www.alertnet.org Jan 2003 00:00 By Niala Boodhoo and Nadim Ladki

WASHINGTON/BAGHDAD (Reuters) - Details of a U.S.- Iraqi skirmish in cyberspace, in which Baghdad blocked U.S. e-mails aimed at key figures, emerged on Saturday after Washington ordered more troops to the Gulf for a possible war.

U.S. defence officials said the military had begun an e-mail campaign urging military and civilian leaders in Iraq to turn against President Saddam Hussein and reveal the location of any chemical, biological or nuclear weapons.

News of the cyber-campaign, part of a psychological war mounted by elite U.S. Special Operations, came as U.N. weapons inspectors flew by helicopter to scour more sites in Iraq in search of weapons of mass destruction.

The inspectors have urged the United States to provide more specific intelligence to help pinpoint any banned Iraqi weapons before they give a January 27 report on two months of searches.

Officials have said U.S. President George W. Bush has yet to decide on any invasion of Iraq over the alleged banned weapons, but Defense Secretary Donald Rumsfeld ordered nearly 35,000 more troops on Friday to the Gulf as part of a build-up aiming to more than double the 60,000 U.S. troops now in the region.

In the campaign on the Internet, the e-mails in Arabic urge Iraqis not to follow orders to use chemical, biological or nuclear weapons, to identify where they are located by signals or render the weapons ineffective.

The state-controlled e-mail service is available only to a small number of Iraqis, mainly government officials, senior public servants, academics and scientists. Iraqis began to receive the e-mails last week, visitors there said.

Iraqi authorities have blocked the e-mail service access in an apparent attempt to stop the messages from spreading inside the country, visitors said.

HELICOPTER SEARCHES

Iraq denies it has any banned weapons programmes. Washington says it does and that if Iraq continues to deceive, it would be in "material breach" of U.N. Security Council resolutions and that could mean war.

Mohamed ElBaradei, head of the U.N. nuclear watchdog, and his colleague Hans Blix, chief of the U.N. Monitoring, Verification and Inspection Commission (UNMOVIC), told the U.N. Security Council on Thursday there were no "smoking guns" to prove Iraq had banned weapons.

Top officials in Europe have spoken out against a rush to war on the basis of inconclusive weapons inspections.

"Without proof, it would be very difficult to start a war," European Union foreign policy coordinator Javier Solana said.

The U.N. arms inspectors flew by helicopter to an oil facility west of Baghdad on Saturday, the second aerial inspection since they resumed work in Iraq on November 27.

They also searched seven other sites, their visits including a trip to a university in the town of Tikrit, birthplace of Saddam and 200 km (125 miles) north of Baghdad.

On the diplomatic front, Turkish Prime Minister Abdullah Gul arrived in Saudi Arabia on Saturday for talks on the Iraq crisis. Before heading for Riyadh, Gul told reporters in Ankara:

"We are a country in the region and one of the countries that will suffer the most (in case of a war)," he said. "It's to our interest if the crisis ends up without a war. To be able to achieve this, every country in the region has a responsibility, but the greatest responsibility belongs to Iraq."

Saudi Arabia and Turkey have publicly opposed a war against Iraq and both have so far declined to grant Washington permission to use bases on their territory for military strikes.

In Algeria, Iraqi Deputy Prime Minister Tareq Aziz held talks with President Abdelaziz Bouteflika as part of a drive to drum up Arab support for Baghdad.

BRITISH TASK FORCE

U.S. ground forces ordered to deploy so far are substantially short of the more than 250,000 sent to the region for the 1991 Gulf War but the current shift could grow more rapidly in January and February.

Britain is also mobilising its forces alongside the Americans despite grave doubts within Prime Minister Tony Blair's Labour party.

The flagship of Britain's navy, the aircraft carrier Ark Royal, set sail on Saturday at the head of the largest UK amphibious task force deployed since the 1982 Falklands War.

The 16-ship flotilla is officially sailing for long-planned naval exercises in the Far East, but British officials say they have upgraded the force in case it is needed in Iraq.

In Vienna, OPEC producers prepared for emergency talks on Sunday that will decide how far to open the oil taps to prevent a price shock as war looms in Iraq.

www.dailytelegraph.news.com.au 12jan03

A BOMB threat forced a Dutch airline KLM flight from Amsterdam to the Netherlands Antilles to divert to Paris, the airline and airport authorities said.

The passengers and crew were evacuated after the flight landed at Paris' Roissy-Charles de Gaulle airport. There, the McDonnell-Douglas MD-11 jet was being searched with police dogs and luggage was being inspected, the Paris Airports authority said.

The plane was flying to the Dutch island of Aruba, in the Caribbean off the north coast of Venezuela.

About half an hour into the flight, a passenger unfolded his table and found a sign that said there was a bomb on board, said Bart Koster, a KLM spokesman.

Charles de Gaulle was the closest airport.

"So far we have no reason to think there really is something on board, but we'll have to await the results of the investigation," he said.

He said the plane was carrying 252 passengers and 13 crew. Paris Airports said there were 273 people aboard. The reason for the discrepancy was not immediately clear.

Crew and passengers were housed in a hotel and the flight was expected to continue on to Aruba tomorrow, he said.

With his back to the wall, would Iraq's Saddam Hussein blow up his oil wells? Just in case, the U.S. military is asking well blowout specialists to be prepared  www.canada.com Chris Varcoe Calgary Herald Saturday, January 11, 2003

The U.S. suspects Saddam Hussein would light his oilfields on fire as part of a "scorched earth" policy.   Safety Boss workers struggle to bring a wellhead under control in Kuwait in 1991.   Mike Miller of Safety Boss expects Saddam to torch the oilfields again if threatened by U.S. military action.   The Kuwaiti oilfield fires of 1991 blackened skies for months and burned up to seven million barrels a day.   As the world inches towards war in the Middle East, the Canadians who helped snuff out the fires of Kuwait are advising the U.S. military on how Iraqi President Saddam Hussein might torch his own oil wells.

Mike Miller, head of Safety Boss Inc., international well-blowout specialists based in Calgary, was contacted by U.S. army explosive experts this week seeking information on how Iraq blew up more than 700 wells in Kuwait during the Persian Gulf War.

Officials in Washington believe Hussein might set his own wells on fire as part of a scorched earth policy during a new war in Iraq, a country containing 10 per cent of the world's crude supplies.

With oil prices rising above $30 US a barrel in recent weeks, energy traders and political pundits are already anticipating a clash between Western armies and Hussein's Republican Guard.

"Obviously, they're not hiring us yet but they want to know how the damage was caused to the wellheads in Kuwait during the first go-around and what kind of damage could be caused now," Miller says.

"We had a discussion this morning with what kind of explosives (Iraq) may have. They think the Iraqis may have seismic explosives and that is similar (to 1991) and can cause the same damage. So things are heating up."

Miller, whose Canadian team capped 163 wild wells in 202 days in Kuwait, shipped U.S. experts pictures showing a well rigged with plastic explosives that failed to explode during the first Gulf War.

The issue of Saddam attacking his own oil industry has become a concern in Washington with a U.S.-led invasion widely expected in the coming months.

About 120,000 American troops are expected to be in the region within a month and plans are being made to avoid a repeat disaster involving oilfields being set ablaze.

"We would want to protect those fields and make sure they are used to benefit the people of Iraq and are not destroyed or damaged by a failing regime on the way out the door," U.S. Secretary of State Colin Powell said last month.

In Kuwait, the head of the country's state-owned oil monopoly expects such a tactic as Iraq's ruler fights for his survival.

"He is the man that you expect the unexpected (from) and as long as he did it for Kuwait, he would do it for other parts, even if it is for his own oilfields," Ahmed Al Arbeed, chairman of Kuwait Oil Co., told CNN recently.

The environmental and economic consequence of such actions would be immense, given the experience in Kuwait.

The infamous Fires of Kuwait, as they have been known since 1991, blackened the skies over the tiny Gulf state for months, causing black rain to fall from the skies and torching up to seven million barrels a day.

The attack caused some wells to spew more than 60,000 barrels of crude per day, creating dozens of oil lakes in the desert.

A report by the Washington-based Centre for Strategic and International Studies (CSIS) noted recently that a second Gulf War would likely be swift and lead to Saddam's defeat, but Iraq's urban warfare strategy "could include deliberate efforts to burn oilfields and create water barriers."

Iraq produces up to 2.8 million barrels per day, although its petroleum industry has been hampered for a dozen years by international sanctions imposed after its invasion of Kuwait.

Well fires could however cause major problems, restricting the ability of soldiers to move through the country and stoking energy prices around the world.

"Iraq's southern oilfields are between the U.S. military and Baghdad and the presumption is that with an army coming, the fields are in harm's way," says Michael Lynch, an energy expert at the Massachusetts Institute of Technology's Centre for International Studies.

"It's very difficult to fly helicopters in thick black smoke. He may put smoke in the air and put up as much chaos as he can. . . He has asked the Iraqi people to make sacrifices before and it's very easy to imagine him doing that.

"The question is how do we stop it?"

Another major concern is whether Hussein attempts to attack oil installations in neighbouring Kuwait and Saudi Arabia, jeopardizing production from the large OPEC members.

Lynch believes the likelihood of such an event succeeding -- one of the market's great fears -- is extremely low, given Iraq's failure to damage Saudi oilfields with Scud missiles in 1991.

Geographically, two of Iraq's largest oilfields -- Kirkuk in the country's north, and Rumaila near the southern border with Kuwait -- are close to U.S. forces and could be seized quickly by coalition soldiers, preventing serious damage.

Yet, even the prospect of losing some of Iraq's production for several months would have an impact on tight energy markets, which are currently grappling with a strike by Venezuela's oil workers that has choked off its exports.

"In our worse-case scenario, we feel Saddam has nothing to lose and puts the torch to his oil wells," says Robert Ebel, director of energy for CSIS. "The worst case scenario is he torches his field. . . and (oil) prices spike."

The CSIS report says if the war is relatively benign, oil prices would average about $36 US a barrel during the first three months of the year, before backing off sharply.

However, deliberate acts of sabotage of Iraq's oil infrastructure would drive prices higher. If the war drags on and retreating soldiers set most wells in Iraq on fire -- and production in other Middle East countries is impeded -- prices could hit $80 a barrel through the first quarter, the report warns.

"I would hope the coalition would take acton early on to capture those fields," Ebel says. "No one knows what goes on inside Saddam's brain."

University of Tulsa professor Dobie Lagenkamp, former deputy assistant secretary for oil in the U.S. Department of Energy, says a larger threat is that crude production is choked off if there's a scramble to control the oilfields by various factions within Iraq.

"I don't see any substantial interruption, because there's no motivation for anyone to shut them down," Lagenkamp says of the country's oil wells.

"The problem isn't the oilfields being destroyed, but who has control over the fields?"

There's little doubt world energy markets are in a fragile state today given the geopolitical complexities of Iraq, the war on terrorism and the near shutdown of Venezuela's oil industry.

Lynch compares the instability to the last Gulf War period, which saw crude shoot up above $40 a barrel only to tumble more than $10 on the day hostilities began, Jan. 17, 1991.

The U.S. Energy Information Administration warned this week that markets are extremely volatile and American oil inventories are near their lowest point in 26 years.

There is some reason for optimism, though. OPEC members, including Saudi Arabia, are contemplating a large production increase in the coming days to tame rising prices.

Saudi officials insist they have excess capacity -- analysts peg it near 2.5 million barrels per day -- and the kingdom could ramp up production quickly.

If oil prices spike, consuming countries also have a short-term mechanism to coax down prices, notes a study by George Perry of the Brookings Institution in Washington.

The United States has access to 570 million barrels of oil in its strategic petroleum reserve -- enough to supply about 2.8 million barrels per day for six months.

Other countries are stockpiling another 700 million barrels.

"We're not worried about the loss of Iraqi oil per se, because it can be made up," notes Ebel.

"But what if Venezuela is still off? Now you've got a real oil supply shortage looking you in the face."

Back in Calgary, talk of a new Gulf War hasn't gone unnoticed.

Well blowout specialists, a small fraternity with only a handful of expert capable of capping large fires, are preparing for a possible return to the region.

The situation, however, is different this time.

During the first Gulf War, Kuwaiti's rulers had access to money in western banks and spent four months before the battle began planning the blowout-stopping operation.

The tiny country's oil production fell to almost nothing, but was largely brought back on stream within 18 months.

In Iraq, the situation is less clear. It's unknown who would run the country following a war, or where the money would come from to cap any wild wells.

Still, the waiting goes on.

"In the past year when it became evident the U.S. would act, it came to our minds immediately that (Hussein) would most likely -- if seriously threatened -- set the oilwells off," says Miller of Safety Boss.

"He's done it before. There's no reason to think he wouldn't do it again."

varcoec@theherald.southam.ca

www.iranmania.com Saturday, January 11, 2003 - 2002 IranMania.com

Tehran, Jan 10 - Former president Akbar Hashemi Rafsanjani said here Friday that US faced many troubles at home, including a whopping foreign trade deficit and insecurity, but it was trying to preserve its hegemony over the world by resorting to threats and terror, IRNA said.

"One should not be intimidated by America which is grappling with economic, cultural, social and educational problems at home," he told thousands of worshipers at weekly Friday prayers.

"The country (US) which always used to have massive surplus trade revenues, is now faced with about 4,500 billion dollars of foreign trade deficit, with interest rates not included."

Rafsanjani, who is the chairman of the arbitrative Expediency Council, said that the American government's budget deficit had piled up to 4,000 billion dollars over the past 20 years. Its debts to the private sector amounts to 32,000 billion dollars and current unemployment rate in the US stands at six percent, he added.

"America's security condition has also worsened very much. Phone taps have increased, surveillance cameras have been set up in sensitive junctions and subways of the country to control people and travel to America has become more problematic," Rafsanjani added.

"All these together have led to a 60 percent decline in foreign investments in America," the cleric said.

Rafsanjani said the American bullying had scared many countries, including certain individuals in Iran who believed in a concession to the United States.

"Many have now become scared. Even in Iran, there are certain puppets who think nobody can confront America and thus there must be a concession," he said, adding "America has instilled this terror into many hearts and is trying exploit this atmosphere of terror".

Rafsanjani denounced US' controversial policies, especially in the case of Iraq which Washington has threatened to attack if Saddam Hussein failed to expose the country's alleged weapons of mass destruction.

"America claims that it wanted to set the people of Iraq, Iran, Saudi Arabia, Pakistan and Venezuela free, but these people will never tolerate American hegemony.

"If Iraq is released from the yoke of the Baath party, will the freedom-seeking Muslim Iraqi people tolerate a hand-picked government in their country?

"Either disintegration of Iraq or its transformation into a federal or free government will prejudice American interests," Rafsanjani said.

"America has many problems in view of all these controversies and its dreams will never come to reality. Meanwhile, we will definitely gain victory if we pay the cost of remaining on the divine track with fortitude," the cleric added.

economictimes.indiatimes.com INDRANI BAGCHI TIMES NEWS NETWORK [ SATURDAY, JANUARY 11, 2003 04:13:57 AM ]

NEW DELHI: When Vajpayee invited the Singapore prime minister, Mr Goh Chok Tong to India last year, Mr Goh put in a rider. “Lets sign a free-trade agreement,� he said, “and I’ll come for the signing.� Not one to miss the opportunity, Mr Vajpayee is reported to have said, “Done�.

In April, then, India and Singapore will be signing a free-trade agreement that has been dredged out of the garbage heap. By the end of this year, India will have signed a similar agreement with Thailand.

During last year’s India-Asean summit, Mr Vajpayee offered a free trade agreement with the Asean in the next decade. The Mexican foreign minister, Mr Jorge Castaneda, who was here last month with an olive branch, to make up for a faux pas his UN ambassador had made, he too offered a free-trade agreement to the prime minister, which Mr Vajpayee readily agreed to.

India is negotiating with Mercosur for a similar pact, while a deal with South Africa is moving out of the drawing board and into the decision stages. And Brazil’s new president, Mr Lula, has India in his radar screen as one of the four countries for trade pacts.

And then there is the big whopper: a free trade agreement with the US. It was proposed by Senator Sam Brownback recently and hailed enthusiastically by the business community.

It remains to be seen whether the government finds the idea as attractive. For the present, however, several task forces are in action: with Singapore, Thailand and the Mexico panel will be meeting shortly.

Is India suddenly discovering the world, you wonder, after years crouched in a protectionist shell? The mindset is clearly changing and free trade as a tool of economic diplomacy is gaining ground in the MEA at least, largely the effort of a foreign minister with a finance background.

But the changed outlook is also a comment on India’s zero achievement in securing bilateral free trade agreements, all the rage in the international arena.

Whatever the reservations of the mandarins of the commerce ministry, India is beginning to realise that it will virtually fall off the map of global trade if it does not get its act together and cobble together some effective bilateral trade agreements with certain key countries.

The multilateral arrangement, WTO, is going nowhere, getting clogged with too many countries, too many issues and too many disputes. Therefore the “quad� (US, EU, Canada and Japan) are working furiously on bilateral arrangements to speed up trade.

Robert Zoellick, USTR, is racing with crusading zeal through nations as varied as Chile and Singapore to tie up free-trade arrangements that are more forward looking than the WTO.

Where does India fit into this trading matrix? Nowhere actually. SAARC is virtually a dead letter, while India is concentrating its energies on economic arrangements by keeping Pakistan out.

This means an extra interest in BIMSTEC, which feeds into Asean, while New Delhi is in the throes of an FTA II with Sri Lanka. Nepal and Bhutan get economic concessions anyway, so India’s next target country in the region is Bangladesh and some big ticket concessions can be expected soon.

An FTA with Sri Lanka was almost derailed by protectionist lobbies here, other countries will face a great deal more scepticism. Therefore, the government is looking at a new way of making these FTAs more palatable.

First, the tariff harmonisation will have longer lead periods. Second, India will be hawking its services to tie up R&D and outsourcing projects under the rubric of an FTA. Singapore is not unwilling. The FTA will be named comprehensive economic co-operation agreement rather than a straightforward FTA.

The way a Mexico or South Africa FTA is being sold within the government is by pointing out the advantages of securing other markets, the US and southern Africa/SADC, respectively.

The Indian government reckons that in sectors like textiles or pharmaceuticals, Indian companies would benefit hugely by an FTA with Mexico.

Singapore will be the test case, because, with zero tariffs, Singapore and India will not only have to resolve issues of local origin but even issues like accessing the rest of Southeast Asia.

According to Indian officials, Southeast Asia is ripe for the picking, because these countries want a counter to China which is not only the factory of the region but also the largest market.

Only India’s size can make it comparable. Does India have what it takes? Watch this space.