In this issue:

Three Gorges Dam Withstood Yangtze Flooding

Survey Begins for China-Kyrgystan-Uzbekistan Railroad

Philippine President Arroyo To Ban Short-Term Foreign Loans

Fitch Rating Agency Warns Philippines of Brazil Parallel

Afghanistan: Are U.S. Troops Caught in a Meatgrinder?

Did U.S. Deputy Secretary of State Set Up U.S./Japan/Australia Strategic Grouping?

Top Bush Adviser Edits Another RAND Study, Seeking More Bases in Asia

Australian Push To Use Papua as Another East Timor, To Break Up Indonesia Further

World Bank Has Assigned Leading Eco-Fascist To Run Its Indonesia Program

Kra Canal Has Thai Prime Minister's Support

Thailand Will Seize Undeveloped Land, Distribute to Landless

From the Vol.1,No.27 issue of Electronic Intelligence Weekly
Asia News Digest

Three Gorges Dam Withstood Yangtze Flooding

According to China's official newspaper People's Daily of Sept. 5, the Three Gorges Dam, the world's largest, has "survived unscathed" the floods on the Yangtze this summer, which were among the worst floods ever, rivalling the disastrous floods of 1998. The floodwaters are now subsiding.

"Having been severely tested by the floods— the most authoritative quality controller— the completed sections of the dam have made people rest assured," People's Daily quoted the Austrian engineer who is general supervisor of engineering for the project.

By the end of August, the dam was about 70% complete. It has been designed to withstand the heaviest floods recorded in a period of 10,000 years.

During the flooding, the cofferdams built when the main stream of the Yangtze was blocked in November 1997, were demolished to test the dam's leak-proof capability, and the results were very satisfactory.

"The dam's design is absolutely safe, and when it is completely finished, it will be able to control floods effectively," People's Daily quoted Zhang Chaoran, general engineer of the Three Gorges Development Company, as saying. As soon as the flood season ends, the river will be dammed a second time to pave the way for next year's three scheduled goals— water storage, navigation, and power generation, Zhang Chaoran said.

Survey Begins for China-Kyrgystan-Uzbekistan Railroad

The Kyrgyz government has announced it will spend one-third of a 15-million-yuan grant it received from China, to launch survey work for the China-Kyrgyzstan-Uzbekistan railroad ("Paris to Shanghai" railroad) project.

Also, Uzbekistan has begun to build a highway linking its capital, Tashkent, with Osh in Kygystan, with a planned extension to Kashgar in western China. Kazakhstan already has a road link to China, and Tajikistan is also building the highway through Pamir Mountains.

According to the Uzbekistan media, these transport projects are being seen "as a modern-day Silk Road" to strengthen links between China and Western Europe. Also, new transit links will help Central Asian nations find new markets in China for their commodities, including oil and gas.

In another rail-related breakthrough, the Quinghai-Tibet Railway Company has been founded in the western Chinese city of Xining, according to the official Chinese wire service Xinhua Sept. 5.

This state-owned enterprise will be responsible for construction and operation of the Qinghai-Tibet railway, the rail line "to the roof of the world." It is to be administered directly by the Ministry of Railways and will be responsible for its own profit and loss, which is Beijing's new policy for administering public-funded railways.

The new company will build the rail line section from Lhasa in Tibet to Gormo in Qinghai, and manage the building and operating of the railroad, after it is completed by 2007.

Philippine President Arroyo To Ban Short-Term Foreign Loans

Saying that she was taking a lead from Thai Prime Minister Thaksin Shinawatra's moderately successful protective measures, Philippines President Gloria Arroyo said the Philippines must depend more on domestic consumption than on exports, according to the Manila-based Business World Sept. 4. The method of "managed asset reflation" used by Thaksin will be implemented, allowing a rise in domestic asset prices "to encourage the shift from import dependence," while encouraging long-term bank lending to small and medium-sized businesses (SMEs). This is intended to increase domestic demand by increasing employment in the widespread SMEs. The Philippine economy is close to collapse, with the U.S. import collapse hitting it harder than any other Southeast Asian nation.

Fitch Rating Agency Warns Philippines of Brazil Parallel

The Hong Kong-based Fitch rating agency issued a tough warning to Gloria Macapagal Arroyo's government on Aug. 20, following the announcement that her government had already hit its annual deficit ceiling only seven months into the fiscal year. Fitch added that Manila's sovereign rating outlook would not be lowered, but warned that the situation "highlights the need to restore fiscal performance swiftly in light of the domestic political timetable and global contagion fears." The release adds: "with 50% of public debt denominated in foreign currency and international market financing needs of US$2 billion annually, the Philippines is potentially vulnerable to contagion, underscoring the need for a credible domestic macroeconomic policy framework."

Fitch says that, although the government is committed to a target budget deficit of 3.3% of GDP, the chances of realizing this now are slight, pointing to low tax collection as the weakness. "If the deterioration in public finances were to persist through 2003 and into 2004, Philippines international credit standing and sovereign ratings would be under threat. Given the backdrop of events in Latin America, the Philippines' fiscal woes could not have come at a worse time, leading investors to draw parallels with Brazil, however unwarranted."

President Gloria Macapagal-Arroyo announced the cancellation of a trip to Europe due to the crisis. She said there were "a number of developments, namely on the fiscal and peace-and-order fronts, that require my continued stewardship."

Afghanistan: Are U.S. Troops Caught in a Meatgrinder?

The assassination attempt on Afghan Interim President Hamid Karzai at Kandahar, and a huge bomb explosion in a busy bazaar in Kabul, put paid to any illusion that the Afghan war is over. In reality, the United States is isolated in Afghanistan, and left with very few friends, while enemies are swirling all around them.

The assassination attempt in Kandahar— three shots were fired from the roadside at Karzai's car, missing the President and slightly wounding Provincial Governor Gul Agha Shirzai, shows that the U.S.-backed Hamid Karzai has become an intruder in his own land. The U.S. security guards who now protect the President 24 hours a day, returned fire, killing three— including an Afghan military personnel. The assassination attempt was attributed to the Taliban and al-Qaeda.

The Kabul bomb, the handiwork of the now-estranged American mujahideen asset of yesteryear, Gulbuddin Hekmatyar, killed 36 and injured more than 200 others. According to reports, the death toll is still rising.

These two incidents this week are the front end of what began in earnest with the failed loya jirga in June and the assassination of Haji Abdul Qadir, Karzai's vice president and a powerful Pushtun leader from Nangarhar province. Reports indicate that the entire south and east of Afghanistan, where the Pushtuns reside and the Taliban ideology prospered in earlier days, is now out of control. Warlords, supported by massive opium production, are now in the process of mobilizing under the banner of the Taliban and Hekmatyar's Hezb-e-Islami.

Hekmatyar, who cooled his heels in Iran in the latter part of 1990s, has now given a call for jihad against the infidel Americans. All reports indicate that the Pushtuns, angered by what they see as the insensitive behavior of the American troops and American vengeance toward fellow-Pushtun Taliban members, are lining up to pick up arms against the Americans. And arms are plentiful, as was pointed out by the U.S. Air Force Brig. Gen. John W. Rosa when he told the press at the Pentagon on July 24, "almost any place we go, we find some type of weapons."

Pakistan's former Inter-Services Intelligence (ISI) Chief and the trainer-cum-controller of many Taliban and al-Qaeda personnel, Hamid Gul, told the Washington Times recently that the "U.S. is out and the Taliban are coming back (in Afghanistan)."

The future for the U.S. troops is truly bleak in Afghanistan. There are only 16,000 US troops in the area. In their invasion, the Soviets brought in 118,000 and could only control a few towns. Reports indicate that a lot more American soldiers have been killed since the operation began in October 2001 than is reported: The Russians and Indians claim the figure is as high as 300-400; the Pentagon says 100. The real number is somewhere in between. In addition, some 100 American troops are also missing.

Al-Qaeda operatives have made it clear that unless the group can make some big hits now, its credibility as a "prime terrorist outfit" will be on the wane. It is evident that the Afghan situation is ripe for the al-Qaeda to exploit, to make such hits.

It must also be noted that the Soviets were contained themselves within Afghanistan; they could not move into Pakistan, since that could have triggered a direct confrontation with the United States. The United States, on the other hand, has now virtually incorporated Pakistan into its Afghan operation, which has weakened the Pakistan government of Gen. Pervez Musharraf. It is a matter of time before President Musharraf will allow anti-U.S. activities within Pakistan.

It is bad enough for the United States to have about 12 million Afghans as its enemies, but it is downright fatal to have 130 million Pakistanis as adversaries.

Did U.S. Deputy Secretary of State Set Up U.S./Japan/Australia Strategic Grouping?

The idea of a trilateral military alliance was first brought up last year, and provoked a stern response from China, which declared that such a body was clearly aimed at isolating China. According to The Australian, the recent meetings in Tokyo between U.S. Deputy Secretary of State Richard Armitage, Japan's Vice Minister of Foreign Affairs Yukio Takeuchi, and Australia's Secretary of Foreign Affairs Ashton Calvert, "inaugurated a new body, which is expected to meet annually." The Australians, who are courting Chinese oil contracts and other business deals at the same time that they pursue their role as the "U.S. Sheriff in Asia," are aware of the contradiction— Foreign Minister Alexander Downer (who was not in Tokyo) met with the Chinese Ambassador to Australia on Aug. 22 to explain the supposedly benign character of the three-way defense discussions. According to The Australian, Downer is the initiator of the idea, starting in March 2000. The plan to drag the Japanese into the utopians' war plans internationally is an openly acknowledged purpose of the trilateral grouping.

Asked by an Australian ABC reporter about the meetings, Armitage snickered: "Nice try," and dodged the question.

Armitage was caught by a Mainichi Shimbun reporter, who quoted his own words back to him, from his March 2001 confirmation hearings. At that time, Armitage had said, "I believe that many of the theoretical debates of the merits of unilateralism and multilateralism become truly relevant only when we have lost the ability to attract supporters to a course of action desired by the U.S. The coalition built a decade ago to free Kuwait did not materialize out of thin air. It was built by those who are able to draw upon relationships of trust.... If we view foreign policy as an episodic endeavor to be engaged in only during times of crisis or convenience, we shall find unilateralism to be a fait accompli instead of an option. Close and constant consultation with allies is not optional, it is a precondition for sustaining American leadership."

The Japanese reporter asked if Armitage agreed with James Baker III and Richard Holbrook that a new UN resolution was required for an attack on Iraq. Armitage said that he was in Japan living up to that dedication to consultation, and that he had not asked Japan to do anything. On the UN, he said the existing resolutions give "sufficient latitude [to the U.S.] to move forward, if that's the President's decision."

Top Bush Adviser Edits Another RAND Study, Seeking More Bases in Asia

Called "U.S. Air and Space Power in the 21st Century," the report edited by Zalmay Khalilzad says that "In the Asian arena, the USAF's biggest problem may be lack of adequate basing in the South China Sea and in Southeast Asia. Addressing these shortfalls promises to be a difficult and long-term problem." According to Asia Times, it recommends expanding the number of bases, finding one or more "reliable" allies in each region of the world, and "count[ing] on them to cooperate when asked," as well as getting more "long-term extraterritorial" basing rights like Diego Garcia.

Khalilzad, who headed the civilian side of the Bush transition team at the Pentagon before joining the National Security Council and representing the President in Afghanistan, was the leading writer of a RAND report last year called "The U.S. and Asia: Toward a New U.S. Strategy and Force Posture," which called for the U.S. to prepare war plans for East Asia in the face of Chinese opposition.

Australian Push To Use Papua as Another East Timor, To Break Up Indonesia Further

Following the ambush of a group of teachers last week in Papua, leaving two Americans and an Indonesian dead near the Freeport-McMoran mine, supposedly by a rogue faction of Papuan separatists, the Australian press has gone on a rampage against the Indonesian military, accusing them of manufacturing the incident (claiming this is the normal modus operandi, as seen by the military in East Timor) in order to blackmail the Freeport company for "protection" money, and to justify allout military assault on the Free Papua Movement (OPM). Not a shred of evidence is put forward.

The Australian press (e.g., Australian Financial Review— AFR, Courier Mail) claim this would also further promote Indonesia's efforts to get U.S. military support passed by the U.S. Congress. The AFR quotes Brigham M. Golden of the Council on Foreign Relations saying that the military "has used OPM elements as proxies," and that the military benefits from instability in the region.

The Courier Mail states outright that although it may not be in Australia's interest to see Indonesia "torn apart by separatist movements, yet neither can it afford to turn a blind eye to a bloody Kopassus [special forces] crackdown." They say that Australia should not be "caught unprepared" as in East Timor— meaning that Australia should intervene now, rather than later, to support independence (and chaos) in the Indonesian Province.

Sidney Jones, formerly of George Soros's Human Rights Watch, but now promoted to top Indonesia-basher at the International Crisis Group (run by former Australian Foreign Minister Gareth Evans), added her voice to the chorus.

World Bank Has Assigned Leading Eco-Fascist To Run Its Indonesia Program

Dr. Andrew Steer, a British economist, headed the World Bank's Environment Department during the years in which the Bank became the leading hit-squad for "sustainable development" as a euphemism for forced backwardness, in the 1990s. Since 1997, Steer has run the World Bank program in Vietnam. A the key proponent of the "new environmentalism" at the Bank, Steer has been their controller for the "Rio Summit" process of the past ten years. Promising goodies to "end poverty" (goodies which never arrive), Steer is an exemplar of the sophistry of the new fascism, which should be a warning to the Indonesians to keep him out of the country, and to the world that the World Bank has ominous plans for Indonesia. Some examples, from an interview in 1996:

"In the 1950s and '60s ... it was a bricks-and-mortar approach to development. Most experts in those days, believe it or not, actually thought that if you simply were able to provide infrastructure— that is, telecommunications, roads, ports, water supply and so on— that these were the constraints that were preventing the developing countries from really developing....

"... You can't think of development without seeing how it really relates to the natural world.... Basically, the goal of sustainable development is to eliminate poverty..., but you've got to do that in a way that preserves the world's forest stock, preserves the atmosphere so that we don't suffer a 4-degree increase in temperature through climate change, that preserves the wetlands, and so on."

"And we've shown in fact that it is the ability of villages to work together that is an even more important determinant of development than some of the more traditional kinds of capital, such as whether or not you have a good infrastructure system, or even whether or not you have a good educational system."

Jakarta, beware!

Kra Canal Has Thai Prime Minister's Support

The Kra Canal project has the support of the Prime Minister of Thailand, and rising interest from China, Thai Defense Minister Chavalit Yongchaiyudh reported Aug. 27, as written up in the Bangkok Post. General Chavalit chairs the national panel, which is exploring feasibility studies for the major project. The Thai Senate has a separate panel on feasibility of the project.

Chavalit asserted that the Kra Canal would open a new chapter, not only for the Thai economy, but for the region as a whole. He said the Cabinet was expected in a few weeks to look into offers from private companies, mostly joint Thai-foreign ventures, interested in funding the feasibility study. Many countries, including China, have expressed keen interest in investing in the construction of the canal, he said.

The Senate committee submitted its findings on the canal project to the Chavalit panel, which touched on geological aspects of canal construction. Suradech Yasawasdi, a member of the senate panel, said Gen. Chavalit was also briefed on the panel's visit to China six months ago to discuss the canal project with Beijing. Suradech said China's Economic Development Deputy Minister welcomed the project. The canal would shorten the distance and cut shipping costs, Suradech said, adding that China was capable of building the canal faster and more cheaply than many other countries.

Thailand Will Seize Undeveloped Land, Distribute to Landless

The land reform proposal was announced by Deputy Interior Minister Sombat Uthaisang, who said laws on the books since 1954 allow the seizure of land left undeveloped for more than 10 years, and five years, in some cases. Although never used, the law will now be implemented to provide land to Thailand's 1.5 million landless families. The government will target speculators, and not holders of small properties.

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