The New Nation - Internet Edition

Afghan quagmire in a changing world

Tanvir Ahmad Khan

The American presidential election is a long drawn out process during which perceptions of domestic and international issues and the semantics employed to articulate them keep undergoing subtle and not-so-subtle transformations.

This time around it has already gone on, in one form or another, for two years. These two years have seen a continuous erosion of paradigms and doctrines associated with the name George W Bush. As his wars became a trillion-dollar affair and Wall Street faced a meltdown, the mystical belief that the United States could afford to expend blood and treasure forever has suffered a blow.

Time has not stood still and other centres of power and influence have emerged. Admittedly, no direct challenger to American power has surfaced but when Americans vote on November 4, they would be aware of more actors on the international stage than at any time since the dramatic collapse of the Soviet Union. While Bush might have won India to the extent that proud and ambitious Asian nation can ever be won over, he has lost much goodwill in the post-Soviet Russia. He is also leaving China more distrustful of American intentions than before.

In the region that he vowed to reconfigure, Iraq and Afghanistan struggle with insurgencies or ravages of conflict that lasted much longer than Bush had imagined. It is doubtful if even Israel is more secure after the ill-fated project to re-engineer the Greater Middle East. Above all, Iran may not have realised its great economic potential but it has now a larger strategic outreach than before. While international opinion might not have done it, the Wall Street crisis will in all likelihood keep Bush's mind off invading Iran in the dying hours of his troubled reign.

Rhetoric apart, both the presidential candidates knew deep in their hearts that the strategic landscape has changed and that they would have to defend their country's global primacy in circumstances less propitious than eight years ago. John McCain said he can do it at all crisis points. Barack Obama limits the battlefield mostly to the lands between the modest Amu Darya and the mighty Indus. He would divert troops from Iraq to Afghanistan and the armies of the West may have up to four more brigades. He is categorical about hunting down Osama bin Laden and his senior associates through unilateral action if the Pakistani Government appears to be unwilling or unable to do the job. But his heroic statements are anything but reckless and he does not claim that these additional troops would produce an outright military victory. Meanwhile, as if on cue, strong voices in the West seek to reverse the stand that there could not be any negotiations with the Taliban. A British commander re-defines the mission: reduce the Afghan insurgency to manageable proportion and let the Kabul regime grapple with it. Hamid Karzai or his successor would have to do it with an army, the officer corps of which would be dominantly non-Pashtun, a good enough reasons for the dispossessed Pashtun tribes to continue fighting.

Kabul would be expected to resurrect the battered Afghan state with a national economy dwarfed by billions of drug dollars shared alike by the friends and foes of the regime. Prospects of the international community creating a robust Afghan economy capable of squeezing out the drug-based economy diminish by the day. If this talk about engaging the Taliban includes a plan to invite them into the mainstream of Afghan politics, the rest of world has not quite been taken into confidence nor has it been told how it could be implemented. Across the border, the Pakistani army and air force are already battling to degrade the power of insurgent groups that have diverse agendas for the future but a common purpose at present in carving out territories outside Islamabad's control. The Pakistani campaign has certainly helped the coalition forces in Afghanistan but it has so far not been very successful in blocking the reverse flow of volunteers, weapons and money into Pakistan from Afghanistan. Nor has Pakistan succeeded in limiting the conflict to the tribal belt; the enemy continues to stretch the security structures by challenging them randomly all over the country.

We may witness significant changes in the battle for Afghanistan in 2009. Having reduced the intensity of conflict in some selected areas the West may well revise its mission objectives. Freedom and democracy will recede into the background; even reconstruction may take a back seat.

Instead, there may be a return to the idea of a confederacy of tribes held together by an authority figure, a veritable dictator who trades transfer of power to him for guaranteeing core western interests such as the two major bases of Bagram and Shindand and a dozen other military facilities to project western power in the mega region. On their part the Taliban may lower their theocratic profile and let the ethno-national factor play a somewhat greater role to retain a dominant presence in the Pashtun belt. This is speculative at best but is the assembled Pakistani Parliament discussing emerging scenarios for the future? Has the Foreign Minister given his assessment of the dynamics at work in the region from which Pakistan cannot hope to de-link its troubles? When will the Prime Minister outline his plan for the political and economic rehabilitation of areas that are bearing the brunt of current fighting? The state did not move into Swat effectively with such plans and the army had to launch the Second Swat War.

Pakistan is likely to face greater pressure whatever way the situation in Afghanistan is reconfigured in 2009. It needs to go beyond securing parliamentary "ownership" of the ongoing military operations and put together a strategic plan incorporating political, diplomatic and economic initiatives to pull the country out of the quagmire in which General Musharraf left it. We do not have unlimited time to do so.

(Tanvir Ahmad Khan is a former Foreign Secretary, and currently Director General, Institute of Strategic Studies, Islamabad, Pakistan. He can be reached at: tanvir.a.khan@comsats.net.pk )

Global financial crisis and Islami finance

Mustak Parker

On October 25, the Jeddah-based Islamic Development Bank (IDB), the multilateral development bank of the Muslim world, is convening an urgent meeting to discuss the impact of the global financial crisis on the Islamic banking industry and to agree on policy initiatives to tackle both any challenges and opportunities for the industry.

The global Islamic finance industry is estimated to be growing at about 20 per cent per year and has funds under management of between US$1 trillion to US$2 trillion. Given the huge liquidity especially in the oil-rich Gulf Cooperation Council (GCC) states thanks to increased revenues due to the high oil prices which only a few weeks ago passed the US$140 a barrel, the Islamic finance industry is set to grow further especially since there is increasing evidence of greater migration of private funds into the sector. Private liquidity in the GCC states alone is estimated at US$1 trillion. Another demand driver of Islamic finance is the increasing use of such financing by utilities and corporate especially in the important oil, gas, petrochemicals and other commodities sectors.

The Saudi Basic Industries Corporation (SABIC), the world's largest chemicals company, according to Mutlaq Al-Morished, Chief Financial Officer, raised some US$6.155 billion of Islamic financing in the midst of the global credit crunch which started in September 2007. Shari'ah-compliant debt at end 2007 accounted for 23 per cent of SABIC's total debt of US$21bn. He believes that an increasing component of project, corporate and asset financing in the GCC countries will be done under a Shari'ah-compliant basis over the next few years.

The Islamic system of financial management, being a faith-based financial system, has shown remarkable resilience in withstanding some of the setbacks in the global financial system. A few years ago, the International Monetary Fund (IMF) published a report which concluded that the Islamic financial system may be in a better position to withstand shocks in the global financial system than its conventional counterpart.

This is because of the nature of Islamic finance especially with its ban on interest (riba); gharar (deception and incomplete disclosure of information in a transaction) and maysir (speculation) as in the recent cases of short-selling of shares in banks such as HBOS and Royal bank of Scotland; credit default swaps and collateralised debt obligations (CDOs) of the US subprime mortgages including Freddie Mac and Fannie Mae, which both had to be rescued through a US Government bailout and nationalisation.

Thus far, while there have been the odd Middle Eastern conventional bank to report some exposures to the subprime CDOs, not one Islamic bank has fallen foul of such investments. The credibility of any Islamic financial institution that did invest in such CDOs would be irreparably damaged because it would have been against Islamic financial principles to do so.

However, while Islamic banking has been less impacted by the global financial crisis from a systemic point of view, it has been affected in other ways especially in terms of market confidence, pricing of products and valuation of assets.

Some Islamic financial institutions and bankers, perhaps unadvisedly, have been playing up the 'superiority' and efficacy of the Islamic financial system, stressing that a subprime crisis and the practices that supposedly precipitated it including betting on bank shares through short selling; on insurance claims through credit default swaps; and the greed culture through bonus chasing, would be impossible in the Islamic financial space.

Even the IDB earlier this month stressed that the Bank, "like other Islamic banks, sets itself apart from the financial markets in that its governing and operation is compliant with Shari'ah principles." All this may be technically true, but the Islamic finance industry has seen a number of scandals and fraud over the last three decades where senior and middle managers did abuse the system and thus undermined the very faith-based principles which they were supposed to uphold.

The sector needs to leverage its systemic advantage by stressing the resilience of a financial system which is not underpinned by rampant interest, speculation, gambling, management and corporate greed. It needs to stress the role Islamic finance can play in contributing to the stability of the global financial system and the real economy. However, to do this the sector needs credible ambassadors, and to date, the only one that comes to mind is, Governor of Bank Negara Malaysia, Dr Zeti Akhtar Aziz. More importantly, the Muslim world needs a Muslim G10 to discuss cooperation and policy issues relating to the Islamic financial system and the economies of the Muslim countries.

The major problem here is that whilst many Muslim countries, save Malaysia and Bahrain, are pushing Islamic finance in their markets, their monetary and fiscal policies are still largely based on an interest-based system. Some critics argue that you can only have a truly Islamic financial system if you have the concomitant Islamic economic, monetary and tax systems.

The market impact of the global financial crisis on Islamic banking has been varied. To date, not one Islamic bank has been affected in terms of capital and liquidity. This may be because most Islamic banks are undercapitalised and therefore the balance sheets are restricted. Also mortgages are a nascent industry in Islamic finance. As such the banks do not have the same level of exposure to the mortgage market, let alone mortgage securitisation packages.

In fact, in Britain, the Islamic mortgage market, according to the Financial Services Authority (FSA) is about £500 million in size, and is expected to rise to £1 billion over the next few years. Islamic mortgage providers in the UK stress that thus far they have had very few if any repossessions in their order book - compared to thousands of repossessions in the conventional sector. It remains to be seen how the Islamic mortgage space plays out. The UK providers, except for Islamic Bank of Britain (IBB), for instance, do not have deposit basis. As such they rely on their parents or the money markets to finance their mortgage lending activities. Even the IBB deposit base is very modest compared to the high street banks. It is not clear whether the high street providers of Islamic mortgages such as HSBC Amanah, Bank of Ireland, Lloyds TSB and Bristol &West, have similar restrictions for both sets of mortgages, given the different structures of each.

The UK has five authorised Islamic banks, with another two licenses pending. One or two of these have different challenges which are more to do with business models, management strategies and a lack of capital.

Perhaps the biggest impact of the credit crunch has been on the Sukuk market. Sukuk are Islamic securities, whose issuance has dramatically proliferated over the last decade. Today, the global Sukuk market is estimated at US$200 billion with the potential of rising to US$1 trillion by 2010. Sukuk structurers and arrangers such as Malaysia's CIMB group and banks such as HSBC, Deutsche Bank, BNP Paribas and Citigroup, all confirm that the Sukuk market has virtually "dried up" as a result of the credit crunch. This is not because the product is at fault but because investors are cautious and the pricing is not right. Valuations of assets of Sukuk already issued, especially real estate assets, have been affected. In other words, investors in Sukuk, which have recently or are about to mature, could lose out on returns due largely to the drop in the value of the assets involved due to the effects of the credit crunch.

There have been a few issuances in the Middle East and Malaysia. Even the IDB launched a Sukuk in Malaysia in the local currency, the first such one. But the Japan Bank for International Cooperation (JBIC) has postponed its planned US$500 million Sukuk against Malaysian assets because of the credit crunch.

UK Treasury Minister, Kitty Ussher, before the recent crisis, stressed that she was hopeful that the UK would launch its debut sovereign Sukuk in the first half of 2009. It is not clear whether this will now be postponed indefinitely or not. However, with the Chancellor Alistair Darling stressing earlier this month that he is considering a policy for the UK to spend its way out of a recession, the Sukuk could be an additional and cost-effective tool for the British Government to raise money to finance its various policy priorities in the wake of the financial crisis in the UK.

There have been suggestions that the Government may raise money through a Sukuk issuance to finance the construction of Crossrail and some of the infrastructure of the London 2012 Olympics.

Islamic finance is all about ethics. But, a credit crunch situation based perhaps on a different root cause, could equally affect the Islamic sector. It would be interesting to see how Islamic banks would react and whether the same mistrust would exist between them. From experience, Islamic bankers can show the same blind loyalty to shareholders and the same disdain to customers and other stakeholders. Similarly, the bonus and fee-chasing culture and corporate greed are not alien to Islamic finance. After all, Islamic bankers are as fallible as all other bankers. Faith, in this case Shari'ah principles relating to finance and investment, ought to be the ultimate deterrent both in terms of market behaviour, corporate culture, and individual actions.

Perhaps the biggest shock of the credit crunch is the undermining of traditional asset allocation choices and the reputational damage to the western financial system. Perhaps, the time has come to pay more attention to emerging markets and the single fastest-growing financial sector in the world, the Islamic financial sector.

(Source: Muslim News, UK. Mushtak Parker is Editor of Islamic Banker (mushtakparker@yahoo.co.uk )

Prisoner 650: I can hear her screams

Yvonne Ridley

(From previous issue)

But no such respect and decency was given to Prisoner 650 - no, this sister was brutalized. She had to share the same open toilet as the men and there were no closed doors, or shower curtains when she wanted to wash.

No wonder Moazzam still hears her cries and screams today.

I also began to hear her cries and screams and so I came to Pakistan in July to ask for help.

I turned to Imran Khan, a great politician and a man of integrity - he agreed to organize a press conference, and was so moved by the mission to find Prisoner 650. I begged the media to help demand the release of Prisoner 650.

I pointed out that my story had made headlines and front page news for the entire 10 days of my captivity when I was captured by the Taliban after 9/11 simply because I am a white, western woman.

Back in Britain, Lord Nazir Ahmed answered my call for help. Not only did he submit a series of hard-hitting questions to the British Government, he roused the Pakistan media in London and announced that if Prisoner 650 was not released then he and I would go to the gates of Bagram and demand her release.

It was inevitable that people would assume Prisoner 650 was Dr Siddiqui and the awkward questions started to be asked after more than 100 media turned up at our scrambled press conference. A Cage Prisoner report was handed out giving the wider picture of the disappeared in Pakistan.

Then suddenly Dr Aafia Siddiqui emerged as though a magician had pulled a rabbit out of a hat - she emerged in a dazed and confused state outside the Governor of Gardez's offices in Afghanistan.

Imagine that … FIVE years after her disappearance in Karachi. And according to the FBI she was carrying in her handbag pieces of bomb-making equipment and photographs of various landmarks in New York City.

What nonsense and how dare the FBI insult our intelligence this way.

Of course the FBI lost much of its credibility when its chief J Edgar Hoover was revealed to be a transvestite who preferred to wear a red dress and be called by the name of Mary.

Hoover, probably one of the most powerful men in America was the originator of dirty tricks campaigns, lies and deceits and his legacy lives on.

Even today US intelligence officers live in a fantasy world but instead of mincing around in red frocks they spend their time dressing up the truth with layer after layer of lies.

Sadly most of the American people have no idea what has, and still is, being done in their name.

If they knew the truth they would be disgusted like the rest of us, so please do not vent your anger on ordinary US citizens, they are as much victims of the Bush Administrations lies as the rest of us.

This was quite evident with the story of Dr Aafia Siddiqui.

It is no coincidence that Cage Prisoners had raised the issue of Dr Siddiqui less than two weeks before.

Many of you know Dr Siddiqui's story - she had been shot by a brave US soldier at close range after she managed to overpower one of his colleagues and fire a gun twice. This woman is less than 70 pounds. This story is rubbish.

If you want the truth she was shot three times - once in the back, by two US soldiers and she NEVER attempted to wrestle any of them or disarm them.

They actually left her for 15 minutes to bleed to death - they shot to kill, but it was the insistence of Afghans at the scene that resulted in medical treatment and surgery.

The US authorities had no right under international law to then cart off this injured victim to America - imagine that t the victim is now back in the hands of her abusers.

But you know what makes this even worse - while our sister lies in agony waiting to be tried for nonsense charges in an American court, two of her children, a babe in arms and toddler (at the time of their disappearance), are still missing. Where are they?

And I'll tell you something else which should make your blood run cold. The Americans have now admitted that the Grey Lady of Bagram does exist.

But Dr Aafia Siddiqui is NOT Prisoner 650, the Grey Lady of Bagram. We still do not know who Prisoner 650 is. We do not know where she is, and we do not know how many other Pakistani women are being held as female enemy combatants - yes, that is what the pentagon calls them: Female Enemy Combatants.

Today I am begging each and every one of you, as your sister in Islam, to help me find Prisoner 650.

If you remain silent I may never find her. But I tell you something now - I can hear her screams and when you go to bed tonight so will you.

Have we all sunk so low that the cries of this sister remain unanswered? The time has come when the people of Pakistan need to restore pride to this great country. You here today can set the agenda. You here today can make a change. You here today can get rid of those rotten politicians and their weasel words.

Those in power only seem great because they try and keep you on your knees. Rise up and bow to no one but Allah. When the people lead, the leaders will follow.

(Yvonne Ridley is a British renowned journalist, captured by the Taliban in Afghanistan, while on assignment with the London's Sunday Express in 2001. She subsequently converted to Islam and now works for the Iranian-based 24-hour English language news channel Press TV, where she fronts her own London-based current affairs show, The Agenda. She was a regular contributor and columnist of defunct Muslims Weekly-New York, the parent newspaper of DailyMuslims.com. She continues her column for DailyMuslims.com.)