[sacw] [ACT] IPARMW No.14 (10 Feb 00)

[Harsh Kapoor]

INDIA PAK ARMS RACE & MILITARISATION WATCH NO.4
(10 February 1999)

[information & news for peace activists on Arms sales to the region,
defence budget figures, acquisitions & updgrades of weapons systems,
development and deployment of new weapons, implications of militarisation;
the developments on the Nuclearisation front and the doings of the
'intelligence' agencies. Bringing this information to wide public knowledge
is our goal here. No to secretive & exclusive control of this information
by technocrats, planners who plot national security hidden from public
scrutiny.
Please help us in the information gathering work for wide public
dissemination in South Asia.
Send Information via e-mail for IPARMW series to: aiindex@m... for
inclusion in the Emailings]

+++PLEASE NOTE THAT THE LAST ISSUE OF IPARMW (NO.13) ENNONEOUSLY CARRIED
ITS DATE AS DECEMBER 7, 1999 WHICH SHOULD HAVE READ 7 FEBRUARY 2000+++
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D
[1.]
[Excerpts]

STATEMENT BY DIRECTOR OF CENTRAL INTELLIGENCE [AGENCY]
GEORGE J. TENET
BEFORE THE
SENATE SELECT COMMITTEE ON INTELLIGENCE
ON
THE WORLDWIDE THREAT IN 2000: GLOBAL REALITIES OF OUR [read USA] NATIONAL
SECURITY
2 FEBRUARY 2000

=2E . .

Transnational Issues:
* Second, the development of missiles and weapons of mass destruction in
South Asia has led to more-advanced systems, and both sides have begun
to establish the doctrine and tactics to use these weapons.
[...]
Mr. Chairman, nowhere has the regional threat been more dramatically
played out than in South Asia. Both Pakistan and India have intensified
their missile and nuclear rivalry. Further nuclear testing is possible
and both states have begun to develop nuclear-use doctrines and
contingency planning. This is a clear sign of maturing WMD programs. I
will discuss South Asia's broader problems later in my briefing.

Mr. Chairman, another sign that WMD programs are maturing is the
emergence of secondary suppliers of weapons technology.

[...]

TERRORISM

Let me now turn to another threat with worldwide reach-terrorism.

Since July 1998, working with foreign governments worldwide, we have
helped to render more than two dozen terrorists to justice. More than
half were associates of Usama Bin Ladin's Al-Qa'ida organization. These
renditions have shattered terrorist cells and networks, thwarted
terrorist plans, and in some cases even prevented attacks from
occurring.

Although 1999 did not witness the dramatic terrorist attacks that
punctuated 1998, our profile in the world and thus our attraction as a
terrorist target will not diminish any time soon.

We are learning more about the perpetrators every day, Mr. Chairman, and
I can tell you that they are a diverse lot motivated by many causes.

Usama Bin Ladin is still foremost among these terrorists, because of the
immediacy and seriousness of the threat he poses. Everything we have
learned recently confirms our conviction that he wants to strike further
blows against America. Despite some well-publicized disruptions, we
believe he could still strike without additional warning. Indeed, Usama
Bin Ladin's organization and other terrorist groups are placing
increased emphasis on developing surrogates to carry out attacks in an
effort to avoid detection. For example, the Egyptian Islamic Jihad (EIJ)
is linked closely to Bin Ladin's organization and has operatives located
around the world-including in Europe, Yemen, Pakistan, Lebanon, and
Afghanistan. And, there is now an intricate web of alliances among Sunni
extremists worldwide, including North Africans, radical Palestinians,
Pakistanis, and Central Asians.
[...]
INDIA-PAKISTAN

Whatever suspicions and fissures exist among states in East Asia, they
pale in comparison to the deep-seated rivalry between India and
Pakistan. Mr. Chairman, last spring, the two countries narrowly averted
a full-scale war in Kashmir, which could have escalated to the nuclear
level.

The military balance can be summarized easily: India enjoys advantages
over Pakistan in most areas of conventional defense preparedness,
including a decisive advantage in fighter aircraft, almost twice as many
men under arms, and a much larger economy.

* Recent changes in government in both countries add tensions the
picture.
The October coup in Pakistan that brought to power Gen. Musharraf-who
served as Army chief during the Kargil conflict with India last
summer-has reinforced New Delhi's inclination not to reopen the
bilateral dialogue anytime soon.
* Pakistanis are equally suspicious of India's newly elected coalition
government in which Hindu nationalists hold significant sway.

Clearly, the dispute over Kashmir remains as intractable as ever.

* We are particularly concerned that heavy fighting is continuing
through
the winter, unlike in the past, and probably will increase significantly
in the spring.
* New Delhi may opt to crack down hard on Kashmiri militants
operating on
the Indian side of the Line of Control or even order military strikes
against militant training camps inside Pakistani-held Kashmir.
* Thus, we must head into the new year, Mr. Chairman, with continuing
deep
concerns about the antagonisms that persist in South Asia and their
potential to fuel a wider and more dangerous conflict on the
subcontinent.

------------
[2.]

Press release from Swedish Peace and Arbitration Society, 2000-02-02

CELSIUS GETS ORDER OF SPARE PARTS TO THE INDIAN ARMY

The Swedish arms producer Celsius, owner of Bofors, has got an order
concerning spare parts to Howitzer 77B the company declares in a press
release February 2, 2000. The value of the order is 105 million Swedish
crowns and is a follow-on delivery from the original contract with Bofors
AB in 1986.

- Celsius and Bofors are not willing to attend the court case and tell the
truth about the bribe scandal in the 80=B4s. But they are obviously eager to
sell new military equipment to India, says Jens Petersson, Secretary
General of the Swedish Peace and Arbitration Society.

SAAB has recently declared its decision to merge with Celsius within short.
The new SAAB will then become the biggest arms producer in Sweden and will
be the prime actor in Sweden's arms affairs.

- Several years of boycott of Bofors did not help to reveal the truth about
the bribe scandal. Now the Indian government will get a new party to
negotiate with. Wouldn't it be logical for the Indian government not to
sign any more contracts until the truth has come forward? asks Jens
Petersson.

According to Celsius sources there are discussions about even further
deliveries. However, the scope of such affairs could not be judged today
they declare in the press release.

=46or more information
Jens Petersson
+ 46 8 702 26 50
info@s...
http://www.svenska-freds.se

______

[3.]
Press release from the Swedish Peace and Arbitration Society, Feb 4th 2000

SWEDEN MUST HELP THE INDIAN PROSECUTOR IN THE BOFORS SCANDAL

Today, February 4th, Sweden's Minister for Trade, Mr Leif Pagrotsky, opened
a two day long international seminar on the theme "Corruption in the Arms
Trade". The Swedish Peace and Arbitration Society praises the initiative,
but demands at the same time that the Swedish Government puts it's own
house in order.

- It is excellent that the Minister for Trade wants to fight corruption in
the arms trade sector. But he should begin with putting his own house in
order says Jens Petersson, Secretary General of the Swedish Peace and
Arbitration Society.

In today's issue of Dagens Nyheter, Sweden's largest daily newspaper, Mr
Leif Pagrotsky says that as far as he knows the government has been
assisting the Indian government as much as is allowed according to Swedish
law.

But the Swedish Peace and Arbitration Society claims that previous Swedish
governments has not done everything they can to facilitate the Indian
investigation into the Bofors bribe scandal.

Swedish governments, both the Social democrats (1991) as well as the
Conservatives (1992) have rejected a request from the Indian police to
assist in their crime investigation concerning Bofors' bribe scandal in
India. The Indian investigators did, among other things, ask for the
documents from the now closed down preliminary investigation by the Swedish
chief prosecutor, Mr Lars Ringberg. The judgement by the Office of the
Prosecutor-General was that the documents could be handed out, but the
government said no.

- This shows that the Swedish government has consciously chosen not to
facilitate for the Indian judicial system to find the truth about the
Bofors bribe scandal in India, states Jens Petersson.

- The new effort by minister Pagrotsky against corruption within the trade
of arms should lead to the Swedish government reconsidering its former
decisions and help the Indian police and court to find the truth about the
Bofors case.

- I do believe that the Minister of Trade honestly wants to fight
corruption. If I were the Indian prosecutor in this case I would therefore
once again demand to see the documents that the Swedish government
classified in 1991 and again in 1992, says Jens Petersson at the Swedish
Peace and Arbitration Society.

***
=46or more information please contact:
Jens Petersson, +46-8-702 26 50, mobile: +46-709-540 510.
Secretary General
Swedish Peace and Arbitration Society
Email contact: jens.petersson@s... (working hours)
Email home: jens.hem@s... (evenings and weekends)
http://www.svenska-freds.se
***
=46ootnote:
The opening speech of the "Colloquium on Corruption in the Arms Trade" by
Mr Leif Pagrotsky, the Swedish Minister for Trade is available at this URL.
http://www.ud.se/english/press/spetrmin/000204_0.htm
________

[4.]
The Asian Age
10 Feb 2000

DEFENCE PSUS ARE NEW BILLION-DOLLAR BROKERS

By Rahul Bedi

New Delhi, Feb. 9:
The investigation ordered by defence minister George Fernandes into
military equipment purchases, including spares, to "cleanse" his
departments corruption-ridden procurement procedure, is little more than
a symbolic populist measure, guaranteed to change little.

Military officers said Mr Fernandes's declaration, that follows
embarrassing exposures in The Asian Age of naval spares and equipment
being imported at astronomical prices despite their availability locally
for next to nothing, was nothing more than an insurance policy against a
possible legal probe by the Delhi high court hearing a promotion case
involving a senior naval officer.

The Asian Age exposes were from legal documents involving a rear
admiral's promotion which detail with mathematical precision the blatant
corruption involved in military purchases. These details have a direct
bearing on the officer's promotion and would ultimately have led to the
court issuing either Mr Fernandes or his ministry, and maybe even both,
a show cause notice to explain the purchases.

Other officers compared Mr Fernandes' alleged zeal in wanting to cleanse
the defence procurement system to his promises last January of
amalgamating service headquarters with the ministry of defence by the
month-end. Nothing has been heard of the merger since.

Armament industry sources expressed surprise at Mr Fernandes ordering a
probe after presiding for two years over a system riddled with
middlemen, agents and influential lobbyists representing global arms
manufacturers. For though defence agents are outlawed, accused of
clearing massive commissions and perpetuating corruption, the MoD even
under Mr Fernandes has continued the age old practice of acquiring
military hardware through this prohibited conduit.

Equipment worth crores has been purchased after the Kargil war, mostly
from single vendors supported by agents. The panic buying of equipment
and frantic negotiating with overseas defence equipment manufacturers
has been dominated by the Army, despite some of the procedures being
contrary to accepted norms.

The purchase of 18,000 snow boots from manufacturers Koflach of Austria,
for instance, for around Swiss francs 230 (Rs 6,440 ) each was a little
mysterious as the order was signed with a local company based at Noida
and headed by a retired major-general.

But the boot purchase from Koflach becomes even murkier as around 25,000
similar snow shoes were bought directly from Asolo of Italy for 185
Swiss francs (Rs 5,180) each. Officials said the price was lower as,
unlike Koflach, no middleman or agent was involved. Last year's purchase
of 1,000 Russian laser-guided 155mm Krasnopol M rounds for Rs 14 lakhs
per shell was also brokered by a South Delhi businessman with diplomatic
connections who operated with impunity in South Block, headquarters of
the MoD, meeting senior officials and organising trials.

In these and other purchases, the MoD continued the laughable charade of
making all equipment suppliers and manufacturers sign contracts stating
that no agent had been employed. This clause, common to all defence
contracts, states: "It is unequivocally confirmed we have not engaged
any individual firm to intercede or recommend the award of the
contract." It goes on to declare that the contract will be terminated
should this declaration prove incorrect later. In such an eventuality,
the principal is liable to refund all payments. Few, if any, contracts
have been cancelled.

"By asking the Central Vigilance Commission to investigate defence
procurements since 1985, Fernandes is merely taking pre-emptive measures
knowing how long such probes take," an officer said, adding, "Instead,
the defence minister should be overhauling the entire system of
planning, evaluation, testing and price negotiating, all of which were
flawed." The genesis of this paradoxical situation in buying military
equipment followed the ban on all defence agents by Rajiv Gandhi in
1985. In its zeal to legally ban defence agents, the government
consulted the law ministry but was told its proposal was legally
untenable. Thwarted, but by now deeply embroiled in the Bofors scandal,
Rajiv Gandhi's Congress government opted to introduce a clause in every
final contract requiring all principals to deny retaining or using any
agent or representative in India.

Despite this fiat, however, Indian Supply Missions attached to embassies
in Tokyo and Washington and the high commission in London - primarily
conduits to acquire military equipment especially for the Defence
Research and Development Organisation - continued to make purchases
through agents based in India.

The only difference, however, was that the principal was required to
identify the agent, who was then legally paid commission in rupees
through the RBI. Before the supply missions in London and Washington
were closed around 1989, they reportedly acquired naval spares from
Britain and components from the US for the Integrated Guided Missile
Development Programme under which India has built a range of long,
medium and short-range missiles.

But this stalemate in defence procurement after the Bofors scandal
prompted overseas vendors of military goods and their well-established
Indian agents to encourage and spawn a new and "safe" defence broker in
India - the Defence Public Sector Units, or DPSU.

Being state-owned, the DPSUs were immune from any ban and, since 1985 -
the period under Mr Fernandes's proposed investigation - have become
importers and manufacturers of military equipment worth billions. For as
a Soviet-equipped Indian military began looking Westwards in the early
Nineties to replace and replenish obsolete military equipment , the role
of the DPSUs in brokering this switchover steadily increased.

Since the early 1990s, DPSUs like Bharat Electronics Ltd, Bharat
Dynamics Ltd, Bharat Earth Movers, Electronic Instrumentation India Ltd,
Hindustan Machine Tools, Hindustan Aeronautics Ltd, Mazagon Docks Ltd,
Bombay, and the Garden Reach Shipbuilders and Engineers, Calcutta, have
profited considerably, procuring defence equipment, often accompanied by
a transfer of technology for local manufacture, usually to other DPSUs.

In the early 1990s BHEL, for example, brokered deals worth over $1
billion for Armoured Recovery Vehicles from Czechoslovakia, 76 mm guns
from Italy for the navy, naval simulators, armour plating for T-72 tanks
and Arjun, the indigenously-developed main battle tank. BEL, on the
other hand, tied up with Oldeft of Holland to form BeDelft Electronics
to make 18mm and 25 mm image intensifiers.

"By acquiring defence equipment through DPSUs, the MoD has legitimised
agents through the back door," said an MoD official. In a majority of
contracts, the DPSUs did little other than deal primarily with local
agents representing foreign manufacturers of defence equipment. And,
having negotiated a purchase almost exclusively through them the DPSUs
then entered into a contract with the MoD to supply them this same
equipment. In short, the DPSUs ended up playing the role of sub-brokers,
sharing the commission in one form or the other with the local
representative and with little or no technology transfer taking place.

Senior MoD officials privately concede that government policy laid down
by Mr Gandhi in the mid-1980s and unquestioningly followed ever since,
imposes a needless "hyocrisy" upon them. This becomes all the more
ridiculous when MoD officials and military personnel admit to frequently
meeting defence agents to exchange information, discuss requirements and
product pricing and, above all, liaising for equipment trials. While
hundreds of Indian defence agents operate in India, based mostly in New
Delhi, armament industry sources say around 80 are established MoD
suppliers involved with the transportation and testing of systems before
finalising contracts.

The procedure for procuring defence equipment in India is laborious,
often taking years before contracts are signed. All requirements are
drawn up by the Weapons Equipment Directorate of the Army and the Air
and Naval Staff Requirement departments headed by the respective
vice/deputy chiefs of staff.

This list is then passed to the Equipment Policy and Planning Group in
order to hone the General Staff Qualitative Requirement. Thereafter,
with help from military attaches in embassies around the world, a
tentative list of suppliers are invited to make presentations, after
which a shortlist is prepared. On final approval by the MoD, these
suppliers are invited, through their local agents, to come to India for
equipment trials on a "no cost, no commitment" basis.

MoD sources say purchases via agents after the ban was imposed include
armoured recovery vehicles, a varied range of ammunition, equipment for
India's new ordnance factory at Bolangir, mine clearing equipment from
UK and Austria and a host of equipment spares for all three services.

Military officers are critical of the MoD's ad hocism in making defence
purchases. They say the implementation of the undisclosed Arun Singh
Committee of Defence Expenditure, headed by the former defence minister,
is a sensible way forward to streamline defence procurement.

The committee has reportedly suggested greater civilian - military
cooperation as well as enhanced user involvement and financial muscle in
the final choice. If implemented, they say the Committee's suggestions
will reduce the prevailing chaos and double standards and, for the first
time make for a rational approach to Indian defence planning that
becomes all the more relevant after India became a nuclear weapon state
last year and hastened its programme of building missiles to deliver
these weapons of mass destruction.
___________

[5.]
The Telegraph
10 Feb 2000

KARGIL BLAME ON ARMY, ELITE SPIES=20
=46ROM CHANDAN NANDY
=20
New Delhi, Feb. 9=20
The Subrahmanyam committee has held the army and the country's external
intelligence agency, the Research and Analysis Wing, responsible for the
Kargil intrusion.
The 2,000-page report, submitted to Prime Minister A.B. Vajpayee on
January 7, has underlined the all-round "systemic failure" and
"composite" lapse on the part of the army and security agencies.

Divided into 18 volumes, the report has pointed out that hundreds of
Pakistani army regulars were able to sneak into Kargil and occupy
strategic heights because of the army's "failure" to remain vigilant,
the discontinuation of regular winter patrolling along the Line of
Control (LoC) and the inability of the field intelligence units of the
directorate-general of military intelligence to detect Pakistani
activities across the LoC.

The intrusion could have been prevented had RAW collected intelligence
in Pakistan on an impending incursion, the report has said. It has
expressed surprise on how even sorties by RAW's Aviation Research Centre
aircraft failed to notice anything unusual on the ground.

Though no senior official has been held responsible for late detection
of the intrusion and the failure to gather advance information on the
Pakistani army's designs in Kargil, the report has said there is no
competent authority or official in the government capable of assessing
intelligence.

The report has asserted that the present set-up does not have the
capacity to grasp the implications of intelligence input to either plan
action for neutralising security threats or to get security agencies to
develop the information to actionable level.

The committee has referred to bits and pieces of intelligence inputs
which Intelligence Bureau director Shyamal Dutta had mentioned in a "UO"
(unofficial) Note of September 1998, detailing some "raw" inputs about
the possibility of a Pakistani intrusion in the Kargil sector. It is
implies that the government had some sketchy intelligence reports which
were not developed further.

The committee, which included defence analyst K. Subrahmanyam,
journalist B.G. Verghese, Lieutenant General (retd) K.K. Hazari and
Joint Intelligence Committee chairman Satish Chandra, did not find
convincing the submissions made by several army officers. G
eneral-Officer-Commanding, 3rd Infantry Division, Major General V.S.
Budhwar, and Kargil-based 121 (Independent) Infantry Brigade commander,
Brig. Surinder Singh, were among the officers who appeared before the
panel.

The committee was of the view that the army units which were supposed to
carry out winter patrolling in the high-altitude areas did not perform
their duty regularly, allowing the Pakistani army to take advantage of
lax security along the LoC.

The report points out that air reconnaissance was discontinued by the
Army Aviation Centre although it was tasked to perform this specific
duty since 1997. Other military and non-military flights, not officially
tasked to conduct air reconnaissance, had also stopped taking pictures
or picking electronic intelligence. =20

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'India Pak Arms Race & Militarisation Watch' (IPARMW)
is a joint initiative of South Asia Citizens Web and
South Asians Against Nukes
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