Ibrahim Malick August 15, 2009
#81 Posted by Goldfinger on August 24, 2009 8:18:00 pm
Intelligence agencies are eyes and ears of a nation...if Pak's top intelligence outfit is sending so many unfriendly Injuns into a tizzy as on this board, getting them to entangle their dhotis into Gordian knots, it must indeed be doing a very good job!
#80 Posted by RiazHaq on August 24, 2009 6:09:07 pm
Re: # 79
Are you part of the orchestrated campaign recommended by India's Vikram Sood to defame and discredit the ISI?
If you are, you know that Sood, a former top spy in India, elaborates on India's covert warfare options to target Pakistan in the following words: "Covert action can be of various kinds. One is the paramilitary option, which is what the Pakistanis have been using against us. It is meant to hurt, destabilize or retaliate. The second is the psychological war option, which is a very potent and unseen force. It is an all weather option and constitutes essentially changing perceptions of friends and foes alike. The media is a favorite instrument, provided it is not left to the bureaucrats because then we will end up with some clumsy and implausible propaganda effort. More than the electronic and print media, it is now the internet and YouTube that can be the next-generation weapons of psychological war. Terrorists use these liberally and so should those required to counter terrorism."
Riaz Haq, PakAlumni Worldwide
Are you part of the orchestrated campaign recommended by India's Vikram Sood to defame and discredit the ISI?
If you are, you know that Sood, a former top spy in India, elaborates on India's covert warfare options to target Pakistan in the following words: "Covert action can be of various kinds. One is the paramilitary option, which is what the Pakistanis have been using against us. It is meant to hurt, destabilize or retaliate. The second is the psychological war option, which is a very potent and unseen force. It is an all weather option and constitutes essentially changing perceptions of friends and foes alike. The media is a favorite instrument, provided it is not left to the bureaucrats because then we will end up with some clumsy and implausible propaganda effort. More than the electronic and print media, it is now the internet and YouTube that can be the next-generation weapons of psychological war. Terrorists use these liberally and so should those required to counter terrorism."
Riaz Haq, PakAlumni Worldwide
#79 Posted by bhairav on August 22, 2009 2:11:43 pm
Another clip of Pakistani would-be suicide bombers caught in Afghanistan
--------------------------------------------------------
World Youngest Suicide Bomber Aged 11; Pakistan ISI=Al Qaeda Send Them To Kill Afghans
http://www.youtube.com/watch?v=5QFqmwNOr3Q
--------------------------------------------------------
World Youngest Suicide Bomber Aged 11; Pakistan ISI=Al Qaeda Send Them To Kill Afghans
http://www.youtube.com/watch?v=5QFqmwNOr3Q
#78 Posted by bhairav on August 22, 2009 1:19:59 pm
ISI is one reason Afghans hate Pakistanis; ISI instructional videos for suicide bombers in Afghanistan
------------------------------------------------------
Exclusive ; New Instructional Videos Of Homicide Bombers Sent By The Paki-ISI To Afghanistan
http://www.youtube.com/watch?v=VCdgu6W1oMk
------------------------------------------------------
Exclusive ; New Instructional Videos Of Homicide Bombers Sent By The Paki-ISI To Afghanistan
http://www.youtube.com/watch?v=VCdgu6W1oMk
#77 Posted by bhairav on August 22, 2009 10:39:05 am
ISI is paying money to ignorant Afghans to throw Acid on school going girls in Afghanistan to maintain a reign of terror. Article in New York Times
----------------------------------------------------------------------
A School Bus for Shamsia
http://www.nytimes.com/2009/08/23/magazine/23school-t.html#
:
:
Shamsia Husseini and her sister, Atifa, were walking along the highway when they spotted the men on the motorbikes. Shamsia, then 17, was old enough to be married; she was wearing a black scarf that covered most of her face. Shamsia had seen Taliban gunmen before and figured the men on the motorcycles would pass. Then one of the bikes pulled alongside her, and the man on back jumped off. Through the mask, he asked Shamsia what seemed like a strange question.
“Are you going to school?”
The masked man pulled the scarf away from Shamsia’s face and, with his other hand, pumped the trigger on his spray gun. Shamsia felt as if her face and eyes were on fire. As she screamed, the masked man reached for Atifa, who was already running. He pulled at her and tore her scarf away and pumped the spray into her back. The men sped off toward another group of girls. Shamsia lay in the street holding her burning face.
:
:
Karzai, wearing his signature karakul cap and flowing cape, looked straight into the camera. “Religious people do not spray acid in the faces of little girls,” Karzai said. “The penalty for this is execution. I will personally ask the Supreme Court to put these men to death.” Karzai repeated that last phrase several times.
The screen flickered. A middle-aged Afghan man appeared. He was unshaven and looking nervous. “My name is Jalil,” he said, his eyes darting.
Jalil spoke tentatively at first, but his story was electrifying. Jalil and eight other Afghans, he said, were paid to throw acid on the girls by an intelligence officer working for the government of Pakistan. This was not some vague assertion; Jalil provided names, details and places. The camera zoomed in on his face. A few weeks before the attack, Jalil said, he was contacted by one Major Tahir, an officer with the Directorate for Inter-Services Intelligence, or ISI, the Pakistani spy agency. The ISI helped create the Taliban in the mid-1990s and has maintained a close association ever since. Jalil and Major Tahir had known each other for years, he said. Jalil said that Tahir offered a sliding pay scale: $2,500 for killing a teacher; $3,700 for burning a school; $1,200 for spraying acid on school girls.
“I said O.K.,” Jalil said.
:
:
----------------------------------------------------------------------
A School Bus for Shamsia
http://www.nytimes.com/2009/08/23/magazine/23school-t.html#
:
:
Shamsia Husseini and her sister, Atifa, were walking along the highway when they spotted the men on the motorbikes. Shamsia, then 17, was old enough to be married; she was wearing a black scarf that covered most of her face. Shamsia had seen Taliban gunmen before and figured the men on the motorcycles would pass. Then one of the bikes pulled alongside her, and the man on back jumped off. Through the mask, he asked Shamsia what seemed like a strange question.
“Are you going to school?”
The masked man pulled the scarf away from Shamsia’s face and, with his other hand, pumped the trigger on his spray gun. Shamsia felt as if her face and eyes were on fire. As she screamed, the masked man reached for Atifa, who was already running. He pulled at her and tore her scarf away and pumped the spray into her back. The men sped off toward another group of girls. Shamsia lay in the street holding her burning face.
:
:
Karzai, wearing his signature karakul cap and flowing cape, looked straight into the camera. “Religious people do not spray acid in the faces of little girls,” Karzai said. “The penalty for this is execution. I will personally ask the Supreme Court to put these men to death.” Karzai repeated that last phrase several times.
The screen flickered. A middle-aged Afghan man appeared. He was unshaven and looking nervous. “My name is Jalil,” he said, his eyes darting.
Jalil spoke tentatively at first, but his story was electrifying. Jalil and eight other Afghans, he said, were paid to throw acid on the girls by an intelligence officer working for the government of Pakistan. This was not some vague assertion; Jalil provided names, details and places. The camera zoomed in on his face. A few weeks before the attack, Jalil said, he was contacted by one Major Tahir, an officer with the Directorate for Inter-Services Intelligence, or ISI, the Pakistani spy agency. The ISI helped create the Taliban in the mid-1990s and has maintained a close association ever since. Jalil and Major Tahir had known each other for years, he said. Jalil said that Tahir offered a sliding pay scale: $2,500 for killing a teacher; $3,700 for burning a school; $1,200 for spraying acid on school girls.
“I said O.K.,” Jalil said.
:
:
#76 Posted by laddu on August 22, 2009 5:23:49 am
.......including all those who consider terrorists are their first-line-of-defence!!!
(what a terminology to fool people)
(what a terminology to fool people)
#75 Posted by laddu on August 22, 2009 3:34:52 am
Re: # 69
agreed, Mush and all those army bootlickers must be hanged.....
all those band masters of army and those who live off launderying their ill gotten kick backs and commissions must be tried for treason and shot......
agreed, Mush and all those army bootlickers must be hanged.....
all those band masters of army and those who live off launderying their ill gotten kick backs and commissions must be tried for treason and shot......
#74 Posted by raj71 on August 21, 2009 6:55:36 pm
Re: # 72
"i never said women can't win more medals than men. Hijras can go both ways and therefore they win more."
So you are admitting that Indian women are even better than pakistani men.
"i never said women can't win more medals than men. Hijras can go both ways and therefore they win more."
So you are admitting that Indian women are even better than pakistani men.
#73 Posted by raj71 on August 21, 2009 6:54:23 pm
Re: # 72
"Tell me why are Indians so obsessed with pakistan?"
Don't flatter yourself. Indians are not obsessed about Pakistan. We are worried about the likes of Mohammad kasabs.
If ISI stop sends Jihadis, Indians will stop worrying about Pakistan
"Tell me why are Indians so obsessed with pakistan?"
Don't flatter yourself. Indians are not obsessed about Pakistan. We are worried about the likes of Mohammad kasabs.
If ISI stop sends Jihadis, Indians will stop worrying about Pakistan
#72 Posted by mustafakrim on August 21, 2009 6:04:12 pm
#65- i never said women can't win more medals than men. Hijras can go both ways and therefore they win more.
Tell me why are Indians so obsessed with pakistan? You have bigger problems.
Maoist will break up your country in pieces. Naxalites have scored a series of successes. The scale and frequency of attacks are one concern. Another is the vast area across which Maoists wield influence. In the early 1990s, the number of districts affected by varying degrees of Maoist violence stood at just 15 in four states. This figure rose to 55 districts in nine states by the end of 2003 and shot up to 156 districts in 13 states in 2004. Today, at least 190 of a total of 602 districts in the country are said to be under Maoist influence.
You have more to worry than poor muslims of India that you treat like garbage anyway.
Tell me why are Indians so obsessed with pakistan? You have bigger problems.
Maoist will break up your country in pieces. Naxalites have scored a series of successes. The scale and frequency of attacks are one concern. Another is the vast area across which Maoists wield influence. In the early 1990s, the number of districts affected by varying degrees of Maoist violence stood at just 15 in four states. This figure rose to 55 districts in nine states by the end of 2003 and shot up to 156 districts in 13 states in 2004. Today, at least 190 of a total of 602 districts in the country are said to be under Maoist influence.
You have more to worry than poor muslims of India that you treat like garbage anyway.
#71 Posted by Zalibhutto on August 21, 2009 2:56:57 pm
INTERNATIONAL
http://www.khaleejtimes.com/DisplayArticle08.asp?xfile=data/inter national/2009/August/international_August1601.xml§ion=international
2 2 August 2009
ISLAMABAD — A covert understanding involving political and military leadership and some of Pakistan’s trusted foreign friends that led to former military ruler Gen. Pervez Musharraf’s resignation a year ago has blocked all attempts to launch a treason trial against him, English daily The News has revealed.
The paper quoting “multiple sources” with direct knowledge of what happened in the corridors of power between August 11 and August 18 last year said that the deal that finally saw Musharraf’s departure was cobbled together by the top PPP leaders, including President Asif Ali Zardari and Prime Minister Yousuf Raza Gilani, Chief of Army Staff General Ashfaq Parvez Kayani, US Ambassador to Pakistan Anne W. Patterson, Britain’s special envoy to Pakistan Sir Mark Lyall Grant and an emissary of the King of Saudi Arabia.
“The bottom line of this deal was to grant Pervez Musharraf a graceful departure from the Presidency with guarantees that there would no impeachment or court proceedings against him in future,” the daily quoted an unnamed senior official as saying.
“There is no guarantee to what happens to Musharraf in distant future, but the deal promises no official disgrace for Musharraf under the present government,” the official said. Prime Minister Gilani’s statement in the National Assembly on Wednesday ruling out the trial as “undoable” and President Zardari’s advice to “Friends” in an interview last week “to leave the politics of revenge” further testifies the sanctity of the arrangement reached in August last year.
Notwithstanding the deal, senior PPP leaders seem convinced that Nawaz Sharif’s growing pressure on the government to file sedition charges against Musharraf was actually a political attempt from the PML-N to pitch the PPP government against the army. Zardari made it clear to Sharif in their meeting last month that his PPP had enough of confrontation with the army and have given enough of sacrifices. “This time please excuse us now, you go ahead and do the job,” the President reportedly told Sharif.
“This is a fantastic deal which none of the participants would own or confirm, yet there is nothing to suggest any violation of this unwritten agreement,” the official said. “It’s more sacred than most written political agreements.”
Units from all three military services gave Musharraf a final salute before a warm send-off by three services chiefs that followed his historic resignation speech. This was all very carefully choreographed to give a message to the nation and the world that no military rebuke was attached to Musharraf’s departure. Musharraf was allowed to stay in the Army House — the official residence of the army chief — till he lived in Pakistan was part of the same deal.
The international element in Musharraf’s exit deal also promised similar treatment and protocol for him during his stay abroad.
mafzalkhan101@yahoo.com
http://www.khaleejtimes.com/DisplayArticle08.asp?xfile=data/inter national/2009/August/international_August1601.xml§ion=international
2 2 August 2009
ISLAMABAD — A covert understanding involving political and military leadership and some of Pakistan’s trusted foreign friends that led to former military ruler Gen. Pervez Musharraf’s resignation a year ago has blocked all attempts to launch a treason trial against him, English daily The News has revealed.
The paper quoting “multiple sources” with direct knowledge of what happened in the corridors of power between August 11 and August 18 last year said that the deal that finally saw Musharraf’s departure was cobbled together by the top PPP leaders, including President Asif Ali Zardari and Prime Minister Yousuf Raza Gilani, Chief of Army Staff General Ashfaq Parvez Kayani, US Ambassador to Pakistan Anne W. Patterson, Britain’s special envoy to Pakistan Sir Mark Lyall Grant and an emissary of the King of Saudi Arabia.
“The bottom line of this deal was to grant Pervez Musharraf a graceful departure from the Presidency with guarantees that there would no impeachment or court proceedings against him in future,” the daily quoted an unnamed senior official as saying.
“There is no guarantee to what happens to Musharraf in distant future, but the deal promises no official disgrace for Musharraf under the present government,” the official said. Prime Minister Gilani’s statement in the National Assembly on Wednesday ruling out the trial as “undoable” and President Zardari’s advice to “Friends” in an interview last week “to leave the politics of revenge” further testifies the sanctity of the arrangement reached in August last year.
Notwithstanding the deal, senior PPP leaders seem convinced that Nawaz Sharif’s growing pressure on the government to file sedition charges against Musharraf was actually a political attempt from the PML-N to pitch the PPP government against the army. Zardari made it clear to Sharif in their meeting last month that his PPP had enough of confrontation with the army and have given enough of sacrifices. “This time please excuse us now, you go ahead and do the job,” the President reportedly told Sharif.
“This is a fantastic deal which none of the participants would own or confirm, yet there is nothing to suggest any violation of this unwritten agreement,” the official said. “It’s more sacred than most written political agreements.”
Units from all three military services gave Musharraf a final salute before a warm send-off by three services chiefs that followed his historic resignation speech. This was all very carefully choreographed to give a message to the nation and the world that no military rebuke was attached to Musharraf’s departure. Musharraf was allowed to stay in the Army House — the official residence of the army chief — till he lived in Pakistan was part of the same deal.
The international element in Musharraf’s exit deal also promised similar treatment and protocol for him during his stay abroad.
mafzalkhan101@yahoo.com
#70 Posted by Zalibhutto on August 21, 2009 2:48:04 pm
In fact Zia needs to be tried as well and his memory publicly and officially humiliated and his body removed from the premises of the mosque and dumped in the Rawalpindi trash dump where dogs can pee on the representation of his carcass
#69 Posted by Zalibhutto on August 21, 2009 2:46:11 pm
The people will hand Musharraf the justice he deserves, how long will he hide and nurse in the cradle of the colonials whose feet he has been worshiping at and to whom he sold the nation and its people for a very cheap price. Mark my words, if Musharraf doesn't come to justice, justice will eventually catchup with Musharraf as is reflected by the statement : what goes around comes around- the hidden morality behind the governance of the universe.
#68 Posted by Zalibhutto on August 21, 2009 2:43:45 pm
If the Army was still not running the country behind the new establishmentized PPP there would be nothing that would prevent the trial of that thug Musharraf, the waffling is becuase the US/Pak Army cannot tolerate a trial that will erode Army power in Pakistan and keep in out of the country's politics- but as we know they didn't want the CJ restored as well but the people are no longer the cattle they used to be:
Pakistan accuses Pervez Musharraf of illegally detaining judges in 2007
The exiled dictator faces arrest and possible imprisonment if he returns to Pakistan. A high court ruling that Musharraf had violated the constitution could lead to treason charges.
Pervez Musharraf
http://www.latimes.com/news/nationworld/world/la-fg-musharraf12-200 9aug12,0,5399418.story
By Alex Rodriguez, LA Times
August 12, 2009
Reporting from Islamabad, Pakistan - Former President Pervez Musharraf was charged Tuesday with ordering the illegal detention of judges during Pakistan's 2007 political crisis and faces arrest if he returns from exile.
The charge is the latest legal setback for the former military dictator, who lives in London. If convicted, Musharraf could face up to three years in prison. He could post bail if he returns, but analysts doubt he would come back to face the charges.
Last month, Pakistan's Supreme Court, led by Chief Justice Iftikhar Mohammed Chaudhry, concluded that Musharraf had violated the constitution in 2007 when he imposed a national state of emergency and purged the country's courts of 60 judges, including Chaudhry. The chief justice was reinstated in March.
Musharraf's actions were widely seen as an attempt to prevent the Supreme Court from declaring him ineligible to simultaneously hold the posts of president and head of the army. He ordered the detention of those 60 judges at their homes, a move that Islamabad police now say was a crime.
"He is formally charged now," said Hakim Khan, a police official in Islamabad, the capital. "If he comes to Pakistan, he can be arrested."
Experts say the Supreme Court's July 31 ruling that Musharraf had violated the constitution opened the door for possible charges of treason, a crime that could result in the death penalty. In issuing its ruling, the high court left it up to parliament to decide whether to pursue such charges against Musharraf.
Pakistan's two main political parties remain split on whether to build a treason case against the former army chief. President Asif Ali Zardari's Pakistan People's Party has shown scant interest in pursuing the matter, while the opposition Pakistan Muslim League-N party, led by former Prime Minister Nawaz Sharif, wants Musharraf brought to trial.
Pressure has been building in Pakistan to hold Musharraf accountable for his actions during his nine years in power. His rule, which began with a coup that overthrew Sharif, has been widely criticized as a harsh dictatorship characterized by widespread corruption and the rise of the Taliban insurgency.
His actions against judges in 2007 led to a grass-roots movement of lawyers that became crucial in forcing Musharraf to relinquish his role as army chief, and eventually in driving him from office in 2008.
alex.rodriguez@latimes.com
Copyright © 2009, The Los Angeles Times
Pakistan accuses Pervez Musharraf of illegally detaining judges in 2007
The exiled dictator faces arrest and possible imprisonment if he returns to Pakistan. A high court ruling that Musharraf had violated the constitution could lead to treason charges.
Pervez Musharraf
http://www.latimes.com/news/nationworld/world/la-fg-musharraf12-200 9aug12,0,5399418.story
By Alex Rodriguez, LA Times
August 12, 2009
Reporting from Islamabad, Pakistan - Former President Pervez Musharraf was charged Tuesday with ordering the illegal detention of judges during Pakistan's 2007 political crisis and faces arrest if he returns from exile.
The charge is the latest legal setback for the former military dictator, who lives in London. If convicted, Musharraf could face up to three years in prison. He could post bail if he returns, but analysts doubt he would come back to face the charges.
Last month, Pakistan's Supreme Court, led by Chief Justice Iftikhar Mohammed Chaudhry, concluded that Musharraf had violated the constitution in 2007 when he imposed a national state of emergency and purged the country's courts of 60 judges, including Chaudhry. The chief justice was reinstated in March.
Musharraf's actions were widely seen as an attempt to prevent the Supreme Court from declaring him ineligible to simultaneously hold the posts of president and head of the army. He ordered the detention of those 60 judges at their homes, a move that Islamabad police now say was a crime.
"He is formally charged now," said Hakim Khan, a police official in Islamabad, the capital. "If he comes to Pakistan, he can be arrested."
Experts say the Supreme Court's July 31 ruling that Musharraf had violated the constitution opened the door for possible charges of treason, a crime that could result in the death penalty. In issuing its ruling, the high court left it up to parliament to decide whether to pursue such charges against Musharraf.
Pakistan's two main political parties remain split on whether to build a treason case against the former army chief. President Asif Ali Zardari's Pakistan People's Party has shown scant interest in pursuing the matter, while the opposition Pakistan Muslim League-N party, led by former Prime Minister Nawaz Sharif, wants Musharraf brought to trial.
Pressure has been building in Pakistan to hold Musharraf accountable for his actions during his nine years in power. His rule, which began with a coup that overthrew Sharif, has been widely criticized as a harsh dictatorship characterized by widespread corruption and the rise of the Taliban insurgency.
His actions against judges in 2007 led to a grass-roots movement of lawyers that became crucial in forcing Musharraf to relinquish his role as army chief, and eventually in driving him from office in 2008.
alex.rodriguez@latimes.com
Copyright © 2009, The Los Angeles Times
#67 Posted by Zalibhutto on August 21, 2009 12:48:39 pm
#50 what "idealism" are you talking about? When you are dealing with dictator supporters like Riaz Haq your idealism talk is totally misplaced. He sees things through the prism of vested interests. India is the enemy and hated for him because that hatred is required if the Army in pakistan is to keep its nuisance value nevermind the fact that in the field of battle it is totally worthless against India as history has amply proven time and again.
So those that support democracy and the voice of the people not only want the two gnats India and Pakistan to quit fighting and concentrate on changing a global structure that has subordinated them, they also want a new and people's military to arise in Pakistan, one whose heart and soul is with the people and the land not with fertilizer and cereal plants and the choicest land resources of an impoverished nation. That military the indigeneously trained and staffed and inspired one can never be defeated, not by America leave alone India- that is the kind of military we want one that does what the military institution is supposed to do and not hobnob with the imperialists to capture the politics of the nation to keep it weak and then break it on multiple occasions, in the case of B'Desh and now as it is trying to as it creates a mini Pakistan out of Sindh and Punjab....God damn the Pakistan Army, an imperialist occupation force and its goddamned dictators...._ them all.....
Have a nice day,
So those that support democracy and the voice of the people not only want the two gnats India and Pakistan to quit fighting and concentrate on changing a global structure that has subordinated them, they also want a new and people's military to arise in Pakistan, one whose heart and soul is with the people and the land not with fertilizer and cereal plants and the choicest land resources of an impoverished nation. That military the indigeneously trained and staffed and inspired one can never be defeated, not by America leave alone India- that is the kind of military we want one that does what the military institution is supposed to do and not hobnob with the imperialists to capture the politics of the nation to keep it weak and then break it on multiple occasions, in the case of B'Desh and now as it is trying to as it creates a mini Pakistan out of Sindh and Punjab....God damn the Pakistan Army, an imperialist occupation force and its goddamned dictators...._ them all.....
Have a nice day,
#66 Posted by anil on August 21, 2009 12:04:40 pm
Riaz sahib:
I know you worship east Asian economic models. Below is a copy and paste of an interview for you to consider.
Unlocking the power of Chinese consumers: An interview with Stephen Roach Morgan Stanley Asia’s chairman discusses the roots and prospects of China’s next revolution.
In China’s rush to join the global economy, the country stoked exports and government-led investment but neglected to build social and economic institutions needed to encourage consumers at home. Stephen Roach, Morgan Stanley Asia’s chairman, says its time for the world’s fastest-growing economy to find a “back-up plan.” This interview was conducted by Clay Chandler, the McKinsey publishing group’s Asia editor, in Hong Kong in August 2009. Watch the video, or read the transcript below.
Clay Chandler: We’re talking today with Steve Roach, the chairman of Morgan Stanley Asia. Steve has been here in Hong Kong for nearly two years now but is known to many for his previous role as Morgan Stanley’s chief economist. He’s a long-time observer of the global economy and of economic policy and development in China. Steve, thank you for being with us.
Stephen Roach: I’m delighted to be here.
Clay Chandler: Private consumption is running at about 36 percent of GDP in China right now. That is half of the US consumption rate, and it’s about two-thirds of the consumption rate of Europe. It has come down very dramatically in the last decade, and tested levels that we’ve really never seen in any other major economy in the history of the modern global marketplace. Why is China’s consumption so low, and how do you explain the extent of the decline?
Stephen Roach: I think there are a couple of reasons why the Chinese consumption rate is as low as it is. When Deng Xiaoping gave the word to push ahead on reforms and open up the Chinese economy, in the late ’70s, the Chinese economy was on the brink of collapse. And so they needed a pretty quick answer, and they needed it to take hold in a relatively short period of time. And so the investment/export model was unleashed, and unleashed with a vengeance. And it did start to deliver immediate results.
The second reason is that as that export/investment-led model began to deliver, the world increasingly embraced globalization, took down trade barriers, and global trade started to skyrocket as a share of world GDP. And so not only was China delivering growth for its own purposes, but it got seduced by the globalization of trade and the ability for this increased share of global trade to reinforce its own opening up.
And so it remained very focused on exports and investment and neglected the heavy lifting that was required to augment that by improved private consumption. And so it never really had a backup plan here. And now that failure to really focus on internal private consumption and the [social] safety net is beginning to be very problematic going forward.
Clay Chandler: What can China do to boost consumption? And what, in your view, is the upper limit of how much China could feasibly raise its consumption rate as a percentage of GDP?
Stephen Roach: I’ve learned, Clay, in my last 12 to 15 years of following China, don’t underestimate the commitment and the determination of the Chinese authorities to address a problem when they finally realize they’ve got a serious one. I think a realistic goal, and I’ve given a speech on this in Beijing earlier this year, would be to aim for a 50 percent consumption share of GDP within five years.
I think they can do it. Now that’s a big move. That’s 14 percentage points of GDP, 15 percentage points of GDP in five years. I think it’s achievable if they do move aggressively on social security, pensions, and nationwide medical care.
Clay Chandler: What are the obstacles to boosting consumption in China? And what’s your sense of how committed China’s leaders are to overcoming that resistance?
Stephen Roach: Well, I think the main obstacles are persuading a large generation of Chinese workers and families who have been displaced under the guise of state-owned enterprise reform—who have lost the sort of cradle-to-grave support, the so-called iron rice bowl, the safety net that had been in place in the prior state-owned enterprise regime—to convince them that it’s okay to begin to draw down the excesses of precautionary saving. People say, “Oh, this is a cultural thing in Asia.” I don’t buy that for a second. I think the excess saving is very much an outgrowth of a necessity rather than a cultural DNA. And it’s up to the Chinese authorities to really deliver on the safety net, to dissuade families so that savings motive can change.
Clay Chandler: In an article in the Financial Times, you wrote that China’s response to the global financial crisis has succeeded in restoring short-term growth but has also raised the risk for long-term problems in the economy. You warned, in fact, that it has raised the possibility of “destabilizing consequences.” Could you explain that?
Stephen Roach: Things were pretty bad in late 2008 and 2009—much worse inside of China than the official year-over-year GDP comparisons might have alluded to. If you recalculate the GDP on a sequential quarter-to-quarter basis, the way we do it in the West, the growth rate had slowed pretty close to zero late last year.
There were massive layoffs in export-dependent Guangdong province; the government admitted at least 20 million migrant workers had lost their jobs. So once again, China needed growth and they needed it now. And so what they ended up doing was, first they enacted a massive 4 trillion renminbi stimulus, 72 percent of which was infrastructure. And then they opened up the spigots of bank lending. And they created the biggest six-month lending binge on record: about 7 trillion renminbi in the January-through-June period.
So what I wrote about in the FT was that it seemed to me that because the growth imperatives were so urgent, the authorities just opted to get as much growth out the door in as short a period of time as they possibly could. And they ended up stimulating perhaps the most unbalanced sector in the Chinese economy: fixed asset investment, which at the end of last year was 40 percent of the GDP. Now it’s probably more than 45 percent of the GDP. We’ve never seen numbers like that for any major economy in the modern post–World War II era.
Clay Chandler: Is it realistic to think about China as a new engine of global growth?
Stephen Roach: I think China has the potential to become a major engine of global growth. But I think it’s unrealistic to expect China to step into that role immediately in this post-crisis era. I think it’ll take three years, more likely five to ten years, for China to really have the type of balance and scale of its economy that can fill the void that’s about to be left—or that is now being left—by the demise of what heretofore has been the biggest and most dynamic and powerful consumer in the world: the American consumer.
I know you worship east Asian economic models. Below is a copy and paste of an interview for you to consider.
Unlocking the power of Chinese consumers: An interview with Stephen Roach Morgan Stanley Asia’s chairman discusses the roots and prospects of China’s next revolution.
In China’s rush to join the global economy, the country stoked exports and government-led investment but neglected to build social and economic institutions needed to encourage consumers at home. Stephen Roach, Morgan Stanley Asia’s chairman, says its time for the world’s fastest-growing economy to find a “back-up plan.” This interview was conducted by Clay Chandler, the McKinsey publishing group’s Asia editor, in Hong Kong in August 2009. Watch the video, or read the transcript below.
Clay Chandler: We’re talking today with Steve Roach, the chairman of Morgan Stanley Asia. Steve has been here in Hong Kong for nearly two years now but is known to many for his previous role as Morgan Stanley’s chief economist. He’s a long-time observer of the global economy and of economic policy and development in China. Steve, thank you for being with us.
Stephen Roach: I’m delighted to be here.
Clay Chandler: Private consumption is running at about 36 percent of GDP in China right now. That is half of the US consumption rate, and it’s about two-thirds of the consumption rate of Europe. It has come down very dramatically in the last decade, and tested levels that we’ve really never seen in any other major economy in the history of the modern global marketplace. Why is China’s consumption so low, and how do you explain the extent of the decline?
Stephen Roach: I think there are a couple of reasons why the Chinese consumption rate is as low as it is. When Deng Xiaoping gave the word to push ahead on reforms and open up the Chinese economy, in the late ’70s, the Chinese economy was on the brink of collapse. And so they needed a pretty quick answer, and they needed it to take hold in a relatively short period of time. And so the investment/export model was unleashed, and unleashed with a vengeance. And it did start to deliver immediate results.
The second reason is that as that export/investment-led model began to deliver, the world increasingly embraced globalization, took down trade barriers, and global trade started to skyrocket as a share of world GDP. And so not only was China delivering growth for its own purposes, but it got seduced by the globalization of trade and the ability for this increased share of global trade to reinforce its own opening up.
And so it remained very focused on exports and investment and neglected the heavy lifting that was required to augment that by improved private consumption. And so it never really had a backup plan here. And now that failure to really focus on internal private consumption and the [social] safety net is beginning to be very problematic going forward.
Clay Chandler: What can China do to boost consumption? And what, in your view, is the upper limit of how much China could feasibly raise its consumption rate as a percentage of GDP?
Stephen Roach: I’ve learned, Clay, in my last 12 to 15 years of following China, don’t underestimate the commitment and the determination of the Chinese authorities to address a problem when they finally realize they’ve got a serious one. I think a realistic goal, and I’ve given a speech on this in Beijing earlier this year, would be to aim for a 50 percent consumption share of GDP within five years.
I think they can do it. Now that’s a big move. That’s 14 percentage points of GDP, 15 percentage points of GDP in five years. I think it’s achievable if they do move aggressively on social security, pensions, and nationwide medical care.
Clay Chandler: What are the obstacles to boosting consumption in China? And what’s your sense of how committed China’s leaders are to overcoming that resistance?
Stephen Roach: Well, I think the main obstacles are persuading a large generation of Chinese workers and families who have been displaced under the guise of state-owned enterprise reform—who have lost the sort of cradle-to-grave support, the so-called iron rice bowl, the safety net that had been in place in the prior state-owned enterprise regime—to convince them that it’s okay to begin to draw down the excesses of precautionary saving. People say, “Oh, this is a cultural thing in Asia.” I don’t buy that for a second. I think the excess saving is very much an outgrowth of a necessity rather than a cultural DNA. And it’s up to the Chinese authorities to really deliver on the safety net, to dissuade families so that savings motive can change.
Clay Chandler: In an article in the Financial Times, you wrote that China’s response to the global financial crisis has succeeded in restoring short-term growth but has also raised the risk for long-term problems in the economy. You warned, in fact, that it has raised the possibility of “destabilizing consequences.” Could you explain that?
Stephen Roach: Things were pretty bad in late 2008 and 2009—much worse inside of China than the official year-over-year GDP comparisons might have alluded to. If you recalculate the GDP on a sequential quarter-to-quarter basis, the way we do it in the West, the growth rate had slowed pretty close to zero late last year.
There were massive layoffs in export-dependent Guangdong province; the government admitted at least 20 million migrant workers had lost their jobs. So once again, China needed growth and they needed it now. And so what they ended up doing was, first they enacted a massive 4 trillion renminbi stimulus, 72 percent of which was infrastructure. And then they opened up the spigots of bank lending. And they created the biggest six-month lending binge on record: about 7 trillion renminbi in the January-through-June period.
So what I wrote about in the FT was that it seemed to me that because the growth imperatives were so urgent, the authorities just opted to get as much growth out the door in as short a period of time as they possibly could. And they ended up stimulating perhaps the most unbalanced sector in the Chinese economy: fixed asset investment, which at the end of last year was 40 percent of the GDP. Now it’s probably more than 45 percent of the GDP. We’ve never seen numbers like that for any major economy in the modern post–World War II era.
Clay Chandler: Is it realistic to think about China as a new engine of global growth?
Stephen Roach: I think China has the potential to become a major engine of global growth. But I think it’s unrealistic to expect China to step into that role immediately in this post-crisis era. I think it’ll take three years, more likely five to ten years, for China to really have the type of balance and scale of its economy that can fill the void that’s about to be left—or that is now being left—by the demise of what heretofore has been the biggest and most dynamic and powerful consumer in the world: the American consumer.
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