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SOUTH ASIA INTELLIGENCE REVIEW
Weekly Assessments & Briefings
Volume 6, No. 50, June 23, 2008

Data and assessments from SAIR can be freely published in any form with credit to the South Asia Intelligence Review of the
South Asia Terrorism Portal


ASSESSMENT

 

INDIA


J&K: Financing the Terror
Kanchan Lakshman
Research Fellow, Institute for Conflict Management; Assistant Editor, Faultlines: Writings on Conflict & Resolution
Ajaat Jamwal
Research Associate, Institute of Conflict Management

While there has been gradual decline in the violence level in Jammu and Kashmir (J&K) since 2001, there is ample evidence that the terrorist infrastructure remains substantially intact, particularly the financial system that funds this jihad, with its huge framework of global linkages. Despite the increased global scrutiny on the flow of funds for Islamist militants across the world, sufficient finances continue to flow to maintain the infrastructure for the jihad in J&K. This includes funding for recruitment, arming the militants, funds for training and camps, paying for their survival on the ground, maintenance of their families (both in J&K and Pakistan), and all associated operational needs.

Security sources informed South Asia Intelligence Review that an estimated INR 250 to 300 million was being disbursed to terrorist and secessionist groups in J&K each month, from Pakistan. However, this does constitutes a 30 to 50 per cent decrease in what was being paid out earlier. This diminution has been gradual and is primarily linked to the ongoing peace process between India and Pakistan and the decimation of the militant leadership and cadres within J&K, as well as factors such as the US monitoring of militancy funding from Pakistan.

Disbursement made to militants in J&K (in Indian Rupees)

Type of Disbursement

Foreign Militants

Local Militants

Money disbursed at the time of recruitment

Up to 50,000

10,000 to 25,000

Monthly Remuneration

10,000-15,000

3,000 to 10,000

End of tenure payment

200,000-250,000

-

Reward for a spectacular terrorist act

100,000-200,000

100,000-200,000

Remuneration given to a militant group’s chief

Up to 50,000 per month

Up to 50,000 per month

Relief for family of deceased militant

NA

Ex gratia 20,000 plus a monthly amount of 1,500-3,000

Each fidayeen (suicide cadre) selected for suicide attacks is assured by his handlers and the militant leadership that his entire family will be taken care of for years. Sources, however, disclose that relief money is paid to any deceased militant’s family for at least six months and there are accusations that some leaders of the secessionist group, the All Parties Hurriyat Conference (APHC), swindle this money.

Except for a small percentage of funds raised through collections and donations made in the Kashmir Valley, virtually the entire funding for militancy comes from other countries, including Pakistan, and various international Islamic organisations. However, the major contributor remains Pakistan through its external intelligence agency, the Inter-Services Intelligence (ISI).

The various methods employed for raising finances for terrorism in J&K include"

  • Fake Currency printed in Pakistan
  • Collection of donations in some Middle Eastern and European countries under the name of ‘Jihad Funds’.
  • Extortion from traders, contractors and affluent people in J&K.
  • Money sent from Pakistan to militant and secessionist groups operating in J&K mainly through Hawala (parallel remittance system) and drug dealers.
  • Some Kashmiri businessmen dealing in the trade of carpets, handicrafts, etc in Dubai.
  • Hawala dealers in Mumbai and Delhi.
  • Zakat (an Islamic tax) and donations.

Militant groups operating in J&K have, however, lately been affected by a shortage of weaponry and funds following Islamabad’s decision to momentarily de-escalate the Kashmir jihad due to the pressure arising from the increasing militancy and internal conflicts within Pakistan, pressure from the United States, a constant scrutiny of the large militancy-linked monetary transactions from Pakistan and the successful operation of the Indian counter-insurgency grid. Terrorists operating in J&K have consequently been forced to make distress calls to their mentors in Pakistan. Security agencies have intercepted numerous conversations between militant cadres based in the State and their leaders and handlers in Pakistan and Pakistan occupied Kashmir (PoK) over the past months, which also indicated that the groups were under enormous pressure due to the neutralization of top level terrorists by Security Forces (SFs) in the State. "Colleagues require stores and faloose (funds)", was one of the distress messages sent by the Lashkar-e-Toiba (LeT) cadres in the State to the outfit’s leaders in Pakistan some time in January 2008.

One of the major sources of funding for militancy in J&K is the fake Indian currency notes (FICN) being pumped into the State by the ISI and sections of the Pakistan Army. While the amount of FICN currently in circulation is not available, sources indicate that of these are being printed in the security press at Malir Cantonment in Karachi and three other printing presses in Pakistan. According to disclosures by some militants and their over ground workers arrested along with currency (reported in April 2008), besides Karachi, the fake currency is also being printed in Lahore, Quetta and Peshawar. The currency notes printed at the Malir Cantonment security printing press are high quality notes and closely resemble genuine Indian currency. According to sources, "Pakistan authorities have adopted a unique modus operandi to smuggle the currency to J&K. The notes are first planted in the ‘banks’ at Dubai, Kathmandu, Bangkok, Dhaka and Singapore from where they are physically smuggled by the smugglers working for Dawood (D) Company through Qatar Airways, Royal Nepal Airlines and Pakistan International Airlines. Unaccounted baggage and containers in planes and ships are also being used for smuggling." Besides airports, coastal areas and border areas are also used for smuggling of FICN, sources added.

Since militants and their guides are being arrested interdicted by the SFs in "view of fencing and sophisticated gadgetry installed on the Line of Control (LoC) and International Border, Pakistan Army and ISI have started taking the services of D Company [the mafia group of Dawood Ibrahim] to push fake currency into J&K." Dawood Ibrahim’s criminal network, which is currently headquartered somewhere in Pakistan, has close links with the LeT. Besides militants in J&K, a part of the FICN sourced from Pakistan is also "distributed among criminals and smugglers in different parts of the country mostly New Delhi, Mumbai, Hyderabad, Lucknow etc., as the ISI also used services of these criminals occasionally to transport weaponry and explosive devices."

According to sources, till 2006, FICN worth INR 50 to 80 million was pumped into the country from Pakistan per annum. From 2007, however, the amount has increased to INR 120 to 130 million. A special cell is reported to have been set up by the ISI in Islamabad to regularly monitor the changes in Indian currency notes. This cell is assigned the task of studying the notes and changing the features accordingly, so that the fake currency is not detected. Further, sources indicated, the "militants revealed that Pakistan Army and ISI know that they can’t disturb the Indian economy by pumping INR 130 million worth of notes a year. Their objective was only to finance militants and keep the ‘Kashmir budget’ out of the purview of the Pakistan Army."

Forensic examination of seized FICN indicates uniformity of replication of security features from which it can be inferred that the notes originate from the same source and there is a strong likelihood that this lies in Pakistan, according to a presentation made by a security agency in October 2007 at New Delhi. Apart from shipping in the FICN, the fake currency notes were also reportedly being smuggled from land routes through Nepal, Bangladesh and J&K, train routes through Atari and Munabao-Khakrapar and also by air.

According to the annual report (2005-06) of the Directorate of Revenue Intelligence (DRI),

…the smuggling of fake Indian Currency notes has acquired a greater geographical spread. While, in the past, such smuggling was largely confined to the Indo-Pakistan and Indo-Nepal borders, the India-Bangladesh border is now becoming increasingly vulnerable. Intelligence inputs indicate that counterfeit Indian Currency printed in Pakistan is moved to Bangladesh either directly or through Dubai and then brought across the porous Indo-Bangladesh border. Intelligence also indicates the smuggling of FICN to destinations in South India such as Bangalore, Hyderabad and Kerala.

Transactions in counterfeit currency are fairly profitable. The DRI notes, "The rate (per Rs. 100) on the India-Pakistan border is around Rs. 35, which goes up to around Rs. 40 in Delhi and Rs. 45-50 in the district and mofussil areas, where chances of detection are perhaps lower. These rates are however flexible and depend upon quality, availability and negotiating strengths at particular points of time."

Intelligence reports indicate that the Samjhauta Express, a train service which facilitates people-to-people contact between India and Pakistan, is being used by the ISI to circulate FICN and arms in India. According to intelligence sources in Punjab, the Samjhauta Express, which currently runs between Attari in India and Wagah in Pakistan, has "always been used by the ISI for smuggling weapons, currency, narcotics and spies into India." In recent times, a May 23, 2008, report indicated, there has been a big network of ISI-sponsored 'sawari' (courier) operators who lure poor people to smuggle their 'stuff' into India. These people are 'soft targets' for the ISI "which uses them for carrying out disruptive activities and providing logistic support to their existing terrorist modules in India, besides weakening the Indian economy by pushing in fake currency." "This train is the easiest way to enter India with legal documents and disappear here," said an intelligence source, adding that smuggling of FICN and Pakistani SIM cards by 'swaris' cannot be de-linked from terrorist activities in India. Following the terrorist attack on Parliament in December 2001, services of the Samjhauta Express were terminated in January 2002. However, the services were resumed again in January 2004.

Karvan-e-Aman, the Srinagar-Muzaffarabad bus service, another channel which enhances the emotional enlistment between India and Pakistan, is also a conduit for the transfer of funds for militants in J&K. While the utility of this channel for funds transfer is relatively low, since Police scrutiny is fairly intense, there have been some attempts. For instance, troops of 19 Infantry Division seized INR 150,000 on May 13, 2008, from Mufad Ali, a passenger who came from PoK on the Srinagar-Muzaffarabad bus. The money was reportedly seized when Ali, a resident of Pahl village in PoK, was handing it over to a contact person identified as Hafizullah, who had been deputed to collect the funds by a militant operating in Sopore.

Police sources told SAIR that narcotics money originating in Pakistan is also being pumped into J&K. Apart from pushing in drug money, narcotics are also sent directly into J&K from Pakistan through infiltrators who subsequently sell them in the local markets. More than 100 kilograms of narcotics, including heroin and brown sugar, was seized in the State during 2007.

The intricate hawala network, according to officials, profits every conceivable terrorist and secessionist group in J&K. Indeed, senior police officials claim that militancy in J&K has emerged as a highly lucrative 'industry' for several thousand families. Apart from the major groups, cadres of a number of lesser known organisations that have mushroomed in the extremist milieu that is J&K today, have also cornered shares in the substantial illicit financial flows. Many J&K-based doctors, engineers, technicians and certain business houses working in the Gulf and engaged in the provision of various services, or export of goods, such as carpets and handicrafts, have diverted funds through hawala operators to finance militants and secessionist leaders. Among one of the popular modes of hawala transfer is the movement of money through small-scale businessmen, such as shawl vendors. Although individual amounts involved in these transactions are small, very large numbers of such transactions result in transfers of great magnitude.

With their handlers in Islamabad having de-escalated violence in J&K, militants currently lying low and awaiting instructions to intensify violence on the eve of the Legislative Assembly elections later in 2008, are beginning to complain about lack of finances to maintain their infrastructure within the State. In fact, there have been isolated incidents during 2007 and 2008 when some militants have resorted to looting and extortion of local contractors and businessmen in the Poonch, Ramban, Kishtwar and Doda Districts.

According to an Intelligence Bureau report, the ISI is planning to substantially enhance the financial support to militant groups operating in J&K, to augment subversion in the run-up to the Legislative Assembly elections. The ISI is reported to have recently briefed the Pakistani political establishment on the militants' activities. The report said the "freedom movement" in J&K was weakening as the jihadi groups were facing financial constraints and the security forces had cornered the militants, The report stated further that the ISI proposed to double financial support to militants so that they would be able to disrupt the elections, adding that the ISI had assured the extremist leadership that it would make every effort to see that no pro-Pakistan individual or group participated in the elections.

With the financial system for sustaining militancy in Jammu and Kashmir intact, it is easy for Pakistan and the jihadi groups to maintain a threshold level of violence in the conflict wracked State or to calibrate it to transient perceptions of Pakistan’s interests and strategy over time.

BANGLADESH

Red Bogey
Bibhu Prasad Routray
Research Fellow, Institute for Conflict Management

In the early hours of June 19, 2008, para-military Rapid Action Battalion (RAB) personnel cordoned off a house in the Baradi village of the western Kushtia District. The knocking on the door led a woman to open it – and to shut it instantly, panicked by the sight of scores of uniformed personnel surrounding the house. Claiming that they anticipated gun shots from inside, RAB personnel immediately opened fire on the house. After an hour and a half of firing, the doors were forced open; inside, 45-year old Abdur Rashid Malitha alias Tapan alias Dada Tapan, the founder of the Janajuddha faction of the Purba Banglar Communist Party (PBCP) and his 32-year female companion, identified as Rikta, lay dead, riddled with bullets. No weapon was found on the extremist leader and his companion, whom the RAB described as the ‘commander’ of the women’s wing of the outfit. Before the raid, RAB personnel had arrested Tapan’s brother Akash from the neighbouring Udibari village. The raid on Tapan’s ancestral house at Mushuriapara village in the Pabna District, a day later, yielded nothing but a few booklets and pamphlets of the PBCB. The killing of the extremist leader was hailed as a major achievement in neutralising the menace of left-wing extremism (LWE) in Bangladesh.

Subsequent intelligence leaks published prominently in the national media detailed the profiles of 40 absconding leaders of a dozen LWE outfits, operating mostly in the ten south-western Districts of the country [Kushtia, Meherpur, Chuadanga, Jhenidah, Magura, Jessore, Narail, Khulna, Bagerhat and Satkhira]. The leaders included Azibor Rahman of the Gono Mukti Fouz (GMF) and his second-in-command Mandar, GMF commander Sahin and three 'regional commanders' - Mukul, Tikka and Bakhtiar, Lalchand Bahini chief Lalchand, Mukti Bahini chief Mukti, and Hamidul and Rashidul, two brothers who lead the Hara Bahini. Three regional leaders of PBCP-Janajuddha Badiur Rahman alias Badi, Anarul Islam and Atiar were reported to be hiding in the Meherpur District. The total strength of the LWE cadres was estimated to be 5000, all of whom were described as armed. The reports projected an alleged regime of killing, abduction and extortion let loose by the LWE cadres and maintained that their neutralisation was vital if order was to be established in vast parts of the country ‘affected’ by this ‘raging insurgency’.

To any Bangladesh watcher, however, such reports, offer an imaginative narrative and interesting reading, but are nothing more than a compilation of half truths and plain lies.

The reality is, the LWE movement in Bangladesh, often described by the generic term ‘Sarbaharas’, in its history of over three decades, is a highly dispersed, low-scale and criminalised movement, consisting of a multiplicity of minor groups, no combination of which constitutes any significant threat to the country’s security. Even though media reports, quoting unnamed intelligence officials, continue to indicate some level of mobilisation by LWE groups, especially in the south-western Districts, their activities in recent years have not proceeded beyond random acts of thuggery and extortion. Targeted action by the security forces has left the movement, already weakened by continuous infighting, in complete disarray. None of the LWE outfits have woman cadres and thus, the branding of slain ‘Rikta’ as a commander of the PBCP-Janajuddha’s recently formed women’s wing is figment of an outrageous imagination. Dada Tapan had actually bought a piece of land, constructed a house and was trying to rediscover an uneventful life, when the RAB decided to cut his dream short.

Despite its marginalisation, indeed, utter irrelevance, the feeble and degenerate LWE movement in Bangladesh remains the principal focus of Security Forces (SF)’ ‘counter-terrorist’ responses, especially of operations by the RAB, which, over the past years, has attained a measure of notoriety by apprehending and then eliminating a number of alleged LWE cadres in fake encounters. On January 26, 2008, for instance, the ‘second-in-command’ of the PBCP-Janajuddha, identified as Mohammad Ali, was killed during an alleged ‘encounter’ at Goaishbari village under Ataikula Police Station in the Pabna District. Two days later, on January 27, 57-year old Akdil Hossain alias Buro, ‘chief’ and one of the founding members of the New Biplobi Communist Party (NBCP) was picked up from a shop at Rayerbazar in capital Dhaka and shown as dead in a January 31 ‘encounter’ that supposedly took place in the Dakshin Mulgram village in the Kushtia District. A range of similar SF ‘operations’ resulted in the killing of 139 LWE cadres in 2006, and a further 72 in 2007. In the first six months of 2008 (till June 20), 26 such fatalities have already been reported.

The narrative on the LWE remains clearly exaggerated in Bangladesh. For example, Dada Tapan’s obituary attributed the loss of ‘over 500 lives’ to the PBCP-Janajuddha, since the group’s formation in June 2003. However, data compiled from open sources by the Institute for Conflict Management (ICM), however, gives a total of just 48 civilian casualties between 2005 and 2008 (till June 20). It is highly unlikely, either that a bulk of over 450 killings occurred in the 18 months between June 2003 and December 2004, or that the national media in Bangladesh simply missed out on reporting carnage of such a magnitude.

Apart from their indulgence in petty crimes, LWE leaders did serve a purpose for the District level leaders of the Bangladesh Nationalist Party (BNP). Before the BNP discovered the wisdom of investing in the radical Islamist Jagrata Muslim Janata Bangladesh (JMJB) and Jama’atul Mujahideen Bangladesh (JMB), probably at the instance of its alliance partner, the Jamaat-e-Islami (JeI), the LWE groups served as an effective tool for the party’s area domination activities in the South-western Districts. The BNP consequently allowed – and perhaps set up – the dramatic operation launched by the PBCP-Marxist-Leninist cadres in the Khulna District judge's court premises on January 26, 2002, to rescue the then arrested Dada Tapan, who was functioning as the chief of the outfit’s military-wing.

In subsequent years, LWE groups fell out of the Government’s favour and the Islamists were let loose against them in several Districts. The now executed JMJB leader Siddiqul Islam alias Bangla Bhai led a gory campaign of terror against the ‘outlaws’ by publicly executing and maiming several of the cadres. The national media carried photographs of dead ‘Sarbahara’ cadres hung upside down from trees.

Contrary to the image of invincibility painted by Bangladeshi intelligence agencies, LWE cadres have had very little access to sophisticated arms and ammunition and are hardly a match for either the elite RAB or the comparatively poorly equipped armed Police. Between 2005 and 2008 (till June 20), only nine SF personnel have been killed in LWE-related violence all over the country. Typical LWE operations have involved the use of locally made shutter-guns and poorly assembled low-grade explosives, which are more of instruments for eliciting compliance to extortion demands, rather than weapons of terror.

The LWE, with its existing capacity, constitutes no significant threat to Bangladesh’s security and cannot, consequently, exhaust the primary focus of SF operations. The Government, on the contrary, would do well to concentrate more on the latent activities of the Islamist extremists, whose involvement in terrorist strikes in various urban centres across India, over the past years, has grown quite frequent.

NEWS BRIEFS

Weekly Fatalities: Major Conflicts in South Asia
June 16-22, 2007

 

Civilian

Security Force Personnel

Terrorist/Insurgent

Total

BANGLADESH

 

Left-wing Extremism

0
0
3
3

INDIA

 

Arunachal Pradesh

0
0
2
2

Assam

2
0
0
2

Jammu &      Kashmir

0
1
15
16

Manipur

2
0
1
3

Nagaland

0
0
2
2

Tripura

1
0
0
1

Left-wing Extremism

 

Bihar

0
0
1
1

Chhattisgarh

2
6
1
9

Maharashtra

1
0
0
1

Total (INDIA)

8
7
22
37

NEPAL

1
0
0
1

PAKISTAN

 

FATA

12
0
20
32

NWFP

9
1
0
10

Sindh

0
2
0
2

Total (PAKISTAN)

22
15
10
47

SRI LANKA

0
36
128
164
 Provisional data compiled from English language media sources.



BANGLADESH

PBCP-Janajuddha founder killed in Kushtia: On June 18, Abdur Rashid Malitha alias Tapan alias Dada Tapan, founder of the Janajuddha faction of the Purba Banglar Communist Party (PBCP), was killed in a 'shootout' with Rapid Action Battalion (RAB) personnel, in the Baradi village at the outskirts of Kushtia town. A woman, identified as Rikta alias Maksuda, suspected to belong to the 'women’s wing' of the outfit, was also killed during the 'shootout', which followed as RAB personnel cordoned of the house in which the extremist leader had been staying for the last couple of years. Tapan’s brother Akash was also arrested from the nearby Udibari village along with one 9mm pistol, 800 bullets, 5,000 books or booklets and 5,000 leaflets of the PBCP-Janajuddha. Daily Star, June 19, 2008.

 


NEPAL

Maoists pull out from government: Communist Party of Nepal-Maoist (CPN-Maoist) on June 20 walked out of the Government after protracted talks between major political formations in the country made no headway over crucial political issues. Maoist Chairman Prachanda, who demanded the resignation of Prime Minister Girija Prasad Koirala, blamed him for delaying the process of formation of the next Government.

On June 22, a meeting of Seven Party Alliance (SPA) and the Maoists at the Prime Minister's residence failed to reach consensus over the structure of the Security Council, including a few issues on integration of the ‘armies’ – the Nepali Army (NA) and the Maoist People's Liberation Army (PLA). Maoists then charged the Nepali Congress (NC) of 'intentionally' delaying formation of the Government and said that they would launch a 'people's struggle' for a change of guard. "Our negotiations collapsed due to Nepali Congress. We will launch people's struggle for formation of a new Government", senior Maoist leader Dr Baburam Bhattarai said. Kantipur online, June 21-23, 2008.


PAKISTAN

Four soldiers killed by jihadis along Line of Control: Four Pakistani soldiers were killed and three others injured in a clash with a jihadi group on June 19. Speaking to journalists in Islamabad Pakistan Army spokesperson Major-General Athar Abbas said the troops died in a clash near the town of Hajira, east of the Line of Control (LoC), in the district of Poonch, with "unknown miscreants." He offered no explanation of how the fighting had broken out, but confirmed that the soldiers’ deaths were not caused by Indian military action. Highly-placed Indian military sources stationed in the area, however, indicated that the deaths were most likely the outcome of an accidental clash between Pakistani troops and a jihadi group. A senior Army official said the clash began when a group of jihadis trying to infiltrate into the Indian side were fired upon by Indian soldiers, forcing them to retreat and run into a Pakistan Army patrol. "In the fog of the fighting it is possible the jihadis mistook the Pakistani Army troops for an Indian ambush, or the other way around", he said. The Hindu, June 20, 2008.

Support to Kashmiri freedom struggle to continue, says Prime Minister: Pakistan Prime Minister Yousuf Raza Gilani, talking to Yasin Malik, Chairman of the Jammu and Kashmir Liberation Front (JKLF), at Parliament House on June 16, said that Pakistan would continue to extend moral, diplomatic and political support for the Kashmiri ‘freedom struggle’, and it wanted a just and peaceful resolution of the problem in accordance with the wishes of the Kashmiri people. Gilani said that sustainable peace in South Asia could not be achieved without the settlement of the Kashmir dispute. Daily Times, June 17, 2008.

"I won’t resign, Parliament has right to impeach me", says President Pervez Musharraf: President Pervez Musharraf has said that he will not step down from his position and would continue to play his constitutional role as the President "to strengthen democracy in the country." Musharraf told at the presidential Camp Office in Rawalpindi that there was, however, a provision for impeaching the President in the Constitution and the Parliament had a right to make use of it. Daily Times, June 19, 2008.


SRI LANKA

128 LTTE militants and 36 soldiers among 164 persons killed during the week: 128 Liberation Tigers of Tamil Eelam (LTTE) militants and 36 soldiers were among 164 persons killed in separate incidents between June 16 and June 22, 2008. At least 17 LTTE militants were killed and more than 15 others injured in confrontations in the Janakapura, Kiriibbanwewa, Ranabapura and Kokkutoduvai areas of Vavuniya District. Three SF personnel were killed while four others sustained injuries during the clashes. A suspected LTTE suicide bomber on a motorcycle blew himself up in front of a Police building in Vavuniya, killing 12 police personnel, including three female Police officers and wounding 23 others on the morning of June 16. On June 17, at least 14 LTTE militants were killed and three others injured during confrontations with the troops in the Palamoddai, Karukkakulam, Kovitkanchikulam and south of Navavi areas in the Vavuniya and Mannar Districts. Further, at least 17 LTTE militants were killed and 14 others injured during confrontations with the troops in the Vedamakilam, Periyamadu, Kayamunai, Nedunkandal, Eachalarakkai, Kuranchatalav and Andankulam areas of Mannar and Vavuniya Districts on June 19. Three soldiers were also killed while nine others sustained injuries. Sri Lanka Army; Daily News; Colombo Page, June 15-22, 2008.


The South Asia Intelligence Review (SAIR) is a weekly service that brings you regular data, assessments and news briefs on terrorism, insurgencies and sub-conventional warfare, on counter-terrorism responses and policies, as well as on related economic, political, and social issues, in the South Asian region.

SAIR is a project of the Institute for Conflict Management and the South Asia Terrorism Portal.

South Asia Intelligence Review [SAIR]

Publisher
K. P. S. Gill

Editor
Dr. Ajai Sahni


A Project of the
Institute For Conflict Management



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