internation-feb-09

CURRENT INTERNATIONAL AFFAIRS :

 

$138-b lifeline for Bank of America: In yet another rescue act, the US government decided to inject $20 billion of fresh capital into financial services major Bank of America, apart from standing guarantee to its toxic assets worth $118 billion. While the treasury will invest $20 billion in the firm in return for preferred stocks, FDIC, along with the Treasury, will guarantee bad assets. Bank of America would also comply with enhanced exe-cutive compensation restrictions. The bank, which recently acquired Merrill Lynch, has already received $25 billion from the Troubled Asset Relief Program.

 

Obama takes over as 44th President of USA: On January 20, 2009, Barack Obama became first black American to occupy White House, fulfilling Martin Luther King’s dream sooner than anyone had imagined. He was sworn in as the 44th President of the United States. The event marked the end of an eight-year chapter of George W. Bush’s Presidency, a record blighted by unfinished wars, record deficits and an economy in recession.

 

United States pulls back as Iraqis vote: On February 1, 2009, Iraqis across the country voted in provincial elections that will help shape their future, but regardless of the outcome it is clear that the Americans are already drifting offstage and that most Iraqis are ready to see them go. The signs of mutual disengagement were everywhere. In the days leading up to the elections, it was possible to drive safely from near the Turkish border in the north to Baghdad and on south to Basra, just a few miles from the Persian Gulf without seeing an American convoy. In the Green Zone, the Americans retreated to their vast, garrisoned new embassy compound. Iraqi soldiers now handle all checkpoints. In the US, many view the war as already over, even though more than 140,000 American soldiers remain in Iraq. Allies of Iraq’s Prime Minister appeared to have made gains in the provincial elections, rewarding groups credited with reining in insurgents and militias, according to unofficial projections.

 

 

UK launches second rescue plan: Britain unveiled a second bank rescue plan and Royal Bank of Scotland recorded the biggest loss in UK corporate history in the month of January 2009, while a cut in Spain’s credit rating caused fresh market wobbles. Announcing Britain’s bank bailout, Finance Minister Alistair Darling said fourth-quarter GDP figures would confirm the UK was in recession for the first time since 1992. The European Commission, meanwhile, forecast the euro zone economy would contract for the first time in 2009, by 1.9%, and grow by only 0.4% in 2010. RBS said it made a loss of up to £28 billion ($41.3 billion) in 2008, including a huge goodwill hit on its purchase of parts of ABN Amro in 2007. Britain pumped £37 billion into the banks in October 2008 but credit remains scarce. The UK government will now allow banks to insure themselves against losses on their riskiest assets. It will offer guarantees on their debt and set up a £50-billion fund to buy up high-quality securities to get cash flowing freely again.

 

Sri Lanka—LTTE last post falls, Army says war over: On January 25, 2009, Sri Lankan troops rampaged through stiff resistance to capture the garrison town of Mullaitivu, the last military stronghold of the Liberation Tigers of Tamil Eelam, making a decisive victory in the war for territorial control of the island’s north and east. Earlier, on January 9, Elephant Pass, the last LTTE stronghold on the A-9 main highway also fell and enabled the military to re-open the Jaffna-Kandy supply route for people and troops instead of relying on supplies through ships.

 

Middle East—Tensions remain despite ceasefire: On January 18, 2009, Israel decided to halt its Gaza offensive without any agreement with Hamas. However, Hamas vowed to fight on. Gaza’s border crossings with Israel were initially allowed to open only for humanitarian supplies, with a more permanent solution linked to progress over negotiations. Later, Hamas also announced an immediate ceasefire by its fighters and allied groups in the Gaza Strip, adding that the Islamists gave Israel a week to pull out its troops. During the 22-day-long offensive, Israeli attacks killed more than 1,300 Palestinians, including some 700 civilians. Hundreds of gunmen were among the dead. Ten Israeli soldiers were killed as well as three Israeli civilians hit by rockets. The mounting civilian death toll in the Gaza Strip and mounting destruction and hardship in the territory brought strong international pressure on Israel to stop the
offensive.

 

Obama, Hu discuss trade imbalances: On January 31, 2009, US President Barack Obama told
Chinese leader Hu Jintao in a phone call that the two countries must work together to correct global trade imbalances and unclog credit markets to fight the world economic crisis. Hu told Obama that China firmly opposed trade or investments protectionism as part of settling the crisis and said Beijing would join Washington in promoting stable development at an economic summit in London in April 2009. Hu also acknowledged US efforts to address the world economic crisis and said the two countries should strengthen cooperation. In 2008 China overtook Japan as the largest foreign holder of US government debt and held $681.9 billion in US Treasuries as of November 2008. With the US expected to issue new debt to help pay for a huge economic stimulus package, China’s holdings could grow.

 

US cuts $ 55 m of terror aid to Pakistan: The Obama administration’s threat to make Pakistan more accountable in the war on terror is materializing quickly, with Washington now withholding $55 million from the latest tranche of reimbursement of expenses that Pakistan claims to have incurred while fighting against terrorism. The decision was taken after auditors raised objections about the bills
given by Pakistan for expenses incurred in the war on the Pakistan-Afghan border. Financial advisor in Pakistan PM’s office, Shaukat Tarin, confirming the development, put down the US decision to a change in accounting procedures. He added that Pakistan has demanded a reassessment from Washington to enable release of the remaining amount. But the decision assumes significance in view of the Obama administration’s known stance that Islamabad must deliver on its commitment as a member of the coalition against terror, in order to receive assistance.

 

US sanctions on Pak N-scientist, 12 others: The US State Department has slapped sanctions on 13 individuals and three private companies because of their involvement in the Pakistan-led Abdul Qadeer Khan nuclear-proliferation network. The sanctions followed a multiyear US government review of information regarding the A.Q. Khan network. The entities provided an extensive international network for the proliferation of nuclear equipment and know-how that offered one-stop shopping for countries seeking to develop nuclear weapons, the State Department said. In 2008 a UN nuclear watchdog said the A.Q. Khan network smuggled nuclear weaponisation blueprints to Iran, Libya and North Korea and was active in 12 countries.

 

Lashkar-e-Toiba’s latest name: Jamaat-ud-dawa, the banned charity front of Lashkar-e-Toiba, has resurfaced as the Tehreek-e-Tahafuz Qibla Awal following the United Nations Security Council ban. A video in public domain shows JuD leaders and activists holding a rally under the banner Tehreek-e-Tahafuz Qibla Awal. The Indian establishment had been voicing concerns about JuD renaming itself in a bid to escape UNSC sanctions that included freezing of accounts, travel and arms ban. Sources have pointed out that JuD remained active in spite of the ban and kept updating its website regularly. Headquarters of JuD in Muridke was never shut down and reports said that all educational institutes, hospitals and seminaries of JuD were operating routinely. The change of name will basically allow JuD to escape restrictions placed on organisations and individuals put on UNSC consolidated list of terror groups and terrorists and operate funds in banks’ accounts frozen by the UNSC ban.