5.21.2007, Monday

The Straits Times (Singapore)May 21, 2007 Monday

China-bashing continues, but it may be all bluster

BYLINE: Derwin Pereira, US Bureau ChiefSECTION: WORLDLENGTH: 709 words

WASHINGTON - CHINA-BASHERS in the US Congress have cast a huge shadow over key economic talks here between the two giants this week.

Criticism of Beijing has been relentless since the Democrats took control of both chambers in January - and the intensity has been increasing over the past week.

Treasury Secretary Henry Paulson goes into the second round of the strategic economic dialogue tomorrow with a mission: to placate lawmakers threatening sanctions against China. Their anger has largely been directed at the yuan.

Many in Congress, who believe the Chinese currency is undervalued by as much as 40 per cent, accuse Beijing of not allowing its tightly managed exchange rate to trade freely or rise in value.

Indeed, they consider it a government subsidy and blame it for fuelling the huge US trade deficit with China, which swelled to a record US$233 billion (S$350 billion) last year.

As Mr Robert Zoellick, the former US trade chief and deputy secretary of state, noted: 'The exchange rate has become a symbol today of whether the relationship is fair or not.'

Last Thursday, a bipartisan group of 42 legislators filed a petition to the US Trade Representative's office. It called for 'strong action' against China's 'unfair currency manipulation'.

Beijing's attempts to mollify Washington last Friday by allowing a slight widening of the trading band for the yuan did little to appease American lawmakers.

'This is a nice gesture, but in the past, most gestures have not produced any concrete change,' said Senator Charles Schumer, one of the most vocal critics of China's trade policies.

The timing of the talks could not have been worse because both China and the US are being held ransom by domestic considerations.

With the crucial Communist Party Congress taking place later this year, the Chinese will not want to be relenting too much to American interests.

US President George W. Bush, weakened by the war in Iraq, faces a bigger challenge dealing with a belligerent Congress.

Mr Kevin Nealer of the Scowcroft Group, a business advisory group, said this could explain why Washington and Beijing are approaching the dialogue differently.

'The tactics differ importantly,' he told The Straits Times. 'The US is trying to manage down the risk of worst-case actions by Congress.

'The Chinese want to maintain a policy dialogue but avoid turning the dialogue into bilateral trade negotiations.

Mr Nealer, who advises the US intelligence community on trade issues, said that both countries recognise that these talks are loaded with unrealistic expectations.

The real objective is modest success. The two-day meeting could yield a few high-profile contract signings that include an airline pact and a significant opening of China's financial services.

But they do little to appease Congress.

'If the talks are just window-dressing, Congress will be ready to press on with strong, veto-proof legislation,' warned Senator Schumer.

But China-bashing may all be bluster. With elections looming next year, it is a very popular play in American politics.

According to Stratfor, some of the biggest hawks have indicated that they have little desire to push through several punitive trade Bills against Beijing.

Rather, they want to use them to shape China's perceptions and its ultimate actions.

Moreover, Bills like a 27 per cent tariff on all Chinese-manufactured goods will hit US businesses, many of which finance congressional campaigns.

American consumers have also grown fond of low-cost imports.

Conceived as a 'management tool' to deal with a range of issues with Beijing, the strategic economic dialogue is now afflicted by pressures which Mr Paulson describes as 'short-term-itis'.

Mr Jeffrey Bader, who heads the China programme at the Brookings Institution, explained the Treasury Secretary's dilemma: 'Paulson sees this as a long-term process to encourage further Chinese economic reform. He wants achievements along the way to demonstrate its value.

'But the problem is that you are not going to get a great deliverable each time, and you have an impossibly high short-term level of expectations.'

The real danger is that Congress and other American interest groups have made the valuation of China's currency the leitmotif of cooperation.

derwin.pereira@gmail.com

http://www.cfr.org/publication/13395/china_policy.html?breadcrumb=%2F

China Policy: Protectionism in the Wind

Officials destroy pirated DVDs and music CDs after a raid on a video and audio shop in China. (AP Images/EyePress)May 21, 2007Prepared by: Carin Zissis

America’s gaping trade deficit with Beijing will likely serve as the main agenda item as U.S. and Chinese officials sit down for economic talks in Washington this week. The biannual Strategic

Economic Dialogue seeks to bridge differences on market access, build cooperation on energy and environmental issues, and more generally to serve as chance for discussion between two of the world’s largest economies. But trade looms as the most contentious issue: In advance of the talks, a bipartisan group of forty-two lawmakers urged the Bush administration to investigate whether Beijing manipulates the value of the yuan, keeping it priced low against the dollar to boost Chinese exports. They charge this practice exacerbates (Reuters) the U.S. trade deficit, which hit a record high of roughly $233 billion last year.

Such talk reflects renewed protectionist movement in Washington targeting China. Last month, Washington filed two cases with the World Trade Organization (WTO), charging Beijing with failing to protect intellectual property rights or lift barriers to market access. The U.S. Commerce Department also raised tariffs on Chinese coated paper, opening the door for other U.S. industries to seek similar duties.

The WTO cases and coated paper tariffs elicited Chinese objections (IHT). Before leaving Beijing to head the Chinese delegation during this week’s talks, Vice Premier Wu Yi published an editorial in the Wall Street Journal calling U.S. protectionist moves “irresponsible.” Wu made headlines during the first round of talks when she told U.S. Treasury Secretary Henry Paulson that “some American friends not only have a limited knowledge of, but harbor much misunderstanding about, the reality in China.”

Despite the tough language, Beijing also maneuvered ahead of the economic summit to placate U.S. lawmakers with a decision to widen the yuan’s exchange rate band against the dollar. The Treasury Department called the change a “useful step” (Thomson Financial). But Paulson has warned that Beijing’s moves to strengthen its currency will have little effect on the trade deficit, and that China must instead decrease dependence (Bloomberg) on exports. Those in Washington who vilify China push for the same kind of currency revaluation policy that harmed Japan’s economy in the 1990s, writes Morgan Stanley Chief Economist Stephen S. Roach. But in an online debate with Roach, Desmond Lachman of the American Enterprise Institute argues greater Chinese exchange rate flexibility would discourage exports as it has in other transitional economies.

Experts say the degree to which such trade and exchange rate issues will be resolved during talks between the two delegations remains in doubt. Jeffrey E. Garten of the Yale School of Management writes in Newsweek that regardless of the political fanfare connected with the meeting, “the event has already failed.” He says, despite the notable experience of both envoys, neither Wu nor Paulson can control the political and financial forces that will stoke U.S.-Chinese tensions in the coming years. A $3 billion Chinese bid (BBC) to buy a 10 percent stake in the U.S. private equity firm Blackstone will likely fire up U.S. political concerns. The intelligence analysis site Stratfor predicts “quiet cooperation” during the economic dialogue. Yet the site also says that, regardless of the popularity of China bashing, Congress would prefer gradual change of trade and currency policy in China.

http://www.taipeitimes.com/News/worldbiz/archives/2007/05/21/2003361862

US to prod PRC for more reforms

AFP, WASHINGTONMonday, May 21, 2007, Page 10

"There are some in the US who overstate the US trade imbalances with China ... some even advocate trade protectionism."

-- Wu Yi, Chinese vice premier

The US is expected to prod China to step up economic and financial reforms during high-level dialogue this week where Chinese trade and currency practices will come under scrutiny.

US Treasury Secretary Henry Paulson and Chinese Vice Premier Wu Yi (吳儀) will lead about a dozen of their ministers in the two-day "strategic economic dialogue" beginning tomorrow aimed at addressing mostly long-term issues facing the world's richest and most populous nations.

The Washington meeting comes amid increasing pressure from US lawmakers for action by Beijing to address a snowballing US trade deficit with China that hit US$232 billion last year, blamed on an undervalued yuan currency.

Ahead of the talks, a bipartisan group of 42 legislators has filed a petition to the administration of US President George W. Bush calling for action against what they call China's "unfair currency manipulation."

Lawmakers also raised the ominous prospect of pushing ahead with legislation imposing sanctions on Beijing over the currency woes if the Chinese refuse to make their currency more flexible.

They accuse the Chinese government of keeping its currency artificially low to give its exporters an unfair advantage.

But the Chinese leaders are unlikely to take the criticism lying down.

The tough-talking Wu is to hold a rare meeting with Congressional leaders to address the trade and currency concerns head-on, officials said.

"There are some in the US who overstate the US trade imbalances with China ... some even advocate trade protectionism," Wu said in an opinion piece in the Wall Street Journal ahead of the meeting.

"Attempts to politicize trade issues should be resisted," she said.

Despite the noise and heated debates, Wu's visit could still be one of quiet cooperation.

"Though raising a cry about Chinese trade and currency practices is politically expedient for Congress, even Congress is quietly satisfied with gradual, rather than rapid, change -- something easier to manage on both sides of the Pacific," said Stratfor, a leading security consulting intelligence agency, in a report ahead of the talks.

In an apparent bid to counter foreign criticism of its exchange rate and also to rein in runaway economic growth, Beijing decided last week to widen the trading band of the yuan and raise interest rates.

But it did little to calm the US' concerns.

While it is a "useful action," Beijing should use the wider band to allow greater currency flexibility, said the US Treasury's special envoy for China, Alan Holmer.

A major facet of the Washington talks is to determine how China could meet its goal of "rebalancing" its economy so that domestic consumption -- rather than exports and investments -- could become a key growth driver, Holmer said.

"This requires greater currency flexibility in the short term and moving to a market determined exchange rate in the medium term," he said. "Rebalancing the Chinese economy towards

consumption will raise the welfare of the Chinese people and allow China to grow in the future without generating huge trade surpluses."

The dialogue is the second since Bush and Chinese President Hu Jintao (胡錦濤) decided last September to launch the forum to grapple with critical issues that extend across multiple agencies and departments of the two nations.

Among other areas to be discussed at the meeting are structural reforms in both financial services and non-financial services with plans to increase access to each others markets in air cargo and passenger travel.

Joint collaboration on improving energy efficiency and sharing technologies as well as moves to enforce intellectual property rights are other key topics.

5.22.2007, Tuesday

http://www.dailytimes.com.pk/default.asp?page=2007%5C05%5C22%5Cstory_22-5-2007_pg7_22

‘Lal Masjid standoff a govt ruse’

Staff Report

WASHINGTON: The present standoff presents the Musharraf regime with a potential opportunity to take some of the steam out of a growing anti-government movement, according to a commentary issued here on Monday.

Stratfor, the Texas-based news intelligence service, argues that at the same time, the government faces the challenge of containing the potential fallout. Many people, both male and female, could die if security forces should try to dislodge the militant mullahs and their students because they have vowed to resist any attempted use of force. Again, an assault on a place of worship, carried live on television, could stir up a backlash from the public, further exacerbating the already turbulent situation of public unrest. But at a time when all of its options for handling political instability are bad, the Musharraf regime is likely to opt for the one it considers the least bad: “rolling the dice and dealing with the mullahs.”

The commentary maintains that the government is hoping that mainstream political forces will refrain from exploiting the situation for fear of empowering Islamists. However, as shown by the events in Karachi on May 12, there is no such thing as “managed chaos”.

Stratfor notes that the authorities on Sunday apparently delayed an operation to wrest control of Islamabad’s Red Mosque and two associated seminaries from and their followers. Despite the mobilisation, authorities have played down the idea of an operation. Such assurances notwithstanding, the belligerence of the mullahs is such that an operation will likely take place sooner or later.

Stratfor writes, “However, this standoff has been going on since February – so why opt for an iron-hand approach now? The answer has to do with the much larger – stemming from the March 9 suspension of Supreme Court Chief Justice Iftikhar Mohammad Chaudhry – which is growing with the passage of time. By moving to resolve the standoff with the militant mullahs in Islamabad, the government could divert attention from the legal crisis, giving itself a breather.

Moreover, the government is hoping the move will go over well with the public, because there is broad public support for cracking down against the Talibanising forces.”

Asian News International Reprints:

Hindustan TimesMay 22, 2007 Tuesday 1:34 PM EST

STRATFOR says 'Lal Masjid standoff a government ruse'

BYLINE: Report from the Asian News International brought to you by the Hindustan TimesLENGTH: 301 wordsDATELINE: Washington

Washington, May 22 -- STRATFOR, the Texas-based news intelligence service, has said in a commentary that the standoff between the Pakistan Government and the clerics of Lal Masjid is nothing but a government ruse to buy time to effectively deal with Islamic hardliners.

It says that the present standoff will provide the Musharraf regime with an opportunity to take some of the steam out of a growing anti-government movement.

According to the Daily Times, the Shaukat Aziz-led government faces the challenge of either trying to dislodge the militant mullahs and their students, or considering an assault on a place of worship. STRAFOR opines that if it comes to push and shove, the Musharraf regime is likely to opt for "rolling the dice and dealing with the mullahs."

The commentary maintains that the government is hoping that mainstream political forces will refrain from exploiting the situation for fear of empowering Islamists.

STRATFOR notes that the authorities delayed an operation on Sunday to wrest control of the Lal Mosque and two associated seminaries from their followers.

"This standoff has been going on since February - so why opt for an iron-hand approach now? The answer has to do with the much larger - stemming from the March 9 suspension of Supreme Court Chief Justice Iftikhar Mohammad Chaudhry - which is growing with the passage of time. By moving to resolve the standoff with the militant mullahs in Islamabad, the government could divert attention from the legal crisis, giving itself a breather. Moreover, the government is hoping the move will go over well with the public, because there is broad public support for cracking down against the Talibanising forces," the STRATFOR commentary says.

Published by HT Media Ltd. with permission from Asian News International.

ANI Reprint: http://www.newkerala.com/news.php?action=fullnews&id=31826

http://www.bloomberg.com/apps/news?pid=20601087&sid=aNcSXXzx8AzQ&refer=home

Fighting Resumes Between Lebanese Soldiers, Militants (Update5)

By Tarek Al-Issawi and Massoud A. Derhally

May 22 (Bloomberg) -- Lebanese army and Islamic gunmen exchanged heavy artillery fire in a third day of fighting after Lebanese officials accused neighboring Syria of sparking the bloodshed.

Clashes intensified after dawn today as both sides fired light, medium and heavy weapons, Lebanon's state-owned National News Agency reported.

Residents are fleeing the area close to the Nahr el-Bared Palestinian refugee camp, where the clashes between the army and the Fatah al-Islam group are concentrated, the news agency said. Live footage from Arab news channels showed plumes of smoke rising from buildings in Tripoli.

While all major political parties in Lebanon, including those allied with Syria, said they supported the Lebanese army and condemned Fatah al-Islam, the violence may be an attempt by Syria to put pressure on the Lebanese government, analysts and Lebanese government members said.

``Syria is using its political intimidation tactics to drive the point home that any actions taken by Lebanese officials against Syrian interests will not go unpunished,'' Stratfor, an Austin-Texas based risk consultancy company, wrote in a report today.

Hariri Tribunal

The Lebanese, U.S. and French governments want to establish an international tribunal to try Syrian officials that they say are behind a series of assassinations in Lebanon, including the 2005 car-bomb killing of former Prime Minister Rafiq Hariri.

Syria and its Lebanese allies, such as Shiite group Hezbollah and Christian General Michel Aoun, oppose the tribunal.

Fatah al-Islam called for a cease-fire to start at 2:30 p.m. local time. ``We want to calm the situation down,'' said Abu Salim Taha, a spokesman for the group. ``For humanitarian reasons, to protect women and children, we have issued orders to stop the fighting.''

The situation ``is harsh with no water, electricity, food or medicine inside the camp,'' Taha said.

The Lebanese army immediately rejected the calls for a halt to the fighting. ``We are not concerned with a cease-fire, but if our troops are not targeted, we will not attack them,'' Brigadier Saleh Haj Suleiman said in a telephone interview.

Cease-Fires

Several cease-fires called over the past two days have failed to hold. Trucks carrying aid were allowed into the camp, Suleiman said.

A member of the militant group blew himself up in an apartment building in Tripoli, an hour and a half after the cease-fire was to take effect, Suleiman said. ``Security forces were surrounding him and that's when he blew himself up but he is the only casualty,'' Suleiman said.

Syria's ambassador to the United Nations, Bashar Ja'afari, said late yesterday his government had nothing to do with the violence and that Fatah al-Islam's leaders are members of al- Qaeda who had been jailed in Syria for terrorist activities.

The fighting between the army and Fatah al-Islam has resulted in the deaths of at least 70 people, including 27 soldiers, over the past two days, according to reports by the news agency.

Members of the group include Saudi Arabians, Syrians and Afghans, Brigadier Suleiman said.

`Al-Qaeda Link'

``Based on their dead, they include Saudis, Tunisians, Afghans, Jordanians, Syrians and Lebanese,'' he said. The group, based on its ``leanings and composition, makes it probably linked to al-Qaeda,'' he said.

The U.S. State Department's report on terrorism for 2006 describes Fatah al-Islam as linked to al-Qaeda and says the Palestinian refugee camps in Lebanon have become ``safe havens'' for the group.

The Arab League said it will hold an emergency meeting today to discuss the crisis. Schools remained closed in Tripoli as a security precaution, the official agency said. Prime Minister Fouad Siniora declined to comment when reached by telephone today.

A representative of the Palestine Liberation Organization, which includes mainstream Palestinian factions, urged the Lebanese army to exercise caution when attacking the militants.

``The Lebanese army has to differentiate between this gang and the civilians, as this gang took up a position in the camp to carry out an attack on the Lebanese army,'' Sultan Abu Al Aynayn, PLO representative in Lebanon, said in a telephone interview today.

Lebanese Army

Under a 1969 agreement, the army can't enter any of the 12 Palestinian camps on Lebanese soil, leaving it to lob artillery shells from positions outside.

Fatah al-Islam is an Islamic splinter group of Fatah Intifada, itself a splinter group of the mainstream and secular Palestinian Fatah group. It has about 150 to 200 fighters, says Alain Rodier, a former French intelligence officer who is head of terrorism research at Paris-based French Center for Intelligence Research.

Al-Qaeda linked groups such as Fatah al-Islam have made little headway in Lebanon or among Palestinians, Rodier says. ``Hezbollah has never tolerated any interference from al-Qaeda in what it considers to be its reserved zone of activity,'' Rodier wrote in a report today.

Casualty Toll

Gunfights yesterday killed about 40 people, including 27 soldiers, the state-owned National News Agency said. As well as the soldiers and militants, another 30 people may have died yesterday and today inside the camp, which houses about 30,000 Palestinian refugees and is at the center of the fighting, the agency reported.

Brigadier Suleiman of the Lebanese army said today the army suffered 30 dead and dozens of wounded. He said soldiers killed more than 20 suspected militants.

In Beirut, six people were wounded yesterday by a bomb that rocked the Verdun district in the mainly Muslim western sector of the city, Agence France-Presse reported. The bomb was placed under a car outside a Russian cultural center, AFP said, citing police.

At least 40 suspects have been detained by Lebanese security forces and are being questioned, a Lebanese military judge said today in a telephone interview. He declined to be identified further because the case is ongoing.

To contact the reporters on this story: Tarek Al-Issawi in Dubai at talissawi@bloomberg.net Massoud A. Derhally in Dubai at mderhally@bloomberg.net .Last Updated: May 22, 2007 09:42 EDT

The Washington TimesMay 22, 2007 Tuesday

Lebanon, Syria point fingers in recent violence;Agree real issue is Hariri tribunal

BYLINE: By Christopher Allbritton, THE WASHINGTON TIMESSECTION: NATION; A10LENGTH: 727 wordsDATELINE: BEIRUT

Lebanon and Syria exchanged charges yesterday, with each blaming the other for an outbreak of fighting that has killed dozens of people in and around a Palestinian refugee camp near the northern city of Tripoli.

But both agreed that the two-day gunbattle, sparked by an attempt to arrest a group of bank-robbery suspects, was really about efforts to convene a U.N. tribunal to try suspects in the 2005 assassination of former Lebanese Prime Minister Rafik Hariri.

The fighting pits the Lebanese army against a Palestinian splinter group called Fatah Islam, which has been publicly linked to Osama bin Laden's global terrorist network, al Qaeda.

But Lebanon's national police commander, Maj. Gen. Ashraf Rifi, said yesterday that the group was little more than a front created by the Syrian government to stir up trouble in Lebanon.

"Perhaps there are some deluded people among them, but they are not al Qaeda," Gen. Rifi said. "This is imitation al Qaeda, a 'Made in Syria' one."

Muhammad Shatah, a senior adviser to Prime Minister Fuad Siniora, said Syria was sowing discord in Lebanon in hopes of derailing the tribunal, which is widely expected to implicate senior Syrian officials in the Hariri killing.

Fatah Islam is led by Shaker Youssef al-Absi, a Palestinian who came to Lebanon after winning early release from a Syrian prison last year. It is widely thought among Lebanese government members that al-Absi is a Syrian agent who was sent to Lebanon to stir up trouble.

Syrian Foreign Minister Walid Moualem flatly rejected those charges, saying his government had been working through Interpol and in other ways to help break up the group. And the nation's ambassador to the United Nations hinted at a Lebanese plot to build support for the Hariri tribunal.

"Every time there is a meeting in the Security Council to deal with the Lebanese crisis, one or two days before the council meets, there is some kind of trouble, either assassinations, or explosions or attempts to assassinate somebody," Bashar Jaafari told reporters.

"This is not a coincidence. ... Some people are trying to influence the Security Council and to make pressure on the council so they can go ahead with

the adoption of the draft resolution on the tribunal," he said

Kassem Kassir, a reporter for the pro-government newspaper al Mustaqbal who has interviewed members of Fatah Islam, said the truth is probably more complicated.

The group is financed and supported less by Syria than by Salafist groups in Iraq, Jordan and the Persian Gulf, he said. Salafists are Sunni fundamentalists who seek a return to Islam's roots and are ideologically in tune with al Qaeda.

Al-Absi was once a member of the main Palestinian faction, Fatah, founded by Yasser Arafat, the Palestinian leader who died in 2004. Al-Absi later joined Fatah al-Intifada, a front group set up by Syria to be used against Israel. That group failed to win popular support among the Palestinians, and al-Absi went out on his own last year by forming Fatah Islam.

The move makes sense, Mr. Kassir said, because al-Absi is a Jordanian of Palestinian descent with ties to Abu Musab Zarqawi, the leader of al Qaeda in Iraq who was killed last year. But he acknowledged that Fatah Islam appears to be very well-armed, presumably with weapons smuggled into Lebanon from Syria.

Syria's most important ally in Lebanon is Hezbollah, but the militant group is constrained by its own carefully nurtured image as a Lebanese resistance group with members in parliament, said Reva Bhalla, director of geopolitical analysis at Stratfor, a Houston-based security firm.

She said Hezbollah is reluctant to turn its guns on the government, given that it seeks to be seen as a legitimate part of the Lebanese political process. Groups such as Fatah Islam have more flexibility.

"Syria is funneling weapons and men to them, keeping them [in Lebanon] and they're a bargaining tactic against the United States" at a time when Washington is preparing for bilateral talks with Iran, she said.

Significantly, she added, Iran has signaled that it doesn't oppose the Hariri tribunal, which is making Syria fearful of being betrayed by its main ally.

"Syria is watching very closely that it doesn't get screwed in any deal," and any support it may be giving to groups such as Fatah Islam is to remind the United States that it has chips it can still play, she said.

http://www.csmonitor.com/2007/0522/p99s01-duts.html

Reports: Radical clerics set to free kidnapped police in IslamabadRelease would defuse potential violence between Islamic students and Pakistani forces, but critics accuse Musharraf of manipulating situation.

By Arthur Bright | csmonitor.com

Two kidnapped policemen at the heart of a standoff in Islamabad between radical Islamic clerics and Pakistani military forces are set to be released, according to news reports.

ABC Radio Australia writes that the chief of Islamabad's Lal Masjid mosque, or Red Mosque, said that the clerics would soon release the Pakistani policemen. Bloomberg reports that Pakistani officials said that the policemen have already been freed. The pair, along with two other policemen released earlier, have been held at the mosque since Friday, when they were seized by students from a madrassah, or religious school.

"The Red Mosque clerics have released all the policemen they had taken hostage from outside their seminaries," Tariq Azeem, the junior minister for information and broadcasting, said in a telephone interview today. "There was no need for use of force."

Security forces were withdrawn from around the mosque known as the Lal Masjid, he said. Students and clerics had held two police officers at the seminary since May 18.

The policemen's release defuses a potentially violent situation, as the mosque had been facing a raid by Pakistani forces, reports Indian broadcaster New Dehli Television Limited. Some 10,000 troops had taken positions around the mosque in preparation to free the policemen, NDTV writes, but Pakistan decided to hold off on using force, due to the high likelihood of bloodshed.

Voice of America reports that the four policemen were seized Friday from the main road outside the Lal Masjid mosque, according to Interior Ministry officials. The mosque's clerics accuse the officers of performing undercover surveillance there, in violation of a previous agreement between the mosque and the government that police would avoid the area. Voice of America notes that the mosque's leaders have been at odds with the government for several months.

Its top clerics have vowed to impose Taleban-style Sharia law in the capital and have threatened massive suicide bomb attacks if the government tries to interfere.

Students from the mosque's religious seminaries swept through one of Islamabad's main market areas last month, warning shop owners against selling music or movies.

Hundreds of students have also been occupying a nearby children's library since January to protest government efforts to demolish several mosques illegally built on government property.

The clerics released two of the four kidnapped policemen Saturday, in exchange for the release from police custody of four seminary students and a former member of Pakistan's intelligence agency, ISI, according to Pakistan's DAWN newspaper. The five were arrested last month for setting fire to a music store. The DAWN notes that the five have not yet been released due to the lack of payment of bond, but that the two policemen were released by the clerics anyway.

The BBC reports that another trio of policemen were briefly kidnapped on Monday afternoon in Islamabad by members of a madrassah linked to the Red Mosque. They were released after a few hours, however.

The BBC's correspondent says that the two Red Mosque-associated kidnappings are "another serious challenge to President [Pervez] Musharraf's authority." But others say that the ongoing conflict between the mosque's clerics and Mr. Musharraf are actually a boost to Musharraf's regime by distracting the Pakistani public from the ongoing controversy over his ouster of Pakistani Chief Justice Iftikhar Muhammed Chaudhry in March. In a commentary printed in Pakistan's Daily Times, security firm Stratfor suggests that Musharraf is intentionally playing up the mosque conflict to solidify support for his government.

Stratfor writes, "However, this standoff has been going on since February – so why opt for an iron-hand approach now? The answer has to do with the much larger – stemming from the March 9 suspension of Supreme Court Chief Justice Iftikhar Mohammad Chaudhry – which is growing with the passage of time. By moving to resolve the standoff with the militant mullahs in Islamabad, the government could divert attention from the legal crisis, giving itself a breather. Moreover, the government is hoping the move will go over well with the public, because there is broad public support for cracking down against the Talibanising forces."

The Daily Times also reports that members of Musharraf's political opposition go even further, accusing Musharraf and the mosque clerics of being in cahoots and manufacturing the issue. "It's a drama staged by the government and clerics to divert people’s attention from the real national issues including the judicial crisis," said Khawaja Muhammad Asif of Pakistan Muslim League-Nawaz.

The New York Times reports, however, that members of Musharraf's own party are advocating that he reconcile with Mr. Chaudhry, as well as his political opposition.

"There are two ways he can go: retreat to the bunker or stop, pause, review, reflect and reverse course," said one ruling party member who did not want to be identified. "He has to show leadership, magnanimity, and be loyal to the broader objective. The important thing is Pakistan's future."

http://www.thenews.com.pk/print1.asp?id=57117

By Shireen M Mazari

As the country continues to reel from the aftermath of the events of May 12 and the acts of violence and terror that have followed, we in Islamabad continue to be confronted with the growing power of the extremist law breakers of the Jamia Hafsa-Lal Masjid combine. While for the other urban centres of Pakistan, the extremist terrorism still remains at a distance, for us in Islamabad, the unreal nightmare continues as we witness the black comedy being enacted by the law enforcement personnel and decision makers in response to the growing challenge thrown to the state by these extremist terrorist forces.

We have seen the ridiculous scenario being repeated, ad nauseam, of law enforcement personnel coming in with what is assumed will be an operation to end the siege of Aabpara by these law breaking extremists and then we see the forces of the state backing off with no action having been taken. Meanwhile, the extremist terrorists are becoming ever more emboldened and have directly begun challenging not only the authority and laws of the state, but also the law enforcement personnel themselves. So far, they have managed to kidnap, at will, police personnel, as bargaining tools and the state seems to be showing a strange helplessness. The show of force it mobilises is dissipated as rapidly when the Jamia Hafsa-Lal Masjid combine makes a tactical gesture of releasing some of the police personnel. Meanwhile, the extremists, very much in the fascist mode, are gaining media access through interviews and columns in the English language press obviously targeting an audience beyond Pakistan.

The argument by the state that they cannot use force because of the collateral damage and its fallout is losing its credibility as the extremists widen the area of their control and operations. The roads around the Jamia Hafsa have been cordoned off by these fascists and their supporters from the Jamia Fareedia in E-7 have joined the terrorisation of state and society far beyond the Aabpara area. Tolerance for these lawbreakers has given them an upper hand in the standoff with the state. As for the collateral damage so far, the civil society is reeling from this because of the inability –- it surely cannot be a deliberate unwillingness -– of the state to deal with this law and order challenge posed by the extremist terrorists.

So cowed down has the citizenry become that barring a few words of protest by individuals, there was no civil society protest at the attack by a religious extremist against a woman professor of Quaid-i-Azam University. In days gone by, the teachers association would have held suitable protests and so would the students -– supported by WAF and other societal NGOs. But not so this time. Certainly there is a feeling of frustrated resignation about the inability of civil society to impact the state with its peaceful protests. But, there is also a feeling of extreme vulnerability because of the state's seeming acquiescence of this extremist terrorism right in the heart of the capital.

As for an anticipated civil society fallout following civilian collateral damage from state action, surely the civil society is far more distressed at the way in which fascist forces can indulge in violence as and when they please while innocent people are left defenceless. In any event, action by the state can also include options like jamming of communication systems, turning off utilities

and use of water cannons and other non-lethal means of ending an occupation. We may not have a highly educated and prosperous populace, but we do have well-budgeted, strong and well-equipped law enforcement organisations, including paramilitary forces and, of course, one of the most cohesive and strong national organisations -- the military. When will they protect the nation from the forces of fascism and extremist terrorists, because we have to believe that no one in officialdom can be suicidal enough to have any truck with these forces of hate and destruction? So why is the mainstream civil society being left to feel under siege with no state protection?

It is this feeling of extreme vulnerability that is also allowing our external detractors to attack us at will. The Afghan government, still occupied or at least inundated, by foreign forces, has had the gall to challenge us at the international border by amassing its "forces" -– and we have kept a stoic silence. We have had the British High Commissioner hold forth, viceregally, on our internal political issues and by the time our Foreign Office woke up to summon him he was gone. Incidentally, we do need to take up the issue of British citizens inciting hatred in Pakistan, especially since we are about to initial a prisoner exchange treaty which does not look after our interests in terms of extradition of criminals to Pakistan, as much as it does British interests. British hypocrisy on the extradition treaty -– that the UK cannot sign such a treaty with a country that has capital punishment -– stands exposed because the UK had an extradition treaty of 1972 with the US which has now been replaced by the new extradition treaty of 2003, which entered into force in April 2007. The issue of capital punishment is dealt with under Article 7.

In any event, all British nationals suspected of inciting hatred and terrorism including overseas, stand vulnerable under three British laws relating to incitement of hatred and violence, either directly or indirectly. There is the Public Order Act of 1986 (Part III), Article 58 of the Terrorism Act of 2000 which includes prosecution for incitement to commit an offence overseas, and the Terrorism Act of 2006, Part One, Article I in which there is, inter alia, a reference to "indirect encouragement" of hatred and terrorism, in terms of statements and so on.

As for our "ally" the US, its think tanks like Stratfor are stating quite clearly that the Lal Masjid standoff is merely a "government ruse". Is this how badly they think of the Pakistani state and an allied government -– that it would play with the lives of its citizens and abet extremist terrorists? Worse still, there are increasing calls for the US to either cut off its payments to Pakistan for the counter-terror operations in the global war on terror (GWOT) or link it to performance. What "performance" do they want to see, given that we have effectively undermined our own nation and state to support the US in the GWOT -– despite the latter's misguided and erroneous strategies that have taken a heavy toll on Muslim states and societies? The US may be paying $1 billion annually but the cost to Pakistan, in terms of its polity, is far beyond this monetary remuneration.

Clearly, as the state and nation seem besieged by extremist terrorists and fascists from within, external detractors will feel free to pressure and attack us on any number of counts. This is a wonderful country bestowed with natural resources and a beautiful people. How long are we going to have to watch helplessly and see it all being destroyed by stick wielding extremist terrorists and gun-toting fascist mobs with an abdication of responsibility by the law enforcers -– and our gleeful detractors watching like vultures?

The writer is director general of the Institute of Strategic Studies in Islamabad. Email: smnews80@hotmail.com

5.23.2007, Wednesday

http://www.thetrumpet.com/index.php?page=article&id=3202

Russian Ambition: Trigger for European Unification

Wednesday, May 23, 2007 Moscow’s growing power and influence alarms Europe. How will the Continent respond?

Just 15 years ago, Russia was a sick bear hibernating in a dark cave. Today the nation has emerged fit and strong, and is prowling the prairie of global politics boldly and dominantly. Since the election of President Vladimir Putin in 2000, Moscow has grown dangerously powerful and belligerent, and many nations and leaders are concerned.

None more so than those in Europe.

Think tank Stratfor discussed Europe’s cause for nervousness several years ago: “And that is why the osce [Organization for Security and Co-operation in Europe] is getting nervous—not so much because of Putin’s election practices as the magnitude of his victory and the way he likely will put that victory to use. Putin is, first and last, a Russian nationalist, utterly pragmatic (or ruthless) in the tools he will use to strengthen the Russian state. He has greater power now than anyone in Russia since the collapse of communism. He can reshape the regime. Consequently, the osce and Europe are nervous about where Putin is taking Russia. They have every reason to be: Putin is slowly and systematically changing Russia’s direction. When Russia changes direction, the rest of Europe should indeed be nervous” (Dec. 9, 2003).

Perhaps the only inaccuracy in Stratfor’s 2003 assessment was that Putin was “slowly” changing Russia’s direction. Since that article was written, Putin has yanked Russia from traveling its obscure gravel path and placed the nation on the center lane of the simmering highway of geopolitics. In just a few years, Putin has secured absolute government control over Russia’s key industries including oil, gas and the press; opposed Western interests at nearly every turn; strengthened relations with the East; patronized into submission former Soviet states; and, through all this, not only anchored Moscow at the center of global energy politics, but also placed himself and his country at the vanguard of the growing army of nations and groups that despise the West.

There’s an important element to this story many are missing today. The more bellicose and dangerous Russia grows, the more we must watch Europe. Europe’s reaction to Russian ambition is the most important element—and be assured: Europe is responding.

Tension between Europe and Russia has been mounting in recent months and weeks over multiple issues. Earlier this month, the German EU presidency and the European Commission rebuked Russia strongly for holding fast to its 2005 ban on importing meat from Poland, accusing Moscow of exploiting trade as a political weapon. Another major incident involved a row over a Soviet-era statue in the nation of Estonia.

In the capital city of Tallinn, Estonian leaders dismantled and removed a pro-Soviet statue. Within days, President Putin attacked Estonians for “desecrat[ing] memorials to war heroes” and caused all Russian road and rail traffic to Estonia to be blocked. Indignant at Putin’s interference in European affairs, Germany and Europe marched to the defense of their EU counterpart. Speaking before the European Parliament in Brussels, Germany’s Europe minister, Günter Gloser, warned Russia that its attack on Estonia was “an attack on the sovereignty of an EU member state” and pledged Berlin’s “full support” for Tallinn. The whole episode revealed how quickly the friction between Russia and Europe can heat up.

Russia is also proving a pain in the side of Europe in the Balkan province of Kosovo. Speaking from Azerbaijan on Monday, Russia’s foreign minister, Sergey Lavrov, made clear how firmly opposed his nation is to a Western-backed plan to support Kosovo’s independence from Serbia under international supervision.

As minor as Russia’s recent belligerence with Poland, Estonia or Kosovo might seem to some, each of these situations is an outburst of the tension mounting between Russia and the entire continent of Europe. In administering a verbal lashing to the Estonians, President Putin also verbally assaulted the other 26 members of the European Union, including such heavy-weights as France and Germany. Why else would Germany accuse Putin of attacking the sovereignty of an EU member and pledge its “full support” for Estonia?

These seemingly minor skirmishes must be considered against the backdrop of already heated EU-Russian relations. The issue of energy supplies remains the most contentious issue between Russia and Europe. During the past two winters, Russia lorded its dominance over European energy supplies by momentarily halting the flow of natural gas and oil into different parts of Europe. Europe’s leaders fear few things more than an audacious Kremlin squeezing the Continent’s energy flow; thus, securing energy independence from Russia has now become one of their most urgent goals. Yet even this venture is being opposed by Russia.

Fed up with Moscow’s belligerent and patently anti-Western gestures, many of Europe’s leaders allowed their frustration to surface last week at a EU-Russian summit just outside the Russian city of Samara. European newspapers captured how their disgruntlement illustrates the debilitating state of EU-Russian relations.

Prior to the meeting, the European Voice warned that EU-Russian relations have reached the brink of a deep-freeze, stating that EU and Russian diplomats themselves “have acknowledged that there is little chance of beginning talks on boosting political and economic ties at the summit ….” The International Herald Tribune explained how the latest tensions (with Poland, Estonia and Kosovo) come amid “increasing alarm in Europe that Moscow is using its vast energy resources for political ends, flouting human rights and stamping out democracy ahead of parliamentary elections in December and a presidential vote next March.”

Relations between the two are so bad, stated the iht, that Peter Mandelson, the EU’s trade commissioner, “warned recently that the level of misunderstanding between the two was the worst since the end of the Cold War and was in danger of going 'badly wrong’” (emphasis ours throughout). The Moscow Times, in an article aptly titled “Europe Scolds a Bristling Putin,” reported on the fruitlessness of the one-day conference in Samara.

“No major deals were reached,” the article stated. “While the two sides spoke of a willingness to cooperate, they disagreed over almost everything ….” During the long and acrimonious post-summit press conference, Vladimir Putin became visibly annoyed and combative as he faced questions from German Chancellor Angela Merkel. Even European Commission President Jose Manuel Barroso emerged from the summit swinging, warning Putin that “the EU is based on principles of solidarity” and that the Russian president’s attack on Poland was an attack on the entire European Union.

The tone of the summit was unmistakeable. Europe’s leaders are fed up with Russia’s bold antics and are showing themselves willing to confront Putin and his comrades.

Of all of Europe’s leaders, the Times of London identified Germany’s Angela Merkel as one of the toughest critics of Russia. According to the Times, prior to last week’s summit in Samara Merkel took her toughest line yet in a dinner with Putin, warning him that “Russia could not pick on individual European states and expect a business-as-usual approach from the European Union.”

The quiet but distinct message emanating from Germany is clear: Russian arrogance and boldness will no longer be met with mere diplomacy.

Russia’s newfound global power and influence is triggering European leaders to demand a strong leader capable of striking back. Few things unite a nation or group of nations more than a mutual

external threat. Logic informs us that Russia’s spiral toward dictatorship will trigger a fear among Europeans that will accelerate the unification of the Continent.

Bible prophecy reveals that this is precisely what we can expect to occur. Russia will be a catalyst to the formation and empowerment of a united European power!

Historians know that Russian-European relations are an enigma. Stalin and Hitler were smiling and shaking hands in 1939; by 1941 their soldiers were killing each other. The lesson: Pleasant relations and peace agreements between Russia and Europe mean nothing. In fact, the friendlier they seem to grow, the likelier that war is imminent.

It is important we remember this lesson. In the coming weeks and months, relations between Russia and Europe may seem to smooth over. Don’t be fooled: Russia is Europe’s greatest, most time-tested enemy—Europe is Russia’s most persistent threat.

The more geopolitical power and influence Russia gains, the more Europe’s leaders and citizens alike will feel the need to unify to counter the threat mounting to their east. More specifically, Russian ambition will help Europeans realize the desperate need for a strong, robust leader to lead them against such external forces like Vladimir Putin.

Thanks to its position at the heart of energy politics, as well as the support it receives from nations embracing it as a counterweight to Western dominance, Russia is destined to grow in power and influence in coming months and years. As this trend unfolds, it is vital that we watch Europe’s reaction.

UPIMay 23, 2007 Wednesday 12:31 PM EST

Analysis: What is Fatah al-Islam?

BYLINE: CLAUDE SALHANILENGTH: 935 wordsDATELINE: WASHINGTON, May 23

Is there something sinister in the timing of the sudden surge of violence that erupted between the Lebanese army and an al-Qaida-affiliated group called Fatah al-Islam around the northern city of Tripoli?

What is Fatah al-Islam? Who supports, arms and funds its members? And why did they suddenly manifest themselves in such a violent manner at this time?

Regretfully, these are questions to which answers will probably never be found. Just more puzzles to be added to the never-ending Lebanese political saga.

Many Lebanese will point to the fact that the fighting shifts the focus from the pending international tribunal set to hear the case of the murder of former Lebanese Prime Minister Rafik Hariri. A coincidence in timing? Perhaps, but nevertheless this crisis does nothing to help the government of Prime Minister Fouad Siniora, already burdened by a serious schism between the country's Sunni and Shiite communities, as well as a division among the Christian community.

The only good news, if one may be optimistic under such circumstances, is that Hezbollah has come out in support of the Lebanese army in its fight against the shadowy Islamist militia. And in Damascus, Syrian Foreign Minister Walid Muallem was quoted by the Syrian news agency SANA

as saying, "We renounce Fatah al-Islam. Members of the group are wanted by the Syrian security services."

The group, led by a Palestinian named Shaker al-Abssi, is believed to number around 200 well-trained and well-equipped fighters, most of whom are Palestinians. But it includes various other nationalities: Lebanese, Syrians, Yemenis, Bangladeshis and others. Fatah al-Islam broke away from Fatah al-Intifada, which in turn had earlier seceded from Yasser Arafat's mainstream Fatah movement in the aftermath of the 1982 Israeli invasion of Lebanon.

At the time when Arafat went to rebase in Tunis, the rebel faction headed for Damascus.

When the Lebanese army first engaged the group in the Nahr al-Bared Palestinian refugee camp it was welcomed by the camp's population, who, according to some reports, were not too pleased by the presence of the Islamist group that imposed itself on the refugees. But the situation quickly changed when the Lebanese army met stiff resistance and began using tanks and heavy artillery against the group.

Casualties were high as the fighting escalated. Reports from northern Lebanon say Fatah al-Islam lost at least 20 fighters in one day while the Lebanese army lost about 30 soldiers. There are also an unknown number of dead and wounded civilians caught in the cross fire. Some reports speak of "hundreds of dead." Humanitarian agencies such as the Red Cross and the Red Crescent have not been able to enter the camp due to heavy fighting.

Fatah al-Islam is a relative newcomer to the Lebanese political scene. They were unheard of until last year. Some observers say the group was created along the model of al-Qaida. Some reports say Fatah al-Islam is most probably sponsored by Syria, though Syria denies having anything to do with the group.

But according to a Stratfor intelligence brief, "It appears Damascus helped facilitate Abssi's new base of operations, and has used him as a point-man to manage the group's activities." Nahr al-Bared, continues the report, is located close enough to the Syrian border to allow easy transit between Syria and Lebanon. "Fatah al-Islam could not have used force to take control over the camp without strong backing from Syrian intelligence officers in the region," says the Stratfor intelligence report.

This battle will test the resolve of the Lebanese army, which, for fear of being fractured along sectarian lines as had been the case during the 1975 civil war, has so far managed to stay away from being dragged into the quagmire that is Lebanese politics.

The army -- so far -- has the overwhelming support of the population and enjoys the backing of the United States and the European Union, primarily France, Germany and Italy.

So who is this leader of the renegade Palestinian Fatah al-Islam? Shaker al-Abssi, 51, was born in Palestine, but his family eventually fled after the establishment of Israel. Not much is known about him other than it is believed he had spent three years in a Syrian jail on terrorism charges.

Abssi admitted to having collaborated with Abu Musab al-Zarqawi, the Jordanian-born leader of al-Qaida in Iraq. He and Zarqawi were sentenced to death in absentia by a Jordanian court for the murder of Laurence Foley, an American diplomat who was shot in the Jordanian capital, Amman, in 2002.

According to intelligence officials cited by the New York Times, Abssi moved to Lebanon in November 2006, setting up his base of operations in the Nahar al-Bared Palestinian refugee camp near the northern city of Tripoli.

Lebanese authorities blamed Fatah al-Islam for the bombing earlier this year of two commuter buses carrying Lebanese Christians. Abssi later denied the allegations in an interview with the New York Times.

Stratfor deduces that, "With Lebanese presidential elections and the fate of an international tribunal to try Syrian suspects over the 2005 killing of former Lebanese Prime Minister Rafik al-Hariri looming, political stability in Lebanon will continue to remain hostage to the negotiations Washington holds with Damascus and Tehran over Iraq."

In other words, what is happening in northern Lebanon today is a natural extension of the war in Iraq. It should send a clear signal that unless that war is settled, the violence witnessed around Nahr al-Bared could spread and engulf other parts of the region.

(e-mail: claude@upi.com)

UPI reprint: http://news.monstersandcritics.com/middleeast/features/article_1308448.php/What_is_Fatah_al-Islam

TheStreet.comMay 23, 2007 Wednesday 18:52 PM EST

New Oil Contract Debuts Higher

BYLINE: Chuck Marvin, TheStreet.com Staff ReporterSECTION: MARKETS; EnergyLENGTH: 643 words

Crude futures crept higher Wednesday on the New York Mercantile Exchange, buoyed by an anticipated spike in demand as U.S. refineries build their motor gasoline inventories.

The July light sweet crude contract, which became the near-term contract after the June contract expired Tuesday, closed 26 cents higher at $65.77 a barrel.

Reformulated gasoline was unchanged at $2.31 a gallon. Heating oil rose 3 cents to $1.93 a gallon, and natural gas slid 4 cents to $7.76 per million British thermal units.

Crude oil futures managed to book gains even though the Energy Information Administration released inventory figures for the week ended May 18 that were more bearish than analysts were expecting.

Oil stores grew by 2 million barrels during the week, whereas analysts were expecting a 600,000 barrel build. Motor gasoline stores gained 1.4 million barrels, compared with a 1.2 million barrel increase that analysts were expecting.

Distillate stores grew by 512,000 barrels, less than the 1.3 million barrels that were estimated. Refinery utilization grew by 1.6 percentage points during the week to 91.1%, bringing it over the important 90% hurdle for the first time this year.

Although the growth in crude stores would suggest lower prices, analysts are forecasting that demand for oil will continue to grow as refinery utilization rates and motor-gasoline demand increase going into the summer driving season. That sentiment allowed crude prices to climb.

Refinery utilization rates remain roughly 4% below normal for this time of year, which has contributed to record-high profit margins for gasoline refiners.

Tight gasoline inventories and high prices at the pump have renewed concerns about possible price-gouging among members of Congress in Washington. Several members have called for investigations into the matter.

Elsewhere, geopolitical issues were again taking center stage for many energy traders, namely the fact that a group of U.S. Navy warships carrying 17,000 sailors entered the narrow Straight of Hormuz to the south of Iran. The move is a strong show of force that is meant to coincide with an upcoming International Atomic Energy Agency report on Tehran's nuclear plans.

The report is expected to reveal that Iran's nuclear enrichment program is advancing faster than the IAEA had originally expected.

"There is a strong fundamental relationship between tight supplies and higher crude prices," said Max Pyziur, energy analyst at CPM Group. "The geopolitical noise in the background adds gravy to the affair. Everything makes for a very bullish configuration in the market."Meanwhile, roughly 6,000 employees of the Nigerian National Petroleum Co. are said to be preparing to strike at midnight if an agreement isn't reached to save jobs at the recently sold Port Harcourt refinery in the southern delta region, according to analysts at Strategic Forecasting in Austin, Texas.

If the workers do in fact stand down, it would mark the latest unsettling development in Nigeria. Already, the nation has seen months of unrest, namely rebel kidnappings of foreign oil workers and election-related violence, that has helped to keep oil prices high.

Meanwhile, energy stocks were mixed. The CBOE Oil Index gained 0.5% to 729.29.

Bernstein upgraded shares of ConocoPhillips (COP:NYSE) to outperform from market perform, lifting its stock 1.1% to $76.71.

American Electric Power (AEP:NYSE) was upgraded by Lehman Brothers to overweight from equal weight, but the shares were only fractionally higher at $48.90.

Chevron (CVX:NYSE) was downgraded by Bernstein to market perform from outperform, and it lost 1% to $81.40.

Deutsche Securities downgraded Breitburn Energy (BBEP:NASD), NuStar Energy (NS:NYSE)and Magellan Midstream (MMP:NYSE) to hold from buy.

Breitburn fell 4% to $33.13. NuStar slipped 1% to $65.24, and Magellan finished the day 1.5% lower at $47.03.

5.24.2007, Thursday

AAP NewsfeedMay 24, 2007 Thursday 6:24 PM AEST

Fed:AWB reforms leave international growers disgruntled:Stratfor

SECTION: DOMESTIC NEWSLENGTH: 388 wordsDATELINE: CANBERRA May 24

Reforms to national wheat marketing arrangements would bolster the government's appeal to farmers in an election year but leave overseas growers disgruntled, a US strategic thinktank said today.

Stratfor, a private-sector intelligence group, said the proposed reforms would have little impact on international wheat markets since they were designed with domestic priorities in mind.Under the changes announced on Tuesday, Australia will retain a monopoly single desk for international wheat sales, which will be conducted by a new grower's body, not the discredited AWB.

The shift was prompted by the Cole commission of inquiry into $300 million in kickbacks paid by AWB - formerly the Australian Wheat Board - to the regime of deposed Iraqi dictator Saddam Hussein.

In an analysis released today, Stratfor said AWB held enormous strength as Australia was the world's third largest wheat exporter with Australian wheat accounting for 15 per cent of the world market.

It said dismantling the monopoly system would have greatly undermined Australia's trading clout and changed the dynamics of the global trade.

"Despite the pressure for reform following the 2006 discovery of a $300 million wheat-for-weapons scandal, nothing has changed in how Australian wheat is traded internationally," Stratfor said.

"Domestically, however, the move will benefit (Prime Minister John) Howard by strengthening his coalition and bolstering his appeal to farmers during an election year."Stratfor said Australian growers did not like restrictions imposed by the monopoly system but didn't want it dismantled.

"Without an export monopoly in place, Australian farmers would be competing with each other, pushing down prices and profit margins for all growers.

"Instead, what they desire most is to hold monopoly control themselves," it said.

Stratfor said the change allowed Canberra to counter claims that selling wheat through a monopoly encouraged corruption - even though the system had been reformed merely by changing who owned the monopoly export rights.

"Internationally, foreign growers from countries like the United States will remain disgruntled," it said.

"Meanwhile, domestic AWB investors who are not wheat farmers now lack a stake in the new grower-controlled company. They are likely to complain the loudest about the new system."

AAP reprints: http://news.brisbanetimes.com.au/awb-reforms-may-anger-overseas-growers/20070424-eo1.html

http://www.thetrumpet.com/index.php?page=article&id=3208

Why Britain Booted Blair

Thursday, May 24, 2007

Tony Blair will turn prime-ministership over to Gordon Brown next month. Here’s why the change—and what to expect from his successor.

Eight months ago, Tony Blair promised to resign as Britain’s prime minister. Now, that promise has a due date: June 27. Succeeding Blair will be the current chancellor of the Exchequer, Gordon Brown. The British are unenthused.

Why is Blair leaving? He has given the British people much of what they wanted from him. Economic growth has made the people wealthier; poorer families now have higher wages and lower taxes; schools and hospitals have risen in quality. The steps toward the dismantlement of Great Britain have pleased the majority of Brits: Scotland, Wales and—just recently—Northern Ireland moved toward greater self-governance under Blair’s leadership. The Labor leader helped focus international attention on global warming more than any other Western leader—another issue that plays well to the increasingly liberal British public. The flow of immigrants into Britain has grown much swifter as Blair has pushed for greater openness. The pm has also made good on his pledge to “modernize” his country, passing social reforms such as the recognition of civil partnerships for homosexuals.

Conservatives balk at some of these changes, but the average Brit sees only positives in them. It isn’t for any of these reasons that Blair has become increasingly unpopular among his fellow countrymen, and in which his political opponents saw an opportunity to muscle him out of office. What really irritates them—to the point that he became vulnerable to pressure to step down in the midst of his weak third term as prime minister—is almost exclusively one thing: his support for the war in Iraq.

The majority view is that Blair rides around in the hip pocket of the widely hated U.S. President George W. Bush. Polls reveal that Britons believe by a 2 to 1 margin that Britain’s alliance with the United States is too close. The prime minister is referred to as “Bush’s poodle” and pummeled for committing British troops to the Iraq war. He lost tremendous public trust over the question of wmd in Iraq. In addition, Blair has also been roundly criticized for his too-firm backing of the State of Israel. A majority of Britons hunger for a leader with more inward-looking tendencies, one who will pull out of Iraq and Afghanistan and, in effect, turn his back on the U.S.

Gordon Brown is probably not that leader.

He is stepping into office not by public vote, but by virtue of the ruling Labor Party elevating him to its chief position—and the fact is, he is widely viewed as being not terribly different from Tony Blair.

As ready for change as the British people are, they can muster no great enthusiasm for Brown—or, at this stage, particularly anyone else. Brown will assume office with public approval ratings almost identical to those of his predecessor. Some polls suggest that Brown’s leadership of the Labor Party will actually drive some voters over to the Conservative side.

Think tank Stratfor sees Brown’s upcoming term as being mostly inconsequential. In a May 9 report, Stratfor wrote, “Brown is entering office already paralyzed—not that he would want to make sweeping changes before the next election, in early 2009. Brown’s term will begin with Iraq still on his plate, a vast shift beginning in Europe, a housing crisis looming and his party divided. Brown will not be able to do much in the international arena; the United Kingdom is already starting to pull out of Iraq. … Brown will simply keep the country together in front of the camera.”

On balance, and barring unforeseen catastrophes, the Trumpet doesn’t expect the direction Britain has been moving to change very drastically under Brown’s leadership. However, there are two areas we feel worthy of watching based on what we know of Gordon Brown.

Though Brown has publicly expressed a desire to maintain the U.S.-British alliance and continue Britain’s support of the “war on terror,” strong public pressure seems to be adversely affecting whatever resolve on these issues he may have possessed. His enigmatic statements on the war reflect the bind in which he finds himself: They are political, measured, lacking substance—eschewing firm policy statements for more whispery platitudes about the difficulty of the situation and promises to look into it.

Though some reports say the White House is convinced Brown won’t push for a precipitous withdrawal of British support from the Iraq and Afghanistan missions, other sources say precisely the opposite. The Sunday Telegraph reported Monday that White House officials have told President Bush to expect an announcement from Brown of a British pullout within 100 days of his taking office. The paper reported that senior officials are worried, quoting one as saying, “There is a sense of foreboding.”

Among the antiwar British press and public, of course, that foreboding is more like optimism. Labor Party official Trevor Owen says, “I think we may well see a more rapid removal of troops (from Iraq) than we would have seen before.” Like Blair before him, Brown has pledged to reduce troop numbers when possible—but he may well shift the timetable forward.

Whatever the specifics, we can be sure that a Brown-led Britain will by no means become more determined to wage war on terrorism. It far likelier that we have already seen the strongest days of the U.S.-British anti-terror alliance and British support for fighting Islamist extremism.

Don’t expect Brown to participate in the British public’s surging anti-Americanism, even while President Bush remains in office. Still, the negative public climate is strong enough that we would expect him to maintain a bit more distance between himself and Washington than Blair did. However, he has closer friendships among the Democrats in the capital than he does among the Republicans. With the Democrats surging in power, Brown may actually take the opportunity to build a parallel transatlantic bridge to what looks like, in the words of the New York Post, “America’s new governing elite” (May 16).

Another issue on which we may see a departure from Blair’s position is that of Europe.

Tony Blair was a committed Europhile—actually more so than most of his countrymen. Gordon Brown has been less excited about the European Union project than was his predecessor, in line with the somewhat more Euroskeptical majority opinion in Britain. As chancellor of the Exchequer, he resisted Blair’s push to move Britain to the euro, Europe’s single currency. This position has remained policy, and clearly to Britain’s economic benefit—though at the cost of no small amount of friction with the Eurocrats across the channel.

The Post makes the point that Brown may move the British economy away from the big government welfare state that has ballooned somewhat under Blair’s watch, and that, should that happen, “that will have the incidental effect of moving him further away from Europe and toward America” (ibid.).

Even the popular candidate for the Conservative Party, David Cameron—the primary candidate that Brown will most likely face off against in the next election—is far more cautious about the federalizing tendency of the European Union than Blair has been.

In other words, Britain is likely about witness the departure of the most pro-Europe prime minister in its history—and future. Brown’s election could well presage an increase in tensions between his nation and the Continent. TheTrumpet.com has good reason to expect this outcome, based on the outline of biblical prophecy regarding the future of that relationship.

These trends—the drawdown of British involvement in the war on terror and the widening of the gulf between Britain and Europe—are likely effects of this transition of power. For more on the longer term prospects facing Britain, read The United States and Britain in Prophecy.

http://www.registan.net/index.php/2007/05/24/is-energy-central-asias-curse-or-cure/

Is Energy Central Asia’s Curse or Cure?

The International Crisis Group has just released a new report detailing all the woe Central Asia will face as it comes to grips with its vast energy wealth. In the first few paragraphs of the introduction, however, some really strange biases show up.

This rising interest [in Central Asian Energy] has often failed to take account of the potential for instability in the region. Oil and gas are linked to violent conflict in a number of ways:

* the risk of interstate conflict over reserves and supply routes, though this has become less common in recent decades, and Central Asia’s disputes over pipelines and gas and electricity trade have not turned violent; * the “resource curse” in which energy-rich countries waste the income in corruption and spending on security forces, while failing to diversify their economy, educate their people and develop effective institutions or stable democracies; and * grievances surrounding production: oil-producing areas often suffer poverty, repression, environmental degradation and labour tensions without seeing benefits from the wealth that is created.

Central Asia shows signs of particularly the latter two. Combined with poor governance, worsening poverty in many areas and widening political gaps among the states, they put it at risk of a variety of forms of conflict.

Now, with respect to the authors, who are clearly making a good point that isn’t repeated often enough (energy exploitation has disastrous consequences far more often than not), their selection is a bit narrow. Though they make it a point to say that only three of the five (I’d say six, but whatever) countries of the region have energy resources to speak of, those “latter two” problems only apply to two of them. While Kazakhstan is by no means perfect, democratic, or uncorrupt by European or American standards, it is definitely leading the way in the region, and has shown encouraging hints of moving toward adopting European-style governance (unlike Nathan, I share the State Department’s guarded optimism for evolutionary change through engagement).

So, the risks they lay out are really only in evidence of two of the five republics. Why this warrants a report entitled “Central Asia’s Energy Concerns” (the email announcing it had the subject, “Central Asia Cannot Solve Europe’s Energy Problem”) eludes me.

This is, however, a minor quibble. A more substantive one would be their analysis of Kazakhstan’s economy: relying on “income gap” analysis and similar indicators can say what the spread of income is, yes, but it says very little about growth—in particular, wage growth, which is a much more concrete way of viewing economic development. So while a small number of people are certainly getting richer than everyone else, the very fact that, despite starting at generally the same place when the USSR collapsed, Kazakhstan has a larger per-capita GDP than the other 4 ‘Stans combined should say something very definite about their economic policies: to a large degree, they have worked. At least some anecdotal evidence supports this: when I was last in Almaty, even the Turkish cab driver swerving to the train station was crowing about how easy it was to make money there, and my students in Astana were all very positive on their prospects for the future (optimism is a surprisingly good indicator of a country’s development prospects).

But the report generally says the economy in Kazakhstan is going well, with the caveats (pointed out here as well) that Nazarbayev’s so far merely amusing Napolean complex and weird decision to build Astana might pose problems if it continues to result in underinvestment in education and healthcare (though even there one can find some encouraging signs of moving in the right direction).

What of the report’s other two examples, Turkmenistan and Uzbekistan? They’re both psychotic messes. But we already knew that. Their analysis of the general situation, though, is not really why I’m talking about the report at all—that section, which is the majority of the report, is very well researched and nicely laid out.

My problem stems from how the report shifts, from discussing the economic underpinnings of the region’s dictators, to the potential for further humanitarian abuse, to whether or not Europe can use Central Asian energy to balance Russian influence on the smaller former Eastern Bloc countries (the gas games). Normally the ICG is good at avoiding such a (please pardon the term) Orientalist outlook on the situation it analyzes. Given the bounds and hypotheses in the report, such an extensive section on Europe doesn’t make that much sense. Were two reports hastily combined?

Additionally, there is reckless fear mongering about instability and violent conflict. The way the authors addressed instability and violence reminded me for all the world of that ludicrous STRATFOR report discussing all the ways the region will collapse into a blood-soaked loose collection of failed states (Nathan piled on as well). While you could maybe make the case that without Karimov running Tashkent Uzbekistan will split, there isn’t any evidence (at least, convincing evidence) that Kazakhstan or Turkmenistan are a price fluctuation away from becoming Ingushetia.

Despite these concerns, I must recommend reading it, as it is an excellent overview of many of the concerns facing the region over the next ten years or so.

Update: The ever-insightful Ben P. piles on with a much closer look at some of the other economic indicators in the ICG report, and finds them needlessly negative on Kazakhstan. We’re both in agreement that Kazakhstan is far from perfect, but that the ICG is also far from even in its treatment of the country. What’s up with that?

5.25.2007, Friday

http://communities.canada.com/nationalpost/blogs/tradingdesk/archive/2007/05/25/aurelian-shares-down-on-speculation-of-ecuador-earnings-grab.aspx

FP Trading DeskAurelian shares down on speculation of Ecuador earnings grab

Shares in Aurelian Resources Inc. (ARU/TSX) are down as much as 14% Friday morning, on speculation that Ecuador plans on reforming laws regarding foreign investment in the country that would allow it to assume as much as 80% of the earnings from the oil&gas and mining sectors.

If the rumours prove true, Aurelian would stand to lose considerably as its current gold and other mineral exploration acitivities, including the wholly-owned Condor project, are situated entirely in Ecuador.

According to Stratfor, a U.S. based analysis service, Ecuadorian government minister Gustavo Larrea, who was president Rafael Correa's campaign manager, said Thursday private companies holding majority stakes in oil or mining operations will be left with 20 percent to 30 percent of the earnings following the reforms.

Despite this announcement, Larrea said Ecuador does not have any plans to nationalize the two sectors, Stratfor reported.

In response, Aurelian has released a press release stating the news has no basis.

David Pettdpett@nationalpost.com

http://www.canada.com/nationalpost/financialpost/story.html?id=4a9a9a80-c91e-4a46-992d-ea0c8766e6cb&k=81228

Aurelian shares tumble on Ecuador policy reportReutersPublished: Friday, May 25, 2007

TORONTO (Reuters) - The shares of Aurelian Resources Inc. tumbled more than 20 percent on Friday, before recouping some of the losses, on a report that Ecuador is considering changes to its foreign investment policy that could hurt the junior mining company.

Shares of Aurelian, known for a major gold discovery at its Condor project in southeast Ecuador, were down C$4.46, or 13.5 percent, at C$28.64 on Friday afternoon on heavy volume of 3.2 million shares. Earlier in the session the stock fell as low as C$26.40.

The turbulence followed an Internet news report that said the country was considering changes to its foreign investment law.

The brief article, which appeared on the Web site Stratfor.com, said: "Ecuador will create a Constituent Assembly to reform the constitutional law regarding foreign investment in the country so the state will be able to assume 70 percent to 80 percent of the earnings from the oil and mining sectors, Government Minister Gustavo Larrea said May 24."

"Private companies holding majority stakes in oil or mining operations will then be left with 20 percent to 30 percent of the earnings. Despite this announcement, Larrea said Ecuador does not have any plans to nationalize the two sectors."

Aurelian downplayed the report.

"Aurelian is doing everything within its power to get clarification from the government since this single news story is totally contrary to the government's earlier statements that confirmed its desire to build a mining industry in Ecuador and create a stable environment for foreign investment," the company said in a release.

Aurelian was not available for further comment.

Michael Gray, a mining analyst at Pacific International Securities in Vancouver, British Columbia, also downplayed the report, noting that it contradicts the signals coming from the Ecuador government and mining associations "lobbying for a positive mining industry in Ecuador."

"This is a little bit out of left field. It does not add up, so therefore I am advising clients accordingly," Gray said.

Gray maintains a "buy" rating on the stock with a target price of C$75.00.

($1=$1.08 Canadian)

© Reuters 2007

http://www.thestar.com/Business/article/217799

Aurelian stock drops after Ecuador report Today's marketsMay 25, 2007 04:32 PMCanadian Press

Shares in Aurelian Resources Inc. (TSX: ARU), known for a major gold discovery at its Condor project in southeast Ecuador, dropped more than 20 per cent Friday after a report the country is contemplating changes to its foreign investment policy.

Aurelian stock fell to as low as $26.40 on the Toronto Stock Exchange in early trading. The stock recovered some of those losses by day's end, closing down 5 per cent or $1.70 to $31.40.

The article, which appeared on the geopolitical analysis web site Stratfor.com, said Ecuador is creating an assembly to reform the constitutional law regarding foreign investment in the country "so the state will be able to assume 70 per cent to 80 per cent of the earnings from the oil and mining sectors."

The article went on to say that private companies holding majority stakes in oil or mining operations will be left with "20 per cent to 30 per cent of the earnings."

It also said Ecuador had no plans to nationalize the sectors.

Austin, Tex.-based Stratfor.com said it has received numerous inquiries on its report, which it says originated from Agence France-Presse and was printed by Ecuadorian newspaper El Universo.

Aurelian said in a statement during market hours Friday that it "does not believe that there is any basis to this report."

The company also said it was "doing everything within its power to get clarification from the government," adding that the story is contrary to the government's earlier statements to develop the mining industry in Ecuador and create a stable environment for foreign investment.

5.26.2007, Saturday

National Post (f/k/a The Financial Post) (Canada)May 26, 2007 Saturday

National Edition

False 'news' creates buying opportunities; Outrageous stories from unlikely sources should raise eyebrows

BYLINE: Peter Koven, Financial PostSECTION: FP MARKETS; Pg. FP9LENGTH: 612 words

The ghost of Ed Pastorini reared its ugly head again yesterday. Mr. Pastorini, you may recall, is the mysterious U.S. financier who was planning a bid for mining giant Gold Fields Ltd. last month.

"I prefer to stay private, which is what I have managed to be for over 25 years in the mergers and acquisitions business," he told Bloomberg News.

"Private" is putting it mildly. In fact, he doesn't appear to even exist. But that didn't prevent Bloomberg from running the bogus story and driving Gold Fields shares up as much as 10%, adding about US$1-billion to the company's market value.

It was a similar story yesterday with Aurelian Resources Inc., a Toronto based mining company with a big gold project in Ecuador.

An institutional news service called Stratfor reported that the Ecuadorian government plans to change foreign investment laws so that the state can assume 70% to 80% of the earnings from the oil and mining sectors. It attributed the comments to Gustavo Larrea, a government minister.

It was an outrageous story, and it came from an unlikely source. But investors punished Aurelian anyway, driving the stock down more than 20% at one point. The news turned out to be false, as Mr. Larrea's statements were not related to the mining industry, just the energy sector.

"I'm disappointed in the market," said Bill Fisher, Aurelian's chairman, in an interview as his stock was getting hammered. "Unsubstantiated rumours are flying about and people are responding to that."

The stock regained most of the losses by the end of the day. But the whole experience shows the way instant news delivery, accurate or not, has changed the way the markets work.

"You've got a lot of momentum out there playing things short," says Robert Cohen, a portfolio manager with Dynamic Funds that owns Aurelian shares. "Here's a headline, the stock is going down."

Yesterday was a short seller's dream. It was a national holiday in Ecuador, so there was no opportunity for the government to refute the story. It happened in Latin America, where political risk is becoming a bigger and bigger issue. And Aurelian has been one of the hottest names on the Toronto Stock Exchange because of its massive gold discovery.

The Aurelian report made for a busy day for Mr. Cohen. But his response is an instructive lesson for investors who see their stocks collapsing under dubious circumstances.

He went through the Latin American news sources, and found the original Spanish-language report. That story had some material that was not in the English translation. In the Spanish version, Mr. Larrea talks about how his proposals are similar to other Latin American countries, and that he expects private investment to "multiply" despite the new rules.

"You can't suck and blow at the same time," Mr. Cohen says. "The statements contradict each other. You know there's something wrong here. We passed it off as some really bad reporting, totally inconsistent with anything the government has said."

He also contacted the company, and got its assurance that the story was wrong. Meanwhile, the stock was down at its lowest level in a couple of months. So as Bloomberg and Reuters picked up the bogus story and spread it around, Mr. Cohen was in the market buying shares.

His advice: don't panic. In an era of instant information, this kind of nonsense will happen and you have to take curious news with a grain of salt.

"It's just a means of separating stupid peoples' money from them and transferring it to smart people," says Bill Belovay, a fund manager with Jones Heward Investment Counsel.

In other words: Mr. Pastorini is still out there. Who knows what company he'll target next?

pkoven@nationalpost.com

Edmonton Journal (Alberta)May 26, 2007 Saturday

Final Edition

Business Browser

BYLINE: The Edmonton JournalSECTION: BUSINESS; Business Browser; Pg. F2LENGTH: 1054 words

QUEST PT HALVES LOSSES

EDMONTON - Quest PharmaTech Inc. halved its losses last year as it streamlined drug development and administration. The loss of $1.3 million, or three cents a share, compared with a loss of $3.5 million, eight cents a share, in 2005.

Research and development expenses were $861,954, compared with $1.2 million the previous year, while administration costs dropped to $640,718 from $1.1 million. The company has debt of $1.2 million, including a $1-million convertible debenture and $230,000 in demand loans from two insiders. This week the company said it will raise up to $1 million in a private placement.

Quest is developing prostate cancer and hair removal treatments based on its SonoLight technology. Shares (TSXV: QPT) closed at 20 cents Friday, up 11 per cent on the day.

COKE GULPS VITAMINWATER

ATLANTA - Soft-drink maker Coca-Cola Co. said Friday it will buy Vitaminwater maker Glaceau for $4.1 billion UA in cash, in a move to expand its non-carbonated beverage line.

The acquisition of Glaceau, formally known as Energy Brands Inc., is expected to add to Coke's earnings per share in the first full year following the deal's closing this summer.

The boards of both companies have approved the transaction.

"Glaceau has built a great business with high-quality growth, as well as a strong pipeline of innovative products and brands," said Neville Isdell, chairman and chief executive of Coca-Cola. "We envision even faster growth for glaceau as part of Coca-Cola's enhanced range of brands for North American customers and consumers."

UNILEVER TO SELL GREEN TEA

NEW YORk - The company that produces Lipton tea, one of the world's biggest black tea buyers, aims to obtain all its tea from plantations deemed "sustainable," a U.S. activist group said Friday.

Announcing its first such agreement with a tea company, the Rainforest Alliance said Unilever, which owns such well-known brands as Lipton and PG Tips, will begin selling Rainforest Alliance-certified tea.

"This decision will transform the tea industry which has been suffering for many years from oversupply and underperformance (low prices)," Unilever chief executive Patrick Cescau said.

Rainforest Alliance certification requires three levels of sustainability -- worker welfare, farm management and environmental protection. The first certified tea will come from Kericho, Kenya, an estate expected to be certified within weeks, to be sold in European restaurants and to caterers in August.

The tea will sell at a premium, about 10 to 15 per cent higher than average auction prices.

LIGHT AT END OF EUROTUNNEL

PARIS - A public share swap offer by Eurotunnel has been a success, the French financial market regulator said on Friday, allowing the troubled Channel Tunnel operator to create a new less-indebted group and avoid liquidation.

"The minimum condition fixed by the initiator - the obtention at the end of the offer of at least 50 per cent (of shares) plus one share has been satisfied," the AMF authority said in a statement.

The public exchange offer for shares in Eurotunnel, part of a plan to save the company from liquidation, expired on May 21. The company was offering holders of its investment units one ordinary share in the new holding company, plus one warrant to subscribe to its shares.

In November, holders of the company's 6.3 billion euros in bank debt as well as its suppliers voted in favour of a safeguard plan for Eurotunnel, which was approved by the Paris Commercial Court in January.

The success of the share swap means that that restructuring plan will be able to go ahead.

ECUADOR JOLTS AURELIAN

TORONTO - Shares in Aurelian Resources Inc., known for a major gold discovery at its Condor project in southeast Ecuador, dropped more than 20 per cent Friday after reports the country is contemplating changes to its foreign investment policy. Aurelian stock fell to as low as $26.40 on the Toronto Stock Exchange in early trading. The stock recovered some of those losses by day's end, closing down five per cent or $1.70 to $31.40.

The article, which appeared on the geopolitical analysis website Stratfor.com, said Ecuador is creating an assembly to reform the constitutional law regarding foreign investment in the country "so the state will be able to assume 70 per cent to 80 per cent of the earnings from the oil and mining sectors."

The article went on to say that private companies holding majority stakes in oil or mining operations will be left with "20 per cent to 30 per cent of the earnings."

SHERWOOD SCOTIABANK OPENS

EDMONTON - Scotiabank has opened its third full-service branch in Sherwood Park, at 665 Baseline Rd. The 5,500-square-foot branch is open until 7 p.m. Wednesdays and Thursdays, until 6 p.m. Fridays, and is open Saturdays, 10 a.m. to 2 p.m.

The branch has two ABMs inside, one drive-through ABM, and 14 employees. This is Scotiabank's 30th location in the Edmonton area.

Scotiabank also announced, Friday, that it will hold its 176th annual meeting in Edmonton, on March 4, 2008.

APOLLO LOSES $122.7M

SOUTHFIELD, Michigan - Apollo Management LP's Hexion Specialty Chemicals Inc. was found liable by a Kentucky jury for a 2003 plant explosion that killed seven people, and was ordered to pay $122.7 million to a Michigan maker of acoustic products. Closely held CTA Acoustics Inc., said dust ignited from a powdered resin made by Hexion's predecessor company, Borden Chemical Inc. Resulting explosions destroyed CTA's Corbin, Kentucky, plant, CTA said. The company claimed Borden failed to warn customers that the product was volatile.

BOMBARDIER-RUSSIA DEAL ON

MONTREAL - After planes come trains.

Bombardier Inc., busy selling business jets to its billionaires and resource giants, on Friday signed an agreement with Russia to develop new locomotive propulsion technology.

Its Berlin-based Bombardier Transportation rail-equipment unit set up two 50-50 joint-venture projects with Transmashholding, Russia's biggest manufacturer of trains and Russian Railways' main supplier. It builds locomotives, freight, passenger and subway cars, with 2006 sales of $2.2 billion US.

- - -

Get a jump on business news at the Edmonton Journal's website with a summary of top stories every weekday morning and updates throughout the day as news breaks. Go to www.edmontonjournal.com and look under Latest from The Journal.

5.27.2007, Sunday

http://timesofindia.indiatimes.com/Opinion/Sunday_Specials/Special_Report/Battleground_N-E/articleshow/2076790.cms

Battleground N-E27 May, 2007 l 0000 hrs ISTlPrabin Kalita/TIMES NEWS NETWORK

Political instability in Bangladesh and the growth of jihadi terrorism organisations has its most visible fallout in India’s northeast, which has witnessed a sudden spurt in terror activities including suicide bombings, something that was not in the repertoire of the indigenous groups. Of much greater concern are footprints of Pakistan’s ISI in ULFA activities and creeping Islamisation in these parts that has security quarters in India in a tizzy.

ULFA, according to security think tank Stratfor, had pumped $6 million into Bangladesh’s elections, funding 15 candidates of Awami League and BNP. The postponement of the elections

has unsettled ULFA, but not to the extent of prompting its leaders, Paresh Barua and others, from leaving their luxurious homes in Dhaka.

Meanwhile, Pakistan’s ISI is reportedly working with Bangladesh’s intelligence agencies to increase financial and terror links between ULFA and other jihadis — the aim apparently being to bring militant and jihadi groups operating in these states under one umbrella. The first suicide bombing in Assam took place on April 9 this year, which pointed to a qualitative change in ULFA’s tactics. This is a favourite modus operandi of Islamist groups in Pakistan and Afghanistan.

An internal assessment of security agencies which has been submitted to the Bangladesh government, reveals that the breeding grounds of terror lie in the 1,800-km belt in north and south Bangladesh, bordering northeast India.

According to the report, this area is a safe haven for as many as 176 training camps of Indian ultras. ULFA leads the list with the highest number of training camps — 38 — within the terror belt which stretches from Sherpur district in the north, bordering West Garo Hills in Meghalaya, to Cox’s Bazaar in the south near Myanmar.

Similarly the National Liberation Front of Tripura (Biswamohan) reportedly has 34 camps spread along the Bangladesh-Tripura border in three Bangladesh districts of Rangamati, Moulavi Bazar and Khagrachari and one at Dhanmandi in Dhaka. The All Tripura Tiger Force also has 15 camps in the same belt. Also in the list are locations of camps of Borok National Council of Tripura and Bru National Liberation Front in Rangamati district.

The National Democratic Front of Bodoland has 14 camps, Dima Halam Daogah of NC Hills district of Assam has one camp in Maulvi Bazaar, Meghalaya's Hyniewtrep National Liberation Council has two, the People’s Liberation Army has sixteen, Kongeiyawal Kamba Lup has three, United National Liberation Front has one, People’s Revolutionary Front of Kangleipak one, Kamatapur Liberation Organisation eight, Muslim United Liberation Tigers of Assam 11 and Islamic United Reformation Protest of India has three camps reportedly located in madrassas in Kurigram district.

Indian intelligence agencies are also concerned about "suspect activities", particularly in the 96 madrassas and 243 mosques in Dhubri in south-western Assam. Long an area of strife and unrest, the north-east now seems to have become a battleground against terrorism.

prabin.kalita@timesgroup.com

http://www.theconservativevoice.com/article/25416.html

by Scott SullivanGen. Petraeus is Wrong on SadrMay 27, 2007 12:00 PM EST

Shame on Army Gen. David Petraeus for the assessment that describes Muqtada al-Sadr as a tool of Iran! See “Iran Deeply involved in Iraq, Petraeus Says;” MarineCorpsTimes.com; 25 May 07.

The unfounded allegations that Sadr is working for Iran are repeated by Stratfor, which is a prestigious private sector think tank. At least Stratfor, unlike Petraeus, has a good motive for denigrating Sadr. Stratfor is advising clients to promote US and Iranian government collaboration in Iraq, while bypassing Sadr. In my view, that would be like promoting US-German collaboration in France in 1940 while ignoring Charles de Gaulle and the Free French. See Stratfor, “Al-Sadr’s Return and Iran’s Plan,” 25 May 07.

A superior assessment is offered by the Jamestown Foundation, which predicts war between Sadr and the pro-Iran militias such as the Badr Brigade. See “A Shiite storm comes on the Horizon,” 25 May 07.

Gen. Petraeus is dead wrong on three issues.

First, Sadr is not Ahmadinejad’s agent, he is a serious rival. To be specific, Ahmadinejad is a Hitler who wants to annex Iraq. Sadr is a Charles de Gaulle who wants to defend Iraq. One will win, and one will lose. Gen. Petraeus and Stratfor are betting on Ahmadinejad. Others are betting on Sadr. My guess is the time will come when a large suburb of Tehran will be renamed Sadr City.

Second, Gen. Petraeus underestimates Sadr’s political appeal and the potential for US-Sadr cooperation to pull Iraq out of the crisis. Sadr, unlike Iran, is part of the solution, not part of the problem. See the assessments in http://Iran-Watch.com.

Third, Gen. Petraeus neglects to identify Iran’s true fifth column in Iraq -- the Badr Brigades and the SCIRI political party. The Jamestown Foundation is correct in predicting war between Sadr and the Badr Brigades. Sadr is fighting for Iraq, while the Badr Brigades are fighting for Iran. The vast majority of the Iraqis, including Iraqi Shi’ites, will support Sadr. He will be the next prime minister of Iraq.

Finally, it is unfortunate that the US military ignores the importance of Muqtada al Sadr. Here is a reminder. In World War II, in addition to US support for Charles de Gaulle, the US supported two communists in very important countries, Tito in Yugoslavia and Mao Tse Tung in China. In those days the US called this coalition the “United Front Against Fascism.” This was a good concept and a good name. Sadr is one of the good guys. Forget the Islamic ideal; Sadr is a right wing leftist, a combination of De Gaulle, Tito and Mao. Sadr is a giant; Ahmadinejad is nothing, a punk who never grew up.