There is No Fate But What We Make: October 2007

Monday, October 29, 2007

How the Kashmir crisis began

BBC has a nice article on this. Reproducing this here in case they archive it off...

How the Kashmir crisis began

It's 60 years exactly since one of the world's most enduring
conflict zones, the Kashmir valley, first erupted in violence.

The BBC's former Delhi correspondent, Andrew Whitehead,
looks back on how the Kashmir crisis started.

Before dawn on Monday, 27 October 1947, soldiers from the Indian army's Sikh Regiment gathered at short notice at Palam airport outside Delhi.

Their mission - to spearhead an urgent military airlift intendedto secure the Kashmir valley for India.

"I arrived at Palam airport at 0300, an hour before the Sikhs were expected," Staff Officer SK Sinha recorded many years later. "The aerodrome was floodlit to facilitate loading and we had tea ready for the troops...

Pashtun tribesmen on their way to fight in Kashmir (Photo: Frank Leeson)

"We were racing against time but fortunately things somehow worked all right." The Dakota planes could take at most 17 soldiers along with personal bedrolls and ammunition. The airfield at the capital, Srinagar was basic - no fuelling or servicing facilities, no tarmac landing strip, no lighting for night-time flights.

Unresolved conflict

The first Indian troops reached there about 9 am on that morning. By the end of the day, 28 military flights had been completed and 300 Indian servicemen had landed.

They were the first ever Indian troops in Kashmir, and the following morning - as they sought to check the advance of invading Pakistani tribesmen - Indian soldiers fired their first shots in a conflict which still remains unresolved.

When India and Pakistan gained independence from Britain inmid-August 1947, the status of Kashmir remained uncertain.

Its autocratic princely ruler, Maharaja Hari Singh, was a Hindu; three-quarters of his subjects were Muslims. He didn't know which way to turn, and he personally favoured the unrealistic option of independence.

A pamphlet for a women's militia formed to fight the tribesmen

To force the issue, sections in Pakistan's army and political leadership encouraged an invasion of the Kashmir valley by thousands of Pathan tribesmen.

They crossed the border in the early hours of 22nd October and - aided by desertions from the maharaja's army - quickly took control of the town of Muzaffarabad.

Khan Shah Afridi, a veteran of the invading force, said he was instructed to go to Kashmir by a Muslim holy man.

"The pir told us we will fight and we should not be afraid. It's a war between Muslims and infidels, and we will get Kashmir freed."

Many Kashmiri Muslims initially viewed the tribesmen as liberators, but the raiders' appetite for loot cost them much local support.

As the tribal army advanced towards Srinagar, the maharaja and his entourage fled by road, south to the city of Jammu.

"Everybody was furious," recalls Leela Pasricha, then in Srinagar; people said the maharaja was "running away, that he was abandoning everybody, that he was a coward. Saving his own skin, that's what we all thought."

Quest for booty

To save his capital city, the maharaja signed the document which made his princely state legally part of India.

The conflict has left some 40,000 dead

At next-to-no notice, the Indian armed forces began the airlift of troops to Kashmir. It was the first big military test of independent India. By then the invading tribesmen, accompanied by a handful of Pakistani army officers, had captured Baramullah, the second city of the Kashmir valley.

"Dirty, blood-stained, ill-kempt with ragged beards and hair; some carrying a blanket, most completely unequipped," wrote Father George Shanks, a missionary priest in Baramullah, describing the ill-disciplined tribal army as it entered the town.

They were armed "with rifles of Frontier make, double-barrelled shotguns, revolvers, daggers, swords, axes and her and there a Sten gun. Jostling one another, shouting, cursing and brawling, they came on in a never-ending stream".

The tribesmen ransacked the mission, looted Muslim homes and businesses, and abducted Sikh girls and women.

The quest for booty delayed their advance towards the Kashmiri capital. The Indian airlift, and strafing and bombing by India's air force, started to tip the military balance against the invaders.

But the tribesmen were effective fighters, and they reached the outskirts of Srinagar.

In the capital, the Kashmiri nationalist leader Sheikh Abdullah -an opponent of both the maharaja and of the tribal army - stepped into the power vacuum. He organised a militia of his supporters, men and women, to help keep the tribesmen at bay.

Within two weeks of the start of the invasion, the tribal fighters were in disarray. Almost overnight, they turned tail and headed out of the Kashmir valley, with Indian troops in pursuit.

But while the Indian army won control of the valley, some other areas which had been ruled by the maharaja remained with pro-Pakistan forces.

Kashmir has, in effect, been partitioned ever since. By the spring of 1948, Pakistani troops were openly deployed in Kashmir, and the two countries were at war.

Kashmiri Muslims, many of whom initially acquiesced in Indian rule, have in recent years been more hostile.

The past 18 years of separatist insurgency has seen huge loss of life - about 40,000 people killed by the most conservative of estimates.

The rise of Islamic radicalism and the nuclear arsenals of the two claimants of the Kashmir valley, India and Pakistan, have compounded the conflict.

In recent months, there has been more talking and less killing. But 60 years on, there's still no sign of a lasting solution to Kashmir's suffering.



14/15 August: India and Pakistan gain independence - Kashmir's status
remains unresolved

21/22 October: Pakistani tribesmen invade Kashmir at night - by dawn
they have overrun Muzaffarabad (now the capital of Pakistan Kashmir)

24 October: Tribal army captures Kashmir's main power station at
Mahura, plunging much of the valley into darkness

25 October: Kashmir's maharaja and his entourage flees Srinagar late at
night by road for Jammu

26 October: Thousands of armed tribesmen enter Baramullah, the second
town of the Kashmir

27 October: In response to the maharaja's plea for help, the Indian
army begins a huge air lift - the first troops land at Srinagar about 9
am. The Indian government accepts the maharaja's formal request for
Kashmir to become part of India. Tribal fighters ransack and desecrate
a convent and mission hospital in Baramullah, in the most notorious
episode of the invasion

31 October: The Kashmiri nationalist Sheikh Abdullah sworn in as head
of a new administration - his National Conference militia prepares to
defend Srinagar from the advancing tribesmen

7 November: Indian troops rout tribal fighters at Shalateng outside
Srinagar - the invaders retreat hastily

8 November: Indian soldiers take control of Baramullah

11/12 November: Nehru, India's Prime Minister, visits the Kashmir
valley, almost all now under Indian army control

Sunday, October 28, 2007

Portfolio Update in Money Today magazine

The latest issue of Money Today (page 32) magazine has taken a second look at
some of the Portfolios they have reviewed over the last one year.
The section is here.
Here's a portfolio that was originally reviewed in March '07 issue.
The article is cross-posted here:


Good getting better
October 24, 2007

Sumant Sarkar is reaping rewards of a good diversification strategy

* Investments spread across all asset classes
* Aggressive equity player investing in both mutual funds and direct equity
* Ample insurance cover through term and endowment policies

* Tweak investments in funds for better diversification
* Convert endowment policies into term plans, take family health cover
* Increase investment in pension plans to build retirement corpus
* Take a loan for investing in real estate

* Changed mutual fund portfolio according to advice
* Bought a family floater health insurance
* Taken a loan for second real estate investment. Paid higher down payment than originally planned.
* Investing in equity-diversified funds rather than pension plans for building retirement corpus.

Financial planning couldn’t get a better brand ambassador. The rewards are for all to
see (and envy) in Sumant Sarkar’s portfolio. Invested across all asset classes,
he’s making his money work terribly hard. But it is the investment blend that is amazing.

For most investors, one property purchase gobbles away 60-70%
of total assets. Here’s Sarkar, owner of a Rs 32-lakh apartment
with real estate constituting just 27% of his portfolio. Even equity
investments stand a notch higher. It was a near-perfect
investment strategy and we presented it likewise — a model portfolio.

But some nip and tucks would make a better fit. Like reducing
concentration in Franklin India Prima fund and investing in
mid-caps (already in his kitty) for better diversification.
Spreading investments within an asset class is important
to reduce risk. Especially in the unpredictable markets where
a consistent performer can take a sudden downturn.

Letter to Editor, Outlook Money sent on Oct 28, 2007

I really appreciate SEBI's move to bring no-load mutual funds. I do not
think the distributors deserve a 2.25% cut specially all they seem to do
is peddle NFOs. Every time I have to meet distributors to renew my
SIPs, they try to influence me to invest in NFOs in large amounts.
They blatantly misguide about the "benefits of low NAV". I have to
request them not to give me any investment advice and just do the
transactions. I feel very bad about shelling out commissions to such
distributors. I will be very happy to invest directly with funds,
bypassing the middlemen.

Secondly, I wonder why the expense ratios are so high in India.
The expense ratios of a typical equity fund is double that of such
funds in developed countries. When we claim to have efficient
stock exchanges with the lowest transaction costs, why are the
expense ratios so high ?

I think the role of middlemen can be reduced in Insurance area
as well. Let the person who is purchasing insurance do his/her
own paper work, medical tests etc. That can reduce the premium.