august-09-part 2

CURRENT INTERNATIONAL AFFAIRS

AFGHANISTAN
Elections to elect President
Taliban threats kept voter turnout low in the Kabul and the militant south on August 20, 2009, as Afghans voted to choose the next President for their deeply troubled country. Militants launched scattered rocket and bomb attacks but no major assaults.

Taliban militants had pledged to disrupt the vote and circulated threats that those who cast ballots will be punished. However, voters throughout Afghanistan came out to cast their ballot, even if not in large numbers.

President Hamid Karzai, who has held power since the Taliban was ousted in late 2001 by a US-led invasion, is favoured to finish first among 36 official candidates, although a late surge by former Foreign Minister Abdullah Abdullah could force a run-off if no one wins more than 50 per cent.

Since Hamid Karzai’s election in 2004, violence in Afghanistan has increased more than seven times, and particularly in the provinces of Helmand, Nangarhar, Zabul and Kandahar where he had got over 80% of the votes.

Karzai’s closest rival in the elections was Abdullah Abdullah, a confidant of Northern Alliance leader Ahmad Shah Masood.
   
India played safe and distant in these elections. There is a clear recognition that despite India’s huge stakes in Afghanistan, there are no gains to playing sides in these elections. No matter who wins, India will have a substantive playing field, except of course if the Taliban return.

Karzai has been close to India, and even when the US was trying to dislodge him, India stood by him. Abdullah is an old India hand, having lived in India with his family during the Taliban years, with full support of the then Indian government.

Nearly 7,000 polling centres across Afghanistan were set-up for a total electorate of 17 million people. Ballots were counted by hand at each polling centre as soon as voting came to a close. Counting process, however, is expected to be completed in September only. To win the election, a Presidential candidate must get over 50% of the votes cast. If no one receives this, a runoff election will be held within 2 weeks of the announcement of the results.

JAPAN
Landslide win for Democrats
Japanese voters swept the opposition to a historic victory in an election on August 30, 2009, ousting the ruling conservative party and handing the untested Democrats the job of breathing life into a struggling economy.

The win by the Democratic Party of Japan (DPJ) ended a half-century of almost unbroken rule by the Liberal Democratic Party (LDP) and breaks a deadlock in Parliament, ushering in a government that has promised to focus spending on consumers, cut wasteful budget outlays and reduce the power of bureaucrats.

Democratic Party leader Hatoyama, grandson of a former Prime Minister, will take over as the new Prime Minister.

The ruling party loss ended a three-way partnership between the LDP, big business and bureaucrats that turned Japan into an economic powerhouse after the country’s defeat in World War II. That strategy foundered when Japan’s “bubble” economy burst in the late 1980s and growth has stagnated since. The Democrats will have to move fast to keep support among voters worried about a record jobless rate and a rapidly ageing society that is inflating social security costs.

The Democrats have pledged to refocus spending on households with child allowances and aid for farmers while taking control of policy from bureaucrats. The Democrats also want to forge a diplomatic stance more independent of the United States, raising concerns about possible friction in the alliance.

MYANMAR
Suu Kyi convicted as global outrage grows
Myanmar democracy icon Aung San Suu Kyi and her US co-defendant are to appeal against their convictions as the ruling junta faced a global wave of anger over her extended detention. US president Barack Obama led worldwide outrage at the military regime’s decision on August 12, 2009, to give Suu Kyi another 18 months of house arrest, a verdict that shuts the Nobel peace laureate out of elections in 2010.

A prison court sentenced her to three years of hard labour after finding her guilty of breaching the terms of her incarceration, but junta strongman Than Shwe commuted the punishment to a year and a half under house arrest.   

In Washington, Obama called for Suu Kyi’s “immediate, unconditional release” and for the freeing of more than 2,000 other political prisoners held in Myanmar. The US president said the “unjust” sentence against Suu Kyi would never be able to stamp out the people of Myanmar’s desire for freedom, accusing the regime of “continued disregard” for UN Security Council statements.
   
NEPAL
Gurung is army chief
Lt Gen Chhatraman Singh Gurung, who received training at the Indian Military Academy, Dehradun, was appointed to head the Nepal Army on August 9, 2009, after his controversial predecessor General Rukmangad Katawal went on a month-long leave ahead of his retirement in September. Gurung is the first from the rank of commoners to head the army, which has been led by the country’s elite and the aristocracy. The change of guard at the helm of 95,000-strong Nepal Army came amid a continued blockade of Parliament by the Maoists demanding Katawal’s removal. The Maoists, whose eight-month-old government fell in May 2009 after the reinstatement of Katawal, had sought his dismissal and a debate in Parliament on the issue of “civilian supremacy” in the country.

PAKISTAN
Politics allowed in Taliban land
On August 14, 2009, Pakistani President Asif Zardari lifted a ban on political activity in the ethnic Pashtun tribal belt on the Afghan border, in an apparent move to loosen the grip of militants on the lawless area. Pakistan’s seven tribal regions, known as the Federally Administered Tribal Areas (FATA), are semi-autonomous and have never been fully integrated into the country’s administrative and political system.

The FATA is a major sanctuary for al-Qaida and the Taliban plotting violence in Pakistan, Afghanistan and beyond and analysts have long argued for it to be fully integrated with the rest of Pakistan and brought under government writ. Zardari, speaking at a ceremony to mark the anniversary of Pakistan’s independence from Britain in 1947, said Pashtun tribesmen deserved to be treated the same as other Pakistanis.

The FATA is governed under a system inherited from British colonialists with a government-appointed political agent ruling through the tribes, which observe their centuries-old codes, not Pakistani laws. Political parties have not been allowed to operate in the FATA which analysts say helped to create a vacuum for hard-line Muslim clerics to exploit.

ECONOMY
World financial crisis costs $11.9 tn
The world has earmarked a staggering $11.9 trillion to wriggle out of the financial crisis, the sum which is enough to finance a $1,779 handout for every person living on the planet, according to the International Monetary Fund.
Most of the cash has been handed over by developed countries, for whom the bill has been $10.2 trillion, while developing countries have spent only $1.7 trillion the majority of which is in central bank liquidity support for their stuttering financial sectors.

The whopping total cost of crisis is equivalent to around a fifth of the entire globe's annual economic output and includes capital injections pumped into banks in order to prevent them from collapse, the cost of soaking up so-called toxic assets, guarantees over debt and liquidity support from central banks.

Japan comes out of recession in Q2
Japan's economy climbed out of year-long recession in the second quarter, the government said on August 16, 2009, expanding 3.7% at an annual pace and joining Germany, France and other regions that appear to be emerging from the global financial crisis. But economists and politicians sounded cautious, noting that the main driver of growth was exports and that domestic consumer spending remained fragile amid plunging incomes and rising unemployment.

The recovery in the April-June quarter was driven by robust demand for cars, video recorders and other electronics goods, according to government data. Shipments to China and other emerging markets were particularly strong, although exports to the US and Europe also showed modest recoveries. Exports grew 6.3% from the previous quarter, the highest rate in seven years.

Government stimulus measures have also helped, such as cash handouts and incentives to buy ecological products. But economists said, the nascent recovery could quickly run out of steam because domestic demand remains weak. Salaries are falling and the unemployment rate has risen to a six-year high of 5.4% as companies such as Toyota Motor Corp and Sony Corp have cut thousands of jobs.

The rebound in the world's second largest economy came after a steep, year-long contraction in gross domestic product, including a worst-ever drop in the final quarter of 2008, when the economy shrank at a 13.1% pace. The news from Japan comes amid signs that the global economy may be recovering from its slump. Earlier, France and Germany, Europe's two biggest economies, said they resumed growing in the second-quarter, while Hong Kong also said it expanded after a year-long recession.
   
Economic recovery has begun: IMF
The global economic recovery has begun but sustaining it will require refocusing the United States toward exports and Asia toward imports, according to the International Monetary Fund’s chief economist, Olivier Blanchard.

"The turnaround will not be simple," Blanchard said. "The crisis has left deep scars, which will affect both supply and demand for many years to come." He said US consumption, which accounts for about 70 per cent of the US economy and a large chunk of global demand, would not quickly return to pre-crisis strength as households cope with trillions of dollars in losses from the falling housing and stock markets.

He said the financial crisis had made Americans more conscious of "tail risks"—events that are unlikely to occur, but when they do have devastating consequences. That means US consumers are unlikely to return to their free-spending ways, and both the United States and its trading partners will have to adjust. Emerging Asian countries, especially China, must play a big role.

ENVIRONMENT
India, China unite to take on West
India and China have agreed to jointly fight any attempt by Western nations to link trade with climate change and impose trade-related penalties on developing countries that fail to meet environmental standards.
   
India and China have agreed to coordinate their views on different aspects of climate change before every major international meeting on the subject. These are expected to be spelt out in form of an agreement. Both countries want to negotiate with West for higher levels of financial assistance and technology transfer in return for promises to do their best to tackle environmental problems. But they would not agree to any legal binding on reducing emission norms because it would come in the way of their development goals. India and China will also not agree to the creation of any trade barriers on the excuse of climate change. India has also suggested China to consider reducing carbon dioxide levels in power plants supplied by it to India. This would be part of the mitigation activities that the two countries expect to carry out jointly.

INTERNATIONAL RELATIONS
Pak has modified Harpoon, India under threat: US
The US has accused Pakistan of illegally modifying the Harpoon anti-ship missile, sold to it as a defensive tool by the Reagan Administration, to expand its capabilities to strike land targets, a potential threat to India. The Obama Administration, reported 'The New York Times' in a front page story, lodged its protest with Pakistan Prime Minister Yusuf Raza Gilani in June, adding to the tension between the two countries.

Quoting unnamed officials from the Administration and the US Congress, the daily said Washington has also accused Pakistan of modifying American-made P-3C aircraft for land-attack missions, another violation of United States law.

The Obama Administration's accusation confirms New Delhi's assertion that the US military aid is primarily used by Pakistan to strengthen and build up its army against India.

The newspaper said Pakistan has refuted the charge that it modified the missiles and claimed that it developed these itself. Between 1985 and 1988, the US had provided 165 Harpoon missiles to Pakistan.

Given the strong protest lodged by the Obama Administration, Pakistan has taken the unusual step of agreeing to allow American officials to inspect the country’s Harpoon inventory to prove that it had not violated the law. he latest round of dispute between the US and Pakistan, however, reflects the “level of mistrust” between them.

TERRORISM
Pak Taliban chief Mehsud killed
Chief of Tehrike Taliban Pakistan (TTP) Baitullah Mehsud, who led a deadly campaign of suicide bombs and assassinations in Pakistani cities, has been killed in a US drone attack in first week of August 2009.

Intelligence officials said Mehsud was killed in a missile attack from an American drone while he was having dialysis. Mehsud’s death means a spectacular development in the campaign by Pakistan and the US against the Taliban and Al-Qaida fighters along the border on Afghanistan. He was declared enemy No. 1 by Pakistani authorities for his terrible suicide attacks that played havoc in Pakistan.

WORLD TRADE
China becomes Japan’s biggest trading partner
In a first, China has surpassed US to become Japan's largest trading partner. The move is expected to have a softening effect on China-Japan disputes over an island and have wide implications in Asian region including India. Japan's trade with the US accounted for just 13.7% of its total world trade in the January-June period. Its trade with China accounted for 20.4% of the total trade volume giving Beijing tremendous clout over its neighbour's economy. South Korea, another neighbour, accounted for 6.1%.