Posts Tagged ‘Nexus’

How Pakistan Is Like AIG

Tuesday, May 12th, 2009

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[digg-reddit-me] buy prednisone tablets nex·us n.pl. nexus or -us·es.

  1. A means of connection; a link or tie: “this nexus between New York’s . . . real-estate investors and its . . . politicians” (Wall Street Journal).
  2. A connected series or group.
  3. The core or center: “The real nexus of the money culture [was] Wall Street” (Bill Barol).

[Latin, from past participle of nectere, to bind.]

This Sunday, America witnessed Pakistani President Zardari’s disgraceful performance on Meet the Press. He pandered; he obfuscated; he shirked any responsibility or blame; he turned briefly eloquent – and then outrageously self-righteous. It was clear that he is not one tenth the politician his wife was – and it seems not one tenth the leader. She may have been corrupt (as it seems was he) – but he appears to lack her communicative gifts or her aptitude for politics. On top of it, his management style seems be Bush-level incompetence. The most ridiculous point Zardari tried was to invoke AIG’s bailout as an argument to give more money to Pakistan.

David Gregory – to his credit – asks the tough question – the question that needs to be asked of Pakistan’s leader (especially given stories like this) although Gregory does manage to shift responsibility for the criticism of Zardari off to another reporter:

The question a lot of people ask is are you – is Pakistan really committed to that war?  In The New York Times Dexter Filkins, who, who’s reported from Afghanistan and Pakistan, writes this:  “Whose side is Pakistan really on?  …  Little in Pakistan is what it appears.  For years, the survival of Pakistan’s military and civilian leaders has depended on a double game:  assuring the United States that they were vigorously repressing Islamic militants–and in some cases actually doing so–while simultaneously tolerating and assisting the same militants.  From the anti-Soviet fighters of the 1980s and the Taliban of the 1990s to the homegrown militants of today, Pakistan’s leaders have been both public enemies and private friends.  When the game works, it reaps great rewards:  billions in aid to boost the Pakistani economy and military and Islamist proxies to extend the government’s reach into Afghanistan and India.”

Zardari’s responded:

[W]hat billions are you talking about?  Like I said, a billion dollar a year?  That’s not even – altogether, this aid package is not even one tenth of what you gave AIG.  So let’s face it; we need, in fact, much more help.

This isn’t the first time Zardari has found it prudent to invoke AIG to justify giving more billions to Pakistan – he apparently disconcerted lawmakers a few days earlier this week – as the New York Times reported:

[W]hen he asked for financial assistance, he likened it to the government’s bailout of the troubled insurance giant, American International Group.

While it is probably true that Zardari needs more funds – his pique at being asked to justify these funds is galling – especially when so much of it was apparently spent preparing Pakistan’s military to fight India instead of the Taliban. Though this analogy is politically stupid – it does bring up an interesting parallel.

AIG has been the nexus of the financial crisis in much the same way that Pakistan is the center of the threat of strategic terrorism. 

When synthetic CDOs were invented, they were structured in such a way as to create positions that were safer than AAA-rated debt. (An explanation of what this means here.) These positions were called super-senior. Yet the ever “cautious” bankers decided to hedge against even these supposedly risk-free positions – allowing them to free up more capital, so that for the purposes of regulation, it was treated as if they had not lent out any money at all. They decided to buy insurance, calling this insurance a credit default swap, hedging against the risk that even this super-safe investment would go bad. There was one big player in this, one firm that provided so much of this insurance which led to this boom in lending and enormous leveraged positions – AIG – who insured these super-safe debts with nary a plan to deal with defaults. After all – these debts were super-senior – there would only be defaults if historically unprecedented numbers of these mortgages went south. (Precedent only went back forty years or so with modern macroeconomic record-keeping.) AIG Financial – a small part of the AIG empire which spanned insurance across dozens of industries around the world – decided to leverage the entire company to insure these products – leading to enormous profits in the short-term – and systematic risk as soon as things went bad. If AIG had not been able to pay on its insurance to the big banks, things would likely have been worse.

Pakistan meanwhile is the land of Dick Cheney’s nightmares, where WMDs, nuclear weapons, terrorists, and a teetering state all exist. Pakistan combines all of the elements national security experts fear could have disasterous consequences if they come together. As Barton Gellman describes Pakistan’s importance in his excellent biography of Dick Cheney:

The nexus, if it was anywhere, was in Pakistan – a nuclear state whose national hero sold parts to the highest bidder, whose intelligence service backed the Taliban, and whose North-West Frontier Province became a refugre for al Qaeda.

What it comes down to is that both are too big – and too connected – to fail. Both have had billions of American dollars pumped into them to prop them up. Both have prompted outrage as they have seemed to use this money to benefit themselves and not for the purposes it was intended. Both are controlled by leaders whose hands were far from clean in creating the current crisis. Neither the leadership of Pakistan nor the leadership of AIG have taken responsibility for the crisis that occurred oin their watch – in their realm of control – blaming America and the world at large for their problems instead.  Perhaps because of this, the leadership of both seem to believe that they deserve to be rewarded for their efforts rather than held accountable for their significant failures. Yet even so, the costs of the failure of either is likely catastrophic.

Maybe this is the point Zardari was trying to make – his way of taunting us with the fact that he knows we cannot allow him to fail – just like AIG.

[Image by cogito ergo imago licensed under Creative Commons.]

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Pakistan: The Edge of the Abyss

Wednesday, May 6th, 2009

[digg-reddit-me]Today, as the President Zardari of Pakistan is scheduled to meet with Obama, the news about Pakistan is growing worse and worse.

A nation with nuclear weapons seems on the brink of collapse. Yet it often seems as if the country’s leadership is still more focused on the threat from its historic rival, India. As the New York Times editorial board explained last week:

If the Indian Army advanced within 60 miles of Islamabad, you can bet Pakistan’s army would be fully mobilized and defending the country in pitched battles. 

The Pakistani Taliban is now within that distance – 60 miles – of the capital. It’s advance has not been halted and it continues to destabilize and then take over large portions of Pakistan. You can see the strong position the Taliban is in by reading the story published just a few days ago by Jane Perlez and Pir Zubair Shah also in the Times telling the story of a Taliban strategist who gave them an inside look at the Taliban’s regional strategy – which focuses in a large part on exploiting the border between Afganistan and Pakistan over which the Taliban move without qualms, but which U.S. forces generally respect. The Pakistani army and intelligence agencies are both said to be sympathetic to the Taliban and islamist extremism in general – and U.S. strategists believe their goal is to wait out America’s interest in the region and then use these Taliban forces to exert control over Afghanistan and to destabilize India, which they still consider the main threat to their national security. This is why – despite the billions of dollars in funding given to the Pakistani military and intelligence agencies since September 11 for the purpose of aiding them in their war against the Taliban – their forces they have arrayed against the Taliban are ill-equipped and too few in number – as they have used most of these funds to build up their military for a more conventional war against India. David Sanger, speaking at the Council on Foreign Relations some weeks ago told a story he described as telling you “everything you need to know about the U.S.-Pakistan relationship.” It is a story, essentially, of a leadership that is friendly with the Taliban – even as they tell the Americans they are doing everything they can to stop them. 

President Zardari meanwhile tried to assure American lawmakers – who he met with yesterday – that the money they were sending to Pakistan was being used wisely by likening it “to the government’s bailout of the troubled insurance giant, American International Group” according to the Times. 

The fall of Pakistan to the Taliban is perhaps the worst case scenario national security experts can imagine. The Taliban is allied with Al Qaeda – who have planned to use weapons of mass destruction against America. Pakistan has nuclear weapons in numerous locations throughout the country – and is already responsible for more nuclear proliferation than any other nation on earth. It is, what Dick Cheney might call, the nexus of America’s worst fears. And worse yet, none of America’s policies in the region seemed to have had the desired effect – former President Musharraf seemed unable to truly take on the Taliban and terrorist elements, despite his being motivated their attempts to kill him – and America, by continuing to support Musharraf in the face of his desperate bids to hold onto power, alienated many Pakistanis and was finally removed from office due to the pressure from both America and groups organizing for a civil society; Benazir Bhutto, martyred running for office, said all the right things and seemed to recognize that the fundamental enemy of Pakistan was no longer India – but the religious extremists within it’s own borders; but she never had an opportunity to lead Pakistan again; her widower, the current President Zardari has followed too much in the path of Musharraf and had likewise angered many Pakistanis by using his power to undermine political rivals  (leading to massive destabilizing protests until he backed down due to pressure from America and groups organizing for civil society) – while at the same time, despite fine words, he has been unable to make progress in combating the Taliban. Instead, he signed a deal with them to allow the Taliban to impose their extremist religion on a large region of the country. Despite the glaringly self-interested actions of Pakistani leaders – and the fact that even today with the Taliban encroaching upon the capital, it is not clear that the government is yet committed to rooting out these insurgents or terrorists – America has been forced time and again to double down in our support of Pakistan’s leaders. What other choice do we have? Pakistan is too important to allow it to fail – and it has nuclear weapons. 

Which is why we can longer accept the constant refrain from Pakistan’s leaders that “Everything’s fine; please send helicopters.” Pakistan is “ground zero in many of the worst-case scenario exercises gamed out by national security officials [and seems] on the verge of spiraling out of control.” General Petreaus is apparently saying privately that “the next two weeks are critical [in] determining whether the Pakistani government will survive.” David Kilcullen, an Australian counterinsurgency expert advising the Obama administration, expressed a related point:  “We have to face the fact that if Pakistan collapses it will dwarf anything we have seen so far in whatever we’re calling the war on terror now.” 

This is where we are – at the edge of an abyss. And it seems there is nothing for us to do but to trust that our government is properly trusting the ineffectual (or perhaps conflicted) Pakistani leadership to control the situation.

Or is that all we can do? Wendy Chamberlin, a former ambassador to Pakistan suggested another idea: “We have to make clear that our relationship is with the people of Pakistan and not with [any] one man…” I don’t this is what she meant – but it seems to me that the best way to make this clear is for Americans to begin communicating with Pakistanis. And I don’t just mean the government.

Remember the Obama campaign – which encouraged tens of thousands of volunteers to call or email or knock on the doors of millions of citizens – in a grass-roots effort to change the nation? We should start that. Here. Today. Go on Facebook. Find someone from Pakistan. Send them a pen-pal letter and ask them what’s going on – so each of us can do our part to figure out what is going on in what we are being told is a very dangerous situation. Be humble; be curious; be respectful. But reach out. It seems kind of silly, but what other choice do we have?

Pakistan: The Nexus

Monday, March 2nd, 2009

Barton Gellman on page 229 of his book, The Angler:

By his own declared measurements of danger, Iraq should not have been the center of the spiderweb for Cheney. The nexus, if it was anywhere, was in Pakistan – a nuclear state whose national hero sold parts to the highest bidder, whose intelligence service backed the Taliban, and whose North-West Frontier Province became a refugre for al Qaeda. Saudi Arabia, too, had a lot more links to bin Laden than Iraq did. As Cheney saw it, there was nothing decisive to be done about those countries. Washington needed whatever help the Saudis and Pakistanis were willing to provide, and if either government fell, the successor was almost sure to be worse.

The Bush administration’s failure to deal with Pakistan may be it’s most profound misstep. Of course, the lack of appropriate information and pressure on the part of the CIA and the Clinton administration also contributed to the problem. Regardless, it is clear that when we refer to the fight against terrorism, the nexus of our concerns and our war is Pakistan. Christoper Hitchens wrote a column entitled, “Pakistan is the problem” back in September in which he discusses the role the ISI, Pakistan’s security service, plays in sponsoring terrorism against India and Afghanistan – about how the Taliban and al Qaeda were both financed, supported, and to some extent created by Pakistan to encourage their strategic depth – and how A. Q. Khan created a global bazaar in nuclear weaponry, seemingly with the consent and support of the Pakistani military:

[W]e were too incurious to take note of the fact that Pakistan’s chief nuclear operative, A.Q. Khan, had opened a private-enterprise “Nukes ‘R’ Us” market and was selling his apocalyptic wares to regimes as disparate as Libya and North Korea, sometimes using Pakistani air force planes to make the deliveries.

At the same time, Pakistan is – whether intentionally or not – furthering the chaos in Afghanistan. American national security types have expressed their frustration about this in various ways:

It’s tough to fight a war in Afghanistan when the opposing team decides to fight the war in Pakistan.

Alternately, David Sanger explains the boozy hypothetical question asked by one of his friends involved with Pakistan and national security:

How can you invade an ally?

The situation, as complicated and fraught as it already is, is growing more unstable. The New York Times editorial board sums it up:

Almost no one wants to say it out loud. But…Pakistan is edging ever closer to the abyss.

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