Vivek Chadha

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Col Vivek Chadha (Retd), served in the Indian Army for 22 years prior to taking premature retirement to pursue research.  He joined the Manohar Parrikar Institute for Defence Studies and Analyses in November 2011 and is a Senior Fellow at the Military Affairs Centre.

Colonel Chadha’s areas of research include counter terrorism and military studies. His single author books on counter terrorism include Low Intensity Conflicts in India: An Analysis; Lifeblood of Terrorism: Countering Terrorism Finance and Company Commander in Low Intensity Conflicts. His single author books on military subjects include, Even if Ain’t Broke Yet, Do Fix It: Enhancing Effectiveness Through Military Change; Kargil: Past Perfect: Future Uncertain; CDS and Beyond: Integration of the Indian Armed Forces. He has also written the book, Indo-US Relations: From Divergence to Convergence.

His current area of research focusses on the strategic lessons of the Mahabharata.

He was part of the team that wrote the Indian Army’s first Sub Conventional Doctrine in 2006.

Col Chadha is on the Editorial Committee of the Journal of Defence Studies.

  • Senior Fellow
  • Email:vchadha[dot]idsa[at]nic[dot]in
  • Phone: +91 11 2671 7983

Publication

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If we want to kill terrorists, we need to find out how they get paid

Speaking at the G-20 meeting in the immediate aftermath of the terrorist attack in Paris, Prime Minister Modi outlined a ten point plan. The very first issued underlined by him was the need to "curb and criminalise terror financing". Just two days later, he yet again reinforced the need for economic sanctions to curb the financing of terrorism from criminal activities. This raises some pertinent questions. Why is the finance of terrorism important? Why does this threat need to be reinforced? And finally, why have we not been able to stop it?

Financing of terrorism has been referred to as the lifeblood of terrorism. Taking this analogy further, one could say that if ideology is the soul of terrorism, finance is its lifeblood. One has to only look at some of the most potent terrorist organisations of recent years like the Islamic State (IS) and Lashkar-i-Taiba (LeT), to reinforce this reality. Both groups have succeeded in making a transnational impact beyond their immediate shores. The groups believe in the ideology of reprehensible violence and exploit and misinterpret religion to support their actions. Both terrorist organisations are also well organised, armed and led, with spectacular strikes having become their vicious calling card.

However, one of the most important factors, which reinforces their similarity, is the access to a very substantial funding, that is able to sustain their terrorist agenda. The reason finance is considered the lifeblood of terrorism, is its capacity to sustain an organisation as mammoth as the IS, which by some estimates is over a million dollars a day! Unlike popular perception, this funding is not as critical for actual terror strikes, as it is for sustaining an organisation that propagates the ideology of terror, recruits believers, pays for their sustenance, weapons, warlike material, travel and next of kin, after the death of terrorists.

In comparison, a terrorist organisation can be compared with a corporate body, which undertakes a large number of background activities in order to finally create a product which is introduced into the market. The cost of the product is not merely its market price, but the cumulative cost of its development. Just like a car company cannot produce new cars unless it can fund the life cycle cost of its product, a terrorist group will not be able to carryout strikes, unless it can generate funds for running the organisation.

There are different ways in which terrorist groups raise funds to support their activities.

In simple terms, the source of funding can be either external or internal to their base or location. It is rare for a terrorist group to physically control a geographical area and not only extract funds from it, but also administer it. The IS is one such example, which is why most of its funding remains internal. It has succeeded in extracting oil from both Iraq and Syria, tax the local people and businesses, employ kidnapping for ransom as a ploy, loot banks, sell antiquities, seek funding from supporters outside the region in the name of religion and the so called caliphate. The irony of the situation is their ability to sell oil at concessional rates, through and to neighbouring countries like Turkey, which are also fighting them on the battlefield. Both parties thus become beneficiaries of the economy of terror, having successfully quarantined their ideological differences for economic interests.

The LeT has an equally stable funding system in place, even if it is not as flush with funds as the IS. The group has successfully sold the idea of a jihad against countries like the US and India, to seek funds both from within and outside Pakistan. It has employed its front, the Jamaat-ud-Dawa, in the garb of a charity and welfare organisation to support its operations. The group has employed ingenious means like selling animal skins during Eid to raise funding, besides benefitting from zakat, a voluntary donation, which is collected at a rate of two and a half per cent of an individual's income, to support jihad. Most importantly, the LeT receives its financial muscle from the ISI, which funds it and coordinates its terror action plan.

The need to reinforce these realities stems from the fact that funding of such groups is no longer limited to the local confines of their area of sustenance. Terror groups, much like corporate bodies have well and truly embraced and exploited the benefits of globalisation. If the recent Paris attacks had their origins in Syria, planning in Belgium and execution in France, globalised terrorism is a phenomenon that is in full bloom. Much like the globalised operations of these terror groups, their funding too benefits from the tools of modernisation.

From legal banking channels to money transfer service scheme (MTSS) and fake Indian currency notes (FICN), printed inside Pakistan (as related to LeT) to hawala, every possible method of transit has been exploited by terrorist groups. Most of these transfers take place in a globalised, networked world, linking a large number of countries in a financial web.

Finally, if the sources and methods of transferring funds is so well known, why are we not able to stop it? The transfer of money is much like the flow of water. It tends to take the easiest available method to meander its way to its final destination. Again, just like water, which may change its course, direction and volume of flow, to eventually fill a reservoir, terror funding also follows this example. For terrorist groups, the channels employed are not as important, as the ability to ensure that funding remains consistent with their requirement.

Take the LeT for example. It began by openly collecting funds for its so called jihad against India. After being declared a terrorist organisation, JuD took on this role, circumventing international pressure. When the JuD also comes under pressure, the Pakistani state was always there, to fill its coffers and make sure that the "strategic asset" could be maintained at optimum efficiency. Similarly, the LeT has in the past moved money through every possible channel available. Whenever it finds strict norms being placed on cash or FICN smuggling, greater reliance is placed on hawala or through overvalued/ undervalued trade transactions.

Given the nature of sources and methods for moving funds, along with the backdrop of globalised instruments, which could well emanate far from the soil of an incorrigible Pakistan or an undermined Syria, the challenge to stop funding continues to affect counter terrorism initiatives. Combine this with the fragmented international resolve, wherein countries and blocs find it more convenient to pursue their parochial interests, the fight against the finance of terrorism remains a cherished ideal, yet a distant dream. Despite acknowledging the complicity of countries like Pakistan in funding terrorism and the US designating Hafiz Saeed as a terrorist, Pakistan remains a frontline ally in the war against terrorism.

The irony of this reality and the contradiction of competing interests, ensures that the globalised threat from terrorism is faced by a piecemeal and stunted response. While India has taken a number of steps to fight the contagion of the finance of terrorism, final victory is likely to elude agencies in the absence of much needed unity of approach at the international level.

This article was originally published in Daily O

  • Published: 19 November, 2015
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An Assessment of Organisational Change in the Indian Army

The article analyses military change in the context of the Indian Army, with specific focus on organisational innovation and change. In doing so, it analyses two case studies: restructuring of the army after the Sino-Indian War of 1962; and mechanisation based on the 1975 expert committee recommendations. On the basis of these case studies, the article assesses the drivers and desirables for organisational change in the Indian Army, with the further aim of deriving policy recommendations which are especially apt in light of the ongoing transformation of the army.

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India’s Doctrine Puzzle: Limiting War in South Asia, by Ali Ahmed

India has often been accused of not having a strategic culture and, more recently, of not clearly enunciating its strategic and doctrinal thought. More often than not, this has led to interpolation of brief statements, actions and speeches in public domain that create more doubts than answer questions regarding the country’s strategic formulations. Ali Ahmed attempts to dig deeper into India’s doctrinal underpinnings in light of nuclearization in the operational domain, a field that remains limited to patchy assessments in the past.

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When Counterinsurgency Wins: Sri Lanka’s Defeat of the Tamil Tigers by Ahmed S. Hashim

The Liberation Tigers of Tamil Eelam (LTTE)-led insurgency in Sri Lanka was amongst the fiercest and most bloody low-intensity conflicts fought during the last two decades of the 20th century and first decade of the 21st century. This ethnic conflict became known for not only the fighting prowess and ruthlessness of the LTTE, but also the equally brutal manner in which it was finally ended by the Sri Lankan Army (SLA).

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Maoist Insurgency and India’s Internal Security Architecture by E.N. Rammohan, Brigadier Amrit Pal Singh and Gp. Capt. A.K. Agarwal

The Maoist insurgency and the internal security response, which in part flows from India’s security architecture, have become increasingly relevant in the recent past. The Maoist threat has repeatedly been referred to as the gravest internal challenge to India’s security. The impact of this threat, along with terrorism in the hinterland, has exposed the inadequacies of the country’s internal security capacities. Therefore, a book dealing with the two is a timely addition to the literature, in the Indian context.

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Macchil Verdict: Reading Between the Lines

The incident raises important issues. First, the role of honours and awards in such crimes, second, the impact of punishment on the morale of troops who undertake a challenging responsibility and last, its impact on the population of the disturbed area at large.

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Fighting Back: What Governments Can Do about Terrorism, edited by Paul Shemella

The scourge of terrorism is not new. However, its relevance andprominence in public discourse has seen a marked rise after 9/11. Whilea lot of writings concentrated on the immediate aftermath of the 9/11attack and terrorism as linked with Al Qaeda, it also spurred efforts tolook beyond this obvious threat into the larger transnational threat posedto the civilized world.

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Terrorism Finance: Sources and Trends in India

Terrorism finance (TF) has been termed as the life blood of terrorism, one of the most important factors sustaining its continuing threat, both from within and without. In the West, a large body of work on the subject appeared after 9/11; in the Indian context, however, there is little contribution towards existing literature. This article contextualizes the reality of terrorism finance in India and provides an alternative framework for a better understanding of this threat.