http://www.mizzima.com/news/inside-burma/1353-another-changing-of-the-guards-for-burmas-junta.html
by Solomon
Monday, 24 November 2008 22:28
New Delhi – An official within Burma's Ministry of Information has hinted there has been a changing of guards within the top ranks of the country's military authorities during the last quarterly meeting held in the capital city of Naypyitaw.
The official, who spoke on condition of anonymity, said there have been a few changes among the ranks of the military leaders during the last quarterly meeting, but declined to give details, saying the government will soon make a public release of the reshuffle.
"There have been some changes and promotions of military personnel, but we cannot say anything at this movement," the official said.
Burma's military leaders regularly hold quarterly meetings, the most recent one ending last Saturday, at which they reportedly discussed matters and issues facing the military and conducted a reshuffling within the ranks. In the previous quarterly meeting, held in June, the junta reshuffled nearly 100 positions.
"This time there are some changes in the military, because they [the junta] have to strengthen the Army, so three Major Generals have been promoted to Lieutenant Generals," said Win Min, a Burmese analyst based in Thailand.
However, Win Min said the reshuffling was insignificant and the quarterly meeting, which is the last for 2008, focused more on the junta's planned election for 2010.
"I think this time there will be less changing within the Ministries, they will do that in the next meeting," Win Min iterated.
The last reshuffling in the top brass of Burma's Army was in June, which gathered members of the State Peace and Development Council, powerful military commanders and heads of Bureau of Special Operations (BSO).
However, sources told Mizzima that retired BSOs, such as Major Generals Maung Bo, Ye Myint and Kyaw Win, were seen at the most recent meeting, proving that they are still members of SPDC's upper echelon.
Sources told Mizzima that the head of the junta, Senior General Than Shwe, wants to keep them in the mix in order to handle ceasefire groups, and particularly due to their role in persuading the nearly one-and-a-half dozen mainly ethnic rebel groups to disarm.
"Than Shwe and his generals may become members of a defense commission; something along the lines of the Chinese model," said a source in Naypyitaw of the potential political landscape following the 2010 election.
The junta has been preparing for such offices in the post-2010 era by requisitioning some Defense buildings in the capital.
Sino-Burmese-based analyst Mya Maung said the recently concluded meeting aimed primarily at preparations for the 2010 general election.
"For the 2010 election, the generals are focusing on security, home affairs and the police department," said Mya Maung.
Burma's rulers have announced that they will hold a general election as part of their roadmap to democracy and will allow the winning party to assume power and form a government.
But it has also maintained strict vigilance over opposition activists in the run-up to the election by arresting and sentencing activists to long prison terms. Additionally, the junta has also stepped up security measures in several towns and cities across the country where pro-democracy activists had led mass demonstrations in August and September 2007.
According to Mya Maung, in preparation for the general election, the junta is likely to change several positions within the military – with some personnel retired and others sent into the civilian government. Police units might also be transformed into paramilitary outfits.
"They [junta] are enhancing police forces for the suppression of any kind of protest that might erupt, while the military will be maintained to sustain the fight against ethnic rebels," Mya Maung said.
He said the junta has thus far expanded at least 16 to 18 battalions of police across the country, with over 400 policemen in each battalion.
However Htay Aung, a researcher at the Network for Democracy and Development (NDD), based in Thailand, said the junta during the recent quarterly meeting was likely to have discussed only a few important things such as the 2010 general election and the recent maritime boundary issue with Bangladesh.
"I think they [the junta] would have discussed important things such as the 2010 election, and the recent oil crisis between Bangladesh, and also about the economic crisis," Htay Aung explained.
It is likely that the junta decided who would form political parties for the 2010 election and who would remain in the distinct military apparatus, Htay Aung said.
However, he said changes within the military ranks in the quarterly meeting are normal and have little overall significance on the military structure.
(Additional reporting by Sein Win)
Tuesday, November 25, 2008
Another changing of the guards for Burma's junta
Japanese Prime Minister Taro Aso's party makes plans to replace him
http://www.telegraph.co.uk/news/worldnews/asia/japan/3511559/Japanese-Prime-Minister-Taro-Asos-party-makes-plans-to-replace-him.html
Japanese Prime Minister Taro Aso is a lame duck barely two months into his administration and his own party is already making open plans to replace him.
By Julian Ryall in Tokyo
Last Updated: 2:20PM GMT 24 Nov 2008
Mr. Aso inherited a declining economy Photo: GETTY Elected head of the Liberal Democratic Party on Sept 22, Mr. Aso inherited a declining economy, increasing distrust of the government and widespread public concern over corruption and apparent incompetence in Japan's halls of power.
Summoned to settle the ship after Yasuo Fukuda's abrupt resignation, Mr. Aso has failed to do so. His plans to rebuild the economy have been ridiculed, he has offended key supporters of the party and announced plans to reverse some of the LDP's most cherished and hard-fought policy platforms.
It has not helped that at the same time, his habit of reading comic books has been mocked and his inability to read relatively straightforward "kanji" characters in prepared speeches leave most Japanese with the impression that the leader of the nation falls well short of being statesman material.
"I would say that up to 70 per cent of my colleagues have reached the conclusion that we will not be able to win the coming election with Mr Aso in charge and that already his power to lead has gone," LDP politician Ichita Yamamoto told The Daily Telegraph on Monday.
"A lot of people in the party have already started to talk about the situation post-Aso," he added.
The early names put forward for his possible successor include Yoshimi Watanabe, the former minister of financial services, Nobuteru Ishihara, who is best known for being the son of right wing Tokyo Mayor Shintaro Ishihara, and Yuriko Koike, who would become Japan's first ever female prime minister if elected.
As well as disappointing those in the party, Mr. Aso's enduring ability to offend was on display again in the last week as he angered doctors - one of the LDP's staunchest supporters - by saying that many of their numbers "lack common sense".
The same day he told a meeting of parents at private kindergartens that teachers should be disciplining the mothers instead of the pupils.
More significantly, Mr Aso suddenly informed the press on Thursday that he was considering freezing the privatisation of the post office, arguably the single issue that won the 2005 election for the LDP.
Mr Ichita responded angrily that he would not remain silent on an issue that former Prime Minister Junichiro Koizumi staked so much on. He was joined by others who pointed out that to go back on such a monumental piece of legislation in the space of three years would inevitably raise more red flags with an already sceptical public.
"I'm a realist," said Mr. Yamamoto. "We're stuck between replacing Mr. Aso - and the negative impact that would have among voters just a few months after he was brought in - and keeping him and losing the next election disastrously.
"What will happen? It is impossible to say at the moment, but the advice I am giving my colleagues is that they should be ready for an emergency," he said.
Remember, Aung San Suu Kyi's disengagement is not her choice
http://www.guardian.co.uk/commentisfree/2008/nov/25/burma-aung-san-suu
Remember, Aung San Suu Kyi's disengagement is not her choiceBurma's pro-democracy movement is still strong, but action is not currently possible, says Thaung HtunComments (2) Thaung Htun guardian.co.uk, Tuesday November 25 2008 00.01 GMT The Guardian, Tuesday November 25 2008 Article historyThere are several misinterpretations and failures to contextualise in the article on Burma's democracy leader Aung San Suu Kyi (Not such a hero after all, November 11). We will concentrate on the most glaring.
The writers have wrongly assumed that the Burmese pro-democracy movement's willingness to be self-critical and/or to be critical of Suu Kyi is evidence of its demise. They quote many figures. One, a "senior MP in Rangoon", said: "We ... have to consider seriously ... whether our sacrifices alone will actually bring victory." Another argued that "the NLD, a party that was popular, got lost". But, rather than signal the breakdown of the opposition movement, these voices prove its strength - its ability to air disagreements and to debate differences without recrimination.
Burma revels in its multifaceted culture and in its many voices, as would any who were as faithful to democracy as we are. Burmese people have proven that the clamour of multitudes does not equate to an implosion. This critical tendency is a sign of rude health.
In assessing Suu Kyi's current silence, your article sought to blame her for the ills of Burma's military regime. She is "internationally renowned for her recalcitrance rather than her compliance"; has become "mute since her arrest"; her "fight appears to have sublimated to a meditative battle"; and she has been guilty of "political naivety and moral high-handedness". The writers ask, "What new policies did the NLD generate?", the implication being that Suu Kyi's seemingly truculent disengagement is her choice, and that the "vacuum" she has created has left the democracy movement weak and directionless.
But under Suu Kyi's incarceration she is denied even the most rudimentary means of communicating with the wider world. Under the regime's iron rule, it is effectively impossible to engage the population and even those who represent them democratically. As such, lasting policy cannot be secured as it would be policy on the run, created without due reference to our constituents - by definition, undemocratic.
Our movement encourages an educated engagement with the issues we are confronting. Suu Kyi herself has never shied from a good debate; informed criticism is constructive and ultimately helpful. Yet firing ill-informed grapeshot in the interests of deflating a national heroine is useful only in terms of sensationalism, not solid debate.
Aung San Suu Kyi's case is quite unique in world politics. Never before has a Nobel peace prize winner been imprisoned for such a long period after receiving the award. Few, if any, democratically elected governments have had to face such extraordinary obstacles over nearly five decades as we have.
Despite this article, we can only keep going, knowing such hollow attacks on the resolve and standing of a woman our people hold very dear will not break her will, nor that of the Burmese people who are sacrificing all to bring freedom to their country.
• Thaung Htun is the UN representative for the National Coalition Government of the Union of Burma, the government in exile made up of MPs elected in 1990, nominally led by Aung San Suu Kyi thaung.htun@gmail.com.
• If you wish to respond, at greater length than in a letter, to an article in which you have featured either directly or indirectly, email response@guardian.co.uk or write to Response, The Guardian, 119 Farringdon Road, London EC1R 3ER. We cannot guarantee to publish all responses, and we reserve the right to edit pieces for both length and content.
Experts propose developing SW corridor of 3rd Asia-Europe land-bridge
http://news.xinhuanet.com/english/2008-11/24/content_10406702.htm
BEIJING, Nov. 24 (Xinhua) -- Experts of some Asian countries called for concerted efforts to build the southwest corridor of the third Eurasian continental land-bridge at a seminar opened here Monday.
Experts believed the southwest corridor was the most important part of the Eurasian land-bridge. The 1,800-km-long corridor will start from Kunming, capital of southwestern China's Yunnan Province, go southwards to Dali, Ruili and end at Myanmar's port city Kyaukpyu.
If constructed, the corridor would greatly improve communications and cooperation in the intra-Asian region as well as between Asia and the rest of the world, Wang Weiguang, executive vice president of the Chinese Academy of Social Sciences, said at the seminar.
More than 50 officials and scholars from countries including China, Myanmar, Pakistan, India and Bangladesh, attended the seminar. Its theme is to "Build the southwest corridor of the third Asia-Europe continental land-bridge".
The planned overland bridge would become one of the most convenient land routes linking Asia, Europe with Africa, said Qin Guangrong, governor of Yunnan Province.
The bridge will contribute to the social and economic development of countries along it, said Mohammad Rahmatullah, transport policy advisor of Bangladesh Planning Commission.
Rahmatullah also noted the challenges in establishing the bridge, such as missing links in the trans-Asian railway, difference in railway gauges of related countries and long cross-border customs delays.
According to plans floated by some scholars, the proposed land-bridge will extend from Shenzhen in southern China's Guangdong Province to Rotterdam in the Netherlands.
The 15,000-km line will run through 21 countries, including Myanmar, Bangladesh, India, Pakistan and Turkey. It will cut short about 3,000 km of the journey between the two ports by sea.
Editor: Jiang Yuxia
The task of unification
by Dr. Sein Myint
Mizzima Tuesday, 25 November 2008 15:10
The world's most renowned scientist of the 20th century, Albert Einstein, successfully revealed the nature of light with his Special Theory of Relativity in 1905 and postulated the curvature of spacetime in his Theory of General Relativity in 1916, integrating his work with Sir Isaac Newton's Universal Law of Gravitation, first conceived of over two-hundred years previously.
While high-profile searches for the unification of the four forces of nature continue through such mechanisms as the gigantic Large Hadron Collider near Geneva, the low-profile political quest for the "unification" of exile-Burmese democratic forces is subtly underway in the small town of Fort Wayne, Indiana.
It is most encouraging to learn that some exile student leaders from 1988 living in the United States and other countries have come together and are working under the process of unifying the exile democratic movement under a motto of 'One Voice One Goal,' as expressed by a former All Burma Students Democratic Front leader. And there is no shortage of endorsements and support from other exile democratic communities across the globe for their endeavors and efforts.
The unity talked about among exiles is long overdue, and time – a commodity that many exile opposition leaders took for granted for so long – is now running out. Soon after the 2010 elections in Burma, the legitimacy and mandate that the National League for Democracy (NLD) obtained through the 1990 elections will no longer be as effective a weapon as before.
The MPs elected in the 1990 election inside the country will soon be joining the Veteran Politicians club, currently comprised of ex-MPs from the Anti-Fascist People's Freedom League era that lost their legitimate posts after General Ne Win's military coup of 1962.
In order for any exile organization to be named as a Federal Democratic Government, it should be based and founded upon democratic principles and must be supported by a broad grassroots-based exile community residing across the globe. And it should be well structured and organized, comprising dedicated, committed, honest and trustworthy team players, who are democratically elected by the various exile communities as their representatives.
However, today there are many exile democratic groups and organizations currently operating under diverse banners, with leaders pursuing their own political agendas and maintaining an egotistic stature – instead of promoting, as they should, unity in spirit and political magnanimity.
One shining example of unification across divides can be seen in the current actions of US President Elect Barack Obama, who has repeatedly made statements to the effect that he will reach out across party and personal divides when forming his future cabinet. Already, his principle Democratic Primary rival, Hillary Clinton, has been offered the post of Secretary of State.
Sadly, many of our compatriots are still wavering on priorities and lingering on self interests rather than the public interest, with many having long been living off welfare from sympathetic donors.
Under such circumstances, the emergence of a frustrated younger generation is inevitable, as many of them are well educated in Western universities and have lived long enough to appreciate the ways and functioning of democratic societies. Yet, they are still committed to the well-being of their fellow countrymen and women in their impoverished homeland, dedicated to the restoration of democracy and basic human rights and now ready to take on the task of unification.
Many of them still well remember how dear the whole population had to pay for the failure of uniting key political players at the critical juncture surrounding 1988. History cannot be allowed to repeat itself.
But the military regime is now well entrenched and more powerful than before, on course with a plan to rule for many years. Since the democratic opposition inside the country has been continuously marginalized for nearly two decades, all exile democratic leaders are imbued with the political responsibility and moral obligation to unite under a common umbrella group and to work for a common goal.
Dr. Sein Myint serves as the director of Policy Development of Justice for Human Rights in Burma, located in Maryland, USA. He is an Honorary Member of Amnesty International Chapter 22 in Washington D.C.
Bangladesh Plans Dispatching Team to Talk with Myanmar
http://energybangla.com/index.php?mod=article&cat=EBReport&article=1210
Monday, 11.24.2008, 11:59pm (GMT)
The state-owned Petrobangla is working towards establishment of friendly working relations with their Myanmar counterpart, Myanmar Oil and Gas, to augment bilateral understanding, officials said.
It will soon seek the energy ministry's consent for sending a delegation for talks with the Myanmar Oil and Gas as part of its initiative to establish mutual understanding between the two state-run bodies of the two countries.
This initiative from Petrobangla is a follow-up to the visit of a Myanmar delegation last week, when both Dhaka and Yangon agreed to continue talks until resolving the bilateral dispute over demarcation of the maritime boundary in the Bay of Bengal.
"We will send a proposal to the energy ministry within a day or two seeking approval for sending a delegation for discussion with the Myanmar counterparts," Petrobangla Chairman Jalal Ahmed told.
He said the Petrobangla delegation is expected to visit Myanmar in December next if the energy ministry permits.
Dhaka and Yangon were locked in a duel early this month to establish their respective rights to exploration of oil and gas in the prospective Bay of Bengal.
The tensions between the two neighbors began to rise at the beginning of November when Myanmar started exploring oil and gas in one of its disputed offshore blocks, AD-7, in the bay that overlaps Bangladesh’s offshore block DS-08-13.
After a week of standoff, the tension eased following intervention of China and South Korea.
Pointing to the Petrobangla delegation's visit to Myanmar, a senior official said both the sides might sign a memorandum of understanding (MoU) to ensure future cooperation in the energy sector, if mutually agreed.
Petrobangla earlier signed MoUs with Thailand’s state-run PTT Exploration and Production Company and a consortium of Korean energy companies to enhance cooperation.
Myanmar and Bangladesh sharing around 320 kilometers of bordering areas are among the many impoverished countries around the globe.
According to an independent survey, Myanmar has encroached on half a dozen of Bangladesh’s offshore gas blocks in the Bay.
After intruding into Bangladesh’s offshore blocks, the Southeast Asian country already leased out those to Chinese, Indian and South Korean companies for exploration in last several years.
The companies that were awarded the disputed offshore blocks in the Bay include the China National Petroleum Corporation (CNPC), Indian Oil and Natural Gas Corporation Ltd (ONGC) and South Korean Daewoo International.
The Chinese CNPC was awarded by Myanmar the block AD-8 that overlaps Bangladesh’s deep-sea offshore blocks - DS-08-18 and part of DS-08-17 and DS-08-13.
The Indian ONGC was awarded Myanmar’s block AD-9 that overlaps the Bangladeshi offshore gas blocks DS-08-22, DS-08-23, DS-08-27 and DS-08-28.
Myanmar suffers steep drop in foreign tourists
http://www.hindu.com/thehindu/holnus/003200811251263.htm
YANGON (AP): A Myanmar news journal says foreign tourist numbers are down by half at one of the country's most revered Buddhist sites after the country was hit by a devastating cyclone in May that killed more than 84,000 people.
The Weekly Eleven news journal says foreign tourists visiting the famed Shwedagon pagoda fell to 25,380 during May through November compared with 53,841 in the same period last year.
The tourism sector across the impoverished country has been hit hard following Cyclone Nargis in May. The storm killed 84,537, left another 53,836 people missing, and caused a vast trail of destruction across the Irrawaddy delta.
The military has held authoritarian power in the Southeast Asian nation since 1962.
A preventable fate: the failure of ART scale-up in Myanmar
http://www.msf.org/msfinternational/invoke.cfm?objectid=D2C233CF-15C5-F00A-25ABCFBC12786F68&component=toolkit.pressrelease&method=full_html
Few of the big international donors provide resources out of concern over the appropriate and effective use of aid in the country, yet it is the people of Myanmar who suffer as a result.
Down a PDF of the report, Preventable Fate, here
Thousands of people are needlessly dying due to a severe lack of lifesaving HIV/AIDS treatment in Myanmar, says international humanitarian organization Médecins Sans Frontières (MSF) in a report released today. Unable to continue shouldering the primary responsibility for responding to one of Asia's worst HIV crises, MSF insists that the Government of Myanmar and international organizations urgently and rapidly scale-up ART provision.
An estimated 240,000 people are thought to have HIV/AIDS in Myanmar. Of these people, 76,000 are in urgent need of antiretroviral treatment, yet less than 20 percent of them are currently able to access it.
"Last year, around 25,000 people died of AIDS related illnesses. A similar number of people could suffer the same fate in 2008 unless there is a significant increase in accessible antiretroviral treatment (ART)", declared MSF Operations Manager, Joe Belliveau.
As it stands, the majority of ART available throughout the country is provided by MSF (to more than 11,000 people), with the Government of Myanmar and other non-governmental organizations (NGOs) providing relatively little.
"It is unacceptable that a single NGO is treating the vast majority of HIV patients in a crisis of this magnitude. It is unacceptable because it is wholly inadequate. We cannot meet the needs, and we therefore call upon those who can to take up this responsibility ", stated Belliveau.
Pushed to its limit, MSF has recently been forced to make the painful decision to drastically reduce the number of new patients it can treat. With so few other actors providing ART, there is little option to refer new patients for treatment elsewhere. "With so many needs still unmet, we strongly urge all actors, led by the Government, to scale-up the provision of ART", continues Mr. Belliveau.
The urgent need for increased treatment is evident, yet investment from both inside and outside of the country remains grossly insufficient. In 2007, the Government of Myanmar spent just $0.7USD per person on healthcare, with a paltry $200,000USD allocated for HIV/AIDS in 2008. This sum is hugely disproportionate when compared to the extent of the needs and availability of resources. The government of Myanmar has proven its ability to treat HIV/AIDS patients in the public sector, but must commit the necessary resources to scale-up.
Likewise, the level of international humanitarian aid is strikingly low, around $3USD per person, one of the lowest rates worldwide. This is significantly less than the far greater amounts received by nearby countries facing similar epidemics. Few of the big international donors provide resources out of concern over the appropriate and effective use of aid in the country, yet it is the people of Myanmar who suffer as a result.
A 29 year-old male ART patient in Myanmar best explains why more should be done, "It is everyone's responsibility to fight against this disease. All people must have a spirit of humanity in helping HIV patients regardless of nation, organization and government".
MSF's work has shown that even though working in Myanmar can be challenging, providing lifesaving HIV/AIDS care and treatment directly to patients is possible. It is long overdue that the Government of Myanmar and other international organizations step-up their efforts and make ART rapidly and widely available. It is crucial that they act now, in order to prevent the suffering and needless death of thousands of people.
MSF has provided essential healthcare services in Myanmar since 1993 and began an integrated programme to support people living with HIV/AIDS in 2003. Since then, MSF staff has assisted thousands of HIV patients, working from 23 clinics, in five areas throughout the country. Services include counseling, testing, treatment of opportunistic infections, nutritional support, health education and most importantly antiretroviral treatment.
BURMA DIGEST » Article » Domestic & Interantional Situations and Us (Burmese)
BY DR. TINT SWE-NCGUB
BURMA DIGEST » Article » Domestic & Interantional Situations and Us (Burmese)
Economy, not rights, rules the new China-US world
http://news.yahoo.com/s/ap/20081124/ap_on_re_as/as_obama_the_china_challenge_1
By CHRISTOPHER BODEEN, Associated Press Writer Christopher Bodeen, Associated Press Writer – Sun Nov 23, 11:20 pm ET AP – A Chinese man watches election result developments at a U.S. Presidential result party organized by the … BEIJING – As a dangerous confrontation flared between China and Taiwan in 1996, Bill Clinton deployed the Seventh Fleet to deter the two rivals from going to war. Five years later, when a U.S. spy plane collided with a Chinese fighter, George W. Bush faced a prolonged international crisis. Meanwhile, human rights and democracy in China were a perennial hot-button issue.
Now it's Barack Obama's turn to deal with the China challenge, and this time, it's all about the money. As the global financial system teeters, China, with its $1.9 trillion in foreign reserves and slowing but still strong economy, offers a potential lifeline.
The crisis that Obama is inheriting has pushed aside the old points of contention and underscored how profoundly the power equation between Washington and Beijing has changed.
China now owns over half-a-trillion dollars in U.S. government bonds, more than any other country, and Washington needs Beijing to continue buying them to help finance the national debt and the $700 billion financial industry bailout.
And while China's economy is heavily dependent on exports to the U.S., it is also a growing market for U.S. products, making trade retaliation — long a threat wielded solely by Washington — more of a two-way street.
"The power shift in China-U.S. relations is making them more interdependent," said Cheng Xiaohe, an international relations scholar at Beijing's Renmin University. "This next president will need to exercise greater caution."
When Clinton first ran for the White House, he made human rights an issue, accusing then President George Bush of "coddling" the communist dictatorship. But during his presidency, the administration moved to uncouple human rights from trade privileges — a milestone in normalizing ties between the two powers.
During Bush's presidency, as Chinese exports boomed, China's trade surplus hit $163.3 billion in 2007, becoming an increasingly fractious political issue, even as the question of human rights was moving to the fringes of the public agenda.
In the Barack Obama-John McCain race, human rights figured early when Tibetan unrest flared and Obama called on Bush to boycott the Beijing Olympics. But the issue soon faded from his talking points, and when relations with China briefly resurfaced, the context was purely economic.
During the campaign, Obama described China as "neither our enemy nor our friend; they're competitors." He called for broad cooperation with Beijing while repeating the accusation that the trade surplus was stoked by a Chinese currency kept artificially cheap.
The currency has been an especially hot topic in Congress and could arise again as an irritant in relations. On Thursday, a congressional advisory panel recommended Congress enact legislation to pressure Beijing into forcing up the value of the yuan, thereby making Chinese imports more expensive.
China is a veto-holding permanent member of the U.N. Security Council and there are many other reasons why Washington needs Beijing's help — to maintain detente in the Taiwan Strait, strip North Korea of its nukes, and pressure Iran into cooperating with nuclear inspections.
Throw in the economy, and many expect Obama to take a mild approach toward Beijing on issues of human rights, freedom of speech and Tibet.
That would be a mistake, argues Wei Jingsheng, the internationally renowned pro-democracy dissident whose imprisonment and exile came to define the difficulties of the U.S.-China relationship in the 1980s and 1990s.
Wei, who now lives in Washington, D.C., maintains that the root of the economic crisis lies in the trade imbalance with China, and that China's industrial might is built on underpaid, badly treated workers. China gets away with it because Western business doesn't want human rights getting in the way of profits, he says.
In an interview with The Associated Press, Wei rejected the idea of China as the West's economic lifeline, saying China would have a hard time saving its own economy and anyway wouldn't mind seeing the West failing.
"This expectation of China to save the West is only a dream," he said. "But why is this dream fanned up so much? Because the big businesses in the West are pumping up this idea; they do not want to see Western governments take severe measures against the Chinese government."
He recalled the days when Western governments and media were focused on Chinese human rights abuses — "It is really because of their effort that people like me survived" — and urged Obama to renew the pressure by establishing a link between trade privileges and workers' rights.
"It would be like killing two birds with one stone — reducing the trade deficit while boosting rights for Chinese workers," he said.
But Chinese scholars at government-backed research bodies sound confident that no radical changes in the relationship will happen under Obama.
"Although we'll see some disputes around issues like trade, human rights and climate change, the general framework will be stable," said Jin Canrong, an expert on the U.S. at Renmin University. "This is mature bilateral relations between two big powers."
___
Associated Press writer Carley Petesch in New York contributed to this report.
China president in Greece for $1 billion port deal
http://news.yahoo.com/s/ap/20081124/ap_on_bi_ge/eu_greece_china_2;_ylt=An3KMcKAfUYwF0m_isc8ZceoOrgF
By DEREK GATOPOULOS, Associated Press Writer Derek Gatopoulos, Associated Press Writer – Mon Nov 24, 8:58 am
ATHENS, Greece – China's President Hu Jintao arrived Monday in Greece for a three-day visit timed to coincide with the signing of a 831.2 million euro ($1 billion) port deal.
China's Cosco Pacific Ltd. will receive a 35-year concession to manage two container wharfs at Greece's main port of Piraeus.
Hu was greeted by Prime Minister Costas Karamanlis at the airport in Athens, and the two planned to hold talks Tuesday. Hu planned to meet later Monday with Greek President Karolos Papoulias.
"We have the will to further develop our ties. This is happening at a rapid rate," Hu was quoted as saying by Greek state television.
The port agreement will be signed Tuesday, amid the global financial crisis which has affected the shipping industry, and commodity shipments in particular. Greek companies control nearly 20 percent of the world's merchant fleet.
The Chinese port operator announced details of the deal last month, citing the value of the deal at 831.2 million euro ($1 billion) in present value terms.
Cosco said it would spend an additional 235.5 million euro ($297 million) on pier upgrades.
Dock workers' unions oppose the Piraeus privatization plan. The Federation of Greek Port Employees announced a 24-hour strike Tuesday as well as a protest rally in central Athens.
"The government and the Chinese leadership should realize that we will not allow our ports ... to become Chinatowns," a union statement said.
Piraeus, the port of Athens, is among the 10 largest ports in Europe, and the largest in container throughput in the eastern Mediterranean.
Greece and China expanded cooperation in the run up to this year's Beijing Olympics, with Athens having hosted the 2004 Games. Papoulias visited China in June, while Karamanlis traveled to China in 2006.
Last year, the volume of trade between the two countries was euro2.9 billion ($3.7 billion) with Chinese exports making up more than 95 percent of that figure, according to data from the Hellenic-Chinese Chamber of Commerce.
Greek companies currently have some 480 orders at Chinese shipyards, chamber spokeswoman Stamatina Markou said.
Hu is in Greece after attending a summit of world leaders in Washington and a visits to Latin America. He will return to Beijing Wednesday.
___
On the Net:
Proposed port concession agreement: http://www.coscopac.com.hk/admin/upload/ir/announcements_circular/e20081118.pdf
China's second-richest person detained: state media
http://news.yahoo.com/s/afp/20081124/bs_afp/chinacrimestockscompanygome_081124044327
Sun Nov 23, 11:43 pm ET AFP/Fil
BEIJING (AFP) – China's second-richest person, who made his fortune building up the nation's largest home appliance chain, has been detained on suspicion of market manipulation, state media reported on Monday.
Hong Kong-listed shares in Huang Guangyu's company, Gome Electrical Appliances Holdings, were also suspended on Monday, according to a statement from the firm to the city's stock exchange.
The shares were suspended "pending the release of an announcement in relation to price sensitive information", the statement said.
This followed a report on the website of Chinese state-run finance magazine Caijing saying Huang had been detained and was under investigation on suspicion of market manipulation.
The magazine, which did not reveal its sources, said the detention took place Wednesday last week, and other Chinese media outlets carried the story.
With assets of 18.4 billion yuan (2.7 billion dollars), Huang was ranked as number two on a list of China's richest people issued by US magazine Forbes in October.
An executive at Gome's investor relations department contacted by AFP Monday morning said she was not aware of the reported case.
Burma needs a pragmatic solution-MIZZIMA
http://arpwar.burmabloggers.net/?p=1650
admin | Articles | November 24th, 2008
Mizzima : Since 1962, not a single military-dominated government in Burma has been able to improve the country’s economy. This, as the Burmese economy is poised to suffer even more in the upcoming months, and possibly years, due to the pervading global economic crisis.
The country’s economy has already suffered a lot during the past two decades, a period when the military regime has continued to pursue its stranglehold on political power, dragging the economy into the doldrums along the way.
“The Burmese army’s philosophy is to keep its own ass safe to the detriment of others, so we will go around in circles until the present structure is forced to change,” said one Rangoon-based observer.
The country is moribund in a Catch-22 situation, in which one “solution” inevitably leads to but another problem.
“I have no hope the country will be back on the right track soon after the 2010 general election, which it is highly possible will lead to but another crisis,” he said. “That’s because of those military officers who have been indoctrinated with a superiority complex for generations.
The Revolutionary Council, which was installed in 1962 and headed by General Ne Win and later transformed into the Burma Socialist Program Party through the 1974 constitution, started this unhealthy mix of civilians and military personnel in public administration.
Ne Win’s military government of xenophobia, combined with the mismanagement of the economy, assured that the country descended to the status of a least developed nation, the effects of which eventually erupted into the mass anti-government uprising that was put down by the Army through bloodshed in 1988.
Following 1988, the then State Law and Order Restoration Council – and present day State Peace and Development Council – assumed power and continued to rule the country, without any constitutional mandate and consumed by paranoia, as has happened throughout Burma’s
martial history.
What could be the remedy for the Southeast Asian nation, rich in natural resources like timber, minerals and natural gas? As long as the country forges ahead with the new constitution, which solely favors the role of the military in the public administration, it will be but old wine in a new bottle.
“We are desperately in need of ‘agents’ like liberal minded general David O. Abel, both in the military and civilian circles,” commented an observer who wished to remain anonymous. Almost all liberal minded civilians are in exile or in prison.
In 1999, a newspaper quoted the military government as saying that the National Convention would go forward without the National League for Democracy (NLD) – who had earlier walked-out of the proceedings under protest in 1996. Burma, the official added, was going to be a democracy in its own way.
The international community has since continuously recognized the NLD’s commitment to democracy. Yet, such recognition has not translated into productive “action.”
It might be possible that Burma could first improve its economy within a framework of a slightly altered political forum. Under such a scenario, some liberal figures would be allowed to play a role, and changes in an improved economy would assist in fomenting pluralism in the political environment.
“In the future government of Burma after 2010, we do not need opportunist civilian politicians who would just sit back and seek personal gains from the status quo, but those who really dare to come out of their comfort zone and speak up to military officers on economic and social issues,” added the observer. He also questioned the democratic credentials and self-complacency of some domestic elitist groups, mainly Burman in ethnicity, who seek to present themselves as the only viable alternatives to military officers.
However, the trick in Burma is that if the leadership was practically enlightened as in China and Vietnam, political pluralism can be kept waiting. But, Burma to date has lacked such political leadership.
In the present stock, only dogmatists are dominant. So are we going to see liberal — not even fully, but partially — elements in the government under the new constitution? Hope very marginally, because it is not in the nature of the military.
“Those 25 percent of seats in the future parliament, which the military reserves in both
houses, will always vote as a bloc,” the observer continued.
Even if Burma is fortunate enough, after the multi-party election is carried through, the key phrase in the coming years will be “economic rationality.”
However, for that, can we be so optimistic about the already corrupted military reinventing itself in our country’s future? Officials of the regime are already corrupt themselves in their morals, and they corrupt others along with them.
“Even if and when Burma is a liberal economy, rent-seeking will be really great and widespread,” he said, adding that most resources would go into private pockets.
Still now, there are elements who are promoting the concept of “regime security,” while the security of 53 million Burmese has been starkly neglected. And they try to expose themselves as an opposition or counterbalance to the military in a future so-called civilian government, if elected.
As generally expected, some businessmen are preparing to contest the 2010 election.
Most of these people will likely come from regime-friendly media and business circles. However, it remains to be seen whether there may be an altered scenario following the announcement of the electoral laws, which are anticipated in a few months time.
Many of these prominent elements are currently active, taking leading roles with the civic organization.
However, an even larger question still looms: Will any civilian government really be able to influence the direction of the country to become a free country broadly accepted by both Burmese and the international community?
Burma’s history since 1962 has been filled with failure stories of “insider” civilian politicians who achieved little or nothing to change the mindset of the ruling military caste. Yale-trained Dr. Maung Maung who was President of Burma during the 1988 uprising is a telling example.
Veteran analysts therefore have cautioned that the possibility for reform within the proposed constitutional framework will be extremely limited. Hopes are slim because many of the older generation Burmese elites, educated in the West and employed in public administration, just gave their nod to all that the Army wanted at the National Convention.
Meanwhile, Burma’s military has already suffered its own generation gaps, resulting in a very limited number of fresh, liberal conscious, new officers, mainly because potential successors have poor exposure to alternative ideas – reflective of a nation that is educationally handicapped.
Imagine it the other way around, liberally trained Burmese soldiers could create a competition among elites, which might lead to a radical solution if competing military personnel claim that they are the ones who most love Burma and care for its future.
Without a reliable new generation produced professionally, no segments of society,
including the Burma defense services, could survive. The Burmese military is already facing such problem.
Recently, Home Affairs Minister Major General Maung Oo said the next one-and-a-half-years would be important for the NLD’s survival. So the NLD must be creative, seeking ways and means to be able to play a role in future political developments; this is why some political forces have come out to encourage the NLD to find a new way to integrate itself into the future processes.
The results of the 1990 election, decisively won by the NLD, could be a tool which it could utilize in order to gain a foothold in forward developments. Perhaps, the NLD should endorse a new political party, in low profile, to remain relevant and to continue to involve itself in the future political process.
Opposition forces are already weak, being unable to adequately oppose the new constitution. But they can still weaken the effectiveness of the implementation of the new constitution.
Politics is about aspiring to nominal things such as freedom, democracy and rights. The new constitution falls short of those basic things for the time being. No rational person is satisfied.
As long as there are accusations of violations of ethnic minority and political rights, then external forces such as the UN and some Western countries’ encouragement for democracy in Burma will be reluctant to openly deal with the Burmese government, regardless of it being called civilian or military.
However, the truth remains that Burma is a low priority in the eyes of most Western countries. For example, the United States has more than enough allies in the region to offset China. Adding Burma to the list will not make a meaningful difference.
The junta understands this, and is thus proceeding apace with its own political process, designed to ensure that it reaps the vast majority of the political spoils. Despite repeated calls from opposition parties and the masses for a process of dialogue to address persisting differences and divides within Burma’s political spectrum, the junta and its supporters look to be preparing to push ahead with the 2010 general election at all costs.
So, what is to be expected in the short and mid-terms? As elections draw near, the world community must make sure that it is endorsing a real opposition in Burma, with reliable democratic credentials, and not a sham opposition of seasoned politicians who entered politics for personal gain.
Some leading pundits and opinion leaders fear that Burma, after 2010, will withdraw into isolation if the ruling class does not get their way. Nevertheless, there is little chance that this worst case scenario will happen, because authoritarian regimes realize the costs of isolation in an increasingly globalized world. They will at least open up some space for their own elites. In Burma’s case, most probably sanctions will also become irrelevant with the arrival of a new government.
International policy circles, therefore, should be prepared and start to think about how to respond to continued political repression and human rights abuses in Burma, while encouraging economic reforms after 2010. They must not forget there are over 2,100 prisoners of conscience in Burma’s gulags and Burma’s future parliament is the fruit of their sacrifice. Revolutions are rare in history, but we should not downplay the role of social movements.
In summary, Burma is possibly headed for a change in direction, where barriers to democracy are cautiously lowered. But, even though this might be – many new challenges will remain.
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Japan Police Arrest Suspect in Fatal Pension Stabbing
http://www.bloomberg.com/apps/news?pid=20601087&sid=axI4ZdT9tyP0&refer=home
By Hideki Asai and Megumi Yamanaka
Nov. 23 (Bloomberg) -- Japanese police arrested a man who turned himself in last night, handing over two bloodstained knives and saying he killed a former government pension official.
Takeshi Koizumi, 46, was arrested for violating weapons laws and authorities are investigating whether he committed the murder, said an official at the Tokyo Metropolitan Police Department. The official asked not to be identified by name, citing department policy.
Takehiko Yamaguchi, 66, a former senior official at the Health and Welfare Ministry, and his wife Michiko, 61, were found dead at their home in Saitama, near Tokyo, with stab wounds to their chests on Nov. 18. On the same day, Yasuko Yoshihara, 72, was stabbed at her Tokyo home by a man who pretended to be delivering a parcel, according to police reports. Yoshihara, who survived the attack, is the wife of Kenji Yoshihara, who once held the same position as Yamaguchi.
Police are investigating whether Koizumi also stabbed Yoshihara, the Kyodo newswire reported, citing police sources.
Both Yamaguchi and Yoshihara were involved in administering pension plans. The ministry has said records of retirement contributions for 50 million Japanese are missing or incomplete, a scandal that helped force the resignations of two prime ministers.
Chief Cabinet Secretary Takeo Kawamura today urged the police to complete a thorough investigation of the stabbings as soon as possible, the Yomiuri newspaper said.
To contact the reporters on this story: Megumi Yamanaka in Tokyo at myamanaka@bloomberg.net.
Last Updated: November 23, 2008 01:15 EST
15 more hydropower dams for Burma (Myanmar)
http://asianenergy.blogspot.com/2008/11/15-more-hydropower-dams-for-burma.html
Junta to Permit Building of 15 More Hydro dams
The Burmese ruling junta is reportedly planning another 15 hydroelectric projects on Burma's rivers in addition to the 22 already on the drawing board or under construction.
If approved, the 15 hydrodams would have an electricity-generating capacity of almost 14,000 megawatts-on top of the 16,500 MW expected to result from dams already being developed.
"These dams, if they reach fruition and their full operating potential, would deliver more electricity than Thailand currently uses," energy consultant Collin Reynolds in Bangkok told The Irrawaddy this week.
"It's ironic, given the paltry level of electricity-generating capacity that Burma lives with in the 21st century. The Burmese have a mere 1,700 MW according to their own government's latest official figures. Such a low level explains why Burma looks black on nighttime satellite pictures of the region."
Neighboring Thailand has a generating capacity of 26,000 MW and will be a major recipient of hydropower generated in Burma. Other countries who will tap this power source are neighboring energy-hungry giants India and China.
The Chinese will not only be major recipients of the Burmese hydropower-their state-owned companies are heavily involved in the construction work to build them, the official Chinese news agency Xinhua said this week.
The companies include Yunnan Machinery and Equipment Import and Export Co, the Farsighted Investment Group Co, Gold Water Resources Limited and the China Power Investment Corporation, which alone will build seven dams, said Xinhua.
Posted by Saigon Charlie at 6:46 PM
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The Freedom Challenge-BURMA-US
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/23/AR2008112302000_pf.html
In Burma, a test of Barack Obama's attitude toward promoting democracy
Monday, November 24, 2008; A16
BARBARITY IN Burma last week served as a reminder that, with or without President-elect Barack Obama, the global struggle for liberty will rage on long after George W. Bush takes his "freedom agenda" home to Texas.
Some of Mr. Obama's foreign policy advisers are nearly as impatient to deep-six that policy as they are to bid farewell to its author. They believe that Mr. Bush's extravagant rhetoric overpromised and underperformed. Dissidents were encouraged and then abandoned. Abu Ghraib and Guantanamo Bay mocked Washington's pretensions to lead or lecture.
The critics are right on all counts. If Mr. Obama intends to govern with more humility, caution and realism, we say, bring it on. U.S. foreign policy could use a healthy dose of all three.
But abandoning the promotion and support of democracy as core American goals would be a terrible mistake. Mr. Bush was right to see freedom as integral to all other foreign policy objectives. The stifling of democratic alternatives in Arab countries fuels terrorism. China's succor of dictators in Africa impedes healthy development in poor countries. Democracies are more likely, over time, to cooperate honestly with each other on global challenges such as climate change and disease control. And the United States can regain and retain the stature to lead in the world, on any issue, only if it is using its power on behalf of universal ideals.
No doubt these principles will feature somewhere in the new administration's rhetoric. But because other, seemingly more hardheaded considerations will always compete, the rhetoric will not mean much unless democracy promotion is baked into the administration's structure, budget and personnel.
The need is especially urgent when global recession could undermine democracy and stoke bellicose nationalism. It's urgent, too, because in the past decade, dictators and authoritarian ruling parties have learned to fight back. When Vladimir Putin seeks to extend Russia's influence, he doesn't just want more people watching Russian movies or buying Russian MiGs. He wants to replicate among his neighbors the kind of one-party rule he has imposed on his own country. His efforts will continue whether or not the Obama administration chooses to push back on behalf of the budding democracies Mr. Putin would target.
The spasm of repression in Burma last week similarly is not just about one country. In secret trials hidden away in fetid prisons, the ruling junta of that Southeast Asian nation of 50 million people sentenced more than 150 activists, Buddhist monks, bloggers, students and others to decades and decades in prison.
U Maung Thura, a comedian better known by his stage name of Zarganar, was sentenced to 45 years, with several charges still pending. His crime: attempting to deliver aid to victims of Cyclone Nargis last spring, when the regime did not want reminders of its own failure to help.
U Gambira, a monk who helped lead peaceful demonstrations against the regime 14 months ago, was sentenced to 68 years. A journalist was sentenced to 14 years for taking photographs during a sham referendum last spring. Lawyers have been sentenced for seeking to defend these activists and for resigning from cases when they were not permitted to mount serious defenses.
As news of these sentences spread from anguished relatives to supporters across the border and so around the world, another development was more openly announced: China's plans to proceed with a $2.5 billion pipeline to bring Burma's oil and gas to its Yunnan province. For China's Communist Party, repression in Burma is not an obstacle but a convenience, enabling the exploitation of natural resources with a minimum of well-targeted corruption.
The regime's ferocity last week, unexpected even by its dismal standards, came as something of an embarrassment to Western humanitarian groups, which have been revving up a campaign to convince the Obama administration that Burma's regime is moderating and that engagement, rather than isolation, is the right policy. Supporters of engagement argue that it helps neither the United States nor the long-suffering people of Burma to leave the field to the Chinese.
This may be true. But public opinion and, we trust, a sense of self-respect will never permit the United States to outbid China for the junta's affections. And in Burma, unlike in many dictatorships, there is a clear alternative authority: the National League for Democracy, which overwhelmingly won an election two decades ago. The regime negated the results, and the league's leader, Daw Aung San Suu Kyi, has been under house arrest for most of the time since. Like Nelson Mandela in his long years of imprisonment, she remains the legitimate leader of her people. Like South Africans, Burmese will remember who sided with her during their years of oppression and who sided with the oppressor. And as the world watched and measured America's shifting stance on apartheid, so it will measure the next administration's commitment to democracy in Burma and beyond.
General Assembly approves Burma resolution, debate intensifies -MIZZIMA
http://www.mizzima.com/news/world/1351-general-assembly-approves-burma-resolution-debate-intensifies-.html
by Mizzima News
Monday, 24 November 2008 18:33
The United Nations General Assembly's Third Committee on Friday approved a draft resolution on the human rights situation inside Burma, amid a lengthy debate that illustrated the divide over Burma, the rights of member states and the workings of the international body.
The UN's Social, Humanitarian and Cultural Committee passed the resolution, critical of the human rights condition in Burma and the authorities inaction or unwillingness in combating rights violations, by a vote of 89 in favor and 29 against, with 63 abstentions.
All 27 members of the European Union offered their support for the resolution, in addition to the United States, Canada, Australia and New Zealand, among others.
In contrast, only seven Asian countries approved of the draft, including none of Burma's immediate neighbors and no member of ASEAN. Bangladesh, Brunei, China, India, Laos, Malaysia and Vietnam all voted against, while Indonesia, the Philippines, Singapore and Thailand abstained (Cambodia was absent).
The abstention on the part of the Philippines came just days before U.S. Secretary of State Condoleezza Rice this weekend rained praise on the Philippines as being the one country in Asia supportive of the United States' position on Burma.
In addition to Japan, Mongolia, South Korea and Kazakhstan, the other three Asian countries to support the item have all recently witnessed significant external intervention, led by either the United States or Australia – Afghanistan, Iraq and Timor-Leste.
Burma's delegate to the Committee reserved strong language for those who supported the motion, letting it be known that Burma would feel under no obligation to be bound by the vote.
"If left unchallenged, [the motion] will set a dangerous precedent for all developing countries", he warned, as the resolution was an attempt to infringe on national sovereignty while a case of direct interference in the domestic affairs of a member state.
Subsequently, a no-action motion put forth by the Burmese representative was defeated by a vote of 90 against to 54 in favor, with 34 abstentions.
Those that opted not to support the draft commonly sighted the politicization of human rights, inattention to the domestic progress made by Burmese authorities and the inappropriateness of the venue for country specific resolutions – the Human Rights Council felt to be the rightful forum in which to raise such concerns.
France, who took the lead in tabling the action on behalf of the European Union, said the text was designed to raise awareness among the international community as to the continuing rights violations in the Southeast Asian country and "in an effort to mobilize action on all sides."
The French representative called on Burma's ruling military to engage in dialogue and to cooperate fully with United Nations mechanisms in the area of human rights. He proceeded to say the new constitution, approved in May, fails to address the assurance of basic rights inside the country and that, "No attempt had been made to prosecute those guilty of repressing the acts of peaceful protest from a year ago."
India's representative, explaining his country's vote, first noted that the country has always recognized the importance of human rights. However, it was forced to vote against the resolution as it was not "forward-looking" and confrontational in approach. India also wished that the Committee would recognize the positive steps of the Burmese government over the past year – a sentiment similarly voiced by Indonesia and Japan, despite the latter weighing in in support of the draft.
Further commenting on the ideological, development and interest divide at the international level, Friday also witnessed the tabling of a resolution critical of human rights as a unilateral coercive measure "implemented in contravention of international law and the United Nations Charter, and with negative consequences to economic development."
The resolution passed, garnering 124 votes in favor to 52 against. All ASEAN countries, China, India and Russia supported the motion; while the European Union, United States, Canada, Australia and Japan were among those who voted against the action.
SOFTWARE INDUSTRY -New regional organisation created
http://www.nationmultimedia.com/2008/11/25/technology/technology_30089326.php
By Asina Pornwasin
The Nation
Published on November 25, 2008
Parks in Asia-Oceania pool strengths to tackle global market
In a bid to expand its global marketing strategy for the local software industry, Software Park Thailand has joined 16 other software parks from eight countries and territories to form a collaborative organisation called the Asia Oceania Regional Software Park Alliance.
The ultimate goal is to put the region's industry on the world software map.
"We want the Asia-Oceania region to become a single window for global software outsourcing in the future," said Software Park Thailand director Suwipa Wanasathop.
Suwipa was elected as the first president of the new alliance, which consists of 16 parks from nine initial country and territorial members, including Thailand, China, Malaysia, Hong Kong, Brunei, Taiwan, Nepal, Burma and Singapore.
"Collaboration between the parks will play an important role in bridging the gap between markets across the Asia-Oceania region. From now on, instead of each country entering another country alone, networks will be pooled to form a single window, allowing software companies from one country to easily penetrate the market in another country," Suwipa said.
She said the alliance's mission was to enable the different parks to share infrastructure and domestic information. The initial goal will be to add value to the software industry of the entire region through business matching among country members.
The alliance will use a social networking model through its cyber infrastructure at www.softwarepark.asia to link members so they can share and exchange resources such as park facilities and infrastructure.
It is hoped that in the first year various regional software industries will begin "third-market penetration", involving collaboration between two countries to penetrate a market in a third, Suwipa said.
This will enable a combination of strengths from two countries, for example a water management solution from Thailand combining with Hong Kong's marketing expertise to tap a market in China.
Moreover, the alliance aims to encourage the IT growth cycle in member countries. It will build bridges between the software industries in member countries so each can be fulfilled through strategies such as business matching, marketing exchanges, the integration of IT-related events, partner programmes and solution centres.
It will also demonstrate best practices among country members, including incubation centres, park management, cooperative training and on-the-job training programmes.
"Each park will complement the others. This will help strengthen the IT-growth cycles in each country. A major problem of local software companies in the past has been a lack of local partners in other markets. To create their own marketing arms in different counties is costly. The alliance will address this issue," Suwipa said.
Forestalling water conflict in Asia
http://chellaney.spaces.live.com/blog/cns!4913C7C8A2EA4A30!903.entry
Beware of Water Wars
China’s hydro-engineering projects in Tibet raise serious concerns
Brahma Chellaney
The Times of India, November 24, 2008
Prime Minister Manmohan Singh’s disclosure that during his recent Beijing visit he raised the issue of international rivers flowing out of Tibet underscores the enormous implications of China’s hydro-engineering projects and plans. Through its control over the Tibet plateau, China controls the flow of several major river systems that are a lifeline to southern and southeastern Asia. Yet China is toying with massive inter-basin and inter-river water transfer projects. Its Great South-North Water Transfer Project is an overly ambitious engineering attempt to take water through manmade canals to its semi-arid north. The diversion of waters from the Tibetan plateau in this project’s third leg is an idea enthusiastically backed by President Hu Jintao, a hydrologist by training whose 1989 martial-law crackdown in Tibet helped facilitate his swift rise in the communist party hierarchy.
Water is getting tied to security in several parts of the world. The battles of yesterday were fought over land. Those of today are over energy. But the battles of tomorrow will be over water. And nowhere else does that prospect look real than Asia, the largest and most densely populated continent that awaits a future made hotter and drier by global warming. According to a 2006 UN report, Asia has less fresh water — 3,920 cubic metres per person — than any other continent other than the Antarctica.
With the world’s fastest-rising military expenditures, most-dangerous hot spots and fiercest resource competition, Asia appears the most likely flash-point for water wars — a concern underscored by attempts by some states to exploit their riparian position or dominance. Riparian dominance impervious to international legal principles can create a situation where water allocations to co-riparian states become a function of political fiat.
Upstream dams, barrages, canals and irrigation systems can help fashion water as a political weapon — a weapon that can be wielded overtly in a war, or subtly in peacetime to signal dissatisfaction with a co-riparian state. Even denial of hydrological data in a critically important season can amount to the use of water as a political tool. Such leverage could in turn prompt a downstream state to build up its military capabilities to help counterbalance the riparian disadvantage.
Except for Japan, Malaysia and Burma, Asian states already face water shortages. A different water-related problem confronts some low-lying states like Bangladesh and the Maldives, whose very future of is at stake due to creeping saltwater incursion and frequent flooding. Bangladesh today has too much water, yet not enough to meet its needs. Born in blood in 1971, it faces the spectre of a watery grave.
China and India already are water-stressed economies. The spread of irrigated farming and water-intensive industries and a rising middle class are drawing attention to their serious struggle for more water. The two giants have entered an era of perennial water shortages, which before long are likely to parallel, in terms of per-capita availability, the Mideast scarcity. Their rapid economic growth could slow if their demand for water continues to grow at the present frenetic pace. Water shortages, furthermore, threaten to turn food-exporting China and India into major importers — a development that would seriously accentuate the global food crisis.
Even though India’s usable arable land is larger than China’s — 160.5 million hectares compared to 137.1 million hectares — the source of all the major Indian rivers except one is the Tibetan plateau. While the Ganges originates on the Indian side of the Himalayas, its two main tributaries flow in from Tibet. This is the world’s largest plateau, whose vast glaciers, huge underground springs and high altitude have endowed it with the greatest river systems. Almost all the major rivers of Asia originate there. Tibet’s status thus is unique: No other area in the world is a water repository of such size, serving as a lifeline for much of an entire continent.
In the stark words of Premier Wen Jiabao, water scarcity threatens the very “survival of the Chinese nation”. But in seeking to address that challenge, China's gargantuan projects threaten to damage the delicate Tibetan ecosystem. They also carry seeds of inter-riparian conflict. The hydropolitics in the Mekong river basin, for example, can only get sharper as China, ignoring the concerns of downstream states, completes more upstream dams on the Mekong.
While making half-hearted attempts to stanch Indian fears about the prospective diversion of the Brahmaputra northward, Beijing has identified the bend where the Brahmaputra forms the world’s longest and deepest canyon, just before entering India, as holding the largest untapped reserves for meeting China’s water and energy needs. A Sino-Indian conflict over the sharing of the Brahmaputra waters, for instance, would begin no sooner than China begins to build the world’s largest hydropower plant on the river’s Great Bend. Upstream projects already have been held responsible for flash floods in Arunachal and Himachal Pradesh.
The way to forestall or manage water disputes in Asia is to build cooperative river-basin arrangements involving all riparian neighbours. Such institutional arrangements ought to centre on transparency, information sharing, pollution control and a pledge not to redirect the natural flow of trans-boundary rivers or undertake projects that would diminish cross-border flows. The successful interstate basin agreements (such as over the Indus, the Nile and the Senegal) are founded on such principles. In the absence of institutionalized cooperation over shared resources, peace will be the casualty in Asia as water becomes the new battleground.
The writer is a strategic affairs analyst.
(c) Times of India, 2008.
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Petition to UN to help political prisoners in Burma-BURMA DIGEST
ဆိုင္းထိုးရန္ ေက်းဇူးျပဳ၍ေခါင္းစဥ္ကို ကလစ္နိွပ္ပါရန္
ဘားမားဒိုင္ဂ်က္တြင္ ဆိုင္းထိုးရန္ျဖစ္ပါသည္
Monday, November 24, 2008
Obama Picks New York Fed Chief to Lead Treasury
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/21/AR2008112102811.html?wpisrc=newsletter
President-elect Barack Obama has selected New York Federal Reserve Bank President Timothy F. Geithner as Treasury secretary, handing the post to a primary architect of the Bush administration's response to the financial crisis, according to Democratic and industry officials yesterday.
At 47, he is the same age as Obama and would represent a generational change in the highest levels of Washington economic policymaking, heading a remarkably young team of White House economic advisers tasked with sorting out one of the worst financial messes since the Great Depression.
A Democrat and a relative unknown outside the world of high finance, Geithner has worked closely with Treasury Secretary Henry M. Paulson Jr. to devise responses to the most critical events of the market turmoil, including the bailouts of the investment bank Bear Stearns and the insurance giant American International Group. Like Paulson, Geithner believes that the Treasury should be given vast powers to develop experimental strategies for responding to the crisis and the flexibility to abandon them if they don't work.
Geithner's mentor is Lawrence H. Summers, 53, a Treasury secretary during the Clinton administration who also was in the running for the job. Summers instead will go to the White House and serve as a senior economic adviser to Obama, according to a senior Democratic official familiar with the matter. Meanwhile, Obama is seriously considering a former opponent in the primary campaign, New Mexico Gov. Bill Richardson, to head the Commerce Department, according to the official.
Joining Summers in the White House would be Jason Furman, 38, as a top economic adviser; Peter R. Orszag, 39, as White House budget director; and Austan Goolsbee, 39, on the president's Council of Economic Advisers, sources familiar with the matter said.
The rollout of the economic team is expected to take place in Chicago on Monday, according to a transition source who spoke on condition of anonymity because the announcements have not been made yet. As for the timing, this source said, "Everything has been accelerated on the economic front because of the news of the last few months" but not in reaction to any specific market trends this week.
The problems facing the new administration are dire as the government's effort to rescue the banking system falters. Yesterday, Goldman Sachs said it expected the economy to shrink even faster during the fourth quarter of this year, at a 5 percent annualized rate. The investment bank predicted that unemployment would soar to 9 percent by the end of next year.
The stock markets cheered the would-be appointment of Geithner, who is well-known to Wall Street. The Dow Jones industrial average had been down as much as 1.4 percent in the morning. Around 3 p.m., when news of Obama's pick broke, the index shot up, ending the day 494.13, or 6.5 percent, higher.
"Geithner is uniquely situated and has the business experience and the political experience and the policy experience to handle this crisis," said Scott Talbott, senior vice president of the Financial Services Roundtable, which lobbies for the nation's largest financial firms. "Everyone I talked to at the New York banks have had positive comments or no negative comments."
He also has experience in addressing complex crises. In the late 1990s, he worked under Treasury Secretary Robert E. Rubin and Summers to guide the Clinton administration's response to currency collapses in Russia, Mexico and Asia. In the last years of the administration, Summers became Treasury secretary and Geithner was promoted to undersecretary.
Geithner "will get a very favorable response in the Senate," said Sen. Kent Conrad (D-N.D.), chairman of the Senate Banking Committee. "You saw the relief rally in the market today. . . . These are the kind of people you want with their hand on the till in a storm. And we're in a Category 4."
Others wondered whether Geithner, who has a youthful manner, could inspire confidence in the markets.
"Tim at 47 looks 32, and you need to have in these compelling times gray hair and gravitas," said Ken Duberstein, a former chief of staff in the Reagan White House, who was interviewed on the possibility of a Geithner Treasury earlier in the fall. "It's not that he's not qualified; it's how he looks."
Under Geithner, the Treasury would not be expected to alter its approach to the financial crisis -- or how to spend the $700 billion in emergency rescue funding approved by Congress last month, though skepticism is building among lawmakers about whether Paulson has devised the right remedy to the problems.
Other than Paulson, no one had more say than Geithner in bailing out Bear Stearns in March or in the events leading up to the bankruptcy filing of the investment bank Lehman Brothers. He also was the primary architect of the $85 billion loan to rescue AIG, and then increased that amount to a total of $152 billion as the company's woes continued. All of those actions have been criticized and debated by lawmakers and economists, who say the moves have contributed to the financial system's turmoil.
With Orszag, Goolsbee and Furman, Obama is assembling a team in the White House of pragmatic centrists who believe in promoting free trade, reducing budget deficits, and using the tax code to narrow the widening gap between rich and poor. Unlike officials in the early Bush administration, they also believe in the power of government to enhance and guide market forces.
Orszag and Furman both served as directors of the Hamilton Project at the Brookings Institution, a research group founded by Rubin and others. Furman left that post earlier this year to join the Obama campaign as a senior economic adviser.
Orszag, founding director of the Hamilton Project, left in 2007 to become director of the nonpartisan Congressional Budget Office. He would bring an intimate knowledge of the federal budget to the Office of Management and Budget, where he would be responsible for assembling Obama's first budget next spring.
Goolsbee, a University of Chicago economist, has been an adviser to Obama since his 2004 campaign for the U.S. Senate. Goolsbee would serve on the president's three-member Council of Economic Advisers, which provides the president with economic analysis and recommends policy actions, congressional aides said.
It was unclear yesterday whether Summers's role would be as chairman of the National Economic Council, which coordinates economic policy for the White House. Other candidates for that post were Jacob "Jack" Lew, a former CBO director who works at Citigroup, and Daniel K. Tarullo, a Georgetown University economist who is part of Obama's transition team, according to congressional sources and a senior Democratic official.
Richardson, the leading contender for Commerce, was originally in the mix to be the secretary of state nominee, but Sen. Hillary Rodham Clinton (D-N.Y.) is now expected be announced for that post after Thanksgiving.
Obama promised in a post-election news conference that he would move with "deliberate haste" to fill out his Cabinet and senior White House staff, a recognition that with the global financial crisis and the United States involved in two wars, there was little time to waste.
The Commerce job was originally rumored to go to Penny Pritzker, the finance chairman of Obama's campaign and a close friend of the Illinois senator, but she removed herself from consideration Thursday due to an inability to extricate herself from a series of complex business ties.
Richardson, who was elected governor of New Mexico in 2002 and was reelected with 69 percent of the vote in 2006, has made no secret of his interest in returning to Washington to take a place in the Obama administration. A long-shot contender for the Democratic presidential nomination, Richardson endorsed Obama in his primary battle with Clinton, and, if nominated for Commerce, would help round out Obama's "team of rivals."
Richardson spent 14 years in the U.S. House -- from 1983 to 1997 -- before being named by President Bill Clinton as the U.S. ambassador to the United Nations. A year later, Richardson became Secretary of Energy in the Clinton Cabinet.
Washington Post staff writer Anne E. Kornblut and washingtonpost.com staff writer Chris Cillizza contributed to this report.
Obama Close to Choosing Clinton, Jones for Key Posts
President-elect Barack Obama, shown getting in his car after a visit to Manny's coffee shop and deli in Chicago, plans to announce his national security appointments on the Monday after Thanksgiving, sources say. (By Charles Dharapak -- Associated Press)
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/21/AR2008112103981_2.html?wpisrc=newsletter&sid=ST2008112104032&s_pos=
By Michael Abramowitz, Shailagh Murray and Anne E. Kornblut
Washington Post Staff Writers
Saturday, November 22, 2008; Page A01
Barack Obama appears intent on naming an experienced and centrist foreign policy team, with Sen. Hillary Rodham Clinton as secretary of state and retired Marine Gen. James L. Jones as national security adviser, sources said yesterday.
A friend of Clinton's said she is ready to accept an appointment that would make the former Obama rival his point person in tackling an array of international crises and restoring the United States' influence around the world, a frequently stated objective of the incoming administration.
Although the Obama transition team and Clinton's Senate spokesman said nothing has been finalized, her office for the first time officially confirmed that she is talking to Obama about the job. "We're still in discussions, which are very much on track. Any reports beyond that are premature," said Philippe Reines, Clinton's spokesman and senior adviser.
Meanwhile, several sources said that Jones has moved to the top of the list to be Obama's national security adviser and that the sides are in advanced talks. Sources familiar with the discussions said Obama is considering expanding the scope of the job to give the adviser the kind of authority once wielded by powerful figures such as Henry A. Kissinger.
The Jones appointment would put the onetime Marine Corps commandant and NATO commander in charge of managing an interagency process that many Democratic foreign policy experts say has been broken under the Bush administration.
With many Democrats expecting Robert M. Gates to remain as defense secretary, the emerging national security team appears to be centrist in orientation, with deep experience in many of the areas likely to be the focus of Obama's foreign policy -- including wars in Iraq and Afghanistan and instability in Pakistan and the Middle East, where Obama advisers have been signaling a desire to make an early mark in the stalled peace process.
While there has been much discussion about the president-elect's purported interest in creating a "team of rivals" in his Cabinet, the emerging group could also be one that works well together. Gates is widely known for being a nonpartisan, congenial manager, while Jones is considered by many who know him to be a self-effacing general who "wears power very gracefully," as one put it. That probably is part of their appeal to Obama, some Democrats said.
One wild card would be Clinton, who clashed sharply with Obama over foreign policy during their battle for the Democratic presidential nomination but worked hard for the party's ticket in the fall. And the past few days have brought increasing signs that, after some hesitation, Clinton and her husband, former president Bill Clinton, want her to take the job. That position comes after the Obama and Clinton sides came to an agreement on how to handle potential conflicts with Bill Clinton's activities.
"It seems more likely today, versus a few days ago, that she will accept," one Clinton loyalist said yesterday.
Obama has also been meeting with possible candidates for other posts, including director of national intelligence. One name that has surfaced as a possibility in recent days is retired Adm. Dennis Blair, a former chief of the U.S. Pacific Command. Others said to be possibilities include John Brennan, a former CIA analyst who worked his way up the agency ladder, and Sen. Chuck Hagel (R-Neb.). A member of the Senate Select Committee on Intelligence and a former Army officer and businessman, Hagel has strong Capitol Hill support and is respected within the national security community as a nonpartisan analyst of intelligence issues.
Sources said the announcement of the national security appointments will be made on the Monday after Thanksgiving.
In picking Jones, Obama would be sending a powerful sign that he wants to conduct a nonpartisan national security policy. Jones is also close to Sen. John McCain (R-Ariz.), his colleague as a military liaison to Capitol Hill in the 1970s, and stayed publicly neutral during the presidential campaign, though he quietly provided advice to Obama in telephone conversations, according to a source who knows both men. Jones is one of the few public figures who probably would have been courted for government service regardless of the election's outcome.
"He would bring a lot of the military dimension to the job," said Wesley K. Clark, a retired four-star general who was one of Jones's predecessors as NATO commander. "And his nonpartisanship at this juncture is really important. He provides a nonpartisan standard for the national interest -- that would be the presumption given his previous experience."
Said Jessica Tuchman Mathews, president of the Carnegie Endowment for International Peace: "I think that would be a very strong appointment. He's got very broad experience, both geographically and substantively, and he's been outstanding in everything he's done."
Mathews and other officials said they expected that Jones would also help impose order in the national security bureaucracy. Over the course of the Bush administration, national security advisers Condoleezza Rice and Steven J. Hadley have been criticized by some for not resolving interagency conflicts, although some of those disputes have receded in recent years.
Jones "is certain to be viewed as a very formidable figure," said David Rothkopf, who served in the Clinton administration and wrote a book about the NSC. "This is a general right out of central casting. He is extremely strong and forceful and thoughtful. . . . If you want a disciplined NSC process, this is your man."
Jones also has experience with many of the big issues that will confront the new administration. As NATO commander, he was intimately involved in assembling troops and other resources for the mission in Afghanistan. He also knows something about energy, a subject the Obama team expects to figure prominently in foreign policy discussions. Jones currently heads the U.S. Chamber of Commerce's Institute for 21st Century Energy.
He is known for being low-key but blunt: Journalist Bob Woodward wrote that Jones told then-Joint Chiefs Chairman Peter Pace that he "should not be the parrot on the secretary's shoulder," referring to Donald H. Rumsfeld.
Sources said another possibility for the national security job is James B. Steinberg, a close Obama adviser who was deputy national security adviser to Clinton, but Jones appears to be the strong favorite.
Sources also said yesterday that Rep. Raul M. Grijalva (D-Ariz.) has emerged as a leading contender for interior secretary. The son of a migrant worker who grew up in Tucson, Grijalva boasts a strong environmental record and chairs the House Natural Resources subcommittee on national parks, forests and public lands.
Also yesterday, transition officials announced the selection of five new White House staff members.
Patrick Gaspard, a longtime labor activist, will be the White House political director. He served as national political director for much of Obama's general-election campaign and was named deputy director of personnel for the transition effort. Prior to his work with Obama, Gaspard was a political operative for the Service Employees International Union.
Vice President-elect Joseph R. Biden Jr. named Cynthia Hogan as his counsel. She has been his legal adviser since 1991, when she became a counsel to the Senate Judiciary Committee.
Biden also named Moises V. Vela Jr. as his director of administration. Vela, a businessman in Denver, was a chief financial officer and senior adviser on Hispanic affairs for Vice President Al Gore.
Incoming first lady Michelle Obama has tapped Jackie Norris, who was Iowa state director for the Obama campaign, to be her chief of staff. Norris, a high school government and history teacher and longtime Iowa Democrat, was Iowa political director for Gore's 2000 presidential campaign and was finance director for future Iowa Gov. Tom Vilsack in 1998.
In addition, the vice president-elect's wife, Jill Biden, has named Catherine M. Russell to be her chief of staff. A former adviser to the Senate Foreign Relations Committee, she served as chief of staff for Jill Biden during the campaign and is the wife of Thomas E. Donilon, a co-chairman of Obama's transition team for the State Department.
Staff writers Michael A. Fletcher and Walter Pincus and staff researcher Madonna Lebling contributed to this report.
The System Implodes: The 10 Worst Corporations of 2008
http://www.multinationalmonitor.org/mm2008/112008/weissman.html
by Robert Weissman
AIG
Cargill
Chevron
CNPC
Constellation Energy
Dole
General Electric Imperial Sugar
Philip Morris Int’l.
Roche
2008 marks the 20th anniversary of Multinational Monitor’s annual list of the 10 Worst Corporations of the year.
In the 20 years that we’ve published our annual list, we’ve covered corporate villains, scoundrels, criminals and miscreants. We’ve reported on some really bad stuff — from Exxon’s Valdez spill to Union Carbide and Dow’s effort to avoid responsibility for the Bhopal disaster; from oil companies coddling dictators (including Chevron and CNPC, both profiled this year) to a bank (Riggs) providing financial services for Chilean dictator Augusto Pinochet; from oil and auto companies threatening the future of the planet by blocking efforts to address climate change to duplicitous tobacco companies marketing cigarettes around the world by associating their product with images of freedom, sports, youthful energy and good health.
But we’ve never had a year like 2008.
The financial crisis first gripping Wall Street and now spreading rapidly throughout the world is, in many ways, emblematic of the worst of the corporate-dominated political and economic system that we aim to expose with our annual 10 Worst list. Here is how.
Improper political influence: Corporations dominate the policy-making process, from city councils to global institutions like the World Trade Organization. Over the last 30 years, and especially in the last decade, Wall Street interests leveraged their political power to remove many of the regulations that had restricted their activities. There are at least a dozen separate and significant examples of this, including the Financial Services Modernization Act of 1999, which permitted the merger of banks and investment banks. In a form of corporate civil disobedience, Citibank and Travelers Group merged in 1998 — a move that was illegal at the time, but for which they were given a two-year forbearance — on the assumption that they would be able to force a change in the relevant law. They did, with the help of just-retired (at the time) Treasury Secretary Robert Rubin, who went on to an executive position at the newly created Citigroup.
Deregulation and non-enforcement: Non-enforcement of rules against predatory lending helped the housing bubble balloon. While some regulators had sought to exert authority over financial derivatives, they were stopped by finance-friendly figures in the Clinton administration and Congress — enabling the creation of the credit default swap market. Even Alan Greenspan concedes that that market — worth $55 trillion in what is called notional value — is imploding in significant part because it was not regulated.
Short-term thinking: It was obvious to anyone who cared to look at historical trends that the United States was experiencing a housing bubble. Many in the financial sector seemed to have convinced themselves that there was no bubble. But others must have been more clear-eyed. In any case, all the Wall Street players had an incentive not to pay attention to the bubble. They were making stratospheric annual bonuses based on annual results. Even if they were certain the bubble would pop sometime in the future, they had every incentive to keep making money on the upside.
Financialization: Profits in the financial sector were more than 35 percent of overall U.S. corporate profits in each year from 2005 to 2007, according to data from the Bureau of Economic Analysis. Instead of serving the real economy, the financial sector was taking over the real economy.
Profit over social use: Relatedly, the corporate-driven economy was being driven by what could make a profit, rather than what would serve a social purpose. Although Wall Street hucksters offered elaborate rationalizations for why exotic financial derivatives, private equity takeovers of firms, securitization and other so-called financial innovations helped improve economic efficiency, by and large these financial schemes served no socially useful purpose.
Externalized costs: Worse, the financial schemes didn’t just create money for Wall Street movers and shakers and their investors. They made money at the expense of others. The costs of these schemes were foisted onto workers who lost jobs at firms gutted by private equity operators, unpayable loans acquired by homeowners who bought into a bubble market (often made worse by unconscionable lending terms), and now the public.
What is most revealing about the financial meltdown and economic crisis, however, is that it illustrates that corporations — if left to their own worst instincts — will destroy themselves and the system that nurtures them. It is rare that this lesson is so graphically illustrated. It is one the world must quickly learn, if we are to avoid the most serious existential threat we have yet faced: climate change.
Of course, the rest of the corporate sector was not on good behavior during 2008 either, and we do not want them to escape justified scrutiny. In keeping with our tradition of highlighting diverse forms of corporate wrongdoing, we include only one financial company on the 10 Worst list. Here, presented in alphabetical order, are the 10 Worst Corporations of 2008.
AIG: Money for Nothing
There’s surely no one party responsible for the ongoing global financial crisis.
But if you had to pick a single responsible corporation, there’s a very strong case to make for American International Group (AIG).
In September, the Federal Reserve poured $85 billion into the distressed global financial services company. It followed up with $38 billion in October.
The government drove a hard bargain for its support. It allocated its billions to the company as high-interest loans; it demanded just short of an 80 percent share of the company in exchange for the loans; and it insisted on the firing of the company’s CEO (even though he had only been on the job for three months).
Why did AIG — primarily an insurance company powerhouse, with more than 100,000 employees around the world and $1 trillion in assets — require more than $100 billion ($100 billion!) in government funds? The company’s traditional insurance business continues to go strong, but its gigantic exposure to the world of “credit default swaps” left it teetering on the edge of bankruptcy. Government officials then intervened, because they feared that an AIG bankruptcy would crash the world’s financial system.
Credit default swaps are effectively a kind of insurance policy on debt securities. Companies contracted with AIG to provide insurance on a wide range of securities. The insurance policy provided that, if a bond didn’t pay, AIG would make up the loss.
AIG’s eventual problem was rooted in its entering a very risky business but treating it as safe. First, AIG Financial Products, the small London-based unit handling credit default swaps, decided to insure “collateralized debt obligations” (CDOs). CDOs are pools of mortgage loans, but often only a portion of the underlying loans — perhaps involving the most risky part of each loan. Ratings agencies graded many of these CDOs as highest quality, though subsequent events would show these ratings to have been profoundly flawed. Based on the blue-chip ratings, AIG treated its insurance on the CDOs as low risk. Then, because AIG was highly rated, it did not have to post collateral.
Through credit default swaps, AIG was basically collecting insurance premiums and assuming it would never pay out on a failure — let alone a collapse of the entire market it was insuring. It was a scheme that couldn’t be beat: money for nothing.
In September, the New York Times’ Gretchen Morgenson reported on the operations of AIG’s small London unit, and the profile of its former chief, Joseph Cassano. In 2007, the Times reported, Cassano “described the credit default swaps as almost a sure thing.” “It is hard to get this message across, but these are very much handpicked,” he said in a call with analysts.
“It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions,” he said.
Cassano assured investors that AIG’s operations were nearly fail safe. Following earlier accounting problems, the company’s risk management was stellar, he said: “That’s a committee that I sit on, along with many of the senior managers at AIG, and we look at a whole variety of transactions that come in to make sure that they are maintaining the quality that we need to. And so I think the things that have been put in at our level and the things that have been put in at the parent level will ensure that there won’t be any of those kinds of mistakes again.”
Cassano turned out to be spectacularly wrong. The credit default swaps were not a sure thing. AIG somehow did not notice that the United States was experiencing a housing bubble, and that it was essentially insuring that the bubble would not pop. It made an ill-formed judgment that positive credit ratings meant CDOs were high quality — even when the underlying mortgages were of poor quality.
But before the bubble popped, Cassano’s operation was minting money. It wasn’t hard work, since AIG Financial Products was taking in premiums in exchange for nothing. In 2005, the unit’s profit margin was 83 percent, according to the Times. By 2007, its credit default swap portfolio was more than $500 billion.
Then things started to go bad. Suddenly, AIG had to start paying out on some of the securities it had insured. As it started recording losses, its credit default swap contracts require that it begin putting up more and more collateral. AIG found it couldn’t raise enough money fast enough — over the course of a weekend in September, the amount of money AIG owed shot up from $20 billion to more than $80 billion.
With no private creditors stepping forward, it fell to the government to provide the needed capital or let AIG enter bankruptcy. Top federal officials deemed bankruptcy too high a risk to the overall financial system.
After the bailout, it emerged that AIG did not even know all of the CDOs it had ensured.
In September, less than a week after the bailout was announced, the Orange County Register reported on a posh retreat for company executives and insurance agents at the exclusive St. Regis Resort in Monarch Beach, California. Rooms at the resort can cost over $1,000 per night.
After the House of Representatives Oversight and Government Reform Committee highlighted the retreat, AIG explained that the retreat was primarily for well-performing independent insurance agents. Only 10 of the 100 participants were from AIG (and they from a successful AIG subsidiary), the company said, and the event was planned long in advance of the federal bailout. In an apology letter to Treasury Secretary Henry Paulson, CEO Edward Liddy wrote that AIG now faces very different challenges, and “that we owe our employees and the American public new standards and approaches.”
New standards and approaches, indeed.
Cargill: Food Profiteers
The world’s food system is broken.
Or, more accurately, the giant food companies and their allies in the U.S. and other rich country governments, and at the International Monetary Fund and World Bank, broke it.
Thirty years ago, most developing countries produced enough food to feed themselves [CHECK]. Now, 70 percent are net food importers.
Thirty years ago, most developing countries had in place mechanisms aimed at maintaining a relatively constant price for food commodities. Tariffs on imports protected local farmers from fluctuations in global food prices. Government-run grain purchasing boards paid above-market prices for farm goods when prices were low, and required farmers to sell below-market when prices were high. The idea was to give farmers some certainty over price, and to keep food affordable for consumers. Governments also provided a wide set of support services for farmers, giving them advice on new crop and growing technologies and, in some countries, helping set up cooperative structures.
This was not a perfect system by any means, but it looks pretty good in retrospect.
Over the last three decades, the system was completely abandoned, in country after country. It was replaced by a multinational-dominated, globally integrated food system, in which the World Bank and other institutions coerced countries into opening their markets to cheap food imports from rich countries and re-orienting their agricultural systems to grow food for rich consumers abroad. Proponents said the new system was a “free market” approach, but in reality it traded one set of government interventions for another — a new set of rules that gave enhanced power to a handful of global grain trading companies like Cargill and Archer Daniels Midland, as well as to seed and fertilizer corporations.
“For this food regime to work,” Raj Patel, author of Stuffed and Starved, told the U.S. House Financial Services Committee at a May hearing, “existing marketing boards and support structures needed to be dismantled. In a range of countries, this meant that the state bodies that had been supported and built by the World Bank were dismantled by the World Bank. The rationale behind the dismantling of these institutions was to clear the path for private sector involvement in these sectors, on the understanding that the private sector would be more efficient and less wasteful than the public sector.”
“The result of these interventions and conditions,” explained Patel, “was to accelerate the decline of developing country agriculture. One of the most striking consequences of liberalization has been the phenomenon of ‘import surges.’ These happen when tariffs on cheaper, and often subsidized, agricultural products are lowered, and a host country is then flooded with those goods. There is often a corresponding decline in domestic production. In Senegal, for example, tariff reduction led to an import surge in tomato paste, with a 15-fold increase in imports, and a halving of domestic production. Similar stories might be told of Chile, which saw a three-fold surge in imports of vegetable oil, and a halving of domestic production. In Ghana in 1998, local rice production accounted for over 80 percent of domestic consumption. By 2003, that figure was less than 20 percent.”
The decline of developing country agriculture means that developing countries are dependent on the vagaries of the global market. When prices spike — as they did in late 2007 and through the beginning of 2008 — countries and poor consumers are at the mercy of the global market and the giant trading companies that dominate it. In the first quarter of 2008, the price of rice in Asia doubled, and commodity prices overall rose 40 percent. People in rich countries felt this pinch, but the problem was much more severe in the developing world. Not only do consumers in poor countries have less money, they spend a much higher proportion of their household budget on food — often half or more — and they buy much less processed food, so commodity increases affect them much more directly. In poor countries, higher prices don’t just pinch, they mean people go hungry. Food riots broke out around the world in early 2008.
But not everyone was feeling pain. For Cargill, spiking prices was an opportunity to get rich. In the second quarter of 2008, the company reported profits of more than $1 billion, with profits from continuing operations soaring 18 percent from the previous year. Cargill’s 2007 profits totaled more than $2.3 billion, up more than a third from 2006.
In a competitive market, would a grain-trading middleman make super-profits? Or would rising prices crimp the middleman’s profit margin?
Well, the global grain trade is not competitive.
In an August speech, Cargill CEO Greg Page posed the question, “So, isn’t Cargill exploiting the food situation to make money?” Here is how he responded:
“I would give you four pieces of information about why our earnings have gone up dramatically.
The demand for food has gone up. The demand for our facilities has gone up, and we are running virtually all of our facilities worldwide at total capacity. As we utilize our capacity more effectively, clearly we do better.
Fertilizer prices rose, and we are owners of a large fertilizer company. That has been the single largest factor in Cargill’s earnings.
The volatility in the grain industry — much of it created by governments — was an opportunity for a trading company like Cargill to make money.
Finally, in this era of high prices, Cargill over the last two years has invested $15.5 billion additional dollars into the world food system. Some was to carry all these high-priced inventories. We also wanted to be sure that we were there for farmers who needed the working capital to operate in this much more expensive environment. Clearly, our owners expected some return on that $15.5 billion. Cargill had an opportunity to make more money in this environment, and I think that is something that we need to be very forthright about.”
OK, Mr. Page, that’s all very interesting. The question was, “So, isn’t Cargill exploiting the food situation to make money?” It sounds like your answer is, “yes.”
Chevron: “We can’t let little countries screw around with big companies”
The world has witnessed a stunning consolidation of the multinational oil companies over the last decade.
One of the big winners was Chevron. It swallowed up Texaco and Unocal, among others. It was happy to absorb their revenue streams. It has been less willing to take responsibility for ecological and human rights abuses perpetrated by these companies.
One of the inherited legacies from Chevron’s 2001 acquisition of Texaco is litigation in Ecuador over the company’s alleged decimation of the Ecuadorian Amazon over a 20-year period of operation. In 1993, 30,000 indigenous Ecuadorians filed a class action suit in U.S. courts, alleging that Texaco had poisoned the land where they live and the waterways on which they rely, allowing billions of gallons of oil to spill and leaving hundreds of waste pits unlined and uncovered. They sought billions in compensation for the harm to their land and livelihood, and for alleged health harms. The Ecuadorians and their lawyers filed the case in U.S. courts because U.S. courts have more capacity to handle complex litigation, and procedures (including jury trials) that offer plaintiffs a better chance to challenge big corporations. Texaco, and later Chevron, deployed massive legal resources to defeat the lawsuit. Ultimately, a Chevron legal maneuver prevailed: At Chevron’s instigation, U.S. courts held that the case should be litigated in Ecuador, closer to where the alleged harms occurred.
Having argued vociferously that Ecuadorian courts were fair and impartial, Chevron is now unhappy with how the litigation has proceeded in that country. So unhappy, in fact, that it is lobbying the Office of the U.S. Trade Representative to impose trade sanctions on Ecuador if the Ecuadorian government does not make the case go away.
“We can’t let little countries screw around with big companies like this — companies that have made big investments around the world,” a Chevron lobbyist said to Newsweek in August. (Chevron subsequently stated that “the comments attributed to an unnamed lobbyist working for Chevron do not reflect our company’s views regarding the Ecuador case. They were not approved by the company and will not be tolerated.”)
Chevron is worried because a court-appointed special master found in March that the company was liable to plaintiffs for between $7 billion and $16 billion. The special master has made other findings that Chevron’s clean-up operations in Ecuador have been inadequate.
Another of Chevron’s inherited legacies is the Yadana natural gas pipeline in Burma, operated by a consortium in which Unocal was one of the lead partners. Human rights organizations have documented that the Yadana pipeline was constructed with forced labor, and associated with brutal human rights abuses by the Burmese military.
EarthRights International, a human rights group with offices in Washington, D.C. and Bangkok, has carefully tracked human rights abuses connected to the Yadana pipeline, and led a successful lawsuit against Unocal/Chevron. In an April 2008 report, the group states that “Chevron and its consortium partners continue to rely on the Burmese army for pipeline security, and those forces continue to conscript thousands of villagers for forced labor, and to commit torture, rape, murder and other serious abuses in the course of their operations.”
Money from the Yadana pipeline plays a crucial role in enabling the Burmese junta to maintain its grip on power. EarthRights International estimates the pipeline funneled roughly $1 billion to the military regime in 2007. The group also notes that, in late 2007, when the Burmese military violently suppressed political protests led by Buddhist monks, Chevron sat idly by.
Chevron has trouble in the United States, as well. In September, Earl Devaney, the inspector general for the Department of Interior, released an explosive report documenting “a culture of ethical failure” and a “culture of substance abuse and promiscuity” in the U.S. government program handling oil lease contracts on U.S. government lands and property. Government employees, Devaney found, accepted a stream of small gifts and favors from oil company representatives, and maintained sexual relations with them. (In one memorable passage, the inspector general report states that “sexual relationships with prohibited sources cannot, by definition, be arms-length.”) The report showed that Chevron had conferred the largest number of gifts on federal employees. It also complained that Chevron refused to cooperate with the investigation, a claim Chevron subsequently disputed.
Constellation Energy: Nuclear Operators
Although it is too dangerous, too expensive and too centralized to make sense as an energy source, nuclear power won’t go away, thanks to equipment makers and utilities that find ways to make the public pay and pay.
Case in point: Constellation Energy Group, the operator of the Calvert Cliffs nuclear plant in Maryland. When Maryland deregulated its electricity market in 1999, Constellation — like other energy generators in other states — was able to cut a deal to recover its “stranded costs” and nuclear decommissioning fees. The idea was that competition would bring multiple suppliers into the market, and these new competitors would have an unfair advantage over old-time monopoly suppliers. Those former monopolists, the argument went, had built expensive nuclear reactors with the approval of state regulators, and it would be unfair if they could not charge consumers to recover their costs. It would also be unfair, according to this line of reasoning, if the former monopolists were unable to recover the costs of decommissioning nuclear facilities.
In Maryland, the “stranded cost” deal gave Constellation (through its affiliate Baltimore Gas & Electric, BGE) the right to charge ratepayers $975 million in 1993 dollars (almost $1.5 billion in present dollars).
Deregulation meant that Constellation’s energy generating assets — including its nuclear facility at Calvert Cliffs — were free from price regulation. As a result, instead of costing Constellation, Calvert Cliffs’ market value increased.
Deregulation also meant that, after an agreed-upon freeze period, BGE was free to raise its rates as it chose. In 2006, it announced a 72 percent rate increase. For residential consumers, this meant they would pay an average of $743 more per year for electricity.
The sudden price hike sparked a rebellion. The Maryland legislature passed a law requiring BGE to credit consumers $386 million over a 10-year period. At the time, Constellation was very pleased with the deal, which let it keep most of its price-gouging profits — a spokesperson for the then-governor said that Constellation and BGE were “doing a victory lap around the statehouse” after the bill passed.
In February 2008, however, Constellation announced that it intended to sue the state for unconstitutionally “taking” its assets via the mandatory consumer credit. In March, following a preemptive lawsuit by the state, the matter was settled. BGE agreed to make a one-time rebate of $170 million to residential ratepayers, and 90 percent of the credits to ratepayers (totaling $346 million) were left in place. The deal also relieved ratepayers of the obligation to pay for decommissioning — an expense that had been expected to total $1.5 billion (or possibly much more) from 2016 to 2036.
The deal also included regulatory changes making it easier for outside companies to invest in Constellation — a move of greater import than initially apparent. In September, with utility stock prices plummeting, Warren Buffet’s MidAmerican Energy announced it would purchase Constellation for $4.7 billion, less than a quarter of the company’s market value in January.
Meanwhile, Constellation plans to build a new reactor at Calvert Cliffs, potentially the first new reactor built in the United States since the near-meltdown at Three Mile Island in 1979.
“There are substantial clean air benefits associated with nuclear power, benefits that we recognize as the operator of three plants in two states,” says Constellation spokesperson Maureen Brown.
It has lined up to take advantage of U.S. government-guaranteed loans for new nuclear construction, available under the terms of the 2005 Energy Act [see “Nuclear’s Power Play: Give Us Subsidies or Give Us Death,” Multinational Monitor, September/October 2008]. “We can’t go forward unless we have federal loan guarantees,” says Brown.
Building nuclear plants is extraordinarily expensive (Constellation’s planned construction is estimated at $9.6 billion) and takes a long time; construction plans face massive political risks; and the value of electric utilities is small relative to the huge costs of nuclear construction. For banks and investors, this amounts to too much uncertainty — but if the government guarantees loans will be paid back, then there’s no risk.
Or, stated better, the risk is absorbed entirely by the public. That’s the financial risk. The nuclear safety risk is always absorbed, involuntarily, by the public.
CNPC: Fueling Violence in Darfur
Many of the world’s most brutal regimes have a common characteristic: Although subject to economic sanctions and politically isolated, they are able to maintain power thanks to multinational oil company enablers. Case in point: Sudan, and the Chinese National Petroleum Corporation (CNPC).
In July, International Criminal Court (ICC) Prosecutor Luis Moreno-Ocampo charged the President of Sudan, Omar Hassan Ahmad Al Bashir, with committing genocide, crimes against humanity and war crimes. The charges claim that Al Bashir is the mastermind of crimes against ethnic groups in Darfur, aimed at removing the black population from Sudan. Sudanese armed forces and government-authorized militias known as the Janjaweed have carried out massive attacks against the Fur, Masalit and Zaghawa communities of Darfur, according to the ICC allegations. Following bombing raids, “ground forces would then enter the village or town and attack civilian inhabitants. They kill men, children, elderly, women; they subject women and girls to massive rapes. They burn and loot the villages.” The ICC says 35,000 people have been killed and 2.7 million displaced.
The ICC reports one victim saying: “When we see them, we run. Some of us succeed in getting away, and some are caught and taken to be raped — gang-raped. Maybe around 20 men rape one woman. ... These things are normal for us here in Darfur. These things happen all the time. I have seen rapes, too. It does not matter who sees them raping the women — they don’t care. They rape girls in front of their mothers and fathers.”
Governments around the world have imposed various sanctions on Sudan, with human rights groups demanding much more aggressive action.
But there is little doubt that Sudan has been able to laugh off existing and threatened sanctions because of the huge support it receives from China, channeled above all through the Sudanese relationship with CNPC.
“The relationship between CNPC and Sudan is symbiotic,” notes the Washington, D.C.-based Human Rights First, in a March 2008 report, “Investing in Tragedy.” “Not only is CNPC the largest investor in the Sudanese oil sector, but Sudan is CNPC’s largest market for overseas investment.”
China receives three quarters of Sudan’s exports, and Chinese companies hold the majority share in almost all of the key oil-rich areas in Sudan. Explains Human Rights First: “Beijing’s companies pump oil from numerous key fields, which then courses through Chinese-made pipelines to Chinese-made storage tanks to await a voyage to buyers, most of them Chinese.” CNPC is the largest oil investor in Sudan; the other key Chinese company is the Sinopec Group (also known as the China Petrochemical Corporation).
Oil money has fueled violence in Darfur. “The profitability of Sudan’s oil sector has developed in close chronological step with the violence in Darfur,” notes Human Rights First. “In 2000, before the crisis, Sudan’s oil revenue was $1.2 billion. By 2006, with the crisis well underway, that total had shot up by 291 percent, to $4.7 billion. How does Sudan use that windfall? Its finance minister has said that at least 70 percent of the oil profits go to the Sudanese armed forces, linked with its militia allies to the crimes in Darfur.”
There are other nefarious components of the CNPC relationship with the Sudanese government. China ships substantial amounts of small arms to Sudan and has helped Sudan build its own small arms factories. China has also worked at the United Nations to undermine more effective multilateral action to protect Darfur. Human rights organizations charge a key Chinese motivation is to lubricate its relationship with the Khartoum government so the oil continues to flow.
CNPC did not respond to repeated requests for comment.
Dole: The Sour Taste of Pineapple
Starting in 1988, the Philippines undertook what was to be a bold initiative to redress the historically high concentration of land ownership that has impoverished millions of rural Filipinos and undermined the country’s development. The Comprehensive Agricultural Reform Program (CARP) promised to deliver land to the landless.
It didn’t work out that way.
Plantation owners helped draft the law and invented ways to circumvent its purported purpose.
Dole pineapple workers are among those paying the price.
Under CARP, Dole’s land was divided among its workers and others who had claims on the land prior to the pineapple giant. However, under the terms of the law, as the Washington, D.C.-based International Labor Rights Forum (ILRF) explains in an October report, “The Sour Taste of Pineapple,” the workers received only nominal title. They were required to form labor cooperatives. Intended to give workers — now the new land owners — a means to collectively manage their land, the cooperatives were instead controlled by wealthy landlords.
“Through its dealings with these cooperatives,” ILRF found, Dole and Del Monte, (the world’s other leading pineapple grower) “have been able to take advantage of a number of worker abuses. Dole has outsourced its labor force to contract labor and replaced its full-time regular employment system that existed before CARP.” Dole employs 12,000 contract workers. Meanwhile, from 1989 to 1998, Dole reduced its regular workforce by 3,500.
Under current arrangements, Dole now leases its land from its workers, on extremely cheap terms — in one example cited by ILRF, Dole pays in rent one-fifteenth of its net profits from a plantation. Most workers continue to work the land they purportedly own, but as contract workers for Dole.
The Philippine Supreme Court has ordered Dole to convert its contract workers into regular employees, but the company has not done so. In 2006, the Court upheld a Department of Labor and Employment decision requiring Dole to stop using illegal contract labor. Under Philippine law, contract workers should be regularized after six months.
Dole emphasizes that it pays its workers $10 a day, more than the country’s $5.60 minimum wage. It also says that its workers are organized into unions. The company responded angrily to a 2007 nomination for most irresponsible corporations from a Swiss organization, the Berne Declaration. “We must also say that those fallacious attacks created incredulity and some anger among our Dolefil workers, their representatives, our growers, their cooperatives and more generally speaking among the entire community where we operate.” The company thanked “hundreds of people who spontaneously expressed their support to Dolefil, by taking the initiative to sign manifestos,” including seven cooperatives.
The problem with Dole’s position, as ILRF points out, is that “Dole’s contract workers are denied the same rights afforded to Dole’s regular workers. They are refused the right to organize or benefits gained by the regular union, and are consequently left with poor wages and permanent job insecurity.” Contract workers are paid under a quota system, and earn about $1.85 a day, according to ILRF.
Conditions are not perfect for unionized workers, either. In 2006, when a union leader complained about pesticide and chemical exposures (apparently misreported in local media as a complaint about Dole’s waste disposal practices), the management of Dole Philippines (Dolefil) pressed criminal libel charges against him. Two years later, these criminal charges remain pending.
Dole says it cannot respond to the allegations in the ILRF report, because the U.S. Trade Representative is considering acting on a petition by ILRF to deny some trade benefits to Dole pineapples imported into the United States from the Philippines.
Concludes Bama Atheya, executive director of ILRF, “In both Costa Rica and the Philippines, Dole has deliberately obstructed workers’ right to organize, has failed to pay a living wage and has polluted workers’ communities.”
GE: Creative Accounting
General Electric (GE) has appeared on Multinational Monitor’s annual 10 Worst Corporations list for defense contractor fraud, labor rights abuses, toxic and radioactive pollution, manufacturing nuclear weaponry, workplace safety violations and media conflicts of interest (GE owns television network NBC).
This year, the company returns to the list for new reasons: alleged tax cheating and the firing of a whistleblower.
In June, former New York Times reporter David Cay Johnston reported on internal GE documents that appeared to show the company had engaged in long-running effort to evade taxes in Brazil. In a lengthy report in Tax Notes International, Johnston cited a GE subsidiary manager’s powerpoint presentation that showed “suspicious” invoices as “an indication of possible tax evasion.” The invoices showed suspiciously high sales volume for lighting equipment in lightly populated Amazon regions of the country. These sales would avoid higher value added taxes (VAT) in urban states, where sales would be expected to be greater.
Johnston wrote that the state-level VAT at issue, based on the internal documents he reviewed, appeared to be less than $100 million. But, “since the VAT scheme appears to have gone on long before the period covered in the Moreira [the company manager] report, the total sum could be much larger and could involve other countries supplied by the Brazil subsidiary.”
A senior GE spokesperson, Gary Sheffer, told Johnston that the VAT and related issues were so small relative to GE’s size that the company was surprised a reporter would spend time looking at them. “No company has perfect compliance,” Sheffer said. “We do not believe we owe the tax.”
Johnston did not identify the source that gave him the internal GE documents, but GE has alleged it was a former company attorney, Adriana Koeck. GE fired Koeck in January 2007 for what it says were “performance reasons.” GE sued Koeck in June 2008, alleging that she wrongfully maintained privileged and confidential information, and improperly shared the information with third parties. In a court filing, GE said that it “considers its professional reputation to be its greatest asset and it has worked tirelessly to develop and preserve an unparalleled reputation of ‘unyielding integrity.’”
GE’s suit followed a whistleblower defense claim filed by Koeck in 2007. In April 2007, Koeck filed a claim with the U.S. Department of Labor under the Sarbanes-Oxley whistleblower protections (rules put in place following the Enron scandal).
In her filing, Koeck alleges that she was fired not for poor performance, but because she called attention to improper activities by GE. After being hired in January 2006, Koeck’s complaint asserts, she “soon discovered that GE C&I [consumer and industrial] operations in Latin America were engaged in a variety of irregular practices. But when she tried to address the problems, both Mr. Burse and Mr. Jones [her superiors in the general counsel’s office] interfered with her efforts, took certain matters away from her, repeatedly became enraged with her when she insisted that failing to address the problems would harm GE, and eventually had her terminated.”
Koeck’s whistleblower filing details the state VAT-avoidance scheme discussed in Johnston’s article. It also indicates that several GE employees in Brazil were blackmailing the company to keep quiet about the scheme.
Koeck’s whistleblower filing also discusses reports in the Brazilian media that GE had participated in a “bribing club” with other major corporations. Members of the club allegedly met to divide up public contracts in Brazil, as well as to agree on the amounts that would be paid in bribes. Koeck discovered evidence of GE subsidiaries engaging in behavior compatible with the “bribing club” stories and reported this information to her superior. Koeck alleges that her efforts to get higher level attorneys to review the situation failed.
In a statement, GE responds to the substance of Koeck’s allegations of wrongdoing: “These were relatively minor and routine commercial and tax issues in Brazil. Our employees proactively identified, investigated and resolved these issues in the appropriate manner. We are confident we have met all of our tax and compliance obligations in Brazil.GE has a strong and rigorous compliance process that dealt effectively with these issues.”
Koeck’s Sarbanes-Oxley complaint was thrown out in June, on the grounds that it had not been filed in a timely matter.
The substance of her claims, however, are now under investigation by the Department of Justice Fraud Section, according to Corporate Crime Reporter.
Imperial Sugar: 13 Dead
On February 7, an explosion rocked the Imperial Sugar refinery in Port Wentworth, Georgia, near Savannah.
Tony Holmes, a forklift operator at the plant, was in the break room when the blast occurred.
“I heard the explosion,” he told the Savannah Morning News. “The building shook, and the lights went out. I thought the roof was falling in. ... I saw people running. I saw some horrific injuries. ... People had clothes burning. Their skin was hanging off. Some were bleeding.”
Days later, when the fire was finally extinguished and search-and-rescue operations completed, the horrible human toll was finally known: 13 dead, dozens badly burned and injured.
As with almost every industrial disaster, it turns out the tragedy was preventable. The cause was accumulated sugar dust, which like other forms of dust, is highly combustible.
The Occupational Safety and Health Administration (OSHA), the government workplace safety regulator, had not visited Imperial Sugar’s Port Wentworth facility since 2000. When inspectors examined the blast site after the fact, they found rampant violations of the agency’s already inadequate standards. They proposed a more than $5 million fine, and issuance of citations for 61 egregious willful violations, eight willful violations and 51 serious violations. Under OSHA’s rules, a “serious” citation is issued when death or serious physical harm is likely to occur, a “willful” violation is a violation committed with plain indifference to employee safety and health, and “egregious” citations are issued for particularly flagrant violations.
A month later, OSHA inspectors investigated Imperial Sugar’s plant in Gramercy, Louisiana. They found 1/4- to 2-inch accumulations of dust on electrical wiring and machinery. They found 6- to 8-inch accumulations on wall ledges and piping. They found 1/2- to 1-inch accumulations on mechanical equipment and motors. They found 3- to 48-inch accumulations on workroom floors. OSHA posted an “imminent danger” notice at the plant, because of the high likelihood of another explosion.
Imperial Sugar obviously knew of the conditions in its plants. It had in fact taken some measures to clean up operations prior to the explosion.
Graham H. Graham was hired as vice president of operations of Imperial Sugar in November 2007. In July 2008, he told a Senate subcommittee that he first walked through the Port Wentworth facility in December 2007. “The conditions were shocking,” he testified. “Port Wentworth was a dirty and dangerous facility. The refinery was littered with discarded materials, piles of sugar dust, puddles of sugar liquid and airborne sugar dust. Electrical motors and controls were encrusted with solidified sugar, while safety covers and doors were missing from live electrical switchgear and panels. A combustible environment existed.”
Graham recommended that the plant manager be fired, and he was. Graham ordered a housekeeping blitz, and by the end of January, he testified to the Senate subcommittee, conditions had improved significantly, but still were hazardous.
But Graham also testified that he was told to tone down his demands for immediate action. In a meeting with John Sheptor, then Imperial Sugar’s chief operating officer and now its CEO, and Kay Hastings, senior vice president of human resources, Graham testified, “I was also informed that I was excessively eager in addressing the refinery’s problems.”
Sheptor, who was nearly killed in the refinery explosion, and Hastings both deny Graham’s account.
The company says that it respected safety concerns before the explosion, but has since redoubled efforts, hiring expert consultants on combustible hazards, refocusing on housekeeping efforts and purchasing industrial vacuums to minimize airborne disbursement.
In March, the House of Representatives Education and Labor Committee held a hearing on the hazards posed by combustible dust. The head of the Chemical Safety Board testified about a 2006 study that identified hundreds of combustible dust incidents that had killed more than 100 workers during the previous 25 years. The report recommended that OSHA issue rules to control the risk of dust explosions.
Instead of acting on this recommendation, said Committee Chair George Miller, D-California, “OSHA chose to rely on compliance assistance and voluntary programs, such as industry ‘alliances,’ web pages, fact sheets, speeches and booths at industry conferences.”
The House of Representatives then passed legislation to require OSHA to issue combustible dust standards, but the proposal was not able to pass the Senate.
Remarkably, even after the tragedy at Port Wentworth, and while Imperial Sugar said it welcomed the effort for a new dust rule, OSHA head Edwin Foulke indicated he believed no new rule was necessary.
“We believe,” he told the House Education and Labor Committee in March, “that [OSHA] has taken strong measures to prevent combustible dust hazards, and that our multi-pronged approach, which includes effective enforcement of existing standards, combined with education for employers and employees, is effective in addressing combustible dust hazards. We would like to emphasize that the existence of a standard does not ensure that explosions will be eliminated.”
Philip Morris International: Unshackled
The old Philip Morris no longer exists. In March, the company formally divided itself into two separate entities: Philip Morris USA, which remains a part of the parent company Altria, and Philip Morris International.
Philip Morris USA sells Marlboro and other cigarettes in the United States. Philip Morris International tramples over the rest of the world.
The world is just starting to come to grips with a Philip Morris International even more predatory in pushing its toxic products worldwide.
The new Philip Morris International is unconstrained by public opinion in the United States — the home country and largest market of the old, unified Philip Morris —and will no longer fear lawsuits in the United States.
As a result, Thomas Russo of the investment fund Gardner Russo & Gardner told Bloomberg, the company “won’t have to worry about getting pre-approval from the U.S. for things that are perfectly acceptable in foreign markets.” Russo’s firm owns 5.7 million shares of Altria and now Philip Morris International.
A commentator for The Motley Fool investment advice service wrote, “The Marlboro Man is finally free to roam the globe unfettered by the legal and marketing shackles of the U.S. domestic market.”
In February, the World Health Organization (WHO) issued a new report on the global tobacco epidemic. WHO estimates the Big Tobacco-fueled epidemic now kills more than 5 million people every year.
Five million people.
By 2030, WHO estimates 8 million will die a year from tobacco-related disease, 80 percent in the developing world.
The WHO report emphasizes that known and proven public health policies can dramatically reduce smoking rates. These policies include indoor smoke-free policies; bans on tobacco advertising, promotion and sponsorship; heightened taxes; effective warnings; and cessation programs. These “strategies are within the reach of every country, rich or poor and, when combined as a package, offer us the best chance of reversing this growing epidemic,” says WHO Director-General Margaret Chan.
Most countries have failed to adopt these policies, thanks in no small part to decades-long efforts by Philip Morris and the rest of Big Tobacco to deploy political power to block public health initiatives. Thanks to the momentum surrounding a global tobacco treaty, known as the Framework Convention on Tobacco Control, adopted in 2005, this is starting to change. There’s a long way to go, but countries are increasingly adopting sound public health measures to combat Big Tobacco.
Now Philip Morris International has signaled its initial plans to subvert these policies.
The company has announced plans to inflict on the world an array of new products, packages and marketing efforts. These are designed to undermine smoke-free workplace rules, defeat tobacco taxes, segment markets with specially flavored products, offer flavored cigarettes sure to appeal to youth and overcome marketing restrictions.
The Chief Operating Officer of Philip Morris International, Andre Calantzopoulos, detailed in a March investor presentation two new products, Marlboro Wides, “a shorter cigarette with a wider diameter,” and Marlboro Intense, “a rich, flavorful, shorter cigarette.”
Sounds innocent enough, as far as these things go.
That’s only to the innocent mind.
The Wall Street Journal reported on Philip Morris International’s underlying objective: “The idea behind Intense is to appeal to customers who, due to indoor smoking bans, want to dash outside for a quick nicotine hit but don’t always finish a full-size cigarette.”
Workplace and indoor smoke-free rules protect people from second-hand smoke, but also make it harder for smokers to smoke. The inconvenience (and stigma of needing to leave the office or restaurant to smoke) helps smokers smoke less and, often, quit. Subverting smoke-free bans will damage an important tool to reduce smoking.
Philip Morris International says it can adapt to high taxes. If applied per pack (or per cigarette), rather than as a percentage of price, high taxes more severely impact low-priced brands (and can help shift smokers to premium brands like Marlboro). But taxes based on price hurt Philip Morris International.
Philip Morris International’s response? “Other Tobacco Products,” which Calantzopoulos describes as “tax-driven substitutes for low-price cigarettes.” These include, says Calantzopoulos, “the ‘tobacco block,’ which I would describe as the perfect make-your-own cigarette device.” In Germany, roll-your-own cigarettes are taxed far less than manufactured cigarettes, and Philip Morris International’s “tobacco block” is rapidly gaining market share.
One of the great industry deceptions over the last several decades is selling cigarettes called “lights” (as in Marlboro Lights), “low” or “mild” — all designed to deceive smokers into thinking they are safer.
The Framework Convention on Tobacco Control says these inherently misleading terms should be barred. Like other companies in this regard, Philip Morris has been moving to replace the names with color coding — aiming to convey the same ideas, without the now-controversial terms.
Calantzopoulos says Philip Morris International will work to more clearly differentiate Marlboro Gold (lights) from Marlboro Red (traditional) to “increase their appeal to consumer groups and segments that Marlboro has not traditionally addressed.”
Philip Morris International also is rolling out a range of new Marlboro products with obvious attraction for youth. These include Marlboro Ice Mint, Marlboro Crisp Mint and Marlboro Fresh Mint, introduced into Japan and Hong Kong last year. It is exporting clove products from Indonesia.
The company has also renewed efforts to sponsor youth-oriented music concerts. In July, activist pressure forced Philip Morris International to withdraw sponsorship of an Alicia Keys concert in Indonesia (Keys called for an end to the sponsorship deal); and in August, the company was forced to withdraw from sponsorship in the Philippines of a reunion concert of the Eraserheads, a band sometimes considered “the Beatles of the Philippines.”
Responding to increasing advertising restrictions and large, pictorial warnings required on packs, Marlboro is focusing increased attention on packaging. Fancy slide packs make the package more of a marketing device than ever before, and may be able to obscure warning labels.
Most worrisome of all may be the company’s forays into China, the biggest cigarette market in the world, which has largely been closed to foreign multinationals. Philip Morris International has hooked up with the China National Tobacco Company, which controls sales in China. Philip Morris International will sell Chinese brands in Europe. Much more importantly, the company is starting to sell licensed versions of Marlboro in China. The Chinese aren’t letting Philip Morris International in quickly — Calantzopoulos says, “We do not foresee a material impact on our volume and profitability in the near future.” But, he adds, “we believe this long-term strategic cooperation will prove to be mutually beneficial and form the foundation for strong long-term growth.”
What does long-term growth mean? In part, it means gaining market share among China’s 350 million smokers. But it also means expanding the market, by selling to girls and women. About 60 percent of men in China smoke; only 2 or 3 percent of women do so.
Roche: Saving Lives is Not Our Business
Monopoly control over life-saving medicines gives enormous power to drug companies. And, to paraphrase Lord Acton, enormous power corrupts enormously.
The Swiss company Roche makes a range of HIV-related drugs. One of them is enfuvirtid, sold under the brand-name Fuzeon. Fuzeon is the first of a new class of AIDS drugs, working through a novel mechanism. It is primarily used as a “salvage” therapy — a treatment for people for whom other therapies no longer work. Fuzeon brought in $266 million to Roche in 2007, though sales are declining.
Roche charges $25,000 a year for Fuzeon. It does not offer a discount price for developing countries.
Like most industrialized countries, Korea maintains a form of price controls — the national health insurance program sets prices for medicines. The Ministry of Health, Welfare and Family Affairs listed Fuzeon at $18,000 a year. Korea’s per capita income is roughly half that of the United States. Instead of providing Fuzeon, for a profit, at Korea’s listed level, Roche refuses to make the drug available in Korea.
Korea is not a developing country, emphasizes Roche spokesperson Martina Rupp. “South Korea is a developed country like the U.S. or like Switzerland.”
Roche insists that Fuzeon is uniquely expensive to manufacture, and so that it cannot reduce prices. According to a statement from Roche, “the offered price represents the lowest sustainable price at which Roche can provide Fuzeon to South Korea, considering that the production process for this medication requires more than 100 steps — 10 times more than other antiretrovirals. A single vial takes six months to produce, and 45 kilograms of raw materials are necessary to produce one kilogram of Fuzeon.”
The head of Roche Korea was reportedly less diplomatic. According to Korean activists, he told them, “We are not in business to save lives, but to make money. Saving lives is not our business.”
Says Roche spokesperson Rupp: “I don’t know why he would say that, and I cannot imagine that this is really something that this person said.”
Another AIDS-related drug made by Roche is valganciclovir. Valganciclovir treats a common AIDS-related infection called cytomegalovirus (CMV) that causes blindness or death. Roche charges $10,000 for a four-month course of valganciclovir. In December 2006, it negotiated with Médicins Sans Frontières/Doctors Without Borders (MSF) and agreed on a price of $1,899. According to MSF, this still-price-gouging price is only available for poor and very high incidence countries, however, and only for nonprofit organizations — not national treatment programs.
Roche’s Rupp says that “Currently, MSF is the only organization requesting purchase of Valcyte [Roche’s brand name for valganciclovir] for such use in these countries. To date, MSF are the only AIDS treatment provider treating CMV for their patients. They told us themselves this is because no-one else has the high level of skilled medical staff they have.”
Dr. David Wilson, former MSF medical coordinator in Thailand, says he remembers the first person that MSF treated with life-saving antiretrovirals. “I remember everyone was feeling really great that we were going to start treating people with antiretrovirals, with the hope of bringing people back to normal life.” The first person MSF treated, Wilson says, lived but became blind from CMV. “She became strong and she lived for a long time, but the antiretroviral treatment doesn’t treat the CMV.”
“I’ve been working in MSF projects and treating people with AIDS with antiretrovirals for seven years now,” he says, “and along with many colleagues we’ve been frustrated because we don’t have treatment for this particular disease. We now think we have a strategy to diagnose it effectively and what we really need is the medicine to treat the patients.”
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