On paper, President Obama’s new $3.7 trillion budget is encouraging. It makes a number of tough choices to cut the deficit by a projected $1.1 trillion over 10 years, which is enough to prevent an uncontrolled explosion of debt in the next decade and, as a result, reduce the risk of a fiscal crisis.
The questions are whether its tough choices are also wise choices and whether it stands a chance in a Congress in which Republicans, who now dominate the House, are obsessed with making indiscriminate short-term cuts in programs they never liked anyway. The Republican cuts would eviscerate vital government functions while not having any lasting impact on the deficit.

What Mr. Obama’s budget is most definitely not is a blueprint for dealing with the real long-term problems that feed the budget deficit: rising health care costs, an aging population and a refusal by lawmakers to face the inescapable need to raise taxes at some point. Rather, it defers those critical issues, in hopes, we assume, that both the economy and the political environment will improve in the future.

For the most part, Mr. Obama has managed to cut spending while preserving important government duties. That approach is in stark contrast to Congressional Republicans, who are determined to cut spending deeply, no matter the consequences.

A case in point: the Obama budget’s main cut — $400 billion over 10 years — is the result of a five-year freeze in nonsecurity discretionary programs, a slice of the budget that contains programs that are central to the quality of American lives, including education, environment and financial regulation.

But the cuts are not haphazard. The budget boosts education spending by 11 percent over one year and retains the current maximum level of college Pell grants — up to $5,500 a year. To offset some of the costs, the budget would eliminate Pell grants for summer school and let interest accrue during school on federal loans for graduate students, rather than starting the interest meter after graduation.

Those are tough cutbacks, but, over all, the Pell grant program would continue to help close to nine million students. The Republican proposal would cut the Pell grant program by 15 percent this year and nearly half over the next two years.

The Obama budget also calls for spending on green energy programs — to be paid for, in part, by eliminating $46 billion in tax breaks for oil, gas and coal companies over the next decade. Republicans are determined not to raise any taxes, even though investing for the future and taming the deficit are impossible without more money.

The budget would also increase transportation spending by $242 billion over 10 years. It does not specifically call for an increased gas tax to cover the new costs, though it calls on Congress to come up with new revenues to offset the new spending. Republicans want to eliminate forward-looking programs like high-speed rail.

The budget is responsible in other ways. It would cap the value of itemized deductions for high-income taxpayers and use the savings to extend relief from the alternative minimum tax for three years so that the tax does not ensnare millions of middle- and upper-middle-income taxpayers for whom it was never intended. For nearly a decade, Congress has granted alternative minimum tax relief without paying for it.

House Republicans want to leave military spending out of their budget-cutting entirely, but Mr. Obama’s budget reduces projected Pentagon spending by $78 billion over five years. If anything, Mr. Obama could safely have proposed cutting deeper, as suggested by his own bipartisan deficit panel.

The bill for the military is way too high, above cold-war peak levels, when this country had a superpower adversary. There’s a point where the next military spending dollar does not make our society more secure, and it’s a point we long ago passed.

Mr. Obama’s budget also includes a responsible way to head off steep cuts in what Medicare pays doctors. It would postpone the cuts for two years and offset that added cost with $62 billion in other health care savings, like expanding the use of cheaper generic drugs.

But not all of Mr. Obama’s cuts are acceptable. The president is proposing a reduction by nearly half in the program that provides assistance to low-income families to pay for home heating bills. Shared sacrifice need not involve the very neediest.

Ideally, budget cuts would not start until the economic recovery is more firmly entrenched. But the deficit is a pressing political problem. The Obama budget is balanced enough to start the process of deficit reduction, but not so draconian that it would derail the recovery.

The same cannot be said for the plan put forward by Republicans last week. It would amputate some of government’s most vital functions for the next seven months of fiscal year 2011. (They haven’t even gotten to next year yet, never mind the more distant future.)

Real deficit reduction will require grappling with rising health care costs and an aging population, which means reforms in Medicare, Medicaid and Social Security, as well as tax increases to bring revenues in line with obligations.

Mr. Obama’s budget does not directly address those big issues, but doing so would require a negotiating partner, and Mr. Obama, at present, does not have one among the Republican leaders in Congress. His latest budget is a good starting point for a discussion — and a budget deal — but only if Republicans are willing participants in the process.

source:
The New York Times - Breaking News, World News & Multimedia
February 14, 2011

Iran, Egypt Caught in the Churning of a Mideast Democracy Wave

The aftershocks of last week's overthrow of President Hosni Mubarak continued to reverberate Monday, not only in Egypt but all the way across the Middle East to Iran. And it was the democratic challenge to Iran's leaders by crowds on Tehran's streets, reported to number tens of thousands, that the Obama Administration chose to emphasize. Secretary of State Hillary Clinton expressed U.S. support for the Iranian demonstrators: "We wish the opposition and the brave people in the streets across cities in Iran the same opportunities that they saw their Egyptian counterparts seize," she said in Washington.

Since bidding farewell to stalwart U.S. ally Mubarak last Friday, the Administration has insistently pressed the issue of democracy in Iran — less so in other places, where challenges to long-standing U.S. allies such as Yemen's President Ali Abdullah Saleh, Algeria's military-based regime and Bahrain's monarchy have also continued to gather steam.

Needless to say, while the Obama Administration is hoping Iran will be the next domino to fall to a democratic rebellion, the regime in Tehran would prefer it to be Bahrain, which plays host to the key U.S. naval facility in the Gulf. Thousands of Bahraini protesters clashed with police across the country Monday, and opposition activists vowed to return to the streets for a second "day of rage" on Tuesday. While the country's Sunni monarchy is a key U.S. ally, Iran can be expected to support the challenge of the country's 70% Shi'ite majority for greater democracy.

While the challenge of reform confronts governments across the region, indications from Egypt and Iran have suggested that bread-and-butter class politics could have a decisive role in determining the political fates of both countries. Iran's opposition green movement has taken its neighbors' democratic uprisings as a cue to reassert itself in public, after a year in which repression by the regime of President Mahmoud Ahmadinejad had largely kept opponents off the streets. In a Facebook-circulated memorandum titled "How to Protest with Awareness," Iranian opposition activists said that the goal of their Feb. 14 protest was to demonstrate that the green movement was still alive, and to show their "alliance with the people of Egypt and Tunisia in rejecting dictatorship." That language represents not only a heartfelt solidarity against authoritarian regimes, but also a kind of political jujitsu, since the regime itself has hailed the success of the Tunisian and Egyptian uprisings that overthrew U.S. allies.

The Facebook memo also spelled out specific measures intended to counter some of the police tactics previously used against protesters. Instead of calling on supporters to gather in a single square or street — which can be commandeered by the authorities to prevent a crowd from forming — the memo recommended gathering spontaneously in neighborhoods across the city, starting small and moving along side streets until protesters have mustered a crowd large enough to take over main streets or squares. It also shared protest tips from Tunisian activists that have since gone viral in Middle East youth opposition networks, such as advice on wearing hooded sweatshirts and carrying lemon juice to counteract tear gas, using crash helmets and pan lids to shield protesters from rocks and rubber bullets, and using spray-paint to blind police visors and windscreens.

But the green movement remains hamstrung by its own strategic limitations. Its nonviolent mass demonstrations have limited impact on a government that is both willing to use force to suppress them and is unconcerned by international reproach. The movement also faces a problem in defining its goals: its leaders, such as former presidential candidates Mir-Hossein Mousavi and Mehdi Karroubi, hail from the political elite of the Islamic Republic, and are dedicated to reforming the system rather than abolishing it. That may be a popular goal, but it's not one for which many of the green movement's mostly middle-class followers are willing to risk their lives. But if the movement was to call for an end to the Islamic Republic and the principle of clerical rule, that would split the opposition and play into the hands of Ahmadinejad.

What could change the dynamic in Iran is the mounting sense of economic grievance among the country's working class, particularly since the government ended fuel subsidies in an economy squeezed by international sanctions. If cost-of-living pressure makes working-class Iranians more inclined to take to the streets to challenge the regime, that could change Iran's political calculus — as it did in Egypt, where the outbreak of massive labor strikes early last week gave the protest movement the critical mass that forced Mubarak to stand down on Feb. 11.

If strikes by Egyptian workers demanding pay raises in the face of rampant food inflation added momentum to the effort to topple President Mubarak, his departure has done nothing to bring the rolling wave of industrial action to a halt. Monday's protests in Cairo's Tahrir Square highlighted the fact that Egyptians' newfound sense of freedom — and the morale-boosting victory of their protests against Mubarak — has bolstered labor militancy. Hours after the military had on Monday cleared the square of the last of the democracy protesters that had camped out there for most of the past three weeks, thousands more Egyptians flooded back in — but this time they were public-sector employees, even disgruntled policemen, taking advantage of the new climate to demand pay raises. Transport, bank and tourism employees remained on strike, joined by steel, oil and gas workers, all flexing their collective muscle to bring their wages in line with rising food prices.

The challenge of restoring stability facing Egypt's new military rulers is growing more complex by the day. The Supreme Council of the Armed Forces — to which Mubarak ceded power — issued a statement Monday urging Egyptians to return to work, warning that strikes "damage the security of the country." But even if it were inclined to vent its impatience through more forceful tactics, getting striking workers back on the job in thousands of workplaces across Egypt is infinitely more difficult than clearing them off the streets. Negotiation and persuasion remain the order of the day, and the military council met Monday with representatives of the youth movement that drove the 18-day rebellion against Mubarak, assuring its leaders of their commitment to democracy. The military leadership promised a referendum on a new constitution within two months, but forging a new political consensus that could restore stability will take some time.

In Yemen, meanwhile, students marched Monday to demand the resignation of President Saleh, who just two weeks ago promised not to stand for re-election in 2013. The focus of Monday's demonstration was to demand the release of seven students detained in a similar protest on Sunday. The crowd of some 4,000 included lawyers and other activists, who urged Saleh to follow Mubarak's example and step down. They marched to Tahrir Square in Sana'a, hoping to reprise the success seen in the Egyptian plaza of the same name. But when they got there, they found that it had already been occupied by some 1,000 pro-government demonstrators loudly chanting support for Saleh. A number of people on both sides of the divide were injured in the clash of sticks and stones that followed. The readiness of the police to forcefully disperse protesters — and the substantial number of Saleh backers ready to fight — suggested that Yemen will not be repeating the Egyptian example anytime soon.

Still, whether viewed from Washington, Tehran or Cairo, there's little doubt that the Middle East's winter of discontent has remade the region's political landscape in ways that will force all stakeholders to reassess long-held assumptions. As President Obama said last Friday, "There are very few moments in our lives where we have the privilege to witness history taking place." For those in power, however, the making of history, while awe-inspiring, can nonetheless produce some uncomfortable surprises

source, Times Magazine

__________________
It's Not Over 'til I Win

Pakistan Delays Ruling on Jailed American

Pakistan provincial court gave the Pakistani government three weeks on Thursday to decide whether the American official in custody for killing two Pakistanis has diplomatic immunity, a decision that amounts to a slap to the United States, the nation’s biggest donor and an ally in the fight against terror.

The decision came a day after a whirlwind visit by Senator John Kerry who tried to find a quick resolution to the case which has severely damaged relations between the two countries and exposed the weakness of the pro-American government headed by President Asif Ali Zardari.

The public furor in Pakistan has revolved around why Raymond A. Davis, 36, arrested with a loaded Glock handgun and other security gear, was driving alone in an impoverished area of Lahore not usually frequented by diplomats. After Mr. Davis killed two motorcyclists who he says were trying to rob him, an official American car that tried to rescue him ran over another motorcyclist who later died. That car fled the scene.

In an argument before the court in Lahore, the city where Mr. Davis shot and killed the Pakistanis, the advocate general of Punjab Province, Khawaja Haris, said the authorities had filed a “double murder case” against Mr. Davis.

On the matter of diplomatic immunity, which the Obama administration insists on, the lawyer pointed to conflicting statements by the Americans on the status of Mr. Davis.

On January 27, the day of the shooting, the United States Consulate in Lahore issued a statement saying Mr. Davis was an employee of the consulate and the holder of a diplomatic passport.

Later, the American Embassy in Islamabad said Mr. Davis, a former Special Forces soldier, worked at the embassy and was employed as a “technical and administrative” official.

The application sent to the Pakistani Foreign Ministry in late 2009 for Mr. Davis’s posting to Pakistan stated he would work as a “technical and administrative” official at the embassy.

The distinctions could have a bearing on the outcome since the Vienna Conventions, the international protocols under which diplomatic immunity is regulated, have different standards of immunity for officials employed at embassies and at consulates.

The Obama administration insists that Mr. Davis status as a “technical and administrative” official, a phrase used in the 1961 Vienna Conventions, grants him immunity from prosecution. The administration has repeatedly said Mr. Davis is being held illegally and must be released.

President Obama, speaking at a news conference earlier this week, referred to Mr. Davis as “our diplomat.”

Officials assigned to consulates generally enjoy less immunity from prosecution in the host countries, according to lawyers who specialize in diplomatic law.

The judge in Lahore, Chief Justice Ijaz Ahmad Chaudhry, ordered the Foreign Ministry to present its findings on Mr. Davis’s immunity in three weeks, a delay that is likely to intensify the standoff.

The Obama administration has already postponed a Washington meeting scheduled for later this month where Pakistan, Afghanistan and the United States were to discuss progress in Afghanistan. The administration has warned Pakistan that a planned state visit by Mr. Zardari next month was in jeopardy if the case was not resolved, and Congress has threatened to cut military assistance.

The argument by Mr. Haris before the court echoed the hard line on the case taken by the former foreign minister, Shah Mehmood Qureshi, who lost his job in a Cabinet reshuffle last weekend because he said he refused to issue the “blanket immunity” for Mr. Davis being demanded by the United States, and favored by President Zardari and his close advisers.

Senator Kerry, the chairman of the Senate Foreign Relations Committee and the sponsor of a $7.5 billion aid package for Pakistan, left Pakistan Wednesday night after meeting with top leaders, including President Zardari. He was confident, he said, that the Davis case would be resolved in the “next few days.”

Mr. Kerry met with Mr. Qureshi, and the leader of the main opposition party, Nawaz Sharif, the most powerful politician in Punjab.

After those two meetings, Mr. Qureshi and Mr. Sharif did little to help the Americans to win Mr. Davis’s release, suggesting that the courts should decide the case.

Mr. Qureshi, who had refused to declare Mr. Davis was a diplomat entitled to “blanket immunity,” denied at a news conference that he was influenced by the Pakistani military in his decision.

Mr. Sharif criticized the United States for not handing over the people in the car that tried to rescue Mr. Davis, saying that Pakistani officials had written five letters to the Lahore consulate demanding to know the whereabouts of the people. The consulate had not replied, he said.

Mr. Davis is being held at the central jail in Lahore where American officials say he is sleeping on a foam mat on concrete floor without access to a cell phone, the Internet or television.

Video footage showing Mr. Davis declining to answer questions while in custody has been showing on the television channel Express News.

Apparently leaked from law enforcement authorities supervising Mr. Davis’s custody, the footage shows Mr. Davis dressed in a blue jersey, impatiently getting up from a chair and indicating he would not cooperate.


Source
nytimes

__________________
It's Not Over 'til I Win

Pakistan Extends Jailing of American Held in 2 Deaths
LAHORE, Pakistan — A Pakistani court on Friday ordered an American official, arrested in the killing of two Pakistanis, to be held for another two weeks while the authorities prepared charges in what the police called a “coldblooded” murder The official, Raymond A. Davis, 36, whose arrest has a cast a chill over relations between the United States and Pakistan, said he acted in self-defense when he shot the men in an attempted daylight robbery on Jan. 27.

After a 30-minute, closed-door court hearing, the Lahore city police chief, Aslam Tareen, said that Mr. Davis had committed “coldblooded” murder, a statement that appeared likely to further inflame the highly contentious case. Mr. Davis was transferred to a crowded city jail to await formal charges.

A lawyer for Mr. Davis, Hassam Qadir, asked Judge Aneeq Anwar Chaudry of the Municipal Court to adhere to the principles of diplomatic immunity and release Mr. Davis. The State Department has repeatedly said that he is protected by diplomatic immunity under the Vienna Convention and must be released immediately.

In a statement on Friday night, the senior American official posted to Lahore, Carmela Conroy, who heads the consulate there, described the shooting as “a tragedy.” At the same time, she criticized the Pakistani authorities for ignoring what she called eyewitness accounts and physical evidence, including the police statement that one of the assailants carried a loaded gun. Mr. Davis was entitled to “full immunity from criminal prosecution,” and under the rules of diplomacy should be freed immediately, she said.

In response to the American demands for Mr. Davis’s release, Pakistani officials say he will be dealt with in the courts.

Although senior Pakistani officials agree in private that Mr. Davis, who carries a diplomatic passport, is protected by the Vienna Convention, they appear unable or unwilling to enforce the protocol, according to senior American officials.

The civilian government of President Asif Ali Zardari is being assailed daily in the news media about the case, and the cause of the two dead men has been taken up by right-wing religious parties.

The Pakistani military and security apparatus appear to be willing to allow the Davis case to dominate the relationship with Washington for the moment, American and Pakistani officials said. That way, Pakistan can wring concessions on the breadth of the presence of American security officials and contractors in Pakistan, an issue that is at the center of deepening antagonism among the Pakistani public toward the United States, according to the officials.

American officials said that two armed men threatened Mr. Davis when he was driving alone on a busy Lahore road, and that he fired in self-defense.

The statement on Friday night said that Mr. Davis was assigned as an “administrative and technical” member of the staff at the American Embassy in Islamabad. But his exact duties have not been explained, and the reason he was driving alone with a Glock handgun, a pocket telescope and GPS equipment has fueled speculation in the Pakistani news media.

Secretary of State Hillary Rodham Clinton has warned the Pakistani government in telephone calls to Mr. Zardari that the continued detention of Mr. Davis threatened the foundations of the strategic relationship between the two countries.

As the United States government argued for Mr. Davis’s release, photographs and video from his camera and his cellphone were shown on two Pakistani television channels in what appeared to be deliberate leaks by the Pakistani security forces.

Several images showed one of the two men, Faizan Haider, lying on the road after he had been shot, a pistol in his hand.

Other photographs showed the road near Lahore that leads to the border with India, old military bunkers along the road and office buildings in the city.

The video taken shortly after Mr. Davis was detained included his voice asking the police the whereabouts of his passport. In the video, he is heard saying he works as a consultant at the United States Consulate in Lahore.

Mr. Davis, who arrived at the court in an armored van with tight security, was kept away from the news media.

While in detention, he will be segregated from the rest of the prisoners but will not be allowed access to the Internet or a cellphone, a senior government official said. Mr. Davis wore a gray suit and tie in court on Friday, in contrast to the checked shirt and jeans he was wearing when he was arrested, according to a lawyer who attended the session.

“By the book,” was how the official described the treatment of Mr. Davis in the jail that housed Zulfikar Ali Bhutto, the former president and prime minister, and, in the early 1990s, Mr. Zardari, who was held on corruption charges that he has contended were politically motivated and never proven

source
nytimes

__________________
It's Not Over 'til I Win

As G20 Leaders Set Deal, Geithner Criticizes China
By LIZ ALDERMAN
Published: February 19, 2011

Treasury Secretary Timothy F. Geithner took direct aim at China on Saturday at a meeting of the world’s most powerful economies, saying that the nation’s currency was still “substantially undervalued” and that recent steps taken by Beijing to adjust its value were too small.

Mr. Geithner’s remarks came as financial leaders from the Group of 20 gathered here said they had agreed on a set of common guidelines to identify when economic and financial developments in some countries would create problems for the rest of the world. The agreement was forged after France and Germany persuaded China to accept a compromise on proposed yardsticks to measure the potential problems.

Mr. Geithner said that even though China had allowed its currency, the renminbi, to appreciate against the dollar since last summer, it had not been enough. As such, the United States and its European partners say, China still retains an unfair edge in trade that is driving the world’s economies to operate at two speeds.

“Its real effective exchange rate — the best measure to judge its currency against its trading partners — has not moved much in this latest period of exchange rate reform,” Mr. Geithner said.

Countries that keep their currencies artificially low, he added, are fueling inflationary pressures within their own economies and forcing others to bear the burden of spillover effects, he added.

The set of guidelines agreed upon grew out of concerns that fast growth in China and other emerging markets would stoke inflation and trade imbalances that could destabilize a recovery.

China had originally tried to quash efforts to measure those differences by looking at real exchange rates and currency reserves, which the United States and other Western countries see as having contributed to the financial crisis. China has accumulated substantial currency reserves in United States dollars, helping it to hold down the value of the renminbi and run up a large trade surplus.

But China, after discussions with France and Germany, agreed to include those elements in the guidelines, along with public and private debt levels.

Beijing’s currency policy has helped stoke a breakneck pace of growth in China that, together with other emerging markets, has also fueled a surge in food and commodity prices. Analysts say the higher prices have contributed to wide social unrest in Egypt and across the Middle East, and in other struggling economies worldwide.

The International Monetary Fund estimates that commodity prices jumped 20 to 30 percent last year, a trend that Dominique Strauss-Kahn, the head of the I.M.F., said was “creating a lot of problems for low-income countries and vulnerable people.”

“We’re reaching a danger point” in these countries, Robert Zoellick, the president of the World Bank, said in a separate telephone call with a small group of journalists. He said he urged G20 officials to “put food first in 2011,” even as they bicker over technical ways to measure imbalances in the world economy.

Mr. Geithner said the United States would support measures to limit the potential for the manipulation of commodity prices through greater transparency and oversight of the commodity and derivative markets.

The worries about inflation come as the global recovery moves at an uneven pace, Mr. Strauss-Kahn said. “Asia is doing well, Latin America and Africa, too,” he said. “But unemployment is still very high in advanced economies. So this recovery won’t deliver sustainable growth,” he said.

China’s initial resistance highlights a daunting challenge for policy makers as the world’s economies move at two speeds. Not surprisingly, each country is pursuing its own self-interest to resolve internal economic problems. These include high unemployment in the United States and difficult austerity measures in Europe, as countries tighten their belts to mend finances, as well as inflation threats in fast-growing nations.

“It’s very difficult to see any government doing something in its fiscal affairs just to benefit the broader system,” Jacob Frenkel, the chairman of JPMorgan Chase International, said in Paris last week at a meeting of the Institute for International Finance.

Bringing China on board is a particular challenge, he added. “It’s clear the Chinese currency will need to appreciate,” Mr. Frenkel said, although that alone won’t address the desire by other countries to see China start spending more of its savings to buy up imports, a trend that would help even out trade imbalances. Lacking broad welfare and retirement safety nets, the Chinese tend to save more than they spend.

But cajoling Beijing is a losing proposition, Mr. Frenkel said, because the Chinese don’t want to be seen as being pushed around.

Instead, he said, governments should tell China they understand why it has a savings glut, “and then say, ‘let us help you design a system that helps you save less,’ “ he said. “That would be a win-win strategy,” he said.

source:
nytimes

__________________
It's Not Over 'til I Win

The Chinese Economy

Market liberalization in the Chinese Economy has brought its huge economy forward by leaps and bounds - but rural China still remains poor, even as its cities increase in affluence.

China's economy is huge and expanding rapidly. In the last 30 years the rate of Chinese economic growth has been almost miraculous, averaging 8% growth in Gross Domestic Product (GDP) per annum. The economy has grown more than 10 times during that period, with Chinese GDP reaching 3.42 trillion US dollars by 2007. In Purchasing Power Parity GDP, China already has the biggest economy after the United States. Most analysts project China to become the largest economy in the world this century using all measures of GDP.

However, there are still inequalities in the income of the Chinese people, and this income disparity has increased in the recent times, in part due to a liberalization of markets within the country. The per capita income of China is only about 2,000 US dollars, which is fairly poor when judged against global standards. In per capita income terms, China stands at a lowly 107th out of 179 countries. The Purchasing Power Parity figure for China is only slightly better at 7,800 US dollars, ranking China 82nd out of 179 countries.

Economic reforms started in China in the 70s and 80s. The initial focus of these reforms was on collectivizing the agricultural activities of the country. The leaders of the Chinese economy, at that point in time, were trying to change the center of agriculture from farming to household activities. At later stages the reforms extended to the liberalization of prices, in a gradual manner. The process of fiscal decentralization soon followed.

As part of the reforms, more independence was granted to the business enterprises that were owned by the state government. This meant that government officials at the local levels and the managers of various plants had more authority than before. This led to the creation of a number of various types of privately held enterprises within the services sector, as well as the light manufacturing sectors. The banking system was diversified and the Chinese stock markets started to develop and grow as economic reforms in China took hold.

The economic reforms made in China in the 70s and 80s had other far reaching effects as well. The sectors outside the control of the state government of China grew at a rapid pace as a result of these reforms. China also opened its economy to the world for the purposes of trade and direct foreign investment.

China has adopted a slow but steady method in implementing their economic reforms. It has also sold the equity of some of the major Chinese state banks to overseas companies and bond markets during the middle phase of the first half of the 21st century. In recent years the role played by China in international trade has also increased.

source:
China Economy, China's Economic Profile, Chinese Economy | Economy Watch
.

__________________
It's Not Over 'til I Win

After Long Exile, Sunni Cleric Takes Role in Egypt
Published: February 18, 2011


CAIRO — Sheik Yusuf al-Qaradawi, an influential Sunni cleric who is banned from the United States and Britain for supporting violence against Israel and American forces in Iraq, delivered his first public sermon here in 50 years on Friday, emerging as a powerful voice in the struggle to shape what kind of Egyptian state emerges from the uprising that toppled Hosni Mubarak.

On the same day, other signs of a changing Egypt emerged. The military warned restive workers that it would stop what it declared were illegal strikes crippling Egypt’s economy, declaring “it will confront them and take the legal measures needed to protect the nation’s security.”

It also allowed two Iranian Navy ships to pass through the Suez Canal — a first since the 1979 Iranian revolution and a move that some Israeli officials called a provocation. Egyptian officials reportedly said the ships did not contain weapons.

Sheik Qaradawi, a popular television cleric whose program reaches an audience of tens of millions worldwide, addressed a rapt audience of more than a million Egyptians gathered in Tahrir Square to celebrate the uprising and honor those who died.

“Don’t fight history,” he urged his listeners in Egypt and across the Arab world, where his remarks were televised. “You can’t delay the day when it starts. The Arab world has changed.”

He spoke as the authorities in Libya, Bahrain and Yemen were waging violent crackdowns on uprisings inspired in part by the Egyptian revolution. The sermon was the first public address here by Sheik Qaradawi, 84, since he fled Egypt for Qatar in 1961. An intellectual inspiration to the outlawed Muslim Brotherhood, Sheik Qaradawi was jailed in Egypt three times for his ties to the group and spent most of his life abroad. His prominence exemplifies the peril and potential for the West as Egypt opens up. While he condemned the 9/11 attacks, he has supported suicide bombers against Israel and attacks on American forces in Iraq.

On Friday, he struck themes of democracy and pluralism, long hallmarks of his writing and preaching. He began his sermon by saying that he was discarding the customary opening “Oh Muslims,” in favor of “Oh Muslims and Copts,” referring to Egypt’s Coptic Christian minority. He praised Muslims and Christians for standing together in Egypt’s revolution and even lauded the Coptic Christian “martyrs” who once fought the Romans and Byzantines. “I invite you to bow down in prayer together,” he said.

He urged the military officers governing Egypt to deliver on their promises of turning over power to “a civil government” founded on principles of pluralism, democracy and freedom. And he called on the army to immediately release all political prisoners and rid the cabinet of its dominance by officials of the old Mubarak government.

“We demand from the Egyptian Army to free us from the government that was appointed by Mubarak,” Sheik Qaradawi declared. “We want a new government without any of these faces whom people can no longer stand.” And he urged the young people who led the uprising to continue their revolution. “Protect it,” he said. “Don’t you dare let anyone steal it from you.”

As the uprising here intensified in recent weeks, Sheik Qaradawi had used his platform to urge Egyptians to rise up against Mr. Mubarak. His son, Abdul-Rahman Yusuf al-Qaradawi, is an Egyptian poet who supported the revolution, and, though Sheik Qaradawi is considered a religious traditionalist, three of his daughters hold doctoral degrees, including one in nuclear physics.

Scholars who have studied his work say Sheik Qaradawi has long argued that Islamic law supports the idea of a pluralistic, multiparty, civil democracy.

But he has made exceptions for violence against Israel or the American forces in Iraq. “You call it violence; I call it resistance,” said Prof. Emad Shahin of the University of Notre Dame, an Egyptian scholar who has studied Sheik Qaradawi’s work and was in Tahrir Square for his speech Friday.

“He is enormously influential,” Mr. Shahin added. “His presence in the square today cemented the resolve of the demonstrators to insist on their demands from the government.”

Egyptians streamed back into Tahrir Square, the epicenter of the revolution, for a rally that was part prayer service, part celebration and part political protest. State television put attendance at two million.

A raucous spirit of flag-waving celebration prevailed. Women in full face veils painted their daughters’ faces in the colors of the Egyptian flag. Young men danced to thrumming drum beats on balconies, lampposts and trucks. There were many signs bearing the dual images of a crescent and cross, the symbol of Muslim-Christian unity
Many said they had come to remember “the martyrs — the people who gave their lives to change Egypt to a new society of justice and freedom,” as Wael Lotfi el-Said, 39, put it. Vendors sold plastic cups emblazoned with the pictures of the “martyrs” — many now easily recognizable here from posters that have hung in the square and portraits that have appeared in newspapers. The Egyptian Health Ministry has said at least 365 people died in the uprising.But many, including Mr. Said, said they were prepared to return every Friday “if necessary” to ensure that the Egyptian military kept its commitment to hand over the government to a civilian democracy as quickly as possible. Many said they worried that the military had not yet clearly ended the so-called emergency law allowing detention without charges or trial. Nor has the military yet incorporated any civilian input into the interim government.

And many complained that the military had kept most of the cabinet ministers put in place during the last days of Mr. Mubarak’s rule. Mohamed el-Beltagui, a Muslim Brotherhood leader who played a leading role in the square during the protests, pointed at Prime Minister Ahmed Shafiq, a retired general and businessman appointed by Mr. Mubarak. “Can we stop the protests when the government of Ahmed Shafiq is still there?” Mr. Beltagui asked. “No, no, no,” the crowd answered.

There were signs that the demonstrators had not forgotten their disappointment with what seemed to be American support for Mr. Mubarak until the end of the revolt. Though the demonstrators had returned to remove most of the graffiti around the square, one billboard remained inscribed with a message in English: “USA Admin — we will get democracy with our will. Play your games with the tyrant.”

By nightfall, however, most politics were forgotten. Fireworks exploded over the square to mark the first week since Mr. Mubarak’s fall, and after midnight the square was still packed with revelers.

source:
nytimes

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It's Not Over 'til I Win

Pakistani Nuclear Arms Pose Challenge to U.S. Policy
By DAVID E. SANGER and ERIC SCHMITT

WASHINGTON — New American intelligence assessments have concluded that Pakistan has steadily expanded its nuclear arsenal since President Obama came to office, and that it is building the capability to surge ahead in the production of nuclear-weapons material, putting it on a path to overtake Britain as the world’s fifth largest nuclear weapons power.

For the Obama administration, the assessment poses a direct challenge to a central element of the president’s national security strategy, the reduction of nuclear stockpiles around the world. Pakistan’s determination to add considerably to its arsenal — mostly to deter India — has also become yet another irritant in its often testy relationship with Washington, particularly as Pakistan seeks to block Mr. Obama’s renewed efforts to negotiate a global treaty that would ban the production of new nuclear material.

The United States keeps its estimates of foreign nuclear weapons stockpiles secret, and Pakistan goes to great lengths to hide both the number and location of its weapons. It is particularly wary of the United States, which Pakistan’s military fears has plans to seize the arsenal if it was judged to be at risk of falling into the hands of extremists. Such secrecy makes accurate estimates difficult.

But the most recent estimates, according to officials and outsiders familiar with the American assessments, suggest that the number of deployed weapons now ranges from the mid-90s to more than 110. When Mr. Obama came to office, his aides were told that the arsenal “was in the mid-to-high 70s,” according to one official who had been briefed at the time, though estimates ranged from 60 to 90.

“We’ve seen a consistent, constant buildup in their inventory, but it hasn’t been a sudden rapid rise,” a senior American military official said. “We’re very, very well aware of what they’re doing.”

White House officials share the assessment that the increase in actual weapons has been what one termed “slow and steady.”

But the bigger worry is the production of nuclear materials. Based on the latest estimates of the International Panel on Fissile Materials, an outside group that estimates worldwide nuclear production, experts say Pakistan has now produced enough material for 40 to 100 additional weapons, including a new class of plutonium bombs. If those estimates are correct — and some government officials regard them as high — it would put Pakistan on a par with long-established nuclear powers.

“If not now, Pakistan will soon have the fifth largest nuclear arsenal in the world, surpassing the United Kingdom,” said Bruce Riedel, a former C.I.A. officer and the author of “Deadly Embrace: Pakistan, America, and the Future of Global Jihad.”

“And judging by the new nuclear reactors that are coming online and the pace of production, Pakistan is on a course to be the fourth largest nuclear weapons state in the world, ahead of France,” he said. The United States, Russia and China are the three largest nuclear weapons states.

Mr. Riedel conducted the first review of Pakistan and Afghanistan policy for President Obama in early 2009.

Pakistan’s arsenal of deployed weapons is considered secure, a point the White House reiterated last week while declining to answer questions about its new estimates. The United States has spent more than $100 million helping the country build fences, install sensor systems and train personnel to handle the weapons. But senior officials remain deeply concerned that weapons-usable fuel, which is kept in laboratories and storage centers, is more vulnerable and could be diverted by insiders in Pakistan’s vast nuclear complex.

In State Department cables released by WikiLeaks late last year, Anne Patterson, then the American ambassador to Pakistan, wrote of concerns that nuclear material in Pakistan’s laboratories was vulnerable to slow theft from insiders. The cables also revealed an American effort to deny its ally technology that it could use to upgrade its arsenal to plutonium weapons.

“The biggest concern of major production, to my mind, is theft from the places where the material is being handled in bulk — the plants that produce it, convert it to metal, fabricate it into bomb parts, and so on,” said Matthew Bunn, a Harvard scholar who compiles an annual report called “Securing the Bomb” for the group Nuclear Threat Initiative. “All but one of the real thefts” of highly enriched uranium and plutonium, he said, “were insider thefts from bulk-handling facilities — that’s where you can squirrel a little bit away without the loss being detected.”

On Monday, The Washington Post, citing nongovernment analysts, said Pakistan’s nuclear arsenal now numbered more than 100 deployed weapons. In interviews over the past three weeks, government officials from several countries, including India, which has an interest in raising the alarm about Pakistani capability, provided glimpses of their own estimates.

Almost all, however, said their real concern was not the weapons, but the increase in the production of material, especially plutonium. Pakistan is completing work on a large new plutonium production reactor, which will greatly increase its ability to produce a powerful new generation of weapons, but also defies Mr. Obama’s initiative to halt the production of weapons-grade material.

Nuclear projects are managed by the Pakistani military, but the country’s top civilian leaders are, on paper, part of the nuclear chain of command. Last year, Pakistan’s prime minister visited the new plutonium reactor at Kushab, suggesting at least some level of knowledge about the program. “We think the civilians are fully in the loop,” one senior Obama administration official said.

Still, it is unclear how Pakistan is financing the new weapons production, at a time of extraordinary financial stress in the country. “What does Pakistan need with that many nuclear weapons, especially given the state of the country’s economy?” said one foreign official who is familiar with the country’s plans, but agreed to discuss the classified program if granted anonymity.

“The country already has more than enough weapons for an effective deterrent against India,” the official said. “This is just for the generals to say they have more than India.”

American officials have been careful not to discuss Pakistan’s arsenal in public, for fear of further inflaming tensions and fueling Pakistani fears that the United States was figuring how to secure the weapons in an emergency, or a government collapse. But in November Mr. Obama’s top nuclear adviser, Gary Samore, criticized Pakistan for seeking to block talks on the Fissile Material Cutoff Treaty, which, if negotiated and adopted, could threaten Pakistan’s program.

In interviews last year, senior Pakistani officials said that they were infuriated by the deal Washington struck to provide civilian nuclear fuel to India, charging it had freed up India’s homemade fuel to produce new weapons. As a result, they said, they had no choice but to boost their own production and oppose any treaty that would cut into their ability to match India’s arsenal.

In a statement in December, the Pakistan’s National Command Authority, which overseas the arsenal, said that it “rejects any effort to undermine its strategic deterrence,” adding, “Pakistan will not be a party to any approach that is prejudicial to its legitimate national security interests.”

Tommy Vietor, a spokesman for the National Security Council, said Friday that Mr. Obama remained “confident” about the security of Pakistani weapons, and said he “continues to encourage all nations to support the commencement of negotiations on the Fissile Material Cutoff Treaty.” Other officials say efforts are now under way to find a way to start negotiations in new forums, away from Pakistani influence.

A senior Pakistani military officer declined Monday to confirm the size of his country’s nuclear arsenal or the describe rates of production, saying that information was classified.

“People are getting unduly concerned about the size of our stockpile,” said the officer, who was not authorized to speak publicly. “What we have is a credible, minimum nuclear deterrent. It’s a bare minimum.”

source:
nytimes

__________________
It's Not Over 'til I Win

WASHINGTON — Erik Prince, the founder of the international security giant Blackwater Worldwide, is backing an effort by a controversial South African mercenary firm to insert itself into Somalia’s bloody civil war by protecting government leaders, training Somali troops, and battling pirates and Islamic militants there, according to American and Western officials.

The disclosure comes as Mr. Prince sells off his interest in the company he built into a behemoth with billions of dollars in American government contracts in Iraq and Afghanistan, work that mired him in lawsuits and investigations amid reports of reckless behavior by his operatives, including causing the deaths of civilians in Iraq. His efforts to wade into the chaos of Somalia appear to be Mr. Prince’s latest endeavor to remain at the center of a campaign against Islamic radicalism in some of the world’s most war-ravaged corners. Mr. Prince moved to the United Arab Emirates late last year.

With its barely functional government and a fierce hostility to foreign armies since the hasty American withdrawal from Mogadishu in the early 1990s, Somalia is a country where Western militaries have long feared to tread. The Somali government has been cornered in a small patch of Mogadishu by the Shabab, a Somali militant group with ties to Al Qaeda.

This, along with the growing menace of piracy off Somalia’s shores, has created an opportunity for private security companies like the South African firm Saracen International to fill the security vacuum created by years of civil war. It is another illustration of how private security firms are playing a bigger role in wars around the world, with some governments seeing them as a way to supplement overtaxed armies, while others complain that they are unaccountable.

Mr. Prince’s precise role remains unclear. Some Western officials said that it was possible Mr. Prince was using his international contacts to help broker a deal between Saracen executives and officials from the United Arab Emirates, which have been financing Saracen in Somalia because Emirates business operations have been threatened by Somali pirates.

According to a report by the African Union, an organization of African states, Mr. Prince provided initial financing for a project by Saracen to win contracts with Somalia’s embattled government.

A spokesman for Mr. Prince challenged this report, saying that Mr. Prince had “no financial role of any kind in this matter,” and that he was primarily involved in humanitarian efforts and fighting pirates in Somalia.

“It is well known that he has long been interested in helping Somalia overcome the scourge of piracy,” said the spokesman, Mark Corallo. “To that end, he has at times provided advice to many different anti-piracy efforts.”

Saracen International is based in South Africa, with corporate offshoots in Uganda and other countries. The company, which declined to comment, was formed with the remnants of Executive Outcomes, a private mercenary firm composed largely of former South African special operations troops who worked throughout Africa in the 1990s.

The company makes little public about its operations and personnel, but it appears to be run by Lafras Luitingh, a former officer in South Africa’s Civil Cooperation Bureau, an apartheid-era internal security force notorious for killing opponents of the government.

American officials have said little about Saracen since news reports about the company’s planned operations in Somalia emerged last month. Philip J. Crowley, a State Department spokesman, said in December that the American government was “concerned about the lack of transparency” of Saracen’s financing and plans.

For now, the Obama administration remains committed to bolstering Somalia’s government with about 8,000 peacekeeping troops from Burundi and Uganda operating under a United Nations banner.

Somali forces are also being trained in Uganda.

Saracen has yet to formally announce its plans in Somalia, and there appear to be bitter disagreements within Somalia’s fractious government about whether to hire the South African firm. Somali officials have said that Saracen’s operations — which would also include training an antipiracy army in the semiautonomous region of Puntland — are being financed by an anonymous Middle Eastern country.

Several people with knowledge of Saracen’s operations confirmed that that was the United Arab Emirates.

A spokesman for the Emirates’s Embassy in Washington declined to comment on Saracen or on Mr. Prince’s involvement in the company.

One person involved in the project, speaking on condition of anonymity because Saracen’s plans were not yet public, said that new ideas for combating piracy and battling the Shabab are needed because “to date, other missions have not been successful.”

At least one of Saracen’s past forays into training militias drew an international rebuke. Saracen’s Uganda subsidiary was implicated in a 2002 United Nations Security Council report for training rebel paramilitary forces in Congo.

That report identified one of Saracen Uganda’s owners as Lt. Gen. Salim Saleh, the retired half-brother of Uganda’s president, Yoweri Museveni. The report also accused General Saleh and other Ugandan officers of using their ties to paramilitaries to plunder Congolese diamonds, gold and timber.

According to a Jan. 12 confidential report by the African Union, Mr. Prince “is at the top of the management chain of Saracen and provided seed money for the Saracen contract.” A Western official working in Somalia said he believed that it was Mr. Prince who first raised the idea of the Saracen contract with members of the Emirates’s ruling families, with whom he has a close relationship.

Two former American officials are helping broker the delicate negotiations between the Somali government, Saracen and the Emirates.

The officials, Pierre-Richard Prosper, a former United States ambassador at large for war crimes, and Michael Shanklin, a former Central Intelligence Agency station chief in Mogadishu, are both serving as advisers to the Somali government, according to people involved in the project. Both Mr. Prosper and Mr. Shanklin are apparently being paid by the United Arab Emirates.

Saracen is now training a 1,000-member antipiracy militia in Puntland, in northern Somalia, and plans a separate militia in Mogadishu. The company has trained a first group of 150 militia members and is drilling a second group of equal size, an official familiar with the company’s operations said.

In December, Somalia’s Ministry of Information issued a news release saying that Saracen was contracted to train security personnel and to carry out humanitarian work. That statement said the contract “is a limited engagement that is clearly defined and geared towards filling a need that is not met by other sources at this time.”

For years, Mr. Prince, a multimillionaire former Navy SEAL, has tried to spot new business opportunities in the security world. In 2008, he sought to capitalize on the growing rash of piracy off the Horn of Africa to win Blackwater contracts from companies that frequent the shipping lanes there. He even reconfigured a 183-foot oceanographic research vessel into a pirate-hunting ship for hire, complete with drone aircraft and .50-caliber machine guns.

In the spring of 2005, he met with Central Intelligence Agency officials about his proposal for a “quick reaction force” — a special cadre of Blackwater personnel who could handle paramilitary assignments for the agency anywhere in the world.

Mr. Prince began his pitch at C.I.A. headquarters by stating “from the early days of the American republic, the nation has relied on mercenaries for its defense,” according to a former government official who attended the meeting.

The pitch was not particularly well received, said the former official, because Mr. Prince was, in essence, proposing to replace the spy agency’s own in-house paramilitary force, the Special Activities Division.

Despite all of Blackwater’s legal troubles, Mr. Prince has never been charged with any criminal activity.

In an interview in the November issue of Men’s Journal, Mr. Prince expressed frustration with the wave of lawsuits filed against Blackwater, which is now known as Xe Services.

Mr. Prince, who said moving to Abu Dhabi would “make it harder for the jackals to get my money,” said he intended to find opportunities in “the energy field


source
nytimes

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It's Not Over 'til I Win

Thanx Khoru Sab . plz carry on this. Allah Pak ap ko jazaye khair day.