U.S. Triggers Chaos Along Pak-Afghan Border

On Jan. 14, at least 10,000 Pakistanis joined anti-U.S. demonstrations across the nation chanting, "Death to America!" The latest anti-American wave throughout Pakistan, which may weaken President Pervez Musharraf even further in the long run, was caused by U.S. air strikes that killed at least 18 Pakistani civilians in Damadola village near the Afghan border on Jan. 12.

The air strike which the Bush Administration, in its characteristic style, has not admitted, was ostensibly based on an intelligence report that the al-Qaeda number two, Ayman al-Zawahiri, and the Taliban chief Mullah Mohammad Omar, were attending a dinner celebration in the village on the occasion of the holy Muslim festival of Eid ul-Adha.

It is evident that Musharraf, who has been swimming against the tide in Pakistan to back the U.S. declared war on terrorism, and allowed U.S. troops to use Pakistan as an undeclared base of operations, is now caught between a rock and a hard place. Without mentioning the incident, Musharraf warned his countrymen not to harbor militants, saying it would only increase violence within Pakistan's borders. "If we keep sheltering foreign terrorists here ... our future will not be good," Musharraf said in speech broadcast on Jan. 14 by state-run television.

But the public pressure within Pakistan, particularly from pro-Islamist political groups and a large section of the anti-U.S. communities along the Pakistan-Afghanistan border, has already forced Islamabad to announce that it would summon U.S. Ambassador Ryan Crocker to protest the "highly condemnable" incident. Meanwhile, mass protests erupted in the region of the attack zone, and attacks on U.S.-funded aid agencies were reported in the town of Khar in Bajur tribal zone.

The incident could not have occurred at a worse time. Washington's credibility in its conduct of the Iraq and Afghanistan wars is at a low ebb in the United States, at the same time that the Bush Administration appears ready to throw down the gauntlet against Iran because of the latter's insistence on enriching uranium, which the U.S. claims is designed to develop nuclear weapons (see InDepth coverage: "Iran Nuclear Crisis Must Not Lead to War").

A quick look at the map makes it evident that, in order for the Bush Administration to flex its muscles against Iran, it needs a pro-U.S. Afghanistan, Pakistan, and Iraq. It is evident at this point that if the Bush Administration chooses to "teach Iran a lesson," the subversion its troops would face in the three countries that surround Iran could be of a frightening dimension.

Secondly, no matter what Washington says, it is almost a certainty that the Bush Administration will encounter intense pressure from within and without, to withdraw a significant number of U.S. troops from both Afghanistan and Iraq, before the end of the year. Already, all warning signs in Afghanistan indicate that the Taliban are just waiting around the corner to move in, once the Americans are out. It is taken for granted that the NATO troops do not have the will or determination to take on the Taliban. In addition, no matter how one slices it, those countries that provided troops to NATO, did so only because they do not want to antagonize the United States. To take on the Taliban, and get killed in the process, is altogether a different proposition to these NATO troops.

In this context, Pakistan's cooperation is vital for the Bush Administration in order to attain even the most minimal of its objectives in Afghanistan. It is well known that it was the Pakistani soldiers who fought and led the Taliban movement in the midst of an ongoing civil war to take control of nearly all of Afghanistan during the 1995-96 period. There is little doubt that those who are in power in Washington have little understanding of history and even of the basic understanding of the consequences of their actions. Killing innocent civilians in Pakistan will sharply divide the military, weaken Washington's best friend in the region, Pervez Musharraf, and ensure the revival of the Taliban in Afghanistan.

Nepal To Provide China with Transport Corridor

Nepal has informed New Delhi that it has agreed to provide China with a transportation corridor in eastern Nepal, along with the permission to open a consulate in Birganj close to the Indian border. In return, China is expected to offer Nepal a package of $2 billion over three years to meet the demands of Nepal's civil war-ravaged economy. India had previously strongly objected to the location of the Chinese consulate.

Nepali King Gyanendra's decision to move closer to China is considered a major setback to the Indian policy towards Nepal. New Delhi had virtually cut off communications with the Nepali King following his decision last year to dismiss the Parliament and take control of the country to "fight" the Maoist insurgents who were rapidly gaining ground. While New Delhi, joining with Washington, demanded that King Gyanendra lift the emergency and bring back democracy, Beijing backed the King's decision and provided arms to the Royal Nepalese Army to fight the Maoists. Only in recent months has New Delhi made an effort to open a dialogue with Kathmandu to resolve the impasse.

But beyond Nepal, the issue will act as an obstacle to improving relations between India and China. There are also possibilities that various anti-Indian forces in the region, including Pakistan, could use this new Nepali policy to pressure India.

China Will Not Put All (Forex) Eggs in One Basket

China's foreign exchange reserves have shot up to $820 billion as of year-end 2005, from $769 billion in September, according to reports published in the Shanghai Securities News Jan. 10. These are the second-highest in the world after Japan, and are growing so fast because of China's huge trade surplus. Wang Zhao, a researcher for the State Council Development Research Center, a leading government think tank, wrote that China has to consider investing its reserves in infrastructure and new technologies, and channels other than U.S. Treasuries.

However, People's Bank of China head researcher Tang Xu said that China is not likely to sell its current U.S. dollar assets, and said the media had misinterpreted a statement from the State Administration of Foreign Exchange on "improving" management of its forex holdings. "No one is willing to put all of their eggs in one basket, and it is impossible for China to put all its forex reserves, which exceed $800 billion, in one currency. But it is unlikely China would reduce its current dollar assets to increase the proportion of other assets." This interpretation of the statement "was definitely a misunderstanding," Tang said.

Philippine Neo-Cons Push for Parliamentary Dictatorship

Leading Philippines reporter Neal Cruz, a regular columnist for The Inquirer, the dominant newspaper in the country, finally broke through the blackout in the press Jan. 9 (other than the LaRouche Society newsletter in Manila, Executive Alert) on the fact that the campaign by the friends of the neo-cons in Manila to dump the Presidential system in favor of a parliamentary system, backed by the Heritage Foundation in Washington, is intended to establish a dictatorship. In the proposed parliamentary system, writes Cruz, "There is no balance of powers. The party in power runs the whole government like a dictator." Cruz reviews the numerous illegalities involved in the drive by President Gloria Arroyo and former President Fidel Ramos to ram through a "charter change," and exposes the effort to get a phony debate going on the best way to do it.

With the Philippine Senate showing signs of resistance, the Arroyo government is now talking about a 5-million-strong petition drive, to force a plebiscite over the heads of the Senate.