The New Nation - Internet Edition

Eid-e-Miladunnabi

MUSLIMS of Bangladesh as those elsewhere over the world are celebrating the Holy Miladunnabi marking the birth and death of Hazrat Muhammad (SM), the Prophet of Islam. According to earlier scriptures and finally the Holy' Quran, the 'guide to mankind' Rasulullah is the last in the chain of Prophets. Islam, the universal religion for mankind, is complete with God's messages compiled in the holy Quran and 'Sunnah', teachings and practices of the Prophet. The holy Quran introduced Rasulullah as the best human character, an example and ideal; and, also proclaimed that his guidance is of immense importance for mankind for the best worldly attainment and salvation in the life hereafter.

Islam, a complete code of life, covers all aspects of life, upholds equality of all people irrespective of caste, creed and colour. The most noble life and unique character of the Prophet is the best embodiment of the ideology and teachings of the holy Quran. He established a welfare state in Madina and ensured fraternity among religious communities. Muslims imbued with the teachings of the Prophet attracted respect and appreciation "from other communities of the world, wherever they went, through the message of equality and brotherhood of man 'that they get from the Quran, the divine book, and the Sunnah, the ideal as manifested in the life of Rasulullah.

The present catastrophe, which has befallen them with the worst of misery and disaster and inhuman atrocities in different parts of the world, can be overcome through culture and perfection of the tenets of Islam as reflected in the life of the Prophet (SM). Mankind has the innate instinct to respond to the universal call of equality, fraternity, tolerance and co-existence irrespective of caste, creed, colour and race that Islam upholds. On this most 'gracious occasion, we seek blessings of Allah Almighty to revive the glory of Islam and lead humanity to peace and prosperity.

Let the gesture succeed

SOME days after the Sidr cyclone had hit south-eastern coast of Bangladesh, Indian Foreign Minister Pranab Mukherjee visited the country and promised to export five lakh tonnes of rice to Bangladesh at government fixed price. Bangladeshis were moved at that gesture and were waiting to receive the rice within a reasonable time as their need was dire. No one thought that there could be any delay or any point of nuance in fixing the price of the rice. May be due to some unexpected developments certain such points have arisen which have delayed the shipment of the rice much to the disadvantage of the people of Bangladesh. Against this backdrop, World Bank MD MS NNgozi Okoiyo Iweala, who at the close of a four-day official visit to Bangladesh, agreed to take up the matter with India.

Bangladesh has so far received five thousand metric tonnes of Indian rice while another seven thousand five hundred tonnes are on the way to Chittagong port. But these consignments taken together form a small quantity of the promised quantum. Bangladesh needs rice badly right now, more than what it needed in the past or it may need in future.

It is said that certain factors including fixation of the price of rice are the causes of delay of shipment. So far as the price of the rice is concerned, it is no trader's job to make a deal on a profit motive but a commitment of the government of India to support its neighbour at the hour of need. Therefore, one would expect that the efforts to be made by Ms Iweala would be successful and Indian rice would be shipped to Bangladesh at the earliest.

Compliance makes better business sense

Samina Rizwan

As more and more Bangladeshi companies participate as suppliers, contractors or customers in the global commercial hub of today's flat world, understanding of and adherence to global compliance norms has become essential for companies of all hues. Compliance to global operating standards makes good business sense too.

Today, irrespective of where a company is based, if it does business on a global scale, which a lot of companies based in Bangladesh, now do they need to understand the best practices and measures for compliance adopted by companies spread across various geographies? It is increasingly becoming essential for them to smoothly and responsibly do business with counterparts worldwide. Whether they are component suppliers to the automobile giants, outsourced partners for retail chains or emerging manufacturers setting up projects overseas, knowledge of global compliance norms is becoming an integral part of their competitive DNA.

While compliance has become a necessity due to mandates and the corporate governance code of the Securities and Exchange Commission (SEC) of Bangladesh it can bring about significant positive organizational changes. For instance, it can boost investor confidence and turn the company into a leaner entity, with more agile business processes and more profitable operations.

To traverse from mere compliance to active corporate performance management, businesses need to focus on strategic goal setting and alignment; planning, budgeting, forecasting and modeling; and operational analytics, reporting and consolidation.

At first, the number of compliance requirements of a successful global business may sound overwhelming. However, there are basic similarities between the laws. For instance, all of them require management to be accountable to stakeholders; all require companies to set up a reliable information system for reporting the organization's financial health using international standards and comply with local legislation and good corporate governance practices; and they all require company management to articulate internal controls and manage the risks of financial reporting error and loss.

To meet such variegated yet similar-intentioned compliance requirements, what companies must do is create a culture of compliance. A culture that is pervasive throughout the organization and one that is based on lasting measures rather than stopgap arrangements. And the approach to creating such a culture must be driven top down in an environment where technology tools are treated and used as facilitators rather than inhibitors.

Information is fast emerging as the differentiator for businesses. It is information, culled from an organization's data banks, that is increasingly helping business managers decide where to expand, what business to focus more on and where to increase sales expenditure and where to cut marketing budget among other things.

Information is also as critical to comply by regulatory requirements. Given that the amount of data a company is required to process for meeting the compliance requirements is enormous, companies are putting in place technology and systems that are specifically tailored for such needs. Besides making their corporate governance efforts more efficient and quick, these systems give them a leg up on their competitors who lack such systems and are either slow to respond to market changes or fail to convince their bigger business partners in continuing to do business with them.

However, acquiring, assimilating and utilizing this cornucopia of compliance knowledge to their benefit puts tremendous pressure on the companies' internal information gathering and processing systems. To deal with this, they need to take a comprehensive or unified technology approach rather than view it in an ad hoc manner.

According to a market survey done in the US, it cost a company anywhere between $3.1 million and $16 million in 2004 to comply with SOX.

Quite often, it's the Finance department that looks after the challenges of compliance, but the tougher part of the challenge is in the way technology systems are designed and used.

An Ernst & Young study has found that virtually all the companies surveyed placed significant reliance on controls in some or all parts of their businesses to reduce the risk of inaccurate financial reporting. It becomes obvious, then, that if the systems supporting the company's daily transactions are not controlled properly, the resulting picture of financial performance may get distorted. For instance, companies often operate varying systems to support different parts of the business - from Customer Relationship Management (CRM) to financials to manufacturing. Inaccuracies in reporting can result from data that is poorly managed as it passes through these multiple applications.

By unifying IT operations with integrated application suites, an organization can create a compliance-friendly environment that improves control, reduces overall cost and increases the assurance of data quality. A unified technology model also helps a company gain an accurate and timely picture of business data, enabling it to make better decisions and respond faster to change.

[Samina Rizwan is the Regional Director, Oracle Corporation, SAGE West]

The third oil shock

Matein Khalid

THE two oil shocks of the 1970's had a seismic impact on the world's industrial constellation, financial markets, geopolitical alignments and competition for energy resources.

Stagflation in the US, the worst economic recession since the Great Depression, a monetary policy revaluation under the Volcker Fed, twenty per cent inflation and Treasury bill rates, stock market crashes, international banking failures and the sovereign bankruptcy of Latin America, the collapse of British trade unions and American airlines, the emergence of Saudi Arabia as the power broker of the Arab world, the Reagan-Thatcher free market ideologies can all be traced to the 1979 oil shock when Ayatollah Khomeini overthrew the Shah's regime in Iran. We are now living in one of history's defining moments, the third oil shock when North Sea Brent and West Texas crude trade at $110. The third oil shock will change the world as we know it, create new realities of geopolitical power and influence. Technology, politics, financial markets, climate change, exploration trends in natural gas and coal, banking systems, the war on terror, central bank monetary policies, commodities prices, business processes and strategies, even social norms will not be immune from the third oil shock. That much, at least, is certain.

The end of the Cold War and the collapse of the USSR left the US as the planet's sole superpower, with its Washington consensus the dominant economic paradigm enforced by the IMF and the World Bank after the 1998 debt crises in Russia and the Far East. Yet the first decade of the new millennium, the reign of George W Bush in the White House, has not been kind to Pax Americana. The enlargement of the EU, wars in Iraq and Afghanistan, the rise of Islamic fundamentalism in the Middle East, the resurgence of Russia, the Silicon Valley tech bubble bust, 9/11, the failure to contain Iran or crush Hezbollah, Hamas and Al Qaeda terrorism, colossal current account deficits, the Wall Street credit meltdown and the collapse of the US dollar in the foreign exchange markets all demonstrate the decline of American power in the world. The third oil shock will accelerate this trend. Russia, with its $500 billion hard currency reserves and ownership of one fourth of the world's gas reserves, has stymied Western oil companies' ambitions to own equity gas. The Kremlin has arm twisted Shell to give up control of its Sakhalin project to Gazprom and used its energy resources as an instrument of foreign policy from Kiev to Berlin, Tashkent to Beijing, Tbilisi to Qom.

Pax Americana in the Middle East also faces grave threats in the future. Iran's Ayatollahs, also beneficiaries of $110 crude oil, have forged an anti-American, anti-status quo alliance that embraces, Syria, Hezbollah in Lebanon, Gaza in Palestine and Shia militias in Iran. While US allies like Egypt, Saudi Arabia, Jordan and the GCC states have not abandoned Washington's security umbrella, their economic linkages with China and Russia have become crucial. The US, with its consumption excesses, crippled money centre banks, collapsing dollar, impotent Treasury and current account deficits is hardly a persuasive economic role model for the Arab world. This is a revolutionary U-turn from the early 1990's when America won the Gulf War, the Soviet Union disappeared into the garbage heap of history, the IMF and Wall Street were the world's financiers and the dollar was king in the currency markets.

If Clinton or Obama win the White House in November, $110 crude oil can easily persuade America to embrace the new ideas on climate change and energy, as happened with Japan, Taiwan and South Korea after the economic insecurities of the second oil shocks. Washington will use regulations and the tax code to force consumers, utilities and businesses to embrace fuel efficient protocols, meaning the golden age of the gas guzzler SUV and the light truck is living on borrowed time. Detroit's future may rise in hydrogen cars and diesel trucks. Of course, every oil shock contains the seeds of its own destruction. The US consumer is no less than 20 per cent of the global GDP and the buyer of the last resort for Asia's exports that define the demand curve for oil and gas. As in 1974 and 1982, economic recession in the West could well mean yet another historic collapse in crude oil prices.

Of course, since the US is no longer the world's sole economic superpower, China has emerged from behind the Bamboo Curtain and India has abandoned the License Raj, the world's ability to recycle petrodollar surpluses is that much greater. Yet chronic inflation, fed by soaring prices of gasoline, heating oil, cement, grains and construction equipment, has become the macroeconomic Achilles heel of Russia, the GCC, India, China and the EU. As in the 1970's higher inflation rates increase political risk for incumbent regimes across the emerging markets because the masses are often the victims, not beneficiaries of inflation. This is the ominous message a capricious electorate delivered to General Musharraf in Pakistan, to Abdullah Badawi in Malaysia, to the South Korean socialist coalition in Seoul. If oil, food, cement and fertiliser prices continue to soar, the Tories will oust New Labour from Downing Street, the Congress-Left Front will lose the next Indian general election, riots and demonstrations could even challenge the dictatorships of the Arab world.

The impact of $110 oil on the GCC will naturally accelerate the region's economic transformation. Saudi Arabia, Qatar and the UAE will see trade surpluses soar as well as imports, defence spending, remittance flows, central bank and sovereign wealth fund reserves. Algeria, with its large population and chronic unemployment, will find it difficult not to raise food subsidies with its $50 billion petrodollar war chest. Libya has become the newest province of black gold after Colonel Gaddifi's diplomatic U-turn with Washington, the lifting of UN sanctions and the $2.5 billion settlement for the Pan Am Jumbo jet his intelligence agents destroyed in the skies above Lockerbie, Scotland. The EU, Turkey, China, India, Taiwan, Japan, South Korea are all significant importers of oil and gas. The impact of $110 crude oil and soaring food prices, Asian trade surpluses will fall, even get wiped out in the decade ahead. Asian export growth could well decelerate, if not collapse, as happened after the 1979 oil shock and global economic recession. This is the SOS flashed by the bear markets that have gripped Asian stock exchanges since October, with the grizzles run amok on Japan's Nikkei, Hong Kong's Hang Seng, India's Sensex and Singapore's Straits times Index. Vietnam, the darling of Wall Street, has lost half its market value. The Istanbul stock exchange reflects the political time bomb that is $110 crude oil on Turkish politics and the stock market with a $40 billion current account deficit, a military high command whose secular Kemalist values are threatened by the Islamist AKP government of Prime Minister Erdogan, a PKK Kurdish insurrection, Turkey can ill afford another financial crisis and run on the lira. India, with 70 per cent dependence on imported oil, will scramble for Burmese gas even as kerosene, cooking oil and gasoline demand soars. Indian dependence on capricious foreign capital is its Achilles heel in a world where emerging markets risk aversion spikes and Manmohan Singh's $400 billion infrastructure bonanza is a pipe dream in a world of $110 oil. Pakistan, with its $7 billion current account deficit, faces grave risk from the third oil shock. The 1970's oil shock doomed ZA Bhutto's PPP. Will the third oil shock derail his son in law Asif Zardari's moment of power?

(Matein Khalid is a Dubai-based investment banker and economic analyst)

The coming uncertain war against Iran

Ramzy Baroud

WHEN Adm William J "Fox" Fallon was chosen to replace Gen John Abizaid as the Commander of the US Central Command (CENTCOM) in March 2007, many analysts didn't shy away from reaching a seemingly clear-cut conclusion: the Bush administration was preparing for war with Iran and had selected the most suitable man for this job.

Almost exactly a year later, as Fallon abruptly resigned over a controversial interview with Esquire Magazine, we are left with a less certain analysis.

Fallon was the first man from the navy to head the Central Command. With the US army fighting two difficult and lengthy wars in Iraq and Afghanistan and considering the highly exaggerated Iranian threat, a war with Iran was apparently inevitable, albeit one that had to be conducted differently. Echoing the year-old speculation, Arnaud de Borchgrave of UPI wrote (March 14) that an attack against Iran "would fall on the US navy's battle carrier groups and its cruise missiles and Air Force B-2 bombers based in Diego Garcia."

Fallon is a man of immense experience, having served equally high-profiled positions in the past (he was Commander of US Pacific Command from February 2005 to March 2007). The Bush administration probably saw him further as a conformist, in contrast to his predecessor Abizaid who promoted a diplomatic rather than military approach and who went as far as suggesting that the US might have to learn to live with an Iranian bomb.

Fallon's recent resignation may have seemed abrupt to many, but it was a well-orchestrated move. His interview in Esquire depicted him as highly critical of the Bush administration's policy on Iran; the magazine described him as the only thing standing between the administration and their newest war plan.

More, his resignation and "Secretary of Defense Robert Gates's handling of same is the greatest and most public break in the Bush team's handling of preparations for war against Iran that we are ever likely to see," wrote respected commentators and former CIA analysts Bill and Kathy Christison (March 12). "Gates has in fact publicly associated himself with the resignation by saying it was the right thing for Fallon to do, and Gates said he had accepted the resignation without telling Bush first."

Fallon's resignation represents a bittersweet moment. On one hand it's an indication of the continued fading enthusiasm for the militant culture espoused by the neoconservatives. On the other hand, it's an ominous sign of the Bush administration's probable intentions during the last year of the president's term. 63-year-old Adm Fallon would not have embarked on such a momentous decision after decades of service were it not for the fact that he knew a war was looming, and - having considered the historic implications for such a war - chose not to be the pulling trigger.

Unlike the political atmosphere in the US prior to the Iraq war - shaped by fear, manipulation and demonisation - the US' political environment is now much more accustomed to war opposition, which is largely encouraged and validated by the fact that leading army brass are themselves speaking out with increasing resolve.

Indeed pressure and resistance are mounting on both sides; those rooting for another war are meeting stiff resistance by those who can foresee its disastrous repercussions. The push and pull in the coming months will probably determine the timing and the level of US military adventure against Iran, or even whether such an adventure will be able to actualise (one cannot discount the possibility that as a token for Israel, the US might provide a middle way solution by intervening in Lebanon, alongside Israel, to destroy Hezbollah. Many options are on the table, and another Bush-infused crisis is still very much possible).

In an atmosphere of hyped militancy, Fallon's resignation might be viewed as a positive sign, showing that the cards are not all stacked in favour of the war party. Nonetheless, it is premature to indulge in optimism. Prior signs indicated a serious rift between those who once believed that war is the answer to every conflict.

Yet that didn't necessary hamper the war cheerleaders' efforts. Last December, one would have thought a war against Iran was totally out of the question, and why not? The National Intelligence Estimate (NIE) - an assessment composed by all American intelligence agencies - concluded that Iran halted its nuclear weapons programme in 2003, and such a programme is still frozen.

The reaction of the 'bomb-first-ask-questions-later' crowd would suggest that such an assessment is pure nonsense. Republican presidential nominee Sen John McCain has since then sung the tune of 'bomb Iran,' - literally - and Israel's friends continue to speak of an 'existential' threat Israel faces due to Iran's 'weapons' - nevermind that Israel is itself a formidable nuclear power.

According to Borchgrave, "McCain's close friend Sen Joe Lieberman…invoking clandestine Iranian explosives smuggled into Iraq, has called for retaliatory military action against Teheran. He and many others warn that Israel faces an existential crisis. One Iranian nuclear-tipped missile on Jerusalem or Tel Aviv could destroy Israel, they argue."

In fact, Lieberman, and other Israeli supporters need no justification for war, neither against Iran, nor any of Israel's foes in the Middle East. They have promoted conflicts on behalf of that country for many years and will likely continue doing so, until enough Americans - from the Fallon-like to ordinary people - push hard enough to restack their government's priorities.

An attack on Iran doesn't seem as certain as the (still ongoing) war against Iraq once had.

Public pressure, combined with courageous stances taken by high officials, could create the tidal wave needed to reverse the seemingly determined war efforts. Americans can either allow those who continue to speak of 'existential threats' and wars of a hundred years to determine and undermine the future of their country - and subsequently world security. Or they can reclaim America, tend to its needy and ailing economy, and make up for the many sins committed in their name and in the name of freedom and democracy.

(Ramzy Baroud is an author and editor of PalestineChronicle.com.)