Shift Seen in U.S.-North Korea Relations

"The [Bush] Administration is reexamining assumptions underlying U.S. policy on North Korea," and may have given up the first-strike policy there, Dr. Jonathan Pollack, chairman of Research at the U.S. Naval War College, told EIR July 29, discussing his recent article in YaleGlobal online. Dick Cheney's policy of "we don't talk to evil" at the Six Power Talks on Korea, was thrown out in Beijing July 26-29. "At least there is a major shift; they are allowing a new attitude in talking," Pollack said. "The very fact that [U.S. negotiator Christopher] Hill is giving the North Koreans this much 'face,' such validation as a legitimate partner, is significant. Certainly [former negotiator] James Kelly never had this kind of latitude. Never during the Bush Administration, has this been done before. Even if it's just keeping the ball in play, it's a heck of an improvement. You must negotiate face to face, if you want a diplomatic solution. You can't have a diplomatic solution without diplomacy. Finally we've got diplomacy," Pollack concluded.

While he would not be explicit, Pollack implied that Cheney has suffered a setback in U.S. policy councils. "Condi Rice has unquestionably been given more latitude; it seems they're standing back and saying 'Okay, gal, give it a whirl,' " as he put it.

U.S. and North Korea Continue Talks in Beijing

U.S. negotiator Christopher Hill and North Korean Vice Foreign Minister KimKye Gwan met twice on July 29, and agree to meet a sixth time the following day, in Beijing, in an attempt to find common language for the first joint statement in three years of talks. "So far it has been very useful, but when we start putting ideas on paper, we enter a new phase," Hill told reporters July 29. "Some of their ideas we did not feel were usable. But some of their ideas very much corresponded to some of the ideas we have. So it is a negotiated process."

U.S. Envoy Protests Energy Policies of China and India

Interim Under Secretary of State for Agriculture and Economic Affairs E. Anthony Wayne, in testimony prepared for the Senate Foreign Relations Committee hearing on July 26, accused China and India of "pursuing policies that are harmful to global stability."

Alluding to the energy investments that the two nations, each with 1 billion-plus populations, are making in Iran and Sudan, Wayne made specific reference to the discussions Indian and Pakistani officials are holding with Iranian officials on the technical, financial, and legal aspects of building a $4 billion pipeline that would bring Iranian natural gas to the Indian subcontinent.

Wayne also noted India, and to a much larger extent China, have made significant upstream investments in Sudan's energy sector. Expressing reservations on these initiatives, Wayne pointed out that "the economic support such investment provides to regimes such as Iran and Sudan can undermine efforts to encourage policy changes that will reduce global instability and enhance energy security."

Bagram Air Base Stoned by Afghans

Bagram Air Base, the U.S.'s largest, next door to Kabul, came under attack when 2,000 Afghans assembled in front of the gate and started chanting "Die America!" and throwing stones at the military vehicles coming out of the base. The violence erupted following the arrest of some villagers under the pretext that they were pro-Taliban elements. The U.S. troops fired in the air to disperse the crowd.

Also in Kandahar in southern Afghanistan, a bastion of Taliban militia, three suspected Taliban were killed in a gunfight with the U.S. troops. The fight saw five Afghan soldiers injured.

Japan May Cut UN Aid Unless It Gets Permanent Seat on SC

Tokyo, the second-largest contributor to the United Nations, has warned that if Japan is not made a permanent member of the UN Security Council, it would be under intense domestic pressure to substantially cut UN aid. The Japanese government has not decided what it would do if its efforts to become a permanent member fail, said Foreign Minister Nobutaka Machimura on July 27. He also cited a recent town hall meeting where speakers made it a demanded that UN be cut signficantly if Japan is denied permanent membership.

Japan contributes 17% of the world body's $1.2 billion annual budget ($204 million annually).

Malaysia Will Intervene To Prevent Speculation

Malaysia, which dropped its currency peg to the dollar, along with China (see Indepth: "China's Controlled Reform To Keep Currency Stable"), will use government intervention and currency controls to prevent speculation. Second Finance Minister Nor Mohamed Yakcop, who was the primary adviser to former Prime Minister Mahathir Mohamad in the 1998 implementation of currency controls and the dollar peg, announced that the dropping of the dollar peg in favor of a basket of currencies, implemented on July 21, a few hours after China's similar announcement, will not include the "trading band" being used by China. Rather, said Nor Mohamed, the government will use its $75 billion in reserves to intervene in case of speculators' manipulation of the market.

Also, Malaysia will not allow shorting of the Malaysian ringgit (borrowing of currency to sell it short, expecting a fall in value), and will retain the ban on trading the currency outside the country. "The Central Bank's rule in the managed float is, of course, to make sure that there is stability, there is no undue volatility in any single period," said Nor Mohamed. "There is no specific program to internationalize the ringgit."

The ringgit has increased by less than 2% in trading Friday (July 22) and Monday (July 25).

Wall Street Pushes Feudalism for Philippines

With a pitched battle raging in the Philippines over American-agent Fidel Ramos's efforts (with his asset, President Gloria Macapagal Arroyo) to end the American Presidential system and the "obstructive" checks and balances, the Wall Street Journal weighs in on the side of the parliamentary system as more fitting for the "feudal society" in the Philippines. The article, by James Hookway, July 26 describes the American Presidential system as "ill-fitting" in the Philippines, arguing that "the Philippines experience during the past 100 years illustrates the difficulties of grafting a political system—in this case, U.S.-style democracy with power apportioned among a president, a bicameral legislature and the judiciary—onto a culture where feudalistic power-brokers wield much more influence than voters. The Philippines has become virtually ungovernable, enabling a communist guerrilla movement to revive and al-Qaeda-linked Islamist separatists to operate freely."

Thailand Nationalizes Rail Systems

The government of Thailand is nationalizing the two light rail systems in Bangkok, Business Day reported July 26. The elevated train and the newly completed subway are to be combined and taken over by the Mass Transit Authority of Thailand, as part of the $40 billion, five-year plan to create a rail solution to the infamous Bangkok traffic crisis.

U.S. Reported To Have Contractors Fighting Abu Saayaf

There are reports from local residents in Mindanao and foreign human-rights workers in the southern regions of the Philippines that, "American troops have engaged in combat operations, and that former American soldiers now working under contract to the Pentagon operate there," according to the New York Times July 23. The U.S. denies these reports, while admitting that special forces "advisers" accompany Philippine troops on operations against the Abu Saayaf. Such activities are strictly forbidden by the Philippine Constitution.