Obama Vows End to ‘Cozy’ Oversight of Oil Industry

WASHINGTON — President Obama angrily denounced the finger-pointing among the three companies involved in the oil spill in the Gulf as a “ridiculous spectacle,” and vowed on Friday to end what he called the “cozy relationship” between the government and the oil industry that has existed for a decade or more and has lasted into his own administration.
In sharp remarks during an appearance in the Rose Garden, Mr. Obama announced a review of environmental safeguards for oil and gas exploration to prevent future spills. He said that he “will not tolerate any more finger-pointing or irresponsibility” from the industry or the government over who made the mess or how to fix it.

“This is a responsibility that all of us share,” Mr. Obama said. “The oil companies share it. The manufacturers of this equipment share it. The agencies and the federal government in charge of oversight share that responsibility.”

Mr. Obama said that he, too, feels the “anger and frustration” expressed by many Americans, and particularly by residents and business people in the gulf region.

“We know there’s a level of uncertainty,” Mr. Obama said, over just how much oil is gushing into the Gulf from the undersea well that was left damaged and leaking by an explosion and fire that sank a drilling rig in April. He added that his administration’s response has always been “geared toward the possibility of a catastrophic event.”

Reacting to reports that federal regulators allowed extensive offshore drilling without first demanding the required environmental permits, the White House and the Interior Department said on Friday that there would be a review of all actions taken by the Minerals Management Service, the agency responsible for offshore rigs, under the National Environmental Policy Act, or NEPA.

The law, enacted after the Santa Barbara oil spill in 1969, mandates that federal agencies must complete a thorough environmental assessment before approving any major project, especially including offshore drilling.

The minerals service short-circuited the process when it granted hundreds of recent drilling permits, according to documents and current and former government officials. The BP well that blew in the gulf last month was granted an exemption from the assessment process because company officials assured regulators that it carried little hazard. Officials went along with the company and granted the permit.

The administration said it would study the way oil regulators apply the environmental law and make changes if necessary.

“A review of the overall NEPA procedures for the M.M.S. is an important part of the ongoing comprehensive and thorough investigation of this incident,” said Interior Secretary Ken Salazar. “But it also continues the reform effort that we have been undertaking at M.M.S. and throughout Interior.”

Pakistan Faces the Perils of Anti-Taliban Offensive

The allegation that Faisal Shahzad, accused in the failed bombing attempt in Times Square, was trained in North Waziristan has raised U.S. pressure on Pakistan to tackle that hornet's nest of militancy. Until now, the Pakistanis have postponed any such operations, citing limited available resources following their campaigns elsewhere against the Pakistani Taliban. But even as they mull a new offensive in the politically and militarily perilous terrain, the options facing Pakistan's generals present no quick or easy solution — and all run the risk of exacerbating security threats in Pakistan and abroad.
The idea that the Pakistani military is doing nothing in North Waziristan, the only one of seven areas comprising Pakistan's Federally Administered Tribal Agencies (FATA) that hasn't been subjected to a full-blown offensive, is misleading. There are currently 70,000 troops deployed across the FATA, 15,000 of them in North Waziristan, where they're engaged in limited operations, mainly to cut off the retreat of militants fleeing battles elsewhere to seek refuge in the extremist hub. The U.S. military has also stepped up its lethal drone attacks in the area to decapitate the militant leadership. There have been 35 strikes so far this year, all but two of which struck targets in North Waziristan, compared to 53 throughout 2009, according to a tally kept by the Washington-based New America Foundation.
But North Waziristan is obviously not just a Pakistani problem. The agency has become an incubator for would-be jihadists, many of them radicalized Western Muslims seeking the training and support to wage war on the West, either in Afghanistan or back home.
Until now, the reason given by the Pakistani Army for declining Washington's request that it launch a large-scale operation against militants in North Waziristan is that the troops it is able to devote to domestic counterinsurgency are stretched too thin by the anti-Taliban campaigns in Swat, South Waziristan and other regions. But the area is also the base of what many in Pakistan's security establishment view as "good" Taliban with which they have longstanding links — such as the network of Jalaluddin Haqqani, which primarily stages attacks across the border in Afghanistan. Pakistan is retaining ties with these and other key leaders of the Afghan Taliban as a counterweight to perceived Indian influence in Kabul. (Read Karzai and Obama: Whose Strategy for Afghan Endgame?)

But North Waziristan is also now home to the Tehrik-e-Taliban Pakistan (TTP), the umbrella militant group at war with the Pakistani state and responsible for numerous terror attacks in Pakistani cities. The TTP has also widened its agenda by claiming responsibility for the botched New York bombing, a development some analysts blame on the TTP leadership's close proximity to al-Qaeda in North Waziristan and their adoption of its trans-national ideology.

Differentiating those it deems "good" from those deemed "bad" Taliban among the hodgepodge of fragmented militant groups will be increasingly difficult for the Pakistani military, says author and Taliban expert Ahmed Rashid. "Nobody really seems to have a clue what's going on there," he says. "It's not clear exactly now what the leadership is."

The expectation is that diverse militant groups will quickly close ranks against any ground offensive by the Pakistani military, says Muhammad Amir Rana, a terrorism analyst and the director of the Pakistan Institute for Peace Studies. Even a limited or selective military campaign targeting only the TTP will be very difficult. "How can you somehow do it [while] keeping the other groups impartial?" he says. "You will provide the opportunity for them to unite."

One likely effect of a North Waziristan offensive is a flood of people displaced by the fighting, which will also strain a government still trying to repatriate some of the 2.3 million people forced to flee its earlier offensives in FATA and Khyber-Pakhtunkhwa (formerly the North West Frontier Province). Another consequence is likely to be an escalation in retaliation through terror attacks in Pakistan's cities, and perhaps internationally as well. "My biggest fear," says Riffat Hussein, chairman of the Department of Defense and Strategic Studies at Islamabad's Quaid-e-Azam University, "is if the leadership of some of these groups operating in FATA move into urban areas and set up shop there and engage in urban terrorism." he says.
While most analysts agree that North Waziristan's militants can't be allowed to operate unmolested, prospects for an offensive may also dim when the U.S. and its allies begin their campaign to restore control of Kandahar in neighboring Afghanistan. "Once [Kandahar] is launched, the Pakistani Army will focus on Balochistan so that these Afghan Taliban don't move into the province," says Hussein, referring to the Pakistani area that is home to violent Baloch separatist groups as well as the Mullah Omar-led Quetta Shura. "That may give the army a reason to take its eyes off FATA."
The benchmark of success in anti-Taliban operations is also murky. Although the Army routed the militants in Swat last year, Rashid warns that they are mobilizing for a comeback. That's why the military is keeping some 30,000 troops there. The answer, says Samina Ahmed, South Asia project director for the Brussels-based International Crisis Group, is the political reintegration of the regions where the Taliban is operating. "If you have deliberately isolated a territory from your country and you treat the people who live there as second-class citizens, [and] you deprive them of the protections of the state... and then you say 'You should be good citizens' — you can't have it both ways," she says.
Such reintegration is a long way off, of course, and for now, the fear is that a military offensive in North Waziristan is unlikely to put an end to militancy in Pakistan.

Karzai to visit US troops before Afghan deployment

Afghan President Hamid Karzai completes his US tour Friday with a visit to US troops from the 101st Airborne Division weeks before they deploy to his war-torn country.
The US Army's Fort Campbell post has played a key role in President Barack Obama's surge of 30,000 extra troops to Afghanistan, a bid to turn around the nine-year war against the Taliban and Al-Qaeda. But the top US and NATO commander in the country voiced cautious optimism about the effort.
Walking through "the saddest acre in America" amid rows of white gravestones at Arlington National Cemetery on Thursday, a somber Karzai bore witness to the tragic cost paid by Americans in the war.
The visit was part of a carefully scripted four-day trip by the Afghan leader designed to mend fences with his main ally after strains marked by Karzai's angry public outbursts.
The commander of US and NATO troops in Afghanistan, General Stanley McChrystal, said there was still no clear winner in the war.
"In the last year, we've made a lot of progress," McChrystal told PBS television. "I think I'd be prepared to say nobody is winning at this point. Where the insurgents, I think, felt that they had momentum a year ago, felt that they were making clear progress -- I think that's stopped."
He predicted the outcome of a pivotal bid to push the Taliban out of Kandahar and nearby villages would be clear by the end of the year.
"I think it's going to be the end of this calendar year before you will know" if the operation is working, the general told reporters earlier. "I may know before that."
NATO commanders view Kandahar -- capital of the 1996-2001 Taliban regime -- as a make-or-break battleground in the war.
McChrystal said there were signs of progress in Kandahar as US and Afghan forces expand their presence, but the Taliban still contested parts of the southern city.
Operations by US-led forces and the Afghan army were designed to improve security but winning the trust of Afghans was the ultimate goal, he said.
Secretary of State Hillary Clinton said the effort in Kandahar would not resemble the large-scale US Marine offensive in the Iraqi city of Fallujah in 2004.
"Lessons have been learned since Iraq," she said during a public forum at the US Institute of Peace.
In neighboring Helmand province, McChrystal said there had been "dramatic" progress after coalition troops forced the Taliban out of Marjah in February.
But the Kabul government had to "convince the people they have the capability to deliver and then the political will to follow through," he noted.
US and NATO officials see Karzai's corruption-plagued government as a vulnerable link in their strategy, especially after his re-election last year was marred by fraud allegations.
During his visit to the US military cemetery at Arlington, Karzai sought to address perceived Afghan ingratitude for US sacrifices.
He knelt briefly before a soldier's grave, bending to touch flower petals, and then caressed a pebble placed on another's headstone.
Section 60, where Karzai stopped to pay tribute, has space for some 12,500 graves, but the wars in Iraq and Afghanistan have nearly filled two-thirds of the area.
Veterans killed in World War II, Korea and Vietnam are buried here. Among them are also 468 men and women killed in the Iraq war and 140 who died in Afghanistan.
On Tuesday, Karzai met US troops severely wounded in Afghanistan, including a soldier who lost all his limbs, in a tour of Washington's Walter Reed Army Medical Hospital.In a bid to put angry spats behind them, Karzai and Obama emerged from their White House talks Wednesday with a vow to stand together and fight Al-Qaeda.
While acknowledging there had been strains, Obama insisted the tensions were "overstated," as Karzai put on an effusive show of support for US war goals.
In keeping with the new united front, US lawmakers on Thursday welcomed Karzai onto the Senate floor in the middle of a debate and treated him to a standing ovation.
About half of Obama's additional troops have arrived since he issued the orders in December. He has set a deadline of July 2011 to begin gradually withdrawing US forces.Karzai and his deputies this week sought assurances on a possible security agreement with the United States that would ensure a US commitment to Kabul beyond mid-2011, a US official said.

Pakistan’s Rupee May Slide to Record, Says Standard Chartered

Pakistan’s rupee will weaken 4.2 percent to a record this year as debt payments rise and foreign investors shy away from the nation because of deteriorating security, according to Standard Chartered Plc.

Investment from overseas has dropped in the last three years after Pakistan’s military cracked down on Taliban militants along the border with Afghanistan, prompting the country to seek international aid to foot the bill. Imports increased 40 percent in March, the most since June 2008, raising demand for dollars and driving the rupee to an all-time low.

The currency will slump to 88 per dollar by Dec. 31, Sayem Ali, an economist at Standard Chartered, said yesterday in an interview from Karachi. That would put the rupee on course for a seventh annual loss. It traded at 84.28 as of 10:40 a.m. local time, little changed from the end of last year.

“The outlook is primarily determined by the further slowdown in overseas investment, large external debt payments of about $4.5 billion annually and a higher import bill,” Ali said.

Foreign investment declined 34 percent to $1.34 billion in the nine months to March from the start of the fiscal year in July 2009, according to the central bank’s website. The funds reached a record $8.45 billion in the year ended June 30, 2007. Pakistan had $53 billion of external debt as of March 31, or one third of its gross domestic product, official data show.

Foreign Reserves

The rupee fell 22 percent in 2008, the most since Bloomberg started tracking the currency in 1989, amid a power struggle between the then President Pervez Musharraf and politicians Asif Ali Zardari and Nawaz Sharif. Zardari became head of state in September 2008 elections.

Foreign-exchange reserves held by the State Bank of Pakistan dropped to $3.45 billion in the 12 months to October 2008, from $14 billion a year earlier. The nation received a $7.6 billion loan from the International Monetary Fund in 2008 to help avoid defaulting on debt. The package was increased to $11.3 billion last year. The holdings stood at $15 billion in the week ended 30 April, 2010.

Pakistan may seek more IMF assistance, Finance Adviser Abdul Hafeez Shaikh said May 12. The government also wants the 25 donor countries of the Friends of Democratic Pakistan, which includes the U.S. and U.K., to meet loan and aid commitments of as much as $5.3 billion as the country battles to contain terrorist insurgents. Prime Minister Yousuf Raza Gilani said the economy has lost $35 billion in the past nine years because of the fighting.

“The medium-term outlook on the rupee will depend heavily on aid inflows from donor nations, the IMF, the World Bank and the Asian Development Bank,” Ali said. Europe’s debt crisis “will have a negative impact as weak demand from the European Union will impact exports and foreign-exchange inflows into the economy,” he said.