Monday, July 28, 2008

CCTVs camera installed at Indo-Nepal border

New Delhi, July 27 (ANI): Director General of Sashastra Seema Bal (SSB) Gopal Sharma informed the media here today that close circuit televisions cameras have been installed at three crossing points along the Indo-Nepal border to keep a check on the movement of terrorists and smugglers.


He further said that there are 17 regular border crossing points which are being manned by SSB personnel.


The SSB guards the 1850 kilometres-long Indo-Nepal border beginning from Uttarakhand to West Bengal.


The installation of CCTVs is considered important in view of the fact that Nepal is sought as a safe haven for Pakistani intelligence agency ISI and various other terror outfits. (ANI)

Source: Newstrackindia.com

Saturday, July 26, 2008

India losing war on terror

When this newspaper ran a story last year about a confidential United Nations report ripping apart India’s anti-terror preparedness, the Ministry of Home Affairs quickly swung into action. Its officials wanted the journalist prosecuted.

Shooting the messengers, an old habit of Indian officialdom, is playing out with disastrous consequences virtually every month across India, the largest theatre of terror groups in the world where more than 70,000 lives have been lost to terror-related violence. India loves blaming the ISI for nearly everything that goes wrong here. But alongside, India’s government behemoth hates introspection. It hates fingers pointed at it on its capability to deal with terrorism.

Across more than a dozen states, India’s 2.2 million-strong police force, one of the largest in the world, is facing challenges of militancy that most policemen are not trained to deal with, and too busy to handle. Armed with the exact same skills, the policemen who rush to the site of a terrorist bombing also investigate bicycle thefts and guard the venues of VIP weddings.

Despite a police modernisation programme that has had hundreds, possibly thousands, of crores of rupees pumped into it, bulletproof vests, night vision devices, fast vehicles — and often, simply diesel or functioning generators and telephones — remain luxuries for most policemen in militancy areas.
Source: Hindustan Times, 26 july 2008

Wednesday, July 23, 2008

India cautions UN Mission in Nepal

Press Trust of India

Cautioning the UN Mission in Nepal (UNMIN) against seeking mandate beyond what the people of that country want, India has said that such a course could jeopardise the work done by the world body and undermine its investment in the Himalayan nation.

Addressing the 15-member UN Security Council on Friday, Indian Ambassador to the UN, Nirupam Sen, said Nepal has not sought the world body's role in taking decision on issues relating to the peace process, which has been consistently nationally-owned, directed and implemented.

''I am constrained to point out that we have noted a consistent effort to expand the definition of what Nepal seeks in terms of support to include a role in the Nepali peace process, irrespective of the desire of Nepalese interlocutors,'' said Sen.

The Council was discussing renewing the mandate of UNMIN at the request of Nepal but Kathmandu had sought its role only in limited fields, which exclude the pace process. That would require drawdown of the mission.

To insist on a role that the host nation is reluctant to provide is to risk jeopardising the work of UNMIN thus far, Sen said.

Sen also pointed out that the UN mission had gone to Nepal at the request of Kathmandu and not sent by the world body because situation in that country presented threat to peace and security.

As India Criticizes UN's Ban on Nepal, Will He Counter-Attack as on Zimbabwe?

By Matthew Russell Lee of Inner City Press at the UN: News Analysis

UNITED NATIONS, July 18 -- Nepal has been one of the UN's recent success stories, if seen in context, at least for now. But even on this, Secretary-General Ban Ki-moon has managed to get publicly criticized. Nepal recently requested a six-month extension of the UN Mission in Nepal, UNMIN. Ban responded with a report asking for more clarification from Nepal, and stating that "should this matter remain unresolved by the time the Council considers the present report, I would recommend a one-month extension."

In the July 18 Security Council session about Nepal, the Ambassador of India Nirupam Sen said "it is difficult to accept parts of the Secretary-General's latest report... It seems inappropriate for [Ban] to advise this Council to extend the mandate for one month unless Nepal's request is 'clarified.' In other words, unless Nepal's request is in line with what UNMIN want it to say, the request is not good enough."

Minutes later at the UN's regular noon briefing, Inner City Press asked Ban's Deputy Spokesperson Marie Okabe to respond to India's critique. She noted that Ban's Special Representative Ian Martin had, in his comments that morning to the Council, recommended at six-month rather than one-month extension. But Martin's statement was made before the Indian Ambassador spoke; India went forward and criticized Ban anyway, criticized him for even asking for the clarification.


One week ago, when Zimbabwe's Ambassador said that "the Secretariat" could not be viewed as impartial, because the UN Department of Political Affairs' reports on Zimbabwe only criticized the government and never the opposition, Ban's Spokesperson responded with a statement on Saturday expressing "deep concern" at the "highly inappropriate" comments of the Zimbabwean Ambassador. This stood in contrast to this Spokesperson's declining to criticize or respond to comments by Russia's Ambassador, about law-breaking in connection with Ban's reconfiguration of the UN Mission in Kosovo. The theory was that since Russia is a Permanent Five member of the Security Council, and could veto any second term by Ban, his office did not express concern when criticized by Russia. On July 15, Inner City Press asked Deputy Spokesperson Okabe

Inner City Press: Over the weekend, your Office put out a statement calling a statement by the Zimbabwe Ambassador highly inappropriate and unacceptable, for having said that, in his opinion, DPA reports were one-sided. How are his comments different from ones like those of Russian Ambassador Churkin, who said the Secretariat was breaking the law with EULEX, and then I was told it was just his right to have that opinion? What’s the basis for calling an Ambassador’s commentary highly inappropriate?

Deputy Spokesperson Okabe: It's evident that the Secretary-General felt strongly about the Ambassador's remarks, because, as you know, the Secretary-General has been discussing the situation in Zimbabwe and how to bring a resolution to that situation with parties in the region. He's been talking with SADC, with his partners, all regional parties and this is an area where he’s been working very closely. And, as you know, he had dispatched an envoy to the region and I think that he did not find such comments helpful to the efforts that he was exerting.

Inner City Press: I think that's something people don't understand, like on Kosovo. He's making a lot of efforts, but he’s been subject to criticism. So what's the difference? Is it that Russia’s one of the P-5?

Deputy Spokesperson Okabe: I'm not going to engage in comparing the situations. That's the way he felt about this situation and I gave you the reason why.

But did Ban change his proposal from one month to six months entirely because he was satisfied with Nepal's clarification? Or because India, a country certainly larger than Zimbabwe and that wants a permanent seat on the Security Council, let it be known, even before Friday morning's meeting, of its dissatisfaction with him even asking for clarification?

Why did India go forward with its public critique even after Ian Martin announced Ban's new position? Since the critique is that by demanding the clarification, Ban made Nepal say what he wanted to hear, recommending a six month extension after receiving the requested clarification does not answer the critique. After making his statement, Ambassador Sen said he will only offer further explanation after the Security Council votes on the Nepal mission extension, currently slated for Tuesday, July 22. Ian Martin will speak at that time, as well, hopefully to offer an update on the deadly UNMIN helicopter crash among other topics.


It's worth noting that the same Department of Political Affairs which Zimbabwe's Ambassador criticized oversees Martin's UNMIN mission, and is in this cas being criticized by India.


For now, given Ban's response a week ago to Zimbabwe's criticism, will his Office respond to India's similar critique? Watch this site. And this --

Tuesday, July 22, 2008

World Bank boost for Nepal ventures of GMR, Sutlej

Kathmandu, July 22, After facing protests from local organisations, two Indian companies that signed separate agreements with the government of Nepal to develop hydropower projects in the Himalayan republic have received a fresh shot in the arm from the World Bank, which has pledged to provide partial funding for the ventures.

According to Anita George, director of infrastructure at the World Banks International Finance Corporation (IFC), IFC will finance 25 percent of the total investment required for the 402 MW Arun III and 300 MW Upper Karnali projects, upon the request of the two Indian companies that hold the licence to develop them.

GMR Energy Ltd became the first Indian company to bag a hydropower project in Nepal after it pipped nearly a dozen other Indian rivals to win the licence for the Upper Karnali project.

Arun III was awarded soon after that to Sutlej Jal Vidyut Nigam, in which Indias central government as well as the state government of Himachal Pradesh hold the stakes.

The Upper Karnali project would require an estimated investment of about $450 million while Arun III would need about $860 million. However, Nepals hydropower projects tend to overshoot estimations due to protracted delays caused by political turmoil and opposition by local organisations.

The government of India had initially shown interest in Upper Karnali but withdrew after fierce opposition by Nepals parties. Even now, Maoist-supported organisations in the region have been demanding the scrapping of the deal with GMR, saying it should go forward only after Nepal has been restructured into autonomous states which would control their own projects.

Arun III has also been generating dissent, with the locals demanding a share in the equity. Arun III officials have been reported as saying that after handing over the free shares to the government of Nepal as per the memorandum of understanding (MoU) signed in March, they would not sell any more of the shares in Nepal.

The investment in the Indian companies projects will be a forward leap for the IFC in Nepals hydropower sector. So far, its investment has been limited to 10 percent each in two minor projects - Khimti and Bhotekoshi.

George, who is in Kathmandu to take part in a workshop on hydropower project financing, said IFC would invest $38 million in infrastructure in Nepal, of which the lions share - 80 percent - will be in hydropower projects.

Sunday, July 20, 2008

Imagine A World Without Money, By John Steinsvold

Economists concede that economics is an inexact science. What does that mean? Perhaps it means their economic forecast is better than yours or mine. Recently, economic indicators have been rising and people have their fingers crossed. Economists have given us reason to hope that the job market will improve and that the stock market will continue on a steady climb. Yet, the newspapers continue to report more layoffs and more jobs going overseas.

Meanwhile, our economy is getting more and more complex. We associate complexity with progress for some ungodly reason. The following problems, however, have become inherent in our economy. What does that mean? It means they will be around for a while:

Needless poverty, unemployment, inflation, the threat of depression, taxes, crimes related to profit (sale of illicit drugs, stolen IDs, muggings, bribery, con artists, etc.), conflict of interest, endless red tape, a staggering national debt plus a widening budget deficit, 48 out of 50 states in debt, cities in debt, counties in debt, skyrocketing personal debts, 50% of Americans unhappy at their work, saving for retirement and our children's education, health being a matter of wealth, competing in the "rat race", the need for insurance, being a nation of litigation, being subject to the tremors on Wall Street, fear of downsizing and automation, fear of more Enrons, outsourcing, bankruptcies, crippling strikes, materialism, corruption, welfare, social security, sacrificing quality and safety in our products for the sake of profit, the social problem of the "haves" vs. the "havenots" and the inevitable family quarrels over money.

Have we become gluttons for punishment? My college professor once said, "You can get used to hanging if you live long enough!"

We Americans love our freedom; yet, we have allowed the use of money to completely dominate our way of life. Indeed, we are no longer a free people. We are 7.4 trillion dollars in debt. We live in fear of depression, inflation, inadequate medical coverage and losing our jobs. Our freedom is at stake if not our very survival. Yet, we put our collective heads in the sand.

Yes, there is something we can do. We can look into ourselves for an answer. We may find that we have the strength to carry out our internal economic affairs without the need to use money. Yes, we will still need to use money when dealing with other countries.

There is no question that a way of life without money will alleviate if not completely eliminate all of the previously mentioned problems. Yet, we scoff at the idea. We are totally convinced that money is a necessity. We cannot imagine life without money. Perhaps the time has come to think otherwise. It is completely obvious our present economy no longer satisfies our present day needs.

As individuals, we will gain complete economic freedom. In return, a way of life without money demands only that we, as individuals, do the work we love to do. It is a win/win situation. Let us consider the following arguments:

Can we learn to distribute our goods and services according to need (on an ongoing basis) rather than by the ability to pay? Why not? Poverty and materialism will be eliminated! Our sense of value will change. Wealth will no longer be a status symbol. A man will be judged by what he is; not by what he has. He will be judged by his achievements, leadership, ideas, artistic endeavours or athletic prowess; not by the size of his wallet.

Yes, everything will be free according to need. All the necessities and common luxuries will be available on a help yourself basis at the local store. Surely, this country is capable of supplying the necessities and common luxuries for everyone in this country many times over.

The more "expensive" items, such as housing, cars, boats, etc. would be provided for on a priority basis. For example, the homeless would provided housing ahead of those living in crowded quarters. How will this priority be established? Perhaps a local board elected by the people in the neighborhood such as a school board. Or perhaps the school boards could absorb this responsibility in addition to their present duties.

Since cooperation will replace competition, can government, industry and the people learn to work together as a team to meet the economic needs of our nation as well as each individual? Again, why not? Yes, competition is great; but cooperation is even better. Cooperation avoids duplication of effort. Wouldn’t it be more efficient to have everybody freely working together, sharing ideas, thoughts and technical knowledge? Patents and industrial secrets would be a thing of the past. Competition, however, will still be around. Individuals will still compete with their co-workers in ideas, achievements, leadership and getting promotions.

For example, Ford, Chrysler & GM would work together to build automobiles that are truly safe and efficient and environmentally friendly. Perhaps, with everyone working together, we can invent a car engine that would eliminate the need to import oil from the Middle East. (Note: Ford, Chrysler & GM would gradually become one entity.)

Unfortunately, what immediately jumps into the minds of most people is: "It simply won’t work!" The idea of a way of life without money is then dismissed without further thought. After all, what motivation is there for people to work if there is no paycheck? How can we possibly satisfy the labor needs of our nation? The following reasons are offered why people would be completely happy working in a way of life without money:

Today, only 50% of Americans enjoy their work. That will change. In a way of life without money, we will all be free to do the work we want to do or even love to do without any economic fear. We will be free to pursue our passion or as Joseph Campbell suggests we "follow our bliss".

Cooperation will replace wasteful competition. We will all work together as a team. Work will become a way to help people, to meet people or to be part of something meaningful. It is a proven fact that people like to help one another. An esprit de corps will naturally build up and make work more enjoyable. Even the most menial task becomes easier when people work together. Yes, work will become more of a "togetherness" thing.

The profit motive will no longer be a hindrance to efficiency. There will be no need to sacrifice quality and safety in our products for the sake of profit. We will, like in the olden days, take pride in our work.

Yes, there is very likely to be a shortage of people volunteering to do the more menial tasks. One option is to offer "perks". A perk can be of various forms such as front row season tickets to the opera or to his or her favorite sports team. Can you imagine an NBA basketball game where the celebrities are sitting in the back rows while the dishwashers and janitors are at courtside? (My apologies to Spike Lee & Jack Nicholson!) Or the perk could be the latest model boat or sports car which would not be immediately available to the public. Another option is to draft everyone once in their lifetime, to do a half year or so stint at a menial task. Perhaps a humbling experience is in order for all of us. It might serve us well in the area of character building.

Also, consider the fact that perhaps millions of people will be freed from jobs associated with the use of money. Millions more that are now unemployed or on welfare will also be available to help fill the labor needs of our country. Thus, we will have the work force necessary to do the work which is not economically feasible in our present economy such as cleaning our environment (land, sea & air), conservation, recycling, humanitarian work, research in medicine, education, science & space and now we can include national security.

Perhaps the most difficult problem is in the administration of a way of life without money. Can we learn to determine our economic needs, allocate our resources from the federal on down to the neighborhood levels? Perhaps some sort of economic bodies must be created to coordinate, monitor and carryout our economic needs. These economic bodies would exist similar to our governments, one for the federal, one for each state and one for each local level.

Yes, in order to administrate a way of life without money, economic bodies, boards or councils or whatever you wish to call them would be created to absorb economic responsibility from our various governments. They will interact and cooperate with one another to meet the economic needs of our country and of each individual. They will be empowered by Congress to tend to the economic needs of its constituents. Thus, a balance of power will be safely maintained.

Our federal needs, which would be similar to the federal budget we have today, will be resolved by an economic body comprised of representatives of the various branches of government, our industrial & labor resources, research (in medicine, education, science & space), our environment, conservation, importing & exporting, and now, national security and whatever facet of our way of life should be represented. This economic body will arrange for the labor and material resources necessary to meet the economic needs of our nation.

Similarly, the same will occur at the state and local levels. The economic body at the local levels will be responsible for providing services to the people in the neighborhood. If the labor needs cannot be met with volunteer workers, "perks" must be offered. Also, the economic body at the local levels will be responsible for keeping the stores stocked with food, clothing and the common luxuries which will be available free. Thus, the economic needs of the nation right on down to the neighborhood levels would be determined and satisfied by these economic bodies.

How much economic responsibility will these new bodies absorb from our federal, state and local governments? How much will be shared? Can a balance of power be maintained? At any rate, our federal, state and local governments will be relieved of considerable amount of economic responsibility. Thus, our various governments will be free to catch up on all the other domestic and foreign issues that face us.

Yes, we will still import and export goods with foreign countries as our needs dictate; but what money will be used in place of the almighty dollar? Would the dollar have any value if everything is free in the USA? Would that be a problem? We would, however, still be able to use the currency of the country we are doing business with. For example, if we export goods to Germany, we would accept marks or euros in payment. The euros would then be deposited in our national treasury for future use. The money could then be used to import goods or perhaps send Americans overseas on vacation.

Yes, a way of life without money could be compared to the kibbutz which now exist in Israel. Can you picture the USA as one big kibbutz? However, ownership of property will remain the same as it is today. Our government will remain the same. Our free enterprise system will remain in place as it is today. There will be no need for money or any substitute for money since everything will be free.

The advantages of a way of life without money stagger the imagination; but they are real and cannot be disputed. Perhaps it is time for us to grab the brass ring.

The Human Race has improved everything except the Human Race. – Adlai Stevenson


Source: Countercurrents.org






World's poorest increase despite growth-UNCTAD

GENEVA, July 17 (Reuters) - Record growth in the world's poorest countries has failed to prevent an increase in their total numbers of poor people, the U.N. Conference on Trade and Development (UNCTAD) said on Thursday.

Recent rising food costs threaten to undercut what modest progress has been achieved, while three quarters of people living in least developed countries (LDCs) still survive on less than $2 a day, it said in a report.

Income under $2 a day does not allow most people to meet basic needs for food, water, shelter, health or education, the Least Developed Countries Report 2008 noted.

The 49 LDCs experienced record growth of 7.9 percent in 2005, followed by 7.5 percent in 2006 and a projected 6.7 percent in 2007, the report said.

But the high growth rates, driven in many cases by record exports boosted by high energy and minerals prices, may not be sustainable, it said.

"The recent growth surge is generally not associated with a structural transition in which the share of manufactures in total output is growing (except for most Asian LDCs)," it said.

"In fact, as compared with 10 years earlier, half of the LDCs have experienced deindustrialisation, reflected in a declining share of manufacturing in GDP."



DEPRIVATION

This record growth should have provided the opportunity for substantial improvements in living conditions but rapid population increases and other factors mean some 581 million out of a total 2005 LDC population of 767 million continue to live in material deprivation, it said.

Growth was uneven, with GDP declining in 2006 in Equatorial Guinea and East Timor, and growing by less than 3 percent in Chad, Somalia, Haiti, Eritrea, Nepal, Lesotho, Comoros, Tuvalu and Kiribati.

Growth had some impact on absolute poverty, defined as those living on less than $1 a day, which fell to 36 percent of the LDC population in 2005 -- a still high 277 million people -- from 44 percent in 1994, it said.

Sharp rises in food prices in 2007 and early 2008 have led the prices of staples such as maize, wheat and rice to double in some countries over the past year and a half, a severe blow to poor people spending a large share of their income on food.

"The bigger food import bills will widen further the already high trade deficits of the LDCs. This will affect all food-importing LDCs, and the balance-of-payment impact will be accentuated as countries also have to deal with rising energy prices," it said.

Besides those mentioned above, the other LDCs are Angola, Benin, Burkina Faso, Burundi, Central African Republic, Democratic Republic of Congo, Djibouti, Ethiopia, Gambia, Guinea-Bissau, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Rwanda, Sao Tome, Senegal, Sierra Leone, Sudan, Togo, Uganda, Tanzania, Zambia, Afghanistan, Bangladesh, Bhutan, Cambodia, Laos, Maldives, Myanmar, Nepal, Yemen, Samoa, Solomon Islands and Vanuatu. (Reporting by Jonathan Lynn; Editing by Charles Dick)

Source: Reuters

Saturday, July 19, 2008

Ultimatum to India by a Nepalese group

Pro-Nepalese feeling is gradually being organized in Nepal. Before some days, a private Indian news channel had shown Nepal as its own territory. Sagarmatha TV, a private TV channel of Nepal has condemned the Indian hegemonic intention and had broadcasted a special news campaign against it. It has drawn huge anger within the Nepalese people. Analysts of Nepal urge that the deeds of private Indian TV channel to undermine the sovereignty of its neighboring country, was supported by Indian authority. This issue has been rose at that time when a fraction of Nepal is being actively involved in the Greater Nepal movement. The Greater Nepal activists are urging to restore the previous territory of Nepal which Nepal has lost with British Colony during Anglo-Nepal war.


In July 18, Unified Nepal National Front, a group which is campaigning for Greater Nepal has submitted five points memorandum at the Embassy of India in Kathmandu. The Front has warned the Indian ambassador to Nepal, Rakesh Sood, to withdraw all the secessionist activities that the Indian authority is regulating from the Embassy of India in Kathmandu. The Front has urge that the intelligence agency-RAW is being involve to destabilize Nepal through some Madheshi party. Three Madheshi party of Nepal, Madheshi Janadhekar Forum, Terai-Madhesh Loktantric Party and Sadvawana Party, are demanding 'One Madhes One Province' which is, according to analyst, the suicidal demand that will ultimately direct the country towards disintegration.


The Chairman of the UNNF, Mr. Phanindra Nepal led a mass of protestors with black flags, numbering in hundreds, towards the Indian Embassy in Kathmandu prior to submitting the memorandum to the security head of the Indian embassy in Kathmandu. 'We will be compelled to do any kind of activities to protect our motherland', addressing the mass, Chairman Nepal said.


The full text of the memorandam summitted by Front is as follow:

His Excellency the Ambassador

Embassy of the Republic of India

Kathmandu

Nepal



Subject: Ultimatum served not to support secessionist forces in Nepal


Your Excellency,

Nepal as a Nation State has been maintaining cordial relations with India since 1947/1950, yet we would like to make it a point here that India on the other hand has been taking Nepal’s friendly behavior as its weakness, inferiority and above all humility. It is clear that India has been taking Nepal as its number one enemy though Nepali people have always maintained good neighborly relations with India.

India’s state sponsored media have been intentionally attacking the Nepali nationality, national unity and sovereignty for all along two years now which implies that the Indian establishment is actively involved in a proxy war with Nepal, which has made us all the Nepali people very unhappy.

More specifically, the unlawful activities the Indian Embassy in Kathmandu is engaged currently, to mention a few, such as to provoke some Madheshi Parties of Nepal’s Tarai to raise the demand for One Madhesh One Province has made the entire world community and the Nepali people clear the Indian mal-intent in Nepal.

Exceeding all stipulated diplomatic limits and violating the Geneva Convention which guides the conduct of a foreign diplomat, the Indian government though it’s Embassy in Nepal is using its intelligence agency-RAW to provoke the Indian immigrants living in Nepal, firstly, to destabilize the country and later push the country towards disintegration. The Indian intelligence agency is also involved in disturbing Nepal’s age old communal harmony by provoking various communities living in Nepal.

We would like to remind it to your Excellency that Nepal’s Tarai problems are exclusive to Nepal. We the Nepalese are competent enough to sort out this issue amicably amongst ourselves. However, in the meantime several meetings have taken place right inside your embassy in Kathmandu to discuss the Madhesi issue of Nepal, your Excellency have been making public comments regarding the issue and India is also providing safe haven for the secessionist groups of Nepal’s Tarai, which in all prove that India has been in an undeclared war with Nepal already.

The Unified Nepal National Front requests the Indian government to create favorable atmosphere for the Indian Immigrants in Nepal to return to their motherland so that the indigenous communities of Nepal such as the Tharus and other indigenous communities live a peaceful and harmonious life in their homeland.

Finally, Your Excellency! we would like to warn you and your government that any further interferences in Nepal’s internal matters from your side could jeopardize the already strained Nepal’s relations with India. India will be solely held responsible for any retaliatory step taken by the Nepali people that will ruin the age-old relations with India, if India does not abide by the Geneva Convention and the diplomatic conduct between nations any further.


…………………

(Phanindra Nepal)
Chairman, UNNF

Tuesday, July 15, 2008

Inflation in the near east

Rising Asian inflation is a well-known problem. The high weightings of food and oil in consumption have been a big factor in driving the Asia ex-Japan inflation rate from 3% in the middle of last year to more than 6% today, according to UBS. The determination of many Asian governments to peg, or manage, their exchange rates has led to inappropriately loose monetary policy; real interest rates, according to UBS, are currently minus 2%.

But what has attracted less attention is the inflation problem in eastern Europe. Headline inflation is 15% in Russia, around the same rate as Bulgaria, 18% in Latvia and a remarkable 30% in the Ukraine. Even in countries where prices are not rising that fast, Capital Economics points out that wage growth is often very rapid; 9.5% in Slovakia, more than 10% in the Czech republic and 10.5% in Poland. In the Baltics, which look a complete mess, wage growth is running at 20-30%.

Monetary policy in the region is distinctly mixed. Some countries, like Poland, have positive real rates but others are ridiculously loose; in Ukraine, credit growth has been 80% over the last 12 months, according to Capital Economics.

This has two consequences for investors. The first is that the image of emerging markets as model economic citizens, which has been built up carefully over the decade since the Asian crisis, is a flawed one. They have indeed improved their economic performance in aggregate, pushing up GDP growth and reducing their dependence on foreign capital. But having tackled the problems that caused the late 1990s bust, they are now facing the concerns that arise from a prolonged boom.

Economic overheating is a very difficult issue to tackle, as developed countries found in the 1960s and 1970s. While workers are getting jobs and getting wage increases, governments are very reluctant to slam on the brakes. Often, they try to get round the problem of inflation by price controls, which simply create a new set of distortions. Forcing interest rates sharply higher, as Paul Volcker famously did between 1979 and 1982, is usually only possible if independent bankers, not politicians, are in charge.

There may be a particular problem in eastern Europe in that most countries have less than 20 years experience of grappling with any kind of free-market economy. It is hardly surprising that they struggle to cope. Whatever the reason, investors face the danger that governments will not control inflation, a tendency that will eventually lead to a currency crisis (even without one, stockmarket valuations traditionally fall when inflation rises). Alternatively, governments will crack down too hard, leading to recession and a collapse in profits.

The second consequence is for investors in developed countries. We all know about the cost pressures resulting from high oil and food prices. But a lot of manufacturing operations have been outsourced to both Asia and emerging Europe in recent years. As inflation accelerates in these regions, costs in the developed world will rise. There may not be “second round” effects from higher wages in the west; instead these pressures will come from the east. The result will surely be pressure on the profit margins of companies in western Europe and America.

In addition, many people and companies in eastern Europe have borrowed money overseas, lured by lower interest rates in the euro zone. It does not really matter if the inflation surge leads to devaluation or recession in the east; either way, bad debts will rise. The next subprime problem may emerge in Latvia rather than Las Vegas.

Source: Economist.com

Thursday, July 3, 2008

China against opening Indo-Nepal border as Tibetan protests mount

KATHMANDU: Nepal's inability to contain mounting pro-Dalai Lama protests has sparked concerns in China which is now lobbying for the closure of the Himalayan country's open borders with India.

"China has cautiously expressed its concern over the existing 1,700 km open border between Nepal and India, accusing that Tibetans have been frequently crossing the border to launch free Tibet agitation in Nepal," a Nepalese weekly reported.

"Tibetans fleeing from China come to Nepal on way to India through this open border," officials in Beijing were quoted as saying by Nepal weekly.

Beijing is regarding the open border as a major factor that is fuelling the nearly three-month long protests sparked after Beijing's crackdown on anti-China protests in Lhasa, the weekly said.

"There has been significant participation of Tibetans coming from India in free Tibet demonstrations being staged in Kathmandu," Chinese officials claimed.

China, therefore, wants to either close down the Indo-Nepalese border or regulate it through certain mechanism, they said.

In order to control such pre-planned anti-China activities in the Nepalese land, it is essential to regulate or control the open international border between Nepal and India, the officials pointed out.

Interestingly, the Maoists, who are set to lead the next government in Nepal have too opposed the open border policy as one of their key demands is abrogating the Nepal-India Peace and Friendship treaty of 1950. There are over 20,000 Tibetans residing in Nepal at present.

Africa's Food Crisis Opportunity, By Josh Ruxin

KIGALI, Rwanda -- Every time Americans buy groceries, we feel the crisis in food prices. But while inflation presents discomfort in the United States, it is causing dire hardship elsewhere. In many of the world's poorest communities, food prices have become an obstacle to survival. Yet rapidly rising prices -- which are hurting the 73 million people fed each day by the World Food Program and the hundreds of millions who work for low wages in cities -- may also create an opportunity: the first chance in years for the world's poorest farmers to climb out of poverty.

More than a billion people around the world eke out an existence on less than a dollar per day. Most people here in Rwanda fall into that category. But since they rely on themselves for food production and are too poor to afford fertilizer, tractors or advanced seeds, they are insulated from price spikes. For years, working as a farmhand in Rwanda meant slow starvation. Yet with basic food items now priced too high for the average person to afford, local production of food is more attractive, meaning that farmworkers are better able to maintain a living wage.


Since 1850, commodity prices have declined steadily. Coffee, maize and even oil have all become cheaper -- until recently. The surge in fuel prices has, ironically, driven up demand for corn-based ethanol. And, while biofuels won't lessen the need for crude oil, at least not yet, the resulting corn shortage has forced food prices higher.

In Africa, the crisis is imparting sharp lessons. Freer, more democratic nations with better economic policies appear more immune to the spike in food prices. Meanwhile, less-open countries have employed anachronistic policies of subsidies and tariffs, exacerbating market fluctuations. It's no coincidence that Nigeria and Ethiopia have experienced rioting while Uganda, Rwanda and Tanzania have been relatively calm.

Asian countries that are becoming industrial economies are in the toughest spot: Low-wage factory workers' situations are less elastic, leaving those workers more hard-pressed when the prices of common household goods rise. But subsistence-level farmers who are not reliant on expensive fertilizer or oil-fueled machinery can sell their excess produce at higher prices, which are still less than prices for food that might be trucked or flown in. The resulting boomlet benefits sub-Saharan Africa's small farmers, who cultivate, on average, less than 2 1/2 acres and who can, with appropriate assistance, expand their production to meet increasing demand. It's also possible that a local agricultural renaissance may attract some of the world's urban poor back to the countryside to cultivate fallow land and earn decent wages.

A report released in April by the U.N. Educational, Scientific and Cultural Organization confirmed that farmers worldwide would benefit from reducing their dependency on fossil fuels and adopting practices that help protect their environments. This means reducing the amount of fossil fuel used for cultivation, as well as transported fertilizers and pesticides, in favor of locally available resources. To be sure, inputs such as fertilizer can tremendously boost poor farmers' productivity and earnings in the short term. A colleague from Nigeria wrote to me this spring saying that while the cost of fertilizer had increased by 50 percent, the selling price of corn was up by 100 percent. In other words, those productive small farmers who had had access to the increased capital required to obtain fertilizer had doubled their income in a year. Other key areas of productivity investment for poor farmers in which donor governments would do well to invest include advanced seeds, technical assistance for terracing and irrigation, and diversification into higher-value crops that are less likely to be influenced by fluctuations in international commodities markets.

It has taken Americans decades to warm to the common sense of producing and consuming locally. Fortunately, the trend may catch on more quickly in the world's poorest countries. Many have argued for an African "green revolution": better farming practices and greater productivity through larger investment in smallholder farms. The timing could scarcely be better for following up on these opportunities. We should also resist the temptation to apply traditional fire-control responses to counter rising food prices, responses such as expanding subsidies or protecting markets. Investing in the poor today may enable many to make the transition out of poverty that has been so elusive for decades. If smallholder farmers can increase their income in real terms for the first time in 50 years, aided by improvements in health and education, they may manage to claw their way out of poverty, as many in Southeast Asia have done.

In the coming months, many will need food relief, but many more will benefit from investments in farm cooperatives and small farms. These investments will help to maintain progress, support stability, and, most important, help the world's poor feed themselves and their neighbors. (Source: Washingtonpost.com)

Africa's Food Crisis Opportunity, By Josh Ruxin

KIGALI, Rwanda -- Every time Americans buy groceries, we feel the crisis in food prices. But while inflation presents discomfort in the United States, it is causing dire hardship elsewhere. In many of the world's poorest communities, food prices have become an obstacle to survival. Yet rapidly rising prices -- which are hurting the 73 million people fed each day by the World Food Program and the hundreds of millions who work for low wages in cities -- may also create an opportunity: the first chance in years for the world's poorest farmers to climb out of poverty.

More than a billion people around the world eke out an existence on less than a dollar per day. Most people here in Rwanda fall into that category. But since they rely on themselves for food production and are too poor to afford fertilizer, tractors or advanced seeds, they are insulated from price spikes. For years, working as a farmhand in Rwanda meant slow starvation. Yet with basic food items now priced too high for the average person to afford, local production of food is more attractive, meaning that farmworkers are better able to maintain a living wage.


Since 1850, commodity prices have declined steadily. Coffee, maize and even oil have all become cheaper -- until recently. The surge in fuel prices has, ironically, driven up demand for corn-based ethanol. And, while biofuels won't lessen the need for crude oil, at least not yet, the resulting corn shortage has forced food prices higher.

In Africa, the crisis is imparting sharp lessons. Freer, more democratic nations with better economic policies appear more immune to the spike in food prices. Meanwhile, less-open countries have employed anachronistic policies of subsidies and tariffs, exacerbating market fluctuations. It's no coincidence that Nigeria and Ethiopia have experienced rioting while Uganda, Rwanda and Tanzania have been relatively calm.

Asian countries that are becoming industrial economies are in the toughest spot: Low-wage factory workers' situations are less elastic, leaving those workers more hard-pressed when the prices of common household goods rise. But subsistence-level farmers who are not reliant on expensive fertilizer or oil-fueled machinery can sell their excess produce at higher prices, which are still less than prices for food that might be trucked or flown in. The resulting boomlet benefits sub-Saharan Africa's small farmers, who cultivate, on average, less than 2 1/2 acres and who can, with appropriate assistance, expand their production to meet increasing demand. It's also possible that a local agricultural renaissance may attract some of the world's urban poor back to the countryside to cultivate fallow land and earn decent wages.

A report released in April by the U.N. Educational, Scientific and Cultural Organization confirmed that farmers worldwide would benefit from reducing their dependency on fossil fuels and adopting practices that help protect their environments. This means reducing the amount of fossil fuel used for cultivation, as well as transported fertilizers and pesticides, in favor of locally available resources. To be sure, inputs such as fertilizer can tremendously boost poor farmers' productivity and earnings in the short term. A colleague from Nigeria wrote to me this spring saying that while the cost of fertilizer had increased by 50 percent, the selling price of corn was up by 100 percent. In other words, those productive small farmers who had had access to the increased capital required to obtain fertilizer had doubled their income in a year. Other key areas of productivity investment for poor farmers in which donor governments would do well to invest include advanced seeds, technical assistance for terracing and irrigation, and diversification into higher-value crops that are less likely to be influenced by fluctuations in international commodities markets.

It has taken Americans decades to warm to the common sense of producing and consuming locally. Fortunately, the trend may catch on more quickly in the world's poorest countries. Many have argued for an African "green revolution": better farming practices and greater productivity through larger investment in smallholder farms. The timing could scarcely be better for following up on these opportunities. We should also resist the temptation to apply traditional fire-control responses to counter rising food prices, responses such as expanding subsidies or protecting markets. Investing in the poor today may enable many to make the transition out of poverty that has been so elusive for decades. If smallholder farmers can increase their income in real terms for the first time in 50 years, aided by improvements in health and education, they may manage to claw their way out of poverty, as many in Southeast Asia have done.

In the coming months, many will need food relief, but many more will benefit from investments in farm cooperatives and small farms. These investments will help to maintain progress, support stability, and, most important, help the world's poor feed themselves and their neighbors. (Source: Washingtonpost.com)

Wednesday, July 2, 2008

Get a grip on Dhaka, By Selig S. Harrison

While the CIA and the Pentagon search in vain for Osama bin Laden in the mountains of northwest Pakistan, an Al Qaeda affiliate has been quietly building up terrorist bases in the jungles of Bangladesh under the protective aegis of a new military regime in Dhaka allied with Islamist forces.

The founding leader of the Harkat-ul-Jihad-al-Islami in Bangladesh, Fazlur Rehman Khalil, was one of the six signatories of Bin Laden's first declaration of holy war against the United States on Feb. 23, 1998, and a U.S. State Department study reports that Harkat "maintains contact with Al Qaeda in Afghanistan."

Bush administration officials privately endorse mounting Indian evidence that Bangladeshi Harkat agents spearheaded a series of terrorist attacks in India -- in Mumbai and Banaras in 2006, in Hyderabad in 2007 and in Jaipur in May. But the United States has conspicuously failed to press Bangladesh's military ruler, Gen. Moeen U Ahmed, for a crackdown on Harkat and for the removal of highly placed intelligence officials with Islamist ties.

Ahmed staged a bloodless coup in January 2007, forcing a figurehead president to give him emergency powers. He has pledged to hold elections in December and return power to a civilian government. The Bush administration, while formally urging him to hold the elections on schedule, has so far ignored his increasingly blatant efforts to rig them.

Ahmed is maneuvering to break up the two biggest secular political parties, the Awami League, which actively opposes Islamist influence, and the Bangladesh National Party. He barred political activity by their popular leaders, Sheik Hasina Wajed and Khaleda Zia, and is organizing a new army-controlled political party to challenge them. Invoking his emergency powers, he is rounding up grass-roots leaders of the two parties and muzzling the media. Harkat, Jamaat-i-Islami Bangladesh and other Islamist groups that support the military regime are operating unhindered.

By its silence in the face of Ahmed's power grab, the Bush administration is signaling that it sees little hope of ending direct or indirect military rule. But it is much too soon to write off the prospects for democracy in Bangladesh, where almost everyone was politicized during the independence struggle against Pakistan. Since then, three free elections have been held, and two previous military regimes have proved to be short-lived.

As the fourth-largest Muslim country in the world, with 150 million people, Bangladesh matters to the United States in security terms because Harkat and its allies have direct links to anti-U.S. Islamist forces in Pakistan. These links predate the secession of Bangladesh from Pakistan in 1971. The Islamists in Bangladesh supported Islamabad during the independence struggle and have subsequently been used by Pakistani intelligence agencies to harass India.

When respected Bangladeshi journalists have attempted to write about Islamist sympathizers in the military regime and their links with Islamabad -- naming names -- they have faced death threats and assassination attempts. This has been fully documented by the U.S.- based Committee to Protect Journalists. The most notorious case is that of Tasneem Khalil, who worked as a correspondent for CNN and others in Dhaka. Khalil was held incommunicado last year for 22 hours, beaten and forced to leave the country after exposing Islamist influence in the military intelligence agency.

Defenders of the military regime point out that four Islamist leaders were executed last year, but they gloss over the fact that the executions occurred after the four had contacted the media to expose their links with the intelligence agency.

The army contends that past civilian regimes were hopelessly corrupt and practiced only a "feudal democracy" in which corruption, cronyism and the use of private militias by leading politicians were rampant. The military takeover in 2007 was unavoidable, it says, because the last civilian government, headed by the BNP, was rigging forthcoming elections.

But the Bangladesh Constitution requires elections within 90 days of the dissolution of Parliament and allows for only one 90-day extension of emergency powers. Parliament was dissolved on Oct. 27, 2006; thus, the army regime has been unconstitutional since April 2007.

The U.S. and other aid donors should use their powerful leverage to push hard for an immediate end to emergency powers and for elections by December. It would be a bitter irony if a new Musharraf should emerge in Dhaka just as Pervez Musharraf finds himself increasingly embattled in Islamabad.

Selig S. Harrison is director of the Asia program at the Center for International Policy and a senior scholar of the Woodrow Wilson International Center for Scholars.