Day: January 21, 2024

Unsurprisingly, the eruption of tensions in the Pakistan-Iran diplomatic ties on Tuesday following Tehran’s air strike across the border against  Baluchistan is subsiding, which testifies to the political maturity of the two countries. Neither side wants the tensions and both are astute observers of the regional and international environment. Their chosen path of reconciliation becomes a model for other regional states in Central Asia, South Asia and West Asia. 

Iran and Pakistan have a troubled history of relations, which bear  similarities with the Pakistan-India relationship in some ways, where too issues of national sovereignty and territorial integrity lie enmeshed with backlogs of history and culture and complicated by geopolitics. 

At the root of it is the Baluchistan problem, the legacy of 1947 Partition and the unresolved nationality question and resulting alienation, real or imagined threat perceptions, deep-rooted deficiencies in governance and development that cannot be addressed through coercive methods of statecraft that come naturally to the ruling elites in our part of the world — and, indeed, external interference endemic to regions of strategic importance. 

Pakistan’s Dawn newspaper carried an excellent write-up by a Baluchi writer giving a resume of Iran-Pakistan border tensions through the past several decades. To my mind, broadly, the historical space has two phases — the period upto the 1979 Islamic Revolution in Iran and the state of play thereafter. 

What is of utmost significance here is that the transition from one phase to the other in 1979 was characterised on the one hand by the establishment of an Islamic system of government in Iran based on the concept of Velâyat-e Faqih (Guardianship of the Islamic Jurist) and on the other hand, by the imposition of Pakistan’s “Islamisation” as the underpinning of jihadism, pivoted on Sunni fundamentalism, with a back-to-back deal between the military dictator Gen. Zia-ul-Haq and the US, midwifed by Saudi Arabia, to create a “Vietnam” for the Red Army in Afghanistan. 

All through, Pakistan’s US connection was a thorn in the flesh for the Islamic regime in Iran. Imam Khomeini had harsh things to say about Pakistan’s comprador mentality. Of course, much water has flown down the Indus since then and Pakistan is today profoundly disillusioned with the US while Iran, on its part, is openly crossing swords with the US. And both Iran and Pakistan have drawn close to BRICS, emblematic of the “no limit” partnership between Russia and China working towards a poly-centric world order. 

That said, there are subplots. Most important, Washington’s impetus to seek out Pakistani military once again as the lodestar of the region’s geopolitics. Therefore, it is only appropriate that the National Security Committee (NSC), Pakistan’s premier authority on security and foreign policy, on Friday ratified Islamabad’s move towards reducing tensions between Pakistan and Iran and underscored a commitment to address mutual security concerns. 

In effect, the imprimatur of the military leadership is unmistakably there in the decision taken by the NSC meeting, which was attended by the chairman of the Joint Chiefs of Staff Committee and the chiefs of the Army, Navy, and Air Staff, along with the heads of intelligence agencies. It is a powerful signal to Tehran. The NSC statement said, “The forum  expressed that Iran is a neighbourly and brotherly Muslim country, and existing multiple communication channels between the two countries should be mutually utilised to address each other’s security concerns in the larger interest of regional peace and stability.” 

The Dawn newspaper commented that the statement “laid the ground for opening a potential pathway towards renewed dialogue and diplomatic engagement.” Interestingly, the statement was preceded by a conciliatory gesture from the Pakistani military, with the ISPR saying, “Going forward, dialogue and cooperation is deemed prudent in resolving bilateral issues between the two neighbouring brotherly countries” — a sentiment that was promptly reciprocated by Iranian foreign ministry, and set the stage for a phone conversation between Caretaker Foreign Minister Jalil Abbas Jilani and his Iranian counterpart Hossein Amir Abdollahian on the same day. 

What emerges is that both Pakistan and Iran are on the right side of history but there is always the possibility that the US, which is angling for partnerships to mitigate its acute isolation in the region, is desperately keen to woo the Pakistani military at the present juncture when the country’s fragile civilian leadership is dispirited and there is uncertainty about the country’s future. 

The reactions by the major external powers to the surge of Iran-Pakistan tensions clearly show the geopolitical fault lines. Setting aside India, which, regrettably, tends to view any negative tidings concerning Pakistan with schadenfreude, the two other major regional states — China and Russia— have called for restraint and dialogue to resolve the issues. Xinhua new agency, in fact, carried a spate of reports aimed at tamping down the tensions. (here, here, here and here) 

In contrast, the alacrity with which President Biden waded into the topic is amazing — “As you can see, Iran is not particularly well liked in the region, and where that goes, we’re working on now. I don’t know where that goes.” The White House national security spokesperson John Kirby told reporters on Air Force One, “We don’t want to see an escalation clearly in South and Central Asia. And we’re in touch with our Pakistani counterparts.”

The Iranian Ministry of Foreign Affairs hit back saying it “does not allow enemies to strain the amicable and brotherly relations of Tehran and Islamabad.” The previous day, the Russian Foreign Ministry spokesperson Maria Zakharova in a statement also alluded to outside interference saying, “The further escalation will only benefit those who are not interested in peace, stability and security in the region.” 

Zakharova particularly regretted that such tensions have arisen “between friendly states, members of the SCO, with whom we are developing partnership relations.”  

Significantly, against this backdrop, Foreign Minister Sergey Lavrov touched on Afghanistan at some length at a news conference in Moscow on Friday. Lavrov said Taliban is the “de facto power” in Afghanistan and despite “hotbeds of tension and protest… the Taliban control the government.” 

While “political inclusivity” remains an issue, Lavrov pointed out that two prominent Afghan leaders still live in Kabul — Hamid Karzai and Abdullah Abdullah. As for Panjshiris, Lavrov, while acknowledging the need to build bridges with them, added the caveat that the “process is not easy. It has never been easy for anyone in Afghanistan.” 

Importantly, Lavrov stressed that Russia maintains “contacts with the de facto leadership” of Afghanistan and that “helps us to work, including on promoting external formats that allow us to develop recommendations for Afghans. He expressed the hope that the Pakistani-Iranian tensions will not complicate the working of the so-called Moscow format or the quartet mechanism of Russia-Iran-Pakistan-China regarding Afghanistan and regional security. 

At a time when the West is pushing hard to remove the Russian influence in Moldova and the Caucasus and is lurching toward the Caspian and Central Asia as part of its strategy to encircle Russia, Afghanistan is becoming an extremely crucial hub in the big-power struggle for the making of a multipolar world order. 

Zakharova’s statement concluded by underscoring Russia’s “unwavering readiness to cooperate in the fight against international terrorism in all its forms and manifestations.” Significantly, Kazakhstan, Central Asia’s powerhouse and a close ally of Russia, recently decided to remove the Taliban Movement from terrorist lists.

These are straws in the wind hinting at a critical mass of regional opinion favouring the Taliban’s integration as a factor of regional security and stability, where Pakistan has a transformative role to play. 

Above all, this episode constitutes a moment of truth in the geopolitics of the region. Iran and Pakistan peered into the abyss,  didn’t like what they saw, and quickly retracted. The region heaves a sigh of relief.  

This article was published at Indian Punchline

By Doug French

People aren’t messing with their 401(k)s enough, according to the The Wall Street Journal. It used to be “Set it and forget it.” Now, according to the Wall Street Journal’s Jon Sindreu, if you forget it, you might miss it.

Inspired by a BlackRock thought experiment which included perfect knowledge, Sindreu looked backward between 2020 and the present at a person making yearly changes (moving funds to the previous year’s strongest sector) which would have generated a compound annual return of 55 percent, nearly four times more than buying and holding the Standard and Poor’s 500 (or setting and forgetting). For the period of 2016 through 2019, the gain would have been 30 percent, twice the index.

Basing a new strategy on back-of-the-envelope testing back just seven years seems dubious. It also requires discipline and market knowledge that the vast majority of 401(k) investors just don’t have. Most people with 401(k)s just plain have no interest in, let alone knowledge of, financial markets.

At least one company understands that its employees are not cut out to be investors. IBM, starting this year, will “provide a defined benefit plan that will save for an employee’s retirement automatically, with no contribution required from the employee. The result will be a stable and predictable benefit that professionally invests every retirement saving dollar to maximize risk-adjusted rates of return,” summarizes Teresa Ghilarducci in an articlefor Forbes.

Ghilarducci makes the point that small businesses may go back to defined benefit plans because “the permitted tax-qualified contributions are larger in [defined benefit] than [defined contribution].”

IBM dropped their pension plan fifteen years ago and went to a 401(k) plan. The United Auto Workers did the same, as did many other large and small companies. These moves shifted “the risk of mistakes onto the employees.”

IBM has now declared its 401(k) plan a failure, as has the Mercer/CFA Institute Global Pension Index, which flunks the US model for not “providing enough accumulation, stable investment, and reliable lifetime benefits.”

Ghilarducci says 401(k) participants are stuck with investment options that are high-priced and inefficient. Plus, what happens when that lump sum of accumulated wealth is staring a retiree in the face? Some take distributions slowly and carefully and likely will live below their means and pass what remains to their heirs. Others, however, will buy expensive toys, what Ghilarducci calls the “red truck syndrome—a term coined when newly retired workers with lumps [buy] something they have always wanted—a shiny new truck.”

Defined benefit plans are A-OK if fully funded, but many government employee defined benefit plans are not. In fact, an academic study finds there are incentives for government defined benefit plans to be underfunded. Not to give away the punchline, but government employee pensioners know it’s the law for them to be paid their pension, and the government will force taxpayers to cover any shortfall.

Sarah Anzia and Terry Moe explain the logic behind underfunded government pensions in Perspectives on Politics:

“Another basic feature of pension politics is that public workers and their unions have incentives to support the chronic underfunding of their own pensions. Due to state statutes, constitutions, and judicial decisions, pensions promised by state politicians are backed by strong legal protections almost everywhere; and public workers thus know they will eventually get what they are promised even if their pension plans are currently underfunded. Indeed, because full funding on a regular schedule would be tremendously costly for state (and local) budgets—crowding out other services, forcing higher taxes, making the true costs of pensions painfully transparent to citizens—public workers and their unions have incentives to prefer that their pension plans be underfunded. Underfunding enables the fiscal illusion that pension benefits are much less expensive than they really are. If public workers and their unions want increasingly generous benefits in future years, they need to convince the public that these benefits are not costly to provide. At the same time, underfunding keeps employee contributions to their own pension funds at low levels; and by keeping contributions by their employers down, they are freeing up public money for other government services, keeping public workers employed—and providing funds for their own salaries and raises.“

Employees in the private sector must spend time researching investment options and hope their investment selections and market timing are right. Meanwhile, government employees can relax and count on taxpayers to make their golden years stress free.

• About the author: Douglas French is President Emeritus of the Mises Institute, author of Early Speculative Bubbles & Increases in the Money Supply, and author of Walk Away: The Rise and Fall of the Home-Ownership Myth. He received his master’s degree in economics from UNLV, studying under both Professor Murray Rothbard and Professor Hans-Hermann Hoppe. His website is DouglasInVegas.com.
• Source: This article was published by the Mises Institute

By Harsh V. Pant

The world is passing through a phase of disorder, which is posing serious policy questions for nations big and small. But the one country that should have been at the center of shaping these conversations is entangled with its own domestic political challenges.

The US is struggling to find some meaning in the spectacle that is passing for American democracy these days. The election season has begun but the trajectory of elections is being shaped by Donald Trump, a former President who is not only facing numerous court cases but who had challenged the very basis of the American democratic order. He is once again making a case to Americans that among the political class, he is still best suited to take the oath of protecting the American Constitution. And much to the astonishment of the rest of the world, many in the US are willing to buy his case.

He achieved a historic win at the Iowa Republican caucuses earlier this week in the first contest in the race for a presidential nominee. It was landslide as he won the most votes in all but one of Iowa’s 99 counties and he won across all segments of the voters – men and women, the young and old, the evangelical and hard-right conservative, even college-educated Republicans. Trump’s opponents have a difficult road ahead. Though Nikki Haley is slated to do better in a relatively moderate New Hampshire next week as there has been a surge in her polling numbers and funding, she will have to put up a really strong performance to make a dent in Trump’s momentum.

That Trump views Haley as the only real challenger left in the race now is evidenced from the fact that he is now targeting her origins. He referred to her by her first name, Nimarata, and has resorted to a misinformation campaign by supporting rumors she was ineligible to run for president because her parents were not US citizens at the time of her birth. For Haley it is a difficult balancing act. She has to attack Trump and his record but also ensure that his support base does not get completely alienated. So, while she has targeted Trump and Biden by saying that “you don’t defeat Democratic chaos with Republican chaos,” she also largely maintained a distance from commenting on the numerous court cases Trump faces.

Trump has managed to convince a large part of the Republican base that he never lost the 2020 presidential elections. And the more he has been dragged to the courts, the more his popularity has gone up among his base, which believes that he is being targeted for political reasons. He is redefining the standard political trajectories of former presidents and presidential hopefuls. A defeated presidential candidate tends to gradually disappear from public presence. But here is a former president who lost to his political opponent three years ago and then supported the January 6 capitol riots while not conceding his defeat. Trump has been removed from the ballot in Maine and Colorado and the matter is now in the US Supreme Court, which will begin to hear arguments from next month. Yet he has already made a remarkable political comeback in Iowa, as if his is a clean slate.

For the last few years, the Republican Party has been trying to get over Trump but as his massive win in Iowa has shown, he remains the undisputed leader of the party. Today’s GOP has been reconstituted in Trump’s image and there is very little his opponents have been able to do about it. Trump’s supporters have effective control of the Republican Party at all levels across the country, thereby giving him a significant advantage over his rivals.

It now seems very likely that despite the best efforts of his rivals, Trump will be on the Republican ticket challenging the Democratic incumbent. It will then be a handful of swing states that will decide the outcome of the Presidential race where recent polls have shown Trump to be highly competitive. A close election is on the cards with the likelihood that polarization in America is going to become even more entrenched.

American presidential elections matter not only for Americans but also for the rest of the world. Trump’s comeback is being watched carefully in world capitals, from Moscow and Beijing to Brussels and New Delhi. What is also being watched is the fraying of the American institutional fabric. A nation that has always been keen to lecture the rest of the world on democratic credentials, today finds itself in an unenviable position of accommodating the resurrection of a leader who challenged the very foundations of American democracy three years ago when he told a mob to “fight like hell” before it ransacked the US Capitol to deny Joe Biden his 2020 election win.

As the world engages with another year of the American democratic spectacle, it bears reminding that democracy is hard work, and Trump’s return to the centrestage of American politics shows that the self-proclaimed beacon of democracy faces challenging times ahead.

• About the author: Professor Harsh V. Pant is Vice President Studies and Foreign Policy at Observer Research Foundation New Delhi. He is a Professor of International Relations with King’s India Institute at Kings College London. 
• Source: This commentary was published by the Observer Research Foundation and originally appeared in NDTV.

Russians are more confident about how their own lives will proceed in the future than they are about how their country will develop, with young people showing the largest divergence because of uncertainty about the country, according to a survey of 1350 of them by scholars at the Moscow Institute of Sociology and Tyumen State University.

Mariya Podlesnaya and Ilona Ilina drew those conclusions on the basis of a study of how different generations view heroism. Their results, published in the Russian journal, Sociological Science and Social Practice, in its current, are discussed by Nakanune news agency journalist Yevgeny Chernyshov at nakanune.ru/articles/121711/.

The two sociologists divided their sample into four age groups: “the Soviet” (born before 1968), the “Reform” generation (born between 1969 and 1981, the millennials (born between 1981 and 1996, and Generation Z (born between 1997 and 2012). 

Seventy percent of the first but only 48 percent of the last told investigators that they have a clear vision of the future of Russia, the poll found. But the various age groups have roughly similar positions as far as their confidence in their own personal futures are concerned, Podlesnaya and Ilina report.

Perhaps the current turbulence in the world explains why Russians make such a distinction between their ideas about the future of their country and their personal futures. But that gap is “very indicative,” Podlesnaya and Ilina says, about the way in which Russians are confronting the future, paying less attention to that of the country and more to their own.