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Analysis: Blasts aimed at India's economy

A child holds a placard during a protest by activists of the All India Anti-Terrorist Front against terrorist organisations responsible for series of bomb blasts in Bangalore and Ahmedabad, in New Delhi on July 27, 2008. The death toll from a string of coordinated bomb attacks in the western Indian city of Ahmedabad has risen to 45, the Press Trust of India news agency said. A series of at least 16 bombings hit the religiously tense city on July 26 evening, with two of the blasts targeting emergency hospitals trying to deal with the first victims. Photo courtesy AFP.
by Indrajit Basu
Kolkata, India (UPI) Jul 28, 2008
Authorities in India are on the hunt for the culprits behind two series of back-to-back terror strikes that hit India over the weekend, in which 24 orchestrated bomb blasts left 50 dead and more than 100 injured. But two things are clear -- India's Islamic extremists have acquired the ability to strike almost at will, and they are aiming their blows not only at the government but also at the economy.

Bangalore, the hub of India's huge information-technology sector, was rocked by eight small blasts Friday that killed two and injured 10. Then on Saturday, 16 more blasts, larger and deadlier, rocked the northwestern city of Ahmedabad in Gujarat state, killing another 48 and injuring more than 100. Ahmedabad, famed as a center of India's textile sector, has increasingly been attracting foreign companies and investment.

These attacks followed a similar one in May, when eight bombs went off within minutes of each other in the northwestern tourist town of Jaipur. The town has not fully recovered from those blasts.

A little-known terror outfit calling itself the Indian Mujahedin -- which said it was behind the Jaipur attacks -- claimed responsibility for this weekend's blasts as well. The group even sent an e-mail warning just five minutes before the Ahmedabad explosions began.

Like the earlier attacks in Jaipur and elsewhere, the bombs in Bangalore and Ahmedabad were hidden in innocuous-looking items including bicycles, lunch boxes and trash cans, and placed strategically in soft targets like shopping malls, hospitals and congested markets. India's city dwellers have started looking at trash cans, bicycles and unattended bags with suspicion and fear.

Experts say that in addition to their economic impact, these strikes carry a treacherous message for the government of Prime Minister Manmohan Singh, which just survived a no-confidence motion in Parliament last week. With general elections in the offing, the aim this time is not just to create havoc but also to inflict a political wound.

"These strikes have two glaring similarities," said B. Raman, the former head of India's foreign intelligence agency, the Research and Analysis Wing, now an analyst at the Institute for Topical Studies, based in the city of Chennai (formerly known as Madras).

"The terrorists have chosen the target cities carefully this time round," Raman said. "Both these cities are ruled by the BJP (Bharatiya Janata Party), and by targeting them perhaps the terrorists are trying to put political pressure on the (ruling) United Progressive Alliance as well."

The opposition Bharatiya Janata Party is a Hindu nationalist party, and its leadership in Gujarat was blamed by some for involvement in anti-Muslim violence in 2002.

Religious and ethnic pressures apart, the United Progressive Alliance government is also under pressure for floundering in its efforts to check terrorism during its four years in office.

Counting from the three blasts that hit New Delhi in October 2005 -- the first major terror strikes after the UPA formed the government in 2004 -- until the latest strikes, India has lost more than 3,800 lives to terrorists, and recently the pace of attacks appears to have quickened.

Terrorist training camps have mushroomed, too. Intelligence estimates suggest that terrorist training modules operating within the country are churning out dozens of terrorists every year.

"In the absence of any significant breakthrough, the government is on the back foot while inter-community relations remain edgy," said Rajeev Deshpande, a political analyst with the Times of India group of publications.

He said the consequent "rise in communal temperature will only heighten concerns of the present government over a political reaction that the BJP might seek to harvest by driving home its weak-on-internal-security charge against the UPA."

In the past, most terrorist activities in India were confined primarily to the region of Jammu and Kashmir, bordering Pakistan. Over the last three years, however, terrorists have been striking at will across India, from the capital, New Delhi, to commercial hubs like Mumbai and Ahmedabad, IT cities like Bangalore and Hyderabad, and even religious destinations like Varanasi and tourist spots like Jaipur.

Still, there is apparently method to this madness. According to Bhaskar Roy, a former Indian government official and now a security analyst, in all the strikes terrorists have "cleverly" chosen everyday objects to deliver mayhem, make detection difficult and throw the intelligence agencies off track.

And the latest targets indicate that, having dented India's political and intelligence setup, terrorists are now targeting the country's economy.

"It appears that the latest preference for attacking the commercial hubs of India is definitely being done with an intention to destabilize the economy and discourage foreign investments," says Raman.

Raman sees a parallel to what happened in Pakistan in an earlier decade, when continuous terror strikes in Karachi in the 1990s "succeeded in creating a feeling of insecurity among foreign investors and they stopped going there."

The Jaipur blast in May this year was significant in that aspect, as it is one of the most famous tourist destinations in India, attracting more than 1.2 million foreign tourists each year.

"Bangalore is already a favorite destination for foreign investors, while Gujarat is attracting a lot of investments from abroad," says Raman.

According to India's economic survey for 2007-08, between 1991 and 2007 the state of Gujarat received investments worth $107 billion, higher than the $93 billion that went to Maharashtra state, generally considered the most attractive for industrial investment. Of this, the foreign direct investment component was $5 billion.

"Perpetrators of acts of terrorism in Bangalore and Ahmedabad then would have two audiences," said Raman. "Indian nationals living in Bangalore for one, but they are expected to take terrorism in their stride. But the second category, the foreigners, are not used to such frequent terrorism attacks, and for them these incidents are unnerving."

Raman is quick to add that fears among foreign investors have not been felt yet, "but if attacks like the recent ones continue, nervousness would soon set in."

Meanwhile, even though the reverberations of the latest blasts have not extended to the economy just yet, the government's priorities may be changing already. According to reports, instead of election-oriented planning and a sharper focus on economic reforms, terrorism has emerged as the central agenda of the present UPA government, which is working to beef up the security and intelligence systems in the country.

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