Tuesday, May 17, 2011

Obama: ‘We saved the country from a Great Depression’

At a pair of fundraisers in Austin, Texas, Tuesday night, a confident Barack Obama touted accomplishments made under his watch, and declared, “We saved the country from a Great Depression.

The president said the shrinking economy he inherited “is now growing fairly steadily.”

“I don't think we fully realized how dramatic some of the changes would be as we came into office,” he told supporters, citing his administration’s handling of the banking crisis, intervening in the auto industry, passing equal pay legislation, investing in education and clean energy, doubling exports, ending a war, “as promised,” and working on drawing down troops in Afghanistan this year.

But with all that progress, Mr. Obama warned, “we still got some climbing to do,” saying he wants to reach a “summit” where all children have opportunity and where America is more prosperous.

“That's the summit we want to reach. And it’s going to take more than a couple years to get there. In fact, it’s going to take more than one term to get there,” he said to applause.

President Obama then asked his faithful to hang in there with him – even if it looks like he’s compromising too much with the Republican agenda.

“I know all the grumbling,” he said, admitting he gets frustrated too.

Then a candid Obama admitted while he gets frustrated, even “candidate” Obama knew it would be a tough road to hoe.

“I always laugh when people say, boy, you know, the Obama campaign back in 2008, that was just so smooth and flawless - and I’m thinking, what campaign were they looking at? We screwed up all the time during our campaign. We made mistakes. We lost all kinds of primaries and caucuses, and there were all kinds of times where I said things that I wish I hadn’t or didn't say things I wish I had. That's life. But you guys stuck with me because you knew that at each and every juncture in our history, when our future is on the line, when our country is at a crossroads - like we are now - we can come together and we can do big things.”

Pakistan’s Prime Minister Visits China

The Pakistani prime minister, Yousaf Raza Gilani, arrived in China on Tuesday for a four-day visit, picking up some welcome diplomatic support at a critical moment in Pakistan’s relations with the United States.

The prime minister’s visit was planned as part of a long-planned celebration of diplomatic ties, but analysts said Pakistan is using it to hint that China is an alternative source of security and economic aid — a reassuring message for a nation angered and humiliated by the covert American raid that killed Osama bin Laden.

“It is being used for show, for politics, for domestic reasons, to show to the Pakistani public that if relations deteriorate with the United States, China is there to swing in with diplomatic and other support,” said Andrew Small, a fellow with the German Marshall Fund in Brussels. “China is playing along to some extent because Pakistan is in sort of a tight spot at the moment.”

Though Mr. Gilani arrived late Tuesday, the Chinese Foreign Ministry said his visit would officially begin on Wednesday. The prime minister will meet with Premier Wen Jiabao, President Hu Jintao and various economic officials, the Chinese government said. He met earlier this week with Senator John Kerry, who flew to Islamabad to try to ease tensions over the raid.Both Mr. Gilani and the Chinese media played up Pakistan’s ties with China. Xinhua, China’s official news agency, quoted Mr. Gilani on Tuesday as saying, “We are proud to have China as our best and most trusted friend.”

A Foreign Ministry spokesman on Tuesday promised China’s unswerving support to Pakistan’s fight against terrorism. A signed commentary the day before in People’s Daily, the official newspaper of the Communist Party, urged Americans to critically examine the unilateral nature of its raid and infringement on Pakistan’s territorial rights.

Analysts said that while China is happy to offer Pakistan diplomatic cover, it is wary of tilting too far in Pakistan’s direction. Annual trade between the two countries amounted last year to $8.7 billion, and China supplied Pakistan with two new civilian nuclear reactors, balancing a nuclear deal between the United States and India.

But “China wants to hold back from a full-on alliance,” Mr. Small said. “They don’t want to be stuck in a situation where they seem to have taken on too much direct responsibility” for a country with Pakistan’s security and political problems. While there is some talk in Islamabad that China might supplant the United States as Pakistan’s main economic backer, the Pakistani officials privately express little expectation that that will happen.

Rong Ying, vice president of the China Institute of International Studies, said tense relations between the United States and Pakistan were more of a threat than a benefit to China. China has a huge stake in a stable Pakistan, he said, partly because it fears that Islamic militants could spill over into its western Xinjiang region.

“I think the United States should think about how it can damage-control relations with Pakistan,” he said.

Pakistan and NATO Forces Exchange Fire

Pakistani ground troops opened fire on two NATO helicopters that crossed into Pakistan’s airspace from Afghanistan early Tuesday morning, the Pakistani Army said in a statement. A firefight then briefly erupted between NATO forces and the troops, the statement said, and two Pakistani soldiers were wounded.

The clash took place at Admi Kot Post in the North Waziristan tribal region of Pakistan, an area that American officials have long regarded as a haven used by militants to attack coalition forces inside Afghanistan. NATO officials said they were looking into the incident, and could not immediately confirm whether the helicopters had indeed entered Pakistan’s airspace.

The exchange of fire between NATO and Pakistani forces appeared likely to worsen frictions between Pakistan and the United States. The Pakistani Army “lodged a strong protest and demanded a flag meeting,” the statement said, referring to a meeting between officials from Pakistan and NATO.

Last September, Pakistan shut down for more than a week the land route through Pakistan that NATO uses to supply its forces in Afghanistan, after two Pakistani paramilitary soldiers were killed in a similar border clash.

Tuesday’s clash came as Pakistan’s prime minister, Yousaf Raza Gilani, traveled to Beijing. Analysts said that visit was meant to signal to the United States that Pakistan saw China as an alternative source of security and economic aid.

On Monday, Senator John Kerry met with top civil and military leaders in Pakistan in an effort to smooth the fraying relations between the two countries in the wake of the American raid by forces that killed Osama bin Laden. The Pakistani Parliament in a closed-door session last week urged the government to renew and revisit its terms of engagement with the United States. It also warned that it might sever supply lines to coalition forces in Afghanistan if there were further unilateral incursions.

Drone attacks, which are operated by the C.I.A., not by the NATO-led coalition force, are highly unpopular in Pakistan. Nationalist and right-wing Islamist political parties regularly denounce the use of drone attacks inside Pakistani territory. Government officials who in the past privately approved the use of drones have lately been joining the chorus of public criticism.

Inter-Services Intelligence, Pakistan’s leading spy organization, also maintains that it has stopped cooperating with the United States in choosing targets for drone attacks.

At the same time, Gen. Ashfaq Parvez Kayani, the Pakistani Army chief, has resisted American pressure to start a military operation in North Waziristan, a stronghold of the Haqqani network, whose militants cross into Afghanistan to battle American and NATO soldiers.

PAKISTAN: Driven out of Kurram Agency by violence

At a transport stand in Peshawar, Ali Junaid, 35, haggles with bus and truck drivers for the best rates to take him and his family to the southern city of Karachi, Pakistan’s largest urban centre.

“I need to hang on to what money I have,” he said. “It is not much, but I also want my family to be comfortable. It is a long journey, and my three children are young.”

Junaid would have been paying for one other family member to travel with them, but his four-year-old son died in January while they were living in the town of Parachinar in the restive Kurram Agency, one of seven tribal agencies on the Pakistan-Afghan border where a bitter war between Sunni and Shia Muslim sects has resulted in hundreds of deaths since the 1980s.

A complex set of geopolitical issues has influenced events in Kurram valley - an area central to the interests of Taliban militants because it offers easy access to Afghanistan. For example, the fiercely Sunni orthodox Taliban have faced consistent resistance in the region from Shia tribes, a factor which has contributed to sectarian conflict in the area.

Kurram’s population of 500,000 has a Shia majority, according to official statistics. Since 2007, things have been particularly grim. That year, the main road linking Parachinar on the Pakistan-Afghan border to Peshawar was closed due to militant activity, resulting in acute shortages of essential items in Parachinar, according to observers like the autonomous Human Rights Commission of Pakistan.

The ongoing violence has resulted in hundreds of deaths and large-scale displacements from Kurram. One of those who died was Junaid’s son.

“He developed a sore throat and very high fever, but there were no medicines available in Parachinar,” Junaid told IRIN. “We found a doctor, who believed my child had meningitis, but without drugs there was nothing he could do for him. I considered trying to take him to a town with a running hospital, even through Afghanistan, but he was too weak to make the long journey and died.”

Leaving Parachinar

When the road was reopened briefly in February this year, before being shut down again in March after fresh sectarian violence, Ali Junaid chose to leave Parachinar.

“It is fortunate we did,” he said. “Now the road is closed again, even food supplies are short and no one pays any heed to demands that the road be opened.” Unable to find a job in Peshawar, Junaid, a mason, hopes for better luck - and a safer future for his family - in Karachi.

After the brief reopening of the crucial road, the prime minister announced a plan to support some 32,000 people displaced from Kurram Agency. However, the truce quickly broke down, prompting more people to want to leave both Kurram and the Tirah Valley area in the Khyber Agency, where there has also been an increase in tensions.

“Many people are trying to leave, but the security situation makes this impossible,” Hussain Abbas, who works with a community-based welfare organization in Parachinar, told IRIN.

UN Refugee Agency spokesman Duniya Aslam Khan said: “We do not have reports of any large-scale movements out of these areas, but people could be moving in with relatives rather than to camps.”

Some certainly have chosen this route. Zaigham Hassan, 40, and his wife, Shandana Bibi, moved out of Kurram Valley in 2009 and took up an invitation from a cousin based in the Khyber Pakhtunkhwa town of Mardan to live in his house. Hassan, who had considered going back to Kurram in March, has now abandoned any thoughts of doing so.

“It seems my four children are destined to grow up away from their homeland,” he told IRIN. “I would love to go back, but after the renewed trouble, I fear things will never get back to normal. The economy has slumped, and as a truck driver I have no work when key roads are closed.”

Deadly crackdown as Yemen protests persists

Growing Dangers Despite U.S. Billions Invested in Pakistan, Iraq, Afghanistan

Those who so jubilantly celebrated Osama bin Laden's demise may be surprised to discover that America's position in Pakistan and two of its neighboring countries remains just as untenable and dangerous as ever.

Three countries which have received billions in U.S. foreign aid -- Iraq, Afghanistan and Pakistan -- made the top ten list of the world's failed states, in a survey conducted by Foreign Policy magazine.

Moreover, Transparency International reports that Iraq and Afghanistan are just about the most corrupt countries in the world -- edged out only by Myanmar and Somalia -- among the 178 nations rated. Pakistan ranks 143, just slightly better than Haiti and Iran.

When a state fails to provide adequately for its citizens, corruption, theft, bribery and extortion become acceptable means of conducting business. Meanwhile, receiving decent education and healthcare becomes next to impossible as the professional classes flee in droves. Those who remain, reasonably and otherwise, point the finger of blame at America.

Iraq, for example, has seen 12,000 of its 34,000 physicians pick up and leave the country. The ratio of teachers to students in Afghanistan is one to 200, while Afghan poppy fields provide 95 percent of the world's heroin. Given these numbers, it would be absurd to think that the U.S. dollars being poured into these countries, instead of ending up in the pockets of their debased rulers, are going to build clinics and schools.

According to Foreign Policy, "Three million Pakistani civilians were displaced by 'counterinsurgency' operations in 2009—the largest single movement of people since the Rwandan genocide." The raid to kill bin Laden, purported to have been without the knowledge, let alone consent of Pakistani authorities, has eroded the confidence of Pakistanis in their own government even more.

And yet more alarming, Pakistan, unlike Iraq and Afghanistan, is a nuclear power. According to a recent report by the Congressional Research Service, Pakistan has 60 to 90 nuclear warheads, which can be delivered by "aircraft controlled by the Pakistan Air Force, and surface-to-surface missiles controlled by the Pakistan Army." The aircraft in question are American F-16 fighters, which have been modified for the purpose.

While the Bush Administration resorted to the Big Lie of weapons of mass destruction in Iraq to invade that country, and succeeding administrations have sanctioned Iran for its nuclear power development, Washington keeps largely silent about a country on the brink of chaos with a verifiable nuclear arsenal.

Pakistan's Inter-Services Intelligence (ISI), answerable to no one, is a predatory, opportunistic organization with a deeply ingrained culture of cynicism bordering on psychosis.

It created the Taliban and supports them still, along with certain al Qaeda elements, even as they operate inside Pakistan and neighboring Afghanistan. With close ties to a military that controls the nuclear weapons, the ISI has twice leaked the identity of the CIA station chief in Islamabad in recent weeks, forcing the first one to leave the country, most likely in order to deflect attention from its own obvious role - independent of Pakistani government oversight - in helping the CIA locate and kill bin Laden.

It is frightening that such an organization, whose actions are consistently guided by self-serving rationalization, can influence the decision-making process that would commence a thermonuclear offensive.

The growing crisis in that region, as all major disasters, has multiple causes. It stems partially from America's consistent misreading of the region and its overriding interests in it, its oil and geopolitical riches, as well as abysmally poor populations within the region who give rise to the worst of leaders.

Even more dangerous than Pakistan's control of a nuclear arsenal is the growing power vacuum in an area of the world which extends from the Persian Gulf to the Caucuses and Central Asia--where numerous former Soviet republics have become nation states with Muslim majorities -- and from the Turkish border to the Indian subcontinent.

Should the war in Afghanistan spill into Pakistan beyond the border mountains, leaving the United States little choice but to solidify its hold over the landmass by launching the long-dreaded offensive against Iran, other world powers are not going to sit idly by.

Russia cannot remain eternally indifferent to the growing turmoil close to its southern reaches, while China may find the moment opportune to flex its considerable muscles. Even India, the other regional nuclear power, may jump into the fray, helping to create a conflict of global proportions to define our times in the most dreadful terms possible, just as two disastrous world wars defined the previous century.

Least helpful is to stage unilateral, feel-good spectacles to serve myopic political ambitions, such as the raid that killed bin Laden. These actions only give ammunition to America’s most vociferous detractors within the region who have long lambasted it for its willful posture.

Quite to the contrary, America must begin to act multilaterally, not only in conjunction with its European allies, but countries within the region, as well as such sleeping giants as China and Russia. As it stands, every step is being taken in the wrong direction with every promise to put the entire world in unfathomable peril.

China unswervingly supports Pakistan's anti-terror efforts: spokeswoman


China said on Tuesday that it will "unswervingly" continue to support Pakistan's efforts to fight terrorism and urged "relevant countries" to offer further help to the South Asian country.

"Pakistan has made important contributions in fighting terrorism and made great sacrifices," said Chinese Foreign Ministry spokeswoman Jiang Yu during a regular news briefing.

"The Chinese government will unswervingly continue to support Pakistan's efforts to fight terrorism," said Jiang.

Jiang said that preventing and dealing with terrorist threats is a challenge for the entire international community, and urged more international cooperation regarding the issue.

"We hope relevant countries will continue to strengthen cooperation with Pakistan and provide further help to the country," said Jiang.

Jiang's remarks came as Pakistani Prime Minister Raza Gilani arrived in Beijing on Tuesday for an official visit.

Suspected Midland drug kingpin linked to family of Afghanistan President Hamid Karzai

Surghar Daily
A SUSPECTED Midland drug kingpin has been linked to the family of Afghanistan President Hamid Karzai.

Robert Dawes, 39, from Nottingham, was extradited to Spain from Dubai last month to face charges connected to a massive cocaine ring which allegedly flooded Britain with Class A drugs.

While Spanish prosecutors prepare to try the Midland man for smuggling and distributing narcotics, reports of links have emerged between Dawes and a nephew of President Karzai.

Afghanistan has a reputation as one of the world’s largest producers of heroin, and the US has estimated that up to $10 million a day leaves the country for Dubai, which has acted as a money laundering centre for Afghan druglords in recent years.

Jamil Karzai, a nephew of the Afghan president, was allegedly seen at Dawes’ offices meeting the suspected kingpin’s right-hand man, Manchester-born Raphael Nasr.

“Raphael is our best friend and is kind of family now,” Karzai allegedly told an undercover investigator. “We can do good business there. If we all get together we can have something really good.”

Asked about Dawes, Karzai allegedly said: “I’ve spoken with him, yeah, I’ve spoken with him, I think, a couple of times.” Meanwhile, Nasr told the investigator, who was posing as a broker for a client looking at business opportunities in Afghanistan, that he had strong links to Jamil Karzai.

The Afghan, who heads the Youth Solidarity Party, was an MP in Kabul until losing his seat in 2010.

When later confronted, Nasr admitted that he was friends with members of the Karzai family and Robert Dawes, but denied he was involved in any criminality. Karzai denied that he knew Nasr or Dawes.

In a statement released last week, the Spanish Civil Guard described Dawes as “the boss of an important English drug trafficking organisation”.


He was arrested after a joint operation between the UK’s Serious Organised Crime Agency (SOCA), the Spanish Civil Guard’s Central Operative Unit in Madrid, and Belgian police.

A further 22 people were taken into custody as part of the probe, nine of them in the UK, eight in Spain, four in Belgium and one in the United Arab Emirates.

Officers seized millions of pounds worth of drugs, including more than five tons of cannabis resin, 100 kilos of heroin and 210 kilos of cocaine. They also recovered four firearms and £90,000 in cash.Dawes was extradited from Dubai to Spain after completing a jail sentence imposed in 2008 for money laundering. Spanish prosecutors say he was able to continue running his operation from his jail cell in the United Arab Emirates.

He fled the UK for Spain nearly ten years ago and left his base in Mijas Costa for Dubai in 2007 after a number of his alleged associates were arrested.

Police in Britain have swooped on members of Dawes’ family, including his brother John and father, Arthur. Both were jailed in 2005 for drugs offences and money laundering.

Dawes has previously been named by SOCA as “a highly significant international criminal” wanted in the UK and other European countries.

He is under investigation in Holland for the 2002 murder of teacher Gerard Meesters, who was shot outside his home in Groningen.

British police are also said to want to interview him about the unsolved murder of father-of-two David Draycott, who was shot at his home in Sutton-in-Ashfield, Nottinghamshire, in 2002.

Who are India's Communists?

India's Communists had not completely abandoned the gun for the ballot box when the country won its independence from British rule after the Second World War.
But they soon came under pressure from the Soviet Union to make peace with the ruling Congress Party, then one of Moscow's most valued allies.

Like other communist parties around the world they was plagued by splits and in the late 1950s and early 1960s was pulled in different directions by the tensions between the former USSR and Mao's People's Republic of China.

In general elections, it didn't manage to win over the masses: its ranks of MPs remained in the 20s, but it managed a breakthrough in 1977, under the leadership of the late Jyoti Basu.

Basu, who died last year, masterminded a stunning victory in the West Bengal state elections, was revered in India as a 'gentleman and a communist' who broadened the party's appeal and transformed it into a national force.

He was widely respected beyond his party as a veteran of the independence movement, but as chief minister of India's first Communist-led government he introduced a series of land reforms and gave poor small farmers a greater say in local government. His popularity was such that he was picked as the United Front's choice to become prime minister, but the move was vetoed by his party's Politburo. He believed it made an 'historic blunder' which may have stopped the party becoming a dominant force in Indian politics.

The party's poll showings improved in the 2004 election and in 2009 it emerged as the country's third largest party with 59 seats, but its fortunes were already in decline. Basu's 'democratic socialism' in Calcutta gave way to a series of alliances between party bureaucrats and local property dealers who colluded with gangsters to force poor farmers to make way for inward investors.

Many felt they had been forced to give up land cheaply for capitalist corporates who would later make fortunes from it.

The party had moved away from the people, and last night the people put the party in its place.

Nato helicopter attacks Pakistan army post

A Nato helicopter

attacked a Pakistani army post near the Afghan border, injuring two Pakistani soldiers in an incident that could further increase tensions following the US raid that killed Osama bin Laden, Pakistani intelligence officials said. Nato confirmed there were helicopters flying near the Pakistani border and was investigating the reported attack.

"There were helicopters operating in the border region, and we are aware there has been an incident," said Nato coalition spokesman Lt. Col. John Dorrian. "But we are going to have to assess the situation."

He declined to give further details or say which Nato country was involved.

Most of the helicopters that fly in that part of Afghanistan are American.

Nato helicopters that fly in the area are outfitted with equipment that monitors whether they cross over the Pakistani border, said a Nato official, speaking on condition of anonymity because of the sensitivity of the issue. Authorities are now reviewing that equipment, said the official. The attack took place Tuesday morning in the Datta Khel area of the North Waziristan tribal region, according to the Pakistani intelligence officials.

Pakistani troops responded with machine gunfire and deployed two helicopter gunships over the post, but the Nato helicopter had already left, they said.

It is unclear how Pakistan will respond if the Nato helicopter attack is confirmed.

Last September, a US helicopter attack killed two Pakistani soldiers at an outpost near the Afghan border, prompting Pakistan to close a key border crossing for 11 days that Nato uses to ship goods into landlocked Afghanistan. The US apologised, saying the pilots mistook the soldiers for insurgents being pursued across the border from Afghanistan.

Relations are even more tense now following the Navy SEAL raid on May 2 that killed bin Laden in Abbottabad, an army town only about 35 miles outside the Pakistani capital, Islamabad.

The Pakistani government is outraged that the U.S. carried out the operation without telling them first, and many U.S. officials have expressed disbelief that bin Laden could have lived in Abbottabad for at least five years without Pakistan knowing. However, the U.S. has also said it has not found any evidence yet that Pakistani leaders knew of bin Laden's whereabouts.

The helicopter attack comes a day after U.S. Sen. John Kerry wrapped up a 24-hour visit to Islamabad in which he worked to salvage the relationship with Pakistan, but also warned the government that "actions not words" were needed to get ties back on track. Kerry was the most high-profile American to visit Pakistan since the raid that killed bin Laden.

Kerry said Pakistan had agreed to immediately take several "specific steps" to improve ties, but did not say what they were. The only tangible signs of progress were a remark by Kerry that Pakistan had agreed to give America the tail of a classified stealth helicopter destroyed by US commandos when it malfunctioned during the raid and an announcement that Secretary of State Hillary Rodham Clinton would soon announce a trip to the country.

But there have also been signs of Pakistan's anger.

The Pakistani government sent the U.S. a written request following the bin Laden raid asking Washington to reduce the number of American military personnel in the country, said a U.S. military official, speaking on condition of anonymity because of the sensitivity of the issue.

There are currently more than 200 U.S. military personnel in Pakistan, some of whom are tasked with training Pakistani troops, said the official. Pakistan has asked the U.S. to reduce the number of trainers in the country, but the official would not specify the numbers involved.

U.S. speeds up direct talks with Taliban

The administration has accelerated direct talks with the Taliban, initiated several months ago, that U.S. officials say they hope will enable President Obama to report progress toward a settlement of the Afghanistan war when he announces troop withdrawals in July.

A senior Afghan official said a U.S. representative attended at least three meetings in Qatar and Germany, one as recently as “eight or nine days ago,” with a Taliban official considered close to Mohammad Omar, the group’s leader. State Department spokesman Michael A. Hammer on Monday declined to comment on the Afghan official’s assertion, saying the United States had a “broad range of contacts across Afghanistan and the region, at many levels. . . . We’re not going to get into the details of those contacts.”

The talks have proceeded on several tracks, including through nongovernmental intermediaries and Arab and European governments. The Taliban has made clear its preference for direct negotiations with the Americans and has proposed establishing a formal political office, with Qatar under consideration as a venue, according to U.S. officials.

An attempt to open talks with the insurgent group failed late last year when an alleged Taliban leader, secretly flown by NATO to Kabul, turned out to be a fraud. “Nobody wants to do that again,” a senior Obama administration official said.

Other earlier meetings between Afghan government representatives and Taliban delegates faltered when the self-professed insurgents could not establish their bona fides as genuine representatives of the group’s leadership.

But the Obama administration is “getting more sure” that the contacts currently underway are with those who have a direct line to Omar and influence in the Pakistan-based Quetta Shura, or ruling council, he heads, according to one of several senior U.S. officials who discussed the closely held initiative only on the condition of anonymity.

The officials cautioned that the discussions were preliminary. But they said “exploratory” conversations, first reported in February by the New Yorker magazine, have advanced significantly in terms of the substance and the willingness of both sides to engage.

Rumors of the talks have brought a torrent of criticism in recent weeks from Afghan President Hamid Karzai’s political opponents, who say that he will ultimately compromise Afghan democracy. In one indication of U.S. eagerness to get negotiations moving, however, administration officials described the criticism in positive terms as evidence that Afghans were starting to take the idea of negotiations seriously.

The Taliban, one U.S. official said, is “going to have to talk to both the Afghans and the Americans” if the process is to proceed to the point that it would significantly affect the level of violence and provide what the Taliban considers an acceptable share of political power in Afghanistan.

Such an outcome is likely to be years away, officials said. They said that the United States has not changed its insistence that substantive negotiations be Afghan-led. “The Afghans have been fully briefed” on U.S.-Taliban contacts, an American official said, and “the Pakistanis only partially so.”
Officials said representatives from the Haqqani network, a group of Afghan fighters based in Pakistan’s North Waziristan tribal region whom the administration considers particularly brutal and irreconcilable, have had no part in the discussions.

Although U.S. officials have said that Osama bin Laden’s killing by American commandos early this month could facilitate progress, initiation of the discussions predate bin Laden’s death. During a Feb. 18 speech, Secretary of State Hillary Rodham Clinton said the United States and the Afghan government would no longer insist on a public break between the Afghan Taliban and al-Qaeda as a precondition for talks. Instead, such a declaration could be made at the end of negotiations.

The U.S. and Afghan governments also insist that any settlement process result in an end to Taliban violence and a willingness to conform to the Afghan constitution, including respect for the rights of women and minorities and the rule of law.

Asked what Obama hoped to announce in July, an official said the president would not offer details of any talks. “It would be something like this,” the official said. “ ‘Here’s my plan on troops, here’s my overall vision for Afghanistan. The secretary [Clinton] said we were going to produce some diplomacy and laid out our desire to speak to the enemy. . . . I want to tell the American people . . . we’re making that policy real.’ ”

The Taliban has transmitted its own list of demands, most of them long-standing, another official said. They include the release of up to 20 fighters detained at Guantanamo Bay, Cuba — eight of whom are thought to be designated “high value” by the United States and two of whom have been designated for trials by military commissions — withdrawal of all foreign troops from Afghanistan, and a comprehensive guarantee of a substantive Taliban role in the Afghan government.

The Taliban proposal of a formal office has raised two immediate questions, one U.S. official said. “One, where is it? Second, what do you call it? Does it say ‘Islamic Emirate of Afghanistan’ across the door? No. Some people say you can call it a U.N. support office and the Taliban can go sit there.’ ”

“If the Afghans want it in Kabul, that’s okay,” the official said. “If they would support it in Qatar, that’s fine.”

Events over the past six months have contributed to the administration’s determination to get substantive talks underway as well as its belief that a successful political outcome is possible, even if still years away.

In a November meeting, NATO contributors to the 140,000-troop coalition in Afghanistan — all under economic and political pressure to end the long-running war — set the end of 2014 as the deadline for a complete withdrawal of combat troops. By that time, they said, enough Afghan government forces would be recruited and trained to take over their country’s security.

Obama had announced that he would begin drawing down U.S. forces, who form about two-thirds of the international coalition in Afghanistan, in July. The U.S. budget crisis, which prompted the election of more deficit hawks last fall, brought increasing political pressure on the administration to decrease the $10 billion monthly bill for the war.

On the ground in Afghanistan, Gen. David H. Petraeus, the coalition military commander, has cited increasing progress against Taliban fighters in the south, although there is some disagreement with the U.S. military’s conclusion that heavy losses have made the Taliban more amenable to negotiations. U.S. intelligence officials have offered a slightly different interpretation, saying that replacement commanders inside Afghanistan have made the Pakistan-based leadership nervous of losing control over its fighters and more anxious to make a deal.

Officials said senior diplomat Marc Grossman, who was appointed as the administration’s special representative to Afghanistan and Pakistan after Richard C. Holbrooke’s death in December, was told that the White House expected him to concentrate his efforts on a negotiated settlement.

At the same time, U.S. relations with Pakistan — the home base for the leading Afghan Taliban groups — have become increasingly frayed. The endgame in Afghanistan clearly requires Pakistani cooperation, and Grossman began trilateral discussions on the subject with top Afghan and Pakistani diplomats in Islamabad, the Pakistani capital, this month. Officials said that he has also visited other regional players interested in talks, including India and Saudi Arabia, and that Iran has been approached through intermediaries.

The administration now thinks that talks with the Quetta Shura and other groups do not necessarily require Pakistan’s cooperation.

“Some people who have met with the Taliban say that among the reasons [the insurgents] want to establish their own office is so they can get out from under the Pakistanis,” one senior administration official said.

U.S. hits debt ceiling

It's official: The U.S. government hit the debt ceiling on Monday, Treasury Secretary Timothy Geithner told Congress.

Geithner said he would have to suspend investments in federal retirement funds until Aug. 2 in order to create room for the government to continue borrowing in the debt markets.
The funds will be made whole once the debt limit is increased, Geithner said. "Federal retirees and employees will be unaffected by these actions."
He went on to urge Congress once again to raise the country's legal borrowing limit soon "to protect the full faith and credit of the United States and avoid catastrophic economic consequences for citizens."
Congress, meanwhile, is not showing any signs of budging. Many Republicans and some Democrats say they won't raise it unless Congress and President Obama agree to significant spending cuts and other ways to curb debt. (Social Security and Medicare squeezed)
Geithner told Congress that he estimates he has enough legal hoop-jumping tricks to cover them for another 11 weeks or so.
But then he said that's it. If lawmakers don't get it together by Aug. 2, the United States will no longer be able to pay its bills in full. (Slashing spending alone won't cut it)
The rhetoric about whether to raise the ceiling and under what conditions has been loud, harsh and, at times, misleading. Exasperatingly, it's far from over.
What is the debt ceiling exactly? It's a cap set by Congress on the amount of debt the federal government can legally borrow. The cap applies to debt owed to the public (i.e., anyone who buys U.S. bonds) plus debt owed to federal government trust funds such as those for Social Security and Medicare.
The first limit was set in 1917 and set at $11.5 billion, according to the Center for a Responsible Federal Budget. Previously, Congress had to sign off every time the federal government issued debt. (Take CNNMoney's deficit quiz)
How high is the debt limit right now? The ceiling is currently set at $14.294 trillion. Based on Treasury's announcement, it hit that mark on Monday morning.
And by taking various extraordinary measures like suspending investments in federal retirement funds, Geithner will be able to bring total debt down enough to allow the government to continue borrowing until Aug. 2.
How is the ceiling determined? They don't admit it, but lawmakers tacitly agree to raise the debt ceiling every time they vote for a spending hike or tax cut.
"Congress has already passed and the president has already signed legislation that increases spending or decreases revenues. Those decisions have already been made," said Susan Irving, director for federal budget issues at the Government Accountability Office.
So in reality arguing over the debt ceiling is essentially arguing over whether to pay the bills the country has already incurred.
Debt ceiling: Time to get real
But politicians who make a stink about the debt ceiling will always try to make the case that the guy who votes to raise it is a fiscal spendthrift.
And politics, of course, permeates the whole debate. Lawmakers who want to make hay of the issue for political gain may push for a small increase so the debate comes up again soon. Others may want a bigger increase so they don't have to revisit the issue for awhile.
How many times has the ceiling been raised? Since March 1962, the debt ceiling has been raised 74 times, according to the Congressional Research Service. Ten of those times have occurred since 2001.
Expect more of the same over the next decade. Barring major changes to spending and tax policies, "Congress would repeatedly face demands to raise the debt limit," CRS wrote.
Why does Congress even bother to set a debt limit? In theory, the limit is supposed to help Congress control spending. In reality, it doesn't.
Every time the debt limit needs to be raised, lawmakers and the president are forced to take stock of the country's fiscal direction, which isn't a bad thing necessarily.
But the decision about how high to set the ceiling is divorced from lawmakers' decisions to pass spending hikes and tax cuts. It's also made after the fact, so it doesn't do much to pull in the purse strings.
That's why budget experts say it would be better to tie the debt limit decision to lawmakers' legislative actions.
What happens if Congress doesn't raise the debt ceiling before Aug. 2? No one knows for sure. But the going assumption is that no good can come of it.
What happens if Congress blows the debt ceiling?
Treasury would not have authority to borrow any more money. And that can be a problem since the government borrows to make up the difference between what it spends and what it takes in. It uses that borrowed money to help fund operations and pay creditors.
Geithner's critics say he could prevent default by simply paying the interest due to bondholders.
But since average spending -- minus interest -- outpaces revenue by about $118 billion a month, Geithner won't be able to pay all the country's bills.
That means he will have to pick and choose who to pay and who to put off every day. And there's no guarantee that paying interest while shirking other legal obligations will protect the country from the perception of default.
Geithner said it would be akin to a homeowner who pays his mortgage but puts off his car loan, credit cards, insurance premiums and utilities. The mortgage is taken care of, but the homeowner's credit could still be damaged.
Ultimately, if lawmakers fail to raise the ceiling this year, they will have two choices, both awful.
They could either cut spending or raise taxes by several hundred billion dollars just to get through Sept. 30, which is the end of the fiscal year. Or they could acknowledge that the country would be unable to pay what it owes in full and the United States could effectively default on some of its obligations.

Shahbaz Sharif, Rejecting loans is easier said than done


The Shahbaz Sharif government, which announced on Monday its decision to reject foreign loans and aid, has obtained foreign loans of Rs34.27 billion in the last fiscal year from the multilateral lenders like the World Bank and the Asian Development Bank to support its budget and carry out various reform and development programmes in the Punjab.

The amount of foreign loans pitched for the current financial year is estimated to be just below Rs40 billion, which forms more than one fifth of its development programme of Rs190.5 billion.

The repercussions of rejecting foreign assistance can be very serious for the province’s development programmes, officials say

Chief Minister Sharif announced on Monday that his cabinet had decided to break the “begging bowl” and rid the province of its reliance on foreign loans and aid. He, however, said the implementation of the decision depended on its approval by Pakistan Muslim League-Nawaz leader Nawaz Sharif.

The province has so far received only a few billion rupees from the total loan amount committed by the lenders for the current year. But the government is hopeful of getting a major portion of the rest of the committed funds before the close of the financial year.

“It will be extremely difficult to meet our budgetary targets if the province does not get the promised funding. It may have to further cut development spending,” an official of the provincial finance department told Dawn on Monday.

The province has already slashed its development programme for the year by more than Rs60 billion to Rs130 billion because of the devastating floods last summer and the falling federal transfers, which form more than 80 per cent of the provincial revenues, due to lower than expected tax revenue collection by the Federal Board of Revenue.

“The rising foreign debt burden of the province is a cause of serious concern for us because of the increasing debt servicing. But the provincial government’s socio-economic development commitments require further foreign borrowing over the next several years even if it means further rise in debt stock and debt servicing,” the official said.

Punjab’s total foreign debt has soared to a little below Rs391 billion or 80.5 per cent of its total debt stock of Rs485.7 billion as of June 30, 2010. If Punjab actually rejects foreign loans, according to officials, it will mean end of several programmes in the education, health and other sectors, at least for the time being, because of resource shortages.

The official was at a loss to understand the “reasons” prompting Chief Minister Sharif to decide to reject foreign loans and aid.

“Apart from the loans we are hoping to receive, the foreign grants and aid (pitched at Rs12.5 billion for the ongoing fiscal) also form a substantial part of our revenues. Foreign loans and assistance (grants and project aid) are important, not least because of uncertain economic conditions in the country and very low provincial own tax collection,” he said.

Punjab’s own tax revenues constitute slightly more than 10 per cent of its total revenues. Last year, it could collect only Rs37 billion against the target of Rs50 billion. This year, it has estimated provincial tax collection (excluding provincial sales tax of Rs51 billion currently collected and disbursed by the federal government) at Rs40 billion.

“If the chief minister and his cabinet are serious about breaking the begging bowl and reducing the province’s reliance on foreign loans and aid, they should think of ways of increasing the provincial tax revenues – substantially. So far I have not seen any plan to raise the provincial taxes,” the official said.

He also pointed out that the Sharif government must also think of cutting its expenditure on projects like sasti roti and Ramzan ration subsidies in addition to changing their lavish lifestyle.

“The provincial government was forced to borrow Rs50 billion from the State Bank of Pakistan to spend on such schemes on financial year 2009. In the given circumstances it is preposterous to talk about rejecting foreign loans and aid. The province cannot afford this kind of policy without sacrificing development and well being of its citizens,” he contended.

In an obvious reference to PML-N leader Nawaz Sharif, former finance minister Salman Shah, who thought of Mr Sharif’s decision to reject foreign aid and loans as a political gimmick, said: “Those who pay a paltry amount of just Rs5,000 as tax to the government cannot break the begging bowl.”