THE LATEST 'GREAT GAME' INVOLVES INDIAN OCEAN

A Sri Lankan port being built by China points to Beijing's jockeying with India for regional influence.

Gavin Rabinowitz

Los Angeles Times, August 31, 2008

HAMBANTOTA, SRI LANKA — This battered harbor town on Sri Lanka's southern tip, with its scrawny men selling even scrawnier fish, seems an unlikely focus for an emerging international competition over the energy supply routes that fuel much of the global economy.

An impoverished place still recovering from the devastation of the 2004 Indian Ocean tsunami, Hambantota has a desolate air, a sense of nowhereness, punctuated by the realization that looking south over the expanse of ocean, the next landfall is Antarctica.

But just over the horizon runs one of the world's great trade arteries, the shipping lanes where thousands of vessels carry oil from the Middle East and raw materials to Asia, returning with television sets, toys and sneakers for European consumers.

These tankers provide 80% of China's oil and 65% of India's -- fuel desperately needed for the two countries' rapidly growing economies. Japan is almost totally dependent on energy supplies shipped through the Indian Ocean.Any disruption -- from terrorism, piracy, natural disaster or war -- could have devastating effects on these countries and, in an increasingly interdependent world, send ripples across the globe. When an unidentified ship attacked a Japanese oil tanker traveling through the Indian Ocean from South Korea to Saudi Arabia in April, the news sent oil prices to record highs.

For decades the world relied on the U.S. Navy to protect this sea lane. But as India and China gain economic heft, they are moving to expand their control of the waterway, sparking a new, and potentially dangerous, rivalry between Asia's emerging giants.

China has given massive aid to Indian Ocean nations, signing friendship pacts, building ports in Pakistan, Bangladesh and Sri Lanka, and reportedly setting up a listening post on one of Myanmar's islands near the strategic Strait of Malacca.

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CHINA UNLIKELY TO LOOSEN ITS GRIP IN WEST

Experts Anticipate Unyielding Response to Latest Fatal Attacks in Xinjiang Province

Jill Drew

The Washington Post, August 30, 2008

Violent outbursts are continuing in the Xinjiang region of western China, with the latest resulting in the deaths of two policemen who were attacked Wednesday while searching a cornfield for a woman they believe is involved in a separatist cell.

State media reported Saturday morning that police found the alleged assailants and shot six of them dead after they tried to defend themselves with knives, wounding two security officials.

The attack and ensuing capture of suspects was the fourth incident this month in the area, bringing the total dead to 39 despite intense paramilitary police patrols since before Beijing's Summer Olympic Games.

In both Xinjiang and the nearby Tibetan regions, China has deployed thousands of security personnel in recent months to keep the peace and root out troublemakers. Now the government might consider keeping those forces in the regions indefinitely, experts said, because tensions remain high. Required affirmations of political loyalty and surveillance of telephone calls, Internet use and physical movement are also expected to continue.

"Three days ago, I called my mother back in Tibet," said Tenzin Losel, who fled Tibet for India in 1997 and had not spoken with his parents since this spring's riot in Lhasa and the ensuing wave of anti-government protests that swept the Tibetan plateau. He said he did not want his call to get them in trouble with police, but he wanted to hear his mother's voice. "She said hello and that she was okay. Then she asked if I was okay and after I said yes, she just put down the phone. I felt in that moment the tense division in Tibet."

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INDIA'S ECONOMY GROWS 7.9%, SLOWEST PACE SINCE 2004

Cherian Thomas

Bloomberg, August 29, 2008

(Bloomberg) -- India's economy grew at the slowest pace since 2004 last quarter as the fastest inflation in a decade and increased borrowing costs damped consumer spending. Asia's third-largest economy expanded 7.9 percent in the three months to June 30 from a year earlier, following an 8.8 percent gain in the previous quarter, the Central Statistical Organisation said in a statement in New Delhi today. Analysts expected gross domestic product to increase 8 percent. Inflation has almost tripled this year to 12.4 percent amid higher fuel and food prices, forcing the central bank to raise interest rates three times since June. While growth is almost double the average pace since India's independence in 1947, it is slowing along with the other so-called BRIC economies of Russia, Brazil and China.

"We don't expect India's slowdown to be too dramatic,'' said Philip Wyatt, a senior economist at UBS AG in Hong Kong. "There will be a gradual slowdown in GDP growth throughout this year - the industrial side of GDP is already slowing.''

India's benchmark Sensitive index, which has declined by a third this year, rose 3.4 percent to 14522.82 at noon on the Bombay Stock Exchange, while the yield on the key 10-year bond fell 11 basis points to 8.66 percent. The rupee was little changed at 43.755 against the U.S. dollar.

China, Russia

Finance Minister Palaniappan Chidambaram said today that growth for the year to March 31 will be close to 8 percent. India risks being overtaken by Russia as the world's fastest expanding major economy after China this year. Russia's economy may grow 7.1 percent in 2008, surpassing India's 7 percent expansion this year, according to World Bank estimates.

The World Bank expects the U.S. economy to expand 1.1 percent this year, half of 2007's pace. The U.S. economy grew at a faster-than-expected 3.3 percent annual rate in the second quarter, helped by a surge in exports that will probably wane as Europe and Japan head toward recessions. India's expansion slowed in the second quarter as construction growth weakened to 11.4 percent from 12.6 percent in the previous three months and manufacturing gained 5.6 percent compared with 5.8 percent in the first quarter, today's report said.

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PEACEFUL PROTESTS IN KASHMIR ALTER EQUATION FOR INDIA
Tough Response Criticized as Outmoded

Emily Wax

The Washington Post, August 28, 2008

SRINAGAR, India -- Inside dozens of cramped kitchens in this Kashmiri city on Saturday, mothers and daughters prepared to make packets of rice for the hundreds of thousands expected at a sit-in two days later. Outside, their sons and brothers collected change from motorists to buy water and juice.

Drumbeats echoed through the Kashmir Valley as college students chanted "Azadi," or freedom. In middle-class neighborhoods, Internet-savvy students blogged about their views and posted videos of the preparations on YouTube.

But early Sunday, Indian security forces blanketed the region, preventing demonstrators from reaching the center of Srinagar, summer capital of Kashmir. Authorities announced an indefinite curfew, blocked Internet access and arrested three prominent Muslim separatist leaders. At least 15 journalists were beaten.

Despite the government's use of force, many Muslims in Indian-controlled Kashmir seem determined to find peaceful ways to voice their separatist aspirations. The slogans of the fighting in the 1990s, such as "I'm going to Pakistan to get an AK-47," have disappeared as the nonviolent movement flourishes, especially among the young.

"For the young generation, it's our moment now," said Malik Sajad, a 20-year-old political cartoonist for the Greater Kashmir newspaper who was raised during the war. "Nobody here saw a childhood. We were always kept indoors. But we don't believe that the solution is in the gun. Now we want to show the world that Kashmiris deserve peace."

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A JIHAD GROWS IN KASHMIR

Panjak Mishra

The New York Times, August 27, 2008

For more than a week now, hundreds of thousands of Muslims have filled the streets of Srinagar, the capital of Indian-ruled Kashmir, shouting “azadi” (freedom) and raising the green flag of Islam. These demonstrations, the largest in nearly two decades, remind many of us why in 2000 President Bill Clinton described Kashmir, the Himalayan region claimed by both India and Pakistan, as “the most dangerous place on earth.”

Mr. Clinton sounded a bit hyperbolic back then. Dangerous, you wanted to ask, to whom? Though more than a decade old, the anti-Indian insurgency in Kashmir, which Pakistan’s rogue intelligence agency had infiltrated with jihadi terrorists, was not much known outside South Asia. But then the Clinton administration had found itself compelled to intervene in 1999 when India and Pakistan fought a limited but brutal war near the so-called line of control that divides Indian Kashmir from the Pakistani-held portion of the formerly independent state. Pakistan’s withdrawal of its soldiers from high peaks in Indian Kashmir set off the series of destabilizing events that culminated in Pervez Musharraf assuming power in a military coup.

After 9/11, Mr. Musharraf quickly became the Bush administration’s ally. Seen through the fog of the “war on terror” and the Indian government’s own cynical propaganda, the problem in Kashmir seemed entirely to do with jihadist terrorists. President Musharraf could even claim credit for fighting extremism by reducing his intelligence service’s commitment to jihad in Kashmir — indeed, he did help bring down the level of violence, which has claimed an estimated 80,000 lives.

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FRACTIOUS COALITION IN PAKISTAN BREAKS APART

Jane Perlez

The New York Times, August 26, 2008

ISLAMABAD, Pakistan — Pakistan’s fledgling civilian government collapsed on Monday, as the leaders of the main two coalition parties turned their sights on each other, only a week after banding together to force the resignation of President Pervez Musharraf.

The coalition’s failure, after just five months of governing Pakistan, worsened the leadership crisis in this nuclear-armed nation at a time when it faces a serious threat from the growing strength of the Taliban in the northwestern parts of its territory.

Now the deepening rivalry between the party leaders — Asif Ali Zardari, the widower of the slain former prime minister Benazir Bhutto, and Nawaz Sharif, a former prime minister himself — will play out in the coming elections for president.

Mr. Zardari, leader of the larger Pakistan Peoples Party, decided last week to run for the office — one of several reasons Mr. Sharif, who leads the Pakistan Muslim League-N, gave for leaving the coalition and naming his own candidate. Mr. Sharif said that Mr. Zardari, relatively new to day-to-day politics though increasingly influential inside Pakistan and with Washington, had broken several promises that made it impossible for him to stay in the government.

“We have been forced to leave the coalition,” Mr. Sharif said in a news conference here in the capital. “We joined the coalition with full sincerity for the restoration of democracy. Unfortunately, all the promises were not honored.”

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AFTER GLOW OF GAMES, WHAT NEXT FOR CHINA?

Jim Yardley

International Herald Tribune, August 25, 2008

BEIJING — The elaborate closing ceremony that ended the Olympic Games on Sunday also ended nearly a decade in which the ruling Communist Party had made the Games an organizing principle in national life. Almost nothing has superseded the Olympics as a political priority in China.

For Chinese leaders, all that effort paid off. The Games were seen as an unparalleled success by most Chinese — a record medal count inspired nationwide excitement, and Beijing impressed foreign visitors with its hospitality and efficiency. And while the government’s uncompromising suppression of dissent drew criticism, China also demonstrated to a global audience that it is a rising economic and political power.

But a new, post-Olympic era has begun. The question now is whether a deepening self-confidence arising from the Olympic experience will lead China to further its engagement with the world and pursue deeper political reform, or whether the success of the Games and the muted Western response to repression will convince leaders that their current model is working.

“China was eager to present something that shows it is a new power that has its own might,” said Shen Dingli, a professor at Fudan University in Shanghai. “It has problems, but it is able to manage them. It has weaknesses in its institutions, but also strengths in those same institutions.”

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