October 21, 2007
News Analysis
Fearing Chaos, U.S. Officials Review Stance on Pakistan

By DAVID E. SANGER and DAVID ROHDE
WASHINGTON, Oct. 20 — The scenes of carnage in Pakistan this week conjured what one senior administration official on Friday called “the nightmare scenario” for President Bush’s last 15 months in office: Political meltdown in the one country where Al Qaeda, the Taliban, and nuclear weapons are all in play.

White House officials insisted in interviews that they had confidence that their longtime ally, Gen. Pervez Musharraf, would maintain enough control to keep the country stable as he edged toward a power-sharing agreement with his main rival, Benazir Bhutto.

But other current and former officials cautioned that the administration had invested so much in General Musharraf’s success that its leverage was now limited. Similarly, they and Pakistan experts said that a series of policy miscalculations had left the administration with few good options.

They contended that the administration was surprised by how quickly domestic support for General Musharraf eroded, and that it was slow to act on warnings dating to 2004 that the administration had built too much of its policy around a single Pakistani leader. That over-reliance meant that a more coherent policy was never fully fashioned.

“You had different parts of the U.S. government dealing with different problems,” said Dan Markey, a State Department official who dealt with Pakistan until he left government earlier this year. “It never stitched together,” said Mr. Markey, now a senior fellow at the Council on Foreign Relations. “At every step, there was more risk aversion — because of the risk of rocking the boat seemed so high — than there was a real strategic vision.”

Even some senior administration officials still in government said privately and in a series of recent intelligence assessments that American influence over events in Pakistan was feared to be ebbing fast. Some officials fear that a year of unrest, violence and political intrigue in Pakistan could undercut President Bush’s last chance to root out Osama bin Laden from the lawless territory where Al Qaeda has regrouped, and could cripple a renewed administration effort to turn around Afghanistan.

If serious divisions emerge in the country’s army, it could also rekindle fears about the security of a potent nuclear arsenal that Bush administration officials worry about far more than they let on publicly.

Over the past year, the Musharraf government has quietly sent officials to Washington to assure Bush administration officials that even if the general were ousted or assassinated, the mechanisms for controlling both weapons and nuclear technology — which Pakistan acknowledges it has put together with aid from other countries — are now unbreakable. Several officials who have left the administration recently, and were involved in discussions with Pakistan about nuclear security, say they are less sanguine.

“We have to remember that the U.S. doesn’t have very much capability to affect internal developments” in Pakistan, said Robert D. Blackwill, the former American ambassador to India and a senior official in the National Security Council during Mr. Bush’s first term.

“What I am struck by are the trends we see today: the North-West Province is ungovernable and a sanctuary for terrorists,” he said, “the politics are fractured and deeply unstable, Musharraf is weaker, and the army is uncertain which way it will go.”

This summer, White House officials were clearly worried that General Musharraf would adopt extreme measures to maintain power. In early August, Secretary of State Condoleezza Rice called General Musharraf twice in one day — once at 2 a.m. in Islamabad — to persuade him not to declare martial law.

A steady parade of American officials, including Ms. Rice’s deputy, John D. Negroponte, have been sent to Pakistan to persuade Mr. Musharraf to make good on his pledge to give up his role as army chief, which now appears likely assuming the country’s Supreme Court validates his victory in a presidential election held Oct. 6.

A senior administration official, who could not speak for attribution because of the sensitivity of the issues, argued in an interview on Friday that these steps have worked. Instability and paralysis in Islamabad “is certainly one scenario, but hardly the only one,” he said.

After trying for a year, and failing, to let tribal leaders deal with Al Qaeda and to negotiate with Islamist forces, the official contended, General Musharraf “learned you can’t appease these people, and they have to go after them. So there is room to be hopeful.”

But critics of the American policy say both General Musharraf and the Bush administration were slow to sense the gathering of new threats. A frequently cited example was the administration’s delay in responding to evidence starting in 2003 that Al Qaeda and the Taliban were creating a new sanctuary in the tribal areas, at a time when Mr. Bush and General Musharraf were publicly declaring that Al Qaeda’s ranks had been greatly weakened, and that the Taliban was a spent force.

Zalmay Khalilzad, the American ambassador to Afghanistan from 2003 to 2005, began warning senior administration officials that Pakistan had become the new sanctuary in 2004, according to a senior administration official. But some administration officials warned against placing too much pressure on General Musharraf.

Part of the problem of fashioning a forceful policy, critics like Mr. Markey say, was that the American approach to Pakistan was never sewn together as a whole.

The military and intelligence agencies focused on the hunt for Mr. bin Laden and his top associates. The C.I.A. was responsible for making sure that the nuclear black market set up by Abdul Qadeer Khan, a man revered in Pakistan for helping make it a nuclear power, had been dismantled. But they were prohibited from interviewing Mr. Khan or finding many of his associates by the Pakistani government.

Meanwhile, the State Department was responsible for coaxing General Musharraf toward democracy, and starting up a $750 million program to bring schools and economic development to the provinces where Al Qaeda and the Taliban have thrived.

Then there was the administration’s focus on General Musharraf, who many in the administration still view as the only moderate military leader who can control the country’s army. As long as the army remains united, most American officials say they believe the nuclear arsenal will remain under strict control.

A senior Pakistani official who briefed Americans in Washington recently reported that Pakistan had built its own version of the system that had long been used to prevent detonation of American weapons.

But some experts say the focus on General Musharraf is a mistake. They argue that Pakistan’s army is overwhelmingly moderate and will remain so even without General Musharraf. “I think our policy has been too much built around one person — and that is Musharraf,” said Teresita C. Schaffer, a Pakistan expert at the Center for Strategic and International Studies in Washington. “The result was that we were seen more as Musharraf’s friends than Pakistan’s friends.”

That has been particularly true in the protected battle against Al Qaeda and the Taliban in the rugged territory where Mr. bin Laden is believed to be operating. A succession of American efforts to locate him have failed. While Mr. Bush only mentions Mr. bin Laden episodically, killing or capturing the man behind the Sept. 11, 2001 attacks is considered a major goal among officials seeking to create for Mr. Bush a legacy beyond Iraq.

But Pakistanis have never been as enthusiastic about that battle, and the Pakistan Army has taken heavy casualties there, including in a recent return to the region that resulted in hundreds of casualties and hundreds of troops taken hostage. “It’s embarrassing to them,” a senior administration official acknowledged.

Today, the tribal areas are a base for a revitalized Qaeda, which has created a new command structure and is again planning international attacks, according to a National Intelligence Estimate issued in July, parts of which the administration published in an unclassified form.

The 2005 London subway bombings, the 2006 plot to blow up British airliners and a recent plot to set off explosives in Germany have all been traced back to the tribal areas, but General Musharraf continues to limit American operations there.

“We can conduct some covert operations, but there is a huge premium on not being seen in the area,” one senior administration official said. “And I don’t think that is going to change for the rest of the Bush presidency. You can imagine the frustration level.”

Other former administration officials are calling for the administration to mount a broad regional initiative in the last year of Mr. Bush’s presidency to quell the suspicions and divisions between Afghanistan and Pakistan that have helped allow the Taliban to come back.

Ronald E. Neumann, who served as the American ambassador to Afghanistan from 2005 to 2007, said recently that a widespread perception still existed in both countries that the United States would abandon the region as it did after the 1989 Soviet withdrawal from Afghanistan. To counter that, he called for a long-term American financial and security commitment to Afghanistan and Pakistan rivaling the aid given to Israel and Egypt after the Camp David accords.

“It is now time for a still larger focus with a still larger commitment of resources,” Mr. Neumann said. “And I do not think we can do it on the cheap.”

Iran to fire '11,000 rockets in minute' if attacked

Oct 20 07:28 AM US/Eastern

Iran warned on Saturday it would fire off 11,000 rockets at enemy bases within the space of a minute if the United States launched military action against the Islamic republic.
"In the first minute of an invasion by the enemy, 11,000 rockets and cannons would be fired at enemy bases," said a brigadier general in the elite Revolutionary Guards, Mahmoud Chaharbaghi.

"This volume and speed of firing would continue," added Chaharbaghi, who is commander of artillery and missiles of the Guards' ground forces, according to the semi-official Fars news agency.

The United States has never ruled out attacking Iran to end its defiance over the controversial Iranian nuclear programme, which the US alleges is aimed at making nuclear weapons but Iran insists is entirely peaceful.

Iran has for its part vowed never to initiate an attack but has also warned of a crushing response to any act of aggression against its soil.

"If a war breaks out in the future, it will not last long because we will rub their noses in the dirt," said Chaharbaghi.

"Now the enemy should ask themselves how many of their people they are ready to have sacrificed for their stupidity in attacking Iran," he said.

Iranian officials have repeatedly warned the military would target the bases of US forces operating in neighbouring Iraq and Afghanistan in the event of any attack and already has these sites under close surveillance.

Chaharbaghi said that the Guards would soon receive "rockets with a range of 250 kilometres (155 miles)" whereas the current range of its rockets is 150 kilometres (91 miles).

"We have identified our targets and with a close surveillance of targets, we can respond to the enemy's stupidity immediately," Chaharbaghi added.

He said that the Guards' weapons were spread out throughout the country and so would not be affected by any isolated US strikes against military facilities.

The Guards are Iran's elite ideological army and responsible for its most significant weapons such as the longer range Shahab-3 missile which has Israel and US bases in the Middle East within its range.

Copyright AFP 2007, AFP stories and photos shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium

The Dam Breaks
China can no longer deny the environmental disaster at Three Gorges.
Monday, October 15, 2007; Page A14

FOR CHINA'S communist leadership, which gathers today for a major party congress, the gigantic Three Gorges Dam holds out the promise of abundant hydroelectric power and an end to devastating periodic floods along the Yangtze River. Yet from the moment they hatched a plan to build the colossal project, China's leaders have known that its benefits would come at a high environmental cost. Undeterred, they ignored or repressed dissent about it. One prominent early critic, journalist Dai Qing, was jailed for 10 months after the Tiananmen Square massacre of June 1989; her book "Yangtze! Yangtze!" was suppressed. Even then, the threats posed by the $22 billion project in Hubei province were so evident that one-third of the delegates to China's rubber-stamp national legislature either abstained or voted against it in 1993. Undaunted, the government began construction in 1994 and has relocated 1.4 million mostly poor rural villagers to make way for a 370-mile-long, 525-foot-deep reservoir. The dam's first stage opened in 2003, permitting cargo vessels to travel from Shanghai to Chongqing; eventually, its turbines are supposed to generate 84 billion kilowatt-hours of electricity per year.

As recently as 2004, the official China Daily was still emitting happy talk about "achievements in environmental protection of the area." But now comes word that the warnings of Dai Qing and others were true. And the source of the news is none other than the Chinese government. In fact, a "catastrophe" is possible if preventive steps are not taken promptly, the official Xinhua news agency said last week. Apparently, thickly populated river banks near Chongqing have been weakened by the project, and landslides -- including one June 28 that killed four people -- are a frequent occurrence. The new reservoir's shoreline is collapsing in 91 places. In addition, the Yangtze is silting up because of the reduced flow of water, and pollutants are accumulating behind the dam -- exactly as critics had predicted.

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The authorities in China have a plan, of course: They will relocate 4 million more people over the next 10 to 15 years. This additional movement of people will have immense direct costs -- financial and human -- and will exacerbate serious land shortages and urban crowding in Chongqing and its surroundings. Chongqing is already one of the most congested and polluted cities in China. We suppose it's good news that China's leaders, consistent with a recent increase in official candor about the country's environmental woes, are finally facing the facts about Three Gorges. But for many years to come, the dam will stand as a monument to their folly and their arrogance.

When Immigration Goes Up, Prices Go Down
By Shankar Vedantam
Monday, October 15, 2007; A03

Last week, a gallon of gas at an Exxon station in the tony suburb of Bethesda cost $2.99.

At an Exxon station in the less affluent suburb of Wheaton, a gallon cost $2.63 -- 36 cents less.

Both Exxon stations are located near a subway line that goes to downtown Washington. Both are in the same county: Montgomery.

Why would the same company charge you 14 percent more for an identical product in one location?

Because it can.

That's the simple answer. The free market relies on the willingness of consumers to punish businesses that overcharge. If you are willing to pay extra for the convenience of filling up your car at an expensive gas station on your way to work, rather than the cheaper one that is a little out of your way, why blame Exxon for taking your money?

But there is also a more interesting answer, which brings us to the subject on tap: The difference in gas prices may have to do with the fact that Wheaton has many more immigrants who are not yet fully assimilated into the economy than does Bethesda. Immigration, economist Saul Lach recently found, plays a powerful role in holding down prices. For every 1 percent increase in the ratio of immigrants to natives, prices go down by about 0.5 percent, according to Lach's new study about the effects of 200,000 Jews immigrating to Israel from the former Soviet Union in 1990.

Aviv Nevo, an economist at Northwestern University in Evanston, Ill., said immigrants to the United States -- and price-conscious consumers in general -- have the same effect: "The broad principle is immigrants change the mix of consumers and will likely change the relative prices of different products."

While sudden increases in immigration could drive up the cost of housing and retail items where production cannot be ramped up quickly, Nevo said merchants quickly realize there is more profit to be made by decreasing prices on everyday items: "You decrease the price by 10 percent but increase the amount you sell by 200 percent."

Lach's research has particular resonance given the contentious debate over immigration that has recently roiled the Washington area and the nation. Several jurisdictions in Virginia and a few in Maryland are attempting crackdowns on illegal immigrants. Arguments about immigration often revolve around cost. Poor and recent immigrants are said to crowd schools and stretch public services.

Prince William, Stafford and Loudoun counties, which have recently experienced dramatic changes in the ratio of immigrants, have led the local effort to deny services to undocumented foreigners. If Lach's thesis is correct, however, successful measures might have the opposite effect than the one desired -- as immigrants are pushed away, prices on everything from diapers to dairy items might go up. (Instead of paying more money for social services, residents will pay more money to Exxon.)

Lach's thesis -- that immigration acts as a brake on inflation -- is unusual in that it explores the effect immigrants have on the demand side of an economy, and not just as workers who lower the costs of child care, for example, by increasing the labor pool.

Lach said in a new paper published in the Journal of Political Economy that immigrants tend to do what Bethesda drivers do not do often enough: They go the extra mile to the cheaper gas station. Lach found that new immigrants spend much more time comparison-shopping than natives -- perhaps because their economic circumstances force them to look for the best deals, or because they have more discretionary time to compare prices, or because they have not yet developed brand loyalties.

Whatever the reason, they force markets to run more efficiently, and thereby make cheaper prices available for all. Lach's study was based on an analysis of 915 products at 1,837 retail stores in 52 cities, after the abrupt influx of 200,000 immigrants to Israel from countries in the former Soviet Union. The economist, who works at the Hebrew University of Jerusalem, collected 199,425 price quotes.

"Immigrants are more sensitive to prices and also are more inclined to search for lower prices," Lach said in an e-mail. "This prompts stores not to increase their prices as often or as steeply . . . or even to lower their prices in order to capture as many immigrant customers as possible. The population at large should benefit from this downward pressure on prices because stores cannot discriminate between natives and immigrants."

Joshua Angrist, an economist at MIT, said Lach's paper is interesting, but added that research also shows the poor sometimes pay more for things because retailers tend to avoid setting up shop in poor neighborhoods. Wealthy people also have more financial leverage for expensive purchases.

The downward effect on prices that Lach found was most evident for everyday items. Ironically, what the research suggests is that poor, new immigrants -- the folks who trigger the most concern among anti-immigration activists -- might impose the strongest brake on prices because they are hungriest for good deals. Once settled, immigrants apparently join the ranks of people who pay $2.99 for a gallon of gas that elsewhere costs $2.63.

October 20, 2007
Backstage, U.S. Nurtured Pakistan Rivals’ Deal

By HELENE COOPER and MARK MAZZETTI
WASHINGTON, Oct. 19 — To lay the groundwork for Benazir Bhutto’s return to Pakistan, some of the highest ranking officials in the Bush administration lavished attention on her as they worked to broker a power-sharing arrangement between Ms. Bhutto and her longtime rival, President Pervez Musharraf.

But the violence that greeted Ms. Bhutto on her return after eight years in exile and the finger-pointing between her camp and General Musharraf’s after the attack on her motorcade on Thursday has raised questions about whether the tenuous deal that the United States helped midwife can survive.

Bush administration officials on Friday publicly played down the potential for a deepening rift between General Musharraf and Ms. Bhutto, pointing out that the opposition leader herself had praised the rescue efforts of Pakistan’s security forces after Thursday’s attack and that General Musharraf had called Ms. Bhutto to make sure she was safe after the blast.

But unresolved questions about the attack have added a new layer of distrust to relations between Ms. Bhutto and the government, as well as new uncertainties for the Bush administration policy.

On Friday, American officials acknowledged that there was no clear basis for confidence that the two leaders could work cooperatively. Now that Ms. Bhutto has returned to the country, they acknowledged that their control over events was limited, as Thursday’s bombing showed.

“There’s really not much left to say or do at this point,” one Bush administration official said, speaking on condition of anonymity because he was not authorized to publicly discuss American policy on Pakistan. “But there’s no clear indication that there is a foundation for both sides to work together cooperatively.”

Ms. Bhutto used her time in exile to nurture influential connections within Washington’s power corridors. Still, the Bush administration had long kept her at arm’s length, in large part out of deference to General Musharraf, who cast his lot with the White House after the Sept. 11 attacks.

Two years ago, Ms. Bhutto could not even get the State Department’s top official for South Asia to show up at a dinner party in her honor. (A desk officer in charge of Pakistan was sent instead.)

But in recent months that began to change. The American courtship of Ms. Bhutto included a private dinner and a jet ride with Zalmay Khalilzad, the American ambassador to the United Nations, and, over the last month, several telephone calls to Ms. Bhutto from Secretary of State Condoleezza Rice.

“The Bush administration for a long time decided that the only telephone number in Pakistan they were going to call was Musharraf’s,” said Husain Haqqani, a former adviser to Ms. Bhutto and a professor of international relations at Boston University. “But Bhutto made it clear to them that her phone number was available to call anytime.”

In turning back to Ms. Bhutto, administration officials said they acted with reluctance, after General Musharraf’s own political missteps and the mounting opposition to his military government had weakened his grip on power and threatened to plunge Pakistan deeper into turmoil.

The administration concluded over the summer that a power-sharing deal with Ms. Bhutto might be the only way that General Musharraf could keep from being toppled.

It began quietly nurturing the accord, under which Ms. Bhutto’s party did not boycott General Musharraf’s election last month, and the president issued a decree granting Ms. Bhutto and others amnesty for recent corruption charges, opening the way for her return.

Administration officials say that Ms. Rice stepped up her personal involvement last month, when it seemed possible that General Musharraf’s other political nemesis, former Prime Minister Nawaz Sharif, would make his own bid to return to power, and upset the deal.

Still, even now, there is no great love in the Bush administration for Ms. Bhutto. While American intelligence officials have been frustrated at times with General Musharraf’s record in fighting the Islamic militants in northern Pakistan, they have also found a small level of comfort in dealing with him.

Now they worry that Ms. Bhutto’s re-entry to Pakistan’s political scene will complicate their lagging efforts to pursue insurgents from Al Qaeda and the Taliban.

State Department bureaucrats also fret that her turbulent past will further inflame an already volatile country. Inside and outside the American bureaucracy, there remains deep skepticism that the arrangement between two longtime enemies has a chance for long-term success.

“This backroom deal I think is going to explode in our face,” said Bruce Riedel, who advised three presidents on South Asian issues and is now at the Brookings Institution. “Ms. Bhutto and Mr. Musharraf detest each other, and the concept that they can somehow work collaboratively is a real stretch.”

Before she left for Pakistan and since her return, Ms. Bhutto has publicly pressed an agenda that should please American policy makers: advocating democracy and attacking suicide bombing and Islamic militancy in words more forceful than those normally used by General Musharraf.

Still, there is concern among American officials that, given rising anti-Americanism inside Pakistan, eventually she and General Musharraf could compete for public support by showing who is less beholden to the White House — especially on matters like attacking Al Qaeda’s haven in Pakistan’s tribal areas.

In their push to engineer a pact between Ms. Bhutto and General Musharraf, American officials for several months held private meetings in Islamabad, New York and Washington. The sessions included a dinner for Ms. Bhutto in New York in August with Mr. Khalilzad, followed several weeks later by a shared ride on a private jet to Aspen, Colo., where both addressed a conference of corporate leaders.

In addition to her conversations with Ms. Bhutto, Ms. Rice had several phone conversations with General Musharraf, including one in which she called him at 2 a.m. Pakistan time to urge him not to seize emergency powers.

John D. Negroponte, the deputy secretary of state, and Richard A. Boucher, the top State Department official for Pakistan, each went to Islamabad to press General Musharraf into the deal.

For Ms. Bhutto, years of relentless networking among America’s political, diplomatic and media elite also helped to vault her back into position to lead one of the United States’ most critical allies. “She is a networker par excellence, and she’s been keeping her contacts,” said Karl F. Inderfurth, the former assistant secretary of state for South Asia who dined across the table from her at a dinner party during her last swing through Washington, in September.

Ms. Bhutto was first introduced to America’s political power brokers in 1984, via the dinner party circuit. Peter Galbraith, whose family was friends with the Bhutto family and who at the time was on the staff of the Senate Foreign Relations Committee, escorted the visiting Ms. Bhutto around Washington.

When she herself later became the first woman elected prime minister of a Muslim country, hers was the first state dinner given by President George Bush on June 6, 1989.

She also maintained her close ties to Washington during the Clinton administration, both while she was prime minister and afterward, when she was living in exile in London, Dubai and New York after being forced from power, accused of corruption. In 1998, Ms. Bhutto asked Mark Siegel, a well-connected Democratic Party operative, to set up a meeting for her at the White House with Hillary Rodham Clinton.

One close Bhutto friend described that meeting as “intimate and warm,” and as one that had touched, at Ms. Bhutto’s prompting, on Mrs. Clinton’s personal struggles in the midst of the Monica Lewinsky scandal.

Mr. Riedel, who attended the meeting, said that most of the meeting was consumed by Ms. Bhutto pressing her case on a range of issues, from Pakistani politics and women’s rights to the rise of the Taliban in neighboring Afghanistan.

“I think that Benazir did about 99 percent of the talking,” he said.

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