India's Power Crisis Threatens Industries

Aug. 14 (EIRNS)—As the Manmohan Singh government continues in its efforts to convince a majority of parliamentarians that the India-U.S. nuclear deal will help India to import a large number of nuclear reactors for power generation, and would not jeopardize India's future nuclear weapons program, one of the top chambers of commerce in India, Assocham, issued a study today pointing out that India's power shortage is likely to disrupt industrial growth in the country, with production expected to be further reduced by 25% in August and September. Industrial output was down by an estimated 15% in June and July due to erratic power supply. The power deficit during these two months was close to 25%, says Assocham.

"As such, the regions were reeling under tremendous power shortage in June and July, and the rains added to it, as defects in the transmission system have hardly been rectified," Assocham President Venugopal Dhoot said.

Simultaneously, explaining the power shortage situation in the Rajya Sabha (House of Elders in the Indian Parliament), Power Minister Sushilkumar Shinde said in a written reply that the power sector will require about $260 billion investment during 2007-12 to add generation capacity, besides creating and upgrading transmission and distribution networks.

Out of the proposed capacity addition of 78,500 megawatts during the 11th plan (2006-2011), 1,870 mw has already been commissioned and another 50,975 mw is under construction, he said.

Delhi-Mumbai Industrial Corridor Cleared

Aug. 17 (EIRNS)—India's Cabinet Committee on Economic Affairs has cleared the first phase of Delhi-Mumbai Industrial Corridor (DMIC) project on the eve of the upcoming visit to India of Japanese Prime Minister Shinzo Abe. Simultaneously, the same Cabinet Committee has also approved setting up of the 1,483-kilometer (about 925 miles) Dedicated Freight Corridor (DFC) between Delhi and Mumbai for high-speed connectivity for high-axle load wagons, Information and Broadcasting Minister Priya Ranjan Dasmunshi said. The construction on the freight corridor will begin in 2009, and will be completed by 2012, Dasmunshi added.

DMIC is slated to be a $90 billion project, which will draw technological support from Japan, in addition to Japan's commitment to loan India $9 billion for the project. The money will be utilized in buying Japanese technologies needed for the project. Prime Minister Abe is scheduled to sign the Japanese commitment to the project during his visit.

The first phase of the DMIC will begin later this year and will be completed by 2013. The work involves development of six investment regions—in six contiguous Indian states—of more than 200 sq. km each and six industrial areas of about 100 sq. km each. These regions are Dadri-Noida-Ghaziabad (Uttar Pradesh), Manesar-Bawal (Haryana), Khushkhera-Bhiwadi-Neemrana (Rajasthan), Pitampura-Dhar-Mhow (Madhya Pradesh), Bharuch-Dahej (Gujarat) and Igatpuri-Nashik-Sinnar (Maharashtra).

The setting up of the DFC freight corridor would involve laying new rail tracks and gauge conversion projects, at a total cost of about $700 million. These are likely to be completed by 2009-10.

Taiwan Sells Off Banks to Foreign Locust Funds

Aug. 13 (EIRNS)—Taiwan's financial regulators have scrapped a 25% ceiling on individual stakes in Taiwan banks, according to AHN Media in Taipei, in order to "allow acquisitions of domestic banks by international private equity funds in response to increasing financial mergers in recent years." A leading Taiwan bank, Bowa Bank, partially owned by GMAC, was taken over by the government last week when it could not find a buyer—the fifth time in the past year that the government had to take over a failing bank.

The locusts are lining up to pick the bones. Carlyle Group [CYL.UL] said last month that it agreed to buy a 35% stake of Taiwan's Ta Chong Bank for $657 million, Longreach Group said it would pay $568 million for a controlling stake of EnTie Bank, and Bain Capital is bidding for a controlling stake in Cosmos Bank, partially owned by GE, at a significant discount. Taiwan has become a fertile hunting ground for the locusts, in part because they have been largely shut out of China and South Korea.

U.S. Troops Caught in Illegal Combat in Philippines

Aug. 15 (EIRNS)—Dick Cheney is proving that he treats the Philippines Constitution with as much disregard as he does the U.S. Constitution. According to the Philippines Inquirer, "heavily armed U.S. Special Forces troops were captured on film leading a Philippine Army military convoy Tuesday in Indanan town, Sulu province, where Philippine security forces are fighting Muslim insurgents. An Agence France-Presse photographer filmed the U.S. troops aboard a Humvee armored jeep as two soldiers manned a vehicle top-mounted with a machine gun with a miniature U.S. flag clearly visible on the back of one soldier's helmet. The American troops were part of a convoy of Philippine Marines hunting members of the terrorist group Abu Sayyaf."

The problem with this is that it is unconstitutional for foreign troops to fight on Philippine soil. Cheney, however, is blatantly ignoring this law in order to establish grounds for permanent U.S. troop deployments in the region.

Lee McClenny, a U.S. Embassy spokesperson, while claiming the Special Forces "are not involved in any combat roles," then admitted that they would "fire back if fired upon"—which is to be expected while leading a convoy in a battle zone. "Yes, they travel with Philippine military convoys. We rotate our people in and out of Jolo on a regular basis," McClenny told AFP.

SCO Summit Establishes Security, Stability Agreements

Aug. 16 (EIRNS)—The Presidents of the Shanghai Cooperation Organization (SCO) nations today declared, at their annual summit held in Bishkek, Kyrgystan, that they can take responsibility for stability and security in Eurasia. The six nations—China, Russia, Kazakstan, Kyrgyzstan, Tajikistan, and Uzbekistan—signed a Friendship Treaty and a Bishkek Declaration, among ten documents, the leading Eurasian news services reported.

The SCO was founded to help resolve the enormous security challenges all these nations have faced since the end of the Soviet Union. Now, the SCO is taking steps to deal with the world's most difficult security problems—Afghanistan, Iran, Iraq, and the Korean peninsula—which all exist on its immediate borders. These declarations are a clear challenge to the United States, to participate in dealing with these crises, which, as Russian President Vladimir Putin said, require international cooperation. "Russia, like other SCO states, favors strengthening the multi-polar international system providing equal security and development potential for all countries. Any attempts to solve global and regional problems unilaterally have no future."

The summit declaration states: "Securing stability of the world economy, decreasing poverty, energy and information security, protecting the population and territories of the SCO states from emergency situations, natural or man-made, cannot be excluded from global security problems."

Kazak President Nursultan Nazarbayev called for setting up a cooperative "SCO energy agency," and the leaders signed documents on transport and financial cooperation.

Chinese 'Greed Economy' Stirs Outrage, Unrest

Aug. 16 (EIRNS)—The collapse on Aug. 14 of the brand-new Tuojiang bridge in China's Hunan province, is "a bloody lesson," the China Daily wrote in its lead commentary Aug. 15. At least 36 workers, who were completing the bridge, are dead, and 22 more are missing. President Hu Jintao, who was out of the country at the Shanghai Cooperation Organization Summit on Aug. 15 called for "utmost rescue efforts," as well as an immediate, full investigation. President Hu said that measures must be taken to ensure lessons are learnt from the accident so that similar accidents shall not happen again, China Daily reported.

This bridge collapse follows one in June, which killed nine people. "The nation was rocked by the news," the daily stated. "Although summer often bears witness to natural disasters, such as floods and heat waves, no one can blame Mother Nature for this latest bridge collapse. While we wait for the official investigation to shed light on the cause of the incident, it seems possible that human factors might have loomed large behind the sorry scene. Given the techniques and building materials we use today are more advanced and safer, it is inexcusable that a brand-new bridge should collapse on top of those who built it. The public deserves a full account of the cause of the accident, and as there is now a safety accountability system for officials, it is necessary to ascertain where the responsibility lies."

These infrastructure disasters follow the horrific brick-kiln slave-labor scandal which sent shockwaves through the entire Chinese population. After one kidnapped boy escaped to his family, police began investigating the brick kilns, and freed at least 500 kidnapped children and poor peasants, who were forced to work as starving slaves in the brick kilns of Henan and Shanxi Provinces. Pictures of the freed slaves were shown in the national media for weeks, and President Hu and Prime Minister Wen Jiabao expressed their horror and demand for justice. Some 35,000 police were sent out to rescue the enslaved workers.

This greed economy is causing a big reaction in the Chinese population. The China Youth Daily, known for exposing exploitation of the population, and Sina.com found that there is a lot of discontent with China's big income gap. Some 57% of the 8,000 polled called China's new rich "extravagant," "greedy," and "corrupt." A recent report by the Chinese Academy of Social Sciences said that the richest 10% of Chinese families now own more than 40% of all private assets, while the poorest 10% share less than 2%, Xinhua reported Aug. 14.