Daily Press Cuttings

Friday 24th November 2000

Business Week: Globalisation: Business Week leader calls for Europe's sweat shops to be shut down. Criminal gangs based in China, the Balkans, the old Soviet bloc, Latin America and Africa are recruiting desperately poor people and transporting them to Europe. The gangs lend these people thousands of dollars to pay for their trips. Many are sent to Italy under the guise of tour groups destined for Venice or Trieste. Once in the country, local gang members send the illegal immigrants into the underground economy, where they labour for years in sweatshops, working 12 to 14 hours a day to pay off their debts. Those who refuse to try to escape are hunted down, punished, or even killed.

Globalisation has unleashed powerful forces into the international economy. The drive to compete and cut costs is overwhelming. The twin businesses of criminal trafficking and slave labour are casting a shameful pall over 21^st centruy Europe, particularly Italy. They must be stopped.

FT: El Salvador: El Salvador will allow the US dollar to circulate freely alongside its own currency in the new year under a monetary law sent to Congress by the president yesterday. President Francisco Flores asaid that the measure stopped short of the dollarisation of the economy as carried out in Ecuador, however. Haiti: Political parties in Haiti yesterday traded charges over responsibility for several bombs in the capital, which killed two people and injured several others.

IHT: Guinea Bissau: Army units in Guinea Bissau stormed a military garrison on Thursday where mutinous soldiers were believed to be holed up, but the rebels had already fled and were at large in the West African country. Argentina: A 36-hour general strike protesting austerity policies began on Thursday. Argentina's three major trade unions, to which around half of the country's 14 million workers belong, called the strike to protest a package of fiscal, pension and tax reforms announced by the government two weeks ago.

The Guardian: Sudan: Around 100 000 supporters of the former Sudanese prime minister, sadiq el-Mahdi, trhronged the streets along the route to Khartoum's airport yesterday, welcoming the opposition leader home after nearly four years in exile. Mozambique: Obituary by Joe Hanlon of Carlos Cardoso, killed recently, whose tenacious journalism exposed corruption in Mozambique.

The Independent: Mozambique: Mozambique seethed with political tension last night after the government was blamed for the unexplained death of up to 70 prisoners, all believed to be opposition supporters, and speculation surrounded the assassination of the country's most prominent investigative journalist. Environment: Global warming will bankrupt the world by 2065, when the cost of the damage will exceed the value of all the world's resources, an insurance expert said yesterday.

The Economist: Paraguay: Article says that without reform of the economy and the state, Paraguay is heading for default on its foreign debt.

Thursday 23rd November 2000 (Summary by Colin Ellesmere, Elliot Frankal, Sophia Mahmud and Davinda Kaur)

The Times: Russia: Russia is unlikely to sign an agreement with the IMF this year after the breakdown of negotiations for a standby loan. As a result Russia may default next February on its debts to the Paris Club, according to Oleg Vyugin, a former deputy finance minister. Peru: Valentin Paniaga, Peru's Speaker, was sworn in as interim President after Congress rejected the resignation of President Fujimori and sacked him instead. He appointed Javier Perez de Cuellar, the former UN Secretary General, as his prime minister. Africa/aid: Article by Michael Dynes says that Africa has virtually nothing to show for the billions in aid that it has been given. $300 billion of Western taxpayers has been sunk into sub-Saharan Africa in development assistance in the past 50 years, but Africa is now poorer than it was in the 1970s. However, Dynes reports, aid has not been neutral in the economic failure in Africa but has probably sabotaged any prospects the continent may have had for development. The legacy has been white elephant development schemes and a burden to the continent of $350 billion debt which takes 40% of government revenue to service, whilst the bright stars of early African independence – Ghana, Kenya, Zambia, Nigeria, Zimbabwe and the Ivory Coast – have been snuffed out. Nevertheless, providing a repost to the Western view that Africa is a `lost cause', under South Africa's President Mbeki leadership, Nigeria's Olusegun Obasanjo, and Algeria's Abdelaziz Bouteflika have been drawing up a `'Marshall Plan'' for Africa's renaissance. Designed to put Africa in charge of identifying its own development needs, the initiative seeks to increase Western Aid budgets, relax debt relief criteria, encourage investment flows, and open up developed markets for African produce to create a virtuous economic cycle which will favour both the West and Africa. A process, Mbeki states, which will require Africans to abandon `'the near exclusive loyalty to the extended family'' and the embracement of private property rights which he sees as the motor of wealth creation the world over.

Financial Times: UN: A report by the WHO and UNICEF found that in developing countries 2.4bn people still lack sanitation and 1.1bn are without a fixed water supply. [ www.wsscc.org ] Mexico: President-elect Vincente Fox has named a cabinet of mainly ex-businessmen, including former World Bank official Derbez as economy minister. Bahrain: Bahrain is to be the centre of a new Islamic money market that would conform to Islamic law and thus `not trade or discount debt'. Russia/IMF: The IMF left Moscow without reaching agreement on their debt repayments.

International Herald Tribune: Mozambique: Heavy storms since Sunday have killed nine and threaten to repeat the mass flooding that left tens of thousands homeless in 1999. Democratic Republic of Congo: Modeste Mutinga, publisher of the Congo's only independent newspaper has defied jail and the police to win an international press freedom award.

The Guardian: Indonesia: Factory workers producing clothes for the German sportswear giant Adidas are subject to forced overtime, physical abuse and poverty line wages, the European parliament heard yesterday. Mozambique: One of the country's most prominent journalists, Carlos Cardoso, has been shot dead in a central area of the capital, Maputo. Haiti: The election campaign has been marred by violence. Despite this, Jean-Bertrand Aristide, the slum parish priest once hailed as the democratic saviour of impoverished Haiti, is still expected to sweep back to power this weekend following the presidential election. The Gambia: The Gambia has detained the former head of Sierra Leonean military junta, who may now be deported to his home country. Valentine Strasser ruled the country from 1992 to 1996. Gambia deported him back to Britain, but he was denied entry and returned to Gambia.

The Independent: Indonesia: Adidas and Nestle, two of Europe's best known multi nationals, came under attack yesterday for boycotting a parliamentary hearing that was given graphic evidence of their unethical behaviour in developing countries.

EU/Immigration: Brussels yesterday called on Europe's 15 member states to turn their backs on 30 years of "zero immigration", embrace radical pluralism and admit a controlled flow of legal immigrants each year.

Wall Street Journal: Indonesia Central Bank uncertainty has placed renewed pressure on the rupiah, raising fears about attempts to clean up the country's finances.

Wednesday 22^nd November 2000 (Summary by Nigel Harris and Elliot Frankal)

Independent: Peru: Peru's Fujimori, who now styles himself as just “a common citizen” said from Tokyo that he has not decided how long he will stay in Japan, adding that it will be for “a long time.” Legally, Peru's ex-president is considered a dual citizen. The Congress President, Valentin Paniagua, a political moderate who has opposition backing, emerged last night as the likely successor as interim president.

Financial Times: Argentina: (Lex) The government's agreement with provincial governors to freeze their primary spending for five years paves the way for an international rescue package of $20 bn or more. The government must press on with its reform programme, particularly of the social security and pension systems. President de la Rua will have to maintain greater discipline, and the government must do a better job of explaining its actions at home and abroad. Argentina: (Wolf) Why is Argentina in a crisis? Lack of investor confidence has pushed spreads for Argentine government debt to beteween 8 and 10 percentage points over US treasuries (the average has been around 6.5 % over the last three years). With real rates of return at 3% on US bonds, and with the Argentine peso tied to the dollar and hence with inflation at much the same level, borrowing becomes frightenly expensive for the Argentine government. Its currency board has imposed a lack of competitiveness in recent years due to the dollar's appreciation, and 92% of its public debt is denominated in dollars. Its debt-service to exports ratio is more than 90% this year (up from 59% in `97) and Argentina has to roll over large sums in the near future. There seem to be two ways out of the trap, either a partial default (but not a devaluation) or a huge effort to persuade investors that it will meet its obligations, including a credible move to a big primary fiscal surplus (at least 4% of GDP). Chile, in comparison, pays a spread of 2.3% over US bonds. WTO: Pascal Lamy, the EU trade commissioner, reaffirmed the EU's commitment to a comprehensive round of global trade negotiations. Mr Lamy said that the lessons of the disastrous Seattle ministerial meeting a year ago were that the WTO had to respond to public concerns about globalisation and ensure that the trading system worked to the benefit of developing nations.

Wall Street Journal: Guinea-Bissau: A government radio broadcast appealed for calm after the leader of a military coup 2 yrs ago announced he was assuming full control of the armed forces. Brazil: Spain's Banco Santander Central Hispano is endeavouring to buy Banespa, Brazil's biggest bank, making it one of the largest financial bodies in Latin America. Russia: The IMF have their $4.5bn debt package to Russia on ice because they suspect Russia won't pay, rather than can't.

International Herald Tribune: Uganda: An outbreak of the Ebola virus that began in October in northern Uganda appears to be almost contained because no new deaths or cases have been reported in the last five days and only 13 patients remain in the hospital, a health official said Tuesday. Peru: Mr Fujimori's legacy as the president who defeated two guerrilla movements and hyperinflation was slipping away as he appeared reluctant to face a country in which he no longer enjoys total control. His former wife called for him to be investigated, and highlighted his association with Vladimiro Montesinos as a reason for his fall from power.

The Guardian: Turkey: The European Court of Human Rights began considering whether to overturn Turkey's death sentence against the Kurdish rebel leader Ocalan. Turkey accused the EU of acting like `colonial governors', but with Turkey being considered for EU membership they are in a weak position. Zimbabwe: A high court judge ruled that war veterans and supporters of Robert Mugabe will be allowed to squat on white-owned farms.

Tuesday 21st November 2000 (Summary by David Chapkin)

Independent: Japan: The Japanese Prime Minister, Yoshiro Mori survived a vote of no confidence last night as a rebellion by members of his own Liberal Democratic Party collapsed at the last minute. But the victory was considered merely a temporary respite given Mr Mori's opinion ratings which were the lowest of any Japanese leader in recent history. Peru: President Alberto Fujimori's letter of resignation was submitted to the Peruvian Congress last night in which he acknowledged committing “errors” during his 10 year rule but insisting that he always acted in Peru's best interests. Critics say that he and his former intelligence chief, Vladimiro Montesinos, were like Siamese twins who could not survive apart. Mr Montesino's alleged crimes include wiretapping, bribery, extortion, torture, arms trafficking, drug profiteering and ordering murder. Investigators are looking into private bank accounts totalling more than $58m which Mr Fujimori has secreted abroad. Environment: The US slashed its demands by two thirds for forests and farmlands to be used as “sinks” to soak up carbon dioxide. Green groups dismissed the proposals last night saying “it would be a giant's free gift that would allow the US to meet up to half their target without any further action.”

FT: China/Human Rights: China has signed an agreement with the United Nations High Commissioner for Refugees accepting programmes for human rights education and police and judicial training. The agreement could include discussion of the re-education-through-labour camps which human rights activists say are used to imprison political opponents of the government. Peru/Commodities: The Peruvian political crisis appears to have scotched the planned auction of the La Granja copper project which is one of the 10 largest copper deposits in the world. The mine is currently owned by Cambior, the beleagured Canadian gold miner.

IHT: Argentina: The editorial entitled “Rescuing Argentina” is of the view that the Argentinian economy is currently in trouble due to various misfortunes that are not of its own making and that the IMF bailout should not be criticised as creating a “moral hazard” where investors pour money carelessly into emerging markets calculating that the IMF will rescue them should things go awry. According to the article, the bailout will not rescue the investors completely but admits that “it is impossible to rescue a country without indirectly helping private investors.” Philippines: President Estrada has 10 days to respond to charges after which the Senate, comprising 22 senators, will begin the impeachment trial, the first in the Philippines. Mr Estrada will he acquitted if eight senators vote for him since two thirds of the Senate must support conviction in order to remove him. According to Hilton L Root in his op-ed article “Removing Estrada will not Save the Philippines”, the decline of the Philippine economy is due to problems with the land laws (such that people cannot prove ownership and thus are unable to collateralise property as security to obtain loans), a deteriorating educational infrastructure (teachers earn less than domestic servants in neighbouring countries), the middle class is too small (to demand government accountability) and politicians cannot challenge the property rights of barons of power because they depend on their money. Meanwhile 14 million inhabitants of Manila live in disheveled squatter settlements without sewerage or clean water. Sierra Leone: Both Jordan and India will be withdrawing its UN soldiers by February primarly due to casualties suffered and because Western countries had refused to join the UN force. During the last 11 months, rather than gaining territory from the RUF, territory has been lost. Although the Jordanian and Indian troops will be replaced by soldiers from Ghana and Bangladesh, it will only maintain the current level of UN forces in a conflict which a high-ranking Indian officer said could not be won militarily. Chile: It is the editorial view in the article “The CIA's Chile Files” that the recent disclosure of 16,000 declassified documents provided no evidence which would put in doubt the Senate investigation in 1975 that concluded that the CIA was not directly involved in the 1973 coup that brought General Augusto Pinochet to power. Nonetheless, the documents did provide details about President Richard Nixon's attempts to keep Salvador Allende, a socialist, from becoming president in 1970, Mr. Nixon's pressure on Chile's military to stage a coup and Washington's embrace on the Pinochet regime along with evidence that the CIA briefed the State Department on a plan among Latin American's military dictatorships to help one another in assassinating their left-wing opponents.

Monday 20^th November 2000 (Summary by David Chapkin)

Economist: HIPC Debt: The article “Can debt relief make a difference?” highlights the assertion made by the World Bank, for instance, that the net present value of debt burden received by countries so far has fallen by an average 40%, with that of the concerns of various NGOs, in particular Jubilee 2000, who “reckon that HIPC countries are still suffering under the burden of unpayable debts” and Oxfam who have argued that HIPC countries “received much less debt relief than the headline figures touted” and that “some countries could even end up paying more in debt service after the HIPC process than before.” The article mentions real progress having been achieved in Uganda, where primary school enrollment has doubled through use of money saved from debt relief and in Mozambique, which expects to save the equivalent of twice its health budget from debt relief. Questions however are asked as to whether debt relief will mean less aid and whether transfers from rich countries will be in the form of cheap loans which would push debt back up to “unsustainable” levels. Concern is also expressed that under pressure to speed up the process so that the decision point for the 20 HIPC countries is reached by the end of the year, debt relief will be given to countries with bad economic policies and efforts to build a national anti-poverty consensus will be sacrificed.

FT: Cuba/Debt: Cuba, which scoffs at the IMF and shuns privatisation, has asked the Paris Club to reschedule a sizeable part of its total $11bn foreign debt, breaking nearly 15 years of deadlock. The Cuban vice-president, Carlos Lange, said he expected negotiations to proceed “without conditions or impositions”. Fidel Castro has said earlier in the week that Cuba had survived a decade of repression and four decades of US economic sanctions precisely because it had avoided the kind of economic remedies advocated by the IMF. Peru: Alberto Fujimori, rumoured to be seeking political asylum, said yesterday that he would submit his resignation by tomorrow instead of continuing in power until next July. Oil: Despite US-led calls for increased oil supply to bring prices down, OPEC indicated yesterday that when global stocks had reached 90 days worth of consumption (it is now 80 days), output would be cut, probably around mid-January.

Guardian: Environment: The Dutch environment minister and president of the environment conference in The Hague, Jan Pronk, said yesterday that “we made no progress in the first week”. The EU want domestic action to cut burning of fossil fuels and strict limits, preferably 50%, on carbon trading. The US, who have not taken domestic action to cut fossil fuel emissions, is claiming credit, along with Russia, Japan, Australia, Canada and New Zealand, for removing carbon from the atmosphere by encourageing tree growth (carbon sinks), changing farming practices and growing energy crops to burn in power stations. The US Senate has passed a resolution making its ratification of any new global code of behaviour on emissions, conditional on assurances that US competitiveness on world markets will not be harmed.

IHT: Arms: According to the article “Clinton Hints at Missile Cuts”, the US administration says it would have to seek changes in the ABM treaty with Russia, or abandon the agreement to build the proposed, son of Star Wars, the Missile Defence System. Mr Clinton said he had postponed the decision on the missile shield because he could not “justify wrecking” the ABM treaty which would have meant “gambling that somehow, someday, some way the technology would be there.”

Voice: Rwanda/Burundi: Rwanda's ambassador to London, Rosemary Musemainali, said her country and that of Burundi were on a knife-edge and that more UN peacekeeping troops were urgently needed. AIDS: Save for Brazil, the rest of the Caribbean and Latin America have turned a blind eye to the growing Aids epidemic according to the UN. Some 1.6m people have the HIV virus in the region and about 600 new people are infected every day. Cuba: For the 9^th year running, the UN General Assembly voted overwhelmingly (167 to 3- being the US, Israel and the Marshall Islands with 4 abstentions- El Salvador, Latvia, Morocco and Nicaragua) for an end to the US trade embargo against Cuba. Both George Bush and Al Gore have said they would seek to keep pressure on Castro.

(Weekend) 18^th and 19^th November 2000

FT: Burma: The International Labour Organisation voted overwhelmingly for the impositions of sanction by governments, companies and international agencies against the Burmese military regime for its use of forced labour. Money Laundering: The Serious Fraud Office yesterday bowed to international requests (i.e. judicial authorities in Switzerland) to investigate the role played by several unidentified UK banks in handling money plundered by General Sani Abacha. Vietnam: The US and Vietnam signed a bilateral trade agreement yesterday which was depicted by US officials as a decisive move in favour of further economic reform. Although no apology for the US invasion was forthcoming from Bill Clinton, Vietnam Airlines did sign a letter of intent to purchase 3 Boeing aircraft worth $480m at list prices.