Here is the Monday, January 11th, 2010 edition of what’s making news and interesting reads from around the world. Also please note that off to the left there are two widgets with updates on news from Asia and the world in a separate page: Around Asia & Around the World New Feeds.

Venezuela’s Two-Tiered Devaluation
On Friday after markets had closed, President Hugo Chávez “adjusted” the value of Venezuela’s currency, the bolívar. The bolívar had been fixed at 2.15 to the dollar since 2005 as part of Chávez’s strict controls of Venezuela’s economy in line with his “21st century socialism” policies. But Chávez, in a live address on state TV, said the bolivar would now have two levels — a preferential rate of 2.6 per dollar for essential imports like food, health and machinery and a 4.3 “petro-dollar” rate for other things. The bond market is likely to react positively to the news but the move is likely to spur inflation in Venezuela, already the highest in Latin America. To combat rising prices, Chávez has threatened to expropriate any business that raises its prices.

Venezuela last devalued its currency in 2005, to 2,150 bolivars per dollar from 1,920 bolivars. In 2008, it re-denominated the currency, lopping off three digits. Venezuela’s economy is estimated to have shrunk 2.9 percent in 2009.

The other aspect worth noting is that multi-tiered exchange rate tend to spur corruption and Venezuela has under Chávez descended to the ranks of one of the world’s most corrupt countries. When Transparency International, an NGO that tracks governance issues, first reported its Corruption Perception Index in 2001, Venezuela ranked 69th in a list of 91 countries — or at the bottom 25th percentile of the world’s most corrupt countries. In 2009, Venezuela ranked 162 in the list of 180 countries, or in the 10th percentile of the world’s most corrupt.

A New Institutional Crisis in Argentina
After Argentine President Cristina Fernández de Kirchner removed the President of the Central Bank, Martín Redrado, by decree, the Congress moved to reinstate him plunging the country into another political showdown. The unprecedented confrontation, which could end up before the Supreme Court, has brought to a head a fight over a bid by the president to use central bank reserves to pay down the national debt. Federal Judge María José Sarmiento will examine the government’s appeal of her decision to temporarily suspend a government decree that removed central bank president Martin Redrado from office after he refused to let the reserves be used for debt payments.

Sarmiento has two days to decide whether to accept the appeal lodged by the government on Saturday. If she rejects it, the government can go to the Supreme Court for an urgent decision to resolve an institutional conflict that could threaten Argentina’s fragile economy.

North Korea Seek Peace Treaty with the US
The New York Times reports that North Korea has proposed talks with the United States to reach a formal peace treaty that would replace the truce that ended the Korean War 57 years ago, indicating it would not give up its nuclear weapons until Washington signed such an agreement.

Social Democrat Ivo Josipovic Scores Decisive Win in Croatia
In Croatia’s presidential elections on Sunday, a left of centre Social Democrat, Ivo Josipovic, took just over 60 percent of the vote. Croatia has mixed parliamentary/presidential system with the Prime Minister governing day-to-day affairs but with the President serving as Commander-in-Chief of the armed forces and conducting foreign policy. More from the EU Observer:

Social Democrat law professor and classical music composer Ivo Josipovic won Croatia’s presidential elections on Sunday (10 January), pledging to back the centre-right government’s efforts against corruption on the path to EU accession.

Mr Josipovic won the vote by a sweeping 60.2 percent against his populist rival, Milan Bandic, according to official results out on Monday. The former chairman of the Croatian composers’ society compared the event to a “victorious symphony.”

Despite being from rival political camps, Mr Josipovic promised to back the centre-right Prime Minister Jadranka Kosor’s drive to implement reforms and fight corruption, as required by Brussels to complete EU accession talks.

South Korea Emerges as Nuclear Power Giant
South Korea’s unprecedented acquisition of a US$20.4 billion contract to develop nuclear power plants for the United Arab Emirates is fueling hopes of at least short-term economic development with regard to nuclear energy-related industries. The acquisition of the contract also marks the beginning of a new relationship with the United States over nuclear power. The largest single construction contact Seoul has ever won, it makes South Korea the world’s sixth exporter of nuclear plants. The Asia Sentinel profiles South Korea’s emergence in the nuclear power industry.

EU Railroad Market Deregulation Sets Stage For a Clash of Titans
As of the first of the year, long-distance passenger rail services are completely deregulated within the EU. Der Spiegel looks at the brewing battle between Germany’s Deutsche Bahn and France’s SNCF for the long distance rail market. It’s a clash of titans. Deutsche Bahn, a joint stock company fully owned by the German government, has long claimed to be Europe’s foremost rail transport company but France’s state-owned SNCF is looking to challenge its German rival. Deutsche Bahn generates about €33.5 billion ($48.5 billion) in sales annually, while SNCF brings in around €25 billion. Deutsche Bahn carries approximately two billion passengers each year.

Return to Main

Here is the Friday, January 8th, 2010 edition of what’s making news and interesting reads from around the world. Also please note that off to the left there are two widgets with updates on news from Asia and the world in a separate page: Around Asia & Around the World New Feeds.

Lashkar-e-Taiba Attack in Jammu & Kashmir
Indian authorities have killed one Lashkar-e-Taiba terrorist in a protracted 22-hour gun battle in Jammu & Kashmir. As many as ten others, including one Indian policeman, have been injured in the second incident in as many days in the restive Indian state. The story in the Times of India. Lashkar-e-Taiba was responsible for the attack on Mumbai in November 2008 and the organization has deep ties to Pakistan’s ISI.

Argentina Central Bank President Removed By Cristina Fernández de Kirchner
A week-long stand-off between Argentine President Cristina Fernández de Kirchner and Martin Redrado, the President of Central Bank of Argentina, grew worse on Thursday. Issuing a decree, President Fernández de Kirchner removed Mr. Redrado from his post citing “misconduct and dereliction of duty by a public servant.” Earlier this week, President Fernández de Kirchner announced she had accepted Redrado’s resignation after the bank chief declined to support a plan to use $6.5 billion in reserves to pay the country’s debt. Redrado retorted that he had not resigned, and that only the Congress, not the president, could remove him. Opposition politicians advised Redrado not to abide by the decree and to seek an injunction to protect his rights. The move is likely to provoke a showdown between the President and the Argentine Congress. More from Bloomberg.

Turkmenistan Gas and an Emerging Economic Axis in Central Asia
The Asia Times reports how Russia, China and Iran are quietly tapping the vast natural gas in Turkmenistan for their benefit and in the process cementing a new economic axis in Central Asia.

We are witnessing a new pattern of energy cooperation at the regional level that dispenses with Big Oil. Russia traditionally takes the lead. China and Iran follow the example. Russia, Iran and Turkmenistan hold respectively the world’s largest, second-largest and fourth-largest gas reserves. And China will be consumer par excellence in this century. The matter is of profound consequence to the US global strategy.

The Turkmen-Iranian pipeline mocks the US’s Iran policy. The US is threatening Iran with new sanctions and claims Tehran is “increasingly isolated”. But Mahmud Ahmadinejad’s presidential jet winds its way through a Central Asian tour and lands in Ashgabat for a red-carpet welcome by his Turkmen counterpart, Gurbanguly Berdymukhammedov, and a new economic axis emerges. Washington’s coercive diplomacy hasn’t worked. Turkmenistan, with a gross domestic product of US$18.3 billion, defied the sole superpower (GDP of $14.2 trillion) – and, worse still, made it look routine.

Seven Militants Killed in Karachi
Seven suspected militants were killed on Friday when explosives being stored in a hideout in the Pakistani city of Karachi were apparently detonated accidentally according to police in Pakistan. The full story from Al Jazeera.

Scores Dead in Tribal Clashes in South Sudan
At least 139 people have been killed in tribal clashes following a cattle raid in southern Sudan, local government officials said. Armed attackers from the Nuer tribe raided Dinka cattle herders in the remote Tonj area in Warrap state on Saturday, seizing 5,000 animals. Violence between the Nuer and Dinka tribes has been increasing in recent weeks ahead of the independence referendum scheduled for next year. More from Al Jazeera.

Religious Violence Flares in Malaysia
Two Malaysian churches have been attacked, leaving one badly damaged, in an escalating dispute over the use of the word Allah by non-Muslims. From the Jakarta Post:

The attacks sharply escalated tensions in the Muslim-majority country ahead of planned protests later Friday against a Kuala Lumpur High Court verdict which struck down a 3-year-old ban on non-Muslims using “Allah” in their literature.

The Dec. 31 court decision incensed many Muslims, who see it as a threat to their religion. Hateful comments and threats against Christians have been posted widely on the Internet, but this is the first time the controversy has turned destructive.

The ruling was on a petition by the Herald, the main publication of Malaysia’s Roman Catholic Church, which uses the word Allah in its Malay-language edition.

Only the first floor office in the three-story Metro Tabernacle Church was destroyed in the pre-dawn blaze, said Kevin Ang, a spokesman for the Protestant church. The worship areas on the upper two floors were undamaged and there were no injuries.

He quoted a witness as saying she saw three or four men on a motorcycle break the main glass front of the church and throw a gasoline bomb inside. The church occupies a corner plot in a row of shops in Desa Melawati, a suburb of Kuala Lumpur.

Separately, a Molotov cocktail was thrown into the compound of a Roman Catholic church before dawn Friday but caused no damage or injuries, said the Rev. Lawrence Andrew, the editor of the Herald.

Andrew said most churches have employed extra security guards amid the protest threats. “Most churches are taking precautions. They are aware it may just blow up,” he said.

The government has appealed the court verdict and the High Court has suspended its decision’s implementation until the appeal is heard.

Muslims argue that “Allah” is exclusive to Islam, and its use by Christians would confuse Muslims and tempt them to convert to Christianity.

Return to Main

Here is the Wednesday, January 6th, 2010 edition of what’s making news and interesting reads from around the world. Also please note that off to the left there are two widgets with updates on news from Asia and the world in a separate page: Around Asia & Around the World New Feeds.

Obama Administration Halts Release of Yemeni Detainees at Guantánamo
The Obama administration said Tuesday that it is suspending the repatriation of detainees held at Guantánamo Bay to Yemen, where a deteriorating security situation driven by a branch of al-Qaeda has stoked fears that detainees could join up with the radical Islamist group. The decision affects at least 30 Yemenis who had been cleared for release by a Justice Department-led inter-agency review. These individual now face many more months in detention. More from the Los Angeles Times.

DEA: “Unholy Alliance” between the FARC and Al-Qaeda
Jay Bergman, DEA director for the Andean region of South America, has said in an interview with Reuters that the FARC and other Colombian guerrillas have entered into “an unholy alliance” with Islamic extremists including Al Qaeda who are helping the Colombian rebels smuggle cocaine via Venezuela through Africa on its way to European consumers.

Interdiction efforts have made it more difficult to send cocaine straight from Colombia and other Andean producer nations to the United States and Europe.

So criminal organizations including the Revolutionary Armed Forces of Colombia, or FARC, are going through Africa to access the European market. And they are doing it with the help of al Qaeda and other groups branded terrorists by Washington, according to the U.S. Drug Enforcement Administration.

“In the mid to late 1990s when the Europeans became better at maritime interdiction, off the coasts of Portugal and Spain for example, traffickers started moving their routes southward. So the next progression was to Western Africa,” said Jay Bergman, DEA director for the Andean region of South America.

Three West African men accused of ties to al Qaeda were extradited to New York in December on drug trafficking and terrorism charges.
It was the first time U.S. authorities established a link suggesting al Qaeda is funding itself in part by providing security for drug smugglers in West Africa.

“As suggested by the recent arrest of three alleged al Qaeda operatives, the expansion of cocaine trafficking through West Africa has provided the venue for an unholy alliance between South American narco-terrorists and Islamic extremists,” Bergman said in an interview over the weekend.
To reach the U.S. market, Colombian smugglers are meanwhile being driven to use disposable, fiberglass submarines. The homemade craft are constructed in the mangroves of Colombia’s Pacific coast, used to carry drugs to Mexico for transshipment to the United States, then sunk.

All big Colombian trafficking groups, including the 45-year-old FARC, are using Africa to reach European cocaine consumers while Mexican cartels import chemicals used to make methamphetamine via the same route, Bergman said.

“For trafficking organizations to survive, they first and foremost have to be flexible and make adjustments quickly to law enforcement efforts,” he added.

“West Africa is that current alternative.”

When sea interdictions stepped up, traffickers started using planes to get cocaine to Africa. Most flights appear to take off from Venezuela, which shares a border with Colombia.

“All of the aircraft seizures that have been made in West Africa, and we’ve made about a half a dozen of them, had departed from Venezuela. If you look at the range and refueling requirements, that’s the place you have to fly from,” he said.

“Geography is the key reason why Venezuela has become a springboard location,” Bergman added.

€30 Billion Green Energy Project in Europe
Nine countries in northern Europe are hoping to boost renewable energies by creating a new grid to balance out weather-related fluctuations. More from Der Spiegel.

China Tightens Its Rare Earth Mineral Trade
China’s Ministry of Industry and Information Technology (MIIT) has announced that it will create a reserve for rare earth metals next year. The announcement of the intention of its department of raw materials director, Chen Yanhai, only wriggled its way out of an obscure conference by reports in the People’s Daily. This comes on the back of a report released in August by the ministry called the ‘Rare Earths Industry Development Plan 2009-2015′, which called for greater controls over their sale and development.

Rare Earth Minerals (REM) are a class of 30 minerals, 17 of which are considered critical in the development of low-carbon technology from wind-turbines to hybrid car batteries and much else in between and so any debate that followed MIIT’s published plan might be expected to be animated. The story in the Asia Sentinel.

Latest Suicide Bombing Attack in Pakistan Kills Three
Three security officials were killed and eleven other injured as the suicide attackers tried to hit an army barrack in Tarar Khel in Rawlakot area of Azad Kashmir. The story from The Nation.

TIAA-CREF Divests from Sudanese Investments
TIAA-CREF (Teachers Insurance and Annuity Association – College Retirement Equities Fund), one of the largest money managers in the United States, has divested itself of its equity stakes in four East Asian energy firms – PetroChina, CNPC Hong Kong, Oil and Natural Gas Corporation and Sinopec – over their business ties to the Sudan. The firm, however, decided to maintain its stake in PETRONAS citing progress in on-going talks with the firm over their ties to the Sudan. The TIAA-CREF press release courtesy of All Africa.

Return to Main

Here is the Monday, January 4th, 2010 edition of what’s making news and interesting reads from around the world. Also please note that off to the left there are two widgets with updates on news from Asia and the world in a separate page: Around Asia & Around the World New Feeds.

Japanese PM Hatoyama Wants a More Equal Relationship with the US
Prime Minister Yukio Hatoyama of Japan said Monday he wants to press for more equal ties with the United States. In a televised speech on New Year’s Day, PM Hatoyama said it is important “for both sides to be able to firmly say what needs to be said, and increase the relationship of trust.”

Hatoyama also reiterated his determination to find a mutually acceptable solution to a row with the United States over the relocation of a U.S. Marine base on the southern island of Okinawa within the space of several months. Not only are Okinawans opposed to a plan to move the Futenma base to a different part of the island, but the tiny pacifist Social Democratic Party has threatened to leave Hatoyama’s ruling coalition if the plan goes ahead unchanged. More from Agence France Presse.

Abbas Visits Hosni Mubarak in Sharm el-Sheikh
The President of the Palestinian Authority Mahmoud Abbas will visit with Egyptian Hosni Murbarak on Monday in the resort town of Sharm el-Sheikh on the tip of the Sinai peninsula. It is expected that President Mubarak will encourage the Palestinian leader to restart peace talks with Israel. On Sunday, the Qatar-based news network Al-Jazeera reported that Obama’s administration supported Egypt’s vision for a Middle East peace plan that would include a complete halt of construction in West Bank settlements as well as the release of senior Palestinian officials from Israeli prisons. More this part of story in Haaretz.

The other relevant development is that Egypt and Saudi Arabia have quietly working behind the scenes to effect a reconciliation between the Hamas and Fatah. Hamas and Fatah have been feuding since March 2007 when Hamas took over control of the Gaza Strip. More on the joint Egyptian-Saudi diplomatic effort from Al Jazeera.

Gordon Brown Bets £100 Billion on Wind
British Prime Minister Gordon Brown will launch a £100 billion green power revolution when he awards a raft of development contracts to build a new generation of offshore wind farms. The hope is to provide at least a third of the UK’s energy from wind power by 2020. The plan is also critical component of Brown’s plan to cut British carbon emissions. The full story in the Times of London.

US Lifts HIV Travel Ban
The US has lifted a 22-year immigration ban which has stopped anyone with HIV/Aids from entering the country. President Obama had said when he announced the lifting of the ban that such a restriction was not compatible with US plans to be a leader in the fight against the disease. The new rules come into force on Monday and the US plans to host a bi-annual global HIV/Aids summit for the first time in 2012. More from the BBC.

South Korean Firms Win UAE Nuclear Deal
Nuclear Power Daily reports that South Korea won a landmark deal to build four nuclear reactors in the United Arab Emirates. A South Korea-led consortium beat U.S. and French rivals and clinched a $40 billion deal to build and operate four nuclear power plants in the United Arab Emirates, in one of the world’s biggest nuclear power contracts, Seoul’s energy and industry ministry said Monday. The deal marks South Korea’s first export of a nuclear power plant and its single largest overseas construction project in terms of value, it said. With the deal, South Korea becomes the world’s sixth exporter of nuclear power plants.

Angola’s State Oil Company Wins Rights to Develop Two Iraqi Oil Fields
Energy Daily reported that Angola’s state oil company, Sociedade Nacional de Combustiveis de Angola (Sonangol), had won the rights to develop the Qayara and Najmah fields, which between them contain an estimated 1.66 billion barrels of oil, in Nineveh province. The agreement is a 20-year deal.

It’s a remarkable development when you think of it. Previously, most oil development projects were the province of major oil companies in the United States, Britain, the Netherlands, France, and Italy but now Angola, which recently became Africa’s largest oil produce,r is making a bid to become a global player in the energy field. Sonangol is a parastatal firm. Sonangol said the move to drill abroad was part of a strategy to bolster Angola’s global image. The oil company is also eyeing exploration opportunities in Brazil, Ecuador and the tiny African island state of São Tomé and Príncipe.

Return to Main

Here is the Sunday, January 3rd, 2010 edition of what’s making news and interesting reads from around the world. Also please note that off to the left there are two widgets with updates on news from Asia and the world in a separate page: Around Asia & Around the World New Feeds.

Former Head of Pakistan’s ISI Blames Foreign Agents for Suicide Attacks
As Pakistan recovers from the latest suicide bomber terrorist attack that left over four score dead at a volleyball match, a former Director General of Pakistan’s vaunted Inter-Services Intelligence (ISI) is blaming foreign agents as the culprits behind the attacks. According to The Nation, Lt. General (r) Hameed Gul said that those involved in suicide attacks in Pakistan are not real Taliban rather they are agents of India, Israel, and the United States. Lt. General Hameed Gul went to blame the United States and India for the increasing unrest in Balochistan, the large and mineral rich but sparsely populated province that borders both Iran and Afghanistan. Lt. General Gul has always been a bit of loose canon. In 2001, he suggested that Osama bin Laden was not behind the September 11th attacks. In return US intelligence has long accused Lt. General Gul of maintaining extensive contacts with both Afghani Taliban and al-Qaeda operatives located in Pakistan, providing financial support and encouragement to these groups

In other news from the Land of the Pure, a shutdown strike brought Karachi, the commercial capital of the country, to a standstill on Friday in protest against violence after a suicide bomber killed 44 Shi’ites in Ashura procession on the 10th of Muharram. Pakistan is a largely Sunni nation.

Atheists Challenging Ireland’s Restrictive Blasphemy Law
Atheists in the Republic of Ireland, one of Europe’s most religious countries, are challenging a new blasphemy law that took effect on January 1st, 2010. Under the law, a person can be found guilty of blasphemy if “he or she publishes or utters matter that is grossly abusive or insulting in relation to matters held sacred by any religion, thereby causing outrage among a substantial number of the adherents of that religion.”

Blasphemy was already a criminal offense in Ireland under the 1937 Irish constitution. The Irish constitution begins with the words “In the Name of the Most Holy Trinity.” But until now, the language against blasphemy had been too murky to make prosecutions feasible.

Now an Irish atheist group called Atheist Irleand has published a series of 25 quotations on religion in an attempt to challenge the law. Among the 25 quotations are quotes from Mark Twain, the Icelandic singer Björk, Salman Rushdie, Frank Zappa, Richard Dawkins, and Pope Benedict XVI.

General Petraeus in Yemen
US General David Petraeus, the head of the US Central Command, flew to Sana’a, the capital of Yemen to meet with President Ali Abdullah Saleh. According to US officials, the talks will focus on strengthening security, military and economic cooperation between the two countries. General Petraeus also delivered a letter from President Obama.

The US is expected to more than double its $70 million annual security assistance to Yemen which is facing a Shi’ite rebellion in the north and a separatist movement in the south centered on the strategic port of Aden. Yemen was two countries until 1990 and the south last attempted to secede in a short but nasty civil war in 1994.

The New York Times offers background on the current chaos in Yemen while the BBC covers the visit of General Petraeus to Yemen.

Sierra Leone: A Political Debate in Song
The Los Angeles Times has a story that looks a musical back and forth between two of the West African country’s musical stars debating the state of the country. One artist Emmerson Bockarie had penned a song earlier this year critical of the current President Ernest Bai Koroma. But now another Sierra Leone singer Prince Kuti-George, better known as Innocent, has answered back with a song entitled “Leh Wi Gi Dem Chance” — “Let’s Give Them a Chance” — suggesting the Koroma administration deserves more time to prove itself.

Return to Main

Here is the Saturday, January 2nd, 2010 edition of what’s making news and interesting reads from around the world. Also please note that off to the left there are two widgets with updates on news from Asia and the world in a separate page: Around Asia & Around the World New Feeds.

Mexico’s Year of Living Dangerously
It’s the quiet war right next door. Drug violence claimed the lives of an estimated 7,600 people in Mexico in 2009 surpassing the record set in 2008 of 6,500 drug-related victims. Since President Felipe Calderón took office in December 2006, over 15,000 have died in the spiraling violence. The violence was most acute in Ciudad Juárez, across the Rio Grande border from El Paso, with an estimated 2,575 slayings in the city in 2009 versus an estimated 1,600 homicides in 2008.

A week before Christmas, Mexican Navy special forces killed Arturo Beltrán Leyva, one of the country’s most wanted drug lords, in a shootout in the well-to-do resort of Cuernavaca , notching an important victory in President Calderón’s three-year-old battle against the drug cartels. Four other suspected drug traffickers died, including one who apparently killed himself rather than be arrested. One Mexican Navy officer, Ensign Melquisedet Angulo Córdova was killed. The day after his funeral, Gunmen broke into his mother’s home of and gunned down his mother, brother, sister, and an aunt in a reprisal killing that shocked the country. One thing that we learned in Colombia is that you never ever publish the names of fallen heroes.

More on Mexico’s year of living dangerously at CNN and from the The Newshour with Jim Lehrer.

US Intelligence Believes Peter Moore Was Held in Iran
General David Petraeus, the head of US central command, confirmed the US intelligence assessment that Peter Moore, a British citizen had been working for US management consultancy Bearingpoint in Iraq when he was kidnapped in 2007 along with four bodyguards, spent at least part of his 31 months in confinement in Iran. The British newspaper The Guardian had reported on Wednesday that evidence suggested that the five British men kidnapped in Iraq were taken in an operation led and masterminded by Iran’s Revolutionary Guard.

The British Foreign Office has repeatedly said that there is no evidence that Peter Moore was ever held inside Iran, dismissing the report in The Guardian as “speculation”. But General Petraeus flatly contradicted the official British view at a Baghdad press conference. US intelligence believes that the Britons were incarcerated in prisons run by the al-Quds force, a unit that specialises in foreign operations on behalf of the Iranian government.

An Oil Tanker Super Glut Stretches 26-Miles
Bloomberg reports that “a 26-mile-long line of idled oil tankers, enough to blockade the English Channel, may signal a 25 percent slump in freight rates next year.”

The ships will unload 26 percent of the crude and oil products they are storing in six months, adding to vessel supply and pushing rates for supertankers down to an average of $30,000 a day next year, compared with $40,212 now, according to the median estimate in a Bloomberg News survey of 15 analysts, traders and shipbrokers. That’s below what Frontline Ltd., the biggest operator of the ships, says it needs to break even.

Traders booked a record number of ships for storage this year, seeking to profit from longer-dated energy futures trading at a premium to contracts for immediate delivery, according to SSY Consultancy & Research Ltd., a unit of the world’s second- largest shipbroker. Ships taken out of that trade would return to compete for cargoes just as deliveries from shipyards’ largest-ever order book swell the global fleet.

“The tanker market has been defying gravity,” said Martin Stopford, a London-based director at Clarkson Plc, the world’s largest shipbroker. Stopford has covered shipping since 1971.

More than half of the ships are in European waters, with the rest spread out across Asia, the U.S. and West Africa. Lined up end to end, they would stretch for about 26 miles.

Harsh Lessons We May Need to Learn Again
US progressive economist and Nobel Laureate Joseph Stiglitz has an op-ed in the China Daily reflecting on the global economy in 2009 and its prospects for 2010. Professor Stiglitz argues that unless the United States and other advanced industrial countries make much greater progress on financial-sector reforms in 2010, these economies may need to relearn five harsh lessons.

The first lesson is that markets are not self-correcting. Indeed, without adequate regulation, they are prone to excess. In 2009, we again saw why Adam Smith’s invisible hand often appeared invisible: it is not there. The bankers’ pursuit of self-interest (greed) did not lead to the well-being of society; it did not even serve their shareholders and bondholders well. It certainly did not serve homeowners who are losing their homes, workers who have lost their jobs, retirees who have seen their retirement funds vanish, or taxpayers who paid hundreds of billions of dollars to bail out the banks.

The second important lesson involves understanding why markets often do not work the way they are meant to. There are many reasons for market failures. In this case, too-big-to-fail financial institutions had perverse incentives: if they gambled and succeeded, they walked off with the profits; if they lost, the taxpayer would pay. Moreover, when information is imperfect, markets often do not work well – and information imperfections are central in finance. Externalities are pervasive: the failure of one bank imposed costs on others, and failures in the financial system imposed costs on taxpayers and workers all over the world.

The third lesson is that Keynesian policies do work. Countries, like Australia, that implemented large, well-designed stimulus programs early emerged from the crisis faster. Other countries succumbed to the old orthodoxy pushed by the financial wizards who got us into this mess in the first place.

The fourth lesson is that there is more to monetary policy than just fighting inflation. Excessive focus on inflation meant that some central banks ignored what was happening to their financial markets. The costs of mild inflation are miniscule compared to the costs imposed on economies when central banks allow asset bubbles to grow unchecked.

The fifth lesson is that not all innovation leads to a more efficient and productive economy – let alone a better society. Private incentives matter, and if they are not well aligned with social returns, the result can be excessive risk taking, excessively shortsighted behavior, and distorted innovation. For example, while the benefits of many of the financial-engineering innovations of recent years are hard to prove, let alone quantify, the costs associated with them – both economic and social – are apparent and enormous.

The full op-ed is at the link above.

Return to Main

Here is the Friday, January 1st, 2010 edition of what’s making news and interesting reads from around the world. Also please note that off to the left there are two widgets with updates on news from Asia and the world in a separate page: Around Asia & Around the World New Feeds.

Iceland Votes to Repay Billions
Iceland’s parliament narrowly approved by 33 to 30 vote a repayment scheme to pay back 3.4 billion pounds ($5 billion USD) to Britain and the Netherlands after the Icesave bank collapsed in late 2008 in the wake of the global financial crisis. The money will reimburse the British and Dutch governments which stepped in to compensate depositors with Icesave after its parent bank Landsbanki failed last year. The bank’s collapse affected more than 320,000 savers. There has been strong opposition to the measure in Iceland, amid fears the country would not be able to afford repayments. But the leftist government of Prime Minister Jóhanna Sigurðardóttir hopes the move will help boost the country’s bid to join the European Union and repair its battered economy.

Charges Against Five Blackwater Employees Dismissed
A federal judge has dismissed all charges against five Blackwater Worldwide security guards charged in a deadly Baghdad shooting. More from the New York Times.

US Drone Strike in North Waziristan
The second US drone strike in as many days has killed three militants in North Waziristan, part of the Tribal areas of Pakistan. The unmanned US predator drone fired two missiles against a suspected militant hideout in Ghundikala village, 15 kilometres east of Miramshah, the main town of North Waziristan and close to the Afghan border. The story in Pakistan’s Dawn newspaper.

Israeli Settlement Construction Continues Unabated
The Israeli newspaper Haaretz reports that despite a temporary ban on construction in Israeli settlements in the West Bank, hundreds of housing units remain under construction in isolated settlements.

Germany Inc. – A Radical Restructuring Needed
The German news magazine Der Spiegel finds that German economy performed “astonishingly well” against the backdrop of the global financial crisis in 2009. Still the staff writers of Der Spiegel believe that Germany “will need to lay the foundations for a radical restructuring” in 2010 if the country is to ” fend off powerful new competitors from China and India.” They ask if Germany needs a new business model. It’s a question we might ask here in the United States.

DPRK Calls for an End to “The Hostile Relationship”
The New York Times reports that North Korea called for an end to “the hostile relationship” with the United States, issuing a New Year’s message that highlighted the reclusive country’s attempt to readjust the focus of six-party nuclear disarmament talks.

In an editorial carried by its major state media outlets, North Korea said that its consistent stand was “to establish a lasting peace system on the Korean peninsula and make it nuclear-free through dialogue and negotiations.” The editorial added that “the fundamental task for ensuring peace and stability” was “to put an end to the hostile relationship” with the United States.

The sequence of easing tension with Washington, establishing a peace regime and then denuclearizing the Korean peninsula has been shaping up as the North’s policy approach before it re-engages in talks about giving up its nuclear weapons, according to officials and analysts in Seoul.

However, the Korea Times reports that a South Korean think tank published a paper arguing that North Korea may detonate a third nuclear device and provoke border clashes to escalate tension on the Korean Peninsula next year. The Korea Institute for Defense Analyses (KIDA) reported that through a third nuclear test, Pyongyang could show the world that it has no plans to scrap its atomic weapons program. On Thursday, President Lee Myung-bak noted that although there was little progress in inter-Korean relations in 2009, he believe that his government has laid the groundwork for developing relations in a positive direction.

Return to Main

Here is the Tuesday, October 28th, 2008 edition of what’s making news and interesting reads from around the world. Also please note that off to the left there are two widgets with updates on news from Asia and the world in a separate page: Around Asia & Around the World New Feeds.

Follow Up on the US Strike in Syria
The raid into Syria on Sunday was carried out by American Special Operations forces who killed an Iraqi militant and senior Al Qaeda leader responsible for running weapons, money and foreign fighters across the border into Iraq. Syria meanwhile is not amused. Russia and Iran joined in condemning the raid. More from the UK Guardian and from the International Herald Tribune.

Zimbabwe Talks at an Impasse
Thirteen hours of talks between Zimbabwe’s main political parties failed to make meaningful gains and the Southern African Development Community’s Organ on Politics and Security called for an urgent regional meeting. The security organ, known as the troika, urged a wider SADC summit to “further review the current political situation in Zimbabwe as a matter of urgency,” in an e-mailed statement early today. More from Bloomberg News.

Angela Merkel and the Financial Crisis
The financial crisis and the threat of recession are revealing German Chancellor Angela Merkel’s weaknesses and could contribute to a dramatic change in her party’s prospects in next year’s election. The Social Democrats, sensing an opportunity, are already planning their attack. Der Spiegel provides the coverage.

India Seeks A New Strategy in the Race for Oil
Strapped by ever increasing energy shortages, New Delhi is seeking to work out a strategy to take on Chinese companies in winning oil and gas stakes around the world, even as the two emerging economies slug it out to meet burgeoning energy demand. Currently, nearly 70 percent of India’s crude requirements are met by imports, a figure estimated to go up to 90 percent by 2030, unless urgent steps are taken. The story from the Asia Sentinel.

The British Pound in a Free Fall
The pound plummeted close to a six-year low yesterday. The currency’s losses in recent months now mirror its demise after Black Monday in 1992, when John Major pulled Britain out of the exchange-rate mechanism and destroyed the Conservatives’ reputation for economic management. In London the pound hit a low of $1.5280, down from $2.01 three months ago, while shares in British companies tumbled again, leaving the FTSE down 30.77 at 3852.59, its lowest close since the invasion of Iraq in the spring of 2003. More from the Times of London.

Return to Main

Here is the Monday, October 27th, 2008 edition of what’s making news and interesting reads from around the world. Also please note that off to the left there are two widgets with updates on news from Asia and the world in a separate page: Around Asia & Around the World New Feeds.

Asian Markets Open Lower Amid Currency Concerns
Intensely nervous after Friday’s mass sell-offs around the world, Asian stock markets started the week lower Monday, as investors shrugged off a deep cut in South Korea’s interest rates, the Australian central bank’s announcement that it had intervened in the currency markets and the Japanese government’s proposed supportive measures. More from the New York Times.

IMF Rescue Plan for the Ukraine and Hungary
Seeking to combat a spreading global financial crisis, the International Monetary Fund said Sunday it had reached a tentative agreement to provide Ukraine with $16.5 billion in loans and announced that emergency assistance for Hungary had cleared a key hurdle. The full story from the Washington Post.

Lithuanian Elections
The Baltic Republic of Lithuania went to the polls on Sunday. The centre-right conservative opposition in Lithuania has come first in a parliamentary election but faces a tough challenge to form a coaltion government. The leader of the Homeland Union, Andrius Kubilis, a former prime minister, is hoping for a best case scenario coalition majority of 79 seats. More from Euro News.

Syria Reserves the Right to Respond to US Attack
A Syrian diplomat called a U.S. helicopter strike on a Syrian village near the border with Iraq on Sunday an “outrageous crime,” adding that Syria reserves the right to respond accordingly. Eight civilians were killed in the strike, which Syria said targeted a civilian building under construction. More from Haaretz and from the UK Guardian.

Return to Main

Here is the Saturday, October 25th, 2008 edition of what’s making news and interesting reads from around the world. Also please note that off to the left there are two widgets with updates on news from Asia and the world in a separate page: Around Asia & Around the World New Feeds.

Britain Officially Enters Recession
The Bank of England was under intense pressure last night to cut interest rates after new figures showed the economy had contracted for the first time in 16 years as it heads into recession.

The news hammered the FTSE 100 index, which lost as much as 9% of its value at one point, wiping £90bn off the value of leading shares. It also clobbered the pound, which suffered its biggest fall against the dollar since 1992, to below $1.53 – a six-year low. As recently as July, the pound would buy $2, but it has been falling rapidly on evidence that the economy is slumping. The pound also hit a record low against the euro yesterday of just under 82p. Official data showed gross domestic product contracted by 0.5% in the July to September period – a much bigger amount than expected, the first fall since early 1992 and the biggest drop since the fourth quarter of 1990. More from the UK Guardian.

Foreign Currency Debt Troubles Mount
Foreign-denominated debt is squeezing countries from Romania to South Korea as their local currencies falter. All told, borrowers in emerging markets owe some $4.7 trillion in foreign-denominated debt, up 38 percent over the past two years. Many developing countries still look strong on paper, with big foreign reserves and healthy trade surpluses. But the statistics can mask heavy dependence on offshore loans to keep economies buoyant. “It’s amazing that people don’t pay attention,” says Mark Mobius, head of Templeton Emerging Markets Fund (EMF). Borrowers have been taking out “mortgages in yen and Swiss francs because they thought the money was so cheap.” More from Der Spiegel.

Yen’s Surge Brings Bad News for Japan’s Exporters
Japan’s stock and currency markets dealt the world’s No. 2 economy a heavy blow Friday. The yen surged, battering shares of Japan’s top exporters as the country nears recession. In Tokyo, the yen reached a 13-year high against even the rising U.S. dollar. In late afternoon trading Friday in New York, the euro was at 119.05 yen, a six-year low and down sharply from 125.12 yen Thursday. The dollar was at 94.6 yen. The full story in the Wall Street Journal.

Asian and European Put on a Happy Face in Beijing
Whatever was happening on market floors around the world, at the meeting of Asian and European leaders in Beijing, the message was solidarity and optimism. The Chinese Premier Wen Jiabao said the global financial situation was a severe shock. The European Commission President Jose Manuel Barroso said it was down to the people there to sort it out. “In this room we represent three-fifths of the world’s population, and produce half of global GDP. Our combined action can and should make a difference.” More from Euro News.

Dollar and Yen Soar as Other Currencies Fall and Stocks Slip
Fear that the financial crisis is infecting once-healthy economies created another white-knuckle day for investors Friday, causing stocks to tumble from Tokyo to New York. Uncertainty also roiled currency markets as investors continued to turn to the security of the United States dollar and the Japanese yen and drove down currencies of developing countries like Brazil, Ukraine and South Korea and even of developed countries like Britain. In the United States, where the crisis began, investors were less alarmed than elsewhere. A rout in Asian and European stock markets sent the Dow Jones industrial average swooning by more than 500 points in early trading in New York, but trading recovered enough ground through the day to leave the Dow down 312.30 points, or 3.6 percent. Just a year ago, a drop of that size would have been considered a black day in the markets, but in these days of routine triple-digit declines, it offered a modicum of relief to traumatized investors. The full story in the New York Times.

Return to Main