International Report - Portugal article





International Report - South Korea Briefing

The Korean Peninsula Remains A Tinderbox
Escalation Worries Grow As North Korea Sabre Rattles

SOUTH KOREAN TANKS CONTINUED TO FIRE artillery shells as the army and air force held its largest air and ground drills of the year in a show of force a month after North Korea’s shelling of a front-line island. According to msnbc as well as Reuters and AP, “The drills, taking place at training grounds in mountainous Pocheon near the Koreas’ heavily fortified border, signalled South Korea’s determination to demonstrate and hone its military strength at the risk of further escalation with North Korea.

Vulcan artillery vehicles fired into a wide valley with numbers carved onto hills below as the army and air force launched the drills at about 20 miles (30 kilometers) from the North Korean border. They are the armed forces’ largest joint firing exercises this year, and the biggest-ever wintertime air and ground firing exercises, government and army officials said on condition of anonymity, citing department rules.

“As the drills began, President Lee Myung-bak visited a military unit to inspect defensive readiness against Pyongyang. Lee’s tour of the forward unit in rugged mountain region in the east just south of the Demilitarised Zone (DMZ). Over one month ago, routine South Korean live-fire drills from Yeonpyeong Island in the Yellow Sea triggered a shower of North Korean artillery that killed two marines and two construction workers. It was the first military attack on a civilian area and since the 1950-53 Korean War ended in a truce. North Korea, which claims the waters around the South Korean-held island lying just 7 miles (11 kilometers) from its shores as its territory, accused the South of sparking the exchange by ignoring Pyongyang’s warnings against staging the live-fire.”

With India increasingly engaged in North Asia and China keeping a close watch on the rumblings in its souterhn backyard abetting the Korean peninsula, the scope for increasing tensions in the area is high.

“Amid international concerns of all-out war on the tense Korean peninsula, South Korea has pushed ahead with live-fire drills from Yeonpyeong Island and Monday’s land-based exercises, according to agency reports.”

“These drills will be the largest-scale firing exercise jointly staged by South Korea’s army and air force. The two Koreas remain technically at war because their 1950s conflict ended in a cease-fire, not a peace treaty. The military tension over the past month has been the worst in more than a decade, and comes on the heels of a South Korean warship that Seoul blames on Pyongyang, but which North Korea denies attacking.” South Korea’s navy has also conducted annual anti-submarine exercises off the east coast. In Pocheon, dozens of soldiers and civilians, including schoolchildren in bright yellow jackets, sat in bleachers on the side of a mountain overlooking the training grounds. Beneath the bleachers, tanks with brightly colored flags and jeeps lined up on a plateau overlooking where the drills were to take place.”

Citizens are concerned by the tinderbox atmosphere. “We are facing a crisis because of North Korea, so I came to see this air and ground operation,” said Kim Tae-dong, 70. “Another North Korean provocation will happen. We should be prepared.”

United States Briefing

The Rise and Rise of Hillary Clinton

The Weeks after the wedding of daughter Chelsea, Secretary of State Hillary Clinton has plunged back into her 15-hour days. She is now President Barrack Obama's leading confidente in the cabinet.

The thaw began in December when Barack Obama and Hillary Clinton were in Copenhagen. The two former political rivals were forced to band together to take on the rest of the world at the international environment summit. Not only did they come away with a partial triumph but they realised that they could work together in an equitable relationship.

The political theatre of the campaign trail that the two starred in has now lost its drama.

Clinton is now influencing policy more than she ever has. The President has relied on her to hammer Iran and to harangue Israeli Prime Minister Benjamin Netanyahu over his defiance of U.S. demands for a settlement freeze. She has also criticised the Russians over Moscow's work on an Iranian nuclear-power plant.

 Her close relationship with Defense Secretary Robert Gates has created an axis that was critical in persuading Obama to add another 30,000 troops in Afghanistan. Clinton has also set a policy of "strategic patience" with North Korea, refusing to offer any new incentives to Pyongyang in order to induce it to return to nuclear-disarmament talks.

The president himself continues to set grand strategy, of course, for his secretary of state to follow but Clinton has added a new sobriety to the administration's approach to the world. She has driven administration policy on Haiti persuading Obama to mount a major military-relief operation in the war torn state. In her biggest strategic speech yet, on Internet freedom in January, Clinton issued a warning about the "new information curtain" descending on countries like China and Iran.

Whether the Obama administration will permit the ascendancy of another star is, of course, hard to permit. Before the President stunned her with his offer, Clinton had wanted to go back to the Senate and write a book about the campaign she'd lost. In the early months when she wielded no influence at all, she had hinted that she would likely not last out the first term.

Zimbabwe Briefing
Mugabe's Zimbabwe Limps Back to Normalcy

Zimbabwe's spiralling inflation rate may have damped down a bit but deep fissures continue to rent the country. The expected happened just a few months ago. Zanu-PF, the party of Robert Mugabe, who marked 30 years in power in April, unilaterally announced regulations to put into effect an Indigenisation and Economic Empowerment Act. The law, passed two years ago but not previously enforced, required all firms worth more than $500,000 to be majority-owned by so-called indigenous Zimbabweans and to show plans within six weeks for compliance within five years.

Under Mugabe's bluntly racist conception of nationality, white Zimbabweans are excluded, since the law defines "indigenous" as those "disadvantaged by unfair discrimination on the grounds of his or her race" before independence in 1980, plus their descendants. So both white Zimbabweans as well as foreign firms are liable to be prevented from wholly owning any small enterprise or farm. Among the foreign firms that will be hit by the introduction of the new act are Barclays Bank and Standard Chartered, as well as Nestl', the Swiss-based food giant, and Impala Platinum Holdings, one of the world's biggest producers of platinum.

The indigenisation act will have far-reaching consequences on Zimbabwe's economic recovery. It will be a deterrent for foreigners looking to invest in the country's mouth-watering mineral riches. Currently international mining firms have stalled future plans. Securing the foreign cash the country sorely needs to recover from Mugabe's ruination of the economy will become increasingly difficult. Insiders insist that this move is part of Zanu-PF's platform for fighting the next election.

The indigenisation bill will give it its populist platform ' blaming the West for all Zimbabwe's ills. It is a platform that has worked in the past and may work in the future. As time passes, it will be increasingly difficult for the country to shake of the yokel of economic stagnation.

Norway Briefing
International Penal System Due for an Overhaul

Halden Fengsel, Norway's newest prison, inaugurated by Harald V, King of Norway is destined to change the face of incarceration worldwide. It embodies the guiding principles of the country's penal system: that treating prisoners humanely boosts their chances of reintegrating into society. Spread over 75 acres, it took ten years and 1.5 billion Norwegian kroner ($252 million) to make Halden a reality. The facility has a capacity of 252 inmates and boasts amenities like a sound studio, jogging trails and a freestanding two-bedroom house where inmates can host their families during overnight visits.
Even before the creation of Halden, Norway has had a better track record than most countries with dealing with the criminal elements of its society. Statistics show that within two years of their release, 20 per cent of Norway's prisoners end up back in jail. In the U.K. and the U.S., the figure hovers between 50 per cent and 60 per cent. The country has, of course, a low level of criminality. A mere 69 per 100,000 people are convicted of crimes and serve time in prison, a figure that is remarkably low when compared to the 753 per 100,000 in the US.
Halden has been designed to avoid creating an institutional feel. The exteriors are not concrete but made of bricks, galvanized steel and larch blending perfectly with their surroundings. The cells are equipped with flat-screen TVs and mini fridges. Designers chose long vertical windows (without bars) for the rooms because they let in more sunlight and for every 10 to 12 cells there is a living room and kitchen.
Halden's greatest asset, though, may be the relationship between staff and inmates. Prison guards do not carry guns and routinely eat meals and play sports with the inmates. The goal is to give prisoners a meaningful life so that they can lead better lives when they are released. It will be interesting to monitor Halden's achievements in the years ahead.  

Greece Briefing
Joint EU-IMF Rescue Package Helps Greece Move On

The state's coffers don't have that money, Finance Minister George Papaconstantinou said in weak explanation of his government's decision to introduce harsh austerity measures in return for a joint EU and IMF bail out. Because today ... the country can't borrow it from the international market. And because the only way for the country to avoid bankruptcy and suspension of payments is to take the money from our European partners and the International Monetary Fund. The government has the responsibility of implementing the most difficult financial measures ever taken in this country. It is a programme which requires effort and sacrifice, and obliges us morally and politically to succeed.

The austerity measures, which include slashing salaries and pensions and increasing taxes, will have to be implemented if Greece is to get the euro110 billion three-year package. The loans are aimed at containing the debt crisis and keeping Greece's troubles from spreading to other countries with vulnerable state finances such as Portugal and Spain. The euro has sagged as those countries have seen debt downgrades, falling below $1.28 from a high of euro1.51 just last year.

The cuts sparked outrage in Greece, with an estimated 100,000 people spilling onto the streets of Athens during a nationwide general strike. Unfortunately what was billed as a protest march quickly grew violent. More than 40 policemen and 15 civilians were injured in the ensuing riots, while 25 people were arrested. Three bank employees, including a pregnant woman, died when they were trapped in a burning bank torched by protesters who were trying to storm parliament. Firefighters used a crane to rescue another four people from the building's balconies.

Greece has lost more than just its financial freedom in the last few weeks. It has also lost its prestige in the eyes of the world. As the daily To Vima headlined, 'Now everyone is judged. Greece frozen by the triple tragedy.'       

Home | Special Feature | Realty | Boardroom | WTO | WEF |International Reports
IMF Economic Briefing | Other Columns | Contact Us