With Roman Law Doctrine, India Moves to Stub out Tobacco Industry Rights

The government is pushing the SC to apply a rarely used doctrine to classify tobacco as “res extra commercium”, a Latin phrase meaning “outside commerce”.

The government is pushing the SC to apply a rarely used doctrine to classify tobacco as “res extra commercium“, a Latin phrase meaning “outside commerce”.

A snack vendor smokes a cigarette as he waits for customers on a street in New Delhi. Credit: Reuters/Adnan Abidi/File Photo

New Delhi: The Indian government is pushing the Supreme Court to apply a rarely used doctrine that would strip the $11 billion tobacco industry’s legal right to trade, an effort aimed at deterring tobacco companies from challenging tough new regulations.

New Delhi has for the first time asked the top court to classify tobacco as “res extra commercium”, a Latin phrase meaning “outside commerce,” according to a Reuters review of previously unreported court filing by the Health Ministry on January 8.

If applied, the doctrine – which harkens back to Roman law – would have far reaching implications: in denying an industry’s legal standing to trade, it gives authorities more leeway to impose restrictions.

For example, the Supreme Court’s application of the doctrine to alcohol in the 1970s paved the way for at least two Indian states to ban it completely and allowed courts to take a stricter stance while regulating liquor – something constitutional law experts say could happen with tobacco if a similar ruling was made.

“The effects of tobacco are much more than even alcohol … It will be a fillip to this drive against tobacco,” said government lawyer R. Balasubramanian, who is acting on behalf of the Ministry of Health in pursuing the designation.

Balasubramanian, however, said the government is not discussing banning tobacco and the goal of invoking the Roman law doctrine was only to curtail the industry’s legal rights.

Curbs and restrictions

With an aim to curb tobacco consumption – which kills more than 900,000 people each year in India – the government has in recent years raised tobacco taxes, started smoking cessation campaigns and introduced laws requiring covering most of the package in health warnings.

But a court in Karnataka last month quashed those labelling rules after the tobacco industry successfully argued the measure was “unreasonable” and violated its right to trade.

The government this month appealed the ruling in the Supreme Court which put on hold the Karnataka court order. The top court will next hear the case on March 12.

In its filing, the government included “res extra commercium” because it wants to stop the industry from pursuing such arguments again, said Balasubramanian.

Seeking to apply the doctrine to tobacco, the government argued it should have the power “to regulate business and to mitigate evils” to safeguard public health, the court filing showed.

Sajan Poovayya, a senior lawyer representing top Indian cigarette maker ITC Ltd and Philip Morris International Inc’s Indian partner, Godfrey Phillips, said the industry’s legal rights would be severely limited if the court applies the doctrine to tobacco.

Poovayya said he would fight the government’s argument “tooth and nail” and make a case that taking away the industry’s right to trade would imperil millions of Indian farmers who depend on tobacco for their living. The industry estimates 45.7 million people in India depend on tobacco for their living.

“India is a tobacco growing country and there’s a need to look at the interest of those people who are already in the sector,” Poovayya said.

“Tobacco is not destructive to health. If tobacco is, sugar is as well.”

ITC and Godfrey Phillips, as well as India’s health ministry, did not respond to requests for comment.

Set a precedent

India’s tobacco labelling rules, which mandate 85 percent of a cigarette pack’s surface be covered in health warnings, have been a sticking point between the government and the tobacco industry since they were enforced in 2016.

That year, the industry briefly shut factories across the country in protest and filed dozens of legal cases challenging the rules.

The federal health ministry says stringent health warnings on packages help reduce consumption of tobacco by making people aware of its ill-effects. A government survey last year found 62 percent of cigarette smokers thought of quitting because of warning labels on the packets.

Mary Assunta, a long-time tobacco control advocate and a senior policy advisor at the Southeast Asia Tobacco Control Alliance, said she had never heard of a country applying the “res extra commercium” doctrine to tobacco, but hoped India would set a precedent.

“Such a classification will help protect tobacco control measures from being challenged, particularly for developing countries where the bulk of the smokers are,” Assunta said.

The doctrine would open the door to an outright ban on tobacco sales if a state so wished, said Pratibha Jain, a partner at law firm Nishith Desai Associates and a specialist in Indian constitutional law.

“It gives the state autonomy to completely ban trade in tobacco,” Jain said. “It gives governments the constitutional cover that will protect future litigation. The industry will lose significant ground as your protection of right to trade is gone.”

(Reuters)

AMU Campus Violence: Administration’s Inability Puts Lives of Students at Stake

“The administration must answer the question about how such lethal weapons are easily available on campus.”

“The administration must answer the question about how such lethal weapons are easily available on campus.”

Aligarh Muslim University. Credit: amu.org.in

Aligarh: In a fresh incident of campus violence, a research associate at Aligarh Muslim University (AMU), Syed Mohammad Waseem, was critically injured after being shot on January 25. He has been admitted to Gurugram’s Medanta Hospital and his condition is critical. An FIR has been filed against three accused – Tabrez, a PhD scholar, and two other who are not students at the university, Sami Shakir and Zeeshan.

According to the FIR, the research associate in the Geology department was on bike accompanied by a pillion rider, Khaliquzzaman. Waseem was stopped by the accused but he managed to escape. Suddenly a bullet hit his shoulder and he lost his control and fell on the ground. Taking advantage of this, the accused reportedly grabbed the victim and beat him. This led to a severe head injury and internal organ damage.

The gruesome attack on Waseem is an addition to a horrific series of campus violence. In April 2016, clashes caused massive destruction on campus, and claimed the lives of Mehtab and Waqif. While Mehtab had been expelled from the university on charges of indiscipline, Waqif, who had completed school, had been residing near campus.

Recently, in September 2017, Nadeem Ansari, a student and former vice president of Aligarh Muslim University Student Union (AMUSU), was reportedly attacked with a sharp weapon following a brief argument with another student.

In another incident, former diploma student, Tauseef accidentally shot himself and died while fiddling with a country-made pistol in his friend’s hostel room in Sir Ziyauddin Hall. In 2015, Alamgir, a student leader who was in his final year of bachelors in social work, was also shot dead on campus.

These incidents and conversations with some students of the university give an idea of the pattern of violence. In most of the cases, the violence was against student leaders and the perpetrators were outsiders. Though there have been other issues – like the illegal entry of non-students to hostel rooms and the free movement of outsiders on campus. These instances pose some serious questions about the safety and security of the students.

RAF deployed at AMU following the 2016 clashes. Credit: PTI/File

Abdullah (name changed), a student, who agreed to speak on the condition of anonymity, said that such violence is the result of the poor state of affairs on the part of AMU’s administration. He said that outsiders (non-students) freely roam in and around the campus and sometimes openly go on rampage, threatening students and hostellers.

Tabrez Ahmad, an AMU alumnus, also blamed the administration. He said, “Non-students get entry into the campus because of some local students and sometimes few local influential teachers facilitate their entry. They (outsiders) do not only try to intervene into internal affairs of the university but also intimidate the students. This leads to a hostile atmosphere in the university premises and claims lives of common students.”

Tabrez said, “Most of the time the administration tries to cover up the issues of violence. The incidents of campus violence is seldom reported in national media because administration do not let the students go out and speak over such issues.”

In Waseem’s case, Tabrez’s claims appear to be true to some extent. Most students, when contacted, said that they felt bad for Waseem but when asked about the violence, they chose to remain silent. Another student, also speaking on the condition of anonymity, said that anyone who dares to speak about such issues is generally suspended on frivolous grounds.

Another matter of concern was a student who talked of a ‘pistol in the hostel’. Some students say that sometimes outsiders get shelter in the hostel through local influence. A few of them carry pistols and create a furore on campus.

Earlier this month, additional city superintendent of police (SP), Aligarh, Atul Kumar Srivastava, had written a letter to the university administration raising similar concerns, and requesting the administration to keep vigil on illegal and unauthorised entries.

AMUSU president Maskoor Ahmad Usmani said, “The brutal attack on a research associate exposes official’s claims of ‘no trespass’. We have demanded a fair probe through a high level enquiry committee and immediate arrest of the perpetrators. We have also made request for installing more CCTV cameras and the replacement of defunct one to make campus fully secure.”

Proctor Mohsin Khan has expressed deep concerns over the repeated incidents of violence. He said, “We condemn such violence. FIR has been lodged. CCTV footages are being examined, we are in touch with the police and trying our best to nab the culprit as soon as possible.”

Despite Khan’s assurance of a fair and fast track enquiry, students do not seem convinced. Some said that on earlier occasions too, students had been targeted and some killed, but nothing had changed.

The university has four operational gates. Locals use different gates to reach the end of the campus that opens up to residential areas and a market. According to the proctor, unlike various other central universities, AMU has many porous pathways. The university has specifically directed campus security personnel to keep an eye on unsocial elements via proper frisking and ID checks.

Nadeem, another alumnus of AMU and Waseem’s brother-in-law said, “The administration has failed to address students’ safety concerns thus the campus is becoming unsafe day by day. The administration must answer the question about how such lethal weapons are easily available on campus. The perpetrators are not dealt (with) sternly and such a passive attitude on the part of the university administration emboldens unsocial elements to commit such crimes again and again. The university must take the strictest possible action to ensure that the campus is completely sanitised from such elements and a true academic atmosphere can be restored.”

He said that the backlash seen at Jawaharlal Nehru University and Delhi University campuses over the infringement of students’ rights and crimes against students is unfortunately absent in AMU. He also pointed a finger at the media: “The media reports minor cases of the alleged involvement of AMU students in petty crimes but when university students are deliberately targeted by miscreants, the media keeps quiet treating the matter as a routine crime story.”

AMU, established in the early 19th century, is known for its academic excellence. It has garnered a reputation for spreading peace and value education, and such untoward happenings not only puts the university’s legacy at risk but also creates a nuisance to the academic ambience.

Aadil Raza Khan is a freelance journalist. He was earlier with Rajya Sabha TV.

Go from Che to Acche in the Blink of an Eye

This is what happens when you wear ‘nationalism glasses’.

This is what happens when you wear ‘nationalism glasses’.

From Che Din to Acche Din

CCTV Comedy brings you this hilarious little video on the spectacle that can be ours if only we see things through the lenses of deshbhakti...

‘Jan Gan Man Ki Baat’ Episode 189: Swara Bhasker and How the Media Diverts Us From Real Issues

Vinod Dua discusses how the media has been distracting the country from real issues and the fallout over Swara Bhasker’s open letter to Sanjay Leela Bhansali.

Vinod Dua discusses how the media has been distracting the country from real issues and the fallout over Swara Bhasker’s open letter to Sanjay Leela Bhansali.

Army Gives Its Version of Shopian Firing to J&K Police, Files a Counter FIR

The army said it had no choice but to defend itself when it was attacked by an unruly mob with stones.

The army said it had no choice but to defend itself when it was attacked by an unruly mob with stones.

Protesters throw stones on security forces amid tear smoke during a protest against the alleged killing of two youth in Army firing in Shopian district of South Kashmir, in Srinagar. Credit: PTI

Srinagar: The Army has submitted its version of the January 27 incident when its convoy was attacked in Shopian district, to the Jammu and Kashmir Police and explained its reasons for opening fire at the stone pelting mob, officials said today.

According to the Army’s narrative, submitted yesterday, the force’s convoy was attacked by a group of stone pelters and its personnel resorted to firing to save themselves, the officials said.

The Army’s version comes after the state police registered an FIR about the incident in Ganovpora area of Shopian in south Kashmir in which two youths were killed. One more person succumbed to his injuries today, raising the toll to three.

It has claimed it opened firing in self defence after seven of its personnel were injured. The Army has also submitted photographs of the vehicles damaged in the stone pelting.

The state government has ordered a magisterial probe into the incident.

The FIR filed by the state police names no accused but states that a company of 10 Garhwal led by Major Aditya was on its way for official duty when it was attacked by an unruly mob with stones.

Police has filed an FIR under sections 336 (endangering life or personal safety of others), 302 (murder) and 307 (attempt to murder) of the Ranbir Penal Code, which is similar to the Indian Penal Code but applicable only in Jammu and Kashmir.

The Shopian incident became a bone of contention between the state’s ruling alliance partners PDP and BJP.

A BJP legislator demanded on the floor of the House that the FIR be cancelled. This was, however, turned down by Chief Minister Mehbooba Mufti, who said the FIR will be taken to its logical conclusion.

BBC Study Finds Taliban Active in 70% of Afghanistan, With Full Control Over 4% of the Country

The BBC estimate was significantly higher than the most recent assessment by the NATO-led coalition.

The BBC estimate was significantly higher than the most recent assessment by the NATO-led coalition.

Afghan security forces take position during a gun battle between Taliban and Afghan security forces in Laghman province, Afghanistan, in March 2017. Credit: Reuters/Parwiz/Files

Washington: The Taliban are openly active in 70% of Afghanistan’s districts, fully controlling 4% of the country and demonstrating an open physical presence in another 66%, according to a BBC study published on Tuesday.

The BBC estimate, which it said was based on conversations with more than 1,200 individual sources in all districts of the South Asian country, was significantly higher than the most recent assessment by the NATO-led coalition.

The coalition said on Tuesday that the Taliban contested or controlled only 44% of Afghan districts as of October 2017.

Afghanistan has been reeling over the past nine days from a renewed spate of violence that is adding scrutiny to the latest, more aggressive US-backed strategy to bolster Afghan forces battling the Taliban in a 16-year-old war.

A bomb hidden in an ambulance struck the city centre and killed more than 100 people, just over a week after an attack on the Hotel Intercontinental, also in Kabul, which left more than 20 people dead, including four US citizens.

The BBC counted 399 districts in Afghanistan, but the NATO-led force counted 407. The reason for the discrepancy was not immediately clear.

The BBC study said the Afghan government controlled 122 districts, or about 30% of the country. Still, it noted, that did not mean that they were free from Taliban attacks.

“Kabul and other major cities, for example, suffered major attacks – launched from adjacent areas, or by sleeper cells – during the research period, as well as before and after,” the report said.

Asked about the BBC‘s study, the Pentagon did not comment directly, but pointed to the latest figures by the NATO-led coalition asserting that about 56% of Afghanistan’s territory was under Afghan government control or influence.

Captain Thomas Gresback, a spokesman for the coalition in Kabul, said the BBC estimate overstated the militants’ “influence impact”.

“This is a criminal network, not a government in waiting,” Gresback said in an emailed statement.

“What really matters is not the number of districts held, but population controlled. RS assesses that around 12% of the population is actually under full Taliban control,” he said, referring to the Resolute Support mission.

The study by Britain’s public broadcaster quoted a spokesman for Afghan President Ashraf Ghani playing down the findings.

The BBC study also said Islamic State had a presence in 30 districts, but noted it did not fully control any of them.

(Reuters)

The Rising Rupee and the Crouching Federal Reserve

Should the RBI intervene and help exporters or does it make sense to wait and see when the interest rate differential peters out?

Should the RBI intervene and help exporters or does it make sense to wait and see when the interest rate differential peters out?

A woman walks past the Reserve Bank of India (RBI) head office in Mumbai, December 6, 2017. Credit: Reuters/Shailesh AndradeA woman walks past the Reserve Bank of India (RBI) head office in Mumbai, December 6, 2017. Credit: Reuters/Shailesh Andrade

A woman walks past the Reserve Bank of India (RBI) head office in Mumbai, December 6, 2017. Credit: Reuters/Shailesh Andrade

When it comes to discussing the implications of any policy reversal, we often evaluate the pros and cons – the advantages and the disadvantages. When it comes to the change in the value of the currency, we have one more dimension to face: the ugly side.

India’s foreign exchange reserves have been on the rise since late December 2017. They reached a new high for the fourth straight week ending January 19, 2018: $414.8 billion, up from $413.8 billion of the week ending January 12, 2018.

A year ago, at the end of January 2017, the reserves stood at $361.6 billion.

Rising reserves lead to appreciation of the rupee. The rupee rose from Rs 67.48 per US dollar in January-end 2017 to Rs 64.01 on January 12, 2018. It was still rising. On January 29, it was Rs 63.67.

If we express the exchange rate in the reverse way, the Indian rupee’s journey is clear. One rupee was worth 1.48 cents in end January 2017; it was 1.56 cents on January 12, 2018; and now on January 29, 2018 it is 1.57 cents. The trend is upward. What are the implications of this?

Three sides of appreciation

The Good: If the rupee appreciates against world currencies, it signifies strengthening of the currency. Politicians would be happy that the country’s growing strength is duly reflected in the rising value of the rupee. Foreigners would now have to shell out more of their US dollar or British pound, for paying in rupees for the same quantity of Indian goods and services they purchased last month.

The Indian consumer would also be happy that prices of imported consumer goods would fall in rupee terms. Indian manufacturers, too, would welcome the appreciation of the rupee, as rupee prices of imported capital goods, machinery, petroleum crude and other raw materials and intermediate goods would duly decline. The purchasing power of one Indian rupee goes up with currency appreciation.

The Bad: Export earnings would be decreasing. Indian exports would become more expensive to foreigners. Overseas importers of India’s limited range of goods and services, as well as foreign tourists to India will be hit hard. The competitiveness of India’s exports is dented with the appreciation of the rupee. So, the exports would have to decline; and exporters would be at a disadvantage.


Also read: A Rising Real Exchange Rate Hurts India’s Exports


The Ugly: India’s export manufacturing sector is especially labour-intensive. Most labour-intensive exports – such as clothing, processed consumer goods, including food and condiments – eagerly consumed by expatriates overseas and handicrafts and the like will be greatly affected. Any exporter seeing a decline in overseas sales following the appreciation of the rupee, now has concerns as to how to cut costs: the immediate avenue is the wage component. Effects on employment in general will be adverse, if the backward linkages of export industries to farm and rural sector are stronger.

Reasons behind India’s currency appreciation or depreciation

India switched onto a market-determined exchange rate regime in 1993, though still a managed float, just as most economies all over the world intervene from time to time to reduce volatility in their exchange rates. In keeping with liberalised capital movements with the rest of the world, the market forces now encompass supply and demand for goods and services and capital as well. Capital flows in search of higher returns either from long-term investment (equity) or debt; or short-term gains by way of investment in bonds and shares due to favourable interest rate differential.

India’s economic reforms in the mid-1990s have increasingly allowed foreign direct investment and encouraged foreigners to participate in the domestic investment and services operation. Second, sound economic policies such as targeting low fiscal deficit, low inflation and, above all, an exchange rate regime relatively free of stringent exchange controls on capital movements, have thus made India a desirable destination for investment.

More importantly, in recent years, after the onset of the Great Recession since 2008, interest rate differentials between the rich economies, which have deliberately kept their interest rates low and the emerging economies, including India, with higher interest rates, have worked to the advantage of India.

Financial capital inflows have grown enormously in recent days. The delay in the often professed but postponed return to normalisation of interest rate policy in the US may eventually end by August 2018. The US economy is picking up growth with President Donald Trump’s “America First” policies of reduction in corporate taxes to foster domestic investment and rising protectionism.

So, until then, India may continue to be benefited by interest differential and the hot moneys would continue to flow in. We all know only FDI inflows add to real sector – hot moneys vanish in no time. They only enlarge financial bubbles until the interest rate differential disappears.

Foreign exchange reserves and exchange rates

Foreign Exchange Reserves (US$ billion) Nominal Market Exchange Rate (Rs/US$) Nominal Market Exchange Rate (US$/Rs) Trade weighted NEER Index (2004-05 =100) Export weighted NEER Index (2004-05 =100)
2015 (average) 360.2 64.15 0.0156 74.8 74.7
2016 (average) 370.0 67.19 0.0149 74.7 76.4
End Jan 2017 361.6 67.48 0.0148 75.1 76.9
End April 2017 372.7 64.31 0.0155 78.8 80.7
End July 2017 378.7 64.32 0.0155 77.6 79.4
End Oct 2017 398.8 64.96 0.0154 76.3 78.3
End Dec 2017 404.9 63.46 0.0158 77.2 79.2
Jan 8, 2018 411.5 64.48 0.0155 NA NA
Jan 12, 2018 413.8 64.01 0.0156 NA NA
Jan 29, 2018 414.8 63.67 0.0157 NA NA

Source: RBI Monthly Bulletin 2015 to 2018 Monthly Issues

The table above presents data (2015-17) on foreign reserves and nominal exchange rates (Rs/US$ and US$/Rs). Further, the table also presents two indices of nominal effective exchange rate (NEER) where the exchange rate is defined as units of foreign currency per one unit of rupee: (i) one index by using the trade (exports and imports) with 36 countries as weights; and (ii) another index using exports to each of 36 major countries as weights.

The two NEER indices, so calculated with both trade and exports as weights, are also rising.

Booming currency trade

According to Bloomberg, the Indian rupee returned the highest yield among its Asian peers. The currency trade involves selling a certain currency with a relatively low interest rate and using the funds to purchase a different currency yielding a higher interest rate. Indian rupee trade gave the highest interest return at 6.37%. Bloomberg also recorded the rupee appreciation as a close 6% against the US dollar.

The appreciation of the rupee is generally attributed to three developments. One, the early recovery in growth after the two domestic shocks of demonetisation of late 2016 and disruption due to introduction of Goods and Services Tax (GST) regime in July 2017. Two, credible RBI policy. And three, continued economic reforms.

Of course, the unsaid thing is the operating influence of interest rate differential in India’s favour – inducing financial capital inflows – which do not add to investment or employment.

Role of RBI

Turning to RBI policy, one could raise some legitimate questions. How about RBI intervention? Has it intervened on previous occasions? Would not RBI intervene for stopping the rupee appreciation and helping exporters?

The answers to the first two are in the affirmative. The RBI did intervene previously and has been intervening for controlling volatility in exchange rate changes. RBI does not target any specific level of exchange rate.

By targeting only at inflation: 4% within an allowable band of plus or minus 2% variation as its mandated goal, it does influence real exchange rate, which is more relevant for maintaining the competitiveness of exports than nominal exchange rate.

Real exchange rate is the product of nominal exchange rate and the domestic price index relative to foreign price index. Given the nominal rate, a fall in domestic price level relative to foreign price level would amount to fall in real exchange rate, which promotes export competitiveness.

No doubt, in the past exporters clamoured for halting or even reducing the exchange rate appreciation. The RBI intervention was not for weakening the currency to favour exporters, but for reducing the volatility in currency fluctuations. The RBI purchased foreign currency and sold rupees in return; by so doing, it reversed the effects of adding to money supply by selling bonds for mopping up excess money supply.

The procedure is known as sterilisation. The RBI may consider it when appropriate.

At present, all central banks including RBI are awaiting the likely US Fed interest rate policy change in the near future. Indication of any change in the monetary policy stance would be known after the latest federal reserve meeting this week.

T.K. Jayaraman is an Adjunct Professor, Amrita School of Business, Bengaluru Campus, Amrita Vishwa Peetham.

France’s Macron Warns Turkey Over ‘Invasion’ of Syria

The French President said that he would have a “real problem” with Turkey’s intervention against Kurdish militia in Syria if it turned into an outright “invasion”.

The French President said that he would have a “real problem” with Turkey’s intervention against Kurdish militia in Syria if it turned into an outright “invasion”.

French President Emmanuel Macron delivers his New Year’s speech to civil servants in Paris on January 30, 2018. Credit: Reuters/Philippe Wojazer

Paris: French President Emmanuel Macron warned Turkey that its operation against Kurdish militias in northern Syria should not become an excuse to invade the country and said he wanted Ankara to coordinate its action with its allies.

Turkey last week launched an air and ground offensive in northwest Syria, targeting the Kurdish YPG militia in the Afrin region. That has opened a new front in the seven-year-old civil war and strained ties with Turkey’s NATO allies.

“If it turns out that this operation takes a turn other than to fight a potential terrorist threat to the Turkish border and becomes an invasion operation, (then) this becomes a real problem for us,” Macon said in an interview with Le Figaro newspaper published on Wednesday.

Turkey considers the YPG a terrorist organisation and an extension of the outlawed Kurdistan Workers Party (PKK), which has waged a three-decade-long insurgency in Turkey’s largely Kurdish southeast.

Turkish Prime Minister Binali Yildirim defended the operation saying it was solely aimed at securing his country’s security and protecting Arabs, Kurds and Turkmens from “terrorist organisations.”

“If France is interpreting this issue as such (invasion operation), we need to assess what they have done in Syria accordingly,” Yildirum said at a news conference alongside Lebanese Prime Minister Saad al-Hariri in Ankara.

“This is a crooked idea from the start. The whole world knows that Turkey is not acting with an invasive mind. They should know it.”

The United States and France have armed and trained YPG-led militia in the fight against Islamic State in Syria.

Macron said he would bring the issue up again with Turkish President Tayyip Erdogan and that the nature of the operation meant there should be discussions between Europeans, but also more widely among allies.

(Reuters)

Iranian-American Dual Citizen and Wife Sentenced to 27 and 16 Years in Jail Respectively

First accused of hosting mixed-gender parties for diplomats and possessing alcoholic drinks at home, they later faced more serious charges, including “espionage”.

First accused of hosting mixed-gender parties for diplomats and possessing alcoholic drinks at home, they later faced more serious charges, including “espionage”.

A file photo released by the Center for Human Rights in Iran (CHRI) shows Iranian-American dual national Karan Vafadari with his Iranian wife, Afarin Neyssari. Credit: Twitter

London: An Iranian-American dual citizen and his wife have been sentenced to 27 and 16 years in jail respectively, the husband said in a letter from prison published on human rights websites.

Karan Vafadari, a US citizen, and Afarin Neyssari, a US permanent resident, were arrested in July 2016. They own an art gallery, and they were first accused of hosting mixed-gender parties for foreign diplomats and possessing alcoholic drinks at home.

However, they later faced more serious charges, including “espionage”, “attempt to overthrow the regime” and “conferring to conspire against national security”, their family said in a petition in 2017.

In a letter from Evin Prison published on Tuesday by the Center for Human Rights in Iran, Vafadari said the couple were sentenced last week by a Revolutionary Court in Tehran, but the “baseless security accusations” had been dropped. He called the verdict “unjust and tyrannical”.

It was not clear what charges the couple were convicted of. Iran’s judiciary was not immediately available for comment.

The couple will have 21 days to appeal the verdict.

Vafadari belongs to the Zoroastrian faith, a religious minority in Iran whose members are allowed to drink liquor discreetly in the privacy of their homes.

Vafadari said he has been targeted by the Revolutionary Guards intelligence agency for his “international activities” in the art world, and his dual nationality.

“It means my wife and me, and every one of you dual national Zoroastrians who returned to your country to invest in the homeland you love, are always going to be in danger of losing your assets and being forced to leave the country.”

Iran does not recognise dual nationality, a position that prevents Western embassy officials from visiting such detainees. Iran’s Revolutionary Guards have arrested at least 30 dual nationals since 2015, mostly on spying charges, Reuters reported in November.

(Reuters)

The Story of the Tet Offensive

Fifty years ago today, the Tet Offensive exposed the US military and the global economic order it oversaw.

Fifty years ago today, the Tet Offensive exposed the US military and the global economic order it oversaw.

President Johnson visits Gen William Westmoreland in South Vietnam a month before Tet. Credit: Wikimedia Commons

At the end of January, the media will commemorate the fifty-year anniversary of one of the Vietnam War’s most pivotal moments: the Tet Offensive.

On January 30, 1968, the combined forces of the Viet Cong, the People’s Liberation Armed Forces in the South, and the People’s Army of Vietnam from the North attacked virtually every important military and political center in the Republic of Vietnam, even invading the US embassy. Within sixty days, President Lyndon Johnson would reject the military’s request for a troop surge, begin de-escalating the war, and withdraw from the 1968 presidential campaign. Even then, observers saw Tet as a turning point in the Vietnam era, and it has maintained near-mythic status ever since.

The consensus view still holds that Tet was a significant American military victory, derailed by political factors at home — especially in the media. Walter Cronkite came to symbolize this domestic opposition after he famously implored Johnson to negotiate a way out of the war during a February 27 Special Report.

While the Vietnamese did suffer huge losses in 1968 (particularly in the so-called Tet II and Tet III offensives later that year), the January 30 attack exposed grave American vulnerabilities, reinforcing the view that the military could not expect future success. People with more influence than Cronkite had been saying that for years.

For some time, senior officials had expressed their misgivings about the war. They pointed out that the government in South Vietnam lacked broad public support, that their enemy was more integrated into the local population, and that American soldiers were not well suited for fighting in Vietnam. As early as 1965, US Commander General William Westmoreland warned that sending in ground troops would “at best buy time”: the military would need more and more reinforcements “until, like the French, we would be occupying an essentially hostile foreign country.”

Marine Commandant Wallace Greene attacked the US strategy of attrition, comparing it to a “grindstone” that the enemy turned. The Communists, he warned, had enough manpower to keep the stone going even while suffering high casualty rates. Army Chief of Staff Harold K. Johnson thought likewise and commissioned a study, the so-called PROVN Study. It called for an end to the attrition strategy, the search-and-destroy operations, and the free-fire zones, recommending instead pacification and political warfare.

This anxiety already established, Tet hit the military hard. Despite public claims of success — Westmoreland had predicted “light at the end of the tunnel” in November 1967 — the offensive reinforced many of the top brass’s bleakest views. At the outset, Westmoreland reported, “from a realistic point of view, we must accept the fact that the enemy has dealt [South Vietnam] a severe blow.” It brought the war to the people, inflicting heavy casualties and damage, and disrupted the economy. President Johnson, alarmed by the official reports, media criticism, and the largest casualty counts yet, dispatched Chairman of the Joint Chiefs of Staff Earle Wheeler to Saigon at the end of February to assess the situation.

Wheeler’s report, presented to the president the same day Cronkite’s televised special aired, called the media unduly alarmist but nevertheless admitted to the grave problems facing the United States. Liberation forces could continue its attacks, but the southern army had lost about one quarter of its strength. Tet had badly undermined the pacification program, and Nguyen Van Thieu’s government was dealing with desertions, refugees, and reconstruction. “In short,” Wheeler concluded, “it was a very near thing.” Harold K. Johnson did not resort to euphemism. “We suffered a loss,” he cabled Westmoreland, “there can be no doubt about it.”

Wheeler nonetheless requested another 206,000 troops for Vietnam alongside the activation of 280,000 reservists, an escalation Johnson would surely reject.

Clearly, later claims that Tet was a great American victory are false; American leaders did not have time to let the dust settle in order to form a different analysis, and their enemy’s losses from the subsequent “mini-Tets” had not yet taken place. With a barrage of candid and often bleak reports pelting Washington from Saigon, policymakers could do little more than cut their losses.

And so they did. In early March, Clark Clifford, Robert McNamara’s replacement at the Pentagon, reassessed the war; Johnson’s informal advisers, the so-called Wise Men, finally urged de-escalation, and the president lamented that “everybody is recommending surrender.”

On March 31, he capitulated, announcing a partial halt to bombing and his withdrawal from the presidential campaign. The conflict continued, and certain elements, like the air war and expansion into Cambodia and Laos, intensified. But it was clear that the United States had to end the ground war, and quickly.

By early 1971, under the Nixon administration’s post-Tet “Vietnamization” doctrine, less than 150,000 troops remained in country. Politically motivated analyses notwithstanding, it became obvious the United States had lost the Vietnam War.

But another factor pushed along the recognition that disengagement had to begin. It took place not on the battlefields, but in banking houses.

Wall Street’s consensus

Most studies of Vietnam have neglected the war’s economic consequences, but the impact of a huge financial commitment to Indochina was always a pressing issue, and never more so than during Tet 1968. While the American ruling class was committed to the nation’s post–World War II imperial mission, it also understood the limits of economic hegemony and recognized the toll the Vietnam War was taking on the United States’ long-term global project.

Throughout the 1960s, American officials confronted a serious balance-of-payments (BOP) deficit, an ever-increasing gap between the number of US dollars going abroad — as investment, tourism, and of course military spending — and the money coming in. This deficit grew dramatically as involvement in Vietnam expanded. It heated up an already roaring domestic economy but eventually led to a run on American gold reserves.

In 1944, the United States had created the Bretton Woods system, establishing the dollar as an international currency fully convertible and backed by gold. The intimate relationship between BOP deficits and the gold supply was vital to American economic stability. As early as 1960, outgoing President Dwight Eisenhower stressed the “grave situation with regard to the outflow of gold” and feared “no one really understands what to do about it.”

By 1965–66 the war had visibly destabilized global economies. At home, the payments deficit grew as spending on the war approached $25 billion or more yearly. Gold reserves fell from $23 billion in 1957 to $16 billion in 1962 and remained in decline after that. Because foreign nations could not adjust their currencies — Bretton Woods demanded fixed rates pegged to the dollar — they had to pay higher prices for American goods thanks to US inflation. So central banks began cashing in their dollars for gold as a hedge, withdrawing $1.7 billion in 1965 alone.

The situation only worsened as US military budgets grew, and, by late 1967, there was a full-blown monetary crisis. The United Kingdom devalued the pound sterling, and European nations, especially France, began to call for an end to the US-dominated world economy. French President Charles de Gaulle warned of an “American takeover of our businesses” resulting from the “exportation of inflated dollars.” At the same time, fourth-quarter BOP deficits rose to $7 billion, triple that year’s rate. References to 1929 became common among the president’s economic advisers.

When the Tet Offensive shocked the world, the international economy was experiencing a less well-known crisis. Deficits grew by over $300 million a week, and gold losses amounted to almost $600 million in the first weeks of March 1968 alone. If European banks continued to exchange dollars for gold, they would weaken the dollar and possibly ignite a series of currency devaluations, not unlike the Great Depression.

At that point, Wall Street turned against the war. Citibank president Walter Wriston said the odds on economic stabilization “would be greater if the Vietnamese war ended,” a position echoed by Goldman Sachs economists.

Most acutely, Federal Reserve Chair William McChesney Martin, alarmed by the war’s costs and fearing a repeat of 1929, complained:

I have been trying for the past two years to make the point on “guns and butter” and the cost of the Vietnam War, economically, without too much success but I think in due course the chickens will come home to roost.

The Tet Offensive called US military power into question, and the gold-dollar crisis was undermining the basis of the nation’s postwar economic growth.Finally, the president stepped in to stop the bleeding. He temporarily froze gold transfers and, more importantly, began to slow down the war and military spending. As a first step, he rejected the reinforcement request, which would have cost another $25 billion. The United States could no longer afford the war, a painful reality to the White House in 1968 but one little examined since.

With the war now an economic albatross, military officials began a political offensive to make sure Johnson took the blame for future failure. They knew that their reinforcement demand would spark a political firestorm; the Army’s Pacific Commander, General Dwight Beach, “had commented that it would shock” government officials. The White House had rejected Westmoreland’s previous proposals for such escalation, and, on February 2, the president himself had told reporters that he saw no reason to expand troop levels beyond the 525,000 then deployed. Westmoreland and Wheeler made the request anyway.

Johnson worried that the Tet crisis would be politically devastating. He saw an empire beginning to show cracks, and he had to address the economic costs of war at home, the interests of Wall Street, and the stability of the Atlantic alliance alongside the battlefield conditions. At a meeting with his advisers, he charged that “all of you have counseled, advised, consulted and then — as usual — placed the monkey on my back again.… I do not like what I am smelling from those cables from Vietnam.”

Johnson’s outburst may have been disingenuous, but it was well founded. He rightly feared that the military would exploit White House divisions over the war. “I don’t want them [military leaders] to ask for something, not get it, and have all the blame placed on me,” Johnson worried aloud. As the war waned, this was precisely what happened.

Though he didn’t expect such a massive reinforcement request, the president clearly understood the political implications of any future decisions regarding Vietnam. Ambassador to Saigon Ellsworth Bunker understood as well, having warned Westmoreland against asking for so many additional forces because reinforcement was now “politically impossible” even if Johnson wanted it.

No one in the military was surprised that the president rejected their request for more resources, but it enabled them to claim that they had to fight “with one hand tied behind their backs,” building a narrative of military success derailed by political mischief.

Who really pays?
The early months of 1968 have become the subject of intense scrutiny thanks to events in Vietnam and the political crisis at home. But the gold crisis was just as historically important, if not more so.
As Tet exposed the US military’s limits, the rush to trade in dollars for gold showed the weakness of the American-led global economy. Americans heard reports about Vietnam every day, but information on the emerging global economic crisis was not nearly as widespread.

Studying major turning points in wars, like Tet, is essential, but neglecting the larger context and consequences creates historical misinterpretations and perpetuates liberal narratives about “winning all the battles but losing the war.”

Wars spread beyond active participation and geography to affect untold numbers. Economic crises crush and kill people as brutally as any battle. The money spent fighting the war in Vietnam was diverted from research and development, investment, education, housing, and health care. Along with the oil shocks of the 1970s, the economic aftermath of the war motivated major pivots in, and the decline of, America’s global economic role, leading to the eventual breakdown of Bretton Woods.

The story of Tet as a military victory but political defeat brought on by Walter Cronkite is an engaging one, but it’s historically inaccurate and politically damaging. In Vietnam (and later in Afghanistan and Iraq), the poor suffered the most, both on the battlefield and amid economic crisis. They died fighting or were cast aside as the government axed social programs, cut taxes on the wealthy, and empowered banks and corporations.

Ultimately, this is the more telling, and damning, narrative about the Tet Offensive.

The story was first published on Jacobin. Read the original article here