Asia News Digest
Malaysia May De-Link Ringgit from U.S. Dollar
Malaysia is considering de-linking its currency, the ringgit, from the dollar if the U.S. currency continues to decline, the Malaysia Star reported Jan. 21. The "breaking point" that would trigger a review of the currency peg to the U.S. dollar has gotten close, the Malaysian Institute of Economic Research (MIER) said on Jan. 20. The think tank's executive director, Dr. Mohammad Ariff Abdul Kareem, said this point could be reached before the end of the year, especially if the Chinese yuan is re-valued upward, or if the euro continues to get stronger vis-à-vis the dollar. He said the "breaking-point indicators" would include the euro hitting US$1.40 or the dollar falling below 100 yen.
The ringgit, which has been pegged at 3.80 to the dollar since September 1998, when former Prime Minister Mahathir bin Mohammad shut down George Soros and his speculator-allies by imposing currency controls, is estimated by some economists to be some 15-25% undervalued, and has been depreciating against other world currencies in tandem with the dollar.
Ariff challenged the notion that a weak ringgit was generally good for the economy, since Malaysia is less dependent now on exports, and the auto industry is facing problems of rising production costs due to its high imported content. It is not clear whether Malaysia would re-peg the ringgit to the dollar, or to a basket of currencies, as has been discussed in China.
China Cannot Finance U.S. Economy Forever
A senior banker from the People's Republic of China, Zhu Min, who is general manager and advisor to the President for the Bank of China, China's largest and oldest foreign-exchange bank, made a very stark statement at the Davos meeting of the World Economic Forum on Jan. 22, reported China Daily on Jan. 23.
"All the Asian countries hold dollars for security reasons, but at some point this has to end," Zhu Min said. "There is a love affair. But everybody knows that this love affair has to end."
The United States is benefitting from China using its trade surplus to buy U.S. Treasury paper as a reserve currency, along with other Asian nations, China Daily cited Zhu Min saying. But in the long run, he said, this is not sustainable.
"China will focus more and more on domestic demand, which is growing fast. Then it won't be able to finance the U.S. deficit," Zhu Min said. "We cannot keep exporting our goods at a growth rate of 30%. That's too much."
Zhu Min also made it clear that China would not be making a "shock therapy" revaluation of its currency, the renminbi. As China Daily noted, a group of U.S. Senators wanted U.S. Vice President Dick Cheney at Davos to pressure China to relent on its fixed currency.
U.S. Bombing Kills 11 Afghans, Mostly Women and Children
Reports indicate a U.S air raid, carried out on the village of Sawghataq in the district of Charcheno in the central Afghan province of Uruzgan on Jan. 18, killed 11 civilians, including four children and three women. The U.S. military spokesman has denied the deaths of children, but said the air raid killed five Taliban suspects.
Soon after the bombing raid was carried out, American soldiers came under attack at their base in the district of Deh Rawood in Uruzgan province. Fifteen attackers allegedly fired assault rifles and rocket-propelled grenades, which wounded three American soldiers. The attack was considered a retaliatory action by the anti-U.S. Taliban militia, which remains strong in Uruzgan.
Despite the U.S. denial, the governor of Uruzgan province, Jan Mohammad Khan told the BBC on Jan. 19, that the U.S. forces had spotted ammunition in one home during their routine search of the village, and it was that home that was struck by the Air Force at 4 a.m. on Jan. 18. "They were simple villagers, they were not Taliban," the Governor told BBC about the victims.
NATO Under Pressure To Expand Afghanistan Operations
Contrary to President Bush's statements in his Jan. 20 State of the Union message about stabilization of Afghanistan, things remain dangerous and highly unstable, and the NATO brass know most of it by now.
A resurgence of attacks by the Taliban militia in the lawless provinces outside Kabul has cast doubts in the minds of the military experts, over plans for holding the country's first Presidential elections this coming June. The Dawn of Pakistan reported Jan. 20 that military and Afghan officials from Britain, Germany, and the United States were to brief those nations' Ambassadors at NATO headquarters in Brussels Jan. 21, on the Provincial Reconstruction Teams (PRTs) their countries have already set up. The briefing was likely a short one, since NATO, which has 5,700 troops in Afghanistanall of them in Kabulhas succeeded in getting only one PRT of 170 German troops in the northern Afghan town of Kunduz. Italy said it "plans" to lead another; and Norway is allegedly looking to see where it can set up teams in collaboration with Sweden. Hopes are high that Finland and Britain would also send PRTs.
Meanwhile, the first contingent of 125 soldiers from Canada's CFB Valcartier left for Kabul to join the International Security Assistance Forces (ISAF) on Jan. 20. ISAF consists of 39 countries, including the NATO countries, and the ISAF troops are now under NATO supervision.
Indian Kashmiri Group Calls for End to Violence
The Indian-held part of Kashmir's main political separatist grouping, the All-Party Hurriyat Conference (APHC), and the Indian Deputy Prime Minister, L.K. Advani, on Jan. 22 jointly urged an end to violence in Kashmir. Advani was meeting the APHC leaders and the statement was issued after the very first meeting.
The unprecedented meeting took place two weeks after India and Pakistan had agreed to resume bilateral talks in February, to discuss a range of disputes, including Kashmir, which lies at the heart of more than five decades of enmity, and has been the cause of two wars between India and Pakistan.
"The Hurriyat delegation stressed that an honorable and durable solution should be found through dialogue," said Abdul Ghani Bhatt, a senior Hurriyat official, reading to reporters from the joint statement. "It was agreed that the only way forward is to ensure that all forms of violence, at all levels, should come to an end," he said, adding that further talks would be held in March.
APHC, a fractious grouping of two dozen political, religious, and community groups, is known to have contacts with armed militants operating within the India-held part of Kashmir. Indian intelligence sources point out that the APHC does not have control over these terrorists, many of whom come from Pakistan, crossing the Line of Control.
China Faces Huge 'Re-Employment' Challenge
Some 3 million workers will be laid off from China's state-run industries over the next three years. Re-employment agencies, set up beginning in 1998 to help laid-off industrial workers find new jobs, will also be closed by 2005, Xinhua reported recently. Re-employment is a big challenge, China's Labor Minister Zhang Silin said, even if the restructuring of state-owned industries is completed by 2006. There are still 2.7 million laid-off workers who have not found new jobs, and additional layoffs will continue, he said. Some 4 million laid-off workers did find new jobs last year, Zhang reported.
Since China established the re-employment agencies, some 27.8 million state-industry employees have lost their jobs. These workers are not included in official unemployment figures, since they get government stipends, however inadequate.
In addition, China has to generate 24 million new jobs in 2004, just to absorb this year's school graduates, who are entering the work force, and the "surplus" rural workers who leave the countryside for the cities. This level of employment pressure will continue in China for the next 20 to 30 years.
Norwegian Diplomat Sent Packing for Collusion with Tigers
The head of the Norwegian ceasefire monitoring mission in Sri Lanka, Maj. Gen. Tryggve Telefsen, has been replaced by another Norwegian, Gen. Trond Furuhovde. Tellefsen had left Sri Lanka last October, after President Chnadrika Kumaratunga's party, The People's Alliance, had complained about Tellefsen's collusion with the rebel Tamil Tigers. The complaint, brought up in the Sri Lankan Parliament, said Tellefsen had tipped off the Sea Tigersthe illegal naval force run by the Tamil Tigersand thus prevented interception of one of the rebel ships by the Sri Lankan Navy.
Subsequently, the Norwegian Deputy Foreign Minister Vidar Helgesen, under pressure from Colombo, sent Tellefsen back to Oslo, but did not replace him. Helgesen, who was under pressure from the Tigers to keep Tellefsen as head of the monitoring mission, told reporters in Oslo Jan. 17 that sending Tellefsen back to Colombo "could have been interpreted as taking sides in a particular political crisis."
One part of the "crisis" Helgesen referred to, is the power struggle between President Kumaratunga (who has made it clear that the peace talks, carried out under the guidance of the Norwegians and Prime Minister Ranil Wickremesinghe, were designed to favor the Tamil Tigers), and the Sri Lankan Premier, who was agreeing fully to the Norwegian initiative, and who believes that President Kumaratunga has undermined the talks by her actions.
The other part of the "crisis," is the threats issued by the Tigers, since talks were put on hold last month. The Tigers are threatening that unless the talks start immediately, the fragile ceasefire may break down, starting an all-out war between the Tigers and the Sri Lankan military.
Myanmar Reaches Ceasefire Accord with Karen Rebels
Following six days of talks, on Jan. 22, Myanmar's ruling State Peace and Development Council and the Karen National Union (KNU) have agreed to a ceasefire accord, which signals the end of over 50 years of conflict between the government and the largest ethnic insurgent faction, since independence was declared in the late 1940s.
"The government of Myanmar and the Karen National Union (KNU) reached mutual understanding this week, successfully ending more than five decades of conflict and agreeing to work together for national unity, solidarity of the nation, and peace and prosperity for all the people of Myanmar," both parties said in a statement. A 21-member delegation led by General Bo Mya, military commander of the KNU, left Yangon on Jan. 22.
The agreement is less formal than similar deals forged with 17 ethnic "ceasefire groups," who were required to reveal troop strengths and weapons capabilities, as well as agree to operate only in specific regions. Myanmar's ruling junta reported in its statement that a banquet was held Jan. 20 to jointly mark the outcome of talks and "to honor" KNU Military Chief Bo Mya, who turned 77 on the same day.
The KNU, which has waged one of the world's longest-running rebel insurgencies, said that when its leaders returned to their base along the Thai-Myanmar border, they would verify whether the ceasefire was holding, before restarting contacts in a month's time.
|