India’s PM Modi Makes Ramadan Call to Pakistan’s PM Nawaz Sharif 

In the latest gesture between the two nuclear-armed neighbors, Indian Prime Minister Narendra Modi called his Pakistani counterpart Nawaz Sharif to greet him ahead of the Muslim holy month of Ramadan, which starts this week.
During the conversation, which lasted for around five minutes, Mr. Modi announced the release of detained Pakistani fishermen as “an act of goodwill,” Mr. Sharif’s office said in a statement Tuesday evening.
The released Pakistani fishermen “will be able to be with their families to observe this blessed month,” Mr. Modi said on social networking site Twitter. Details on the number of fishermen to be released and the timing were not disclosed.
In response, Mr. Sharif said in a statement that the two nations should “forget their differences and talk of war, and move towards peace and tranquility.”
“Pakistan and India should co-exist peacefully as they are neighbors, and they should not let their bilateral differences become hurdles in that path,” the statement added.
Mr. Modi first extended an olive branch to Pakistan when he invited Mr. Sharif to his swearing-in ceremony after his election last year, but since then, the fragile ties have soured with inflammatory remarks from both sides.

Pakistan Seeks To Energize Naval Modernization

ISLAMABAD — Pakistan hopes to revive its naval modernization program through a warship construction deal with China that will also expand Pakistan's shipbuilding industry.
Chinese media reports have outlined a construction program involving six of eight S-20 variants of the Type-039A/Type-041 submarine under negotiation; four "Improved F-22P" frigates equipped with enhanced sensors and weaponry (possibly including the HQ-17 surface-to-air missile developed from the Russian Tor 1/SA-N-9); and six Type-022 Houbei stealth catamaran missile boats, to be built by Pakistan's state-owned shipbuilder Karachi Shipyard and Engineering Works (KSEW).
The reports indicate Type-022 construction may be delayed by the ongoing Azmat fast attack craft building program, but also highlight a significant expansion of KSEW's facilities.
These include a foundry, fabrication facilities to cover all aspects of ship construction, berthing facilities, and two graving docks of 26,000 and 18,000 dead weight tons, spread over 71 acres.
A 7,881-ton ship lift transfer system will be completed next year.
KSEW will expand to occupy facilities vacated by the Navy as it transfers from Karachi to Ormara. The Pakistan Navy Dockyard, which is adjacent to KSEW, already has facilities upgraded by the French during construction of Agosta-90B submarines.
Pakistani officials would not comment on these reports. Repeated attempts to secure comment from the Ministry of Defence Production, KSEW, the Navy and federal politicians connected with defense decision-making bodies were turned away.
The program will follow a Sino-Pakistani agreement for six patrol vessels for Pakistan's Maritime Security Agency agreed to on June 10, with two built by KSEW.
Author, analyst and former Australian defense attache to Islamabad Brian Cloughley said the groundwork laid by the Agosta-90B program that included upgrades to PN Dockyard facilities and the training of some 1,000 civilian technicians greatly facilitated present plans.
However, Trevor Taylor, professorial research fellow, defense, industries and society, at the Royal United Services Institute highlighted the problems KSEW's construction and expansion plans could encounter.
"Experience from around the world shows that it is very easy to be optimistic about the difficulty of naval shipbuilding and the time taken to complete construction and systems integration," he said. "Plans for rapid expansion of warship production are unlikely to proceed on schedule. The coordinated and sustained application of extensive managerial and technical skills is required, and submarines especially have vital safety dimensions."
He highlights the importance of a sustainable program.
"The lesson from the UK and elsewhere is that, once a warship design and build capability is in place, it is best maintained and developed through a planned and steady drumbeat of programs, rather than a rapid expansion of activity for a limited period of years followed by a sudden drop-off in orders. Clearly this requires a consistent stance of support for the industry from political authorities."
Cloughley is optimistic, however, that the extensive Chinese help provided to Pakistan in warship construction, in addition to agreements made during Chinese President Xi Jinping's recent visit, "indicate that all types of cooperation will continue and expand."
He said this is related to the burgeoning Indo-US relationship, India's increasingly antagonistic anti-Pakistani rhetoric, and clearer Sino-Indian divisions that mean the Sino-Pakistan "axis of understanding has become more tangible."
Consequently, "KSEW can expect considerable input from such as [China Shipbuilding & Offshore International Co]. Money, certainly; but also, and perhaps of more importance, provision of expertise."
He said China's help will also further increase the number of skilled technicians as "there are many would-be technicians with great potential who cannot obtain training," which China is aware of "and has planned accordingly," with KSEW also running a training program.
Cloughley said the Chinese investment and involvement will ensure the program's sustainability.
"Given China's amazingly large financial commitment to cooperation with Pakistan, there is no doubt that Beijing will be calling the tune. And KSEW and many other establishments will be pleased to dance to it."
Though the naval expansion plan is impressive and will ensure future refit and modernization work, analyst Haris Kahn of the Pakistan Military Consortium think tank said with the decommissioning of Type-21 frigates it still only meets Pakistan's "minimum naval deterrence."
"The Navy needs close to 20 large surface vessels [frigates and heavy frigates]" of which at least three should be ships able to provide area air defense, as the "F-22P will not cut it and the need of longer-range SAM coverage is essential."
"Unfortunately, with the serious shortage of funds we have not even heard about anywhere else the Navy is looking to get these much-needed vessels," he added.
To meet its requirements for larger warships, Pakistan had hoped to acquire approximately six Perry-class frigates from the US, but Nilanthi Samaranayake, Indian Ocean analyst at the US-based CNA, a nonprofit research and analysis organization, said this route is now blocked "due to congressional obstacles."
However, Samaranayake still sees a need for such frigates to "support its counterpiracy and maritime security operations under combined maritime forces."
Cloughley cites Indian influence in Washington for their unavailability, but though Pakistan still desires more Perry-class frigates "on easy or gift terms ... the lure of Chinese ships combined with the massive [Chinese] investment program and Pakistan's increasing disenchantment with Washington would seem to militate against any movement [toward the US]," and Pakistan will certainly look to China in time.

Pakistan-India Relations On Slippery Slope

There is a strong perception in Pakistan that India’s present 
confrontational policy has been motivated by several internal and external factors. New Delhi appears to be deeply concerned by the agreement on the China-Pakistan Economic Corridor. It feels that this agreement will further strengthen strategic and economic ties between the two countries, and provide China with easy access to the Gulf of Oman and increase its footprint in South Asia, the Middle East and Central Asia. The corridor is also being perceived as a strategic encirclement of India by China in collusion with Pakistan. Notwithstanding this, Beijing has repeatedly assured India and the international community that it is essentially an economic project.
New Delhi is also disturbed by the significant improvement in Pakistan-Afghanistan relations. It is making efforts at subverting them by sowing doubts in the minds of the Afghans through its lobbies, even though strengthening of Afghanistan-Pakistan relations does not imply that it is at the expense of any other country.
The BJP is allergic to Pakistan raising the issue of Kashmir at international and bilateral forums. This is an anathema to the party. One fails to comprehend why India thinks that Pakistan will abandon its political support for the Kashmir cause. If, however, India engages with Pakistan at the formal level, a way out can be found eventually.
There is genuine grievance in India regarding Pakistan’s failure to proceed against the perpetrators of the Mumbai carnage with Zakiur Rehman Lakhvi and other accomplices roaming about freely. Pakistan needs to address the matter seriously.
It is believed that the Modi government, having failed to show results on the economic front, is trying to deflect attention from its domestic challenges by adopting a confrontational policy towards Pakistan. Based on the reputation that Narendra Modi had built in Gujarat, the Indian people were hoping that he would bring about a qualitative change in their lives by improving India’s economy. There is no doubt that there has been progress in certain areas but expectations have fallen short in the economic sector. The Delhi elections were an indication of the people’s disappointment with the BJP. A more realistic check of the people’s mood would be the forthcoming elections in Bihar and other states.
The BJP’s current policy seems to be to keep Pakistan embroiled in such a way that its economy is adversely affected and it is unable to sustain the strategic parity that has existed over the years. It wants to draw Pakistan into an arms race at a time when its economy is entering a stabilisation phase and is poised to move into the growth paradigm. By keeping up the war hysteria, India is discouraging foreign and local investments and creating conditions wherein Pakistan is forced to spend more on defence.
Modi’s intention, apparently, is not to engage Pakistan in a major military conflict, as that will go against Indian interests of fast-tracking economic development in India. But what if the Lashkar-e-Taiba or India’s own extremist elements, taking advantage of the current hiatus, launch a terrorist attack anywhere in India or in Indian-held Kashmir? This will trigger a situation that could in all probability get out of control. In case India responds by invoking the Cold Start doctrine and launches a limited attack on Muridke or any of the locations of the Jamaatud Dawa (JuD), Pakistan will not sit idle. It will respond by launching a similar attack on Indian soil. In a worst-case scenario, the situation could escalate where Pakistan employs its tactical nuclear weapons. Apparently, other options for India in the event of a terrorist attack could include a naval blockade or a punitive air strike. All these are likely to result in stepping on the escalatory ladder with similar consequences. The most alarming aspect is that the two countries could unwittingly become hostage to militant and radical forces if they close all avenues of dialogue.
The international community will remain sceptical of Pakistan’s sincerity in engaging India unless we come out clean and abandon support for the JuD.
One is aware that the BJP government has no interest, at least as of now, in developing even trade and commercial relations with Pakistan. This perhaps, fits in with its policy of snubbing Pakistan. Besides, in the overall volume of foreign trade, the trade between India and Pakistan is inconsequential, as currently at the official level it constitutes a very small fraction of India’s global trade. Modi’s charm offensive at the global level and in Saarc countries, however, can be grounded if belligerence towards Pakistan were to get out of control. A hostile neighbourhood and a volatile border is not an ideal scenario for promotion of trade with other countries.
The establishment in Pakistan exercises overriding influence over foreign policy and is equally opposed to trade with India and has been the prime obstacle to granting it the MFN status. In essence, both countries perceive that political objectives trump any possibility of expansion of commercial or economic relations. Clearly, this is a short-sighted policy. The current level of trade between the two countries is not a true indicator of the potential that exists for its future growth. It is widely believed that trade opens up new channels of communication. Lobbies develop that contribute in bringing even inimical neighbours to shed their past. We have the classic example of the European Union. The recent model of China-India relations may be more apt. Economic and commercial relations between India and China are developing at a rapid pace despite an undercurrent of distrust, strategic rivalry and a running border dispute. The trade volume in 2014 crossed $71 billion and is on the rise. This is staggering considering that in 1977 it was only $1 billion. I am not overlooking the fact that the power equation and nature of the dispute between India and Pakistan is vastly different when compared with the one that exists between China and India. Yet the possibility and potential is there and has to be exploited to mutual benefit. Regrettably, in our region, countries look at neighbours with great suspicion. India is fearful of China to the point of paranoia; Pakistan views India as hegemonic and Afghanistan finds Pakistan domineering. This is preventing the region from exploiting its potential.

Millions Of Samsung Galaxy Phones May Be Vulnerable To Hackers

If you’re one of the millions of users of a Samsung Galaxy phone, you might be a potential target for a malicious hacker.
A report released today by NowSecure, a security firm located in Chicago, found that a glitch in Swift, the keyboard software used by default on all Samsung Galaxy devices could allow a remote attacker to compromise your phone.
This particular bug makes the phone vulnerable to what is known as a “man in the middle” attack. The Swift software consistently sends requests to a server, checking for updates. To someone with the right know how, though, it’s possible to impersonate Swift’s server and send through software that can be used to gain control of the device.
The main problem with this vulnerability is that there’s no real solution. The Swift keyboard is so integrated into Samsung’s software that it cannot be removed or disabled — even if it is switched out with a different keyboard app. Steering clear of unsecured Wi-Fi networks will make you less likely to be targeted, but it won’t render you invulnerable.
Swift runs with elevated permissions, giving it pretty much free rein around the phone. This means that a hacker that worms his way into it can also access the Galaxy’s microphone and camera, track the user’s location or listen to their calls. They can even install apps.
NowSecure claims to have made Samsung and Google’s Android team aware of this vulnerability in late 2014, and Samsung reportedly has made a patch available to network providers. It’s not clear, though, whether providers have pushed out the patch to users yet. Many networks have a record of being notoriously slow to push through updates and security patches, and NowSecure’s tests found a number of Galaxy phones on different carriers were still vulnerable as of Tuesday.
If you’re of a more technical bent, you may be interested in seeing the details of NowSecure’s report on their blog. If you’re of a less technical bent, you might want to check with your carrier and try to avoid insecure Wi-Fi networks.

Think Japanese Cars The Most Reliable? Think Again

After years of setting the standard for quality and reliability, Japanese brand autos have dropped below the industry average, according to a new report by J.D. Power and Associates.
The latest Initial Quality Study, which ranks brands based on consumer surveys after owning a vehicle for three months, shows the collective results of Toyota, Honda, Nissan, Mitsubishi and Subaru are not keeping pace with the industry as a whole and the Korean auto brands, in particular.
"It's not that the Japanese models are all getting worse, but this shows they are not improving as fast as their competitors," said Renee Stephens, vice president of U.S. automotive quality at J.D. Power. "This is a clear shift in the quality landscape."
Leading the way in quality, according to J.D. Power, are the Korean auto brands. They improved their results by 11 percent compared to last year, easily ahead of the auto industry's overall rate of improvement, which was 3 percent.
Their relentless pursuit of eliminating problems is paying off, Stephens said.
"The Korean automakers are focused on getting it right from the design process up front all the way through to the plants and with finished models," she said.
The study validates the decision Hyundai and Kia made a few years ago to slow global expansion to ensure the quality of their vehicles did not slip. At the time, many in the industry openly asked if the Korean automakers were missing out on boosting sales by not adding more assembly plants around the world.
"Look at their plants around the world, especially in Korea, and you see they [are] very focused on quality," Stephens said.
As for the European and U.S. automakers, both improved about 3 percent year over year.
For the domestic automakers, the Ford and Lincoln brands both cut the number of problems reported in their vehicles. Meanwhile, the Chevrolet and Buick brands both placed within the top 11 brands and showed fewer problems per 100 vehicles than the industry average.
This report will have some asking if the Japanese automakers, who for years have been considered the gold standard for quality, have lost focus and are now slipping.
Stephens said the Japanese automakers are still improving, but have been hurt by the incorporation of infotainment and voice recognition systems in new models.
"They really falter in that area," she said. "Sixteen of the bottom 20 models when it comes to problems with voice recognition systems are Japanese brands." 

Fed leaves Interest Rates Unchanged -- For Now

Keeping a tight lid on its future intentions, the Federal Reserve on Wednesday held interest rates steady at zero and provided only faint clues about when the first hike in nine years might occur.
Adhering to market expectations, the Fed's Open Market Committee voted essentially to maintain the status quo that has prevailed since the U.S. central bank first went to zero rates in late-2008.
FOMC members deemed economic activity "expanding moderately" with various sectors seeing some activity. The language, though, was tempered and the various indicators the Fed uses to tip its hand on policy showed little movement.
Market participants were looking toward the rest of the committee's report, which included economic projections and the so-called dot plot that diagrams individual members' expectations for the future path of rate hikes.
The move comes as unemployment continues to drop but inflation shows almost no signs of getting to the Fed's target rate of 2 percent. The jobless rate has fallen to 5.5 percent but most inflation measures are moored in the 1 percent to 2 percent range, with low wage pressures, energy prices well below their year-ago levels and the gross domestic product in check.
Traders for months had been expecting the Fed to move at the June meeting. Now, the likelihood is for September at the earliest, with Chicago Mercantile Exchange trading indicating a higher probability in December.
The economy thus far has fallen well short of 3 percent growth expectations. GDP actually contracted 0.7 percent in the first quarter and, according to the Atlanta Fed, is likely to rise only about 1.9 percent in the second quarter.
That's created a dilemma for the Fed, which would like to normalize policy but fears disrupting a still-fragile recovery.

Refiners profit as US demand for gasoline soars

Oil supplies are abundant. America’s refiners are running the hardest in 10 years. So why isn’t the country awash in gasoline?

It’s all going up in smoke.

Back in January, the Energy Information Administration forecast Americans would burn 8.71 million barrels of gasoline a day in the first quarter. They actually used 100,000 more than that to drive a record 720.1 billion miles. That’s about 3,900 return trips to the sun.

The thirst for fuel in the U.S. and abroad has been greater than analysts, including the EIA and Energy Aspects Ltd., estimated. It’s pushed pump prices beyond forecasts and extended the good times for America’s refiners, which, thanks to the shale-drilling boom, are gorging on a type of crude easily refined into gasoline.

“The speed at which demand picked up surprised a lot of people, including even ourselves,” Robert Campbell, an analyst at Energy Aspects, a London consulting company, said by phone June 11. “We have been very positive on demand from the get-go and we were still a bit surprised by how quickly it came on.”

Retail gasoline prices in the U.S. rose by 16 percent in the past two months to $2.802 a gallon on June 16, near the highest since November, data compiled by Heathrow, Florida-based AAA show. The motoring group projected in May that average prices would range from $2.55 to $2.75 this summer.

More Driving

More drivers are taking road trips this summer and commuting to the office after the U.S. added 3.1 million jobs last year, the most since 1999.

Gasoline is still almost a dollar below year-ago levels as a flood of low-density oil drawn from shale formations with hydraulic fracturing makes producing fuel cheaper. Refiners used the lightest crude in March since April 1991. Lighter oil tends to yield more gasoline than heavy crude like the bitumen from Canada’s oil sands.

U.S. benchmark West Texas Intermediate crude sank 5 cents on Wednesday to settle at $59.92 a barrel on the New York Mercantile Exchange. The grade is down 44 percent from a year ago.

Refining margins have widened so much that plants are delaying shutdowns and repairs until next year. The profit from turning three barrels of Light Louisiana Sweet crude into two of gasoline and one of diesel has averaged $15.53 a barrel this month, $4.18 more than a year ago.

Declining Supply

Inventories of gasoline have dropped 10.5 million barrels in the past five weeks, despite the increase in refining rates. There’s enough fuel to cover 23.1 days of demand, the lowest for this time of year since 2012, according to EIA data.

Gulf Coast plants used the most crude on record in the week ended June 2. Planned outages from June through August will be about 200,000 barrels a day less than the past two years, according to data compiled by Bloomberg.

Motiva Enterprises LLC delayed repairs at its Port Arthur refinery, the biggest in the U.S., to the first quarter of next year. BP Plc’s Whiting complex in Indiana put off a maintenance turnaround until next year.

“It would behoove any refinery manager to defer maintenance,” Campbell of Energy Aspects said.

Refiners aren’t running at almost 95 percent of their capacity just to meet a surge in U.S. demand. Gasoline exports were up 9.2 percent in the first quarter from a year earlier.

Improving Economy

Adding to increasing fuel consumption are Americans returning to work and burning more gasoline during their daily commutes. So is the improving construction market, with new home sales in the U.S. rising more than projected in April, Philip Verleger, an energy consultant, said by phone on June 12.

Demand is increasing as drillers are retreating from U.S. oil fields in response to the collapse in crude prices in the second half of last year. The retrenchment is beginning to spur reductions in crude production that, along with higher consumption, may drive prices to as high as $80 a barrel by the end of the year, said Verleger, president of the economic consulting company PKVerleger LLC in Carbondale, Colorado.