Order and Anarchy

Ramadan Mubarak to all of you out there. May the holy month brings with it all the tidings and blessings that are there for this world to grab.

As with last year, this year too, a dedicated Ramadan blog is being activated (rather continued from last year) that will contain everything related to this holy month in pictures and in words, that will cover the Ramadan theme from around the world and that will share and mix an immense array of the beautiful universal Ramadan activities and rituals as carried out in different cultures.

I welcome you all to visit Ramadan Kareem and immerse yourselves in the amazing journey through the holy month as experienced by bloggers from a multitude of nationalities, cultures and backgrounds but sharing a unique and distinct urge to make out the most of the month’s beauties!!

Lately the international financial scene has been hit by the news of the implication of a Pakistani banker, one Hafiz Muhemmed Zubair Naseem, in insider trading in US markets and profiting immensely from his scheme. He has been charged with 25 counts of securities fraud and one count of conspiracy for revealing details of deals on which Credit Suisse advised. And guess what?? He was not alone.

The SEC has charged Hafiz Naseem, an investment banker with Credit Suisse, with illegally divulging non – public information to a person believed to be a banker in Pakistan concerning the leveraged buyout of TXU Corp. by an investor group led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group. Naseem misappropriated the information from his employer, Credit Suisse, which served as a financial advisor to TXU in connection with the buyout. The SEC has filed a complaint with the US District Court for the Northern District of Illinois alleging insider trading in TXU Call Options ahead of the TXU buyout. The Comission further charged Naseem of breach of duty in telephoning his colleague in Pakistan, another prominent banker, and divulging to him material but non – public information regarding the buyout. Naseem has also been alleged to have been tipped others concerning atleast eight additional merger deals worked upon by Credit Suisse since he joined in March 2006.

Well, the icing on the cake is yet to come. Dawn reports that the other banker in Pakistan indicated above is Ejaz Rahim, former Group Head of the Investment Banking Group at Faysal Bank. Ejaz Rahim has further confirmed that he is under investigation by the SEC. Both Naseem and Rahim have earlier worked together at American Express in Lahore (and both have been accused of illegal banking practices over there as well). Although Ejaz Rahim denies any wrongdoing on his part, he accepts making $5 million on a leveraged deal of 6,700 Call Options just three days before the buyout was announced; but he maintains that the deal was purely based on market analysis data provided to him by a London based energy sector analyst. At that time, the Call Options gave Rahim the right to buy TXU stock at prices between $57.50 and $60 by March 2007, through a brokerage account at UBS in London. And when the TXU deal was announced on Feb. 26, its stock shot up $7.91 from the day before, to $67.93. This way, Rahim was able to net $5 million, the SEC maintains.

The SEC does not only stop here on the TXU deal, but further adds that other investors similarly benefitted. From January 29th to February 20th, Seema and Sunil Seghal, who are believed to be British citizens, bought several hundred TXU call option contracts, which expired in March and April 2007. Together, they made more $271,600 in profits. In late February, Francisco Javier Garcia, believed to be a resident of Switzerland, bought similar TXU securities through Fimat Banque Frankfurt based on inside information; he reaped trading profits of more than $150,500. The SEC has sued them all.

Dawn further reports that these two are just a peek into the dark world of insider trading. A number of additional Pakistani bankers, whose names haven’t been released as yet because of they being “big guns”, are also involved and are now worried about their skin as the powerful SEC pursues the case further. Dawn comments:

The banking fraternity is up in arms as this has dealt quite a blow to the reputation of the industry in the international banking arena. It is feared that the recent influx of investment by foreign banks will suffer a setback because of the fraud.

No doubt it’s got to reflect badly particularly on Pakistani bankers, who are famous for their skills and acumen, and on the Pakistani banking industry in general. However, one more unintended fallout of this saga has been that western audiences have come in motion to implicate the religion of Islam in all this. Blogs have been discussing this and accusing Eastern societies and the religion of Islam in particular for being responsible. It couldn’t have gotten worse than this. Well, all such Islamophobic and rascist remarks and sentiments aside, as they are the by – product of the larger ill – will that runs across the globe at this moment in time, one thing is certain that internationally, Pakistani reputation hasn’t been helped at all by this incident.

However, as further impact of this incident takes hold, we can expect to get more details and certainly more names. Pakistani authorities should also step ahead and take action. But, to think that any strong action will be taken here in Pakistan is naive at best as insider trading is supposed to be the rule of the game to make big bucks. And it’s not just here in Pakistan. Every market must be having big fish ready to plunge into this illegality to make the big buck, and it’s true for US markets also. However, this time the powerful SEC got wind of this activity and now it will not spare a dime in processing all the relevant insider trading regulations to take offenders to task.

Pakistan, though, is another story. They never catch the big fish over here and history is replete with examples of the big culprits being let free. So for those additional Pakistani bankers who now fear that the SEC will get them, the SEC will sure do its best to get them but they can rest assured that they wouldn’t be safer anywhere else than in Pakistan.

They say that in today’s world, information is everything. They say that information gives privileges and information leads to control. It may well be true, but given the consequences, is such a twisted role of information desirable? I doubt.

The role of information is indeed immense but as the world is turning out nowadays, information is being used and manipulated to twist reality and affect and mould perceptions. Effectively, information is being used to take away the freedom of thought from the citizens of the world. The sickening ideal is that if you control the way people see and feel reality, you infact control reality. Never has this been truer than it is in today’s world. There are a number of instances where interest groups have sought to influence public opinion to their favour. And leading from the front are governments that find it in their interest to make the masses to believe in a certain manner.

A belief that has developed recently is that as nations advance and as interests become more and more varied the corresponding advancements in technology has led governments to seek new ways to exert control. Thus, we see that battlefields have changed quite a bit. Now, apart from territorial wars, wars are also being fought for ideas, beliefs and ideologies. Thus, the mind has emerged as a vast battlefield. The result has been that information is presented in such a fashion that, at times, it states a totally different form of reality. It’s as if people are made to believe that the artificial reality is the ‘real reality’ (remember the movie The Matrix?). It’s like when you keep bombarding people with a set of accounts regarding the artificial reality and somehow keep their attention too, they may at last surrender to the information onslaught and start believing in what you tell them without any questions. In my view, in such cases, our collective intelligence comes to questions. I wonder how easy it is for an interest group to mock our senses and perceptions. These guys are initially always in a minority but they ultimately become able to win over the minds of people and their ideas become the ideas of the majority.

There is truth in this world and there is lie. If one somehow remains sane enough to hold onto the truth, that person should counter the prevalent propaganda and show the people the real reality. It may sound utopian, but freedom of thought amounts to be one of the basic rights of man. Truth should be defended and kept separate from a lie. People have the right to distinguish between white and black. They have to know that white is light and black is dark, because that is the truth.

The birth pangs in the Middle East are now over but the newborn is definitely not to America’s liking. Tough luck. What has it resulted in? The exposure of incapability and incapacity of the “forces of good” to overcome the “forces of evil”, as the America and Company would observe. Thus, it has remained a hard birth both for the Israelis and Americans as well as the Lebanese.

The adoption of Resolution 1701 by the Security Council has led to relative calm and has presumably kindled hopes for a long – lasting solution. However, such hopes are misconcieved and misplaced. The Resolution is infact merely a tool of the Israelis and the Americans to appease the International community which was getting increasingly unnerved by the miseries being caused by the war to the large number of civilian victims. One can view Resolution 1701 as being a mildly watered down version of the earlier draft proposed by the French and the Americans and which was duly rejected by Hizbullah. Resolution 1701 ultimately remains weak and ambiguous and one that does not take into account the ground realities. The Resolution, by virtue of its draft, remains vulnerable to manipulations and is certainly biased in favour of Israel. Therefore, it also goes agianst the principle of natural justice and equity as well as the mandate of the UN.

For this outcome, the brokers (United States) have cunningly moulded the text in a manner that would clearly provide Israel with ample room for action in contravention of international law.

Resolution 1701 certainly does not stop the war, but as with the earlier rejected draft, only persuades Israel to cease all “offensive military action” while tells Hizbullah to stop all attacks. The ramifications are clear. This leaves Israel with ample space for manipulation and strike anywhere, even civilians, in the future in the name of self – defence.

The blame for the recent round of hostilities has squarely been put on the shoulders of Hizbullah. Resolution 1701 further fails to doubt the legality of Israeli action by not condemning the disproportionate response that was displayed by the Israeli forces not against Hizbullah, but against innocent Labenese civilians. The response was no doubt made so to pressurize the Lebanese government and to cause the public sentiment to rise against Hizbullah. What happened was a frustration to the Israeli – American plans. Nevertheless, in failing to taking Israeli actions to account, the UN has set a dangerous precedent as this amounts to endorsing the act of targeting innocent civilians in the name of self – defence.

One of the major bones of contention that was there in the earlier draft too is that the Resolution does not tell Israel to pull back its forces from Lebanon immediately, and still leaves no timeframe when these forces will eventually return to Israel. Ths act has been solely left upon the option of Israel that as and when a beefed up United Nations Interim Force in Lebanon (UNIFIL) is deployed in south Lebanon, Israel will withdraw its forces gradually. Again, a basic Hizbullah demand has been ignored for an immediate and complete withdrawal of Israeli forces. Still, Hizbullah has braced to be bound by the rules but has made it clear that it reserves the right to resist and that it will target Israeli forces inside Lebanon, Israel being the occupying force, till they withdraw completely. Now this is a major loophole in the Resolution is it can very well lead to a conflict that involves, apart from Israel and Hizbullah, the Lebanese army and the UNIFIL forces. Looking from the other side of the mirror, Resolution 1701 legitimizes the temporary occupation of Lebanon by Israel till the complete deployment of the proposed international force.

The main thrust of Resolution 1701 for a long – lasting settelement is the complete disarmament of Hizbullah. This is a rather uphill task given the history of Israeli belligerence in the region and the continuation of Israeli action to corner the Palestinians. The Resolution further proposes an arms embargo as well as a forbiddance of any training or any other help that is not authorized by the Lebanese government. This is indeed a plan to neutralize Hizbullah and sever its links with Syria and Iran. However, there’s no restriction placed on the Israelis. The disarmament of Hizbullah would be done simultaneously with the formation of a buffer zone that is free of anything military except for assets and personnel belonging to the government. The UNIFIL is being mandated to aid the Lebanese government to effectively implement the proposed buffer zone and in securing entry points to prevent arms or related material from entering Lebanon. Here, the UNIFIL is being authorized to act in all manners possible to take all necessary action to prevent the area under its control to be used for any “hostile activities”. This point certainly creates a chance for UNIFIL for being faced with a catch – 22 situation by creating a possibility of its confrontation with Hizbullah.

The authors of Resolution 1701 may well have led the world to believe that the Resolution will lead to alleviation of miseries of innocent civilians. But the way the Resolution has been drafted and it’s ignorance of a number of critical issues and its not being partial may only lead to an opposite scenario.

The United Nations should realise that post 9/11, it has been turned into a sort of a wholly owned subsidiary of the US administration. The United States gets away with the UN with whatever it wants; Afghanistan, Iraq and now Lebanon are prime examples of this state of affairs. It has continued to fail the citizens of this world in all these instances. The result has been that as an organization that has the mandate to ensure international security and protection of human rights, common people have now started having a hard time in placing their trust in it. This leads to the erosion of legitimacy of actions carried out by the United Nations.

This time, it was the steadfastness of the Hizbullah forces on the ground and support for the resistance amongst the masses that led Lebanon not to really bow down completely in front of the powers and that enabled Lebanon to stand up in front of Israeli threats to its sovreignty. There is significant doubt whether the United Nations has been useful for the Lebanese. Rather, as is clear from Resolution 1701, the UN has sided with Israel – a clear evidence of American hegemony at the international body. However, now that the Resolution has been adopted by all parties, let’s hope for the best for the victims. But there will always remain fears that another round of fighting might break out and which may well be worse than what the world saw during the last month.