December 10, 2004

World Media Watch

by Gloria R. Lalumia

BuzzFlash Note: WMW provides BuzzFlash readers foreign views and perspectives that are not usually available from the media here in the U.S. The presentation of these articles from these international publications is not an endorsement of their viewpoints.

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WORLD MEDIA WATCH FOR DECEMBER 10, 2004

1//The Independent, UK--LORD BUTLER LAMBASTS BLAIR OVER 'BAD GOVERNMENT' (Tony Blair's autocratic style of government was savaged yesterday by Lord Butler, the former cabinet secretary. Lord Butler, who led the inquiry into intelligence failures on the Iraq war that largely exonerated the Prime Minister, said the Blair Government was guilty of "too much emphasis on selling" its own policies, "too much central control" and too little cabinet discussion...The Independent learnt last night that a Labour-led Commons select committee was also planning to deliver a wounding attack on the Blair Government in the new year for the way it has handled the "whitewash'' public inquiries by Lords Butler and Hutton on the Iraq war and its aftermath.)

2//Inter Press Service News Agency, Italy--MISHANDLED MONEY PLAGUED U.S.-RULED IRAQ (Sloppy accounting and lax oversight of contracts were routine under the now defunct U.S.-led Coalition Provisional Authority (CPA), which handled Iraq's reconstruction funds and left blueprints for the economy that the current interim U.S.-backed government follows...Hundreds of U.S. officials and experts, both from the government and the private sector, still hold prominent positions in Iraqi ministries or are working in advisory roles, and remain the real force behind the country's economic policies. "The legacy of CPA accounting practices is a poor model for present and future Iraqi governments," said Julie McCarthy, acting director of Iraq Revenue Watch, a New York-based group that monitors the country's finances...Iraq Revenue Watch is funded by former Wall Street guru George Soros, who reportedly spent 18 million dollars of his own money during the last U.S. election campaign to try to prevent President George W Bush from retaining his post.)

3//Asia Times Online, Hong Kong--US TIED OVER NUCLEAR KINGPIN (The United States is selling the theory that the Pakistan-based nuclear proliferation ring has been broken up and its mastermind, Dr Abdul Qadeer Khan, has been "brought to justice". He is under house arrest in Pakistan. Unfortunately, as much as the Bush administration would like to wish away the Khan issue, it continues to dog two of the biggest foreign-policy crises for the US.)

4//The Daily Star, Lebanon--SINGAPORE LOOKS FOR CLOSER TIES WITH IRAN (Singapore can be a springboard for oil-rich Iran to expand its business links in Asia, Trade and Industry Minister Lim Hng Kiang said Thursday as the city-state emphasised its desire for closer bilateral trade ties...Iran, a major oil producer, can leverage on the city-state's position as the third-largest refining center in the world to make further inroads into the region. "In the oil and gas sector, Iran is a major producer and Singapore (is) a major processor," Lim said.)

5//The Daily Pioneer, India--YOUR SALE COULD START OUR ARMS RACE, RUMSFELD TOLD (India on Thursday expressed its concern to the US over the sale of sophisticated arms to Pakistan and its possible adverse impact on the ongoing Indo-Pakistan peace dialogue and repercussions on the positive perceptions amongst the Indian masses about Washington....Conveying these apprehensions to US Defence Secretary Donald Rumsfeld, who held talks with the top political leadership here, India said that the introduction of sophisticated arms into the region could lead to an inevitable arms race.)

6//The Moscow Times, Russia--STOCKS DROP $10BLN IN A DAY (Nearly $10 billion was wiped off Russian stocks Thursday as investors continued to bail out over fears that a surprise $158 million tax claim against No. 2 mobile phone operator VimpelCom signaled a new arbitrary onslaught against private business..."It's starting to look like a banana republic," said Mattias Westman, CEO of Prosperity Capital Management, which manages about $600 million in Russian stocks. "Nobody looks safe. It appears anybody can do whatever they want. It appears that a government minister is trying to sabotage a company that he is in conflict with."...O'Sullivan said Western investors were also growing wary because of Russia's attempts to pull Ukraine into its fold during the recent election crisis. "Ukraine has changed people's minds about what Russia's approach to the West is. Now it's seen as confrontational," he said.)

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1//The Independent, UK 10 December 2004
http://news.independent.co.uk/uk/politics/story.jsp?story=591675

LORD BUTLER LAMBASTS BLAIR OVER 'BAD GOVERNMENT'
By Colin Brown, Deputy Political Editor

Tony Blair's autocratic style of government was savaged yesterday by Lord Butler, the former cabinet secretary.

Lord Butler, who led the inquiry into intelligence failures on the Iraq war that largely exonerated the Prime Minister, said the Blair Government was guilty of "too much emphasis on selling" its own policies, "too much central control" and too little cabinet discussion.

He accused the Prime Minister of presiding over "bad government in this country" with too many "bad Bills", and a "huge amount of regulation".

Lord Butler's assault went further than his attack on the sofa-style of the Government in his report in July, and opened Mr Blair to criticism.

Michael Howard, the Leader of the Opposition, said: "Lord Butler has blown open the reasons why this Government does not deliver on the things that really matter to people. He was an insider at the very heart of the Blair Government. It's certainly the most damaging testimony I can remember from someone in such an eminent position."

The Independent learnt last night that a Labour-led Commons select committee was also planning to deliver a wounding attack on the Blair Government in the new year for the way it has handled the "whitewash'' public inquiries by Lords Butler and Hutton on the Iraq war and its aftermath.

Tony Wright, the Labour chairman of the Commons select committee on public administration, which took evidence from Lord Butler and Lord Hutton, said his report will be "pretty strong in that area".

(MORE)

2//Inter Press Service News Agency, Italy December 8, 2004
http://ipsnews.net/interna.asp?idnews=26598

MISHANDLED MONEY PLAGUED U.S.-RULED IRAQ
Emad Mekay

WASHINGTON, Dec 8 (IPS) - U.S. management of the Iraqi economy was plagued by irregularities, corruption, failures and mishandling of billions of dollars, according to analysts and multiple recent audits.

Sloppy accounting and lax oversight of contracts were routine under the now defunct U.S.-led Coalition Provisional Authority (CPA), which handled Iraq's reconstruction funds and left blueprints for the economy that the current interim U.S.-backed government follows.

The CPA was in full control of the Iraqi economy after the U.S.-led invasion in March 2003 until June 2004, when the U.S.-installed leadership took over.

Hundreds of U.S. officials and experts, both from the government and the private sector, still hold prominent positions in Iraqi ministries or are working in advisory roles, and remain the real force behind the country's economic policies.

"The legacy of CPA accounting practices is a poor model for present and future Iraqi governments," said Julie McCarthy, acting director of Iraq Revenue Watch, a New York-based group that monitors the country's finances.

"The fact that Iraq's public institutions began to take shape in this climate of negligence raises serious concerns about the viability of the current Iraqi government's financial management systems," added McCarthy in the group's latest report, issued earlier this week.

Iraq Revenue Watch is funded by former Wall Street guru George Soros, who reportedly spent 18 million dollars of his own money during the last U.S. election campaign to try to prevent President George W Bush from retaining his post.

The group says that under the CPA's watch, hundreds of irregularities were permitted in the payment of funds for the reconstruction of Iraq. The U.S. government also failed to set up a transparent financial management system for the occupied nation, it argues.

Other independent watchdog groups have corroborated those statements.

In October 2004, the United Nations International Advisory and Monitoring Board (IAMB) said in its latest report it found many examples of malpractice during the last six months of the CPA's term as the guardian of Iraq's economy.

IAMB auditors say those irregularities included lack of competitive bidding for large contracts, missing contract information, payments for contracts that had not been supervised, and, in some cases, outright theft.

The occupation authority oversaw the disbursement of more than four billion dollars in Iraqi revenues during its tenure, noted the board.

The IAMB's audit also showed the CPA did not take sufficient measures to monitor and control oil smuggling during the latter stages of its term, despite being advised by the board in March 2004 to install metering equipment.

As a result, the CPA admitted to IAMB auditors it was "unable to reliably estimate the amounts of petroleum and petroleum products that were illegally exported for the period from Jan. 1 to Jun. 28, 2004."

The board's audit also says that during the last half year of its tenure the CPA did little to ensure that all proceeds from oil sales actually ended up in the Development Fund for Iraq. The fund was authorised by a U.N. Security Council resolution to safeguard and monitor the nation's oil revenues and other money earmarked for reconstruction.

Corruption in the U.S. handling of the Iraqi economy was also documented in the findings of reports by the CPA's inspector general (CPA-IG).

In its third report to Congress, also submitted in October, it cited numerous aberrations in the CPA's management of Iraqi revenues.

These include a case in which a contract was entered into against the explicit objections of the only Iraqi representative to the spending board.

Other examples include the CPA using reconstruction funds for purposes forbidden by statutory laws under the occupation. In one instance, 1.4 million dollars in Iraqi funds was unlawfully allocated for a weapons buy-back programme that the U.S. government was supposed to pay for.

The report also points to a disbursement of 1.4 billion dollars, in the CPA's final days, to the Iraqi Ministry of Finance under the budget line item "transfer payments."

The inspector general says auditors were "unable to obtain further analysis or information regarding the intended utilisation of this budget line item."

In more than 110 cases, concerning work worth more than 19 million dollars, reports or other supporting documentation that should have described the services received for contracts signed and payments made could not be found, added the CPA-IG.

"As shown by these audits and others, the legacy of CPA accounting practices is a poor model for present and future Iraqi governments," said Iraq Revenue Watch in its report.

(MORE)

3//Asia Times Online, Hong Kong Dec. 10, 2004
http://www.atimes.com/atimes/South_Asia/FL10Df07.html

US TIED OVER NUCLEAR KINGPIN
By Kaushik Kapisthalam

The United States is selling the theory that the Pakistan-based nuclear proliferation ring has been broken up and its mastermind, Dr Abdul Qadeer Khan, has been "brought to justice". He is under house arrest in Pakistan. Unfortunately, as much as the Bush administration would like to wish away the Khan issue, it continues to dog two of the biggest foreign-policy crises for the US.

The first one is Iran. With the re-election of President George W Bush, the neo-conservatives within the administration want to ensure that the Bush second term looks at every option, including a military one, to prevent Tehran from developing and deploying nuclear weapons.

But then again, the neo-conservatives do not want to talk directly to the hardline Iranian regime, and have let Britain, France and Germany do the negotiations with Iran, in conjunction with the International Atomic Energy Agency (IAEA) doing the verification. But so far, the Iranians have been playing a clever game of hide-and-seek by agreeing to stop uranium enrichment one day, and denying it the next. And IAEA inspectors, mindful of the Iraq weapons of mass destruction assessments, have been cautious about giving conclusive findings on Iran's nuclear weapons program. In this ambiguity, Iran could stall and dodge its way into presenting the world a set of nukes as a fait accompli.

One man holds the key to this puzzle - Khan. It now appears that Khan not only sold advanced uranium-enrichment centrifuges to Iran; he likely sold it an actual nuclear weapon design along with nuclear fuel material, according to a report issued by the US Central Intelligence Agency on November 23.

A direct testimony from Khan, with corroborating evidence obtained by IAEA inspectors, could provide the US and the Europeans with clinching evidence of Iran's violation of its Non-Proliferation Treaty pledge and lead to a showdown with the United Nations Security Council. Faced with global condemnation, the Iranian clerics in this scenario may choose to back down and agree to intrusive inspections.

But this could only happen only if Pakistan allows IAEA inspectors to interrogate Khan. Official IAEA reports on Iran reveal that agency's frustration at not being able to nail Iran because of Pakistan's obstructive tactics. Interestingly, other IAEA reports reveal that even the supposedly concluded investigation into Libya's nuclear program hit a roadblock thanks to Pakistan's non-cooperation.

On the other side of Asia, the United States' blow-hot, blow-cold crisis with North Korea appears as calm as a dormant volcano, but is liable to erupt at any time without warning. Prior to the US presidential elections in November, North Korean leader Kim Jong-il had been stalling for time, hoping perhaps for a John Kerry victory, which could have resulted in direct negotiations with the US. But with a Bush victory, the Korean peninsula is once again headed toward a possible showdown. Here too, the ambiguity about the North's nuclear program has been a big hindrance for the US.

(SNIP)

It has emerged that Khan was the main figure behind what is now believed to be Pakistan's nukes for missiles barter deal with North Korea in the late 1990s. Khan's eponymous lab in Kahuta, Pakistan, has been producing the Ghauri medium-range ballistic missile, which is in fact a repainted North Korean No-Dong missile. Part of the payment for this illegal missile transfer is believed to be a complete uranium-enrichment kit from Khan's nuclear bazaar. In addition, the only nuclear device that Khan was entrusted to explode during Pakistan's 1998 nuclear tests is now believed to be a North Korean plutonium bomb, which Pakistan tested as a returned favor for North Korean missile transfers. Interestingly, former Pakistan army chief General Jehangir Karamat, whom many experts claim oversaw this deal with North Korea, is now the Pakistani ambassador in Washington.

The European Union has enough belief in this claim to officially ask Pakistan about the test. Of course, for the US to accept this would lead it to face the fact that at least the North Korean side of Khan's business portfolio had state sanction in Pakistan - a situation it desperately wants to avoid.

(MORE)

4//The Daily Star, Lebanon Friday, December 10, 2004
http://www.dailystar.com.lb/article.asp?edition_id=10&categ_id=3&article_id=10852

SINGAPORE LOOKS FOR CLOSER TIES WITH IRAN
By Agence France Presse (AFP)

SINGAPORE: Singapore can be a springboard for oil-rich Iran to expand its business links in Asia, Trade and Industry Minister Lim Hng Kiang said Thursday as the city-state emphasised its desire for closer bilateral trade ties.

Trade between the two countries has doubled to $1.2 billion over the past 10 years but there are still many areas for the two countries to deepen their mutual economic interests, Lim said in a speech at an Iranian business seminar here.

(SNIP)

"Singapore will be a good resource for Iran to tap, not just for our infrastructural links but for our knowledge, expertise and insights of Asia." The oil and gas sector is one area where the two countries can step up cooperation, Lim said.

Iran, a major oil producer, can leverage on the city-state's position as the third-largest refining center in the world to make further inroads into the region.

"In the oil and gas sector, Iran is a major producer and Singapore (is) a major processor," Lim said.

5//The Daily Pioneer, India Friday, December 10, 2004
http://www.dailypioneer.com/indexn12.asp?ma...

YOUR SALE COULD START OUR ARMS RACE, RUMSFELD TOLD
Pioneer News Service/ New Delhi

India on Thursday expressed its concern to the US over the sale of sophisticated arms to Pakistan and its possible adverse impact on the ongoing Indo-Pakistan peace dialogue and repercussions on the positive perceptions amongst the Indian masses about Washington.

(SNIP)

Conveying these apprehensions to US Defence Secretary Donald Rumsfeld, who held talks with the top political leadership here, India said that the introduction of sophisticated arms into the region could lead to an inevitable arms race.

India told the US Cabinet Minister, who was visiting New Delhi for the first time after the Bush regime was voted into a second term, that the dialogue process had started very well, but US selling arms to Pakistan could pose problems.

Mr Rumsfeld was also informed that the ceasefire on the Line of Control (LoC) was holding for the last one year and the general atmoshperics between India and Pakistan were good.

While appreciating the role played by Pakistan in the global war against terrorism, India, however, said it was difficult to see the relevance of sophisticated arms sale to its neighbour for fighting terrorism.

On his part, Mr Rumsfeld said the US understood Indian sensitivities in this regard and would remain continually in touch, an External Affairs Ministry spokesman said.

(SNIP)

Earlier, while interacting with the media after meeting Union Defence Minister Pranab Mukherjee, the US Defence Secretary said Washington wanted the defence ties between the two countries to be further "knitted" together.

Briefing the media along with Mr Mukherjee after a one-on- one and delegation level talks, he said "we discussed all kinds of things that are important for our two ministries."

"We intend to see these ties further knitted together in the coming months and years," Mr Rumsfeld said, while expressing his "conviction" that the two countries needed to develop "stronger and cooperative relations."

6//The Moscow Times, Russia Friday, December 10, 2004. Page 1.
http://www.themoscowtimes.com/stories/2004/12/10/001.html

STOCKS DROP $10BLN IN A DAY
By Catherine Belton, Staff Writer

Nearly $10 billion was wiped off Russian stocks Thursday as investors continued to bail out over fears that a surprise $158 million tax claim against No. 2 mobile phone operator VimpelCom signaled a new arbitrary onslaught against private business.

The RTS plummeted another 5 percent, sending the benchmark index down 10 percentage points in just two days to close at 546.1. The steep decline sent it below its Jan. 1, 2004, level, reversing the rapid growth trends of recent years that have seen Russia outperform most other emerging markets.

"International investors are radically changing their view of Russia," said Alexander Kim, equity strategist at Renaissance Capital. "They are reassessing the risk premium for the country and we are seeing a massive reduction of position."

Investors have already been spooked over the Kremlin's protracted legal onslaught against oil major Yukos, which faces breakup in a Dec. 19 auction of Yuganskneftegaz, its key production unit, over $20 billion in outstanding tax bills. But Wednesday's tax claim against VimpelCom appeared to dash previous hopes that the attack on Yukos was an isolated case of payback for its jailed former CEO Mikhail Khodorkovsky's political ambitions.

"This is of a different realm when a private telecoms firm is getting hit with back tax claims," said Sam Barden, head of equity sales at Trust. "On the face of it, it looks like a witch hunt."

"It's been a long time since there's been a sell-off as hard and fast as the last two days," he said. "Quite a few funds have capitulated."

(SNIP)

"It's starting to look like a banana republic," said Mattias Westman, CEO of Prosperity Capital Management, which manages about $600 million in Russian stocks. "Nobody looks safe. It appears anybody can do whatever they want. It appears that a government minister is trying to sabotage a company that he is in conflict with."

(SNIP)

O'Sullivan said Western investors were also growing wary because of Russia's attempts to pull Ukraine into its fold during the recent election crisis. "Ukraine has changed people's minds about what Russia's approach to the West is. Now it's seen as confrontational," he said.

(MORE)