www.alertnet.org 12 Feb 2003 23:40

BRASILIA, Brazil, Feb 12 (Reuters) - Latin America's largest country, Brazil, threw its weight on Wednesday behind a proposal by France, Germany and Russia to reinforce arms inspections in Iraq to guarantee Baghdad has no arms of mass destruction.

The government of center-left President Luiz Inacio Lula da Silva had so far remained silent on the growing crisis over Iraq. But the Foreign Ministry said in a statement that Brazil "supports all peaceful efforts" in the United Nations to disarm Iraq of weapons of mass destruction.

"In this sense, Brazil's government was very interested in the common declaration by Russia, France and Germany about Iraq, which it supports," the statement said.

Although Brazil is not on the U.N. Security Council, it's position as the world's fourth most populous democracy gives it some status on the world stage.

www.gulf-daily-news.com LONDON:

A long war in Iraq will hurt the likes of Brazil and Turkey, which depend on overseas finance, rather than more creditworthy Gulf states like Kuwait, Qatar and Bahrain, ratings agency Standard & Poor's said yesterday.

A short war would have little impact on current sovereign ratings but a longer war could have a large impact, which may not yet be priced in by emerging market investors, the ratings agency said in a report.

"Every time something unexpected happens, you hear the same mantra. People this time are looking at credit risk in a way they did not before," said David Beers, S&P's global head of sovereign ratings.

"What we are looking at is the capacity of governments to ride out a period when they do not have access to markets," Beers said after the release of the S&P report.

So far the reaction of emerging market debt investors to war has been muted, with shifts to relative safe havens like Russia and away from the likes of Brazil and Turkey, but there has been no big sell-off as there has been in equity markets.

The risk premium for holding emerging market debt rather than safe-haven US Treasuries has actually fallen since November 8 when the UN Security Council approved resolution 1441 to 719 basis points (7.19 percentage points) from 854 bp.

The S&P report had little direct impact on emerging market debt prices as most investors and analysts have been pondering the impact of a conflict in Iraq for some time and have been recommending a shift to safe havens like Russia, Malaysia and eastern Europe.

Brazil is rated B-plus by S&P and Turkey is rated B-minus, while among the Gulf states close to Iraq which are rated by S&P, Kuwait is rated A-plus and Bahrain and Qatar are both A-minus.

Kuwait kept on paying its debts even after it was invaded by Iraq in 1990.

Brazil, which many analysts reckoned last year was only 18 months from default, has won a huge funding programme from the International Monetary Fund and has elected the one-time bete noire of markets leftist Luis Inacio Lula da Silva as president.

Since taking office, Lula's government has surprised the financial community by imposing tough measures like imposing $3.9 billion of spending cuts so as to exceed the IMF mandated budget targets.

Nonetheless, Brazil still faces interest rates on its external debts in excess of 1,300 basis points over Treasuries, a burden which makes the debt unsustainable in the long term.

If those risk premiums do not fall in response to the implementation of a credible economic programme, Beers said there would be calls for the IMF to step in.

Turkey, which is asking the U.S. to put its hands in its pockets to help offset the effects of any war, with figures being mooted up to $15 billion, could face a tougher task.

"What we are concerned about is not whether the IMF or U.S.

give additional financial support, but whether this (new) Turkish government is going to be able to use its political advantage to achieve an enormous fiscal correction which can be sustained," Beers said.

Apart from Brazil and Turkey, S&P said Guatemala, Israel, Jamaica, Lebanon, Morocco and the Philippines could also see problems.

As well as constrained financing, there will simply not be the ability to achieve lower spending and budget reduction if the war is long and there was the risk of political disturbance in some states, S&P said.

www.thekansan.com

By Myrna Krehbiel and Cathy Anderson

Telling someone you love them. Accepting a compliment. Choosing not to kick the dog when you are in a bad mood.

These are all ways to practice nonviolence. Most of us would agree that they make us feel better, and yet, they might not come naturally to us -- unless we practice.

"A Season For Nonviolence" is a nationwide program, now in its sixth year, to help people discover ways to practice nonviolence in their everyday lives. It includes 64 activities -- 23 for practicing personal peace, 23 for practicing interpersonal (one-to-one) peace and 18 activities for practicing community peace. Each day from today through April 4, one activity is offered for practice. At the end of the 64 days, every participant will have tried at least one new thing and increased their understanding of what they can do to reduce violence around them.

Locally, the program complements efforts of the Harvey County Partnership/Communities in Schools to "ensure that our kids succeed in life."

In 2002, the Kansas Children's Report Card gave Harvey County a C- in the area of "Safety and Security." It may seem hard to believe, but violence to children here is above both the state and national averages.

That kind of statistic can make us feel powerless, discouraged, even hopeless. Too often, we may not be aware of the everyday actions that we can take. We may not realize we have choices about how to act. We may think that only giant efforts will accomplish something, and we are afraid we don't have energy to spare for a giant effort.

That's why Peace Connections recommends "A Season For Nonviolence." It's do-able. It doesn't push politics on us. Because we are practicing and experimenting, we don't have to worry about getting it right the first time.

By practicing creative, constructive ways to reduce violence in ourselves and the world around us, we believe we will be able to influence future generations to do the same.

Myrna Krehbiel is director of Peace Connections in downtown Newton. Cathy Anderson is administrative associate.

64 ways to practice nonviolence BEGIN LIVING YOUR LIFE FOR PEACE

PERSONAL

Nonviolence begins by learning how to be less violent and more compassionate with ourselves. We learn by building the courage to speak and act with respect, honor and reverence for our own being.

JANUARY 30

• Courage Eleanor Roosevelt urged, "You must do the things that you think you cannot do." Practicing these 64 Ways will challenge you to do things that you think you cannot do. Today, light a candle and accept the courage to practice 64 Ways of living nonviolently.

JANUARY 31

• Smiling Buddhist teacher, Thich Nhat Hanh said, "If in our daily life, we can smile...not only we, but everyone will profit from it. This is the most basic kind of peace work." Today, share a smile with at least three people, knowing that your smile contributes to peace.

FEBRUARY 1

• Appreciation Louise Hay says, "Praise yourself as much as you can...the love in our lives begins with us...loving yourself will help heal this planet." Write down 10 things that you appreciate about yourself. Read aloud what you have written.

FEBRUARY 2

• Caring According to Peter McWilliams, "Nonviolence toward the self is caring for oneself. Self-love a crowning sense of self-worth...it is what the Greeks call reverence for the self." Real caring is not just what we say, but what we do. Make a list of at least five ways that you can take better care of yourself. Practice at least one today.

FEBRUARY 3

• Believing Author Wayne Dyer writes about the impact that our beliefs have on our daily lives. Today believe that you have all the resources to move your life in the direction of peace. Be aware of simple, peaceful responses you receive.

FEBRUARY 4

• Simplicity To simplify is to invite peacefulness. Think of three ways you can simplify your life and put at least one of them into practice today.

FEBRUARY 5

• Education Knowledge strengthens your conviction and deepens your wisdom and understanding. Learn about the power of nonviolence by educating yourself. Read an article, periodical or book; watch a video on a subject that relates to nonviolence. Learn about human rights, diversity, ecology, history, politics, forgiveness, spirit-uality, peace studies, biographies of heroes and more.

FEBRUARY 6

• Healing Writer, poet, activist, and professor Maya Angelou turned a traumatic childhood experience into a catalyst for creativity and achievement. Today, choose a painful incident in your life and find the "gift" it has given you. Consciously share this gift with others.

FEBRUARY 7

• Dreaming Martin Luther King, Jr., had a great dream. What is your own dream for peace? Write it down. What is one thing you can do to honor your dream? Do it today.

FEBRUARY 8

• Faith When Caesar Chavez was organizing farm workers, he challenged them to say, "Si, se puede" (yes, it is possible) when they didn't know how they would overcome obstacles. Today, say, "Yes, it is possible," even if you don't know how your goal will be realized. Have faith and say, "it is possible," until you find a way.

FEBRUARY 9

• Contemplation For at least three minutes, relax, breathe, and let your mind be fed "by whatsoever is good and beautiful." Sacred scripture states, "as a man thinketh in his heart, so is he."

FEBRUARY 10

• Groundedness Gandhi said, "To forget how to dig the earth and tend the soil is to forget ourselves." And Black Elk said, "Some little root of the sacred tree still lives. Nourish it, that it may leaf and bloom and fill with singing birds." Today place a seed in the earth or nurture a plant.

FEBRUARY 11

• Creativity The worst thing you can do to a human soul is to suppress its natural desire to create. Identify at least five ways in which you express your creativity everyday. Today, allow something unpredictable and joyous to express through you.

FEBRUARY 12

• Humility Making mistakes is a part of learning and growing, simply an "error in approach." Today, freely acknowledge at least one mistake you make and reflect for a couple of minutes on what you have learned.

Click here to return to story: www.thekansan.com

BY K.P. LEE

FUND managers are confident that the return of CalPERS to Malaysia, should it decide to do so at its meeting next week, will boost the KLSE and may encourage other large global investment funds to consider Malaysia in their investment horizons. Current geopolitical concerns, however, could cloud the issue in the short term, they said. 

Michael AuyeungThe CalPERS decision, if favourable, would follow recent reassessments of Malaysia by a number of other global funds and rating agencies such as Standard & Poor's and Moody's which have upgraded their weightings and outlook on Malaysia following its success in tackling the Asian financial crisis of 1997–98 and its economic recovery. 

Before the Asian financial crisis, foreign funds had accounted for an estimated 20% share of the equities held in the KLSE. After the crisis, foreign holdings fell to as low as 3% to 4 % before improving to some 7%–8% now. 

“Obviously, if CalPERS makes the decision to reinvest in Malaysia, it would be a vote of confidence for the local market,” said Michael Auyeung, chief executive officer of Pacific Mutual Fund Bhd. “But any real impact will be seen in the medium to longer term.” 

The California Public Employees’ Retirement System, or better known as CalPERS, is the world’s second largest and America’s biggest pension fund with assets totalling US$132.6bil. It exited the Malaysian market a year ago in February 2002. 

Yeoh Keat SengA CalPERS board meeting scheduled for Feb 18 will decide whether to act on a report by its investment adviser Wilshire Consulting, which has recommended a return to certain emerging markets, including Malaysia and Thailand, deemed to have met the fund's investment criteria. These criteria include country and market factors such as political stability, transparency and capital market liquidity and openness. 

Fund managers contacted by StarBiz yesterday were generally optimistic that a positive decision by CalPERS would result in improved sentiment on the KLSE. 

“The move is positive in terms of sentiment. It shows that we are deemed to be investment grade by foreigners again,” said CMS Dresdner Asset Management Sdn Bhd executive director Raymond Tang. 

Thomas Yong of Fortress Capital said a decision in favour of Malaysia would stimulate foreign interest in the country as a viable destination for funds headed for this region. 

The fund managers, however, cautioned that even if CalPERS did return to Malaysia, the impact may not be immediate and prospects for the KLSE would be better in the longer term. 

”There will not be an immediate cash inflow although there might be some short-term support for the market,” said Pacific Mutual’s Auyeong, who said the positive news of CalPERS’s return could be mitigated by the current geopolitical concerns of an impending war in Iraq. 

Commerce Trust Bhd chief executive officer Yeoh Keat Seng said he expected the impact of CalPERS’s return to be “negligible” as the amounts invested may not be significant. He expected not more than RM100mil to come in. 

CMS Dresdner’s Tang agreed that the initial investment of CalPERS may not be large. “In the Philippines, for example, it had only invested about US$30mil (RM114mil),” he said. (The Philippines is one of the emerging markets that Wilshire has recommended to be dropped in favour of Malaysia and Thailand.) 

Tang added that, as a comparison, Valuecap Sdn Bhd’s commitment of RM10bil (US$2.63bil) in new money to the local equity markets already far exceeded the entire CalPERS emerging markets portfolio of US$1.8bil. 

Nevertheless, the fund managers were upbeat about the positive signals for investing in Malaysia should CalPERS return.  

“It helps to build a credible case for investing in Malaysia,” said Tang. “We are aware of a number of other foreign funds that have returned to or increased their weightings in Malaysia, although I cannot disclose their names.” 

Fortress Capital’s Yong said although the outlook for the KLSE had been muted since last year, selling pressure was easing off, especially for large cap stocks. “This indicates that the fear factor is not there,” he said. 

Yong was confident that when stability returned after resolution of the Iraq crisis, the KLSE would not miss out on the rally in the regional stock markets. 

Last year CalPERS stunned Asian markets when it followed Wilshire's recommendation to divest from a number of emerging markets, including Malaysia. It adopted rigorous new standards that included consideration of the degree of civil liberties, press freedom and political risk after board members argued that investing in more stable countries with liberal practices would provide better returns over the long term. 

However, the markets that met their investment criteria had actually underperformed between last April, when CalPERS instituted the new policy, and the end of the year. An investment in CalPERS’ target list of emerging markets lost 19.8% over that period, compared with a 16.4% loss for a fully diversified basket of emerging markets. 

Wilshire said limiting the number of countries permitted for investment appeared to have restricted CalPERS' ability for diversification. 

The consultancy's latest report recommends investments in 20 countries – Argentina, Brazil, Chile, Colombia, the Czech Republic, Hungary, India, Israel, Jordan, Malaysia, Mexico, Morocco, Peru, Poland, South Africa, South Korea, Sri Lanka, Taiwan, Thailand and Turkey. Among the countries excluded were China, the Philippines, Pakistan, Indonesia, Venezuela, Russia and Egypt. 

E-mail: sfeats@examiner.com Publication date: 02/12/2003 BY PATRICIA UNTERMAN Special to The Examiner      Like boutique olive oil, coffee and wine before it, chocolate has become the next culinary frontier -- and as usual, Northern California is in the vanguard.

    Great chocolate releases layers of flavor and an evocative aroma as it melts in your mouth. Semisweet or bittersweet chocolate with a high proportion of cocoa to sugar (say 65 to 80 percent) might taste bitter or astringent at first, but it opens up as it dissolves on your tongue, revealing fruit, smoke, spice and floral overtones.

    Some say the complexity of flavor in chocolate is akin to that in wine. Others liken it to varietal coffee. But in the past five years, a revolution has swept America's taste in chocolate. We now want more from, and are willing to pay more for our indulgences, especially affordable ones like chocolate.

    History in chocolate     My changing taste in chocolate is typical: Way back in the 1950s I used to bake a simple sour cream chocolate cake with my mother. We used Baker's unsweetened chocolate in the cake and Hershey's unsweetened cocoa powder in the buttery frosting, which we also flavored with brewed coffee.

    Even as a child I loved the cake because it had a dark chocolate bite unlike the lighter, sweeter, chocolate cakes that seemed to be the common currency.

    In the '70s I made Toll House chocolate chip cookies straight from the recipe on the back of the package of chocolate chips, with my own baking variation: I pressed down each spoonful of dough on the cookie sheet with wet fingers so that the cookies baked up very thin and crisp.

    Then, sometime in the '80s, I tasted a bar of Bernachon chocolate. I'll never forget the moment I first bit into a bittersweet bar from this famous artisan chocolate maker in Lyons.

    Not only did many flavors dance around on my tongue, but the finish seemed to last forever. One bite led to another in this haunting blend. Who knew that chocolate could be so expressive, so thrilling?

    Bernachon's beans     About five years ago I made the pilgrimage to this Lyonnaise chocolate maker. Jean-Jacques Bernachon himself conducted the tour, available by appointment, which took place in a warren of rooms behind his chocolate shop at 42 Cours Franklin Roosevelt (tel. 78 24 37 98).

    We smelled the roasting beans from Venezuela, Ecuador, Trinidad and Madagascar, each bag checked for slow outdoor fermentation in the open air where the beans were harvested.

    The pinkish beans roast for 20-30 minutes, (checked every two minutes by the roaster) until they darken and shed their moisture. Then they are broken in a machine which winnows out the dark, shiny, brown nib.

    Bernachon carefully grinds the different varieties of cocoa nibs with sugar, vanilla and cocoa butter. This mixture passes slowly through steel rollers of different sizes until it forms, first, a moist sludge and then, a dry powder.

    The conching begins next: the smoothing out of the chocolate with added cocoa butter. For three days this mixture is warmed to the melting point and churned until it forms a thick, brown liquid. This silken liquid is formed into blocks which are aged in what looks like a huge walk-in refrigerator.

    Bernachon sells some of this chocolate in small pure bars with graduating ratios of pure chocolate to sugar. Most of it goes into in their exquisite filled chocolates (the best is the bittersweet chocolate-covered ganache called palets d'or), and flamboyant, achingly rich pastries.

    This is one of the few chocolatiers in the world that makes its chocolate from scratch. Most other candy makers buy blocks of chocolate from manufacturers and create their own confections with it.

    Going gourmet     About the same time that I was touring Bernachon, Scharffen Berger Chocolate Maker, a local company, was just starting.

    Founded by John Scharffenberger, who previously developed an excellent Mendocino county sparkling wine, and Michael Steinberg, a doctor turned chocolate-maker, their goal was to manufacture their own super-high quality chocolate to sell in blocks to pastry chefs and also to retail consumers, just as the Europeans do.

    Experimenting in a home kitchen, the two came up with a recipe for expressive dark chocolate. As they became more experienced, their small-batch artisan chocolate got better and better.

    Word of mouth spread like melted chocolate. Pastry chefs all over America started using it and consumers bought little individual bars of pure chocolate to eat out of hand, and larger slabs for the home kitchen.

    A year ago they set up a new factory in Berkeley (914 Heinz Ave.; 510-981-4050; www.scharffenberger.com). You can take a tour yourself and buy their products at the factory shop.

    Now, another local chocolate maker has jumped into the high-end chocolate sweepstakes: Burlingame's Guittard Chocolate Company, founded in 1868 (in San Francisco). Guittard supplies the inimitable See's (my favorite), among others, with chocolate for their confections, and is a major manufacturer of chocolate chips.

    But fourth-generation owner Gary Guittard told me that the success of Scharffen Berger was a wake-up call, that its European-style chocolate forced him to rethink the whole process in this highly competitive business.

    Though his operation is much larger than Bernachon and Scharffen Berger, Guittard now makes its own small-batch artisan chocolate.

    E. Guittard L'Harmonie is now sold in little orange boxes with five individually wrapped leaves of dark, fruity chocolate, a perfect two bites each. I like the thinness of the L'Harmonie packaging, but I prefer Guittard's Sur del Lago, a blend of cocoa bean varietals that grow south of Lake Maricaibo in Venezuela. Currently Sur del Lago only can be bought in big slabs.

    Gary Guittard, who grew up working in the chocolate factory, has an emotional attachment to chocolate making. As we tasted fingerfuls of warm chocolate sludge (just ground nibs, sugar and cocoa butter), he told me that this was his favorite stage in the manufacture of chocolate. He loved eating it as a child.

    He gave me a nugget of crumbly chocolate from a white jar made with the same blend of Sur del Lago beans but processed differently. It was delicious -- more vivacious, more accessible and with an addictive finish.

    I asked Guittard what made it taste like that; he wouldn't tell me. He said the process was proprietary and that the company was thinking about using those same techniques on its other premium chocolate. The chocolate tasted as if it were closer to that initial moment of mixing of nibs, sugar and cocoa butter. There was something brighter about it, more friendly.

    Taster's choice     If you want to sample the range of artisan chocolate, visit Fog City News (455 Market St.; 415-543-7400), a unique magazine store that carries the largest selection of magazines in the Bay Area as well as more than 150 premium chocolate bars from Europe and the United States.

    Owner Adam Smith has the soul of a collector. He goes well beyond just stocking the bars; he catalogues them and lovingly describes them.

    Here's his description of Guittard L'Harmonie (64 percent): "This chocolate has a smoky raisin and maple scent, with a smooth consistency and notes of mint, orange, lightly roasted peanut and toffee presented at the back of the palate."

    And Michel Cluizel 1er Cru d'Hacienda (66 percent): "Pleasant rose fragrance, the slightly brittle exterior leads to notes of cool orange, cinnamon, pear, and black cherry, with a smooth kiwi and apricot conclusion."

    Since he opened the store in 1999, Smith told me that his palate has become more sophisticated, and he has watched his regulars develop theirs, too, distinguishing between chocolates as they would wines. So it's no coincidence that the Bay Area now has two artisan chocolate makers and a growing appetite and appreciation for complex, layered, dark chocolate.

    With more and more people tasting the difference, chocolate will only get better.