Asia News Digest
Australian Financial Review Warns U.S. of Failure in Iraq
"Foreign Minister Alexander Downer has at last recognized that a new UN Security resolution is required to provide an adequate framework for dealing with the Iraq mess," the Australian Financial Review Sept. 1 editorial stated.
The editorial continued: "There is now a real risk of failure in Iraq by the U.S. and its partners, including Australia. What is clearly needed is a fresh approach, including a new UN mandate to give expression to a consensus international view about how to manage a chaotic aftermath to a war of liberation. Australia has a responsibility to try to ensure that common sense prevails. That means support for a significant broadening of the international involvement in Iraq under a new UN mandate. This mandate would enable countries like Russia, France, and India to become involved in peacemaking and peacekeeping. The U.S. must accept it can no longer expect to call all the shots in Iraq. U.S. domination of all the postwar processes has become a lightning rod for protest by disaffected Iraqis. Washington should welcome a sharing of the burden for cleaning up the mess."
Indonesia Demands That Hambali Be Turned Over for Trial
Indonesian Minister of Foreign Affairs Hassan Wirayuda on Sept. 4 responded to U.S. complaints that the four-year sentence against Abu Bakar Ba'asyir, accused of leading the Jemaah Islamiah terrorist network, was too lenient, by blaming the U.S. itself for refusing Indonesia access to the leading Indonesian terrorist, Hambali. Hambali, an Indonesian who was wanted for terrorism in Indonesia long before 9/11, was captured through international cooperation in Thailand, but the U.S. has spirited him off to an undisclosed location and is preventing anyone from seeing him.
"Maybe we should question the U.S. commitment in the Hambali case," Hassan said. "There was important information missing from Ba'asyir's trial, which could have been gotten from Hambali. This information would have connected Ba'asyir with the Jamaah Islamiyah (JI) terror group," the Foreign Minister said, assuming that Hambali would have been willing to testify against Ba'asyir.
Foreign Minister Wirayuda also announced that he had written to Secretary Colin Powell requesting that Hambali be turned over for to Indonesia for trial.
Russian Foreign Ministry Considered Korean Talks Useful
"The Russian party regards the just-concluded talks as useful, that allowed every party involved in the issue to better understand each other's position," a Russian Foreign Ministry statement released Aug. 29 said. It also repeated Russia's determination to do all it can for the constructive continuation of the talks, in the interest of all participants.
The head of the Russian delegation, Deputy Foreign Minister Alexander Losyukov, stated on Aug. 28, that Pyongyang is "interested in the denuclearization of the Korean peninsula and does not intend to own nuclear weapons," according to Xinhua. Itar Tass quoted Losyukov saying on new negotiations, that "There is a general understanding that we should not be delaying the negotiations, and that the next round should be held within the next two months. The sides agree that [the talks] should be held in Beijing. As far as I understand, North Korea has no objections to this," he said.
Russian Foreign Minister Igor Ivanov and U.S. Secretary of State Colin Powell discussed the matter by telephone on Aug. 29, and agreed to keep looking for a diplomatic solution to the issue.
China Calls for U.S. Clarity on Korea Talks
Chinese Vice Foreign Minister Wang Yi stated that "The American policy towards the DPRK [North Korea]this is the main problem we are facing." Speaking at a press conference in Manila Sept. 1, Wang went on: "We want the U.S. to make clear about its position.... We hope each party, including the U.S. and DPRK, move together so we can find the final solution."
On Pyongyang's reaction, Wang said that "they may not be so satisfied [about the Beijing six-party talks] but they also want to continue the peace process. So what we are going to do is see how we can narrow the difference and how we can enlarge our common consensus, common ground." He said that the talks had been "just the beginning" of what could be a long, long" process.
In Beijing Sept. 2, Chinese Foreign Ministry spokesman Kong Quan said that the next round of talks, should try to clarify "the negative policy" of Washington to North Korea. "How the U.S. is threatening the DPRK, this needs to be further discussed in the next round of talks, especially between the U.S. and the DPRK," Kong said.
U.S. Official Briefs Press on Korea Talks
A U.S. official recently briefed press on the Korea talks. "Our presentations, from the U.S. side, were consistent with our long-standing objectives," the official said, "but I think were in many respects different in tone and in content from the presentations that were made last October in Pyongyang, and in April in the three-way talks in Beijing. We made clear that we are not seeking to strangle North Korea. We stated that North Korea unquestionably has a much better future if it turns away from nuclear weapons. We made clear that we can sincerely discuss security concerns in the context of nuclear dismantlement, and that we are willing to discuss a sequence of denuclearization measures with corresponding measures on the part of both sides."
The official went on to say that North Korea had "clearly stated a dedication to a nuclear-weapons-free Korean peninsula, and they told everyone that they do not want to have nuclear weapons," but said at certain points they used "troubling language." He refuted reports that the United States had said that there were certain things which North Korea must do "unconditionally" before progress could be made. The official said that looking back on the record of the meetings, nothing was demanded "unconditionally."
He was asked about reports that some Chinese representatives had said the U.S. position had placed "obstacles" to an agreement. The official indicated that the Chinese had assured the United States that no one had referred to the United States as an "obstacle," and that such reports were spurious.
As to how the process would unfold, the official replied, "I don't know that we know specifics on the next round of talks. I'm, as Secretary Powell is, quite optimistic that there will be some. There's some press accounts today. But the date and location has not yet been decided, although I would think Beijing would be a likely venue, and probably well before the end of the year. But I think that's something that will probably be part of a discussion of the Chinese with various parties, and certainly including the DPRK [North Korea]."
North Korea Calls the U.S. a 'Dialogue Partner'
On Sept. 2, the official North Korean KCNA news agency stated that "There is no change in our firm will to resolve the nuclear dispute between North Korea and the United States peacefully through dialogue." Also, the same day, the North Korea Communist Party newspaper Rodong Sinmun referred to the U.S. as a "dialogue partner," which is highly unusual.
The U.S. Demands China Revalue the Yuan
Blaming China for the loss of jobs in the collapsing U.S. economy, a group of Senators wrote to Treasury Secretary John Snow, urging him to put pressure on China to float its currency, during Snow's visit to China. The letter, sent Aug. 29 by Senators Joseph Lieberman (D-Conn), Charles Schumer (D-NY), Elizabeth Dole (R-NC), and Olympia Snowe (R-ME), states: "We believe the current undervaluation of China's currency is contributing to job loss and business failure in the United States at a time of great economic strains."
The Washington Post Sept. 1 featured a long front-page article on Chinese resistance to floating their currency, which notes that China has become a prime target for criticism in the same way that Japan was in the 1980s.
Meantime, U.S. hype about the "undervalued yuan" has created hot-money flows into China. The flows began in the forward markets in June, when Goldman Sachs said the yuan was as much as 15% undervalued, the Straits Times reported in a commentary Sept. 4. Goldman Sachs had said that China might allow the yuan to fluctuate by as much as 2.5% on either side of the current peg by year's end. Most currency traders doubt that the yuan would rise as much as 40%, which is the figure being tossed around among U.S. trade-union, business, and financial circles trying to get China to submit to another "Plaza Accord"the agreement which destroyed the Japanese economy in the 1990s.
A senior currency strategist at Bank of America, Simon Flint, was quoted by the Straits Times as saying that "The yuan may be undervalued if you look at purchasing power parity or external balances such as the current account surplus. But if you consider internal balanceemployment, condition of the banking systemthere is no evidence that the yuan is undervalued."
A number of American firms oppose the Administration push to revalue the yuan. "Revaluation would mean increased prices for our products around the world," warned Darren Tucker of New Balance, a company which makes about 60% of its shoes in China. Speaking to the Wall Street Journal on Sept. 4, Tucker said that even its U.S. workers wouldn't be helped by a higher yuan, because the shoe parts are made in Chinese factories. A relatively weak yuan keeps costs down in dollar terms for some top U.S. corporations, which depend on China as a source of raw materials, to produce parts for assembly elsewhere, or, as a manufacturing site.
Wal-Mart told China's Vice Commerce Minister Ma Xiuhong that "they want a stable Chinese currency despite recent calls ... for a stronger yuan," Xinhua reported in July. Chinese-made products account for a whopping 70% of Wal-Mart's global procurement. Likewise, health-care giant Johnson & Johnson "has a long-term strategy in China [that] requires a stable ... currency exchange rate," said Zian Shunjian, chief financial officer for Johnson & Johnson China Investment Ltd.
According to an executive of a major U.S. clothing maker, "A lot of fabric is shipped out of China to be made in other countries"even shirts labelled "Made in Honduras". As a result, retail prices would go up if the yuan rose.
Treasury Secretary Snow Brushed Off at APEC on 'Floating-Exchange Rates' Demand
Treasury Secretary John Snow was brushed off in his effort to coerce the APEC (Asia-Pacific Economic Cooperation) Finance Ministers to endorse his demand for "flexible rates" for currencies.
Arriving in Phuket, Thailand from Beijing, Snow told reporters he would call on the delegates to the APEC Finance Ministers' meeting Sept. 5 to include in the communiqué a statement supporting "flexible exchange rates" as a goal. With the United States demanding a Chinese revaluation of the yuan (an effective U.S. devaluation), Snow had the chutzpah to lecture the Asians that "you can't devalue your way to prosperity."
Asia wasn't biting. China and Malaysia both maintain a currency peg, while Japan, Taiwan, Hong Kong, and others intervene in the markets to maintain currency stability. The joint APEC ministerial statement at the end of the two-day conference stressed regional reform, but called for "appropriate exchange rate policies that facilitate orderly and balanced external adjustment." While referring to Snow's demands as "a view expressed at the meeting that more flexible exchange-rate management" was the best approach, the communiqué concludes that "there is no single exchange-rate regime that suits all economies at all times."
Chinese Vice Finance Minister Lou Jiwei said, "I'm very satisfied with the joint ministerial statement."
Taliban Widens Area of Conflict in Afghanistan
Under intense attack from American bombers and artillery in Zabul Province in southern Afghanistan, Taliban militia and their friends have opened new fronts. On Sept. 2, some Afghan rebels attacked a road construction crew on the Kabul-Kandhar Road, about 60 miles north of Kandahar, according to AFP. The project was handled by the New Jersey-based highway design and construction firm, the Louis Berger Group. A vehicle belonging to the Louis Berger Group got destroyed by a rocket-propelled grenade (RPG) and four got killed. The rebels, who are suspected to be Taliban, kidnapped four crew members. This is the first time the Louis Berger Group has come under fire.
Meanwhile, the U.S. has restricted the travel of its diplomats in Kabul and warned U.S. citizens in Afghanistan of ongoing security threats in the country. The restriction went into effect on Sept. 1.
Is Karzai Talking to the Taliban?
Despite denials by a spokesman for the government of Hamid Karzai in Kabul, both the AFP and the Afghan Islamic Press reported Sept. 1 that Afghan President Karzai has sent a senior Afghan government official, Abdul Rahman Hotak, to meet with Taliban officials in several parts of the troubled southern province of Zabul. The report came as the Afghan forces, supported by U.S. troops and aircraft, were engaged in a major operation against suspected Taliban and al-Qaeda bases in the mountains of Dai Chupan district of Zabul, 190 miles southwest of Kabul.
The subject of discussion is a ceasefire. "We have started negotiations because the Karzai government believes in resolving problems through peaceful dialogue," Hotak told the AFP. Describing the talks as positive, he said the Taliban in Atghar District of Zabul Province have promised that "in case of a successful dialogue they would not take any step against government." Similar negotiations for a peaceful settlement were also underway in other provincial districts of Shenkay, Syori and Naubahar, AFP was told.
If true, this is the first time since the fall of the Taliban in 2001 that the Afghan government has negotiated a ceasefire with Taliban militia, and is reminiscent of the legendary commander Ahmed Shah Massoud, who negotiated seven ceasefires with the Soviets during 1980-88.
Internal Changes in Myanmar Government: Efforts To End Country's Isolation?
The hard-line head of the Myanmar junta was eased upstairs on Aug. 26, with the moderate Gen. Khin Nyunt taking over as Prime Minister, according to Irrawadi of Myanmar. General Than Shwe has relinquished his position as Prime Minister to the intelligence chief, Khin Nyunt, while retaining the position of head of state. Than Shwe had been the most isolationist of the State Peace and Development Council (SPDCthe junta), and was viewed by many as an impediment to resolving the internal crisis, where opposition leader Aung San Suu Kyi is still in custody. Khin Nyunt, who has handled most of the important diplomatic work, has also met with Suu Kyi several times.
A Washington expert on Myanmar who has remained close to both sides of the political division there, and who just returned from a visit to Yangon, told EIR before his trip that he and others were encouraging precisely such a move, as a precondition for a solution to the isolation of the country and to unblock the internal situation.
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