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Sunday, October 3, 2010

[ALOCHONA] India: Economic power house or poor house?

Well, despite equal distribution of Wealth, before American Industrialists had started closing their factories in USA and started installing them in China in 1980, Chinese were poorer than Indians.
What India needs is more Socialism to end poverty.
Are we forgetting, ...
.
* ... India has the 3rd or 4th largest Foreign Exchange Reserves in the world, while none of None Oil Rich Moslim countries are still under Debt instead of having Net Foreign Exchange Reserves?
* ... Only USA, China, Russia and Germany have more Billionaires than India and 2 of them are 2 of them hold number 4th and 5th position in list of Top 5 richest men in the world?

--- In alochona@yahoogroups.com, Isha Khan <bdmailer@...> wrote:
>
> India: Economic power house or poor house?
>
> Mary Albino
>
> India's economic miracle is a perfect example of how appearances can be
> deceiving.
>
> [image: India is home to more poor people than any other country in the
> world.]
>
> India is home to more poor people than any other country in the world.
>
> The dominant narrative on the country goes like this: as the fourth largest
> economy in the world, with a steady annual growth rate of close to 9 per
> cent, India is a rising economic superstar. Bangalore is the new Silicon
> Valley. Magazines such as *Forbes* and *Vogue* have launched Indian
> editions. The Mumbai skyline is decorated with posh hotels and international
> banks.
>
> There are numbers to back up this narrative. The average Indian takes home
> $1,017 (U.S.) a year. Not much, but that's nearly double the average five
> years ago and triple the annual income at independence, in 1947. The
> business and technology sector has grown tenfold in the past decade.
> Manufacturing and agriculture are expanding, and trade levels are way up.
>
> India is also on the up and up in terms of human well-being. Life expectancy
> and literacy are steadily rising, while child mortality continues to
> decline. The poverty rate is down to 42 per cent from 60 per cent in 1981.
> While 42 per cent still leaves a long way to go, India's situation seems
> rosy compared with that of, say, Malawi and Tanzania, which have poverty
> rates of 74 per cent and 88 per cent, respectively.
>
> If we examine these statistics in real numbers, however, a different
> narrative emerges, one the Indian government likes less.
>
> With a population as big as India's, 42 per cent means there are some 475
> million Indians living on less than $1.25 per day. That's 10 times as many
> facing dire poverty as Malawi and Tanzania combined.
>
> It means India is home to more poor people than any other country in the
> world.
>
> To put it another way, one of every three people in the world living without
> basic necessities is an Indian national.
>
> The real number is probably even larger. The recently launched
> Multidimensional Poverty Index (MPI), a more comprehensive measure of
> deprivation than the current "poverty line" of $1.25 per day, uses 10
> markers of well-being, including education, health and standard of living.
> The MPI, developed by the Poverty & Human Development Initiative at Oxford
> University, puts the Indian poverty rate at 55 per cent. That's 645 million
> people — double the population of the United States and nearly 20 times the
> population of Canada.
>
> By this measure, India's eight poorest states have more people living in
> poverty than Africa's 26 poorest nations.
>
> A 10-year-old living in the slums of Calcutta, raising her 5-year-old
> brother on garbage and scraps, and dealing with tapeworms and the threat of
> cholera, suffers neither more nor less than a 10-year-old living in the same
> conditions in the slums of Lilongwe, the capital of Malawi. But because the
> Indian girl lives in an "emerging economy," slated to battle it out with
> China for the position of global economic superpower, and her counterpart in
> Lilongwe lives in a country with few resources and a bleak future, the
> Indian child's predicament is perceived with relatively less urgency.
>
> One is "poor" while the other represents a "declining poverty rate."
>
> What's more, in India there are huge discrepancies in poverty from one state
> to the next. Madhya Pradesh, for example, is comparable in population and
> incidence of poverty to the war-torn Democratic Republic of Congo. But the
> misery of the DRC is much better known than the misery of Madhya Pradesh,
> because sub-national regions do not appear on "poorest country" lists. If
> Madhya Pradesh were to seek independence from India, its dire situation
> would become more visible immediately.
>
> As India demonstrates, having the largest number of poor people is not the
> same as being the poorest country. That's unfortunate, because being the
> poorest country has advantages. In the same way a tsunami or earthquake
> garners an intense outpouring of aid and support, being labelled "worst off"
> or "most poor" tends to draw a bigger share of international attention — and
> dollars.
>
> When Bangladesh became independent from Pakistan in 1971, it was the poorest
> country in the world, so poor most economists were skeptical it would ever
> succeed on its own. But being labelled "dead last" worked in its favour:
> billions of dollars in aid money flooded in, and NGO and charity groups
> arrived in droves. The dominant narrative of Bangladesh at the time was of a
> war-ravaged, cyclone-battered and fledgling country on the brink of famine.
> That seemed to help rally the troops.
>
> No doubt India's government wants the world to perceive the nation in terms
> of its potential and not its shortcomings. But because it's home to 1.1
> billion people, India is more able than most to conceal the bad news behind
> the good, making its impressive growth rates the lead story rather than the
> fact that it is home to more of the world's poor than any other country.
>
> Still, at least part of the blame should be placed on the way poverty is
> presented on the international stage. If the unit of deprivation is a human
> being, then the prevalence of poverty should be presented in numbers of
> lives. If we know precisely how many billionaires India has — 49 in 2010,
> double last year's number — than we should also know precisely how many
> people live without basic necessities.
>
> *Mary Albino has lived and worked in India and writes on economic issues.*
>
> http://www.thestar.com/article/869143--india-economic-power-house-or-poor-house
>


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[ALOCHONA] India in Afghanistan, Nation building or proxy war?

If we look at the past, Afghanistan has always benefited from India and has been hurt by Pakistan since inception of Pakistan. Following are the facts:
.
PAKISTAN'S ANIMOSITY AGAINST AFGHANISTAN:
.
1. Pakistan has been Birth Enemy of Afghanistan because she stole a lot of land that used to be a part of Afghanistan until 1834.
2. The Land of Afghanistan had 99% PushToon Population, that still speaks a language of Afghanistan.
3. Historically, land west of Indus River and north of Rawalpindi east of Indus River never belonged to Punjab that was given to Mr. Jinnah by the British and no Punjabis lived there.
4. Pakistan never had good relations with Afghanistan and had always tried to cause trouble.
5. Pakistan Army had created Taliban in 1994, to invade Afghanistan since its Puppet Hekmatyar could not remain in power there after Afghan Communist Regime was overthrown and Soviets had left.
6. One Pak Army Division disguised as Taliban, had accompanied Taliban in 1996 invasion of Afghanistan.
7. Pakistan Army has hated Indian Help to Afghans so much that it has gotten huge Indian Embassy in Kabul attacked and destroyed through its Pakistani Mercenaries called Taliban.
8. Pakistan Army considers Afghanistan like one of its Territories because more Afghans called PushToons or Pathans live in Pakistan than in Afghanistan. Pak Army's objections on everything goes on in Afghanistan proves this fact.
.
INDIA'S HELP TO AFGHANISTAN:
.
1. India always had good relations with Afghanistan and had provided as much help as she could.
2. India has spent $ 2 billion to build a highway in Afghanistan recently from Kabul to Chaah Baagh, Iran, when Pakistan has never done anything like this and had destroyed all the Roads from 1980 to 2001.
3. India has built Hospitals and provided other Technical Help to Afghanistan after US Invasion.
4. Pakistan does not want to provide Afghans excess to Indian Market so, hardly any Indian import-export takes place with Afghanistan since Afghanistan is a Land Locked country and has no Seaport.
.
Its right time for BD to have a revenge of 1971 Pak Army's atrocities now by killing Pakistani Mercenaries, the Taliban in Afghanistan under US and NATO protection, when Pakistan can not rush land her Army in BD anymore.


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[ALOCHONA] Will UN Peacekeeping Fall Victim to Budget Cuts?



Will UN Peacekeeping Fall Victim to Budget Cuts?  

By Richard Gowan | September 23, 2010
 

Is United Nations peacekeeping fading away? Or are we just settling into a new normal? Richard Gowan argues that the greatest threats to UN operations in the years ahead may not come from individual atrocities. Rather, a mix of financial pressures and gaps in international military resources may cut off the money, troops and hardware the UN needs.


he last decade was boom time for "blue helmets," with the number of UN peacekeepers having grown from 12,000 in 1999 to 120,000 today.

Peacekeeping looked like a bargain for Europeans for a few years when the euro was strong and the dollar was very weak.

The UN has done a decent job of getting countries like Liberia and Sierra Leone on their feet. It was making progress in Haiti before this year's earthquake. Although the Haiti mission lost its chief and 100 personnel in the disaster, the peacekeepers managed to maintain order. U.S. Marines deployed to Port-au-Prince came away praising the UN.

Yet, there's been a stream of bad news for the organization since then. Its highest-profile mission in Darfur reels between crises. In August, senior officials confessed that up to 500 civilians had been raped just miles from a UN camp in the Congo.

The greatest threats to UN operations in the years ahead may not come from individual atrocities, however. A mix of financial pressures and gaps in international military resources may cut off the money, troops and hardware like helicopters the UN needs.

For a decade, there has been an implicit deal between the states that pay for UN operations (the United States, Japan and Europeans) and troop contributors (including India, Pakistan and Nigeria) to keep blue helmet missions going. This could soon fail. Why?

Despite the financial crisis, the UN's peacekeeping budget — running at between $7 billion and $8 billion a year — has not yet faced drastic cuts. The Obama Administration has made a point of paying its dues (now 27% of the total) on time, compensating for Bush-era arrears.

However, other big financial contributors — especially members of the European Union, who cover 40% of the costs combined — are looking for cuts as part of broader spending reductions.

In June, GĂ©rard Araud, France's ambassador to the UN, told the Security Council that "in the context of budgetary austerity, the cost of peacekeeping was increasingly difficult to manage."

For a decade, there has been an implicit deal between the states that pay for UN operations and troop contributors to keep blue helmet missions going.

These European sensitivities are exacerbated by the weakness of the euro. Governments' contributions to the UN budget are denominated in dollars — which made peacekeeping look like a bargain for a few years when the euro was strong and the dollar was very weak.

The euro crisis has changed that. In 2008-9, Germany's contribution to the UN peacekeeping budget was $607 million, or €390 million at pre-crisis exchange rates. Its contribution for 2010-11 will be roughly $620 million: €480 million at current rates.

EU governments are not going to invite odium by demanding major cuts to forces in hot-spots like Darfur. But diplomats warn that they will trim UN costs wherever they can.

This is likely to lead to tensions with those countries — primarily in Asia, Africa and Latin America — that contribute significant numbers of troops and assets to UN operations.

There have always been difficulties between "those who pay" and "those who play" in UN missions. The "players" are reimbursed through the UN for their forces, and poorer countries like Bangladesh and Fiji make no secret that they profit from peacekeeping.

That is no longer true of rising powers like Brazil and India. If your economy was growing at 8%, as India's is, you wouldn't worry too much about income from the UN.

Nonetheless, even wealthier troop contributors bridle at signs of Western miserliness at the UN. After all, they point out, the Europeans send hardly any troops on UN missions — with the notable exception of that in Lebanon. They could at least pay up properly.

Some leading troop contributors to UN forces are already reassessing their commitments.

Poorer countries like Bangladesh and Fiji make no secret that they profit from peacekeeping.

This summer, India decided to stop sending military helicopters to the UN in the Congo and Sudan. This was a pragmatic call. The Indian Air Force is short on helicopters, and there is growing demand for air assets for operations against Maoist rebels at home.

But the Indian decision has already had an impact on UN operations. In the Congo, the blue helmets used to fly in by helicopter when they wanted to set up a base in a dangerous area. Now, say experts returning from Congo, they go in by road. This raises the risks of ambushes and casualties — UN officials are still struggling to fill the gap.

Delhi's decision is striking because it has a long tradition of backing UN peacekeeping, dating back to the Cold War. If India walks away from the UN, who will stick with it?

UN peacekeeping is not about to implode. But it is being corroded by a growing sense of indifference from all sides. Many of "those who pay" want to pay less. India is showing that "those who play" will not keep on playing for the sake of it.

A vicious cycle may emerge. Rising powers like India will assume that cash-strapped Western governments don't care about the UN, and so they will contribute fewer troops. Western donors will conclude that there's no point in paying for ill-armed, third-rate UN forces.

So UN peacekeeping may fade away. Pity the refugees and weak states it leaves behind.
 



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[ALOCHONA] US wants Bangladesh to deploy troops in Afghanistan

No BD Soldier has landed in Afghanistan so far and Pak Army is issuing warning to BD through its Protege, Taliban.
Its been about a month that 11,000 Chinese Troops has taken away northern 2/3rd of Pakistan Occupied Kashmir from Taliban without any battle. No Warnings to China because Taliban's Bosses in Pak Army had told them to keep quite. This proves Pak Army had told them to move out ahead of time.
Pakistan screaming 'Sovereignty' over US Drone Attacks in Tribal areas near Afghan Border but that problem did not appear, when China decided to move in to Pakistan Occupied Kashmir somehow. It tells, all Pakistan's crying about Sovereignty is a try to save her Taliban in Tribal Areas.
.
* BD should not worry about Taliban Warning and send as many troops, Trainers, Doctors and Teachers as she can to Afghanistan to join NATO there because it would create a lot of Goodwill between Afghanistan and BD besides
* BD can earn some Foreign Exchange and get some US Aid for Bangladeshis because USA is known to compensate a lot for any help she asks for.
* Remember, Afghans hate Pakistanis and their Agents the Taliban.
* Afghanistan would appreciate any help she can get against Pakis but we should remember, they drink Green Tea with Milk and Cinnamon Tea without Milk only. They do not entertain themselves with 'Paan' but they have been getting BD Ginger and Pineapples, whenever available.
* BD Soldiers must take Pineapples, Bananas, Coconuts and some Ginger with them, when they are deployed. They would be able to get a good price for those items in Kabul because Elite of Kabul has gotten pretty rich, thanks to billions of dollars in Charity of USA.
* In Sumer, Afghanistan can become a lot hotter than B.D. but there is hardly an Humidity there and this is why their Skin does not get that dark. In BD Humitity is always around 70% or above in air and this is why Bangladeshis keep getting darker and darker.
* In Winter, it even Snows in Afghanistan so, heavy Woolen Uniforms (Cowdroy would be a good choice) with Heavy Sweaters would be needed for Soldiers. Temperature can drop to below Freezing Point even in daytime there sometimes.
* Grapes, SurDaa (a yellow big Melon with sweet White Pulp), Gurma (another similar Green Melon), Apples, Pomergranet, Khoobani (Appricots), Plums, Prunes, etc and all kinds of Dry Fruits a lot cheaper there. The precious Stone 'Neelam' (Saffire) is also damn cheap besides Hand Wooven Carpets. BD Soldiers can bring that kind of stuff back, when they go on vacation after their deployment.
* It would be great opportunity for BD Soldiers to learn Afghan language because later they can make up to $ 250,000 a year as Translators working for US Army as Interpreters or Translators.

If any Bangladeshi know, PushTo or Darri Language please contact me. I can try to get you that job.

--- In alochona@yahoogroups.com, Isha Khan <bdmailer@...> wrote:
>
> *US wants Bangladesh to deploy troops in Afghanistan *
> The US special representative for Afghanistan and Pakistan, Richard C.
> Holbrooke, placed the request when he called on foreign minister
>
> The United States wants that Bangladesh should deploy combat troops in
> Afghanistan to establish security and stability, according to a foreign
> ministry news release.The US special representative for Afghanistan and
> Pakistan, Richard C. Holbrooke, placed the request when he called on foreign
> minister Dipu Moni at her hotel suite in New York on Thursday.
>
> He sought for `any kind of help like deploying combat troops', providing
> economic and development assistance, and training for the law enforcement
> agencies to establish security and stability in Afghanistan, the news
> release said.
>
> Dipu Moni assured him that Bangladesh would do whatever it can to help
> restore peace in South Asia, specially in Afghanistan.Bangladesh has already
> offered to send teachers and doctors to Afghanistan, she said. The foreign
> minister also held a separate bilateral meeting with British undersecretary
> for foreign and commonwealth affairs Alistair Burt on Thursday.
> http://www.newagebd.com/2010/sep/26/front.html
>


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[ALOCHONA] Humayun Ahmed's Shomudra Bilash



Humayun Ahmed's Shomudra Bilash
 
 


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[ALOCHONA] CIA hired Karzai brother before 9/11



CIA hired Karzai brother before 9/11
 
Ahmed Wali Karzai, the half-brother of Afghanistan's president and boss of the strategically important Kandahar province, has been on the CIA payroll for over a decade, Bob Woodward writes in his new book, "Obama's Wars."
 
 
Ahmed Wali Karzai - Christian Science Monitor
 
 
By the fall of 2008, Woodward says, "Ahmed Wali Karzai had been on the CIA payroll for years, beginning before 9/11. He had belonged to the CIA's small network of paid agents and informants inside Afghanistan. In addition, the CIA paid him money through his half-brother, the president."
 
Hamid Karzai was plucked from obscurity and installed as president after U.S.-backed Afghan forces chased the Taliban from power following the Sept. 11, 2001, attacks.
 
There have been many accounts of his brother's relationship with the CIA over the years, leaving the impression that he is a CIA "agent," i.e., a controlled asset of the spy agency.
 
But Woodward's account of the CIA's relationship with Karzai, who has also been accused repeatedly -- but not charged with -- protecting the illicit opium trade, is more nuanced.
 
"He was not in any sense a controlled agent who always responded to U.S. and CIA requests and pressure," Woodward writes. "He was his own man, playing all sides against the others -- the United States, the drug dealers, the Taliban and even his brother if necessary."
 
Still, the spymasters in Langley went with him.
 
"It was necessary to employ some thugs if the United States was going to have a role in a land of thugs," they concluded. "Cutting him off might break Wali Karzai's control of the city, and Kandahar might be lost entirely.
 
"Lose Kandahar," they thought, "and we possibly lose the war."
 
Last week NATO and Afghan troops launched a major military offensive around Kandahar city, with uncertain results.
 
Woodward's portrait of Ahmed Wali Karzai dovetails in part with an account provided to SpyTalk last year by Rep. Mike Rogers of Michigan, a former FBI agent and ranking Republican on a House panel overseeing terrorism and human intelligence issues.
 
Rogers, who has regularly visited Afghanistan, where his brother, an Army general, also served, depicted Ahmed Wali Karzai as someone who "cooperates" with U.S. intelligence, but is not a controlled agent.
 
"There's a difference between being an intelligence asset and somebody who cooperates," said Rogers. "Asset is an overstatement ... He is a public official who cooperates ... He cooperates when he's talked to -- that's different than an asset."
 
An American lawyer for Ahmed Wali Karzai rejected the depiction of his client as a paid CIA asset of any kind.
 
"It is absolutely false that Ahmad Wali Karzai is, or has been, on the CIA payroll," said Gerald Posner by e-mail.
 
"Since 9/11, it should be noted that Ahmad Wali has worked with virtually all aspects of U.S. and coalition forces, from regular Army, to special forces, to intelligence personnel, and diplomats as well. ..."
 
Posner added, "Ahmad Wali would be very surprised if the world's most sophisticated intelligence gathering agency, the CIA, had not made contacts with him over time, but they have never identified themselves as such."
 
Poser also rejected depictions of Karzai as "the landlord in Kandahar for CIA or military facilities rented by the United States," as Woodward wrote.
 
"He is not the owner of those properties, and does not collect rent from those groups. He has no role in the Kandahar Strike Force. He receives no American taxpayer monies of any type," Posner said.
 
CIA spokesman George Little reiterated today that, "We don't, as a rule, comment on these kinds of allegations, which have circulated for a long time."
 
But a U.S. official, speaking on condition of anonymity, praised Karzai's contribution to the war effort, saying he "has made decisive contributions to counter-terror efforts in Afghanistan, and he's helped save Afghan and American lives."
 
"No one's saying he's perfect, but nobody's found anything yet that would land him in court," the official added. "And Americans have looked. Afghanistan is a tough place. It's clear that he's focused on improving security in his country. He deserves praise for that."
 


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[ALOCHONA] Indian Energy Security



Indian Energy Security
 
By Ashish Puntambekar
 
Setting the Right Priorities

Talking about energy security has become a fashion. Every now and then there is a conference on the subject or someone writes a scholarly article. The flavour of the season could be "equity oil" (buying stakes in oilfields overseas) or it could be "renewables " such as Solar / Wind energy. Sometimes the discussion is about high oil prices (WTI crude just touched $ 100 / Bbl) being a threat to our energy security. As far as conferences go, there usually is a big function, a nice lunch and then everyone goes home. The scholarly studies on their part present the reader with voluminous sets of data and they make detailed comparisons of various options. As the reader approaches the last page, however, he/she is usually left wondering whether there was anything worth implementing in what was just read.

map.jpg

Achieving energy security is a serious issue. It is projected that by 2020 India's dependence on imports will rise to 92 percent from the 70 percent levels we are at today. The Indian economy is therefore getting increasingly vulnerable to supply disruptions and this has serious implications on our sovereignty from a military and economic standpoint.

The only notable, large scale, policy initiative of the government that has led to tangible energy security is the NELP (New Exploration & Licensing Policy). This initiative, which was flagged off in 1997-98, has already yielded good results and has led to the discovery and development of large scale gas reserves on the east coast of India. The Reliance Industries promoted KG D6 project for instance will lead to nearly doubling of indigenous natural gas supplies in the country from 88 MMSCMD currently to almost 166 MMSCMD by mid 2008. More oil and natural gas discoveries by others are expected under the NELP and this will lead to enhanced energy security and a reduction in the energy intensity of the GDP. It is to be noted that NELP has succeeded because it was based on the principles of free markets which attracted investment.

picture.jpg

The recent successes in discovering indigenous natural gas reserves however do not provide any security in the supply of critical transportation fuels and feedstock inputs to Indian refineries. There is therefore a very urgent need for a government promoted PPP (Public Private Partnership) project which encourages the private sector to work with government companies to deliver a large project that can guarantee energy security. This will bring new ideas to bear on the issue and lead to the construction of the necessary secure infrastructure in the area of transportation fuels.

For the purposes of this paper, energy security has the conventional meaning which countries like the US, Japan, some within Europe and more recently China, have adopted, which aims to create a large buffer stock of not only crude oil (to feed refineries) but also petroleum products.

There has been a small move in the direction of strategic reserves, by the Government of India, which, acting through the Oil Industry Development Board (OIDB) has set up " The Indian Strategic Petroleum Reserves Limited (ISPRL)". ISPRL's initial mandate is to set up a strategic crude oil reserve of 5 million metric tonnes, equivalent to 19 days of imports (basis demand in 2006-07). The company has since proposed three different locations for the setting up of the reserves.

Sl. No. Location Capacity (million Barrels)
1. Mangalore  Karnataka) 10.95
2. Visakhapatnam  (Andhra Pradesh) 7.30
3. Padur (Karnataka)                                       18.25
  Total 36.50

As this paper goes to press, The Ministry of Petroleum & Natural Gas, is all set to award the first contract to construct two underground oil storage caverns at Vizag. The site selected for the reserve has already received environmental clearance and land acquisition is almost complete. The site will store high and low sulphur crudes in a 70:30 ratio. This reserve however is smaller than those planned at Mangalore and Padur (which is 40 Km from Mangalore). 

The government of India has so far approved a total investment of US $ 2.85 billion for the creation of the 36.5 million barrel reserve which is expected to be built over the next nine years. Annual operating costs for the programme are estimated to be US $ 20 million. The government has been planning the emergency reserve since the mid-1990s, but disputes over funding and ownership have hampered progress.  So, in effect as the strategic oil storage available currently is zero, the only real buffer capacity that India has is the oil inventory that is maintained with the individual Indian refineries to support their normal operations.

Existing commercial storage available with oil companies in India                    

  Million Barrels Import Basis (days) Demand Basis (days)
 Crude 54.75 34 23
 Products 55.30 54 37
 Total 110.05 88 60
Basic Data : 2004 -05 in million Barrels                                                 
Source : ISPRL/ OIDB
1 Tonne Crude : 7.3 Barrels            1 Tonne of Products : 7.9 Barrels

          

As can be seen from the table above, India has just 23 days of crude oil inventories and 37 days of product stocks at any point in time. This is an extremely alarming situation to be in.

This paper will therefore examine the options that ensure the availability of crude oil and finished petroleum products to meet the needs of the country and its surface transport requirements in the event of the occurrence of any of the following:

  • An international event like the closure of the Suez Canal (July 1956) or a 9/11 kind of event that disrupts markets
  • An export facility outage in a major supplier country or a closure of the Straits of Hormuz for any reason, or
  • A large import terminal / port outage within India

To cater to the needs of India as dictated by the above possibilities, there is a need for conceptualising and designing a project which ensures that a disruption on account of any of the above factors does not harm the growth prospects for the economy, which is currently registering an 8 percent plus GDP growth rate. To be feasible, the solution must be based on current global energy industry realities, exporter country strategic needs and the unique needs of India given its current financial position and growth plans over the next 20-30 years.

The Answers? Do we have any?

Yes we do. A possible answer, as spelt out in this paper matches the opportunities in the global energy industry and the world's economic surpluses among oil exporting countries with a need which is specific to India. In doing so it devises an innovative financial structure and a funding mechanism that while addressing market realities and the current geopolitical context, generates a solution that meets the needs of all market participants in an unique way. Central to this solution is financing the storage facilities, pipelines and the massive crude oil inventories (valued at US $ 36 billion @ a crude oil price of $ 60 / Bbl) in a manner that distributes ownership and risk in a fair and transparent manner.

Current Global Energy Market Realities

Commodity prices suddenly started shooting up towards the middle of 2003, driven mainly by demand from China as that country moved to dramatically expand its economy. The patterns were seen first in metals like tin and zinc and in oil. It's a trend that has continued as demand from other countries including India and several in the middle east, started picking up. This demand acceleration, has been accompanied by enhanced geopolitical risk in oil producing countries in the Persian Gulf and in countries such as Nigeria where production has dropped sharply due to ethnic conflict. High oil prices have also been driven by a weakening in the US dollar (which is the invoicing currency for a majority of production) and the actions of speculators in the financial markets who have been actively involved in playing the entire forward curve.

The massive increase in the price of oil (basis WTI) from $ 31/ Bbl as an average for 2003 to $ 100 / Bbl at the beginning of 2008 has resulted in huge surpluses in producing nations. The GCC countries alone have earned a windfall US $ 600 billion in 2006. Going by the fact that the Saudi government is able to balance its budget at an oil price of approximately US $ 35 / Bbl, it is therefore quite believable that the GCC states have finished the year with a net investible surplus of US $ 170 billion in 2006 alone.

Since oil prices have been rising since 2002, the investible surplus has been accumulating at an increasing rate and is now looking for suitable destinations both within the middle east and in other geographies.

Exporters' Paradox

Ever since Churchill, as First Lord of the Admiralty, took the crucial decision to switch all the ships of the Royal Navy to oil fired furnaces from coal which they were using, the middle east has been an area of conflict. Today, there are clear signs that the conflict will escalate as Iran seeks to develop its nuclear capability. This has given rise to legitimate fears that the Persian Gulf might be closed to shipping, every now and then, due to a possible blockage of the Straits of Hormuz due to a war in the region. This is a big worry for all countries and not just those in the Persian Gulf.

While the current high oil prices are good for the exporting countries concerned in the short term, they do however create long term problems of market share as other energy alternatives become viable at an oil price over US $ 60 / Bbl. It is therefore not in the long term interests of oil producing countries to have the market trade at current levels. It is thus to be expected that these countries will take executive measures that remove the risk premium (related to geopolitical incidents) and the resulting volatility out of the oil market so as to ensure price stability and long term market share for their production. There might even be a need for OPEC to collectively evolve a strategy which while giving members an adequate surplus, caps oil price at a level of $ 60 / Bbl.

To secure its energy infrastructure, Saudi Arabia has been spending close to US $ 2 billion a year to guard its oil terminals in the Persian Gulf as also its giant central oil processing plant at Abqaiq. The Kindgom has also spent huge amounts in building backup pipelines to an export terminal located at the Red Sea port of Yanbu. All this money however still has not provided the Saudi's with a viable alternative to their main trade route via the Straits of Hormuz. Other Persian Gulf countries do not have any such alternative. So, going forward, high oil prices and a possible prolonged blockage of their main trade route are the main risks that Persian Gulf states will be very keen to mitigate.

The Indian Need

India is growing fast. Last year, a survey of some 600 companies by the NCAER found that an astonishing 96 percent of them were operating at close to their optimal levels of capacity utilisation. Demand is surging and therefore over the next 5 – 6 years, we can expect an investment in excess of US $ 450 billion in the creation of world class infrastructure across the country. These investments are not an option, they are required to prevent the economy from hitting major roadblocks and heating up. While most of this money will be generated within the country by the expansion of the banking sector and the capital markets, some of it will come in from overseas investors interested in taking part in the action on the ground.

Growth of the kind described above cannot happen through small projects. A market of 1.2 billion people is opening up at a rapid pace and India is setting itself up as a regional superpower. So, while a majority of the investments will be in infrastructure sectors like roads, ports, urban development schemes and social infrastructure projects such as hospitals and schools, the energy business will also see huge sums being invested in power plants and oil & gas infrastructure such as refineries, oil storage facilities, LNG terminals and pipelines. For the energy industry planner, a crucial question to be answered will be "How do we raise the living standards of 400 million people at the subsistence level to middle class status without ruining the environment?"

100 percent availability of energy resources is necessary to deliver robust growth. This kind of availability needs a large project that guarantees energy security. As described earlier, there has been only one small attempt at building strategic storage facilities in Vizag and Mangalore but the initiative has not really delivered a meaningful solution due to the inadequacy of resources that are required to fund the extensive storage infrastructure as well as the inventory which as current oil prices would be worth close to $ 90 million for every million barrels of a crude cocktail.

The need for large strategic storage of crude oil is not the dispute. What is missing is a dedicated effort aimed at finding innovative financial solutions that could make the reserve a reality.

Project Concept

Given the need of GCC countries and others in the Persian Gulf to ensure access to market even in times of conflict (which now appears likely) and to maintain long term market share in an era where energy alternatives could predominate (Crude Price > $ 60 Bbl), it might make sense to marry the needs of GCC states with India's need to have a strategic reserve to create a project that meets the needs of all the stakeholders. In addition, as the Indian west coast lies close to the shipping lanes of most GCC markets, there would be a minimal need to alter course for moving cargoes in and out of storage.

map-2.jpg

GCC countries with their huge investible surpluses might be open to the idea of a large reserve outside the region located in a neutral and stable country such as India from which they could continue to supply the oil market globally even at times when the Persian Gulf is blocked to traffic. The idea, itself "of storing Persian Gulf crude in India "is not new as it has been mooted earlier by others. Its only now, however that it could be the right time for the oil industry to think in terms of a large Middle East strategic production reserve located on the Indian west coast, 700 Km south of Mumbai. The rationale for this project is compelling and the argument for its construction is simple. Such a project will be of immense benefit to Persian Gulf producers and their customers all over the world.

Financing

The classical strategy on reserves in consuming countries up to the year 2002 had been to build them in the $ 16 / Bbl – $ 25 / Bbl range. We are clearly out of that territory now and the US has been building reserves even at $ 65 + / Bbl.

But this particular project is a producers' reserve and not a consumers' reserve. This subsumes that the current oil price would make no difference to oil producers as they would simply be moving oil out of one storage tank (the oil field) to another storage tank outside the Persian Gulf. The only additional thing they will be doing is taking a forward view on the freight rate between the oil field and the south India based storage which anyway lies close to their direct trade route to destinations in the US or the Far East. Saudi Arabia and Kuwait, with spare capacities, could then keep pumping into the reserve and always operate at full capacity (but especially during the second quarter of each year when global oil demand drops by close to 1.5 million Bbls / day) till their self determined levels of reserves are attained.

If demand comes off for whatever reason … be it a US housing sector led slowdown or an Avian Flu pandemic, oil producers could use the period of demand hiatus to fill up the producers' reserve. This is clearly a very long term plan but as we look at an ever more volatile market, it appears to be an idea whose time has come.

The financing of a large project such as the one being proposed is always challenging. Any financial structure, to work, must be equitable in its distribution of risk. To achieve this, it is being proposed to split the entire project into two Special Purpose Vehicles or SPVs, so as to clearly demarcate ownership and the boundaries at which price risk and title to the crude oil passes between project participants. The project documents must also clearly spell out the conditions under which oil in the reserve can be used by Indian companies and the rights and responsibilities of all parties to the project agreements. This also needs to be tied into a clear and transparent enforcing mechanism which is seen as fair to everyone involved.

The two SPVs that are being proposed are:

  • The Petroleum reserve SPV …. 600 million Bbls (built in 3 phases) + Marine evacuation system
  • The Transportation system SPV … 2500 Km of crude oil pipelines + 2400 Km of multiproduct, bi-directionally flowing pipelines

Petroleum Reserve SPV

SPV1 will consist of the petroleum reserve and will be wholly owned by the GCC states and any other supplier country which wants to participate. The Indian government will take a token equity stake in this project company to provide comfort to investors.

There are a few defining features for this reserve:

  • It will be owned by the national oil companies of the Gulf Cooperation Council plus any other producer country that they invite to join them … The reserve however will be operated by a local arm (Indian entity) set up specifically for the purpose. The entire reserve, for Tax purposes can be treated as an SEZ or a bonded warehouse where no Indian taxes will be payable.
  • The main objective of the reserve for the GCC states would be to stabilise their revenues from oil sales, and allow them to sell oil to their customers even when the Persian Gulf is closed to traffic for any reason. The first phase of the project will be accelerated and will be commissioned by 2014 with 300 million Barrels in its tanks.
  • The reserve will also provide security of supply to refiners around the world. It will put in place an effective price cap on oil price at a level acceptable to GCC / OPEC and its constituents (say $ 60 / Bbl). Such a cap will help maintain OPEC market share which is bound to get eroded at prices in excess of $ 60 / Bbl crude (it is well known that at this level almost all alternate energy sources become viable).
  • The arrangement while meeting GCC country needs must not compromise Indian energy security. There should be a clear understanding that oil from the reserve will be supplied to Indian refineries / oil companies in the event of a national emergency at market prices. On the occurrence of specified events, the arrangement should provide a mechanism which results in shared ownership rights to the government of India for the specific period of the disruption, or till the Force Majure continues.
  • The reserve will serve as a stabilizer of last resort in the event of a major market upset. In this regard, the reserve could function like the International Bank of Settlements, in that one crude producer may borrow oil from another producer and supply crude from that producer's tanks, provided API gravity and sulphur content / TAN are compatible with their client refiners needs.
  • A unique feature of the reserve would be that it could help increase availability of Brazilian / Mexican and African crudes to Asia as producers in these countries could store crude oil in India in times of slack demand, and ship it out to consumers in Asia at short notice. The reserve will also help to even out the fluctuations in the Light – Heavy differentials.
  • The reserve could be filled by member states utilising their spare capacity, and also by others, at times when global demand dips as in the 2nd quarter of every year. Member countries will also have the option of pumping at full capacity all year round as long as there is capacity in the tanks to accommodate their crude oil. The reserve can also be augmented when there is a fall in demand triggered by a possible coming off of the US housing market and other such causes. This could result in the reserve getting filled up very quickly.
  • Project site will be spread over 30,000 – 45,000 acres. Preferred location is degraded forest land with natural gullies / small valleys. Once constructed, a lush forest cover will be built above the tanks using modern forest management methods.

The Pipelines SPV

The pipelines Special Purpose Vehicle (SPV 2) will be a consortium of Indian energy companies and strategic investors some of whom will be investing primarily for tax purposes. This SPV will therefore be owned primarily by Indian companies while SPV 1, which will be the storage SPV, will be owned by oil exporting countries.

There will be two broad categories of pipelines within SPV2.

The first network will consist of crude oil pipelines which will connect the strategic storage to all Indian refineries.

The second network of pipelines will be product pipelines, but with a difference. Unlike conventional product pipelines, these will be multiproduct, bi-directionally flowing lines. Under normal or steady state conditions, they will carry petroleum products from Indian refineries to target markets all over India. All these product pipelines will operate under the common carrier principle and investors will receive dividends which will be exempt from incidence of tax.

The special feature of these pipelines will be that they will be enabled for bi-directional flow and will be configured to enable imports from the Indian east coast in the event of either a process upset in any Indian refinery or if any west coast port / import terminal for petroleum products gets damaged for any reason. By throwing a single switch it will be possible for a remote operator sitting hundreds of miles away to enable the pipeline system to accept petroleum products at a designated terminal (to be decided) on the east coast and move products in the reverse direction to markets all over India. This system is necessary, because in times of a national energy crisis, the immediate need is for transport fuels like petrol and diesel and not crude oil.

The overall financial structure and the basis for the project documents is given below.

International Institutional / Legal Framework

For the scheme to work and to guarantee the transactions leading to the creation of the reserve, its operation as also the payments into and from the Escrow accounts, it might be necessary to provide investor comfort by way of involving organizations such as the International court of Justice in the Hague or some other organization having sufficient credibility to guarantee the agreements. Alternately it could be a committee of nations with shared interests outside of the OECD (the IEA already has huge reserves and could constitute a monopoly) who can act as guarantors acceptable to all concerned parties.

Tax Incentives needed to encourage investment in this Project

Since the storage facilities and pipelines are extremely capital intensive, and require massive upfront investment, which by itself is not economically sustainable, the central government should provide tax and policy incentives to facilitate investment in this essential national energy security infrastructure, besides providing some minimum viability gap funding under the PPP route. The government should provide strong policy support for this project as it lays the foundation for a robust economy, and also constitutes an essential step towards making India a de-facto regional superpower.

The entire project (Storage SPV + Trans-portation SPV) needs to be notified as an infrastructure project for the purposes of tax under:

  • Section 80 IA … 10 year Tax holiday on revenue. In addition, the SPV 1 Project area needs to be notified as an SEZ or a bonded warehouse of some sort where no Indian taxes will be payable.
  • Section 10 (23 G) read with Section 115-O … Allowing exemption of dividend distribution tax to domestic companies.
  • Exclusion from the incidence of MAT (minimum tax on book profits @ 7.5 percent) by removal of section 115 JB for companies eligible for 100 percent tax holiday under sections 80 – 1B.
  • Exemption of sales tax / work contract tax / services tax for vendor provided goods and services.
  • Both the project companies should also be allowed accelerated depreciation and 100 percent depreciation of asset values in the first year itself for tax purposes as a one time write off.

In addition to the above, both project SPVs need to be notified as infrastructure projects to enable them to seek exemption from customs duties by issuing appropriate customs notifications for project related imports. Purchases from the domestic tariff area (DTA) should also be freed from the incidence of excise duties. Entry tax which is applicable on project material in some states needs to be exempted as well.

fig-2.jpg 

Indian entities will be greatly encouraged to participate in this project if there is a special provision that enables them to take an equity stake in this particular project by implementing a tax optimisation structure which allows equity in the pipeline / storage SPV to qualify for deduction from corporate tax to the tune of 100 percent. For example, if an Indian company were to invest Rs. 100 crores in either project company, it will also get a Rs. 100 crore deduction in its corporate income tax besides equity rights in the project company.

Conceptual Engineering / Design Issues

It is necessary to understand the engineering issues involved in the construction of the reserve, as these will have an impact on the cost which needs to be kept as low as possible.

Comparative Construction Costs

The Strategic Petroleum Reserve (SPR) of the United States currently holds approximately 727 million barrels of crude oil in massive underground salt caverns. The 62 cylindrical tanks have been carved out of huge salt mounds that are located approximately 2000 ft below the surface and have an average height of 2000 feet and width of 200 feet. Warm fresh water was used to leach out the salt which was then discharged into the Gulf of Mexico. Using a simple water hose and nozzle as a construction tool greatly reduced construction costs and this resulted in the lowest possible construction cost of US $ 7 / Bbl.

Unfortunately, we in India, have not as yet found large salt deposits (except maybe in Rajasthan where a huge salt formation is believed to exist. This however needs to be investigated further) in which we can store crude oil or petroleum products. We however do have natural gullies / small valleys and undulating landscapes which could be used as natural storages which require minimum soil and rock excavation. When done on a large scale the costs could be very low.

The engineering solution chosen usually depends on the storage method selected (land based /sea based). For the purpose of this project however, only land based storage is being considered as the life cycle costs and maintenance expenditure required is considerably lower.

For land based projects again, the optimum design will depend on the geology, permeability and settlement of in -situ soils, ground water levels and size and type of tank. The design will also depend on the type of product to be stored.

The engineering schematics below pictorially convey what is involved. Schematic A appears best suited to Indian conditions and might be the lowest cost option available especially if done on the large scale that is envisioned. If built on degraded land, after construction, we can cover the site with soil and build 30,000 – 45,000 acres of rich forest cover on it. The concrete storage tanks also provide large scope for innovation as instead of steel we could use carbon fibre, which has far greater tensile strength than steel as reinforcing material in the concrete. It also has zero corrosion problems. The site could also use recycled plastic as fill material on a truly massive scale. This could therefore be the largest environmentally friendly project globally.

Earthquake risk is minimal since the tanks have a special long lasting polymer fabric lining both the inside and the outside which provides effective containment.

Engineering Solutions for Strategic Storage

 

Project Cost Estimates

Approximate project cost calculations below exclude the cost of land.

Project Protection

The project is proposed to be located near Mangalore on the west coast of India. Advanced naval ordinance, including naval aviation units working out of the large Indian naval base at Karwar, 270 Km to the north will be responsible for the protection of the strategic reserves marine assets. Missile units of the Indian Army will secure the underground facility which will be located in the hinterland.

Environmental Issues

Since the storage itself is going to consist almost completely of underground storage tanks, it will have no adverse impact on the environment as the containment is secure against even earthquakes. The marine part of the project (SPMs and underwater pipelines) are standard equipment and have a proven safety record.

The project overall will be designed to be net – net positive to the environment as some 30,000 – 45,000 acres of new forests will be grown at different locations based on where large tracts of degraded forest / land is available.

table-3.jpg

Forward Path

There are no major show stoppers that could come in the way of making the reserve as conceptualized above a reality. Getting the initiative off the ground quickly is important and for this it is essential for the Ministry of Petroleum and Natural Gas to work with the Finance Ministry and the Prime Minister's office to get a high level team of energy industry experts to visit countries in the Persian Gulf to get their oil ministers on board. The role of the Ministry of Finance in this project is critical and it is hoped that since the financial outflow and budgetary impact of the project  (especially SPV1) is extremely low, they will find the project worth supporting as the scheme has solved the fundamental problem of financing the reserve.

http://www.indiandefencereview.com/2008/05/democracy-and-security.html



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[ALOCHONA] Internet Censorship



New Internet Censorship Bill Introduced

October 2nd, 2010

by Stephen Lendman

Like most others in Congress, Senator Patrick Leahy is no progressive. He voted to fund imperial wars, regressive Obamacare, Wall Street-friendly financial reform, and other pro-business measures, including agribusiness-empowering bills, harming small farmers and consumers.

Now he's at it again. On September 20, he introduced S. 3804: Combating Online Infringement and Counterfeits Act (COICA), "A bill to combat online infringement, and for other purposes." Referred to committee, it awaits further action. In fact, it needs a dagger thrust in its heart to kill it.

According to the Electronic Frontier Foundation's Richard Esguerra:

If enacted, this bill lets the Attorney General and Justice Department "break the Internet one domain at a time - by requiring domain registrars/registries, ISPs, DNS providers, and others to block Internet users from reaching certain websites."

Two online blacklists will be created:

-- one for web sites the Attorney General may censor or block, and

-- most disturbing, domain names the Justice Department decides (without judicial review) are "dedicated to infringing activities."

The bill doesn't mandate, but "strongly suggests" that second category domains be blocked "as well as providing legal immunity for Internet intermediaries and DNS operators" that do it willingly at the behest of authorities.

Without question, "tremendous pressure" will be applied to comply, the alternative perhaps being recrimination for refusing.

Though fairly short, COICA may dangerously impair free expression, "current Internet architecture, copyright doctrine, foreign policy," and more. In 2010, "efforts to re-write copyright law (targeting) 'piracy' online" have been shown "to have unintended consequences."

Like other 2009 and 2010 bills, COICA "is a censorship bill that runs roughshod over freedom of speech on the Internet," an outrageous First Amendment violation by "tr(ying) to define a site 'dedicated to infringing activities,' (by) block(ing) a whole domain," not that one part alone if legally proved, rather than by government edict.

The 1998 Digital Millennium Copyright Act (DMCA) "already gives copyright owners legal tools to remove infringing material piece-by-piece." It also lets them get injunctions requiring ISPs block infringing offshore sites. Misusing these provisions "have had a tremendously damaging impact on fair use and free expression."

If enacted, Leahy's COICA will take a giant leap, "streamlin(ing) and vastly expand(ing)" existing damage. It'll let the Attorney General shut down domains, including their "blog posts, images, backups, and files." As a result, "legitimate, protected speech will be taken down in the name of copyright enforcement," and basic Internet infrastructure will be undermined.

For example: when users enter web site URLs into their browsers, the domain name system server identifies their Internet location. COICA will let the Attorney General "prevent the players in (those) domain system(s), (possibly including your ISP) from telling you the truth about a website's location."

It's also unclear what would be accessed - perhaps a message saying "a site or page could not be found, without explaining why? Would users receive some kind of notice," possibly saying "the site they were seeking was made inaccessible at the behest of the government?"

COICA will force Internet "middlemen" to act like the "Internet doesn't exist," even though the site or page wanted "may otherwise be completely available and accessible."

Like many other pre and post-9/11 bills, COICA is police state legislation. It says America "approves of unilateral Internet censorship," no matter that it's constitutionally illegal.

America is on a fast track toward despotism, civil liberties threatened by bills like COICA, mandating "Unilateral censorship of websites (Washington) doesn't like...."

Moreover, its "poorly drafted definitions....threaten fair use online, endanger innovative backup services, and raises questions about how new (Internet intermediary) obligations....fit with existing US secondary liability rules and the DMCA copyright safe harbor regime."

Also, it's easy to get blacklisted because COICA streamlines the procedure for adding domains - "including a McCarthy-like (one) of public snitching." Then, once on, it's hard getting off, just like persons unfairly vilified struggle to regain their reputations, often without success.

COICA takes but doesn't give in letting Washington "play an endless game of whack-a-mole, blocking one domain after another," even though sophisticated users will figure out a way to access censored sites. Maybe them, but not ordinary ones denied free access to constitutionally protected information.

Bottom line - COICA lets Washington "suppress truthful speech and could block access to a wealth of non-infringing" material. It will do little to end online infringement, but plenty of constitutional damage, besides other vast erosion in recent years heading toward ending democratic freedoms unless public awareness gets aroused enough to stop it in time.

On September 29, Tech Daily Dose.nationaljournal.com reported possible COICA changes, "addressing some of the concerns raised by technology and public interest groups," pertaining to online piracy and counterfeiting. COICA remains a work in progress. What emerges in final form demands close scrutiny.

Obama's Proposal to End Online Privacy - Another Police State Measure if Enacted

Merriam-Webster defines a police state as follows:

"a political unit characterized by repressive government control of political, economic, and social life usually by an arbitrary exercise of power by police and especially secret police in place of regular operation of administrative and judicial organs of the government according to publicly known legal procedures."

In other words: overt and covert hardline control, maintained by loss of personal freedoms, civil liberties, and constitutional protections though legislation, pervasive surveillance, lawless privacy intrusions, and midnight or pre-dawn arrests on whatever grounds authorities charge against which there's no defense.

In the last decade especially, America has recklessly gone that route, one government edict, pronouncement or congressional bill at a time. Obama has advanced the Bush agenda further for totalitarian control, including the right to imprison anyone for their beliefs, assassinate American citizens extrajudicially, and much more.

Since taking office, he's done the impossible, compiling a worse record than his fiercest critics feared, exceeding Bush in militarism, harshness, lawlessness, and betrayal of the public trust. Besides waging imperial wars, he wrecked the American dream, and hardened a police state apparatus to protect privilege from progressive change. He also waged war on free expression, dissent, due process, judicial fairness and privacy rights.

He calls heroic activism "violent extremism" and persecutes Muslims for their faith and ethnicity. He says anti-war supporters are anti-American, providing "material support to terrorism," a serious charge carrying 15 years imprisonment. It's why former Reagan administration Assistant Treasury Secretary, Paul Craig Roberts, says "the Bush and Obama regimes" wrecked the country. "America, as people of my generation knew it, no longer exists."

But wait, the worst is yet to come, including subverting privacy, what former Supreme Court Justice Louis Brandeis called "the most comprehensive of rights, and the right most valued by a free people." The Fourth Amendment and numerous laws embody it, requiring judicial warrants for most searches and seizures. Yet today's sophisticated technology enables lawless intrusions, absent congressional legislation prohibiting them.

New legislation, however, may mandate them, according to an Electronic Frontier Foundation alert saying:

"an Obama Administration proposal (will) end online privacy as we know it by requiring all Internet communication service providers - from Facebook to Skype to your webmail provider - to rebuild their systems to give the government backdoor access to all of your private Internet communications."

Planned legislation, so far not introduced or named is expected in 2011, the Center for Democracy & Technology (CDT) saying "Federal law enforcement and national security officials are preparing to seek sweeping new regulations for the Internet, arguing that their ability to wiretap criminal and terrorism suspects is 'going dark' as people increasingly communicate online instead of by telephone."

CDT's vice president, James Dempsey said:

"They are really asking for the authority to redesign services that take advantage of the unique, and now pervasive, architecture of the Internet. They basically want to turn back the clock and make Internet services function the way" telephones work, making them simple to wiretap the same way but do it online digitally.

Currently, the 1994 Communications Assistance to Law Enforcement Act requires broadband networks to have intercept capabilities to permit digital and cellphone surveillance. However, for encrypted messages, ISPs must be ordered to unscramble them because they're not covered under the 1994 law. Further, providers can't unscramble some encrypt messages between users.

As a result, proposals may include the following:

-- mandate that communication services, including foreign-based ones doing business in America, have full unscrambling technology capabilities; and

-- require peer-to-peer software communication developers to redesign their intercept capabilities.

These ideas not only fly in the face of a free society, they contradict a congressionally-ordered 1996 National Research Council report that found back door access bad government policy, its committee chair, Professor Kenneth W. Dam, saying:

"While the use of encryption technologies is not a panacea for all information security policies, we believe that....our recommendation would lead to enhanced protection and privacy for individuals and businesses in many areas, ranging from cellular and other wireless phone conversations to electronic transmission of sensitive business or financial documents."

"It is true that the spread of encryption technologies will add to the burden of those in government who are charged with carrying out certain law enforcement and intelligence activities. But the many benefits to society of widespread commercial and private use of cryptography outweigh the disadvantages."

Further, according to government records, encryption rarely subverts law enforcement, statistics showing few case examples. In 1998, crytography expert, Professor Matt Blaze, questioned the technical capabilities of back door access. Now he says:

"This seems like a far more baffling battle in a lot of ways. In the 1990s, the government was trying to prevent something necessary, good and inevitable. (Now) they are trying to roll back something that already happened and that people are relying on."

Blaze added:

"We need to protect the country's information infrastructure....So how do you reconcile that with the policy of discouraging encryption broadly," or making it vulnerable to surveillance. Hackers and other experts have the same capabilities as government. Mandate back door access, and they'll find a way to block or otherwise subvert it.

According to computer expert Peter Neumann:

"The arguments haven't changed. 9/11 was something long predicted and it hasn't changed the fact that if you are going to do massive surveillance using the ability to decrypt - even with warrants, it would have to be done with enormously careful oversight. Given we don't have comp(uter) systems that are secure, the idea we will have adequate oversight is unattainable. Encryption has life-critical consequences."

Current and possible new legislation worries organizations like the CDT and its efforts "to keep the Internet open, innovative and free," what's fast eroding in America and may soon entirely dissappear. Apparently like Bush, Obama is committed to assuring it unless mass public outrage stops him. Even so, a kinder, gentler America "no longer exists."

Some Final Comments

On September 27, Tech Daily Dose.nationaljournal.com writer Eliza Krigman headlined, "Net Neutrality Bill Gives FCC No New Rulemaking Power," saying:

Leaked House Energy and Commerce Committee (chaired by so-called liberal Henry Waxman) draft bill information aims to subvert Net Neutrality, according to an unnamed source saying:

"This bill represents a giant retreat by some of those who claim to support net neutrality and sends the wrong signal to the FCC (that) will ultimately deal with this issue."

If enacted, it will let cable and telecom giants establish, among other provisions, premium higher-priced lanes (two Internets), effectively destroying Net Neutrality, subverting the last free and open space. Dirty politics and back room deals put the Internet up for grabs to the highest bidders, creating a two-tiered system, besides blocking entry for those who can't pay.

Waxman hopes for passage in the lame duck session. So far, efforts to advance Net Neutrality legislation have stalled, some congressional leaders saying anything this year is doubtful.

Post-election, cybersecurity will also come up in the form of a bill combining earlier ones introduced:

-- S. 773: Cybersecurity Act of 2009, and

-- S. 778: A bill to establish, within the Executive Office of the President, the Office of National Cybersecurity Advisor

Information on them can be accessed through the following link:

http://sjlendman.blogspot.com/2009/11/struggle-for-net-neutrality.html

The revised measure will let Obama shut down parts of the Internet, as well as businesses and perhaps organizations, not complying with national emergency declared orders. Specifically, his order will last 30 days, renewable for another 60 before Congress may, if it wishes, intervene.

At issue, of course, is whether government can unconstitutionally regulate, restrict, censor or suppress online free expression, the direction Congress and the administration are heading.

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net. Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

http://www.thepeoplesvoice.org/TPV3/Voices.php/2010/10/02/new-internet-censorship-bill-introduced



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