The Funding Methods of Bangladeshi Terrorist Groups

Combating Terrorism Center at West Point, CTC Sentinel

May 2009

Bangladesh receives minimal attention in counterterrorism circles, the international media, or academia, despite the large amount of Islamist violence in the country. Occasionally, however, it enters the spotlight when major incidents occur, such as the mutiny by the Bangladesh Rifles (BDR) in February 2009.¹ August 17, 2005 was another day that grabbed international attention: 459 bombs were detonated in 63 out of 64 district towns within seven minutes. It was an extraordinary act of terrorism that was logistically impressive, disciplined and deadly.

The incident triggered a marked shift in the Bangladeshi government's stance on terrorism. After initially blaming external forces for the attacks, including Israel’s Mossad and India's Research and Analysis Wing (RAW), the administration of Prime Minister Khaleda Zia admitted, for the first time, the presence of Islamist militants in the country, declaring Jama'atul Mujaheedin Bangladesh (JMB)² responsible for the blasts.³ Some 743 suspects were apprehended, and the leadership of the JMB and its affiliated party Jagrata Muslim Janata Bangladesh (JMJB) were arrested and executed.⁴

Today, Bangladesh faces threats from not only JMB, but an estimated 29-33 Islamist terrorist groups.⁵ These organizations are resurgent—internally and externally—with financing coming from numerous sources, most notably non-governmental organizations. While legislation exists, curbing funding faces numerous obstacles. This article will outline the various Islamist militant groups in Bangladesh, and then address the known and suspected financing methods of such groups and the obstacles faced in countering terrorist financing.

Bangladeshi Terrorist Groups

Nearly four years since the August 2005 bombings, JMB has resurfaced under new leadership. Raids by the armed forces in Dhaka and elsewhere have regularly uncovered JMB arms caches, ammunition, and literature.⁶ Not only is JMB active in Bangladesh, but various sources claim that between 29 to 33 Islamist terrorist groups are active.⁷ Only four of those, however, are officially banned: JMB, Harkat-ul-Jihad-al-Islami Bangladesh (HUJI), JMJB, and Shahadat-e al Hikma.⁸ More than 100 Islamic political parties and organizations exist.⁹

The Indian government, on the other hand, claims that there are 50 Islamic militant groups operating in Bangladesh, and has accused Dhaka of harboring 148 arms training centers.¹⁰ “The level of operational terrorism is as active as a few years back, we've had extensive levels of terrorism,” explained Major General (Rtd.) Muniruzzaman, the president of the Bangladeshi Institute of Peace and Strategic Studies (BIPSS) in Dhaka. “People who say we don't have a problem are in a state of denial.”¹¹

While militant groups have carried out terrorist attacks within Bangladesh—although none on the scale of 2005—there has been increased activity in India in recent years, as well as links to Indian groups.¹² HUJI, which has ties to al-Qa`ida,¹³ is allegedly carrying out contract activities in India to garner international recognition and obtain funds, explosives and munitions.¹⁴ Reports in the Indian press have also indicated Bangladeshi links to terrorist attacks in Bangalore and New Delhi,¹⁵ as well as the Mumbai attack on November 26, 2008.¹⁶

Yet while the Bangladeshi and Indian authorities have continued to crack down on militant organizations operating inside and outside of Bangladesh, this has been largely confined to the more immediate: raids, arrests and intelligence gathering. Going after the financiers and income generating techniques of Bangladesh-based terrorist organizations remains as great a challenge, with Bangladesh lacking the infrastructure as well as the political will to curb terrorist financing.

Funding Methods

Funding for fundamentalist and terrorist groups comes from the usual variety of sources. More than $1 billion in taxable goods is smuggled into the country from India, and analysts believe that some of this ends up in the hands of terrorist groups. This is also the case with small arms sales, drugs and counterfeit U.S. dollars that enter Bangladesh from neighboring Myanmar and the Golden Triangle. Money laundering is also a prime way of generating funds, estimated to account for 12-13% of the country’s GDP at $3.4 billion.¹⁷ Some 90% of revenue from smuggling is laundered; 30% of bribes, 60% of the retail sector, 35% of import-export, and 25% in tax evasion.¹⁸

Remittances from expatriate Bangladeshis working in the Middle East, the United Kingdom and elsewhere are a further area of concern. Currently estimated at $7 billion a year through banks, remittances surged from only $2 billion in 2006 as a result of financial institutions improving their delivery time and including value-added services.¹⁹ A further $7 billion, however, is estimated to illegally enter Bangladesh through the hundi system,²⁰ an illegal alternative remittance system similar to the hawala system that operates in the Middle East.²¹ Sources at the Bangladesh Bank (BB), the country's central bank, said the government was loathe to legalize hundi—which would increase oversight—as it would divert this capital away from the official banking sector and the financial system. ²²

While there is a broad consensus that such aforementioned techniques are used by militant organizations, the levels of funding generated are mere speculation. Several raids on JMB safe houses in Dhaka have revealed the properties were rented by expatriate workers in Saudi Arabia.²³ In the case of remittances, research by the BIPSS has indicated that large volumes of money are sent from members of the Bangladeshi community in London,²⁴ and that there are increasing signals of the diaspora link to incidents in Bangladesh. One of the most significant links to funding from the diaspora was unearthed in March 2009 when a madrasa in Bhola in southern Bangladesh was raided by an anti-terrorist division, turning up 10 firearms, 2,500 rounds of ammunition and radical Islamic literature.²⁵

Investigations revealed that the madrasa was funded by British-registered charity Green Crescent, and that the founder, British citizen Dr. Faisal Mostafa, had close links to the JMB and its current leader, Saidur Rahman..²⁶

The Green Crescent case highlights the lack of oversight by the authorities in regulating charities and NGOs—in Britain as well as in Bangladesh—and indicates what analysts have long suspected: NGOs are a major source of funding for militant groups. There are some 2,500 officially registered NGOs operating in Bangladesh, but potentially as many as 100,000, with smaller initiatives registered locally.²⁷ “No one has an exact number,” said Iftehkar Zaman, executive director of Transparency International Bangladesh. The Saudi Arabia-based Al Haramain Islamic Foundation, banned internationally by United Nations Security Council Committee 1267, has come under suspicion, along with other charities from the Middle East, for financing terrorism in Bangladesh. NGOs and charities have also been linked to the rise of Islamic extremism in the country, with the Kuwait-based Revival of Islamic Heritage Society (RIHS)²⁸ and the Saudi Arabian organization Hayatul Igachha (HI) connected to funding for some 650 mosques that have been used by terrorist organizations such as Ahle Hadith Andolan Bangladesh (AHAB)²⁹ and the JMJB.³⁰

An “Economy within an Economy”

Financing for legitimate Islamic political groups such as the country’s largest, the Jamaat Islami Bangladesh (JIB) and others such as the Islami Oikya Jote,³¹ are believed to stem from what has been called an “economy within an economy.”

Abdul Barkat,³² a professor of economics at Dhaka University, states that Islamic political parties have invested in 13 different economic sectors, including finance, insurance, retail, education, real estate, communications, media, health care and pharmaceuticals. “They earn to the tune of $300 million a year in net profits, and invest 10-20% for political purposes, anywhere from $30-$60 million, including paying salaries to up to one million full timers,” he said.³³ Muniruzzaman of the BIPSS thinks the amount is much higher than Barkat indicates. “They probably run a parallel economy.” Yet while front companies are undoubtedly linked to Islamic organizations, not all are militant, although the rise of an alternative economy does present further opportunities for militant groups to generate funds.

The JIB is a case in point. The largest Islamic political organization in the country, the JIB was a member of the Bangladesh Nationalist Party-led government alliance from 2001-2006. Yet while the JIB claim they have no links to militant groups, not everyone is convinced. Both JMB leaders who were executed in 2007, Abdur Rahman and Bangla Bhai, were active members of the JIB's student wing, the Islamic Chhatra Shibir.³⁴ Moreover, the JMB drew its ideology and political support from JIB.³⁵ There are also allegations that support for the JMB and Jagrata Muslim Janata Bangladesh (JMJB)extended to the higher echelons of the BNP government and the JIB.³⁶ These links are attributed to the government's half-hearted response to Islamic extremism and violence, and initial refusal to blame the JMB for the August 2005 bomb blasts.

These questions over the JIB and its plans for the future have Bangladeshi analysts concerned about the growth of the Islamist economy, believing it is a means to build up economic power as a way of gaining political power over time. “The Jamaat [JIB] works with long term plans unlike [the major two political parties] the BNP and Awami League,” said Iftehkar Zaman, of Transparency International Bangladesh. “They have infiltrated the administration, bureaucracy, the army, media and increasingly, even NGOs.”³⁷ The JIB also controls the largest bank, the Islamic Bank of Bangladesh, six universities throughout the country, and a think tank in Dhaka. Moreover, with the fundamentalist economy registering higher annual growth, of 7.5% to 9%, than the mainstream economy (of 4.5% to 5%), “it means that if it grows higher, there might be a time in 15 years where their economy will be difficult to fight in a monetary sense,” said Barkat.

Enforcement and Reality

In the immediate months after a military-led emergency government seized power in January 2007, a Financial Intelligence Unit was established, the Money Laundering Prevention Act was re-enacted in April 2008, and an Anti-Terrorism Ordinance was passed in June 2008.³⁸ Yet continuous political undermining of the legal process,³⁹ in addition to coercion, bribery and corruption, has meant that the country’s anti-money laundering (AML) and counterterrorist financing (CTF) measures “are confined to regulations we have printed.”⁴⁰ Furthermore, the government lacks effective knowledge and training to curb AML and CTF. “At a recent workshop of 50 people from the financial sector, law enforcement and key ministries, the people most related to CTF and AML said, frankly, that they didn’t have a clue on this sector and are comparatively weak in knowledge and implementation,” said Muniruzzaman.

The Bangladesh Bank (BB) is also struggling to implement regulations, lacking the manpower and finances to investigate the foreign and domestic transactions going through the financial system. Sources at the BB have admitted as much, conceding that some of the country’s six Islamic banks are “not properly run.” The country equally lacks reporting agencies such as on car dealerships and precious stones, raising concerns that such businesses could be used to launder money and finance terrorism.

The NGO bureau is of more concern, given the thousands of NGOs and charities in the country, and a total lack of transparency by the sector in the usage of funds.⁴¹ Sources at the BB said the bureau has insufficient human resources to regulate the whole sector, further highlighted by the Green Crescent case in March. A thorough investigation of charities and NGOs has also been suggested by the Bangladeshi media, pointing out that the bureau was run by the Ministry of Social Welfare, which was held by Jamaat Islami from 2001-2006.⁴² Given the claims that JIB has links to the JMB, there is speculation that some of the 473 local and 25 foreign NGOs licensed during this period were not properly regulated.

Conclusion

The reining in of financing for Bangladeshi terrorist groups is a significant challenge to the authorities. Given groups such as HUJI's growing reach in South Asia, and links to expatriates as far away as the United Kingdom, the issue is increasingly of international concern. Tackling terrorist financing is but one of the multipronged techniques needed on the ground. Yet with a weak state it is problematic unless substantial financial and professional assistance is given to the central bank to implement a more proactive AML and CTF regime and better regulate the financial sector.

The mutiny by the BDR suggests that the democratically-elected government of Sheikh Hasina faces an uphill struggle in holding on to power. The mutiny has shaken the military establishment, and left the country's borders porous and vulnerable. Claims that leaders of the mutiny were members of JMB are also of concern.

While the JIB did not garner as many seats in the December elections as in previous governments, the percentage of JIB voters actually increased, indicating a shift in society toward more radical Islam.⁴³ The rapid growth of the Islamist “economy within an economy” is equally an area of concern for the country's political future. Furthermore, corruption is on the rise once again in Bangladesh, with the new civilian government criticizing the Anti Corruption Commission (ACC) established by the emergency government in 2007, and the chairman resigning in protest.⁴⁴

Bangladesh clearly faces a tortuous road ahead. Given the weakness of the state, high poverty levels, widespread corruption, and the bipartisan nature of politics, the situation in Bangladesh warrants more attention from the international community.⁴⁵

Paul Cochrane is a freelance journalist based in Beirut, where he has lived since 2002. He covers the Middle East and Central Asia for specialized publications, business magazines and newspapers. Mr. Cochrane's work has been featured in The Independent on Sunday, the Frankfurter Allgemeine Zeitung, Money Laundering Bulletin and Fraud Intelligence. He has written on money laundering, terrorist financing, corruption and alternative remittance systems in Lebanon, Saudi Arabia, Afghanistan, the United Arab Emirates, Egypt, Syria and the Indian subcontinent. Educated in Britain, Mr. Cochrane earned a master’s degree in Middle Eastern Studies at the American University of Beirut.

Footnotes

1 The BDR is responsible for Bangladesh's 4,427 kilometer long border with India and Myanmar. On February 25, 2009, more than 1,000 BDR soldiers mutinied in Dhaka, killing 56 officers. For 36 hours, as the revolt spread to 12 other towns and cities, the BDR fought the regular army before surrendering. The findings of an official investigation have yet to released.

2 Jama'atul Mujaheedin Bangladesh (JMB) was created in 1998 by Sheikh Maulana Abdur Rahman, with the aim of capturing power through arms and implementing Islamic law. The Jagrata Muslim Janata Bangladesh (JMJB) is an offshoot of the JMB, founded in 2003 following clashes with the police. Both organizations overlap in structure and personnel, with JMB activists often JMJB members.

3 Haroon Habib, “17 August 2005: Milestone of Terror” in Jaideep Saika, Bangladesh: Treading the Taliban Trail (New Delhi: Vision Books, 2006), p. 252. The JMB left leaflets at the blast sites, declaring: “We’re the soldiers of Allah. We’ve taken up arms for the implementation of Allah’s law the way the Prophet, Sahabis and heroic Mujahideen have done for centuries…it is time to implement Islamic law in Bangladesh.”

4 The six leaders were hung on April 30, 200. See the Bangladesh Assessment 2008 at the South Asia Terrorism Portal, located at www.satp.org. For information on the arrested suspects, see “Intelligence focused only on accused JMB men,” Bangladesh News, October 28, 2008.

5 “Lack of policy affecting fight against militancy in Bangladesh,” The Indian, October 26, 2008. A detailed list of the organizations can be found i Bangladesh Awami League Newsletter 4:4(2005), located at www.albd.org/newsletter/2005/vol4_no4_2005.htm.

6 According to The Daily Star, 35 out of the 50 most-wanted JMB cadres are still active in four northern districts.

7 “Lack of policy affecting fight against militancy in Bangladesh,” The Indian, October 26, 2008. A detailed list of the organizations can be found in Bangladesh Awami League Newsletter 4:4 (2005), located at www.albd.org/newsletter/2005/vol4_no4_2005.htm.

8 Harkat-ul-Jihad-al-Islami Bangladesh (HUJI), a Deobandi group, is affiliated to the Pakistan-based HUJI, and was formed by 17 Bangladeshi mujahidin that returned from Afghanistan, allegedly with financial help from al-Qa`ida. The group is one of the six signatories to the fatwa for Jihad Against Jews and Crusaders on 23/2/98. Shahadat-e al Hikma (SAH) announced in 2003 that it planned to launch an armed struggle to turn Bangladesh into an Islamic state. It was promptly banned. Its chief, Sayed Kawsar Hussain Siddiki Raja, stated at the time that SAH had 10,000 “commandos” and 25,000 fighters. SAH has since gone underground.

9 Shakhawat Liton, “Islamic parties boom after 1976 ban lifting,” The Daily Star, August 29, 2006. A constitutional ban on religious parties was repealed in 1976. Liton notes that there are no exact figures on the number of parties with either the government or the Election Commission.

10Personal interview, Colonel Satinder Saini (Rtd.), Institute of Defence Studies and Analyses in New Delhi, September 24, 2008.

11Personal interview, Major General (Rtd.) Muniruzzaman, Dhaka, November 24, 2008 and April 22, 2009.

12 India's Union Home Ministry in its 2007-2008 Annual Report stated: "The hand of Pakistan-based terrorist organizations—Lakshar-e-Toiba (LeT) and Jaish-e-Mohammed (JeM)—and, increasingly of the Bangladesh-based HuJI, known to have close links with the Inter Services Intelligence, has been observed in most cases" of terrorist attacks in India. New Delhi has also accused HUJI of providing grenades to LeT in India and coordinated attacks in India with the Students' Islamic Movement of India (SIMI), the LeT and JeM.

13 Rohan Gunaratna, Inside Al Qaeda: Global Network of Terror (New Delhi: Roli Books, 2003), p. 219; Bruce Vaugh, “Islamist Extremism in Bangladesh,” Congressional Service Report, January 17, 2007.

14Personal interview, Major General (Rtd.) Muniruzzaman, Dhaka, November 24, 2008 and April 22, 2009.

15“Delhi Police launches drive to deport illegal immigrants,” Press Trust of India, July 13, 2008.

16 Interview with the author, 22 April, 2009. According to one report, the Thuraya satellite phone recovered from the fishing trawler the terrorists used to reach Mumbai contained records of a conversation between Lakshar-e-Toiba chief Yusuf Muzammil in Muzafarabad, Kashmir, and 'Yahya', a point man for LeT and HUJI in Bangladesh. Pakistan's Federal Investigation committee report also has a reference to HUJI's involvement, and there are indications that mobile SIM cards were purchased in Kolkata by Bangladeshis on behalf of the perpetrators.

17According to research carried out by Abul Barkat, Professor of Economics at Dhaka University – ‘The Economics of Fundamentalism and the Growth of Political Islam in Bangladesh’ in Dhaka University’s Social Science Review journal

18Ibid.

19Figures provided by members of the Bangladesh Bank in Dhaka, November 25, 2008.

20Hundi, or Hawala, is an alternative remittance system (AMS) widely used in the Middle East and South Asia, particularly by expatriate workers, to send money via official or unofficial brokers with minimal (or no) paperwork involved. Many countries are trying to better regulate AMS.

21Ibid.

22Personal interviews, meeting with members of Bangladesh Bank, Dhaka, November 25, 2008.

23Personal interview, Major General (Rtd.) Muniruzzaman, Dhaka, November 24, 2008 and April 22, 2009.

24There are an estimated 500,000 British citizens of Bangladeshi origin.

25 James Brandon, “UK Charity Funding Arms and Training for Bangladeshi Terrorists,” Terrorism Monitor 7:9 (2009).

26'Faisal now admits ownership of arms,' The Daily Star, 16 April 2009 – http://www.thedailystar.net/story.php?nid=84247 Faisal was arrested in Bangladesh on April 6, 2009

27Interview with Iftekhar Zaman, Executive Director of Transparency International Bangladesh, Dhaka, 26 November, 2008.

28The RIHS registration was canceled in 2007, but is still operating. The head of a local wing of the RIHS, a Sudanese national, was arrested in March 2009 for using the charity to train militants.

29Ahle Hadith Andolan Bangladesh (AHAB) is a similar party to the JMB and JMJB, often working closely together, and has been linked to the Jamaat Islami Bangladesh (JIB).

30See Hiranmay Karlekar, Bangladesh: The Next Afghanistan? (New Delhi: Sage Publications, 2005).

31 Islamic political party Islami Oikya Jote was part of the Bangladesh National Party four-party ruling coalition from 2001-2006.

32Interview with Abul Barkat, Professor of Economics, Dhaka University, 27 November, 2008

33 Following the publication of ‘The Economics of Fundamentalism and the Growth of Political Islam in Bangladesh’ in Dhaka University’s Social Science Review journal, Barkat told the author he received some 70 death threats. In JIB newspaper Shagram, Barkat was subjected to character assassination but the economic statistics and findings were not refuted.

34The Islamic Chhatra Shibir is the JIB's student wing, operating in most universities (but banned at Dhaka University). The ICS has been involved in violence and has connections to the banned Students' Islamic Movement of India (SIMI).

35 Wilson John, “The Bengali Taliban: Jamaat-ul-Mujahideen Bangladesh,” Terrorism Monitor 6:10 (2008).

36For a detailed account, see Hiranmay Karlekar, Bangladesh: The Next Afghanistan? (New Delhi: Sage Publications, 2005).

37Iftekhar Zaman, Executive Director of Transparency International Bangladesh, Dhaka, 26 November, 2008.

38See Bangladesh Bank's Anti Terrorism Ordinance, 2008, No. 28 and Money Laundering Prevention Ordinance, 2008, No.12.

39Politicians have continuously undermined the judiciary through bribery and applying pressure on the judiciary to drop cases linked to political parties and prominent businessmen.

40Personal interview, Major General (Rtd.) Muniruzzaman, Dhaka, November 24, 2008 and April 22, 2009.

41Zaman.

42“Terror-financing NGOs remain unscathed,” The Daily Star, November 26, 2005.

43Personal interview, Major General (Rtd.) Muniruzzaman, Dhaka, November 24, 2008 and April 22, 2009.

44The creation of the ACC led to the arrest of 200 officials and businessmen, and the seizure of $30 million. Two former prime ministers—Khaleda Zia of the BNP and Sheikh Hasina Wajed of the Awami League—both had charges brought against them but were dropped as part of a political compromise in the lead up to the elections. Bangladesh ranked 147 out of 180 countries in Transparency International's Corruption Index in 2008.

45 Recent proposals to establish Joint Working Groups on Counter Terrorism with the British, American, Australian and Russian governments are a move in the right direction.

Copies of CTC Sentinel can be downloaded at www.ctc.usma.edu/sentinel/

Kuwait the unforgiving

Commentary - Executive

It's been 19 years since Saddam Hussein's armed forces invaded Kuwait, and five years since the US-led invasion that overthrew the dictator, but Kuwait is still demanding reparations from the Iraqi people.

According to Kuwaiti officials, Iraq still owes $25.5 billion in war reparations, in addition to some $16 billion in loans that funded Iraq's eight year war with Iran. At the very same time, Iraq is considering a $7 billion loan from the International Monetary Fund (IMF), as it struggles to pay for reconstruction, and oil revenues plunging from $7 billion in June 2008, to just over $2 billion in May.

Given the beleaguered state of Iraq, and all it has been through, it is high time that these reparations and debts are confined to the dustbin of history, finally closing the chapter on the Saddam Hussein era.

It is outrageous that a country that is among the richest in the world, with a per capita income of $40,800, is forcing Iraqis, with a per capita income of under $4,000, to pay for Saddam Hussein's actions.

Kuwait was, after all, no innocent bystander in the Iran-Iraq war – it helped fund the war and was happy to have Iraq do all the dirty work to contain and weaken the fledgling Islamic Republic – or a hapless victim of the 1990 invasion. Kuwait had goaded Iraq from the outset of the end of Gulf War I, allegedly violating OPEC agreements by increasing oil production pumped from the disputed Rumaila oilfield, which is partly in Kuwait but mostly in Iraq. This caused oil prices to tumble, and due to Kuwait's violation of Iraqi sovereignty, reduced Iraq's oil revenues by an estimated $4 billion a year. After 16 months of an Iraq-Kuwait standoff, and no resolution to a heightening dispute that was bleeding Iraq economically while it was trying to rebuild, Saddam Hussein made his fateful mistake and invaded his southern neighbor. The Iraqis have been paying economically ever since.

After the end of Gulf War II, the United Nations Compensation Commission (UNCC) was created to assess and payout claims, with Kuwait claiming $386 billion in damages, while individuals and businesses from a 100 countries also filed claims. Indeed, multinational corporations have received vast sums, not for war damage, but for “profit loss” and “lost potential earnings.” As of April, according to the UNCC website, Iraq has paid out $27.1 billion to the commission.

But as Kuwait reminded Baghdad, there is still a further $25.5 billion to pay. And then there are the other debts Hussein accrued with numerous nations around the world. However, following a lot of pressure from organizations such as Jubilee Iraq, many countries have waived Iraq's debts, most recently the United Arab Emirates writing off $7 billion.

Kuwait should follow suit. The 1990 invasion was a decision of a dictator, not the Iraqi people. Furthermore, history has numerous precedents of debts being written off that were made by an individual – the leader – not the country itself. And most famously, of course, reparations have been shown to have negative consequences, particularly if one recalls the outcome of the Versailles Treaty in 1919 that forced Germany to pay out billions, yet resulted in hyperinflation and acted as a catalyst for the rise of National Socialism. We all know where that led. But while such an outcome is exceedingly improbable in Iraq, paying out reparations means there is less money for reconstruction. It is also disingenuous on Kuwait's part to divert such funds away from Iraq, as an unstable and poor neighbor is not to Kuwait's benefit, or anyone else for that matter.

Currently, Iraq has received $125 billion in reconstruction aid, according to the Special Inspector General for Iraq Reconstruction, the successor to the Coalition Provisional Authority. Tens of billions of dollars more are needed. Oil revenues were expected to help in this regard, but with low oil prices and billions needed to upgrade energy infrastructure, Iraq is still years away from being able to allocate oil revenues to pay off debts when it needs money for reconstruction. Either debts are frozen until Iraq has ample revenues, or written off completely by Kuwait. This is what Iraq has asked for.

Equally, the whole reparations deal reeks. There have been innumerable wars and invasions since World War II and the victorious Allies rightly realized that reparations from Germany and Japan were a bad idea. Few, if any countries, have received compensation since for being on the receiving end of aggression. The United States has certainly never paid out reparations for the numerous wars and conflicts it has been involved in, while Israel has never paid a cent for the damage it has caused to the Arab economies, left to foot the bill from decades of Israeli aggression.

While Kuwait has not acted militarily, the Gulf state's demands are not healthy for Iraq, for its border with its neighbor, or for the region. Kuwait's requests should end and allow a more prosperous Iraq to develop.

PAUL COCHRANE is the Middle East correspondent for International News Services

Photo credit: Burning oil fields during Operation Desert Storm, Jonas Jordan, US Army Corps of Engineers

BBC Persian television - PTV - launches

By Paul Cochrane, Arab Media and Society

On January 14, the BBC launched its Persian-language satellite television network, BBC Persian, with a £15 million ($21 million) annual budget, the
British broadcaster’s latest foray into a foreign language channel after BBC Arabic went on air in 2008.(1)
As has been the case for most foreign language channels linked to Western governments, a cloud of suspicion has hung over BBC Persian, much like how the U.S.-government funded al-Hurra and Voice of America (VOA) are viewed in the Middle East, as soft power at its most blatant and spectacular.
For while the BBC is funded by the British public paying an annual television license, PTV – as it is referred to within the BBC – receives additional funding from the Foreign and Commonwealth Office.
Indeed, PTV made waves from London to Tehran before the channel was even launched, with British tabloid newspaper The Daily Mail spouting off on the ill usage of taxpayer money (2), while Tehran eyed the channel as a potential rabble rouser on par, if not actually worse, politically speaking, than the 50-odd private Persian channels that illegally broadcast into Iran from LA. – “Tehrangeles.”(3)
While VOA has been broadcasting Persian news and discussion programming into Iran by satellite since 1999, such forays by foreign powers into the Iranian television market are rare. The launch of BBC Persian TV comes some 69 years after the BBC Persian Radio Service went on air during World War II, when the news was firmly controlled by the propaganda department of Iran’s Ministry of Information.(4) Ever since, the BBC has had a complex relationship with its Iranian audience, being viewed as a credible alternative to state propaganda at times and an agent of British meddling at others.
BBC radio broadcasts were considered instrumental in turning the people against Reza Shah Pahlavi, who was forced to abdicate following the British and Russian occupation of Iran in August 1941, (5) while the service carried out a similar function during the CIA- backed overthrow of Premier Muhammad Mossadegh in 1953.(6) Conversely, in the lead up to the overthrow of Muhammad Reza Shah Pahlavi in February 1979, the Persian Service was accused of backing Ayatollah Khomeini when it ran interviews with the revolutionary leader and aired segments of his speeches.
Nearly 30 years after the Islamic Revolution and just months before PTV was to launch, the BBC was again under fire.
In late October 2008, the Iranian Ministry of Culture issued a statement that it had “reliable reports” that the BBC Persian Service had “attempted to make suspicious and unjustifiable contacts that flout the law,” and were making “an effort to attract notorious individuals and create programs about suspicious topics.”(7) Intelligence minister Gholam-Hossein Mohseni Ezhei followed up by saying “BBC activities are against the national security of Iran,” and that correspondents were under surveillance.(8)
Then in early January 2009, Culture Minister Mohammad Hossein Safar-Harandi
announced PTV was not to get a license. No PTV correspondents were to be allowed in the country and BBC News, which has a bureau in Tehran, was barred from sharing footage with the channel or face having its license revoked. “The BBC English channel will be confronted if it abuses its legal rights by producing reports for BBC Persian and we are continually on watch for that,” he said. (9)
Safar-Harandi went on to advise journalists to avoid “unconventional” and “illegal” activities, in addition to naming Iranians that had applied for jobs with PTV. (10)
So far, seemingly not so good for the fledgling channel: PTV did not have a bureau in Iran, the channel could not be viewed legally due to the ban on private satellite receivers, and the website is filtered by the Iranian government.
A change in tune?

But while the outlook for the channel did not appear overly optimistic, four months down the line PTV has garnered thousands of viewers and one of the BBC’s highest numbers of web hits, while the mood in Tehran seems to be softening in its approach to the channel. Iranians were clearly viewing PTV by satellite – an estimated 60% of all households have illegal satellite receivers – and accessing the BBC Persian website. (11)
According to Rob Beynon, Acting Manager of PTV in London, “early indications from Tehran suggest that one in five people who have access to satellite TV tuned in during the first month. We have been encouraged by the fact that BBC Persian received 300,000 blog articles and mentions and around half a million searches for “BBC Persian Television” on Google Farsi – all in the first month after launch.”(12)
PTV was also being watched in the Persian speaking countries of Tajikistan and
Afghanistan, a reason for the channel’s title rather than ‘BBC Iran TV’, in the hope of appealing to the estimated 100 million Persian speakers worldwide.(13)
“If we have 10 million viewers in a few years we would be very happy,” said a source at PTV who wished to remain anonymous. “I often ask people who have just been to Iran if people watch PTV, and they say lots do,” he added.
With a staff of 100 mainly young Iranians, PTV shook off the image the Persian radio service had garnered by appealing to the country’s youth, with 70% of the country estimated to be under 30 years old.
“Old surveys found that BBC Farsi radio was mainly tuned into by men, sitting on their own having a smoke or with friends; that politics is a man’s world to the exclusion of women and young people. It had a slightly fusty, more mature audience,” said the source. “We tried to make PTV better than BBC Arabic TV, which is news driven. This is fifty-fifty, but with news on the hour, which is unusual for Iran,” he added.
Programs include Nobat-e Shoma (Your Turn), a live interactive show about everyday social and political issues; Talk Back; motor show Top Gear translated into Persiab; and Kook (Tune), presented by Behrzad Bolour, who is considered “the John Peel of Iran with lots of old records, dressed strangely in a hat, with earrings and a larger than life personality.”(14) The youth show Emruziha (Today’s People) is reportedly very popular, with the source saying the presenter is frequently recognized in Iranian-run shops in London and in airports, a clear indication people are watching the channel.
“I think what surprised many people was the range and diversity of our programming, from news through documentaries, technology, culture, through interactive to sport and pop music,” said Beynon. “Our interactive show combines webcams, emails, texts, and phone calls, and we have reunited families who have been apart for a generation, and covered topics never aired before for our audiences,” he added.
In terms of coverage, PTV has bureaus in London, Washington D.C., Istanbul, Beirut, Dushanbe, Kabul, and a correspondent in Jerusalem. “He is the first Iranian citizen to report from Israel, which is an anomaly for any Iranian channel,” said the source. There are also operations in Los Angeles and Islamabad, Pakistan.

Mohammad Manzarpour reporting from Gaza

The channel was the first in Iran to broadcast live the entire inauguration of U.S. President Barack Obama (although reportedly faced problems with security guards in DC), and had better coverage of the Israeli attack on Gaza than Iranian channels were able to muster due to having no presence on the ground. High quality production values and professionalism are also attributes that are appealing to Iranians, faced with choosing between the antiquated programming by state run channel IRIB or the U.S.- based channels that tend to be entertainment oriented and blatantly anti-government in their rhetoric.
“PTV has been very successful for the money invested and brought free media to one of the most strategic countries on earth for the price of Jonathan Ross,” said the source. (15)
As Iranian blogger Omid Habibinia commented, “The launch of BBC PTV should have a major effect on the state of television culture in Iran in general. In the absence of independent television on the one hand, and amateur-level programming from the stations abroad on the other, many will refer to the BBC for news and other information. Because the bar is so low, the BBC will not have to work hard to look good.” (16)
But while the channel appears to be going down well with Iranians, Tajikistan is
reportedly disappointed that it has been sidelined in PTV coverage, attributed to the overwhelmingly Iranian staff of PTV. “Dushanbe thought it would be a big opening to the world for Tajikistan, whereas Iranians feel they don’t need coverage of Tajikistan or Afghanistan,” said the source. Both Central Asian states are covered by IRIB, Iran’s main state broadcaster.
Describing the PTV staff, the source said “all are nationalistic and fairly patriotic, whether they like the people in charge or not, and not in favor of military action against Iran. You don’t feel the newsroom is a hot bed of anti-government sentiment.”
As PTV Iranian Affairs analyst Sadegh Saba told the executive editor of PTV, Steve Williams, in the January edition of in-house BBC publication The News Magazine, Iranians “don’t necessarily trust our motives, though they do trust our information. They can’t get their heads round us being government funded. However, they do think we’re balanced and fair.”(17)
This is the approach PTV is trying to get across. “There is the hope of showing the regime another way to interface with the world, of not being aggressive or defensive. The aim is not regime change, but bridge building,” said the source.
There is also the possibility that Tehran might start to cooperate with the channel as it builds an audience, although the test will come over the next few months in the lead-up to the summer presidential election.
“Tehran was initially worried that the channel would be against the system as a whole, but now is worried that reformists could use it as a platform as given less airtime on IRIB,” said the source. “They are very cagey about something they cannot control as they’re used to controlling everything.”
For such a fledgling channel, there are challenges ahead. “The technical configurations are fine, but in all cases the PTV bureaus are not independent of BBC Arabic or the BBC, so if a major story breaks there could be competition for satellite bookings; it is a lack of strategic forethought that may cost the station,” said the source. Furthermore, PTV will have to get correspondents in Iran for the channel to be effective in the long-term. “If within a year to 18 months there are not correspondents on the ground in Iran, it will be
a failure,” he added.
Beynon said that PTV will continue to press for a bureau in Tehran. “We have also been given permission to work on some programs inside Iran, so it’s wrong to say our correspondents are banned in Iran. One of our series had a very successful culture and cuisine theme and was broadcast in English on BBC World as well as on PTV,” he added.
There could also be competition in the offing, which negatively affected the reception of BBC Arabic when it was launched again last year. In the gap between the ill-fated BBC Arabic closing in 1996 following a fallout with Saudi partner Orbit, Iran, France, Russia and the USA have all set up Arabic language channels, while BBC Arabic was not able to re-hire the BBC trained journalists that had gone to work for the likes of al-Jazeera and al-Arabiya.
Al-Jazeera or CNN do not have Persian channels yet, but there has been talk of CNN setting up a franchise similar to CNN Turk. Equally, Gulf countries might expand into non-entertainment Persian broadcasting – there is currently a Dubai-based Persian Music Channel - while the first live FM broadcast in Farsi out of the UAE is to be launched in the coming months following an IPO. (18)
Indeed, in April, al-Hayat newspaper reported that Saudi Arabia is planning to launch a fifth state-run satellite channel that will broadcast in Persian and Turkish, “to acquaint them with Saudi society's social, economic, political, and security reality.”(19)
For the time being, PTV is at the cusp, not yet on terra firma but with a future that bodes well if the channel is granted a bureau in the country of its prime target audience.

1. BBC Arabic TV was launched March 11 2008, with an annual budget of £25 million a year, the broadcasters second attempt following a disastrous teaming up with Saudi Arabia’s Orbit channel in the mid-1990s, ending in 1996 after two years when the BBC fell out with Orbit.
2. ‘£15m a year to give Iran a BBC channel it doesn't even want,’ Paul Revoir, The Daily Mail, January 8 2009 - http://www.dailymail.co.uk/news/article-1109502/15m-year-Iran-BBC-channel-doesnt-want.html
On the other hand, British academic Timothy Garton Ash called the channel the “most unambiguously positive developments I have seen in a long time, and worth every penny of its £15m annual budget (the price of about one bolt on a Trident missile)” - ‘If Obama and Khamenei want to get along, they should
start watching TV,’ Timothy Garton Ash, The Guardian, January 15, 2009 -
http://www.guardian.co.uk/commentisfree/2009/jan/15/bbc-persian-television-iran
3. There are an estimated 50 satellite channels beaming into Iran from Los Angles – Tehrangeles – where there is a sizeable Iranian community. The majority of the channel’s are against the Iranian government, while some want to see the return of the Pahlavi dynasty. Despite satellite being banned in Iran, satellites are widespread and the channels are watched. The exception is during elections when the government blocks non-governmental channels through magnetic wave frequencies.
4. BBC Persian Radio was launched 28 November 1940.
5. “The BBC Persian Service, 1940-1953, and the Nationalisation of Iranian Oil,” Hossein Shahidi, Journal of Iranian Research and Analysis, Volume 17, No. 1, April 2001
6. “The BBC Persian Service was seen by most listeners as putting across the point of view of the British Government and of the Anglo-Iranian Oil Company, the fore-runner of today's British Petroleum, or BP. Listeners were particularly enraged by commentaries which criticised Dr Mossadegh and sought to
persuade Iranians that the nationalisation of oil was illegal and would not be in Iran's interest.’ ‘Injaa landan ast: BBC Persian Service 60 Years On’, Hossein Shahidi, September 24, 2001, The Iranian - http://www.iranian.com/History/2001/September/BBC/
7. Who's Afraid of BBC Persian TV? By Amir Mansouri, February 7, 2009 -
http://www.payvand.com/news/09/feb/1080.html
8.Ibid. Such statements by the Iranian government must be taken seriously, given the recent arrest of Iranian-American freelance journalist Roxana Saberi, who has worked for the BBC, for allegedly spying for the USA - 'Iran jails US journalist Roxana Saberi as spy' Peter Beaumont, The Observer, 19 April 2009
- http://www.guardian.co.uk/world/2009/apr/19/iran-america-journalist-sentence
9. “Iran bans BBC's Farsi language TV station, journalists asked not to work for foreign media, Newswatch, January 29, 2009- http://www.newswatch.in/newsblog/3879
10. Who's Afraid of BBC Persian TV? By Amir Mansouri, February 7, 2009 -
http://www.payvand.com/news/09/feb/1080.html According to a rumor within PTV, two unsuccessful applicants for PTV that had attended a vetting and
training course in Istanbul were later arrested in Iran: One for making a fake BBC Press pass to seemingly better his situation in the country, while the other tried to claim asylum in Britain after Tehran accused him of being a spy.
11. ‘BBC Persian TV is launching!’ Omid Habibinia, September 30, 2008, -
http://2006omid.blogspot.com/2008/09/bbc-persian-tv-is-launching.html
12. GND Audience Research February 2009, provided by PTV.
13. There are an estimated 70 million Farsi speakers in Iran, 20 million in Afghanistan and 10 million in Tajikistan.
14. John Peel was a popular BBC Radio One disc jockey in the UK.
15. Jonathan Ross, a television chat show host, reportedly has a £18 million, 3 year contact with the BBC – ‘Ross and Moyles face pay cuts in new £400m BBC squeeze,’ Chris Tryhorn and John Plunkett, The Guardian, March 20 2009 - http://www.guardian.co.uk/media/2009/mar/20/bbc-ross-moyles-pay-cut
16. The Long story of my critic [sic] on BBC Persian!’ Omid Habibinia, October 31, 2008 - http://2006omid.blogspot.com/2008/10/long-story-of-my-critic-on-bbc-persian.html
17. ‘Launching Persian TV’, Steve Williams, The News Magazine, Jan-Feb 2009, Issue 24, page 21.
18. Investors sought for UAE Farsi radio station, Andy Sambidge, Arabianbusiness.com, 3 April 2009 - http://www.arabianbusiness.com/551467-investors-sought-for-uae-farsi-radio-station
19. Saudis planning to launch Turkish, Persian-language TV channel, paper', al-Hayat, April 22, 2009 –Translated www.mideastwire.com/.

Photographs courtesy BBC Persian TV

In search of a global standard, Halal sector poised for growth

By Paul Cochrane in Beirut, Executive magazine

The Halal sector, which covers food, pharmaceuticals, cosmetics, finance and tourism, is at the cusp of exponential growth in the Middle East and worldwide. Valued at $1.5 trillion globally, the sector has been growing by 10-20 percent a year, even during the financial crisis, according to Ramez Shehadi, senior partner at consultancy firm Booz and Company.

Other estimates put the sector at over $2.1 trillion, and set to rise even further as companies start cottoning on to the potential of a sector that directly appeals to some 1.5 billion Muslims.

But what has been holding back the roll out of the Halal sector is the labeling and certification of products as Halal. With no global certification body, there is minimal standardization and coordination between national certifying bodies, such as in Australia, Malaysia, the USA, Britain and Brazil. It is the same story in the Middle East, with separate bodies in every country, and further compounded by the GCC importing an estimated 80 percent of Halal food from Brazil, Argentina and Australia. The Halal food market in the GCC was estimated at $9 billion in 2007, according to Canada's Agriculture and Agri-Food Trade Service.

“Halal is one of the last industries to have a common standard that producers and governments can abide by, and also a logo that consumers can look to,” said Jamaatun Azmi, Managing Director of Kashedia in Malaysia, and the creator and founder of the World Halal Forum.

With globalization resulting in products made from ingredients from numerous sources, the need for certification is even more pressing. As a result, the non-profit International Halal Integrity Alliance was established last year to create a global Halal standard, later endorsed by the Organization of the Islamic Conference.

“The whole idea of standards are they are voluntary but of benefit to manufacturers, jut like the ISO standards,” said Azmi. “You can compared to this to the growth of the organic food sector, which has become quite established, although it took decades to achieve.”

In early May, the Fourth World Halal Forum will be held in Kuala Lumpur to thrash out a global certification. But it will not be easy given the technical and scientific issues involved, such as whether mechinal fodder is considered Halal or not.

“We have to have something 100% Halal that no one can debate. If we had waited for Muslims to come to an agreement we wouldn't be where we are now,” said Saleh Abdullah Lootah, CEO of UAE-based Al Islami, the largest producer of Halal food products in the Middle East through franchises Al Islami Foods, Al Islami Cart, Al Islami Meat Shop, and fastfood chain Al Farooj Fresh.

“We went back to the book, to the Qu'ran, and adapted to that. There is a gray area, such as machine slaughtering of animals, but for us that is not acceptable,” he said. Lootah draws a line between what some say is Halal and 'real Halal,' which is meat that is hand slaughtered without stunning, as according to Islamic Sharia law.

He added that while multinational companies and others may want to get into the Halal sector, they should go all the way, as having some operations that are Halal and others not can result in confusion for consumers.

“The new generation of Muslim consumers are very sophisticated and more demanding, like it used to be with our grandfathers,” said Lootah. “With Halal it is about trust and integrity, this doesn't take days but years; it's not easy for companies to portray the message we have.”

Indeed, part of the need for certification on products – which could be as simpe as a logo of H for Halal – is that there have been a number of causes of fraudulent claims by companies marketing their products as Halal. “We have examples of pork having Halal certification, and it's pork!” said Azmi. “We also found Halal certification on knives, so there is clearly no education among manufacturers of what is actually Halal.” Just last month (APRIL), the Indonesian Agency of Drug and Food Control warned Muslims that five of out of every 35 meat flosses sold in the country contained shredded dried pork.

But it is not just in food – whether meat, processed food or in the restaurant sector - that Halal certification has potential. Cosmetics and pharmaceuticals are multi-billion dollar industries that manufacturers can tap into as Muslim consumers start to demand Halal sourced products. For cosmetics this could be big money, with the sector in the Middle East valued at $2.1 billion a year, according to trade experts Epoc Messe Frankfurt.

Sparking such potential growth is the fact that certain cosmetics have ingredients derived from pig fat and alcohol, while in pharmaceuticals, gelatine capsules also come from swine. “It opens a Pandora's box and a wealth of opportunity for generating demand by simple awareness in the Muslim world that this is really the case,” said Shehadi.

Interestingly, while Halal certifying bodies and governments in majority Muslim countries are aware of the non-Halal ingredients of products, a Halal gelatine has not yet been developed, which poses a quandry: inform the public or keep the matter quiet as people's health could be jeopardized if they stop taking certain drugs.

“Some governments are looking at this carefully to try and not create panic or chaos, as if we know the extent of non-Halal medicine it is not going to be good,” said Azmi.

But while Malaysia is taking the lead in certifying Halal, Shehadi said the Middle East has to get its act together. “It is counter intituitive that the home of Islam is not leading in Halal. The region should be a beacon, developing Halal standards and products suitable for the world. And by investing in Halal it can generate online content, entrepeneurism, small and medium sized enterprises, tourism, education and healthcare, which will have a snowball effect for development,” said Shehadi.