From Volume 4, Issue Number 40 of EIR Online, Published Oct. 4, 2005
Asia News Digest

Interior Minister Resigns as Afghan Situation Worsens

Afghan Interior Minister Ali Jalali has officially resigned, expressing his desire to go back to scientific research work. Jalali has kept quiet about his differences with Afghan President Hamid Karzai, while strongly opposing Karzai's policy of appeasing the Afghan opium warlords. Prior to the Sept. 18 elections, Jalali had left Afghanistan, but was cajoled back by Karzai. But it became evident to Jalali that Karzai, fully under the thumb of Washington, could distance himself from the warlords. Former Afghan Finance Minister Ashraf Ghani Ahmadzai, who resigned in 2003, to take up the job of Vice Chancellor of Kabul University, had also battled Karzai on the opium issue.

Meanwhile, it is becoming increasingly clear that the Afghan rebels have got in their arsenal the dangerous shoulder-fired surface-to-air missiles (Russian SA-7s, most likely, along with a Chinese version). At least four Chinook helicopters have been downed already by these missiles. But the Pentagon continues to deny presence of any missiles in Afghanistan.

Interestingly, according to a senior Pakistani journalist, Afghan rebels have brought under their banner former religious commanders, some communist fighters and the poor. He claims this new fighting force against Kabul and Washington is more nationalist, and less religious.

Upset Iran Scrapped Gas Export Deal with India

Iran's Ambassador to the International Atomic Energy Agency (IAEA) has reportedly conveyed to India's permanent representative at the IAEA that Iran is scrapping the gas export deal signed last June, IndiaDaily reported Sept. 29.

Under the deal, India planned to import 5 million tons of LNG annually for 25 years with deliveries beginning in 2009. The deal was worth $22 billion.

Tehran's action followed India's Manmohan Singh government's decision to vote against Iran on Sep. 18 at the last minute at the IAEA Board of Governors' meeting at Vienna in support of a resolution to allow Iran's nuclear case referred to the UN Security Council.

The Manmohan Singh government was telling the Indian people that Iran will not retaliate.

IMF: Philippines Lags Behind Neighboring Economics

The Philippines next year will continue to lag behind its Southeast Asian neighbors in terms of economic performance, the International Monetary Fund said in a report released Sept. 28.

Hounded by huge public debts and political uncertainties, the Philippines is expected to post the slowest growth of 4.8% in gross domestic product and the highest inflation rate of 7.5% among four mid-level peer economies on the Association of Southeast Asian Countries (ASEAN-4) in 2006, the IMF said in its latest report on economic prospects.

Grouped as ASEAN-4 are the Philippines, Indonesia, Thailand, and Malaysia. "Looking forward, the key macroeconomic priorities remain continued fiscal consolidation—particularly in the Philippines, where large external financing requirements and high public debt remain significant vulnerabilities," the IMF said.

The government has a newly revised target of 5.7-6.3% for 2006.

The IMF report puts the projected 2006 average growth of ASEAN-4 economies at 5.4%, and that of other emerging economies on the regional bloc at 6.9%.

It forecasts Indonesia's growth at 5.8%, Thailand's at 5.0% and Malaysia's at 6.0%.

The IMF forecasts Philippine inflation in 2006 at 7.5%, compared with the ASEAN-4 average of 5.1%: Indonesia with 6.5%, Thailand with 2.7%, and Malaysia with 2.5%.

For this year, the IMF forecasts Philippine GDP growth at 4.7%, compared with Thailand's 3.5%, Indonesia's 5.8% and Malaysia's 5.5%.

It expects inflation this year to average 8.2% in the Philippines, 8.2% in Indonesia, 4.2% in Thailand and 3.0% in Malaysia.

Overall, the IMF said persistently high oil prices would adversely affect the region's economies.

"In the Philippines, where, after several months of improving fundamentals, the recent political turmoil has raised concerns about the prospects for economic reforms and led to downward revisions to the ratings outlook," it said, citing country-specific risks.

The IMF added that the very low level of private investment was the greater concern, underscoring a need to complete the unfinished reform agenda in financial and corporate sector restructuring, including improvements in governance.

The IMF expects the Philippines to perform well, second only to Malaysia, in terms of surpluses in the current account.

It forecasts the Philippine current account surplus at 2.1% of GDP this year and 1.9% next year, as against a deficit in Indonesia at 0.4% of GDP this year and a surplus of 0.7% of GDP next year. (See this week's InDepth for additional coverage of the Philippines.)

Vietnam, China Slammed by Typhoon

Typhoon Damrey, which translates as "elephant" in Khmer, slammed into Vietnam and China's Hainan Island and Guangdong province Sept. 27. Officials characterized the storms as "60-year" storms, where officials also had to deal with destroyed protective dikes, not unlike New Orleans. Vietnamese authorities mobilized 30,000 troops and police to move some 300,000 people before the storm hit. Two adjoining districts in Vietnam had to contend with 13-foot waves breaching the dikes.

Chinese officials admitted that the storm triggered the biggest-ever evacuation campaign. Some 3.9 million residents of Hainan and another 1.8 million people in Guangdong were affected. A total of 287,000 people were successfully evacuated to safer areas.

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