June 3, 2005

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 JUNE 3, 2005

1//The Turkish Daily News, Turkey--RAFSANJANI: IRAN NEEDS TO SORT OUT ‘PROBLEM’ WITH THE US (Iranian presidential election frontrunner Akbar Hashemi Rafsanjani said on Wednesday he was in favor of ending a quarter of a century of estrangement with the United States, but Washington needed to make the first move.  "If they make a positive sign, I am one of those who believes that we need to sort out this problem," Rafsanjani said.  "I am convinced that it is the Americans who need to show their goodwill so that relations can resume," the top cleric and former president was quoted as telling a gathering of university professors.  "They need to deal with us as equals and renounce their animosity," Rafsanjani said. … His comments were a marked departure from the usual rhetoric from a regime totally at odds with the United States and much of the international community -- and also in contrast to the preceived opposition of Iran's supreme leader, Ayatollah Ali Khamenei, to any talks of resuming ties with America.)

2//RIA Novosti (Russian News & Information Agency), Russia--OPINION & ANALYSIS: RUSSIA, INDIA, CHINA: TRILATERAL MEETING ACHIEVES UNEXPECTED SUCCESS (The June 2 meeting of the Russian, Chinese, and Indian foreign ministers that took place in the Russian Far East, was seen as an international-level event by analysts following the intricate relationships within the triangle.  However, the meeting appeared to be more than that, it was a tremendous success.  Foreign ministers Sergei Lavrov, Natwar Singh, and Li Zhaoxing, whose meeting took place at the assembly hall on the Pacific coast 19 kilometers away from Vladivostok, agreed to draft an agenda for cooperation in the energy, transport, high-tech, and agricultural spheres. … We are actually witnessing the emergence of a new mechanism in Central Asia similar to permanent dialogue between Russia, France, and Germany (Spain has only recently joined it). Neither of them are anti-American alliances, but those set up to ensure the common interests of Europe and Asia, something they can only do themselves.)

3//The Daily Star, Lebanon--INDIAN OIL MINISTER TO PUSH FOR PROPOSED IRAN-INDIA GAS PIPELINE VIA PAKISTAN (Indian Oil Minister Mani Shankar Aiyar is hopeful upcoming talks with Pakistan on a proposed route for a gas pipeline from Iran will lead to an agreement that attracts companies and finance for the multi-billion-dollar project.  Aiyar will travel to Islamabad at the weekend to meet his counterpart Amanullah Khan Jadoon to discuss a proposed 2,775-kilometer energy corridor in Pakistan to deliver gas from Iran's South Pars field to the Indian border. … New Delhi has said boosting gas imports are crucial to maintaining expected growth of 7 to 8 percent annually. India now uses about 27 million cubic meters of gas daily which analysts expect to rise to 200 million cubic meters in the next decade. … However, the United States has thrown a spanner in the works by noting its Iran-Libya Sanctions Act prohibits countries from major investment in Iran and U.S. Secretary of State Condoleezza Rice warned India in March the gas pipeline could trigger sanctions under the law. … Aiyar said the warning by Rice has been overblown. "First, there is no pressure on the government of India to abandon this project," Aiyar said. There is no pressure to desist. The matter has come up for discussion with the U.S. and we believe we need to meet our energy requirements and this can be done with gas from Iran.")

4//The Japan Times, Japan--ITOCHU PLANS MAJOR IRAN INVESTMENT (Trading giant Itochu Corp. announced Thursday that it will launch a partnership with two Thai firms in a bid to begin producing polyethylene in Iran in 2008 in a deal that would make it the first Japanese company to invest in Iran since 1989. … The alliance between Itochu and the Thai firms will take a 60 percent stake in the investment firm, it said. The Iranian entity will hold the remainder. A U.S. law restricts business operations by companies engaging in oil and natural gas development projects in Iran from operating in the United States, due to Tehran's suspected nuclear arms program. Itochu and its partners believe their petrochemical investment in Iran will not go against the U.S. law as it will not involve oil-related development, Itochu said.)                   

5//Asia Times Online, Hong Kong--CHINA OVERHAULS ENERGY BUREAUCRACY (The chronic power shortages in many regions of China beginning in 2002 have made it crystal clear that one of the biggest obstacles hindering China's "peaceful emergence" blueprint is energy. The issue is not only economically vital, but has diplomatic and military implications. But the cause of the shortages was not, as one might think, high fuel prices alone. China's dysfunctional energy bureaucracy has been a major contributor to the problem … long-term supply concerns, on top of the recent shortages, are a major reason why Beijing has been keeping an increasingly tight rein on energy projects and issues. Observers believe that the setup of the SEO is only the beginning of an energy administration reshuffle, and further adjustments will follow, since energy is now considered a core national interest.)        

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1//The Turkish Daily News, Turkey, Thursday, June 2, 2005
http://www.turkishdailynews.com.tr/article.php?enewsid=14800

RAFSANJANI: IRAN NEEDS TO SORT OUT ‘PROBLEM’ WITH THE US

TEHRAN -- AFP --  Iranian presidential election frontrunner Akbar Hashemi Rafsanjani said on Wednesday he was in favor of ending a quarter of a century of estrangement with the United States, but Washington needed to make the first move.

"If they make a positive sign, I am one of those who believes that we need to sort out this problem," Rafsanjani said.

"I am convinced that it is the Americans who need to show their goodwill so that relations can resume," the top cleric and former president was quoted as telling a gathering of university professors.

"They need to deal with us as equals and renounce their animosity," Rafsanjani said.

Departure from usual rhetoric:

Iran and the United States cut off diplomatic relations in 1980, after Islamic revolutionaries stormed the U.S. embassy in Tehran and held 52 U.S. personnel hostage for 444 days.

But Rafsanjani, seen as a savvy deal-maker who favors closer ties with the West, has been playing up the issue in the run-up to the June 17 presidential poll -- an apparent bid to draw support from many Iranians keen to see the US problem resolved.

His comments came the day after he called on the 26-year-old Islamic regime to undergo a radical rethink of the way it deals with the international community and how it relates with its own burgeoning youth population.

"There are new demands. Nobody should think that we can act by employing the same literature, the same policies or the same attitudes that we had at the beginning of the revolution or at the end of the (Iran-Iraq) war," Rafsanjani said in a televised campaign broadcast.

His comments were a marked departure from the usual rhetoric from a regime totally at odds with the United States and much of the international community -- and also in contrast to the preceived opposition of Iran's supreme leader, Ayatollah Ali Khamenei, to any talks of resuming ties with America.

(MORE)

2//RIA Novosti (Russian News & Information Agency), Russia, 3/06/05  17:41http://en.rian.ru/analysis/20050602/40462338.html

OPINION & ANALYSIS: RUSSIA, INDIA, CHINA: TRILATERAL MEETING ACHIEVES UNEXPECTED SUCCESS

VLADIVOSTOK (RIA Novosti political commentator Dmitry Kosyrev) - The June 2 meeting of the Russian, Chinese, and Indian foreign ministers that took place in the Russian Far East, was seen as an international-level event by analysts following the intricate relationships within the triangle.

However, the meeting appeared to be more than that, it was a tremendous success.

Foreign ministers Sergei Lavrov, Natwar Singh, and Li Zhaoxing, whose meeting took place at the assembly hall on the Pacific coast 19 kilometers away from Vladivostok, agreed to draft an agenda for cooperation in the energy, transport, high-tech, and agricultural spheres.

The ministers said businessmen from the three countries would convene in India early next year.

The chambers of commerce will most likely organize the meeting. They also discussed the reform of the United Nations and developments in the Middle East and Central Asia, the places where issues related to oil and natural gas production, terrorism, and social tensions merge into one difficult knot. Once again the meeting showed the three governments shared approaches to those problems.

Significantly, the Indian minister said the three men got on very well. Those were more than polite words. Indeed, Russia has maintained friendly relations with both India and China, whereas relations between the latter two have not been very simple.

(SNIP)

Moscow believes it can benefit from its role as a mediator promoting rapprochement between its two allies. This role can prove to be a boon, particularly since both China and India need Russian oil and natural gas. Even Russia has not quite understood that China and India are evolving into main investors in the oil and natural gas sector, which is crucial for the Russian economy.

Anyway, the trio should learn to talk all difficult things over rather than push each other around.

Today, all trilateral talks seem to focus above all on Central Asia, which is crucial for Russia. The country has improved its positions there in the wake of recent unrests in Kyrgyzstan, which makes talks more specific.

Determining a range of issues to be discussed in the trilateral format was a difficult process. It took the three countries three meetings they held on the sidelines of international forums to finish it. The Vladivostok meeting showed the process had been completed successfully. We are actually witnessing the emergence of a new mechanism in Central Asia similar to permanent dialogue between Russia, France, and Germany (Spain has only recently joined it). Neither of them are anti-American alliances, but those set up to ensure the common interests of Europe and Asia, something they can only do themselves.

Moscow, Beijing, and New Delhi are yet to draw up a timetable for regular meetings. The foreign ministers have already stated that they will definitely hold another meeting. All they have to do is find the right place and time.

3//The Daily Star, Lebanon, Friday, June 03, 2005 
http://www.dailystar.com.lb/article.asp?edition_id=10&categ_id=3&article_id=15597

INDIAN OIL MINISTER TO PUSH FOR PROPOSED IRAN-INDIA GAS PIPELINE VIA PAKISTAN

Talks between Mumbai and Islamabad to start this weekend

By Agence France Presse (AFP)

NEW DELHI: Indian Oil Minister Mani Shankar Aiyar is hopeful upcoming talks with Pakistan on a proposed route for a gas pipeline from Iran will lead to an agreement that attracts companies and finance for the multi-billion-dollar project.

Aiyar will travel to Islamabad at the weekend to meet his counterpart Amanullah Khan Jadoon to discuss a proposed 2,775-kilometer energy corridor in Pakistan to deliver gas from Iran's South Pars field to the Indian border.

"If security and other issues are resolved with Pakistan, I would say construction could begin with all deliberate speed in three years," Aiyar told AFP.

"This could be an international consortium or other entity. We are only a customer right now, but security and other agreements will make this project viable for investors." Aiyar said from India's side, the actual construction of the pipeline would be the job of Iran and Pakistan. India's role would be to negotiate a price for the gas if the pipeline reaches its border.

"There are talks with Iran on pricing," Aiyar said declining to discuss specifics.

(SNIP)

Nuclear-armed India and Pakistan, which have fought three wars, two over the Himalayan region of Kashmir, have been engaged in a slow-moving peace dialogue since January 2004.

"There are two sets of agreements. Iran and India have to agree on a price. Iran and Pakistan have to agree on building the pipeline. There could be a necessity for a tri-lateral meeting to outline the terms," Aiyar said.

(SNIP)

Iran and India have been talking about a pipeline since 1994 but longstanding hostility between India and Pakistan has stood in the way.

Other countries too are eager to tap South Pars, the largest offshore field in the world, located on the Iran-Qatar border in the Persian Gulf and is shared by the two countries.

The field accounts for half of Iran's estimated 23 trillion cubic meters of gas reserves, about 16 percent of the world's total, second only to Russia.

(SNIP)

New Delhi has said boosting gas imports are crucial to maintaining expected growth of 7 to 8 percent annually. India now uses about 27 million cubic meters of gas daily which analysts expect to rise to 200 million cubic meters in the next decade.

The country had been holding out for construction of the pipeline only if overall economic dealings with Pakistan widened but in February the federal Cabinet decided to delink the pipeline from the overall peace process.

However, the United States has thrown a spanner in the works by noting its Iran-Libya Sanctions Act prohibits countries from major investment in Iran and U.S. Secretary of State Condoleezza Rice warned India in March the gas pipeline could trigger sanctions under the law. The U.S. law makes it illegal for companies to invest more than $20 million in Iran and extends the prohibition to foreign firms by excluding them from business deals in the United States if they cross the limit.

Aiyar said the warning by Rice has been overblown. "First, there is no pressure on the government of India to abandon this project," Aiyar said. There is no pressure to desist. The matter has come up for discussion with the U.S. and we believe we need to meet our energy requirements and this can be done with gas from Iran."

4//The Japan Times, Japan, June 3, 2005
http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nb20050603a3.htm

ITOCHU PLANS MAJOR IRAN INVESTMENT

Trading giant Itochu Corp. announced Thursday that it will launch a partnership with two Thai firms in a bid to begin producing polyethylene in Iran in 2008 in a deal that would make it the first Japanese company to invest in Iran since 1989.

Itochu will sign corporate alliance pacts with the Siam Cement Public Co. group and Thailand's state-run PTT Public Co. group for the 25 billion yen investment, the company said.

Itochu and the Thai firms will establish an investment firm in Iran later this month along with Iran's state-run National Petrochemical Co., according to Itochu.

Itochu would be the first Japanese firm to invest in Iran since trading house, Mitsui & Co. and others pulled out of a petrochemical venture with Iran in 1989.

(SNIP)

The alliance between Itochu and the Thai firms will take a 60 percent stake in the investment firm, it said. The Iranian entity will hold the remainder.

A U.S. law restricts business operations by companies engaging in oil and natural gas development projects in Iran from operating in the United States, due to Tehran's suspected nuclear arms program.

Itochu and its partners believe their petrochemical investment in Iran will not go against the U.S. law as it will not involve oil-related development, Itochu said.

Of the 25 billion yen needed for the investment, about 70 percent will be financed by loans from parties that include the Japan Bank for International Cooperation.

5//Asia Times Online, Hong Kong, Jun 3, 2005
http://www.atimes.com/atimes/China/GF03Ad01.html

CHINA OVERHAULS ENERGY BUREAUCRACY

By Qiu Xin

HONG KONG - The chronic power shortages in many regions of China beginning in 2002 have made it crystal clear that one of the biggest obstacles hindering China's "peaceful emergence" blueprint is energy. The issue is not only economically vital, but has diplomatic and military implications. But the cause of the shortages was not, as one might think, high fuel prices alone. China's dysfunctional energy bureaucracy has been a major contributor to the problem. Realizing this, Beijing recently enacted a major reshuffle of its energy-related agencies in a bid to resolve the issue and allow better management of future crises.

According to the Jing Bao ("First") daily newspaper, the State Council, China's cabinet, has appointed an energy coordination task force under the leadership of Premier Wen Jiabao, Vice Premier Huang Ju and Zeng Peiyan. The ministerial-level State Energy Office (SEO), founded two weeks ago, will report directly to the task force. It is hoped that the high-level support given to the SEO by Premier Wen's direct oversight will give it the bureaucratic heft to succeed where its predecessor, the Energy Bureau (EB), largely failed.

It had been expected that, to avoid duplication, the new SEO would be merged with, or replace, the EB. Instead, the two will remain separate and be given different assignments: the SEO will focus on broad decisionmaking, while the EB will ensure that the decisions are put into effect. According to the influential Caijing Magazine, this specialization was an effort to contain the power of energy officials. Given that almost a third of total state assets, valued at a staggering 11 trillion yuan (US$1.33 trillion), are related to the energy sector, the birth of a single government agency with complete power over energy would have created a massive potential for official corruption and malfeasance. Fear of such a development was a major reason why the government did not create a unified energy ministry despite the fact that the EB's insufficient influence contributed to the national energy mess.

(SNIP)

The major function of the new SEO will be to coordinate and supervise existing resources authorities, to provide a master plan for the development of national energy resources, and to finalize and enforce energy industry policies. Structurally, the office will be composed of three panels whose routine duties are to track the energy security conditions; forecast macro conditions and impeding crises; advise the energy coordination task force; organize academic studies related to energy resources strategy; and draft policies on resource exploitation and conservation, energy security issues and contingencies, as well as cross-border cooperation, according to the Hong Kong Economic Journal.

(SNIP)

Boosted by soaring economic growth, China's gross energy consumption has been growing ever since 1980 at an annualized rate of 5%, three times the world's average growth rate. Oil imports exceeded exports for the first time in 1993, and China's reliance on oil imports has only increased since then. As of 2000, proven exploitable oil reserves per capita in China stood at a mere 2.6 tons, while natural gas stood at 1,074 cubic meters and coal 90 tons. These figures represented 11.1%, 4.3% and 55.4% of the world averages, respectively. Worse yet, pundits predict that the gaping resources shortfall will reach the energy equivalent of 250 million tons of coal by 2030 (since its predominant energy resource is coal, China routinely calculates other energy sources in "tons of coal equivalent") and 460 million tons by 2050.

Such long-term supply concerns, on top of the recent shortages, are a major reason why Beijing has been keeping an increasingly tight rein on energy projects and issues. Observers believe that the setup of the SEO is only the beginning of an energy administration reshuffle, and further adjustments will follow, since energy is now considered a core national interest.

MORE