In this issue:

Newly Named South Korean PM-Designate Published LaRouche Interview

Rumsfeld Moves To Undercut Powell, Military in Shaping U.S. Policy in Philippines

Arrow Missile Defense System: Point of Conflict Between India and U.S.

U.S. Asked Dutch To Freeze Assets of Philippines Communist Party

Manila Paper Challenges U.S. Decision To Declare Philippine CP a Terrorist Group

Debate in Malaysia Over Powell vs. the Utopians

Philippines Going Down Argentina Way?

Inter-Korea Talks End as Half-Success

From the Vol.1,No.24 issue of Electronic Intelligence Weekly
Asia News Digest

Newly Named South Korean PM-Designate Published LaRouche Interview

South Korean President Kim Dae-jung has appointed Chang Dae-Hwan, president and publisher of Seoul's main business daily Maeil Business News, as South Korea's Prime Minister, after Kim's ruling party suffered another disastrous electoral defeat Aug. 8. The opposition Grand National Party won 11 of the 13 seats up for grabs in by-elections, taking a majority of 139 seats in the 273-member National Assembly. Kim's government is hanging by a thread and his ruling party has collapsed, so far failing to form a new party, with many leaders resigning.

Lyndon LaRouche was prominently interviewed May 7 in Maeil Business News, focussing on his program for the "New Silk Road," and Korea's role in this as the "Asian Hub" for Pacific transport and trade.

LaRouche's interview was controversial inside the Blue House (Seoul's equivalent to the White House) at the time, as EIR belatedly learned, because Maeil News sometimes behaves like the Wall Street Journal and had (unbeknownst to EIR) been attacking President Kim from the standpoint of the opposition.

Publisher and PM-designate Chang, however, has now been chosen "as a compromise figure between all parties in Korea," one official told EIR, "because he does stand for the need to reconnect the Trans-Korean Railway. No matter what else the warring parties in Korea's December Presidential elections want to fight about, they should at least agree that this is a national goal."

President Kim, 78, has been hospitalized with pneumonia, and so Chang gave the pivotal Aug. 15 Korean Independence Day speech in Seoul, the most important speech of the year for any Korean President. Some are speculating that Kim has deliberately stepped aside to put Chang and the railroad up front, to help Chang win confirmation as PM this month in a hostile National Assembly. Kim's first choice for PM, university dean Chang Sang— who would have been Korea's first female Premier— was kicked out by the opposition last month. They accused her of faking her academic background, speculating in real estate, and letting her son dodge military service.

Chang Dae-Hwan said on Aug. 10 that his top priorities must be given to keeping peace on the Korean peninsula, hosting the Sept. 29-Oct. 14 Pusan Asian Games jointly with North Korea, and managing the December Presidential poll fairly. Chang took a doctorate in international business at New York University and worked his way up at Maeil News, starting in 1986.

Rumsfeld Moves To Undercut Powell, Military in Shaping U.S. Policy in Philippines

U.S. Defense Secretary Donald Rumsfeld has moved to undercut Secretary of State Colin Powell and the military in shaping U.S. (and Philippine) military policy in the Philippines. The open division between the civilian, war-party leadership at the Defense Department and the uniformed military (with Powell on the military's side) was played out in regard to the Philippines Aug. 13, when Rumsfeld met with Philippine Defense Minister Gen. Angelo Reyes in Washington. They set up a civilian-to-civilian policy group, clearly as a counter to the military-to-military group which has overseen policies and implementation previously.

Reyes told the Washington Post Aug. 13: "While there is close military-to-military contact, I've been in this job for over a year, and I saw there is just a dearth of corresponding contact between the two departments to set the policy that will drive the planning." The new board, in other words, will allow the civilian war party to override the military.

In fact, a very moderate "five-year plan" for U.S. military operations was just signed, sticking to Powell's stated policy that there should be no U.S. involvement in the field (let alone in combat, as was nearly implemented in the anti-Abu Sayyaf "exercise" which ended Aug. 1), and which will have a reduced number of U.S. military trainers. General Reyes noted for the Post that this plan was "drafted by the Mutual Defense Board, a long-standing forum co-chaired by [the] Philippine military's chief of staff and the head of the U.S. Pacific Command." The new civilian-run board (ominously called the Defense Policy Board, the same as the Richard Perle operation on the U.S. side) is intended to restrict the military's influence in restraining the "utopians" in Asia.

Arrow Missile Defense System: Point of Conflict Between India and U.S.

According to information made available by a source, U.S. Secretary of State Colin Powell asked the Indians during his recent visit there not to acquire the Israeli Arrow Weapons System, as it "could exacerbate friction between India and Pakistan" and lead to a war between the two nuclear neighbors.

The U.S. request to India not to buy the Arrow System has not gone down well in New Delhi. India pointed out to the U.S. Secretary of State the following facts:

*Arrow missiles have not gone into series production and are yet to be inducted into the militaries of Israel and the United States. The gestation time to acquire this missile system cannot be related to the present India-Pakistan confrontation.

*India was one of the first countries to come out supporting George Bush's BMD proposal for exactly the reason that Delhi wants to have a missile defense system of its own.

*Once India has decided to acquire a missile defense system to protect its 1 billion people from various nuclear-weapons states, New Delhi will either acquire the Arrow system or develop its own.

*The Arrow Missile Defense System is purely a defensive system with no offensive capability. Washington's opposition to the acquisition of such a system will be construed in India as the United States' desire to keep the Indian Union unsecured. This is particularly significant since the Pakistani military has made it clear that in case of an India-Pakistan conflict, Islamabad will use nuclear weapons.

*While the Secretary of State was voicing his concerns about the missile-defense system, the United States launched a parallel initiative through "consultations on missile defense with its NATO allies in search of ways for those countries to participate and benefit from the program."

U.S. Asked Dutch To Freeze Assets of Philippines Communist Party

The U.S. has asked the Dutch government to freeze the assets of the (Maoist) Communist Party of the Philippines (CPP) and its armed component, the New People's Army (NPA), who live in exile in the Netherlands. The Dutch government complied with the request the following day, Aug. 13. The request follows the Aug. 9 inclusion of the CPP/NPA on the State Department's Foreign Terrorist Organization blacklist. Some 31 relevant individuals live in Utrecht, including CPP founder Jose Maria Sison, and Luis Jalandoni.

Several elements of this story are bizarre. First, is the statement by Philippine President Macapagal-Arroyo's spokesman, Ignacio Bunye, who said in a radio interview that the subject of targetting the CPP/NPA was not discussed during Colin Powell's Aug. 1-2 meetings in Manila, and that no Filipino official had suggested such a move. Second, the Communist Party is not an illegal party, following the repeal in 1992 of the the Anti-Subversion Act of 1957. Bunye also pointed out that the Philippines has no anti-terrorism law, such that, at best, the CPP could be charged with rebellion, but Bunye said, "There is no actual revolution"— in fact, the government says it wants to return to peace negotiations.

The 31 CP-linked individuals living in the Netherlands, while troublemakers, are receiving Dutch government assistance as applicants for political refugee status!

Some Filipino Generals, however, are enthusiastic, and are discussing rebuilding the civilian militia, which has played a key role in the 33-year-old communist insurgency and against the Moros.

Manila Paper Challenges U.S. Decision To Declare Philippine CP a Terrorist Group

The establishment paper The Inquirer in Manila has challenged what it calls the "unilateral U.S. decision" to declare the Philippine Communist Party (CPP) a terrorist group. This U.S. decision has "boxed the Macapagal regime into a bind," the paper's editorial said Aug. 14, "from which it is now trying to extricate itself." Calling the policy "the Powell Doctrine," since it was announced by Secretary Powell after his return from the Philippines, with no public call from the Philippines to do so, The Inquirer calls it " a restriction of Philippine foreign policy, as well as its domestic policy. It will stanch the growth of the parliamentary tendency in the Philippine communist movement; and, secondly, it hampers the flexibility of the Philippine government in resuming peace talks with even the externally based communist leadership."

The editorial adds the concern: "We are not certain, at this stage, how much military involvement the U.S. will have in combatting the communist armed groups."

Debate in Malaysia Over Powell vs. the Utopians

A commentary in the Aug. 11 New Straits Times of Kuala Lumpur is noteworthy in describing the factional fight in the Bush Administration, but, by leaving out the role of Lyndon LaRouche, winds up pessimistic that Colin Powell (or anyone else) has any real power to change U.S. policy.

Titled "Tough Job Ahead for Mr. Nice Guy," the commentary, by Munir Majid, reads: "Powell swept across eight states in South and Southeast Asia in eight days. Dubbed the 'Good American' by a regional magazine, he is the acceptable face of American foreign policy. But does he make U.S. foreign policy, as opposed to trying to implement it in a less unacceptable manner? The message he tried to put across is that America is not unilateralist and that it is not obsessed by the war against terrorism.... Truly, U.S. foreign policy is encapsulated by what President George W. Bush might call this 'terror' thing, that there is good reason to believe it has also now become the justification for almost every foreign policy objective. So the hawks in Washington are having a roaring time. Powell is often sent out to say one thing while they do another."

He reviews how Powell's efforts to act in the Middle East were all overridden by the hawks, specifically Rumsfeld, Wolfowitz, and Rice. "All this is sad," says Munir, "not only for Powell, but for the world. If everything is looked at through the U.S. prism of the war against terror, there is little hope that many of the world's problems will be solved, including the fight against international terrorism.

"At the White House, during Prime Minister Datuk Seri Dr. Mahathir Mohamad's Washington visit in May, Bush nodded with a bit of a grunt, when asked if he did not think it necessary to address the root causes of terrorism. Yeah, he said, before quickly moving on to the need to wipe out all terror first, that the terrorists must stop, or be stopped.... In all of this, unfortunately, Powell's influence is lost. His assertion that the U.S. is not unilateralist and is not obsessed with terror, is only a wish....

"The world, in other words, looked for American wisdom and leadership, not anger and revenge. I have written before that we must sympathize with and understand the American reaction, that there will be a dark period which the perpetrators would have forced upon the world, but I think it has gone on for too long. The pity of it is Americans, like Powell, cannot make a difference."

Philippines Going Down Argentina Way?

Philippine President Gloria Arroyo plans to go on a pre-election spending spree to prop up growth despite a ballooning budget deficit, according to the Singapore Business Times. Arroyo is considering a higher-than-expected national budget of 820 billion pesos ($16.4 billion) for 2003 to finance projects crucial to alleviating poverty among the 40% of the 80 million population who are poor.

Opposition Sen. John Osmena has warned the budget deficit problem could plunge the Philippines into an Argentina-like situation. "The total debt stock— the total amount of money that we already owe— is very dangerously high, almost approaching 80% of our GDP, and that's about the upper limit of what the country should be borrowing."

In her first year in office, President Arroyo's government missed the budget deficit target of 145 billion pesos by 2 billion pesos, due to low revenue collection. In 2002, Manila overshot its first-half budget deficit ceiling by 53% to 119.7 billion pesos, nearly 10 billion pesos shy of the full-year target of 130 billion pesos. Herminio Teves, an Administration Congressman, warned that the full-year gap between spending and revenue in 2002 could balloon to 163 billion pesos unless there are major spending cuts or sharply improved tax collection.

Aug. 12, the government approved the issuance of another 7 billion pesos in dollar-linked peso bonds next month to bridge the widening budget gap.

Inter-Korea Talks End as Half-Success

The Seoul Inter-Korean minister-level talks closed Aug. 14 with most officials rating them a "half-success." The two Koreas issued a 10-point joint statement which announced Ministerial Economic talks Aug. 26-29 in Seoul to discuss the Trans-Korean Railroad project and construction of an industrial park at Kaesong in the North. It scheduled Red Cross negotiations on Sept. 4-6 to discuss the establishment of a permanent meeting place for separated families, and new reunions around Korean Thanksgiving Sept. 21. Also scheduled were joint soccer and taekwondo matches.

Japan and North Korea also announced Aug. 14 that they will hold high-level talks on normalizing diplomatic relations Aug. 25-26 in Pyongyang.

The Seoul Inter-Korean talks, however, ended without being establishing a schedule for the high-level military talks, needed to actually re-start rail and other various construction projects that involve the work inside the demilitarized zone (DMZ). The South Koreans urged that inter-Korean military talks be held this month to resume rail construction work. The North, however, insisted the two discuss the railway issue during the upcoming economic talks, saying that they were not empowered to schedule concrete military talks without further guidance from military leaders in Pyongyang. To guarantee the safety of workers inside the heavily fortified border, the militaries of the two sides need to sign regulations.

Meanwhile, according to Yonhap and Korea Times of Aug. 14, the opposition to the Sunshine Policy is mobilizing in Seoul. The Grand National Party (GNP) immediately attacked the Aug. 14 Inter-Korean agreements, complaining that, "It is extremely regrettable that the joint statement overlooks the naval clash in the Yellow Sea," as GNP spokesman Nam Kyong-phil said. Near the Seoul hotel where talks were held, the GNP led 1,000 Korean War veterans in a demonstration, calling President Kim Dae-jung's Sunshine Policy of engaging North Korea "too conciliatory." They burned a North Korean flag and a portrait of North Korean leader Kim Jong-il. On cue, radical leftist students with steel pipes clashed with riot police, who stopped them from marching to the main U.S. Army base in Seoul.

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