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EDITORIALS

Growth picks up speed
Stimulus, resilience key factors
A
t a time when Dubai’s credit woes have depressed investment sentiment comes India’s better-than-expected GDP growth data as a ray of hope, which has put life back into the stock markets. The 7.9 per cent economic growth during the September quarter, just a tad behind China’s 8.9 per cent during the same period, is something not even optimists in the government or outside had predicted.

Pak double game
Obama coming to grips with reality
U
S President Barack Obama’s blunt message to Pakistan President Asif Zardari that Islamabad “cannot continue” to use terror as an instrument of state policy shows Washington’s realisation that Pakistan has been playing a double game ever since it became a US “ally” in the war against terror.


EARLIER STORIES

Positive signals from Obama
December 1 2009
RBI’s caution
November 30 2009
Pitfalls of anti-defection law
November 29 2009
Cutting carbons
November 28 2009
One year after 26/11
November 27 2009
Boost for ties with US
November 26, 2009
Babri trauma revisited
November 25, 2009
Fragile peace in Assam
November 24, 2009
Sena goes berserk
November 23, 2009
Arresting urban decay
November 22, 2009
Damage control on China
November 21, 2009
Whiff of fresh air
November 20, 2009

THE TRIBUNE
 SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS


Is Koda off the hook?
Investigating agencies could do more
T
he arrest of former Jharkhand Chief Minister Madhu Koda appeared to be an exercise designed to ward off rising suspicion that he was being let off the hook. But in effect his arrest has served to strengthen suspicion due to the Jharkhand Vigilance Bureau’s failure to press for his remand. Had the Bureau been serious about questioning Koda, it should have asked for his custody from the court and continued with his interrogation.
ARTICLE

Sheikh Mujib’s idea of B’desh
It must be translated into reality
by Kuldip Nayar
T
HAT the killers of Bangabandhu Sheikh Mujib-ur-Rehman have been brought to book is the biggest compliment to the judiciary of Bangladesh. First the lower court, then the High Court and finally the Supreme Court have pronounced death sentence on 12 retired and dismissed army personnel.

MIDDLE

The pilgrimage
by Harish Dhillon
M
y father had some strange habits. He was a very taciturn man — his conversation was limited to monosyllables and even these dried up altogether when the conversation turned to subjects like his three and a half year internment in a Japanese POW camp in Singapore during World War II. Because of this I did not get to really know him.

OPED

Indians emerge from fatalism to realise their dreams
by Vijay Sanghvi
A
moment comes, which comes but rarely in history, when we step out from the old to the new, when an age ends and when the soul of a nation, long suppressed, finds utterance.” This was written by an Indian visionary, Jawaharlal, a few years before Independence.

Zardari holds off his foes
by Pamela Constable
P
resident Asif Ali Zardari, fighting to keep his job amid pressure from opponents in the media, the courts, the Parliament and the military, appears to have reasserted his grip on the presidency for the time being, according to analysts here.

Flashy Dubai turns to staid Abu Dhabi for aid
by Jeffrey Fleishman and Meris Lutz
T
he flashy, spendthrift needs his prim, conservative neighbor to bail him out. Such is the situation between debt-ridden Dubai and flush Abu Dhabi, two Persian Gulf emirates with starkly different financial strategies and temperaments that grudgingly may need each other to prevent long-term investor panic from spreading beyond the United Arab Emirates.



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Growth picks up speed
Stimulus, resilience key factors

At a time when Dubai’s credit woes have depressed investment sentiment comes India’s better-than-expected GDP growth data as a ray of hope, which has put life back into the stock markets. The 7.9 per cent economic growth during the September quarter, just a tad behind China’s 8.9 per cent during the same period, is something not even optimists in the government or outside had predicted. The global economic scenario has turned so uncertain that analysts prefer to be cautious rather than risk facing the accusation of being out of touch with reality. Hardly had people started believing that the economic recovery was real that the Dubai crisis took centrestage.

What has spread cheer in India is attributed to the government’s stimulus package, which propped up manufacturing and services. Salary hikes at the state and Central levels and increased government spending in rural India have not let consumption flag. The corporate sector has stopped lay-offs even if job pick-up is slow and perks and incentives, which had sparked a craze for MBA, are yet to return to their previous levels. Although the government would like to take all credit, it is equally the inner resilience of the economy and low dependence on ever-falling exports that have saved the day.

A major surprise comes from agriculture. Everyone had expected a negative growth after the way the monsoon behaved. The real effect will, however, be seen in the coming months. If agriculture has not disappointed, credit must go to farmers, who go to any length to save their crops. They need help. The government should focus more on agriculture as it employs half the country’s workforce. The robust GDP figures, partly due to the sluggish growth last year, may drive the RBI to raise the interest rates to control inflation and the government to cut stimulus spending to rein in fiscal deficit. Yet the temptation should be avoided. Pro-growth policies should stay in place. The recovery, as the RBI Governor noted a few days ago in Hyderabad, is still “fragile”.

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Pak double game
Obama coming to grips with reality

US President Barack Obama’s blunt message to Pakistan President Asif Zardari that Islamabad “cannot continue” to use terror as an instrument of state policy shows Washington’s realisation that Pakistan has been playing a double game ever since it became a US “ally” in the war against terror. It has been willy-nilly fighting against Al-Qaida and the Taliban, but at the same time clandestinely helping some of the groups aligned with them to achieve its unholy objectives in India and Afghanistan. In a recent message to Mr Zardari, the US leader has specifically mentioned, perhaps for the first time, the Lashkar-e-Toiba (LeT), one of the many Pakistan-based terrorist outfits operating against India, along with Al-Qaida, the Afghan Taliban, the Haqqani group and the Tehrik-e-Taliban Pakistan. The message warns that if Pakistan cannot deliver, then the US itself will have to accomplish the task. It appears the US is no longer prepared to ignore “ambiguity in Pakistan’s relationship” with any of the terrorist outfits functioning from its territory.

Significantly, Mr Obama’s terse communication upholds India’s viewpoint on handling terrorist outfits. India has been arguing that the war against terror cannot be won unless all kinds of terrorist networks are eliminated root and branch. Any distinction between those harming the interests of the US and Pakistan and the groups operating to cause death and destruction in India will not serve the purpose. Terrorists are terrorists irrespective of their targets. The LeT among the India-bound terrorist networks has been finding frequent mention after its hand was discovered behind the 26/11 attack on Mumbai. But the Jaish-e-Mohammed and other such groups are equally dangerous and need to be decimated.

Almost all of the terrorist groups sending their recruits from Pakistan to India have been created and patronised by the ISI at one time or the other. These were floated to fight Pakistan’s proxy war in Jammu and Kashmir and other parts of India. After 9/11 these groups have been providing all kinds of help to Al-Qaida and the Taliban. The US would have been more successful in achieving its objectives had it given serious thought to what India had been pleading for. Anyway, it is better late than never, as they say.

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Is Koda off the hook?
Investigating agencies could do more

The arrest of former Jharkhand Chief Minister Madhu Koda appeared to be an exercise designed to ward off rising suspicion that he was being let off the hook. But in effect his arrest has served to strengthen suspicion due to the Jharkhand Vigilance Bureau’s failure to press for his remand. Had the Bureau been serious about questioning Koda, it should have asked for his custody from the court and continued with his interrogation. But in the absence of any such prayer, the special vigilance court on Monday remanded Koda to judicial custody for 14 days. If the Bureau did not intend to question Koda, there was no need to arrest him now, specially since a chargesheet is yet to be filed. The arrest, on the other hand, allows him to escape the glare of the media. It may also help him garner some sympathy among voters and help his regional party win a few or all of the six seats it is contesting in the on-going election for a new Assembly.

That Koda took advantage of his public office and feathered his nest is well-documented. Affidavits, filed at the time of the Assembly election in 2005 and the general election in 2009, establish that his movable assets grew from Rs 13 lakh to Rs. 94 lakhs in four years and that his cash-in-hand rose spectacularly from Rs. 30,000 in 2005 to Rs. 13.6 lakh. But the crucial question is whether he was involved in hawala transactions of over Rs. 2000 crore and whether he bought companies in Thailand and mines in Liberia, the allegations which appeared in the media but are yet to be declared officially or substantiated in chargesheets before the courts. Koda himself has publicly denied the charges, describing himself as a “poor tribal” who does not have any asset abroad. The country certainly wants to know the truth.

While politicians are fond of repeating that law takes its own course, it would be taken more seriously if agencies complete the investigation and file chargesheets in the court. Not that our politicians are ever daunted or deterred by them. The disproportionate assets case against former Bihar Chief Minister Lalu Prasad Yadav has lingered on for over a decade. Chargesheets actually gave a boost to his political career. Who knows what political fortune now awaits Madhu Koda?

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Thought for the Day

Nothing puzzles me more than time and space; and yet nothing troubles me less, as I never think about them. — Charles Lamb

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Sheikh Mujib’s idea of B’desh
It must be translated into reality
by Kuldip Nayar

THAT the killers of Bangabandhu Sheikh Mujib-ur-Rehman have been brought to book is the biggest compliment to the judiciary of Bangladesh. First the lower court, then the High Court and finally the Supreme Court have pronounced death sentence on 12 retired and dismissed army personnel. Understandably, Prime Minister Sheikh Hasina was “overwhelmed with emotion” after the verdict. She was abroad when her father, her mother and her three brothers were killed in a coup on August 15, 1975.

The credit for seeing the case to its ultimate end goes to Hasina and her party, the Awami League. They retrieved the case from the limbo 17 years ago when they came to power for the first time after the Sheikh’s assassination. It was a lower court which sentenced the culprits during her regime. Whenever the opposition, the Bangladesh Nationalist Party (BNP), headed by Begum Khalida Zia, came to power, it saw to it that the case did not move or moved at a snail’s speed. The prosecution would stall the matter as if it did not want the culprits to be brought to justice.

In fact, BNP Secretary-General Khandakar Delwar Hossain confirmed the doubt by his churlish remark on the eve of the Supreme Court’s verdict. He said, “People of the country will certainly accept the final verdict of the Supreme Court. Where was the dispute about it?” People of Bangladesh have been waiting for the sentence for the last 34 years when the person who led them to freedom was killed by the army. Hossain unnecessarily revived the debate over the responsibility for the delay in the judgment and showed where he and his party stood.

I was in Dhaka a few days after the assassination of the Sheikh and his family members. I went to the Dhanmandi area where they lived. The security men did not allow me to visit his home. But I could see how forlorn the place was. I could relate the tragedy to the killing of Mahatma Gandhi at the hands of a fanatic Hindu. I had then gone to Birla House where Gandhi lived before the assassination.

Dhanmandi, like Birla House, had an air of asceticism and spiritualism about it. Something touched me deep within. I remembered how only a few years earlier I had interviewed the Sheikh. How buoyant and confident he was about the future of his country and outlined many plans to take Bangladesh forward, economically and socially. His emphasis was on the unity of the nation. The words he had uttered at that time were that Bangladesh belonged to its people, both Muslims and Hindus. This was the ethos of India’s independence movement too. Would Bangladesh respect the Sheikh’s thoughts ? Would his mission for unity be completed after sacrifice? For the time being I could see that the loss had fused the different religious communities. All constituted a nation in mourning.

Now that the case relating to the Sheikh’s assassination is out of the way, the government in Dhaka should hold an inquiry into why the information conveyed by India’s RAW to the Bangladeshi authorities that the Sheikh faced the danger of assassination was not taken seriously. It is believed that some officers went from Delhi to discuss with the top officials in Dhaka at that time about the possibility of a coup and the elimination of the Sheikh. Probably, the accomplices of the killers or their influential friends did not want the warning to be taken seriously and did little to protect the Sheikh. Their negligence or complicity took away from Bangladesh the leader it wanted the most at that time.

I told the Bangabandu what Zulfikar Ali Bhutto, the then President of Pakistan, had said in an interview. “…Our standard of living could rise substantially more than that of East Pakistan or whatever you want to call it and in terms of per capita income even more than India if we make a go of it and control our population. Of course, we do not have much of a population problem but we still have to control the population and have an economic policy attuned to modern times; develop our agriculture and industry, and oil-I think we have got oil and I think we are going to make a big search for it. So, I think if we make a good go of it that is good enough.”

When I conveyed what Bhutto said to the Sheikh, his reaction was: “We have more resources than Pakistan; we have fish, tea, jute, gas, fruits, fertile land and a handy people. We shall soon be on our own. It is Pakistan which will have to mortgage itself to sustain the present level of spending.” How prophetic the Sheikh has turned out to be! However, Hasina has to make his dream about Bangladesh come true.

While holding the inquiry into the circumstances that led to the Sheikh’s assassination, one relevant factor that needs to be looked into closely is the supply of tanks to Bangladesh. India’s minister D.P.Dhar, who was the civilian face of India’s operation, had told New Delhi not to send tanks to Bangladesh. Who supplied the three tanks to Dhaka because the entire coup was carried out by the three tanks? I believe Cairo had sent them. Why? Were the killers, senior army officers, involved in importing the tanks in one way or the other?

The chapter does not close with the Supreme Court’s laconic judgment: “We find no cogent ground to interfere with the judgment of the high court” that had confirmed the lower court’s judgment. The Sheikh Hasina government must strengthen the democratic forces in the country so that the freedom of the people is not snatched away as it happened when the Bangabandhu was killed. Bangladesh had to suffer a long military rule which did its worst to destroy the values that were planted in the minds of the people during the liberation struggle.

Hasina has to reignite the spirit of togetherness which her father had fostered. This requires the participation of the people in governance. It is not beyond Hasina, who has won this year’s Indira Gandhi prize for peace, to do so.

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The pilgrimage
by Harish Dhillon

My father had some strange habits. He was a very taciturn man — his conversation was limited to monosyllables and even these dried up altogether when the conversation turned to subjects like his three and a half year internment in a Japanese POW camp in Singapore during World War II. Because of this I did not get to really know him.

He was miserly in his personal habits. He would salvage anything that was even remotely edible from the kitchen peelings, patch his worn-out trousers and refuse to discard chipped crockery. His conduct was even more incomprehensible because he never stinted any expense for the rest of the family. Because of these habits my memory of him had harboured less respect for him than it should have.

Then two weeks ago I found myself in Singapore and was able to fulfil a longstanding wish to visit the place where he had been imprisoned. The camp was gone now but the graphic display in the little museum that stood there brought it back so vividly, it was like being in prison myself.

My father had shared a six feet by eight feet cell with three other inmates, with a hole in the ground in one corner as the toilet. He survived on a daily diet which was just a point away from total starvation. The diet took its toll and a heartrending photograph of the survivors at the time of the Japanese surrender in 1945 showed them all as skeletons dressed in a loose covering of wrinkled skin.

The prisoners had only the clothes they wore. When these fell away in tatters, they salvaged abandoned sacking and any other material they could lay their hands on, to cover their nakedness.

There was another haunting picture, of a group of prisoners wearing nothing but a loin cloth. It was a fuzzy picture but looking at it, I imagined my father among the group.

There was a mug on display. Each inmate was issued one such mug which became a prized possession because it was used for bathing, for drinking water and for food. Only those who were exceptionally strong in spirit had survived.

My heart and mind were completely numbed and I sat down in the little chapel to collect my thoughts. Gradually, the horrible enormity of my father’s situation came upon me and I put my head in my hands and wept. I wept for all the suffering that he had undergone. I wept because for so long I had been unfair and unjust to him. I wept because at last I understood his strange habits. And I wept at the indomitable will and courage which had helped him to survive.

There is a little shrine in the courtyard of the museum where I lit a candle to his memory and pinned a note to him on the memorial board. I walked out with a deep, almost radiant stillness in my heart, born out of a new and great respect for my father.

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Indians emerge from fatalism to realise their dreams
by Vijay Sanghvi

A moment comes, which comes but rarely in history, when we step out from the old to the new, when an age ends and when the soul of a nation, long suppressed, finds utterance.” This was written by an Indian visionary, Jawaharlal, a few years before Independence.

He was certainly a visionary but not a pragmatic or a practical person to clearly see that there was a mismatch in the two models he had chosen for his vision of India. His political model was of a liberal democracy on the pattern of the West but his economic model was based on the Soviet pattern of a planned development in which he refused to allow a place for and participation by private sector and individuals on their own. The consequence was a tightening of the nozzle on Indians’ creativity, most of whom had been under the spell of fatalism for centuries.

They were eking out their lives in the abyss of poverty, illiteracy, social and economic disparities and inequalities. They accepted life as it came and continued their vocations of life as were ordained by the prevalent caste system without ever protesting.

The rigidity of life under the spell of fatalism was confirmed vividly by the fact that more than four million preferred to perish in the worst famine of 1943 in Bengal when food-laden trucks were waiting on main streets of Kolkata for onward journey to Burma for the fighting British forces. They could not think of stretching their hand to take food from trucks as it was not given to them by the owner.

They were thankful that the government organised cheap food for them through imports. But no one questioned why the government had not attended to improving agriculture and productivity so that the country would not suffer from perennial food shortages.

The first stirring in their life began with the introduction of the Green Revolution in 1966, the first year of Indira Gandhi as the prime minister. Before they could see the fruits of the revolution, Indira Gandhi promised everyone two meals a day as their right when she was combating old guards in her party to ensure her survival in office.

They identified with her and placed her on a high pedestal of their hearts by giving her a massive mandate. She could not keep her promise but she had nevertheless delivered a message to them that food was their right and not their fate alone. Disappointed in their expectations raised by her promise, they became restless and the situation slipped out of the hands of Indira Gandhi within three years.

The tribal population of Bastar district defied the establishment, first instance of their defiance to bring the rail movement in their region to a complete halt for a week as they were looking for food during the severe scarcity conditions in 1974. It was an unheard-of event in India.

The Green Revolution caused the first stirrings with the economic benefits flowing to the rural areas with improved productivity in agriculture and a cascading impact on other allied services connected with it.

Economic liberation for a large section appeared on the horizon and it also brought freedom of thinking about life. They had never before seen better job opportunities that the improved agriculture provided now. The slow liberation from economic wants had brought social awakening in other aspects. First was the need for better education to children.

For centuries people had believed, and the poor more ardently, that more hands in the family would help. Now they had understood that more hands also meant more mouths to feed. There never was enough food to share with so many hungry bellies. A dream of economic betterment had brought social awareness of small family.

A realization also dawned that without education, children would never be able to break out of the caste straight jacket in which their lives were tightly packed. For centuries India has been an open society with closed minds. The prospects of betterment of economic conditions began to open their minds.

The Other Backward Classes always had numerical superiority but the life struggle had kept them away from the political arena. Some of them were accommodated on the periphery of parties but were never given a place inside the decision-making structures.

With improved conditions, their aspirations and a desire for a share in power structure were aroused. As they found no place in traditional parties, they began forming their own parties. Their strength was always fragmented among several castes with an ever-present strife for a larger share within.

Hence they could not collectively assert their position in the political arena. No leaders had attempted to bring the entire OBC under one umbrella so they could end the upper-caste hold on the levers of power and divert gains of economic development to more needy classes.

Dr. BR Ambedkar had during the freedom struggle strived relentlessly to give a voice to the Dalits. However, he could not succeed in giving them courage. Kashi Ram, a former employee of the Defence Ministry, was able to make them understand the need for closing their ranks and stand united to demand their due share and social equality.

For twenty years, he continued with his social movement to inculcate a sense of belonging and courage to stand on their ground without bowing their heads. He was able to motivate the better-off among the Dalits by education and jobs to devote their time, money and energies for the Dalit causes.

A measure of his success was in a clear majority in the Uttar Pradesh assembly election in 2007 won by the Bahujan Samaj Party that he had launched in 1983. The Dalits needed no more to stand with bowed heads before men of upper castes. They had ripped through the caste jacket that had kept them in captivity for ages.

It is true that even now nearly one-third of the population ekes out life on twenty rupees per head per day. However, India has now a middle class of 300 million, which is larger than the population of the United States of America.

The pace at which the population is emerging from the abyss of poverty is phenomenal. The pace increased since the global winds blew across India and engulfed even the poor. It gave them the courage to dream that they can snap out of the social straight jacket that had kept them bound for centuries.

In the last two decades, the spread of education, easy availability of means of communication and an expansion of the media have brought the entire world to the homes of even lower middle class families as they aspire to provide a computer at home for access to the internet for their children.

More than 400 million mobiles were in use by the year-end and ten million new connections are being added every month. Mere statistics of enrolments in schools and emerging graduates from universities cannot convey the full story of the march to modernity that Indians have undertaken during the last two decades.

Even GNP figures do not tell the full story as the value of services rendered by the unorganized sector, including the roadside cobblers, tea vendors and food servers, is not covered by the GNP figures merely due to logistical difficulties.

The poor have always been objects of politics. Everyone talked of the poor and poverty in India as it cost nothing. Now they have become subjects of politics because they no more hesitate to aspire for a better life. They are willing to struggle for it rather than wait for the destiny to decide and deliver it. They have stepped out of the old world to enter a new age.

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Zardari holds off his foes
by Pamela Constable

President Asif Ali Zardari, fighting to keep his job amid pressure from opponents in the media, the courts, the Parliament and the military, appears to have reasserted his grip on the presidency for the time being, according to analysts here.

But Zardari's government remains caught between pressure to support Washington in the war against Islamist insurgents in Afghanistan and the need to improve its tenuous relations with the army, which is focused on fighting domestic Taliban extremists and mistrusts the Obama administration's friendship with India, Pakistan's neighbor and archrival.

On Monday, Prime Minister Yousaf Raza Gillani – who reports to Zardari but is also a political rival – warned in a television interview that any sizable increase in U.S. troops in Afghanistan would lead to a spillover of insurgents into Pakistan, further destabilizing the border area where troops are now conducting a ground and aerial war against domestic Taliban forces.

In the past week, Pakistan's embattled president has had to relinquish a number of executive powers to Gillani to placate his adversaries. Zardari agreed Friday to transfer control of Pakistan's nuclear arsenal to the prime minister, and has also given up his right to dissolve Parliament, an authority he inherited through a decree by his predecessor, Pervez Musharraf.

Now, Zardari's opponents in Parliament are demanding that he give up even more authority, and some have called on him to resign. Zardari cannot be impeached because his Pakistan People's Party dominates the legislature, but it is now being widely predicted that he will serve out his term with greatly reduced powers.

Meanwhile, the president has also become vulnerable to legal action by Pakistan's Supreme Court. An amnesty for past corruption charges against Zardari and a host of other officials expired Saturday, and although the president cannot be prosecuted while in office, the high court could also rule that his election was illegitimate and then pursue the original cases against him.

But Zardari, backed into a corner by multiple adversaries, has come out swinging. In a defiant speech last week, he lashed out at "political actors" seeking to dethrone him and sharply criticized certain opponents in the media. He also forced the cancellation of a cable TV show whose host often criticized him.

Such clumsy actions drew further ridicule from the anti-Zardari media. Shaheen Sehbai, editor of the News International newspaper, wrote in a sarcastic column that he "laughed and laughed" at Zardari's "rants." Sehbai has called for the president to "step down with dignity," hand over his powers to Gillani or become a figurehead.

Zardari appears to have temporarily fended off a far more powerful opponent: the army. Analysts said that although the army is still unhappy about Zardari's concessions to Washington and soft stance on India, and has been working against him behind the scenes, it does not want to be linked to a messy or illegitimate change of government.

Moreover, military experts noted that the army is heavily dependent on U.S. spare parts and equipment to wage its current air war against the Taliban and cannot afford to sabotage Zardari's ties with Washington just as U.S. officials are calling for a new "strategic relationship" with Pakistan.

The president has also received a political lifeline from a surprising source — his longtime rival, former prime minister Nawaz Sharif of the Pakistan Muslim League-N. Until this month, Sharif had been seen as biding his time and waiting for Zardari to self-destruct so he could run for president in midterm elections.

But in a high-profile TV interview recently, Sharif struck a more statesmanlike chord. He said he did not support a midterm election or power-sharing formula. He warned that "time is running out for democracy" in Pakistan and that obsessive partisan competition was partly to blame.

A third potential source of trouble for the president, Supreme Court Chief Justice Iftikhar Mohammed Chaudhry, also seems less likely to pounce than he did just a few weeks ago. Analysts noted that the president has been careful not to antagonize the court.

— By arrangement with LA Times-Washington Post

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Flashy Dubai turns to staid Abu Dhabi for aid
by Jeffrey Fleishman and Meris Lutz

The flashy, spendthrift needs his prim, conservative neighbor to bail him out.

Such is the situation between debt-ridden Dubai and flush Abu Dhabi, two Persian Gulf emirates with starkly different financial strategies and temperaments that grudgingly may need each other to prevent long-term investor panic from spreading beyond the United Arab Emirates.

Dubai's $80 billion debt, nearly $60 billion of it held by the investment conglomerate Dubai World, is testament to the emirate's overextended reliance on a real estate market whose fortunes tumbled in the global downturn. Unlike much of the region, Dubai was not blessed with vast oil reserves and needs deep pockets to prevent two of its main corporations – and its reputation – from collapsing.

Abu Dhabi has deep pockets. The question is: How deep will it dig? It considers Dubai to be an upstart, a boisterous, garish spectacle of steel and glass rising along the Persian Gulf. Oil wealth has conjured a staid sense of stability in Abu Dhabi, which regards itself as shrewd and refined, cautiously expanding its skyline and portfolio.

Analysts believe at least a partial bailout plan from Abu Dhabi will be forthcoming; a financially teetering Dubai over time could weaken the entire nation, which comprises seven emirates. The United Arab Emirates' two stock markets were down 7.3 percent and 8.3 percent Monday over anxiety about Dubai's problems. And other gulf nations, including Qatar and Bahrain, are expected to try to entice investors wary of the emirates.

"I fully agree with the `Dubai is too big to fail' rhetoric," said Samir Ranjan Pradhan, an economic analyst with the Gulf Research Center in Dubai. "You look at Abu Dhabi's strategy and financial commitment to bail out Dubai as it involves huge stakes for them also."

Abu Dhabi has put "a significant proportion of its assets on the line in Dubai, and perhaps even done more than some would expect," said Hady Amr, director of the Brookings Institution branch in Doha, Qatar. "At some point, you have to temper your support for your own brother when he keeps getting into trouble."

Over the years, Dubai became a hub for trade, international investment and glitz, attracting movie and sports stars and endless bling and buzz. That attention has agitated Abu Dhabi, which prefers tribal circumspection and seeks artistic and cultural respectability; the emirate eventually will house branches of the Guggenheim and Louvre museums.

Abu Dhabi's oil reserves may not last forever, but they give it clout these days in negotiations with Dubai.

It is unclear what will happen in the United Arab Emirates' financial markets in coming days as Dubai World, which oversees the developer Nakheel, seeks to suspend debt payments while its puts together a restructuring plan. The central bank has promised to stand by foreign and domestic banks with holdings in the country. The five other emirates, lacking the economic and political power of Dubai and Abu Dhabi, can do little but mediate from the sidelines.

Dubai officials insist their emirate's financial problems have been exaggerated. It is unlikely, however, that such a scenario would have unfolded in Abu Dhabi.n

— By arrangement with LA Times-Washington Post

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