From Volume 7, Issue 43 of EIR Online, Published Oct. 21, 2008
Asia News Digest

Is U.S. Getting Suspicious of British Plans in Afghanistan?

Oct. 15 (EIRNS)—A number of differences have emerged between Washington and London over Afghanistan. To begin with, Britain had refused to take on the drug warlords, thus helping the anti-U.S. insurgents in Afghanistan. U.S. Defense Secretary Robert Gates and the U.S. Supreme Commander with NATO, Gen. John Craddock, read the British the Riot Act, saying taking on the drug lords is necessary to curb the Taliban-led insurgency.

On Oct. 12, the Daily Times of Lahore pointed out that British officials covered up evidence that a Taliban commander killed by special forces last year in Helmand, the largest drug-producing area in Afghanistan, where the British troops are centered, was in fact a Pakistani Inter-Services Intelligence (ISI) officer. The report said Britain's refusal to make the incident public led to a row with Afghan President Hamid Karzai, who has long accused London of viewing Afghanistan through the eyes of Pakistani military intelligence. So furious was Karzai that he threatened to expel British diplomats. EIR has pointed out the close links between the ISI and the Britain's MI6 in breaking up Pakistan, and the anti-U.S. role of this duo.

In addition, according to a French diplomatic cable leaked to a French magazine last week, U.K. Prime Minister Gordon Brown's government is looking for an exit strategy from Afghanistan, and sees a U.S. escalation of the war as an alternative to a political settlement, rather than as supporting such an outcome. The Bush Administration, however, was evidently taken by surprise by news of the Afghan peace talks that took place in Riyadh under the aegis of Saudi Arabia and Britain, and the implication was that the administration would not welcome such talks. The U.S. is suspicious of these talks because they took place behind its back and involve all three parties—the Taliban, Saudi Arabia, and Britain—that are undermining the U.S. troops in Afghanistan.

Asian Nations on Food and Energy Crisis

Oct. 17 (EIRNS)—Rising food and energy prices are cutting sharply into the world economy, Kazakstan Foreign Minister M. Tazhin said at the Asian Cooperation Dialogue meeting of 31 nations in Astana yesterday. The world financial crisis and the price shocks were the leading issues at the conference, The Hindu reported. Anxiety over these "the twin crises was palpable right from the beginning" of the conference, the correspondent wrote. "The world situation in the market of energy equally causes concern. We have approached to such a stage where recent jump of the prices has caused sharp falling demand and decrease in economic activity. The urgent coordinated measures to correct the situation are required [from] Asian countries," Tazhin said.

Indian Ambassador to Kazakstan Ashok Sajjanwar told the meeting that the "global food crisis is not a natural catastrophe. It is man-made. The fall in world cereal production, low foodstock levels, and crop diversion for the biofuel sector have played a major role. Add to these, the role of speculation and financialization of commodities, and we have an unprecedented crisis." The effects of rising food and energy costs, natural disasters, and climate change are "pressing challenges," he said. "This has been further exacerbated by the global economic slowdown, coupled with the financial crisis. The specific and inter-related challenges of high oil and food prices threaten to undermine the economic progress made by many developing countries." The need of the hour is a "global compact of coordinated and collective action" to ensure food security.

He stressed the role of the Green Revolution in India's development, and said there must be another round of such research in the public domain. "India on its part is willing to work with all other countries, including through collaborative R&D, to evolve better seed and farm technologies."

Russian Foreign Minister Sergei Lavrov told the meeting that the world is gripped by crises which "stress the necessity to promote collective methods of solution of world problems on the basis of possession of equal rights, mutual respect of interests and recognition of variety of models of development."

The ACD, founded in 2002 by former Thai Prime Minister Thaksin, includes Russia, China, India, Japan, and South Korea, and many nations of Southeast and Southwest Asia.

Chinese Industry Hit by Crisis

Oct. 17 (EIRNS)—Thousands of workers were shut out of their workplaces this week when two Chinese subcontractors of a Hong Kong toymaker went bankrupt in Guangdong Province, the National Business Daily reported yesterday. The factories were unable to pay their 6,500 workers' salaries since last month, due to the collapse of the market in the United States. Such subcontracted manufacturers are being hit hardest in China. Half of China's toymakers have had to shut down so far this year. The city of Dongguan, where most of the toys are produced in China, experienced a 1.5% fall in exports, the first such decrease in years. The Hong Kong parent company, Smart Union, which produced for Mattel and Disney, is on the verge of shutdown, China Daily reported.

China's own industry—not just the foreign-owned processing trade operations—is also being affected, which will have even more serious consequences, China Daily reported. Chinese car producers, in contrast to affiliates of foreign producers, will have to be "consolidated" beginning next year, as slower sales and rising costs hit, an official of the National Development and Reform Commission said yesterday. "Some weak brands and less competitive players will start to be pushed out next year," Cheng Xiaodong said. "Local carmakers with small profit margins will be hit first." The process is already under way.

Economic Crisis Destroying Pakistan

Oct. 17 (EIRNS)—The Pakistani rupee hit an historic low to the U.S. dollar today, as the country's foreign reserves fell 7% this week alone to just $7.7 billion—barely enough for six weeks' worth of imports, Pakistan News reported. The rupee is down almost 30% this year so far. The State Bank of Pakistan has just $4.34 billion in reserves; the rest is in other banks. The rupee hit a low of 84.5 to the dollar, and was pulled up to 83 to the dollar only after a $40 million intervention by the State Bank. Flight capital is estimated at some $70 million per day. Pakistan's trade deficit has risen 53% in the 2007-08 financial year, to over $20.7 billion. In July alone, the deficit hit $1.6 billion, with imports costing $3.5 billion.

This hits the impoverished population hardest. Inflation is at 25%, mostly of food and fuel. Prices of wheat, rice, and milk have doubled in the past few months, and a third of the population of 165 million is now living below the poverty line—which means hunger.

Shaukat Tareen, top financial advisor to Pakistani President Zardari, warned yesterday that Pakistan is on the verge of economic collapse, The Australian reported from Islamabad. Tareen said that the "economic cost caused by the war on terror in Pakistan has now risen to an unbearable level and a very negligible portion of the costs is being defrayed by its partners." He and central bank governor Shamshad Akhtar were in Washington to seek a $10 billion loan.

The government of former President Perez Musharraf is being blamed for the problem, allegedly because of its big subsidies to wheat and fuel, which Pakistan "could not afford."

One effect is that many Pakistanis who can no longer afford to pay for their children to go to school, are now sending them, instead, to Islamic madrassas, where they are given free education centered around Koranic studies.

Standard Chartered to Asia: Don't Stop Deregulation!

Oct. 16 (EIRNS)—Fresh from formulating British Prime Minister Gordon Brown's bailout plan, together with Alan Greenspan, the leading British imperial bank, Standard and Chartered, one of the drug-running institutions under the British East India Company in occupied China in the 19th Century, is showing its alarm that Asia may be ready to break from the Empire once and for all. Gerald Lyons, the chief economist and head of global research for Standard Chartered, wrote in the Taipei Times today about Asia's response to the ongoing collapse: "It would be wrong if emerging economies thought they should stop, or even reverse, deregulating their financial sectors. The fact that there have been financial problems in the U.S. should not stop deregulation across Asia.

Fighting Erupts on Cambodia-Thailand Border

Oct. 15 (EIRNS)—Small-scale but serious fighting has occurred in the area near the Preah Vihear Temple World Historical site, between the Thai army and Cambodian forces. Both sides have taken casualties, with two Cambodian deaths reported. Both sides claim that they were in their own territory when the other side began firing. The foreign ministries of the two countries summoned each other's ambassadors and lodged formal complaints about the clashes.

This border spot, although having been disputed for many years, had been quiet until being designated a World Historical site earlier this year. Several Thai newspapers and the right-wing anarchist PAD party accused the Thai government of "not defending Thailand's heritage" and made a major issue of the temple. Tension has been high and there have been several border incidents since. [End of file]

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