From Volume 7, Issue 22 of EIR Online, Published May 27, 2008

Global Economic News

Netherlands Considers Going Nuclear To 'Meet CO2 Targets'

May 19 (EIRNS)—One of the bastions of the anti-nuclear movement in Europe, The Netherlands, is seeking "to build nuclear power plants to reduce greenhouse gas emission." Economics Minister Maria van der Hoeven said she could not envisage a nuclear-free future if the government is to meet its CO2 targets. "We are very gas dependent and we have to do something about it," she said. "In my opinion it will be very difficult to achieve a clean energy household in 2050 without nuclear energy." She is due to present a report to Parliament next month, outlining Dutch energy options, Financial Times reported.

The Netherlands has one working nuclear power plant of 485 MW PWR, built in 1973. It had been due to close in 2004, but the government extended its operational life until 2033. Nuclear power makes up less than 2% of the domestic electricity mix, compared with 78% in France. In 1981, a second reactor, of 54 MW capacity, was shut down when the government allowed anti-nuclear activists to make The Netherlands' energy policy decisions.

Even in the mid-1970s, it was expected that all new power stations built in The Netherlands after 1980 would be nuclear.

Japanese Internal War Over British 'Locust' Invasion

May 19 (EIRNS)—The Japanese government is reflecting the "two Japans" syndrome identified by Lyndon LaRouche, in trying to deal with the "financial locust" invasion from London. Two weeks ago, Japan denied a bid by the Children's Investment Fund (CIF), one of the most vicious of the London hedge funds, to increase their holding in a leading Japanese power company, J-Power, from 9.9% to 20%—an act fully in keeping with Japanese law. CIF didn't quit, however, and is threatening to take it to court. The Japanese government has threatened to punish CIF if it persists.

CIF, the company that earned the name "locust" for the hedge funds, is also campaigning internationally, threatening mass capital flight from Japan if it doesn't accept "market discipline." CIF director John Ho, in a Wall Street Journal Asia op-ed, said that the company's real target is the historic cooperation between government and business, the "system of cross-shareholdings to fend off takeovers," and the practice of retired government officials working in the private sector. Ho writes: "Both practices had started to decline under former Prime Minister Junichiro Koizumi. Now they're back with a vengeance."

While the Japanese government of Prime Minister Yasuo Fukuda is aligning with Asia against the British assault, there are British-linked assets trying to change the Japanese laws, to "boost foreign direct investment." The London Financial Times gloats today that a "government advisory panel" called for "reforms to promote foreign takeovers of Japanese companies," and the proposals are "expected to become policy." This is typical FT spin; the newspaper admits, however, that there are "conflicting views within the government."

India Moves To Strengthen Economic Relations with Bhutan

May 20 (EIRNS)—As a part of India's move to engage its neighbors in closer economic ties, Indian Prime Minister Manmohan Singh, during his recent visit to Bhutan—a Himalayan nation with less than a million people, which was formerly a monarchy, and last month became the world's youngest democracy—pledged $2.5 billion over the next five years, as part of a package of economic engagement with Bhutan, asserting that the "challenge before both countries is to evolve a model of sustainable development."

On May 17, India announced a significant move to broaden its energy basket, by pledging to import 10,000 MW of electricity by 2020 from Bhutan, a country with one of the world's largest hydropower potentials.

Referring to the proposed 30-km rail link between the border towns of Hashimara in West Bengal and Phuentsholing in Bhutan, Manmohan Singh said it would be called the Golden Jubilee Rail Line. Following his address, Singh dedicated the Tala project, built with India's assistance, to Bhutan, and laid the foundation of the 1,095-MW Punatsangchhu hydroelectric project.

Addressing Bhutan's newly elected national assembly, Singh pointed out that the Indian market offered vast opportunities for Bhutan's agriculture, industry, and service sectors. "We will work towards the further improvement of connectivity between our two countries so that our borders become the gateways for mutually beneficial undertakings," the prime minister said, before winding up his two-day visit to Thimpu, Bhutan's capital.

Indian Ambassador Blames Globalization for Food Shortages

May 22 (EIRNS)—Financial crisis, speculation, the biofuels obsession, and globalization are responsible for the world food crisis and rising oil prices—not increasing consumption in developing nations—Indian UN Ambassador Nirupam Sen said to a meeting of the United Nations Economic and Social Council on the world food crisis, held in New York yesterday. Sen blamed the policies of the World Bank and International Monetary Fund, which told countries to shift from food crops for the domestic population, to cash crops for export, with harmful results. The IMF/World Bank "remedy" to the crisis, to end nations' restrictions on food exports in the interest of market purism, is partly responsible for the crisis in the first place. He also stressed the effect of the crashing dollar and skyrocketing oil prices on food production and prices.

Sen attacked the "dismal" response of the international community to the crisis, including the promotion of biofuels to produce allegedly cheaper energy. In several developed countries, Sen said, land for food crops has shrunk, as it was lost to biofuels. This must be reversed, he said.

The financial crisis has fed directly into the food crisis, Sen said. "A consequence is that speculators, encouraged by the dollar's relative decline, 'invest' in food futures to profit from the 'commodities super cycle.'" This may not have started the crisis, "but it makes it worse. Hopefully this bubble would also burst with at least a marginal beneficial effect on food prices," Sen said.

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