www.dailytimes.com.pk

Just a day before United States President George W Bush delivered a fresh diatribe against Iraq in his State of the Union address, India’s Prime Minister Atal Behari Vajpayee did something unexpected. He appealed to the Great Powers to show “great restraint” and “patience” in dealing with Iraq and make “all efforts” to avoid a war and resolve the Iraq crisis through “negotiations”. Without naming the United States, he said: “It is time the superpower showed some restraint and sought United Nations mediation to resolve the dispute.” Vajpayee also noted that a majority of European countries seem opposed to war on Iraq. Nothing should be done to disturb the delicate balance of forces in the Persian Gulf, he said, because war would “push up the prices of petroleum products”, and India receives the bulk of its supply of these from that region. Most important, Vajpayee somewhat grandiloquently said: “India has always believed that war is no way to resolve disputes”. Vajpayee’s off-the-cuff remarks contrast with the generally wishy-washy position which India’s foreign ministry has outlined over the past few weeks on the issue of weapons inspections in Iraq. Its official statement limits itself to demanding that there should be no unilateral action against Iraq; authorisation for a military attack from the UN Security Council is imperative. One can only hope that Vajpayee’s view is fully translated into a coherent and firm policy and that India will make a diplomatically adequate response to the new rift opening up between the US and Western European states, particularly Germany and France. It is in India’s national interest – and certainly in the interests of its people – that there is no war against Iraq, that the use of force does not get legitimised in world affairs, and that multilateral structures like the UN are defended against America’s aggressive unilateralism. However, it is by no means certain that the Indian government, which is building a “strategic partnership” with the US, and is highly vulnerable to American pressure, will act in the national and international interest. A war on Iraq could also further complicate relations between India and Pakistan. A war on Iraq will have extremely damaging economic and political effects on India, both directly and through the destabilisation of the Middle East and India’s immediate neighbourhood. The effects will be all the graver if the United States launches a protracted operation to effect a regime change in Baghdad. A convulsion in the Middle East will affect the 3 million-plus Indian workers who live in the Persian Gulf. The Indian government has very few defences against these adverse consequences. Five categories of effects are relevant here:

• Direct macroeconomic effects, through increased prices of crude oil, India’s single biggest import item.
• Effects on downstream industries and markets.
• Indirect medium-term economic impact of the likely turbulence in the Middle East.
• Political impact of an unstable Middle East in the event of prolonged US occupation of Iraq.
• Strategic impact of the war on India-Pakistan rivalry – if Islamabad joins the war effort (which India is unlikely to). Iraq is India’s biggest oil supplier and tops the list of its Persian Gulf petroleum sources, including Saudi Arabia, Iran and Kuwait. India depends on imports for 70 percent of its (rising) petroleum consumption. India has had good political relations with Iraq. In recent years, India, along with China, and to an extent Russia, took the lead in signing oil-for-food agreements with Iraq. India has long advocated abolition of such sanctions. India has provided (limited) food and medical assistance to Iraq. Iraq in turn is one of the world’s few governments that broadly supports India’s stand on Kashmir. For decades, the two governments have had extensive trade and investment relations, including long-term oil supply agreements. Before 1991, some of these used to be routed through the former Soviet Union. Currently, there is complex barter as well as direct oil purchase agreements between India and Iraq. In 2000, Iraq leased two new oilfields to India’s Oil and Natural Gas Commission for further development. Should there be a war against Iraq, India will be immediately affected through a choking of relatively steady and cheap oil supplies from Iraq, and a sharp rise in international crude prices, which are widely expected to spurt by up to $10 a barrel, from the present $30-32. India’s oil import bill in the current year is running about 30 percent higher than last year. The latest political troubles in Venezuela have raised it further. The Indian government has ordered state-owned oil companies to top up their stocks to the equivalent of about 40 days’ requirements of petroleum products such as diesel, kerosene and petrol, and 15 days’ supply of crude. This is not a comfortable cushion. India has no strategic oil reserves. Plans have been drawn up by Indian Oil Corporation (India’s only Fortune-500 company) to create three or four storage facilities in collaboration with a German company. But these have still to be approved by the government. The storages will take three and a half years to build. High oil prices will not only raise the general cost-base of the Indian economy (in which petroleum consumption has been rising far more rapidly than GDP), but also erode the country’s currently high ($70 billion-plus) foreign exchange reserves. This is liable to create macroeconomic imbalances and aggravate the crisis of public finances and the state’s aggregate fiscal deficit. This deficit already exceeds 10 percent of GDP. Ultimately, macroeconomic imbalances will slow down growth. With a worsening fiscal deficit, the government will further lower its capital expenditure (an important booster of private sector growth), and cut back essential public services, raising unemployment and poverty ratios. High crude oil prices will have a strong impact on a number of sectors: e.g. power generation (especially for agricultural irrigation), fertilisers and petrochemicals. Indian agriculture, especially food grains production, has just had a record bad year, thanks to a severe drought. High energy prices for irrigation pump sets will cripple recovery, raise food prices and create social unrest. If the US’s reported plans to bring about a full-scale “regime change” in Iraq and set up a model “Middle Eastern democracy” materialise, American troops are likely to remain in the region for 18 months or longer. The longer the US presence, the higher the chances of oil prices remaining at peak levels for long periods. Politically and diplomatically, a strong unilateral push on Iraq by the US, which receives token support from (a reluctant?) UN Security Council will further weaken multilateralism and consensual decision-making in the world community. It will legitimise the use of military force as the preferred method of conflict resolution. This will harm global governance – to the detriment of, among other states, India. War on Iraq will generate generalised turbulence in the Middle East, further inflaming the crisis in Israel-Palestine. Such turbulence, involving violence, will have a broad-based impact on the Gulf region, where 3.1 million Indian workers are located. Their annual remittances to India exceed all flows of foreign direct investment put together. Whether and how far India can resist US pressure to “cooperate” with the war effort remains unclear. In the 1991 war, India originally refused to condemn Iraq’s invasion of Kuwait and to join the US-led war coalition. However, under pressure, India soon allowed US warplanes to refuel on its soil. Later, India also tried to win a share of the contracts for rebuilding Kuwait’s economy. In the last war, India had to evacuate to safety hundreds of thousands of its nationals from the region, especially Kuwait, in what is said to be history’s biggest airlift. Currently, there are large numbers of Indians in especially vulnerable parts of the Gulf: 1.4 million in Saudi Arabia, a million in the UAE, and 350,000 in Kuwait. In the event of a prolonged US occupation of Iraq, Washington is expected to break the back of OPEC. Should that happen, all the great oil producers of the Middle East would be badly affected. This will result in a general recession in the region, with joblessness – and lower remittances to India. An Iraq war also spells upheavals in India’s immediate neighbourhood, especially in Iran, Pakistan and Afghanistan. It is likely to strengthen the forces of ethnic-religious fundamentalism and reinforce regional rivalries. Iran’s President Mohammad Khatami, on a recent visit to India, expressed that concern while opposing unilateral action against Iraq. India is likely to stay neutral in the event of a US-led war on Iraq, but will qualify its position if there is strong multilateral support for military action, with a specific new UN resolution authorising the use of force. The Pakistan government seems more inclined than earlier to join a US-led war coalition. Islamabad is under a fair amount of pressure to do so and may also want to support the US militarily. Its latest statement says a “heavy responsibility” rests on the shoulders of the Iraqi President, Saddam Hussein, to ensure implementation of UN resolutions. This runs contrary to the popular sentiment. There is growing unrest in Pakistan on a possible war on Iraq. If Pakistan does join the US-led war effort, there will be a change in the triangular India-Pakistan-US relationship – in favour of Islamabad. As of now, both India and Pakistan feel frustrated that they cannot win adequate backing from Washington for their respective agendas to marginalize each other. If Pakistan moves close to the US as a war ally, it will capitalise on that proximity to drive a hard bargain with India and adopt a tougher posture. This could create new tensions between the two nuclear rivals which have just witnessed a 10-months long military standoff at the border and whose relations have plummeted to an all-time low. —By Praful Bidwai in Antiwar.com

www.dailytimes.com.pk

Just a day before United States President George W Bush delivered a fresh diatribe against Iraq in his State of the Union address, India’s Prime Minister Atal Behari Vajpayee did something unexpected. He appealed to the Great Powers to show “great restraint” and “patience” in dealing with Iraq and make “all efforts” to avoid a war and resolve the Iraq crisis through “negotiations”. Without naming the United States, he said: “It is time the superpower showed some restraint and sought United Nations mediation to resolve the dispute.” Vajpayee also noted that a majority of European countries seem opposed to war on Iraq. Nothing should be done to disturb the delicate balance of forces in the Persian Gulf, he said, because war would “push up the prices of petroleum products”, and India receives the bulk of its supply of these from that region. Most important, Vajpayee somewhat grandiloquently said: “India has always believed that war is no way to resolve disputes”. Vajpayee’s off-the-cuff remarks contrast with the generally wishy-washy position which India’s foreign ministry has outlined over the past few weeks on the issue of weapons inspections in Iraq. Its official statement limits itself to demanding that there should be no unilateral action against Iraq; authorisation for a military attack from the UN Security Council is imperative. One can only hope that Vajpayee’s view is fully translated into a coherent and firm policy and that India will make a diplomatically adequate response to the new rift opening up between the US and Western European states, particularly Germany and France. It is in India’s national interest – and certainly in the interests of its people – that there is no war against Iraq, that the use of force does not get legitimised in world affairs, and that multilateral structures like the UN are defended against America’s aggressive unilateralism. However, it is by no means certain that the Indian government, which is building a “strategic partnership” with the US, and is highly vulnerable to American pressure, will act in the national and international interest. A war on Iraq could also further complicate relations between India and Pakistan. A war on Iraq will have extremely damaging economic and political effects on India, both directly and through the destabilisation of the Middle East and India’s immediate neighbourhood. The effects will be all the graver if the United States launches a protracted operation to effect a regime change in Baghdad. A convulsion in the Middle East will affect the 3 million-plus Indian workers who live in the Persian Gulf. The Indian government has very few defences against these adverse consequences. Five categories of effects are relevant here:

• Direct macroeconomic effects, through increased prices of crude oil, India’s single biggest import item.
• Effects on downstream industries and markets.
• Indirect medium-term economic impact of the likely turbulence in the Middle East.
• Political impact of an unstable Middle East in the event of prolonged US occupation of Iraq.
• Strategic impact of the war on India-Pakistan rivalry – if Islamabad joins the war effort (which India is unlikely to). Iraq is India’s biggest oil supplier and tops the list of its Persian Gulf petroleum sources, including Saudi Arabia, Iran and Kuwait. India depends on imports for 70 percent of its (rising) petroleum consumption. India has had good political relations with Iraq. In recent years, India, along with China, and to an extent Russia, took the lead in signing oil-for-food agreements with Iraq. India has long advocated abolition of such sanctions. India has provided (limited) food and medical assistance to Iraq. Iraq in turn is one of the world’s few governments that broadly supports India’s stand on Kashmir. For decades, the two governments have had extensive trade and investment relations, including long-term oil supply agreements. Before 1991, some of these used to be routed through the former Soviet Union. Currently, there is complex barter as well as direct oil purchase agreements between India and Iraq. In 2000, Iraq leased two new oilfields to India’s Oil and Natural Gas Commission for further development. Should there be a war against Iraq, India will be immediately affected through a choking of relatively steady and cheap oil supplies from Iraq, and a sharp rise in international crude prices, which are widely expected to spurt by up to $10 a barrel, from the present $30-32. India’s oil import bill in the current year is running about 30 percent higher than last year. The latest political troubles in Venezuela have raised it further. The Indian government has ordered state-owned oil companies to top up their stocks to the equivalent of about 40 days’ requirements of petroleum products such as diesel, kerosene and petrol, and 15 days’ supply of crude. This is not a comfortable cushion. India has no strategic oil reserves. Plans have been drawn up by Indian Oil Corporation (India’s only Fortune-500 company) to create three or four storage facilities in collaboration with a German company. But these have still to be approved by the government. The storages will take three and a half years to build. High oil prices will not only raise the general cost-base of the Indian economy (in which petroleum consumption has been rising far more rapidly than GDP), but also erode the country’s currently high ($70 billion-plus) foreign exchange reserves. This is liable to create macroeconomic imbalances and aggravate the crisis of public finances and the state’s aggregate fiscal deficit. This deficit already exceeds 10 percent of GDP. Ultimately, macroeconomic imbalances will slow down growth. With a worsening fiscal deficit, the government will further lower its capital expenditure (an important booster of private sector growth), and cut back essential public services, raising unemployment and poverty ratios. High crude oil prices will have a strong impact on a number of sectors: e.g. power generation (especially for agricultural irrigation), fertilisers and petrochemicals. Indian agriculture, especially food grains production, has just had a record bad year, thanks to a severe drought. High energy prices for irrigation pump sets will cripple recovery, raise food prices and create social unrest. If the US’s reported plans to bring about a full-scale “regime change” in Iraq and set up a model “Middle Eastern democracy” materialise, American troops are likely to remain in the region for 18 months or longer. The longer the US presence, the higher the chances of oil prices remaining at peak levels for long periods. Politically and diplomatically, a strong unilateral push on Iraq by the US, which receives token support from (a reluctant?) UN Security Council will further weaken multilateralism and consensual decision-making in the world community. It will legitimise the use of military force as the preferred method of conflict resolution. This will harm global governance – to the detriment of, among other states, India. War on Iraq will generate generalised turbulence in the Middle East, further inflaming the crisis in Israel-Palestine. Such turbulence, involving violence, will have a broad-based impact on the Gulf region, where 3.1 million Indian workers are located. Their annual remittances to India exceed all flows of foreign direct investment put together. Whether and how far India can resist US pressure to “cooperate” with the war effort remains unclear. In the 1991 war, India originally refused to condemn Iraq’s invasion of Kuwait and to join the US-led war coalition. However, under pressure, India soon allowed US warplanes to refuel on its soil. Later, India also tried to win a share of the contracts for rebuilding Kuwait’s economy. In the last war, India had to evacuate to safety hundreds of thousands of its nationals from the region, especially Kuwait, in what is said to be history’s biggest airlift. Currently, there are large numbers of Indians in especially vulnerable parts of the Gulf: 1.4 million in Saudi Arabia, a million in the UAE, and 350,000 in Kuwait. In the event of a prolonged US occupation of Iraq, Washington is expected to break the back of OPEC. Should that happen, all the great oil producers of the Middle East would be badly affected. This will result in a general recession in the region, with joblessness – and lower remittances to India. An Iraq war also spells upheavals in India’s immediate neighbourhood, especially in Iran, Pakistan and Afghanistan. It is likely to strengthen the forces of ethnic-religious fundamentalism and reinforce regional rivalries. Iran’s President Mohammad Khatami, on a recent visit to India, expressed that concern while opposing unilateral action against Iraq. India is likely to stay neutral in the event of a US-led war on Iraq, but will qualify its position if there is strong multilateral support for military action, with a specific new UN resolution authorising the use of force. The Pakistan government seems more inclined than earlier to join a US-led war coalition. Islamabad is under a fair amount of pressure to do so and may also want to support the US militarily. Its latest statement says a “heavy responsibility” rests on the shoulders of the Iraqi President, Saddam Hussein, to ensure implementation of UN resolutions. This runs contrary to the popular sentiment. There is growing unrest in Pakistan on a possible war on Iraq. If Pakistan does join the US-led war effort, there will be a change in the triangular India-Pakistan-US relationship – in favour of Islamabad. As of now, both India and Pakistan feel frustrated that they cannot win adequate backing from Washington for their respective agendas to marginalize each other. If Pakistan moves close to the US as a war ally, it will capitalise on that proximity to drive a hard bargain with India and adopt a tougher posture. This could create new tensions between the two nuclear rivals which have just witnessed a 10-months long military standoff at the border and whose relations have plummeted to an all-time low. —By Praful Bidwai in Antiwar.com

www.whittierdailynews.com246371153875,00.html Car crash kills 1, hurts 3 U.S. troops

A member of the U.S. military died from a head injury and three others were injured after a traffic accident on Saturday. The other three soldiers were in stable condition at a military medical facility at the al-Udeid U.S. airbase in Qatar.

The troops were stationed at Camp As Sayliyah, a base 15 miles outside Doha that would be used as operational headquarters for a war against Iraq. They were returning to their base at about 5:30 p.m. after conducting official business in Doha, said Army Capt. David Connolly.

The military would not release the victims' identities or their units. There were no other injuries in the accident, which was still under investigation Sunday night.

This is the second fatality the American military has suffered in the Gulf state of Qatar since the Sept. 11, 2001, terrorist attacks, U.S. officials said. In October 2001, Master Sgt. Evander Earl "Andy' Andrews died in a construction accident.

Czech president Havel ends his term

PRAGUE, Czech Republic

Vaclav Havel, the former dissident playwright who led the revolutionary movement that peacefully toppled communism here 13 years ago, marked the end of his final presidential term Sunday.

"I bid you farewell as your president,' Havel said at the end of his address on state television just hours before his term's expiration at midnight. "I remain with you as your fellow citizen.'

During the prerecorded five-minute speech, he thanked the Czech people for their support and asked their forgiveness for his mistakes. He also alluded to the dramatic events that have marked the nation's transition from communism to democracy since he first took power in 1989.

Chavez declares victory in Venezuela

CARACAS, Venezuela

President Hugo Chavez declared victory Sunday after his opponents agreed to ease a two-month national strike, but thousands of Venezuelans still lined up for a petition drive seeking his ouster.

Strike organizers, who began the protest Dec. 2 to pressure Chavez into accepting a referendum on his rule, said Friday they would ease the work stoppage, already waning, this week to protect businesses from bankruptcy.

However, the strike will continue in the vital oil industry, where production was cut from 3 million barrels a day to 150,000 at the height of the strike. Chavez said Sunday the government boosted production to 1.8 million barrels a day, but striking workers put the number at 1 million.

"Today is a victorious day,' the president said in his weekly television and radio program. "We have beaten once and for all a new destabilizing attempt, a new malevolent and criminal attempt to sink Venezuela.'

Rioters clash with police in Abidjan

ABIDJAN, Ivory Coast

In their biggest protest since this West African nation's civil war began five months ago, hundreds of opposition supporters clashed with police on Sunday after the discovery of a body thought to be that of a key opposition figure.

Supporters of the opposition Rally of the Republicans said the body of Kamara Yerefe, a popular comedian known as "H,' was found in a Dumpster near an auto junkyard early Sunday. Yerefe, a northern Muslim, was a key political figure in the party.

Yerefe's family accused paramilitary police of assassinating him. A Western diplomat, speaking on condition of anonymity, said agents of the internal security service had picked up Yerefe on Saturday night.

Police said the body had not been identified.

Rioters stormed through Abidjan's crowded Adjame neighborhood, erecting barricades and burning tires. Police fired tear gas and shots in the air to disperse the demonstrators, who set a bus ablaze in the middle of a highway.

Suspected radicals arrested in Greece

ATHENS, Greece

Three suspected members of a radical far-left group including the mayor of an Aegean Sea island were arrested in weekend raids by police, authorities said Sunday.

The raids were part of a major police effort to smash shadowy Greek terror groups ahead of the 2004 Olympic Games in Athens.

The suspects, arrested Saturday and Sunday, were identified as Angeletos Kanas, the 52-year-old mayor of the Aegean Sea island of Kimolos, Constantine Agapiou, 56, a civil engineer and 49-year-old Irene Athanasaki.

Police spokesman Lefteris Economou said the three were accused of participation in a terrorist group, the Revolutionary Popular Struggle, or ELA, which has eluded authorities since it first appeared in 1975.

All three were being questioned at Greek police headquarters in central Athens and were to appear before a public prosecutor. Police also questioned more than a dozen people, none of whom were held.

ELA claimed responsibility for the murder of two police officers and more than 100 bomb attacks including many American commercial targets before it officially disbanded in 1995.

:- From wire reports

www.theaustralian.news.com.au By Robin Bromby February 03, 2003

RIO Tinto and BHP Billiton are certain this year to win back most of the iron ore price concessions they made to European and Japanese steel mills in 2002, thanks to booming demand from China, according to a report.

Sydney-based AME Mineral Economics said last night the iron ore sector was gearing up for boom times in 2003 while most of the rest of the business world was gripped by trepidation.

China's thriving steel industry was driving unprecedented levels of demand for iron ore in international markets.

That country's iron ore imports in 2002 smashed the previous year's record of 92 million tonnes, coming in at about 112 million tonnes. This year, China would import close to 130 million tonnes, surpassing Japan and becoming the world's top importer of iron ore.

AME expects Japanese and European steel makers to agree to price rises between 2 per cent and 3 per cent in 2003 after forcing through a 2.4 per cent reduction last year.

Producers were expected to start the negotiations by asking for a price increase of between 5 and 10 per cent.

"While the tight supply situation might support a rise of this magnitude, the increasingly consolidated steel majors in Japan and Europe, with an eye on their uncertain bottom lines, are unlikely to agree," the report said.

Rio, BHP and Brazil's CVRD are the world's three big iron ore producers. AME said the scale of Chinese demand would force the pace on new projects, as well as on mine expansions in the pipeline such as BHP's Mining Area C, Rio's West Angelas and CVRD's capacity upgrades in Brazil.

These companies between them control 70 per cent of the world seaborne trade. They have also slashed costs over two years by 13 per cent by using their size to impose labour force rationalisation. The growing ownership concentration opened the doors to reducing overheads, saving back office costs, and exploiting operating synergies.

These three companies had, since 1998, expanded their production by 40 per cent. In the longer term, the iron ore industry was facing some big mining problems.

AME said these included ever deepening mines, having to pull out growing percentages of waste material to extract the ore, longer hauling distances and the depletion of higher grade ores.

Ore transport and port costs continued to burden the producers.

In 2002 transport and port expenses alone made up 52 per cent of the cost of getting the ore into the holds of ships - compared to the mining process's 21 per cent.

Australia ranked as 2002's lowest cost producer, mainly due to removal of restrictive labour practices.

www.indianexpress.com Press Trust Of India

New Delhi, February 2: With WTO negotiations on Trips and public health hitting a road block over EU’s proposal, member countries are mooting a ‘cooling off period’ even as host nation Japan has prepared a new proposal to be tabled at the Tokyo mini-ministerial later this month.

Official sources told PTI here that this suggestion follows the failure to accept EU’s proposal to give the world health organisation (WHO) a role in assessing additional coverage of diseases at a special session held in geneva recently.

But the issue is expected to figure prominently at the forthcoming WTO mini-ministerial at Tokyo starting on February 14 where Japan would submit the proposal.

WHO has already indicated that it is not willing to take on the responsibility of assessing additional diseases. Sources said india supported the stand of Brazil, China and the African countries who questioned the diseases classified by EU’s trade commission Pascal Lamy in his letter dated January 7, addressed to all trade ministers.

Lamy had in his letter said that roping in the WHO could “produce an overall WTO decision with comprehensive scope but differentiated modalities of application”.