From Volume 5, Issue Number 28 of EIR Online, Published July 11, 2006
Asia News Digest

Attempt To Fire Up a Crisis Over NK Missile Fizzles

North Korea test-fired its Taepodong-2 long-range missile on July 4, but it exploded after 40 seconds, and fell in the Sea of Japan. They also test-fired six other short-range missiles. Lyndon LaRouche noted that the Cheney faction was clearly goading North Korea to test its missiles, hoping to manufacture yet another crisis and artificial justification for war.

Although no laws or treaties were broken, the U.S. Ambassador to the UN John Bolton and the Japanese Ambassador called a closed-door UN Security Council meeting July 5, where they demanded sanctions against Pyongyang. Security Council President France announced after the meeting that there was an "agreement in the room that the Council should act swiftly and firmly." However, Russia and China absolutely oppose sanctions. The Russian Ambassador to the UN stated that Russia proposed only a Presidential statement condemning the tests, and that he would "caution against whipping up emotions too much." China, which announced the previous day that it was sending Vice Premier Hui Liangyu to Pyongyang on the anniversary of the China-DPRK friendship treaty next week, called on "all relevant sides to remain calm and restrained." South Korea intends to proceed with already-scheduled cabinet-level meetings between the North and South next week.

By July 6, Washington was toning down the rhetoric. U.S. Assistant Secretary of State Chris Hill, who is also the chief U.S. negotiator at the six-party talks on North Korea, went to China to meet with his Chinese counterpart, Deputy Foreign Minister and six-party negotiator Wu Dawei, on July 7. Wu is then travelling to North Korea for a week of discussions. President Bush, in a July 7 press conference, repeatedly emphasized the need for time for diplomacy to work.

A Washington Post editorial July 7, speaking for the synarchists, continued fanning the flames of war: "If China and South Korea are unwilling to act," then the proposal by former Defense Secretary William Perry and his assistant Ashton Carter, published in the Post the previous week, to militarily take out the North's missile sites, "must be an option for the future."

AP Lies that North Korea Issued Nuclear War Threat

An Associated Press wire, carried around the world on July 3, screams: "N. Korea Warns of Nuclear War if Attacked." The operative phrase, taken from the KCNA, the North Korean news service, reads, with grammatical vagueness typical of the news service: "The army and the people of the DPRK are now in full preparedness to answer a pre-emptive attack with a relentless annihilating strike and a nuclear war with a mighty nuclear deterrent." Had a comma been inserted after "annihilating strike," it would be clear that the intent of the phrase was to warn of a nuclear response to a nuclear attack—not to a conventional attack. AP fraudulently chose to ignore this obvious intention.

The KCNA, following the AP lie, changed the wire to state that the U.S. is "set to ignite a nuclear war," and that the DPRK is "compelled to bolster its deterrence."

China, India Parliaments Sign Memorandum of Understanding

The first-ever agreement between the Chinese and Indian Parliaments proposes to regularize bilateral exchanges, build trust, and "consult and coordinate" on international and regional affairs. The MoU was signed by Lok Sabha Speaker Somnath Chatterjee and his Chinese counterpart Wu Bangguo. Chatterjee arrived in Beijing July 3, with a big delegation, for a visit until July 8. The event, which took place in the course of the "India-China Friendship Year," should be seen in the context of the increasing cooperation in Eurasia, through the Shanghai Cooperation Organization (SCO) and other organizations.

South Korea Furious Over Invasion of Financial Locusts

The Dallas-based equity fund Lone Star is selling the Korea Exchange Bank, which it bought in 2003, at a 300%, $4.4 billion profit, and avoiding any Korean taxes. the financial press reported July 5. Lone Star, which was one of the many hedge and equity funds that bought up South Korea cheap after the 1997-98 speculative assault against several Asian currencies, arranged its purchases through a Belgian subsidiary, because Belgium has a treaty with South Korea which eliminates all Korean capital-gains taxes.

The South Korean government and the population are furious. Tax officials announced a sweeping investigation of 6,100 foreign operations in the country. President Roh Moo Hyun said in April that deregulation has exposed the country to foreign takeover, and the results are increasingly clear.

Besides Lone Star, The Carlyle Group also made a killing, selling KorAm Bank two years ago at a $740 million profit, by working through Malaysia, which also has a tax-free arrangement with South Korea. Others under investigation by various South Korean government agencies include Warburg Pincus (insider trading), Newbridge (tax evasion), and Icahn and Steel Partners (regarding a hostile takeover attempt of a tobacco company).

The Wall Street Journal vented its anger over the South Korean challenge to the "free market," with a headline that read: "While N. Korea Fires Missiles, S. Korea attacks U.S. Business."

Deposed East Timor Prime Minister Accuses Australia

Former Prime Minister Mari Alkatiri, who was forced to resign on June 26 after weeks of violent unrest and the deployment of Australian troops to the tiny nation, accused Australia of orchestrating the subversion of his government. Alkatiri charged the Australian government and press with running an "orchestrated plot" to force his resignation. He identified his tough and largely successful negotiations on behalf of East Timor's interests to stop Australia's effort to grab East Timor's oil in the Timor Sea, as the main cause of Australia's hatred of him. "I have no doubt that the whole of the Australian media was trying to demonize me," Alkatiri told The Age July 6, in his first interview with an Australian journalist since he was forced to resign. On the oil deal they had worked out, Alkatiri said: "Now everything is back on the table."

Australia is now promoting Jose Ramos Horta, who lived there during the revolutionary conflict in East Timor, to become Prime Minister—an act which would be outside the country's new constitution, but is likely nonetheless. Ramos Horta, for his part, denied any role of the Australians in the regime change, but added they should have been more "discreet—but, well, they are a big donor."

Russia, Indonesia Sign Major Defense Deal

Russia and Indonesia have signed a major defense deal, including Russian arms sales, on credit, to Indonesia, according to Asia Pulse July 3. Alexander Denisov, co-chairman of the Indonesia-Russia Joint Commission on Military Technical Cooperation, told RIA Novosti before returning to Moscow about his meeting with Indonesian Defense Minister Juwono Sudarsono: "We felt that our partners in Jakarta were genuinely interested in developing bilateral cooperation, recalling old times, when Russia helped the young Indonesian state build its armed forces. We could see they clearly wanted to recover their former military strength, and our country could have a large role in that."

Denisov said Moscow was considering various ways to help Indonesia develop its own arms industry, possibly including joint ventures.

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