On 10th October the Kyrgyz people voted to elect a new parliament.  These elections were  widely hailed to be the fairest in the recent history of Central Asia. It seems that democracy has finally found a foothold in Central Asia. Soon , one by one, the oppressive regimes of Central Asia, led by dynastic rulers would be gone only to be replaced by enlightened democratically elected governments working tirelessly for the betterment of their pathetically poor countries.  Democracy is winning and we , as the world’s biggest democracy, should be delighted.

Eh No .   The time is not ripe for parliamentary democracy in Central Asia and it is in India’s interest to leverage all its influence to ensure that stability and not the spread of democracy remains our top priority.  But before I state my reasons, let us have a look at Kyrgyzstan.

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Although many Indians would not have even heard of the country and would be hard placed to name its capital , Bishkek ,  Kyrgyzstan is of vital strategic importance in Central Asia.  Kyrgyzstan is  a member of Shanghai  Cooperation Organization and figures prominently in both Chinese and Russian geo-strategic plans.   Kyrgyzstan is also home to  large US and Russian military bases. The US military base at Manas,  in Kyrgyzstan is a primary logistics base for USAF to ship supplies into Afghanistan and has become increasingly important in view of the continued attacks on routes through Pakistan.

Kyrgyzstan also sits astride the fertile Ferghana Valley , an explosive tinder box in the heart of Central Asia and a fertile breeding ground for Islamic terrorist which range from there to as far as Xinjiang in the east and Kashmir in the south.  It has been of vital interest for India that Kyrgyzstan, and other central Asian countries like Uzbekistan and Tajikistan, which control this restive region , are governed by stable and moderate governments which don’t let these fundamentalist organizations take hold .

And that is why , the recent Kyrgyz elections are  bad news. Since the April ouster of Kurmanbek Bakiyev , there has been a continued flux in Kyrgyz politics. And the results of the October election are unlikely to bring stability to the country.

The elections ( background information could be found here )have resulted in a split verdict . According to Kyrgyz law, only those parties which win more than 5% of the total national vote are eligible to enter the parliament. In Sundays election , only 5 parties made the cut .  These parties divided into Nationalist, pro-US and pro-Russian camps would have to cobble up  some sort of coalition .But any such coalition would be fragile and inherently unstable due to their contradictory policies.

These parties have very little common ground between themselves and differ on a host of factors.  Whether it is the question of foreign bases on Kyrgyz territory, the nature of the government, or the direction of foreign policy their country should adopt , they have little in common.  And none of these have got more than 9 % of the public vote, which severely limits their individual legitimacy. But more worryingly , these elections have exposed ethnic divides. In a country with sizeable Russian and Uzbek minorities, and which has suffered from inter-ethnic violence recently, these elections have served to harden ethnic fault lines.

This is bad news . Continued instability(Already, there are allegations of foul play by smaller parties which have forced a recount ) in the country would only embolden the dormant Islamic terrorist organizations there. These organizations, desperately in search of a safe haven , might use this opportunity to establish themselves in Kyrgyzstan. With its wild , mountainous terrain , Kyrgyzstan could provide them with an ideal launching ground . To prevent all this , we must ensure stability above all else, even democracy.

It is my view that blind promotion of  democracy has been one of the biggest strategic mistakes made by the western world. We must remember that democracy is by itself is not a panacea to all the problems. It is in fact a culmination of the society’s economic, social and educational progress. Top down effects to bring democracy to countries with ill developed social and cultural institutions usually result in disaster.  .  And this is particularly true in Central Asia.

With its artificial boundaries cutting across ethnic lines, desperately poor populations ,  over dependence on natural resources for revenue , Central Asia simply does not have the basic mechanism to ensure the smooth adoption of  democracy .  Decades of Soviet rule , followed by oppressive dictators have left the country bereft of social institutions which are so necessary for the normal functioning of democracy.

It  is simply not the correct time to push for democracy in these countries.  What  is needed now is a strong central authority which brings stability and thus enables investment in the social and economic infrastructure of the countries by foreign powers. This will eventually enable a  shift to more democratic form of government.

This blog as always held that realism , as opposed to misty eyed idealism should be the corner-stone of our foreign policy.  It is in the interest of India and other major powers  to work towards stability in Kyrgyzstan. Democracy can wait for a few more years .

There is war brewing. The guns are primed, the sights set, and the enemy marked.  The soldiers are jittery, and the atmosphere explosive. A rash action by either party could trigger a ferocious war causing untold mayhem .

No , I am not talking about Israel standoff with Iran. I am talking about the currency wars which government officials of both China and US are preparing to fight.

The innocuous sounding “H. R. 2378 — Currency Reform for Fair Trade Act” was passed by the US House of Representatives  by a vote of  348 to 79 on 28th of September .  The bill calls for the US Department of Commerce to start imposing – even without approval by US President Barack Obama — punitive tariffs on certain countries. The initiative specifically targets countries that have “a fundamentally undervalued currency,” “persistent global current account surpluses” and very large currency reserves – in other words, China.

Ahead of the impending elections and faced with massive unemployment and sluggish economy, the US politicians are baying for Chinese blood. They want to put and end to the deplorable Chinese practice of currency manipulation, which makes Chinese exports cheaper and causes US industries to shut shop.

 

Unequal Competition

 

But the Chinese are in no mood to oblige. They are determined not to suffer the same fate as Japan of the 1980’s. Under US pressure the Japanese were forced to let yen appreciate. Within one year, the value of the yen had increased by some 60 percent. In order to balance out the negative consequences of the revaluation for the country’s export industry, the Bank of Japan lowered interest rates to nearly zero, thereby triggering a huge speculative bubble on the stock exchange and the real estate market. Even today, Japan has still not recovered from the prolonged crisis that ensued.

And then there are political considerations.  The Chinese government, which has long positioned itself as crusaders to restore Chinese glory, cannot afford to lose face in front of their domestic constituency by bowing to Chinese demands.

So I guess, the Chinese won’t do anything except a slow and gradual revaluation of their currency, which gives time to their export industries to adjust.

Uncle Sam can now either it its own words or proceed with sanctions. Under Republican pressure and increasingly being branded as a weak president, Obama cannot afford to do nothing.  He would  go for sanctions. And then we can kiss free trade and the recovery of the world economy goodbye.

It would be like the 1920’s and 1930’s. European powers bent upon reviving their sluggish economies indulged in protectionist policies that ultimately led to a deflationary cycle and ultimately the Great Depression.

There is a lot at stake, and I am keeping my fingers advised. In the meantime I am buying gold , I will advise you do the same.

 

Gold prices

 

The Economist has carried an article on the extension of the Tibet railway line to Shigatse, a town near the Mt. Everest base camp on the Tibetan side.

The proposed railway line would cause considerable headache for India by enhancing Chinese ability to project power in Nepal and also strengthen their trade links with the troubled Himalayan state.

Another proposed line, from Lhasa east to Nyingchi, would bring the network close to the Indian state of Arunachal Pradesh.

There are considerable difficulties in constructing these railway links and they would face stiff resistance from Tibetans who fear their culture getting swamped by the Han influx which these railway lines bring with them. However, they provide ample indication of the Chinese resolve to increase their geopolitical reach.

You can read the article here.

 

The New Silk Route

October 3, 2010

A cursory look at a map of Eurasia will shortly reveal a very interesting fact. All the major centres of civilization ( and power) are on its periphery. Whether it is India in the South, China in the East, Russia in the North or Western Europe in the West .  And for millennia these civilizations have traded and communicated with each other through that vast thoroughfare of humanity : the Central Asian Steppes.

Ever since the dawn of humanity , Central Asia has been crisscrossed by caravans laden with exotic items bound for distant lands.  These trade routes, sometimes collectively called the Silk Route have served as arteries of trade and also , and perhaps more importantly, conduits for exchange of ideas .

Silk Route in the first century AD( Courtesy : Wikipedia)

As networks connecting nodes of civilizations and wealth, they hade immense geopolitical significance.  Nations had vied for their control and much blood has been spilled on the steppes to decide who can tax the rich caravan trader . Some of the world’s most ferocious conquerors, Ghenghis Khan, Tamerlane started their careers with a desire to become the master of this lucrative trade route.

For India, participation in and control of these trade networks was always vital.  Through the millennia, access to and control of the southern part of this route was essential for the vibrancy of our economy and the safety of our country .In fact , the patterns in decline of Indian power and trade closely corresponds to loss of our ability to project power on the southern branch of the silk route.

This trade route eventually lost its importance with the Portuguese and Spanish discovery of sea routes to Asia. Soon, the Silk Road was forgotten and relegated to the history books as an exotic relic of a bygone era.

Now in the twenty first century, these trade routes are once again been revived.  And not just for trade.

From Kashgar to Constantinople, from Lhasa to Tehran, the Chinese are quietly reactivating these old trade routes that once served  not only as channels for the export of Chinese goods but also Chinese power projection.

And this time , it is not  silk that is the principal commodity and it is not the caravans of  two humped Bactrian camel , it is a motley collection of Chinese manufactured goods travelling on shiny new  railway lines that the  are being laid down to connect most of Central Asia and beyond with China.

The proposed extension of Qinghai- Tibet railway line and the proposed Kashgar- Gwadar railway line, would help integrate the Chinese rail network with that of Pakistan.  The Pakistanis on their part are in talks with the Turks and the Persians to create an Ankara- Islamabad link.  This network could eventually be extended all the way to Europe.  There are already talks of a Berlin to Beijing network .

For the Chinese, such a project would be immensely beneficial. Their goods would be able to find markets in not only Europe but also in the rapidly growing and populous economies of Pakistan, Iran, Turkey, Uzbekistan etc.  This will also help them in securing direct access to the oil rich Persian Gulf and Arabian Sea, thus reducing their vulnerability to disruption of their sea-borne oil imports.

The Middle kingdom could leverage this to integrate Central Asia more tightly into its sphere of influence. And combined with the dual nature of these projects, they will give China an unmatched ability to project power anywhere in Asia.

The ramifications of this project would be far-reaching and would change the whole structure of world trade and politics.  And if succesfully executed could indeed make China as the dominant world power of the 21st century.

There is no denying that this reactivation of the old Silk Route will be a seminal event in world trade and geopolitics. Sadly, India once again doesn’t have any means to participate or project power on this new avatar of Silk Route.

The widely discredited presidential elections, the reluctance of the United States and its allies to commit more troops on the ground and a lack of vision about Afghanistan are slowly contributing to the gradual weakening of the US power in Afghanistan . Afghanistan is slipping out of Obama’s hand.
The recent Afghan elections are widely perceived as unfair by a majority of the population. There were widespread allegations that ballot boxes were stuffed, ballots pre-marked, and polling stations closed during the elections.
The preliminary tally gives President Hamid Karzai 54.6 per cent of the vote, compared to 27.8 per cent for his main opponent, Dr. Abdullah Abdullah. The European Union’s election monitoring team says a third of Karzai’s votes are questionable. If the official, UN-backed, Electoral Complaints Commission agrees, Karzai’s vote count could drop to less than 50 per cent, forcing him into a second round “run-off” vote against Abdullah. It may not be possible to hold such a vote before harsh winter weather cuts off Afghanistan’s mountain regions, which would prolong the political inertia well into next spring.
However to avoid such long drawn out political instability, international community is already veering towards some kind of a quick fix to avoid a run off. It is likely that Karzai will become President again. However this time he will be a greater liability. His lack of legitimacy will only feed into the insurgent propaganda. The Taliban have always alleged that the Karzai government is corrupt and only a puppet of the foreign occupying forces. And this time many Afghans will agree with them.
At the same time , General Stanley McChrystal, the top US and NATO commander for Afghanistan, in a grim assessment of the conflict, warns that a “failure to … reverse insurgent momentum in the near-term (next 12 months) … risks an outcome where defeating the insurgency is no longer possible.” McChrystal’s demand for further troops, however, comes at a time when opinion polls indicate an increasing American public desire to limit and even reduce commitment to an ‘un-winnable’ war. As intense debate in the Obama administration revolves around the need to send or not to send more troops into the Afghan abyss, a Washington Post-ABC News poll released in August found 51 per cent of Americans saying the war is not worth fighting, with 70 per cent of Democrats holding that opinion. Only a quarter of those polled supported an increase in troop levels. Obama is also under pressure from his own party members, notably Vice President Joseph R. Biden Jr., against any commitment towards an ‘open ended’ war. Late August, Democrat Senator Russ Feingold called for a “flexible timetable” for removing US troops from Afghanistan.
NATO countries, too, are looking for an exit plan after the spike in violence over the past few months. Italy, which lost six soldiers this month, is the latest. In Germany, the Afghan conflict has become a major election issue. And if the violence and casualties mount, others will follow.
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Will these chain of events eventually result in a withdrawal of the US occupation forces from Afghanistan ? Will the eventual withdrawal of the American forces from Afghanistan result in a vacuum that will lead to a brutal civil war which will tear the country apart? Will Pakistan again back Taliban ? Will the mujahedeen’s emboldened by defeating two superpowers in succession not engage in actively exporting terrorism in Central and South Asia and to the rest of the world ?
To rule you must be clear in your thoughts, you must have the guts to battle it out and most importantly you must be just. The Obama administration is lacking on all these. And soon they will not be the rulers of Afghanistan. That is certain . But what will happen next is too horribly uncertain.

Despite everything, the Chinese economy has shown incredible resilience recently. Although its biggest customers — the United States and Europe — are struggling (to say the least) and its exports are down more than 20 percent, China is still spitting out economic growth numbers as if there weren’t a worry in the world. The most recent estimate put annual growth at nearly 8 percent.

Is the Chinese economy operating in a different economic reality?  Will it continue to grow, no matter what the global economy is doing?

The answer to both questions is no. China’s fortunes over the past decade are reminiscent of Lucent Technologies in the 1990s. Lucent sold computer equipment to dot-coms. At first, its growth was natural, the result of selling goods to traditional, cash-generating companies. After opportunities with cash-generating customers dried out, it moved to start-ups — and its growth became slightly artificial. These dot-coms were able to buy Lucent’s equipment only by raising money through private equity and equity markets, since their business models didn’t factor in the necessity of cash-flow generation.
Funds to buy Lucent’s equipment quickly dried up, and its growth should have decelerated or declined. Instead, Lucent offered its own financing to dot-coms by borrowing and lending money on the cheap to finance the purchase of its own equipment. This worked well enough, until it came time to pay back the loans.
The United States, of course, isn’t a dot-com. But a great portion of its growth came from borrowing Chinese money to buy Chinese goods, which means that Chinese growth was dependent on that very same borrowing.
Now the United States and the rest of the world is retrenching, corporations are slashing their spending, and consumers are closing their pocket books. This means that the consumption of Chinese goods is on the decline. And this is where the dot-com analogy breaks down. Unlike Lucent, China has nuclear weapons. It can print money at will and can simply order its banks to lend. It is a communist command economy, after all. Lucent is now a $2 stock. China won’t go down that easily.
The Chinese central bank has a significant advantage over the U.S. Federal Reserve. Chairman Ben Bernanke and his cohort may print a lot of money (and they did), but there’s almost nothing they can do to speed the velocity of money. They simply cannot force banks to lend without nationalizing them (and only the government-sponsored enterprises have been nationalized). They also cannot force corporations and consumers to spend. Since China isn’t a democracy, it doesn’t suffer these problems.
China’s communist government owns a large part of the money-creation and money-spending apparatus. Money supply therefore shot up 28.5 percent in June. Since it controls the banks, it can force them to lend, which it has also done.
Finally, China can force government-owned corporate entities to borrow and spend, and spend quickly itself. This isn’t some slow-moving, touchy-feely democracy. If the Chinese government decides to build a highway, it simply draws a straight line on the map. Any obstacle — like a hospital, a school, or a Politburo member’s house — can become a casualty of the greater good.
Although China can’t control consumer spending, the consumer is a comparatively small part of its economy. Plus, currency control diminishes the consumer’s buying power. All of this makes the United States’ TARP plans look like child’s play. If China wants to stimulate the economy, it does so — and fast. That’s why the country is producing such robust economic numbers.
Why is China doing this? It doesn’t have the kind of social safety net one sees in the developed world, so it needs to keep its economy going at any cost. Millions of people have migrated to its cities, and now they’re hungry and unemployed. People without food or work tend to riot. To keep that from happening, the government is more than willing to artificially stimulate the economy, in the hopes of buying time until the global system stabilizes. It’s literally forcing banks to lend — which will create a huge pile of horrible loans on top of the ones they’ve originated over the last decade.
But don’t confuse fast growth with sustainable growth. Much of China’s growth over the past decade has come from lending to the United States. The country suffers from real overcapacity. And now growth comes from borrowing — and hundreds of billion-dollar decisions made on the fly don’t inspire a lot of confidence. For example, a nearly completed, 13-story building in Shanghai collapsed in June due to the poor quality of its construction.
This growth will result in a huge pile of bad debt — as forced lending is bad lending. The list of negative consequences is very long, but the bottom line is simple: There is no miracle in the Chinese miracle growth, and China will pay a price. The only question is when and how much.
Another casualty of what’s taking place in China is the U.S. interest rate. China sold goods to the United States and received dollars in exchange. If China were to follow the natural order of things, it would have converted those dollars to renminbi (that is, sell dollars and buy renminbi). The dollar would have declined and renminbi would have risen. But this would have made Chinese goods more expensive in dollars — making Chinese products less price-competitive. China would have exported less, and its economy would have grown at a much slower rate.
But China chose a different route. Instead of exchanging dollars back into renminbi and thus driving the dollar down and the renminbi up — the natural order of things — China parked its money in the dollar by buying Treasurys. It artificially propped up the dollar. And now, China is sitting on 2.2 trillion of them.
Now, China needs to stimulate its economy. It’s facing a very delicate situation indeed: It needs the money internally to finance its continued growth. However, if it were to sell dollar-denominated treasuries, several bad things would happen. Its currency would skyrocket — meaning the loss of its competitive low-cost-producer edge. Or, U.S. interest rates would go up dramatically — not good for its biggest customer, and therefore not good for China.
This is why China is desperately trying to figure out how to withdraw its funds from the dollar without driving it down — not an easy feat.
And the U.S. government isn’t helping: It’s printing money and issuing Treasurys at a fast clip, and needs somebody to keep buying them. If China reduces or halts its buying, the United States may be looking at high interest rates, with or without inflation. (The latter scenario is most worrying.)
All in all, this spells trouble — a big, big Chinese bubble. Identifying such bubbles is a lot easier than timing their collapse. But as we’ve recently learned, you can defy the laws of financial gravity for only so long. Put simply, mean reversion is a bitch. And the longer excesses persist, the harder the financial gravity will bring China’s economy back to Earth.

I would first of all like to apologize for not being able to post anything new on this blog for almost a month. My MBA program had just started and the schedule was hectic .

It has been quite an interesting month. The Iranian Revolution fizzled out , Indian Union Budget was announced, Uighurs went on the rampage in Xinjiang , Google came up with another nail intended for Microsoft’s coffin, Michael Jackson died , McNamara finally got a chance to meet God and ask Him forgiveness for Vietnam , Sarah Palin resigned and President Manuel Zelaya of Honduras was ousted in a coup.

A month is indeed a long time in today world . As the Chinese say , “We are cursed to live in interesting times”.

Our world today is fluid .We live in a constant sate of flux, of power, economical and political, demographics , technology and climate changes. Our world is being fundamentally and irrevocably altered. Fifty years from now, you and I will marvel at how completely different the world was once upon a time. However at the same time , we have no clue as to what that change will look like. It is naive , nay outrightly foolish ,to predict anything at this moment. It is not guaranteed that China will rule the world, it is not guaranteed that America’s decline is inevitable, it is not guaranteed that Sarah Palin will always seek publicity . The World could turn out to be very different.

Let us embrace  change. Only those who can embrace the change, only those who can qucikly adapt themselves to the changing scenarios will survive.

The grass , which bends the way the wind blows, and not the proud tree which fights a gallant but ultimately futile battle against the storm is the symbol of the age. The proud tree stands no change, the storm of change is just too strong.

It is official now. On Wednesday the Indian Meteorological Department announced that the South West Monsoon has weakened and is likely to remain below normal. This can have some grave consequences for the economy.

The 2009 monsoon rainfall would be 93 percent of the long period average(LPA), the government said, lower than an earlier forecast of 96 percent. Over the four broad geographical regions of the country, rainfall for the 2009 South-West Monsoon Season is likely to be 81% of its LPA over North-West India, 92% of its LPA over North-East India, 99% of its LPA over Central India and 93% of its LPA over South Peninsula, all with a model error of ± 8 %.

The monsoon is crucial to India’s farm sector. This year, the monsoon has stalled after an early start. In the week ended June 17, rains were 51% below normal.

Poor rainfall in June could hurt growth, push up food prices and prompt more government spending to support farmers.The possibility of a further delay in the crucial south-west monsoon in the central and northern regions of the country could hit crop production countrywide. Kharif crops depend on south-west monsoon and account for 52% of the estimated food crop output of 229.85 million tonnes. Planting of such summer sown crops such as sugarcane, rice and soybean will be hit leading to more sugar imports in the sugarcane crushing season which starts in October.

If the monsoon doesn’t happen by July, Paddy crops will be seriously hit. Lower output of rice may force the government to continue with the ban on exports of non-basmati rice. A fall in soybean, the main summer sown oilseed, production may lead to more vegetable oil imports.

If the monsoon fails by July then the consequences could be far-reaching. GDP growth may drop to 5% this financial year. This would put extra pressure on the government, which is already dealing with a double digit fiscal deficit.

Economists say below normal rains could prove to be a big issue for agriculture and the hydro power sector. Some economists estimate farm sector growth at 1 percent, which could hurt industrial output and hurt the economic recovery underway. However, some economists say they would prefer to wait and see the distribution of monsoon rains in the remaining months to assess the impact on overall growth.

The Iranian Elections

June 18, 2009

 I have always been amazed at how starry eyed idealism has replaced hard nosed realism in our times. Any international event should be analyzed objectively and we should be prepared to accept the fact that sometimes the truth might be what we don’t want to it to be.

There is no revolution going on in Iran. There is not going to be a revolution in the foreseeable future. Ahmadinejad has won. And Mousavi is not going to lead an army of liberalists into Tehran and free the country from the corrupt theocracy. Let us accept it.

 And let us gird our loins to prepare for the inevitable: the rise of Iran as a significant player on the international stage. The Persian resurgence is significantly going to impact Indian strategy and we must ensure that our interests are safeguarded.  

After the decline of the Safavid Empire, this is the first time that the Iranian nation is following an independent and consistent foreign policy. This is also the first time that a strong central government exists in Iran. And contrary to all that we read in the western papers, this government is going to stay. 

Why? Why don’t the people just rise up and throw the corrupt Mullahs out? How can they continue to live in the 21st century in a theocracy? Why do they not get hooked to democracy, the real one as practiced in Washington and London, as they are hooked to twitter, blogging and IPods? 

Because, my friends, this world is infinitely more complex than a continuous black and white struggle between democracy and anti-democracy, western style liberalism and despotism. It is complex. 

Iran is neither Libya nor Iraq nor Afghanistan. It is an ancient culture with a deep sense of its place in the world. Its people are proud. And more than subscribing and confirming to the ideals of the western world, the things that matters most to them are religion, good governance and national honor. 

Iranian Shiaism is actually a part of Iranian identity. It has replaced, and in many cases almost immaculately, Zoroastrianism as the binding force of the Iranian people. The Shia clergy even now commands much respect. And for most part, Iranian population still lives in rural areas. For these people piety and religion virtue are cornerstones of life. They feel threatened by the talk of modernization. Here Ahmadinejad delivers, Mousavi doesn’t. The vast majority of Iranians will make do with the shabby economic growth that the present regime provides but would not accept a modernist Mousavi regime, which howsoever efficient in providing growth, would be seen as lax in Islamic virtue. 

The second most important consideration for Iranians is corruption in governance. Corruption in the Shia clergy and upper echelons of government has become commonplace and most Iranians resent this. On this count too, Ahmadinejad delivers. He has a proven track record of raising corruption issues and is unafraid to even indict some of high ranking mullahs. 

Third, Ahmadinejad is a spokesman for Iranian national security, a tremendously popular stance. By arguing that Iran become a great power and pursue all means by which it can do so, Ahmadinejad has successfully positioned himself as a champion of Iranian pride. Mousavi, on the other hand is seen as more accommodating to western interests. Many Iranians would rather have a president who is willing to fight than one who is willing to compromise. 

What we witness as the huge protests are actually  groups of young, vocal, articulate and most importantly, English speaking, elite of Iranian society. For these people the current regime of Ayatollahs is stifling. Mousavi definitely has their support. But they are definitely not the majority. Being photogenic and the ability to give a quick sound bite in English to some touring journalist doesn’t actually translate into actual political power. The silent God fearing masses of the Iranian countryside are the one whose support is most crucial and it seems Ahmadinejad has that support.

What amazes me is not that Ahmadinejad won, what amazes me is that how the western media ,and some sections of Indian media too,  keep on misreading Iran. They were wrong in 1979 when they were expecting the public to support the reformist Shah and not the theocratic venom spitting Ayatollah’s. They are wrong today also.