has also been the same, she lets her husband's family feed in troughs allocated for the PA only eg.. the "road to CA" racket that Gul et al.. had a monopoly on - Zardari jumped in on that. As if that isn't enough she starts letting her American friends poke around the PA's backside. Ofcourse everytime around she is confronted about this sort of thing in Pakistan, she acts like she didn't do anything but the moment she is booted out of the country, she can't stop giving interviews about what she did to keep the PA in check and how it was not enough.

At a time when the PA itself is searching for answers to Pakistan's myriad problems, it seems unlikely that they would really care for window dressing like Bhutto.

 
At 10:50 AM, Blogger maverick said...

Hi Anonymous,

In your approach, how would I sheild my domestic market from the price escalation in the essential commodity?

Especially if my domestic economy is dependent on imports for a large fraction of my basic goods and services?

It seems that I have to ensure that any dinars that flow back into my country the essential commodity sellers will have to go back directly into the hands of people in my country or they will not be able to afford the essential commodity.

All the money coming back into the country will have to go into some kind of credit machinery so that my subjects don't actually pay for the commodity.

The simplest way to do this would be to have my companies that trade in the essential commodity internationally start issuing credit cards. The credit cards would offer lower interest rates than other lenders, and offer discounted rates for purchases of the commodity. This way buyers of the commodity in my country would pay a very small monthly debt servicing fee. The debt servicing fee would be small enough that they would not feel significant inflationary effects.

However such a scheme has the possibility of springing a terrible leak.

Once I offer low interest credit cards with discount prices on essential commodities, my subjects will attempt to switch their debts to these lower interest cards. If that happens, then all the other lenders in my country will have to reduce their rates or offer similar essential commodity pricing support schemes. Pretty soon the whole country will drown in debt.

It seems to me that what starts as a price escaltion in one commodity could spiral into a wider credit crisis.

 
At 7:02 PM, Blogger maverick said...

Hi Kg and Anonymous,

I went over this and the previous threads a couple of times and here is what I could piece together from the various posts by the participants.

*********************************

Pakistan offers the US (and the West) a way to minimize exposure in high risk ventures. The value of life is low in Pakistan, and the Pakistanis have *so far* demonstrated the ability to maintain control over the risk environment by utilising a variety of bipolar type strategies. This has enabled the Pakistan Army to emerge as the key "go to" entity for risk management in Pakistan. However prolonged usage of such bipolar strategies by the Army, has driven Pakistan to the brink of state failure.

Public anger inside Pakistan is at a very high level. It is possible that this could vent in the form of an explosion that completely overwhelms the remaining shreds of the Pakistani state. In order to minimize exposure of the US to such a risk a strategy must be concieved to deflect public anger.

Ideally the anger in the awam, could be vented in the form of semi-violent public demonstrations. As long as such demonstrations did not damage anything of value, control could be maintained. The Islamists who were in the past, relied upon for such venting proved unable to control the beast. In the run up to Lal Masjid, the limitations in their control model have become apparent and with that it has become necessary for the Pakistan Army as an institution to distance itself from the Islamists.

Benazir Bhutto with her non-islamist popular appeal seems capable of securing similar avenues for such venting. As already demonstrated in her "homecoming" rally, she can bring large numbers on to the streets. Unlike the Islamists, Bhutto has no depth. Her cadre is politically uncommitted and their actions will be easier to modulate and so Benazir can be given a chance to ride the tiger.

However this strategy comes with risks. Her ride to some extent will rely on a controlled friction with Musharraf. Benazir is known to have short attention span and may be more keen on securing the Bhutto-Zardari fortune than following any premade plan. She is also likely to go poking around in the Army's backyard and invite the Army's wrath. Pissing the Pakistan Army off will completely negate any gains that are made via Benazir's public displays. The presence of other political rivals like Nawaz Sharif is likely to distract Benazir, so Nawaz has to be kept out of the place.

I think this way almost all the pieces fit in, though I don't see how shortcut and company can sit around in positions of power while BB gets to be Noor-e-Pakistan. A clash there is likely to cause severe welts in this strategy.

I want to keep going over these threads with a fine tooth comb. I feel we are very close to nailing this thing down and rolling this back and forth should help us get to the bottom of this.

There is a very obvious flaw in this.

Benazir has *no* discernable model for controlling the beast. She is just going to try and wing it and see what works. This is no different from Musharraf did in 1999, but at least he had the support of the Islamists. Benazir is unlikely to enjoy that either. In fact the greater risk is that she will exhaust Fazl ur Rehman's resources in the pursuit of her non-strategy.

I suspect this "emergency" drama is part of the act staged to make Benazir's popularity rise.

 
At 11:17 PM, Anonymous kg. said...

Hi Maverick:

I'm wondering about something else with respect to Bibi - specifically, are we putting to much faith in the Americans "Al Qaeda" meme.

See, there may be a bit of reification involved here - someone says folks from X and Y are both fanatical Muslims and therefore Al Qaeda and any thinking about the differences between X and Y stops.

I was thinking about Bibi and general Babur creating the Taliban and her former allies in what is now the MMA.

Is that alliance truly dead? Or do there exist folks there who would be willing to work with her? She's told us about Osama trying to kill her, but does that mean Diesel wants to have her wacked as well? What about Babur and his types?

They may be against Mush, or so we're told, but they seem to have been remarkably quite about Bibi herself recently. Recall that Osama wasn't the blue eyed boy in the early days of the taliban, that was certainly Bibi and Baburs influence then. OBLs popularity with Omar came later - via the PA when Bibi was out.

Sure Mullah Radios folks are going ape now - but recall it was Barbur who killed his father-in-laws dreams of being the Amir of Swat during the 90s.

i.e. There exists a significant difference between some of these groups - a killing difference. And some of them *have* worked with Bibi in the past.

The Allah brigades are *not* uniform - the PA plays them off against each other regularly enough. Could Bibi have some assurances from her old friends in Allahs camp that she can do the same thing?

That would split Allah into 3 camps, the PAs allah types, Bibis allah types and the rest who want to kill Bibi and Mush.

One other point that's vital to acknowledge - reading the net alone and coming to the conclusion that Bibi is hated by the Army is, IMO, a serious mistake.

Because the net-Pakee is almost wall-to-wall elite types that loathed Bhutto's "socialism". The current Pakee Army isn't wall to wall feudal/elite types - there's been a significant infusion of what used to be, once upon a time, the lower *economic* classes. Kiyani is the epitome of this. I mean seriously, an NCO's son as COAS?

These lower economic classes, (middle and lower middle) are the bedrock of the PPP anyway. I fail to see why the PA couldn't have the same or larger percentage of PPP supporters in it as they do Allah types. And there would exist a percentage of PPP/Allah type supporters like Babur.

Bibi may be a scacrificial goat, and this tamasha may be designed to increase her street cred, but can we really discount those folks, not Mush and Amreeka bahadur, but others even in Allahs camp who may perceive a need for what she can bring them?

kg.

 
At 6:56 AM, Blogger maverick said...

Hi kg,

The Net-pakistanis are split between various feudal factions and their reception to BB has been mixed. The oped writers are cautious or somewhat cynical sounding, the respondents on the letters and blogs are more open minded.

It is difficult to determine how much support there is for Benazir in the armed forces. People are often described as loyalists to her father, not so much as loyalists to her. This makes an estimation difficult. Bhutto Sr made many friends as a young man. He attracted the attention of a number of senior people inside the PA and that brought with it a cult like status. That is why he was able to turn the tables on Yahya. Benazir does not have the same social spread, her friends in the armed forces come from acts of patronage she extended as PM and from people whose relatives served under her dad. I don't know how to evaluate the quality of that support.

I think she has Fazl ur Rehman on her side due to their former association, but Fazl is facing a lot of fire from both sides for being too close to Musharraf and Bhutto. I fear that he will end up getting dragged out in this drama and that he will lose his ability to communicate to the radicals.

It is true that Benazir has support in the "middle class" of Pakistan, but is this middle class going to stick its neck out to back her?

This is the same middle class that Musharraf kept claiming he appealed to and I don't see them sticking their necks out for him, so why are they going to do that for Bhutto.

I remain skeptical about BBs appeal to Pakistani masses.

 
At 8:53 AM, Blogger maverick said...

Hi Kg,

per Sri. Raman, the corps commanders are unhappy with this BB drama.

http://www.saag.org/papers25/paper2454.html

 
At 7:15 AM, Blogger maverick said...

Hi Kg,

Get this boss!

Recall that time when the disreputable forum's Langley rep. had told us that India should abandon its search for Iran-India pipelines in favour of LNG ships capable of regassification?

Well... Iqbal Z. Ahmed, who was in the news lately, is the CEO of Pakistan GasPort. "GasPort" is a proprietary label of the Excellerate Energy systems company. The project was "fast tracked" by Musharraf himself last year.

 
At 6:42 AM, Anonymous kg said...

Hi Maverick,

Am travelling at the moment. Boss, did you know a taxi from Narita to downtown Tokyo costs over $200 fukking dollars!!!!

A falling dollar is all very well dude, but this is just ridiculous!

>>Excellerate Energy systems

Now that's funny. Never heard of them before last year when I was at the apec gas conference. Heard about them there though. Their regasification plants are found on a global scale, US, Oz, EU etc.

FYI: At the apec conference, this was one of the main talks:

http://www.apgasforum.com/articles/pdfs/James_Slutz.pdf

Another thing I remember is the number of folks at the conference who dissed the whole "clean coal" thing really hard. One guys impromptu talk on it openly called it a scam.

>>Crore Kommanders against Bibi

It's really strange. The RAPE seem to be convinced that only Bibi can "unify/lead" the fight against Musharraf. The non-mullah anti-Mush crowd is looking for a leader. And they seem to have settled on Bibi, despite their misgivings., because there's no-one else.

You know, I had thought a long time back that there would eventually be a break between the RAPE and the PA because the Paki economy simply wasn't generatiing or creating enough new wealth to sustain the looting of the RAPE *and* the PA.

In this sort of circumstance, the PA with it's guns wins. Note the angst by the civs against the retired mil types taking over all the lucrative state jobs.

The RAPE thought it was an "unfair double dipping" on the part of the PA, curtailing opportunities for the non-military elite to grab their "fair" share of the national wealth.

I wonder if what we're seeing now is an aspect of this split.

If it is, there's no going back. They can only "share" if the cake is big enough. If it isn't, then it simply isn't. And it's a bare knuckled fight between the militarised RAPE/PA and the non-militarised RAPE for whatever they can grab of the spoils.

BTW: That Shezad guy on Asia Times, who is clearly an ISI mouthpiece (but which faction of the ISI is unclear from his articles), says that the good folk of the jihad are about to declare an Islamic Emirate soon in sections of the NWFP that they control.

Now *that* would be a superb example of fecal matter meeting the rotary air circulation device.

Later,

kg.

 
At 12:59 PM, Anonymous Faizi said...

Kg,
Havent they already declared an emirate in that general region as part of a ceasefire agreement with the PA ?

Faizi.

 
At 6:29 AM, Blogger maverick said...

Hi Kg,

Wow, that is steep.

I am going to pass Shulz's speech along to others.

The RAPE's definetely charged up about the "double dipping". That is a beautiful way of putting.

Shehzad does interesting work. The formal declaration of an emirate would be a signal to the RAPE to pack their bags. It is a very short road from there to the lamposts. The military has kind of bluntly told the RAPE that it will not be stepping in to save their hide.

 
At 2:18 PM, Anonymous Anonymous said...

Maverick,

Call me Sparsh.

I apologize for the delay in replying. I am occupied with too many things these days.

- Sparsh.

 
At 2:22 PM, Anonymous Anonymous said...

Maverick,

One way to mitigate the increase in prices of that essestial commodity would be to release controlled amounts of it into your domestic market from a reserve that you have built up over the years. Another way would be to aggressively prospect for that commodity domestically, including areas that you have previously left untouched out of environmental concerns.

As far as your domestic consumer economy goes, lets suppose that it is dependant upon imports for a large fraction of basic goods from one country in particular. Then you can try to convince that country to substantially undervalue its own currency against your own and to keep the exchange rate between your currencies fixed. In effect you are asking that country to absorb the price increases in that essential commodity and not pass it on to your domestic consumers. That country partly goes along with the plan because letting their own currency appreciate will make their exports uncompetitive and partly because you gave them some sort of a geopolitical bribe in a quid pro quo for going along with this plan.

All the money coming back into your country can be packaged and then repackaged into these increasingly abstract debt instruments that are not backed by a sufficient amount of real assests and loaned out to your subjects. Such cheap credit will inevitably lead to misallocation of capital and resources and create asset pricing bubbles, say for instance in your real estate market.

I confess that as you so rightly point out all of this is a terribly risky thing to do with too many ways in which things can get out of control. The only way out of the mess that I can think of would be to somehow get the message across to your people that their addiction to a lifestyle of conspicuous consumption fueled by debt is something that is not sustainable and that they can not keep asking you to sheild them from the consequences of living beyond their means. Unfortunately I see no one in your dinar-land who has the political capital to point out that the emperor is naked and take corrective action.

Your fictional dinar-land is already drowning in debt and the credit crisis that you allude to is precisely what you are seeing in your realm these days.

I must also confess that all the things that I have proposed are short term fixes to deeper systemic problems. But then this sort of "short-termism" is the prevalent way of doing things in this fictional land of yours.

- Sparsh.

 
At 3:23 PM, Anonymous Anonymous said...

Maverick,

Regarding Benazir and Musharaff:

Note the way in which Benazir would announce well in advance the exact time and place from where she would lead rallies protesting the emergency rule. Very convenient for Musharaff to then put her under house arrest just in time to prevent her from leading these rallies that never actually materialize. Benazir then comes across as some sort of a champion of democracy without having to do anything more than sit comfortably in her house. This is just too convenient for everyone involved. I too think that the emergency drama was meant to prop up Benazir's political fortunes before the elections.

There is also the matter of the ISI reportedly meeting with all the opposition parties before the emergency rule to assure them they would find a place in the caretaker government.

So far so good. Then things seem to go off script. The caretaker government turns out to be a collection of Musharaff's lotas from the PML(Q). Then Benazir starts demanding Mushraff's complete removal from the scene and talks about boycotting the election along with a unified opposition front.

This leads me to believe that someone double crossed someone behind the scenes and the apparent falling out that we are seeing is a result of this.

My money is on Musharaff being the double crosser. The opportunity and the situation was ripe for taking a gamble with a possibly big pay off and Musharaff's instinct to indulge in some commandogiri was too strong for him to resist.

The Americans in the person of Negroponte raging away impotently at the developments further strengthens my belief that Musharaff was the double crosser. Now we fully expect the Americans to put on a hollow song and dance about democracy before people's minds move on to other things but the words coming out of Washington these days are a bit too severe and have gone on for a bit too long to be the usual lip service to democracy. He duped not only Benazir but also the Americans who had engineered this whole deal.

Look at this from his perspective: With the emergency rule in place he can clean out the Supreme Court and have his election as President rubber stamped by the new people he puts in place there. He can also have the ISI fix the elections so that all his lotas from the PML(Q) are elected to another term in Parliament. And as long as the emergency lasts he can put off resigning as COAS on some sort of a "unity of command in these trying times" excuse. If Benazir gets too uppity then he can have his new and improved Supreme Court declare her amnesty illegal and either put her behind bars or send her back into exile. The rest of the opposition he can just have arrested and thrown in prison under his emergency powers. As for the Americans, its not like they have a choice. They rely on the PA to secure their primary supply lines that sustain their deployment in Afghanistan. As long as that fact remains, Musharaff has them by the balls. Then there is also the JDAM ace that he holds up his sleeve. As you put, who is bench pressing whom?

Note that none of this tactical brilliance is sustainable in the long term. There will come a point when Musharaff has simply pissed off far too many people but then the commando has never shown that he takes these sort of long term considerations into account.

- Sparsh.

 
At 10:13 AM, Blogger maverick said...

Hello Sparsh,

With regards Benazir and Musharraf, I think I want to ask Vishal Bharadwaj to make a movie based on "Julius Ceaser" next. The lead character "Julius" should be a Pakistani general.

As he has obviously managed to deflect blows from people of Mr. Honduras and Mr. Benchpress' stature, I will now refer to him only as Musharraf the Magnificent.

I think that the real risk - if any Musharraf the Magnificent percieves from the BB/NS/Imran Khan types is that they might be able to use their social position inside Pakistan to help the US find fissures inside the PA command staff. This is at its very core a search for Brutus, without which the drama cannot be staged.

You have an interesting take on the inflation issue. By the way, I have posted another question on the first post on the blog, it concerns the point at which the poor performance of the private debt markets in Dinar-land will start to affect the international perceptions of my ability to service Dinar-land's soverign debt.

 

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