www.sky.com

A man whose luggage allegedly contained a hand grenade when he landed at Gatwick Airport was remanded in custody when he appeared in a London court.

Hasil Mohammed Rahaham-Alan, a 37-year-old Venezuelan, was remanded until February 24 when he appeared at Bow Street Magistrates Court charged under the Terrorism Act.

He was stopped by Customs officers on Thursday after arriving on a British Airways flight he had boarded in the Venezuelan capital, Caracas.

Interpreter

He has been charged with possession of an article for the purpose of committing a terrorist act, possession of an explosive substance with intent to endanger life or damage property and carrying a dangerous article on a British-registered aircraft.

Rahaham-Alan, bearded and with long, black hair, walked into court dressed in a baggy blue jumper.

He sat in the dock with a single police officer and a female Spanish interpreter during the five-minute hearing. Police van carrying suspect

His lawyer, Peter Corrigan, said he could understand the proceedings in English but the interpreter would provide clarification if necessary.

Flights suspended

Rahaham-Alan, whose occupation is unknown, stood and spoke in a barely audible voice as he gave his full name and date of birth to the court.

He was questioned throughout the weekend by detectives from Scotland Yard's Anti-Terrorist Branch who have been liaising with their counterparts in South America.

Following the alleged grenade discovery, passengers at Gatwick were evacuated from the North Terminal and outbound flights were suspended.

District Judge Nicholas Evans ended the hearing by telling the defendant that he was transferring the case to the Old Bailey under Section 51 of the Crime and Disorder Act.

There was no application for bail.

www.iht.com Chi-Chu Tschang Bloomberg News Monday, February 17, 2003   BEIJING China has posted an unexpected trade deficit for the first time in over six years as it stockpiles crude oil ahead of a possible war on Iraq and consumers take advantage of tariff reductions to buy more imported cars. The deficit in January was $1.25 billion, the first time China has posted a shortfall since December 1996, the Ministry of Foreign Trade and Economic Cooperation said Friday, citing customs statistics. Imports rose 63 percent to $31 billion, driven by a 78 percent increase in the volume of oil imported. Exports rose 37 percent to $29.8 billion. General Motors Corp. and other carmakers are taking advantage of China's entry into the World Trade Organization to import more cars into China and raising production at plants assembling parts shipped from overseas. "It is surprising," said Robert Subbaraman, an economist at Lehman Brothers in Tokyo. "My suspicion is there were temporary factors involved. Oil prices have been going up so China might be trying to front load their imports." As China imported greater quantities of oil, prices rose. The price of crude in New York has risen 73 percent in the past year on concern that an Iraq war may disrupt supplies from the Middle East. A workers' strike in Venezuela also reduced output from the world's fifth largest oil exporter. "Half of the deficit is due to oil," said Gordon Kwan, an industry analyst with HSBC Securities in Hong Kong. Kwan said the import bill might keep rising as war jitters cause crude prices to increase further. China will build a 20-million-ton strategic oil reserve to protect itself from a war in Iraq and other conflicts that may disrupt supply from the Middle East, the government said last month. The country plans to stockpile about 149 million barrels, enough to meet oil demand for one month, said Song Chaoyi, a deputy director at the State Development Planning Commission. There is a growing appetite for raw materials and machinery in China, whose economy is expanding by about 8 percent a year, the fastest pace of any other major nation in Asia. As the economy grows, incomes are rising and foreign cars, wines and other goods becoming more affordable. Car imports rose more than three-quarters to 127,394 units last year after China raised its vehicle quotas as part of its WTO commitments. Car and auto part imports totaled $860 million last month, two and a half times what they were a year earlier, the report said. China will increase its vehicle import quota 15 percent this year to $9.12 billion. General Motors said it imported 789 cars in January, compared with 145 a year earlier. The company's total vehicle sales in China last month topped 30,000, compared with 14,500 a year ago. While China is allowing foreign companies greater access to the growing Chinese market, trading partners such as the United States are pressing for trade barriers to come down faster. The U.S. trade deficit with China widened by a fifth to $93.6 billion in the first 11 months of last year, the U.S. Commerce Department. Chinese negotiators may be tempted to use China's January trade deficit as a reason for easing import restrictions more slowly when they meet next week in Beijing with the U.S. trade representative, Robert Zoellick. Economists said China would need sustained deficits to reasonably argue such a case. Last year, China had a trade surplus of $30.4 billion, up 35 percent from 2001, according the Chinese government.

www.insightmag.com Posted Feb. 17, 2003 By Martin Edwin Andersen Media Credit: Pierre Roussel/iPhoto IDB President Enrique Iglesias and other officials of multilateral development banks are under increased scrutiny. Yellow police tape sealed off a sixth-floor office in the exquisite headquarters of the Inter-American Development Bank (IDB) just two blocks from the White House. The tape barred entry to the room, but it could not contain the horror within, where a former official of an IDB Central American office, reportedly distraught over misconduct at the multilateral development bank (MDB), had slashed throat and wrists. While doing so, say IDB insiders, the former official wrote in blood on an office wall: "The bank is corrupt!"

The tragedy is reported to have occurred after the official blew the whistle to superiors concerning alleged abuse of power affecting IDB projects in the field. In response, the official had been transferred back to Washington. According to a former IDB officer familiar with the case, the official's "grade [job rank] was lowered" and the whistle-blower "was assigned to a small windowless office -- something very important to bank staff -- and given no responsibility." Then the "silent treatment" began.

Four other sources, including a highly placed bank official, have confirmed part or all of the story. Contacted at home by Insight, the recovering bank officer had been on leave since the July 18, 2002, incident and continued to be under a physician's care. The officer would not comment on what had happened, nor would the IDB.

The incident offers emblematic and tragic evidence of what some officials at the MDBs tell Insight are the risks they face in speaking out against wrongdoing at these institutions supported by U.S. taxpayers. Not only can doing the right thing lead to losing one's job, but foreign hires dependent on bank-sponsored work visas face additional risks. "Everybody is afraid," a well-placed IDB source tells this magazine. "Of course, they fear losing their jobs, but another way [the bank] keeps them in line is by threatening to take away their visas. If they lose their visas, they have to go home."

Similar concerns, say advocates for bank reform, are heard from inside the World Bank, the Asian Development Bank and the African Development Bank. "Experts I work with at the World Bank say that if they make comments critical of the bank's position, they do so at what they have described as 'great risk,' and they end up not being listened to anyway," says Korinna Horta, a senior economist at Environmental Defense, a citizen watchdog group. "I have firsthand knowledge that this happened in the case of the Chad-Cameroon oil-pipeline project."

According to a recent study by Northwestern University political scientist Jeffrey Winters, in the last five decades corrupt officials from Third World countries have skimmed an estimated $100 billion from World Bank loans. Not until 1996 did the World Bank institutionalize a strategy and mechanism for combating the corruption inside the institution, which next to the federal government is the largest employer in Washington. The years passed. In 2000, the bank shifted the chairs on the deck of what seemed to some like the Titanic, merging its corruption-and-fraud-investigations unit and its office of business ethics into a department of institutional integrity. That same year the General Accounting Office (GAO), the U.S. congressional watchdog, issued a report calling on the World Bank to make greater efforts to control corruption.

But the U.S. Treasury Department is the executive-branch overseer of the development banks. And in November 2000 it successfully killed recommendations to Congress proposed by the U.S. Agency for International Development (USAID) that greater public disclosure of the banks' operations be mandated and a better process of external and internal review be established to prevent potentially illegal loans from being approved.

More recently the International Financial Institution Advisory Commission, a congressionally mandated 11-member panel on the role and effectiveness of several international institutions, was created. Known as the Meltzer Commission, it was created amid growing bipartisan discomfort about the slowness of these banks to reform. Those demanding action ranged from the late senator Paul Wellstone (D-Minn.) to former House majority leader Richard Armey (R-Texas). Few were surprised when the commission called for major reform to ensure a more efficient use of U.S. funds -- such as the more than $1 billion provided in the fiscal 2003 foreign-operations bill.

Within the last year, allegations of endemic corruption at the IDB have been accompanied by complaints heard at sister institutions alleging gross mismanagement and violations of U.S. law. In addition, U.S. watchdog groups have charged that all the banks still are reluctant to heed calls for greater transparency and public disclosure concerning the use of public funds for development objectives such as poverty reduction.

In response, there have been increasing calls for greater congressional oversight of the banks. Proposals range from requiring the State Department and the Justice Department more actively to review MDB-funded activities and report to Congress every year, to holding the MDBs' feet to the fire by authorizing their budget only on a yearly basis, at least for the next year or two, rather than on the current three-year schedule. As one congressional source observes, "The banks come up for their money every three years, make a lot of promises, then basically thumb their noses at us until the next appropriations cycle is near."

Rep. Steve Israel (D-N.Y.), a member of the House Financial Services Committee, tells Insight: "The multilateral development banks are critical instruments for reducing poverty around the world and making life better for billions of people. The U.S. makes significant contributions to these banks and it is essential that the Congress find out if we are getting what we pay for. These banks shouldn't be making people rich. They shouldn't be used as personal fiefdoms. They are a public trust, and the people who run them must remember that. If they don't, the Congress should remind them, in the strongest possible terms." And, according to Israel, "We must put their very existence at risk if we are going to get any results."

Senate Finance Committee Chairman Charles Grassley (R-Iowa) emphasizes: "We need to make certain that these development banks are being operated for the common good and are not above the law. Just as the banks require loan recipients to be forthcoming about information, so Congress expects the banks to be responsive and candid to requests for information."

Oversight of operations at the World Bank, says John Ruthrauff, senior policy adviser for Oxfam, is still a hit-and-miss proposition, despite improvements instituted during the 1990s by current bank president James Wolfensohn. Ruthrauff notes that the bank's directors do not see their oversight responsibilities extending to operational issues and, even if they did, they are hamstrung by small staffs and a system of rotation in which most directors last only a few years because 26 executive directors and a similar number of alternates represent 180 countries. "They just don't have the time to look into issues themselves -- there are just too many projects," Ruthrauff adds. "So oversight, where it exists, is left to the staff."

The situation is even worse at the regional development banks, insiders say. "While at the World Bank you might have a Pakistani in charge of programs in Venezuela, in the regional banks it pretty much boils down to an elite group that works with its friends," says one insider. "It is tougher to have an arms-length relationship between borrowers and bank staff, or among the latter, because the regions are smaller and there is a lot of opportunity to develop networks and special friendships."

Most observers agree that, of the international financial institutions, the World Bank appears to have the best internal-review policies, an image carefully bolstered by a first-rate press office. "The World Bank takes its fiduciary and audit responsibilities very seriously," bank spokeswoman Caroline Anstey, says. "To this end, we encourage anyone with a complaint of fraud or corruption involving a World Bank financed project to come forward and report these allegations to our fraud and corruption investigations unit. ... Our experience over the years has shown that a transparent management of public funds represents a key element of good governance, and this, in turn, is indispensable for sustained growth, poverty reduction and a country's overall development."

Treasury's role in the oversight process continues to be controversial. Sources on the IDB board tell Insight that U.S. Executive Director José Fourquet has not provided leadership needed to curb alleged corruption at that bank. Fourquet has not responded to several requests for comment.

On Feb. 3, Rep. Barney Frank (D-Mass.), a longtime proponent of greater oversight of the banks and a supporter of their development mission, wrote to Rep. Jim Kolbe (R-Ariz.), chairman of the House Appropriations subcommittee on Foreign Operations, complaining about Treasury's resistance to outside oversight. "I was very disturbed to learn recently that the Treasury Department reproached some officials at the World Bank for engaging in some detailed, high-level discussions with my office about [funding issues] without Treasury's approval," Frank said. "I think these actions speak to the need for continued, assertive congressional oversight."

Critics contend that without conditions placed on the banks, passage of the omnibus appropriations bill by Congress will result in continued abdication of responsibilities in monitoring institutions that lend tens of billions of dollars each year. Not only are U.S. taxpayer dollars in danger of being squandered, they warn, but less-developed nations continue to be saddled with unwanted debt that all too often ends up in the hands of greedy local politicians or is spent on projects that exacerbate economic and environmental problems.

Martin Edwin Andersen is a reporter for Insight. He worked as an international consultant for the IDB from 1997-2001.

www.weeklystandard.com 02/17/2003 12:00:00 AM Fred Barnes, executive editor

THERE WAS A TIME--the 1960s, 1970s--when the political left in America favored wars of national liberation in countries ruled by dictators, some of them fascist dictators. True, the left would have installed communist dictatorships in their place. But at least leftists targeted enemies who were corrupt, brutal abusers of human rights.

Now the left has flipped. The effect of its crusade against war in Iraq would be the survival--indeed, the strengthening--of Saddam Hussein's oppressive regime. The left has brushed aside the pleas of Iraqi exiles, Kurds, and Shiite Muslims who are seeking liberation from Saddam's cruelty. Instead, leftists have targeted those who would aid the Iraqi dissidents, particularly the Bush administration.

The corruption of the left has deepened in recent years. At no time was this more evident than last Saturday when large antiwar protests were staged in New York, San Francisco, and other cities in the United States and around the world, including London. Did the demonstrators march on the Iraqi consulate in New York to demand an end to Saddam's murderous practices? No. Did they spend time condemning him in their speeches and placards? Nope. Did they come to the defense of Saddam's victims? No. The left now gives fascist dictators a pass. Its enemy is the United States.

No one has explained this better than British prime minister Tony Blair in a speech Saturday. If he took the antiwar demonstrators advice, Blair said, "there would be no war, but there would still be Saddam. Many of the people marching will say they hate Saddam. But the consequences of taking their advice is he stays in charge of Iraq, ruling the Iraqi people . . . There will be no march for the victims of Saddam, no protests about the thousands of children that die needlessly every year under his rule, no righteous anger over the torture chamber which, if he is left in power, will be left in being."

In ignoring the 25 million Iraqis who suffer under Saddam's autocratic rule, the left has stripped any moral dimension from the antiwar cause. And its arguments for opposing a war of liberation in Iraq are either uninformed or merely stupid. Here are a few of those arguments:

(1) War will mean thousands of civilian casualties. If there's anything Saddam has produced in his nearly 25 years of rule in Iraq, it's civilian casualties. He ordered the gassing of thousands of innocent Kurds. He had thousands of Shiites murdered. His war against Iran caused tens of thousands of civilian casualties, and his invasion of Kuwait was marked by the killing of thousands of Kuwaiti civilians. Saddam has personally ordered the execution of thousands of Iraqis. He has allowed thousands of Iraqi children to die from starvation or lack of medicine.

Compare that with the few hundred civilians killed in Afghanistan by the U.S. military. In fact, the American intervention saved hundreds of thousands who would have starved to death otherwise. And in the 1991 Gulf War relatively few Iraqi civilians were killed. In truth, a war that deposes Saddam in Iraq will save civilian lives, thousands of them.

(2) It's a war for Iraqi oil. There's an easy way to get all the oil in Iraq that President Bush or anyone else might desire--and it's not war. No, the easy way is to lift sanctions on Iraq and make a deal with Saddam. He's eager to sell the oil and make money. And the United States doesn't need Iraqi oil anyway, what with Russian oil production coming on line. At the moment, America's problem is the cutoff of oil from Venezuela. A war for oil would oust President Hugo Chavez of Venezuela. Of course there is no such war planned, nor is there one to cut the price of oil. The price favored by Bush and the domestic oil industry--and producers like Saudi Arabia--will be restored when Venezuela is pumping fully again, probably soon.

(3) War in Iraq will stir a new wave of terrorism. We've heard this one before. The Gulf War, it was warned, would arouse the Arab street and subject Americans to a wave of attacks. That didn't happen. When the United States went into Afghanistan and, worse, bombed during Ramadan, it was supposed to prompt a worldwide uprising of Muslims, and Muslim terrorists in particular, against America. Again, that didn't happen. So when the Arab leader most hated by other Arab leaders--a leader who's far more secular than Muslim, is removed, it's highly unlikely to cause more terrorism. Most likely, the result will be less.

(4) Give the inspectors more time. This was a common cry at Saturday's antiwar demonstrations. But of course those cries were entirely disingenuous. By definition, the "stop the war" protesters don't want war, no matter what the United Nations inspectors in Iraq happen upon. The demonstrators are playing Saddam's delaying game: Let the inspections continue until support in the United States for military action in Iraq dissolves and war is averted. Then Saddam survives. The inspections ploy is further proof the left has given up wars of national liberation against oppressive dictators and is now in the business of saving oppressive dictators from wars of national liberation.

Fred Barnes is executive editor of The Weekly Standard.

www.nzherald.co.nz 17.02.2003 5.05 pm

CARACAS, Venezuela - Venezuela's embattled President Hugo Chavez is looking to further secure his grip on the private sector, threatening a military takeover of factories and new controls on the hobbled banking sector.

Tens of thousands of opposition Catholics marched in Caracas against the populist president, praying for peace and an end to his rule as firemen soaked them.

Chavez branded his foes fascists waging "economic and financial sabotage," and pledged to defend newly imposed currency and price controls which industry leaders say will drive them out of business.

"The revolutionary government (is) on the offensive," Chavez said.

"If anybody even thinks about closing their (food processing) factories ... we'll take them over. Nobody can threaten the people's food supplies," he said during the state-sponsored Sunday television program "Alo Presidente."

Chavez spooked Wall Street last month when he ordered troops to briefly take over a Coca-Cola affiliate's bottling plant, after accusing its owners of hoarding. His opponents seized on the episode as proof that Chavez's "peaceful revolution" was a mask for Cuban-style communism.

The former paratrooper, who narrowly survived a coup last year, is desperately trying to stem fallout from an oil strike meant to force him from power. The world's No. 5 oil exporter is gripped by its worst recession in at least two decades and the economy contracted nearly nine percent last year.

The economic turmoil and rising unemployment is underscored by violent street clashes between Chavez allies and enemies that have left seven dead and scores injured since December. After three months of fruitless negotiations, Chavez has refused to bend to opposition demands for early elections.

First elected in 1998, Chavez still has three more years left in his term, and jokes he'll stay in power until 2021.

Opposition marchers, many clad in their Sunday best, packed an enormous Caracas highway to pray before Venezuela's patron saint -- the virgin of Coromoto. A priest called for peace before a sea of Venezuelan flags, as a firetruck shot thousands of liters of water into the swelling crowd.

Chavez has already shuttered foreign exchange markets and forced retailers to sell everything from tomatoes to funeral services at government-set prices to shield his mostly poor supporters from spiralling inflation.

The currency controls have hurt the private sector, starving businesses of the much-needed U.S. greenback in a nation that imports more than 60 percent of its goods. The black market has bloomed, offering dollars at 25 percent below the government's official exchange rate.

As marchers gathered in Caracas, Chavez headed east to an oil field where he announced a proposal to introduce controls on commercial bank lending rates for the first time in seven years. He complained Venezuela's poor were not offered affordable credit.

"I want rates to be fixed. I want interest rates to be cut and I want the BCV (Venezuelan Central Bank) to fix interest rates," Chavez declared.

Commercial banks angered the president in December by slashing operating hours to support a damaging, but short-lived, general strike.

To revive the crippled petroleum sector, Chavez has fired more than 12,000 employees of the state oil firm PDVSA.

Still, the flow of oil from Venezuela to the United States, which had been about 13 percent of all U.S. oil imports, has slowed dramatically. The 11-week stoppage has further jolted world oil prices, already reeling from war worries in Iraq.