Comment & Briefs

The above question arises in the context of publicly known government plans of arms procurement amounting to over $64 billion1 as part of the modernisation programme of the armed forces. The majority of these acquisitions will obviously be from abroad and will be concluded in the next five years or more.

The Ministry of Defence (MoD) recently issued a new set of rules for the procurement of arms, ammunition and other defence related products and services. The rule book, known as Defence Procurement Procedure 2008 (DPP 2008), has revised, among others, the offset policy that was first promulgated in 2005 and subsequently revised in 2006. The revised offset policy which retains the earlier minimum 30 per cent offset requirements in defence imports of Rs. 300 crore or more has added a provision of offset banking, besides enlisting a number of categories of defence products.

Two co-ordinated strikes on July 25 and 26, 2008 in Bengaluru and Ahmedabad killed 54 people and injured nearly 200. In the next few days, 28 bombs including two car bombs were found in Surat, which possibly did not explode due to faulty mechanism. This set of incidents seems to mark a new terrorist tactic – the targeting of important cities to cause significant casualties. Serial blasts of this kind began in India with the October 2005 co-ordinated strikes in New Delhi.

Russia’s new President Dmitry Medvedev has put forward a fresh foreign policy blueprint and set forth a brand new idea of a Pan-European Security structure, which envisages a role for India in Euro-Atlantic affairs. The 7,000 word document makes a turn from the earlier roadmap that guided Putin’s agenda. Medvedev seeks no “Great Power” status but wants Russia to be one of the influential centres of the world. Not exactly distinct in form from Putin’s doctrine, the new concept entails style and diplomatic nuance; it talks about abandoning ‘bloc diplomacy’ in favour of ‘network diplomacy’.

SAARC has in recent years attracted wide international attention and generated much interest among countries that now hold Observer status. The 15th Summit held in Colombo on August 2 – 3, 2008 renewed its pledge to take SAARC from a declaratory to the implementation stage. Four agreements were signed at the Summit on mutual assistance to address criminal activities, trade, combating terrorism and climate change. The theme of the 41-point Colombo Declaration announced at the end of the Summit was “Partnership for Growth for Our People.”

The low-intensity bombs that blew up in Ahmedabad and Bangalore have thrown light on the challenges before India’s intelligence agencies. Not only are the agencies unsure of who is behind the attack, the terrorists remain faceless. The obvious question to ask is: why has there been a spate of low-intensity bombings in small markets as opposed to say, the high-intensity bombing of a strategic location?

At a time when Pakistan’s phenomenal economic growth of the past few years under the Musharraf regime has hit a severe road block, the country’s Trade Minister Ahmed Mukhtar, who also holds the defence portfolio, announced a new trade policy on July 18, 2008. The announcement of the new trade policy has been governed by the state of Pakistan’s economy, which has been on a downward spiral since February.

Though the recent Indo-Bangladesh Foreign Secretary level talks held in New Delhi made significant progress on several issues, there was no forward movement on the issue of connectivity. Bangladesh remains reluctant to extend this facility to India, though bilateral relations have generally been trouble-free in the last two years.

Game theory is the analysis of strategic interaction among agents. These agents may be two or more people, firms or countries, with both taking into account how the other agent will “play”. Game theory has been employed to increase revenue at auctions, better equip challengers against incumbents in the market, and explain why bad dictators last so long.

Rising food and oil prices worldwide have increased the misery of people in Bangladesh who have already been suffering the effects of near double digit inflation. The military backed caretaker government has been forced to increase the prices of oil products by 33 to 67 per cent with effect from July 1, 2008. Diesel and kerosene prices have been hiked by 37.5 per cent to 55 taka a litre (0.26 gallons) and petrol prices by 34 per cent to 87 taka a litre.