From Volume 6, Issue Number 6 of EIR Online, Published Feb. 6, 2007
Asia News Digest

U.S. Trumpets Opposition to Gas Iran-India-Pak Pipeline

In a hastily arranged press conference Jan. 27 in Islamabad, U.S. Deputy Assistant Secretary of State for South and Central Asian Affairs John Gastright said that the United States would not support the multibillion-dollar Iran-Pakistan-India gas pipeline project, now in discussion among three nations, since "it violated the terms of America's domestic law—the Iran and Libya Sanctions Act." The act imposes sanctions on foreign companies investing $40 million or more in the energy sectors of either Tripoli or Tehran.

The United States has all along reacted negatively to the proposal and had resorted to linking this project with the U.S.-India nuclear cooperation act. But, what is intriguing at this point, is the fact that Gastright felt compelled to call a last-minute press briefing in Islamabad to make the position official.

Responding to the press conference, Pakistani Foreign Office spokeswoman Tasnim Aslam told reporters: "We are determined to implement the Iran-Pakistan-India gas pipeline project.... We are facing a shortage of electricity and gas, therefore, we have a firm intention of buying gas from Iran."

Donors Warn Sri Lanka Government About Violence

At a donors' meeting held at the southern Sri Lankan port city of Galle Jan. 30-31, World Bank Vice President Praful Patel said the ongoing conflict between the government and the rebel Tamil Tigers remains at the center of any discussion of Sri Lanka. Pointing out that there is no way "to politely skirt" the issue, since more than 3,500 Sri Lankans were killed last year, he said, "We cannot spend two days discussing development plans if we do not place the conflict squarely in our sights as the single largest obstacle."

While Sri Lankan President Mahinda Rajapakse told delegates that it was "equally important to defeat futile terrorist attacks," U.S. Ambassador Robert Blake said the United States "remains unwavering in the conviction that there can be no military solution to this terrible conflict." Urging Colombo to "seize the opportunity to forge a power-sharing" with the Tigers, Blake said a basis can be formed for renewing talks with the rebels that could eventually bring an end to the conflict.

The Tamil Tigers are listed by the United States, EU, India, and many other countries as a banned terrorist organization.

Thailand Takes Measures To Curtail Bio-Fuels

The military junta which seized power in Thailand in September, the Prime Minister, and members of the Cabinet have taken measures against the globalization orthodoxy, including modest controls on currency speculation, authorizing AIDS and heart drugs to be produced by local manufacturers, and now cutting back drastically on the bio-fuel idiocy. Viraphol Jirapraditkul, director-general of the Energy Policy and Planning Office, said Jan. 30 that the use of biodiesel (B5), a mix of 95% diesel and 5% used vegetable oil, will be cut by half from the existing plan of 8.5 million liters per day, by 2011-12. The Agriculture Ministry is also revising a plan to promote palm-oil cultivation by slashing the producing area in half, from the existing plan of 5.1 million rai by 2012. The government also terminated a plan to promote palm-oil cultivation in neighboring countries, saying it was unnecessary at the moment.

The policy to promote cultivating jatropha, a cactus-like plant, remains unclear.

Viraphol said the target to promote the number of vehicles nationwide to use natural gas (NGV) would also be revised down to 300,000 units in 2011 from the existing 500,000 units.

Philippines Commission Names Names in Death Squad Probe

A Philippines government commission investigating the death squad murders of leftists and journalists surprisingly named the military generals as responsible, the Philippines Inquirer reported Jan. 30. Gen. Jovito Palparan, assigned by President Gloria Arroyo last year to "clean up" the communist insurgency, has denied any role in the hundreds of deaths, many in areas of his command, but at the same time, has repeatedly bragged that individuals, including soldiers in his unit, could well have been inspired by his own diligence to take the law into their own hands, and bring "justice" for those who had been killed by communists.

The Commission, headed by former Supreme Court Justice Jose Milo, was expected by many to be a cover-up, but the 89-page report, presented to Arroyo, said that "the majority of the victims were leftist-activists-militants" who were killed by "elements of the military who were allowed to do their thing without supervision from higher officers."

In releasing the report, Melo said: "There are several pages there on Palparan. You know, he has said he inspired them. You can hook the fish through the mouth."

President Arroyo not only appointed Palparan, she also praised him for his excellent work long after he had essentially taken credit for the death squads. She is now scrambling to insist that the culprits be brought to justice, that she could not accept human rights violations, etc.

Talk at Davos About Moving Out of Dollar

On Jan. 27, Malaysian Prime Minister Abdullah Ahmad Badawi said that Malaysia has shifted some of its $82 billion equivalent of currency reserves away from dollars. "We're concerned for the reason that the high percentage of our international trade is in U.S. dollars," Abdullah said, in an interview with Bloomberg at the Davos World Economic Forum. Asked if Malaysia would cut dollar holdings, he said: "We already have done. We'll continue to watch the situation.... Overdependence on one currency can create a problem, the dollar or any other currency." He would not say to which currencies Malaysia is shifting. In July 2005, Malaysia ended its peg to the dollar, and shifted to a basket of currencies.

Kuwaiti Finance Minister Bader al-Humaidhi also said on Jan. 27, that Kuwait may abandon the peg of its currency, the dinar, against the dollar. "We might go to a basket [of currencies] for an interim period," Al-Humaidhi said. "The dollar fell a lot against the euro last year, but if we'd been linked to a basket we would not have suffered" as much. He would not comment about which currencies might be in the basket.

Other oil-producing countries, such as the United Arab Emirates, Venezuela, and Iran, are also diversifying from dollar reserves. Deutsche Bank reported in January, that Persian Gulf states' currencies are undervalued because they are pegged to the dollar, according to Bloomberg. Last October, the UAE central bank said it would eventually, over a longer period, cut dollar holdings by anything up to 50%, and diversify into yen, euros, and/or sterling. As of December, UAE reserves of some $25 billion were 98% in dollars, and the bank's immediate goal is to shift that to 90% by later in 2007.

Beijing Issues New Rules on Foreign Takeovers

Beijing has issued new regulations for transactions concerning state-owned companies in key industries, Xinhua reported Jan. 30. The new regulations were issued in the wake of an effort by the Carlyle Group to buy 85% of the Chinese construction machinery company Xugong. The Ministry of Commerce turned down the deal, but Carlyle has now bid to buy just 50% of the enterprise for $225 million—a bargain. The Carlyle bid has drawn attention to other "questionable" takeover attempts, such as the German Schaeffler Group trying to buy up the biggest bearing producer in China, Luoyang Bearing Co.

The Ministry of Finance and State-Assets Administration Commission's new regulations say that the "sale of state-owned assets should not violate the restrictive or prohibitive rules concerning the country's economic safety."

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