Dispatch

India's Failing Counterinsurgency Campaign

A rare visit to a Maoist rebel camp deep in the jungle shows why New Delhi's clumsy attempts to stamp out its most dangerous internal revolt have been so disastrous.

Tapping his fingernails on a tiny stainless steel lunch box, Comrade Vijay, a mustachioed rebel commander, made a startling assertion: There was enough bomb material inside to blow up a jeep. With 90 pounds of such explosives, he claimed, his comrades in the Indian Maoist rebel army had blown up land-mine-resistant armored vehicles the Indian government imported from South Africa. Improvised Explosive Devices (IEDs) are the "main strength" of the rebels, he told me, as he sat under a makeshift tarpaulin tent, rifle at his side.

Last October, on assignment for Abu Dhabi's National newspaper, I hiked more than 40 miles through the damp, malarial jungles of Bastar in central India, the deadliest theater of the country's decades-long Maoist insurgency, winding through mineral-rich hills and a spate of rebel-controlled villages to Comrade Vijay's hideout in a patch of forest clearing atop a hill. I had traveled all that way to ask the rebel commander whether there was any chance of a truce between his forces and the Indian government -- a possibility he and his men vehemently denied. As we spoke, Vijay's fellow comrades -- about 20 communist guerrillas, mostly teenaged boys and girls in olive green commando fatigues -- milled around the clearing, antiquated Enfield rifles slung on their shoulders, many of them snatched in raids on police stations.

Just after my trip, the Indian government launched Operation Green Hunt, a 100,000-troop-strong counteroffensive designed to stamp out the Maoist insurgents (also called Naxalites) who are active in nearly a third of India's landmass. So far, the operation has not gone according to plan. Just last month, in a patch of jungle not far from where I met Comrade Vijay, a mob of rebels attacked a police convoy at dawn. The rebels opened fire indiscriminately, lobbed grenades, and set off IEDs, killing 76 policemen and hacking off the limbs of any who survived the initial blast. It was the deadliest Maoist attack in recent memory.

But the challenges of Operation Green Hunt should have been a surprise to no one -- and after interviewing the Naxalites, I can't say they were a surprise to me. Focused purely on conventional military techniques and brute force, without much thought to the social problems that originally fed the Naxalites and the close relationship they've built with local populations, the Indian government's initiative is unlikely to succeed over the long term.

Four hours into my trek to the rebel camp, as I rolled up my trousers to cross a shallow stream that twisted between boulders through the jungle, I noticed a boy, about 6 or 7 years old, barefoot and barely clad, standing on the other side of the creek and watching us with a stony gaze. My guides greeted him in Gondi, the local dialect. He knew them and trusted them, but he couldn't take his eyes off me, the conspicuous outsider. A minute later, when I turned around, he had disappeared. Six miles ahead, we were waylaid by a clutch of armed rebels, who were well aware that I was coming.

The Maoists got their start in 1967 as a peasant revolution against rich, exploitative landlords, and the movement has germinated in rural areas stalked by poverty, misery, and disease ever since. In 2004, when the rebels were present in nine states, India's Home Ministry put the movement at an estimated 9,300 hard-core underground members. Since then, they have spread into 22 of India's 35 states and territories, and their numbers have increased by several thousand, prompting the Indian government to declare them the country's biggest internal enemy. Currently, some estimate that the movement is made up of 40,000 permanent members and 100,000 additional militia members.

Over the years, Naxalites have developed a symbiotic relationship with the indigenous tribal people, adivasis, or "tribals," living in remote parts of India, who find common cause with the Maoists in accusing multinational companies and the Indian government of trying to usurp their mineral-rich lands. To date, more than 40 million tribals have been displaced by dams, industries, and power projects since independence in 1947. As I saw myself, the tribals are used as human couriers, serving as a rudimentary intelligence and communications network in areas of the jungle where cell phones don't work. Comrade Vijay was wrong: It's not IEDs that are the rebels' greatest strength -- it's their relationship with the tribals.

For the tribals, Naxalism, with its emphasis on Mao Zedong's doctrine of armed peasant revolution, doesn't seem out of date. Naxalism has taken root in villages that have been completely ignored by the government. In the rebel-controlled villages, as in most tribal Indian villages, life hasn't changed for decades. There is no electricity, schools, or hospitals. People die of snake bites and treatable diseases like malaria and tetanus. Villages are full of naked, chronically malnourished children with distended bellies. Gaunt men clad in dirty loincloths toil in scorched farms, while women in frayed saris look after the goat and cow barns outside mud-and-clay huts, worried about the next meal. Many tribals survive on leaves and berries.

 

With little to no government machinery present, the rebels have stepped in to create a mini-state within a state. To settle local disputes, villagers travel to the nearby jungle to attend jan adalats, the rebels' kangaroo courts. Justice is delivered instantaneously, unlike in India's sluggish legal system, often from the barrel of a gun. Gun-toting rebels saunter around villages in battle fatigues for their monthly meetings and swoop in from the nearby jungles for nightly rests and daytime meals. The Naxalites fund their insurgency by extorting "taxes" -- to the tune of 14 billion Indian rupees each year -- from local businessmen, contractors, and landowners.

The government justifies ignoring development in what the rebels call "liberated villages" as punishment for supporting Maoists. But India had been neglecting those villages long before the rebels showed up.

Now the neglect is coming back to haunt India's security forces. "We scarcely get credible information from tribals," admitted Brig. Basant Kumar Ponwar, director of the Counter Terrorism and Jungle Warfare College located in north Bastar, the only school in India that trains policemen in tactics of jungle warfare. "That's what I emphasize to my men: Don't antagonize the local population, or you will go back from here in coffins."

But instead of starting with development, the plan laid out in Operation Green Hunt is to neutralize the rebels, capture their territory, and only then enact the development projects that have failed to materialize for so long. This is likely to backfire. Operation Green Hunt promises to be a bloody, drawn-out war, with a high risk of civilian casualties due to the fact that the government doesn't discriminate between tribal and Naxalite. Despite their rudimentary military capabilities, the Naxalites have long run circles around government forces, killing two policemen for every dead rebel since 2007. The government is using armored vehicles, laser-guided weaponry, and mine-sweeping equipment, and it is even considering importing U.S.-made unmanned surveillance drones to track down the rebels in the jungles. But the fighting will push the tribals even closer to the rebels. To wean tribals away from Naxalites, the government needs to send in food and medicine, not soldiers.

It should be possible to separate the tribals from the Naxalites because the Naxalites don't actually care about protecting the tribals -- they just care about capturing power. During our conversation, I probed Comrade Vijay and his men: If the state stopped multinational companies from coming here, would you end your resistance? What if the government made tribals stakeholders in mining projects? What if they gave tribals veto power over mining companies? If that happened, would you negotiate with the government? He completely avoided my questions.

A road contractor I met on the outskirts of Bastar told me that the rebels abducted him last year, even though he had paid them about 30 percent of the revenue he would earn from building a road that would connect some interior villages to the district's main towns. He was blindfolded and held captive inside the jungle for days, and released only after he promised to withdraw from the project. "Naxalites don't want development in their areas," said the contractor, who requested anonymity. "If you build a road, poor tribals will be more exposed to city life. They'll be more informed and less gullible."

But until the government changes its tactics, the violence will not stop. The Naxalite rebels make use of brainwashing to attract child soldiers for Bal Sangham, their children's corps. They pluck them from the villages at an early age, indoctrinate them in Maoism's violent creed, and train them to plant IED detonators in the ground. The young members of Bal Sangham I met in Comrade Vijay's hideout seemed thoroughly indoctrinated. The state has gravely wronged them, they said. Some had been convinced that the specialized forces involved in Operation Green Hunt were known to resort to cannibalism. They feel morally obligated to fight -- and die fighting, if they have to. If only the Indian government weren't giving them so many easy opportunities.

DESHAKALYAN CHOWDHURY/AFP/Getty Images

Dispatch

Bubble, Bubble, China's in Trouble

The mad scramble for Chinese real estate.

The Chinese dream, like the American dream, has taken shape around the promise that each new generation will live better than the one before it. In recent years, that has meant more job options, more material comforts, and increasingly, home ownership. Last fall 80 percent of respondents to a China Youth Daily online poll said that home ownership was a prerequisite for happiness.

Today's frenzied housing market in China's top-tier cities is rattling that aspiration, threatening to create a generation of agitated young people who work hard, play by the rules, but feel angry at the system and priced out of their chance at the Chinese dream. With residential prices and commercial prices in top-tier cities jumping 11.7 percent over the last year -- and jumping more than 50 percent in some particularly hot eastern cities -- the government in Beijing is worried.

Chen "Aggie" is a 20-something marketing professional in Beijing. The daughter of shopkeepers, she hails from a small village in the western province of Guizhou. She came to Beijing for college, and has since made the great leap forward that so many families in China hope for their children: moving from blue-collar to a white-collar job. Stories like hers are regular fodder for state-run media. But real estate is where the vision of upward mobility smashes against unhappy reality. Ten years ago, even five, her salary would have made buying an apartment feasible, but not now. "I was born too late," she says. "I missed the train."

According to the investment bank Goldman Sachs, in recent years housing prices in Beijing have risen 80 percent faster than wages. Chen's friends from well-to-do families -- "second-generation wealthy," as they're called -- have been able to borrow money for hefty down payments; her friends from humbler backgrounds cannot. When I met her at a Beijing Starbucks, she was dejected and making plans to leave the city. In some senses, her struggles mean the Chinese capital is just like any other world-class city -- London, Paris, New York -- where only the wealthiest and most established can own homes. But this realization is crashing hard on a generation of little emperors and empresses that have been told they could have everything.

The agitation of China's young professionals is a politically sensitive subject. Recently the government banned one of the most popular shows on television, Wo Ju (Narrow Dwelling), a sort of Chinese Friends set in a city much like Shanghai. The show chronicles the exploits of a young couple with good jobs and degrees from China's finest universities who still can't afford a home, until a young woman has an affair with a well-connected government official. Wo Ju drew millions of viewers and sparked controversy; prominent Chinese writer Xiao Fuxing has denounced the show's equation of home ownership with happiness as a "thorn" in Chinese society. (In big cities such as Beijing and Shanghai, it's a truism that a man who can't afford a home isn't worth marrying.) The fact that Wo Ju was deemed so dangerous by the censors only reveals how deeply it struck a chord with China's aspiring classes.

Last month, a representative of the Communist Youth League told a gathering of Chinese reporters that the government was launching a propaganda campaign to convince young people to lower their expectations for success. The message: Let them rent. "Everyone worries about the 1980s generation -- the young generation," says Yang Xiao, a reporter with Beijing Youth Daily newspaper. "What if they become cynical or have no dream?"

Meanwhile, it's not only the young and restless in China for whom real estate represents a source of frustrated ambitions. Economists say one significant driver of China's soaring real estate prices has been wealthy investors in China snatching up property, because they have few other investment options. Current laws -- based on longstanding Chinese economic doctrine that regards capital inflow as good, outflow as bad -- forbid Chinese citizens from making most kinds of overseas investments. Meanwhile, stock markets in China are unstable and immature, and there are few tax incentives for philanthropy. As a result, the wealthiest in China are faced with a problem unimaginable a generation ago: what to do with their money.

The answer, for many, has been to invest in one of the few options available to them -- an asset whose value, within their lifetime, has only gone up and up: real estate. "Property is being held by many as a store of value, like gold," explains Patrick Chovanec, a professor at Tsinghua University's School of Economics and Management. "This bids up prices and also skews development toward high-end properties, as opposed to affordable housing."

Ms. Wang, the wife of a successful Beijing businessman who gave only her surname, has purchased four homes in recent years. There's the apartment she and her husband live in, and three others they hold as investments. All three are vacant; she's making no attempt to rent them out. No property taxes are assessed in China, and so there's no financial penalty for simply buying and holding. The rental market in Beijing, in comparison to the red-hot real estate market, is fairly weak, and besides, renting out those apartments -- putting them to use and risking some wear and tear -- could diminish their value. So they remain pristine and empty.

Ms. Wang's thinking is not unique. Many of China's wealthiest see empty apartments as their best investment option. China's nouveau-riche, which have benefited from the country's rising tide, are now bumping up against its limits. The economy hasn't diversified enough to afford them many options for building their wealth. Privately, some are beginning to grumble; as one corporate tax analyst in Beijing told me: "The government is to blame."

Massive immigration into China's fast-growing cities, as well as emerging investment pressures and lingering housing-welfare programs favoring government employees, all combine to drive up both residential prices. In the case of commercial properties, additional forces are at work; with an underdeveloped credit and risk-assessment system in China, business loans are issued not on the basis of expected earnings, but on collateral -- usually property. Companies have multiple incentives to acquire property, and commercial realtors have an incentive to keep the asking price for office space high, even if offices remain vacant, because lowering prices (and thus the value assigned to a property) could bring unwanted scrutiny of outstanding loans. Across from the vaunted Olympic Aquacube in northern Beijing sits an impressive five-tower commercial property; it was built three years ago, but many of the offices remain empty. Still, several new commercial properties are under construction not far away.

Beijing is worried about both the economics and the political implications of the real estate frenzy, and has lately announced several measures to cool off the market. The government is walking a tightrope -- on the one hand wanting to prevent a total meltdown ("The government has to move before  the bubble bursts and destroys the overall economy," said private-sector economist Zuo Xiaolei in unusually frank comments to state-run China Daily newspaper), and on the other hand not quite wanting to slow down an economy so heavily dependent on construction, property-rights sales, building materials, and other construction-related jobs.

There are holes in the new regulations. Efforts to limit the purchase of multiple homes are easily circumvented: Ms. Wang, for instance, purchased one of her homes in her daughter's name (using easily obtained false documents about her daughter's place of employment). Higher down-payment requirements won't ward off wealthy investors who pay in cash up front.

True reform won't be easy because it involves a painful re-examination of core aspects of the Chinese economic system, Chovanec argues: "The government is dealing in terms of edict, not root causes -- but it's not easy to just order water to stop flowing downhill."

Over time, some regulatory holes will likely be closed, but reining in local governments and corruption pose additional challenges. With many city governments deriving between one-quarter and one-third of their annual revenues from the sale of land-use rights for development, it will be hard to wean localities across China from such a giant cash cow. The incentives for graft are high.

Zhang Xin is co-president of SOHO China, Beijing's largest property developer, and has made her fortune on the property boom. Yet the former Goldman Sachs investment banker, who last year made Forbes magazine's "Top Ten "Billionaire Women We Admire" list, admits she is worried about the engine of her wealth. As she told China International Business magazine in January: "We do have a view that this is a bubble. Real estate is very much driven by government policy ... I am sure the government is worried about it, but what do you do? They want the stimulus and if you want to create jobs then this is a by-product." She finds the empty apartment syndrome troubling: "These buildings are not fully occupied and people should be worried about it ... Because of where China is with asset bubbles, people want to buy the assets regardless of whether they can be leased out or not. People just want to hold [property], even if it is empty."

Of course, if China's real estate is a bubble scenario, it won't necessarily pop in the same way as the U.S. housing market, or as immediately -- residential borrowers aren't as highly leveraged (down-payment requirements are relatively higher), and state-run banks won't call in bad loans as quickly. Some observers, such as hedge-fund guru Jim Chanos, see an immediate danger ("What we're talking about is a world-class -- if not the world-class -- property bubble," he recently told PBS host Charlie Rose, adding that he expects a dramatic slowdown in China within a year). Some argue the danger is overstated; others think the day of reckoning may be 5 or 10 years off.

But one thing is clear now: The political frictions are already evident -- and both China's haves and its have-nots are fuming.

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