A significant feature of President Musharraf's recent tour of nine countries in the Americas and Europe was that while reiterating Pakistan's resolve to keep fighting terror, he made a strong case for a just and balanced approach to the Islamic world.
Since the attack of 9/11, the US virtually holds the world of Islam responsible for the outbreak of terrorism in the world. This perception is caused by the fact that a strong undercurrent of hostility and resentment has developed in the Islamic world, owing to the total US support to Israel over the past half-century.
In addition, President Bush has demonstrated an ideological identification with the evangelical Christians, who believe that the defeat of Muslims by Israel will create the situation for the Second Coming of Christ.
Having won a second term, George Bush believes he has a mandate to proceed further with his unilateralist agenda. However, after the pre-emption in Afghanistan, and Iraq, he is becoming aware of the limitations of relying entirely on military strength, to maintain US hegemony.
With European allies divided over his policies, and resentment persisting in the Muslim world, he appears to be realizing the desirability of acquiring allies in the world of Islam, and President Musharraf looks like a good prospect.
It may be recalled that the first reaction of British Prime Minister Tony Blair to Bush's electoral triumph was to state publicly that the most urgent task confronting the West was to resolve the crisis in Palestine, which was the major cause of frustration in the Islamic world.
When President Musharraf met President Bush in Washington, he also urged the US leader to help resolve issues like Palestine and Kashmir, if he wanted to address the roots of terrorism.
President Bush had reiterated that he stood by his resolve to achieve a settlement in the Middle East on the basis of two states in Palestine. He also stated in his press conference that he would like President Musharraf to assist him in finding and implementing a peaceful solution.
This public statement reflects the personal rapport that has developed between President Bush, and the Pakistani president. There are indications that the Bush administration would like the Israeli government headed by Ariel Sharon, to move forward with concrete moves launched to implement the roadmap for Palestine, with some changes in Israel's favour.
The Sharon plan is to withdraw from the Gaza strip, one of the most crowded places in the world, pulling out some 14 Israeli settlements. Israel would also withdraw from the West Bank, but hold on to settlements established there, that would effectively reduce the portion returned to around 50 per cent.
Thus Israel is being encouraged to depart from key provisions of the UN resolutions 242 and 338, that call for Israel to withdraw from territories occupied in 1967, though the wording suggests that such withdrawals should be consistent with Israel's security imperatives.
Sharon also announced that his plan did not include the right of return by Palestinian refugees, since such return would swamp the territory of Israel. Since the death of Yasser Arafat, whom both Bush and Sharon considered to be an obstacle to peace in Palestine, the two leaders have openly stated that prospects for a peaceful settlement have improved.
Mahmoud Abbas, who is expected to win the election scheduled for January 9, 2005, has even expressed the view that the armed struggle can be called off. This statement assumes that Israel will be ready to conclude a settlement acceptable to the Palestinians, so that peace can return to the tortured region, and the gulf between the West and the Islamic world can be bridged.
Israel has already imposed modifications on the roadmap announced in June 2002 that will not be acceptable to the Palestinians. The other backers of the roadmap, the UN, European Union and Russia may not support the modifications that appear to have US approval.
The Arab and Islamic countries would share the dissatisfaction of the Palestinian Arabs over the high proportion of the occupied territory which Israel wants to keep, about the status of Jerusalem, and about the right of Arab refugees to return.
The question arises what role can Pakistan play in such a situation? Given Pakistan's history of principled support to the Palestinians in rejecting acquisition of territory by aggression, Islamabad would have to maintain its stand.
Arab states are already restive over the US policy of pressurizing them, and its traditional ally, Saudi Arabia, is not hiding its resentment over the current campaign against it.
Can Pakistan afford to play a role supportive of US backing to Sharon, when the traditionally hard-line Jewish leader is virtually tearing the UN resolutions on Palestine to shreds?
For the time being, international attention is focused on the elections in the so-called Palestinian areas, and Mahmoud Abbas is virtually the only candidate, who as the provisional president of PLO, can lay claim on being the legitimate successor to Arafat.
The young Marwan Baghouti, who is in an Israeli prison, and is regarded as the mouthpiece of the younger generation, withdrew his candidature after having his name entered at the last minute.
Abbas, also known as Abu Mazen, is favoured by the US and Israel, as he supports the approach based on negotiations, and questions the usefulness of the Intifada. However, Israel itself has made the peaceful route virtually unacceptable by maintaining its military incursions against the militant factions, whom it describes as "terrorists".
The militant Palestinian factions, such as Hamas and Islamic Jihad find the alternative of dealing with Sharon, while he is indifferent to Palestinian suffering and casualties, as tantamount to accepting an inferior status.
The election campaign has started, but Israel continues to attack Palestinian villages, and to kill civilians in a manner considered incompatible with the peace process even by Europeans. This approach by Sharon would certainly be unacceptable to the Arab and Islamic countries.
Bush has shown few signs of disciplining Sharon, since he maintains he must keep fighting terror, though Israel is perpetrating most of the violence. Already, western analysts have serious doubts if the election process set for January will be completed.
The major western donors would be ready to commit $ 6 billion to $ 8 billion to help the Palestinians only if the completion of elections creates an environment conducive to undertaking the task of rehabilitation and reconstruction in Palestine.
Any government in Pakistan will be totally out of line with public feeling if it ignores the suffering and injustices being perpetrated against the Palestinian population, to advance the Bush version of the roadmap that is being drawn by Israel.
Pakistan's natural and logical place would be with the Arab and Islamic countries, who would want justice, rather than power to be the basis of a settlement in Palestine.
Apart from the considerations of fairness and justice embodied in the Security Council resolutions that must apply in Palestine, Pakistan is a party to the Kashmir dispute, where also the principles embodied in UN resolutions need to be honoured in any final settlement.
The only credible role, that will be acceptable to the people of Pakistan, would be for the government to use whatever leverage it has as an ally in the war against terror to persuade the sole superpower to honour the UN resolutions.
How Iran is winning Iraq
By David Ignatius
If you had asked an intelligence analyst two years ago to describe the worst possible political outcome following an American invasion of Iraq, he might well have answered that it would be a regime dominated by conservative Shia Muslim clerics with links to neighbouring Iran.
But just such a regime now seems likely to emerge after Iraq's Jan. 30 elections. Iran is about to hit the jackpot in Iraq, wagering the blood and treasure of the United States.
Last week an alliance of Iraqi Shia leaders announced that its list of candidates will be headed by Abdul Aziz Hakim, the clerical leader of the Iranian-backed Supreme Council for the Islamic Revolution in Iraq.
This Shia list, backed by Grand Ayatollah Ali Sistani, is likely to be the favourite of Iraq's 60 per cent Shia majority and win the largest share of votes next month.
Wary of trusting Iraqi Shias to manage the campaign, the Iranian intelligence service has been pumping millions of dollars and hundreds of operatives into the country.
The Iranians have also recruited assassination squads to kill potential Iraqi rivals, according to several Iraqi officials. One Iraqi Shia tells me the Iranians view the hit teams as a kind of "insurance policy" to make sure they prevail, even if the US-backed election process should fail.
Iraqis who aren't part of the Shia religious juggernaut are frightened by what's happening. The Iraqi interim defence minister, Hazim Shalan, this week described the Shia political alliance as an "Iranian list" created by those who wanted "turbaned clerics to rule" in Iraq.
Shalan is no saint himself - like interim Prime Minister Ayad Allawi, he was once part of Saddam Hussein's Baathist network. But he and Allawi speak for many millions of Iraqis who don't want to see an Iran-leaning clerical government but are powerless to stop it. Senior US commanders in Iraq had hoped Allawi's slate would win in January, but they are beginning to assess the consequences of Shia victory.
Not only would it empower the mullahs, it would alienate Iraq's 20 per cent Sunni Arab population, who mostly won't be able to vote next month because of the continuing wave of terrorism in Sunni areas.
As sectarian tensions increase, post-election, so will the danger of a real civil war. What will become of the US military mission in Iraq? Will we really arm one group of Iraqis in a sectarian conflict against another?
Given the stakes for the United States in these elections, you might think we would quietly be trying to influence the outcome. But I am told that congressional insistence that the Iraqi elections be "democratic" has blocked any covert efforts to help America's allies. That may make sense to ethicists in San Francisco, but how about to the US troops on the ground? -Dawn/ Washington Post Service
Who supplied arms, money to Saddam?
By Eric S. Margolis
Who was the first high government official to authorize use of mustard gas against rebellious Kurdish tribesmen in Iraq? If your answer was Saddam Hussein's cousin, the notorious "Chemical Ali," aka Ali Hassan al-Majid - you are wrong.
The correct answer: sainted Winston Churchill, the idol of western conservatives. As Home Secretary, he authorized the RAF in the 1920s to routinely use mustard gas against rebellious Kurdish tribesmen in Iraq and against Pushtun tribes on the Northwest Frontier.
Iraq's US-installed regime announced al-Majid, one of Saddam's most brutal henchmen, will stand trial for war crimes. Al-Majid is accused of ordering the 1988 gassing of Kurds at Halabja that killed over 5,000 civilians.
He led the bloody suppression of Iraq's Shias, killing tens of thousands. These were the same Shia whom President George Bush I called to rebel against Saddam Hussein's regime, then sat back and did nothing while they were crushed.
The Halabja atrocity remains murky. CIA's former Iraq desk chief claims Kurds who died at Halabja were killed by cyanide gas, not nerve gas, as is generally believed.
At the time, Iraq and Iran were locked in the ferocious last battles of their eight-year war. Halabja was caught between the two armies that were exchanging salvos of regular and chemical munitions. Only Iran had cyanide gas. If the CIA official is correct, the Kurds were accidentally killed by Iran, not Iraq. But it's also possible al-Majid ordered an attack. Kurds in that region had rebelled against Iraq and opened the way for invading Iranian forces. What's the difference between the US destroying the rebellious Iraqi city of Fallujah and Saddam Hussein destroying rebellious Halabja? What difference does it make if you're killed by poison gas, artillery, or 2,000 lb bombs?
"Chemical Ali" was a brute of the worst kind in a regime filled with sadists. I personally experienced the terror of Saddam Hussein's sinister regime over 25 years, culminating in threats to hang me as a spy.
Saddam Hussein and his entourage should face justice. But not in political show trials staged to influence upcoming, US-"guided" Iraqi elections, nor in Iraqi kangaroo courts.
They should be sent to the UN's Hague War Crimes Tribunal where Saddam Hussein should be charged with the greatest crime he committed: the invasion of Iran, which caused one million casualties.
Nor should we forget that Britain, the US, Kuwait and Saudi Arabia convinced Iraq to invade Iran in 1980, then covertly supplied Saddam with money, arms, intelligence, and advisors. Meanwhile, Israel secretly supplied Iran with $5 billion in American arms and spare parts while publicly denouncing Iran as a terrorist menace.
Who supplied "Chemical Ali" with his mustard and nerve gas? Why, the West, of course. In late 1990, I discovered four British technicians in Baghdad who told me they had been "seconded" to Iraq by Britain's Ministry of Defence and MI6 intelligence to make chemical and biological weapons, including anthrax, Q-fever and plague, at a secret laboratory at Salman Pak.
The Reagan administration and Thatcher government were up to their ears in backing Iraq's aggression intended to overthrow Iran's Islamic government and seize its oil.
Italy, Germany, France, South Africa, Belgium, Yugoslavia, Brazil, and the USSR all aided Saddam Hussein's war effort against Iran, which was even more a victim of naked aggression than was Kuwait in 1991.
Senior officials of those nations that abetted Saddam's aggression against Iran and supplied him with chemicals and gas should also face justice with Ali Hassan al-Majid and Saddam Hussein.
What an irony it is to see US forces in Iraq now behaving with much the same punitive ferocity as Saddam Hussein's army and police: bombing rebellious cities, arresting thousands, terrorising innocent civilians, torturing captives and sending in tanks to crush resistance.
In other words, Saddamism without Saddam. A decade ago, this writer predicted that when the US finally overthrew Saddam Hussein, it would need to find a new Saddam.
Finally, let's not forget that when Saddam Hussein's regime committed many of its worst atrocities against rebellious Kurds and Shia, it was still a close ally of Washington and London. Americans paid for and supplied his bullets, tanks, gas and germs. He was their regional bully boy. Their hands are very far from clean. - Copyright Eric S. Margolis 2004
Corporate psychology
By Robert J. Samuelson
President Bush called an "economic summit" last week, but of course the economy will do its own thing without necessarily heeding what Bush wants. To those wondering how it will actually behave in 2005, here are a few instructive facts: Since their recent low in late 2001, after-tax corporate profits have surged by more than 70 percent; but business investment - in new computers, software, machinery and buildings - has revived only modestly, increasing about 18 percent.
Capitalism isn't supposed to work this way. Soaring profits usually signal new investment opportunities and provide the cash to exploit them. Indisputably, cash is plentiful.
Since 2001 corporate cash flow is up 42 per cent and is now running at a record rate of $1.3 trillion annually (cash flow is essentially the sum of undistributed profits and depreciation - depreciation being a non-cash expense to reflect the obsolescence of existing plants and equipment). But companies aren't aggressively deploying all that money in new products, factories or markets.
The disconnect reflects a sea change in corporate psychology. Call it the return of "risk aversion" - a fancy phrase for caution. In the late 1990s, the idea of risk virtually vanished.
The business cycle was dead; stocks would always rise; globalization was good; the Internet was empowering; CEOs were heroes. Anybody could do anything. Not to worry. Now risk has revived with a vengeance.
Executives often blame their new caution on the Sarbanes-Oxley Act, the federal law requiring companies to maintain stricter financial controls over their operations.
Complying with the law is so time-consuming (it's said) that it's hard to concentrate on new business opportunities. At best this is a self-serving half-truth. The larger truth is that America's corporate elite has been scarred by the tech "bubble"; the recession; the Sept. 11, 2001, attacks, and corporate scandals. Everything has changed.
The business cycle endures; stocks fall; globalization is hazardous (i.e. terrorism and high oil prices); the Internet is unnerving; CEOs are felons. Greater profitability does not, in this climate, automatically become a springboard for action. Companies are not entirely immobilized. But there are higher hurdles, both psychologically and financially, for undertaking new expansions or hiring lots of new workers. "Businesses just love these [profit] margins," says Mark Zandi of Economy.com.
"They're not going to sacrifice margins" with risky new investments. In the past year after-tax profits represented 7.7 percent of national income, Zandi reports; that's the highest since 1965.
One way to guard profit margins is to merge with competitors, striving for cost savings and more market power. See, for example, the recent $35 billion merger between phone companies Sprint and Nextel and the $10.3 billion merger of the software firms Oracle and People Soft.
Companies can also pay out some of their cash in higher dividends or simply hoard it. They've done both. In 2004 dividends of companies in the Standard & Poor's 500 index will total $185 billion, up from $161 billion in 2003, says S&P's Howard Silver blatt.
And the 2004 figures exclude Microsoft's one-time special dividend of $32 billion. Even more stunning are cash levels (meaning money invested in bank deposits or short-term securities).
For S&P's industrial companies, cash now totals about $592 billion, says Silver blatt. At the end of 1999 the comparable figure was $260 billion. Some high-tech firms are especially flush: Dell has $8.3 billion; Intel, $15.8 billion, and Microsoft, $24.7 billion. Companies are stockpiling against future setbacks, opportunities or both.
There are two ways to look at the new "risk aversion." One is that it's healthy. Everyone realizes that the wild spending of the late 1990s was wasteful. Why invest more when many industries still have surplus capacity? (In November the Federal Reserve's capacity utilization index stood at 77.6, well below the 81.1 average from 1972 to 2003.) Companies also want to make better use of existing computers and software before buying more.
This, too, makes sense. The economy may benefit from corporate caution. A slow rise in business investment spending sustains the recovery without promoting inflation or speculation. The other possibility is that it's a potential calamity. -Dawn/Washington Post Service