NEWS,13.11.2012

Latin America's middle class now rivals poor, study finds

Rapid economic growth and more inclusive social policies in Latin America in the last decade have lifted 50 million people into the middle class, which for the first time rivals the poor in number, the World Bank has said in a new study.Rising income levels have also created a 'vulnerable' class, which at 38% makes up the largest income group.These people hover just above poverty, living on a daily income between $US4 and $US10 per person."As poverty fell and the middle class rose... the most common Latin American family is in a state of vulnerability," the World Bank, the global development lender, said in a report looking at the middle class and economic mobility in Latin America and the Caribbean . The World Bank measures the middle class as people who have economic security, facing less than a 10% chance of falling back into poverty.For the region, that translates into a daily income of $US10 to $US50 ($12 and $61) per person.Roughly 30% of the population now falls into that category, equal to the third of people still in poverty a remarkable shift in a continent that has been known for its vast income inequalities, dominated by the poor and a narrow slice of the rich.With global economic expansion, and redistributive policies in some countries, at least 40 percent of the region's population has moved to a higher economic class between 1995 and 2010.In Brazil, the region's largest nation and the world's sixth biggest economy, booming commodity-led growth and conditional cash transfers helped pull 30 million people out of poverty under left-leaning former president Luiz Inacio Lula da Silva.Across the region, the rise of the middle class has had clear effects, helping countries like Brazil become less reliant on foreign assistance and less amenable to foreign pressure.Latin America is now the only region in the world with narrowing income inequality, the World Bank said in a report last month, though the rich-poor divide remains higher than in most developed countries.It has nudged some countries toward greater democracy, and raised hopes for businesses eager to take advantage of the growing consumer tastes for everything from the Internet to financial services.The question is whether this rapid rise can continue, especially with the global slowdown.While families have improved their situation in the last decade, children are often still bound by the incomes and education of their parents, meaning mobility between generations remains low, the World Bank said.It is unclear whether the middle class's rising expectations can by themselves create a society of more equal opportunities.Traditionally in Latin America the middle class has opted out of public services like education and health if they can afford to do so, creating a fragmented society where the poorest members are stuck with subpar social protection. Low taxation has also exacerbated the problem of low-quality services, the World Bank said."The middle classes may not automatically become the much-hoped-for catalytic agents for reforms," the Bank said.

US re-elected to UN Human Rights Council

The United States was re-elected on Monday to another three-year term on the UN Human Rights Council in the only contested election for the organisation's top human rights body.The US was competing with four countries for three open seats belonging to the Western Group on the council. Germany and Ireland were also elected by the 193-member General Assembly. Greece and Sweden lost out.US Ambassador to the UN Susan Rice said her country was "pleased and proud to have been re-elected to a second three-year term"."I'm proud to say that, today, the Obama administration's leadership of the Human Rights Council has delivered real results. Today's vote affirms that active US leadership in the Human Rights Council and throughout the United Nations system will continue to pay real dividends for Americans and for the rest of the world," Rice said following the voteGermany's UN Ambassador Peter Wittig also praised the vote, thanking member states for their support."It was a good sign that we had a healthy competition at least in the Western Group, we could explain and promote our human rights agenda and we believe this also should also be an example for other regional groups," Wittig said.African, Asian, Eastern European and Latin American countries put forward uncontested slates, meaning candidates were virtually certain of winning one of the 18 open seats up for grabs in this year's election on the 47-member council.Several human rights groups have criticised a number of the candidates as unqualified, including Ivory Coast, Ethiopia, Gabon, Kazakhstan, Pakistan and Venezuela.On Monday, Venezuela's UN Ambassador Jorge Valero said his country's efforts to become a member of the council had "unleashed a truly unusual campaign"."It's important to emphasise that Venezuela has committed itself to defend the sovereignty and liberty of people," Valerio said in an apparent allusion to Venezuelan President Hugo Chavez's comments that Venezuela would oppose any actions or aggressions against allied countries such as Syria or Cuba.The five Western nations competing for seats were all deemed qualified by the rights groups as was Estonia, which was elected from the Eastern Europe groupAlso elected on Monday were Argentina, Brazil, Ivory Coast, Ethiopia, Gabon, Japan, Kazakhstan, Kenya, Montenegro, Pakistan, South Korea, Sierra Leone and the United Arab Emirates. They begin three-year terms on 1 January 2013.Jamil Dakwar, the director of the American Civil Liberties Union's Human Rights Programme, welcomed the US re-election to the council."Despite an imperfect human rights record, US membership on the council helped turn the tide on key issues, especially in the area of LGBT [Lesbian, Gay, Bisexual and Transgender] rights, freedom of speech and association, and women's rights," Dakwar said in a statement. "Now that the Obama administration has won a second term, human rights at home and abroad should be a high priority." The Human Rights Council was created in March 2006 to replace the UN's widely discredited and highly politicised Human Rights Commission. But the council has also been widely criticised for failing to change many of the commission's practices, including putting much more emphasis on Israel than on any other country and electing candidates accused of serious human rights violations.Former President George W Bush's administration boycotted the council when it was established because of its repeated criticism of Israel and its refusal to cite flagrant rights abuses in Sudan and elsewhere. But in 2009, then newly elected President Barack Obama sought to join the council, saying the US wanted to help make it more effective. Rice said Obama's decision was vindicated on Monday when the US was re-elected to serve on the council with 131 votes."The United States is clearly of the view that the Human Rights Council clearly has its flaws ... including its excessive focus on Israel, but it is also a body that is increasingly proving its value and we've been proud to contribute to some of what we think are some of the finer moments of the Human Rights Council it's approach to Syria, it's approach to Sudan, it's approach he situation in Libya with the commission of inquiry."

Satellite shows N Korea missile activity

Satellite imagery indicates North Korea has been testing rocket engines, a sign it continues to develop its long-range ballistic missiles, a US academic institute said on Monday.The analysis provided to The Associated Press is based on satellite images taken as recently as late September of the Sohae site on the secretive country's northwest coast. In April, the North launched a rocket from there in a failed attempt to propel a satellite into space in defiance of a UN ban.The analysis on the website of the US-Korea Institute at Johns Hopkins School of Advanced International Studies, which is called "38 North", said it remains unclear whether the North is preparing another rocket launch but predicted it may embark on new rocket and nuclear tests in the first half of 2013.The analysis underscores the challenges posed by the North's weapons programmes to the United States and its allies as President Barack Obama heads into his second term. Washington's most recent attempt to negotiate a freeze in the North's nuclear programme and a test moratorium in exchange for food aid collapsed with the April launch that the US regarded as a cover for testing ballistic missile technology.In 2009, North Korea tested a long-range missile and its second nuclear weapon within months of Obama taking office, and the 38 North analysis says North Korea may conduct new tests in the aftermath of presidential elections recently completed in US and due in December in South Korea. That could be viewed as a tactic to exert more pressure on the close allies as the North seeks recognition as a nuclear power.Last month, Defence Secretary Leon Panetta said North Korea continues to prepare for such tests, and the North, angered by Washington's recent agreement to let Seoul possess missiles capable of hitting all of its territory, has recently claimed that the US mainland is within range of its missiles.According to South Korea's Defence Ministry, North Korean missiles are believed to have a range of up to about 6 696km, putting parts of Alaska within reach. But the North is not believed to have mastered the technology needed to hit a distant target and miniaturise a nuclear warhead to mount on a missile. The North has a spotty record in test launches, raising doubts about whether it is truly capable of a long-distance attack.The 38 North analysis concludes that since the failed launch on 13 April of the Unha-3 rocket that disintegrated shortly after takeoff, the North has conducted at least two, and possibly more, tests of large rocket motors at a test site less than a kilometre away. The tests are critical for the development of new rockets."Pyongyang's large motor tests are another clear sign that its missile programme is moving forward. Whether there will be another long-range missile test this spring remains unclear but is a distinct possibility," said Joel Wit, a former US State Department official and editor of 38 North.A 9 April satellite image shows what appear to be dozens of fuel tanks near a stand used for conducting tests of rocket engines. A 17 September image shows the tanks are no longer there, and a flame trench has been stained orange and surrounding vegetation has been burned from the exhaust of an engine. An image from 28 September indicates a further test has taken place.The analysis was written by Nick Hansen, a retired expert in imagery technology with a 43-year experience in national intelligence.He concludes the tests were likely of the first-stage engines of the Unha-3 or the new, bigger KN-08 long-range missile first viewed in a military parade in Pyongyang shortly after the April launch attempt.The capabilities of the KN-08 and whether it could pose a potential threat to the continental United States remains unclear. Some analysts have also questioned whether the half-dozen of KN-08 missiles shown at that parade were genuine or just rigged up for show.The analysis by 38 North says the 28 September images also show construction work on the upper platform of a launch tower at Sohae to enable it to accommodate even larger rockets than the Unha-3 or KN-08.

NEWS,11.08.2012

Globalization and the Lessons of History

 

As the U.S. economy struggles to recover from the worst recession in 70 years, we face a new, much more challenging world. Economic globalization means that more countries are exporting their goods, generating first-rate research, and attracting investments: besides China, we compete with Brazil, India, South Korea, and Turkey. Although terrorism, elections, and natural disasters dominate headlines, globalization has been the most powerful trend over the last thirty years. Despite the recession, it shows no sign of abating. Dealing with globalization may tempt us to see other countries as simply our competitors or worse, as our enemies. If we are to deal with globalization more wisely, the lessons of history are crucial to understand.Globalization is not completely new. A century ago, the world economy went through a similar dramatic expansion. "For economic purposes all mankind is fast becoming one people," wrote James Bryce in 1903. For the first time, a world wide web of telegraph lines, centered on London, sent news and prices around the globe. The United States became an industrialized country because of millions of immigrants and a mountain of European investment. Tragically, the first era of globalization ended badly in two world wars, Communism, fascism, the Great Depression, and the Cold War. Why? Those who suffered from rapid economic change were often recruits for violent solutions; war could undo decades of economic progress. In short, those who gained from economic globalization became complacent about the need to maintain it and cavalier about the costs it generated. Old industries declining, migration, social problems in rapidly expanding cities all of these occur almost inevitably with economic growth. If social policies do not cushion the costs and help people adjust to the changes set off by economic growth, the entire system supporting economic growth can be undermined. At the same time, international peace and cooperation have been crucial to economic globalization. Prosperity in the long run depends on peace. The first era of globalization occurred in the late nineteenth century because Europe experienced the longest period of peace in its history. Only one, brief war the Crimean War occurred among more than two of the Great Powers. World War One broke out in part because leaders in Germany thought they could use violence to strengthen their country's position in the world economy. Instead, they nearly destroyed the entire world economy, and brought on more war. By the time Europe stabilized again, after a second, more awful war, the world economy was no bigger than it had been 35 years earlier, with a much larger population to feed.History also teaches us that we can do better. Nothing illustrates that nations can learn from the past as much as the difference between what the United States did in 1919, at the end of the First World War, and what we did in 1945-48, after the Second. In 1919, we turned our back on Europe and its problems. The world economy limped along and eventually collapsed into the Depression, while the unsolved problems of the War led to dictatorships and more war. After 1945, we did better. The United States created a range of international institutions in the late 1940s the UN, IMF, World Bank, NATO, the alliance with Japan, and the GATT, the forerunner of today's World Trade Organization. We also helped Europe set up what eventually became the European Union. With all their imperfections, these institutions and the cooperative agreements they support still provide a framework for worldwide economic growth. Because of them, we can travel, send money, buy and sell goods, and communicate among the nations of the world in a way that would have been unimaginable just a few decades ago.In tough times, it may be tempting to turn our backs on the rest of the world or to think that economic growth, once begun, runs on its own. But we depend on our global economic ties for future growth. By investing in our greatest resource  people  and improving our transportation and communications infrastructure, we can compete much more effectively than by tariffs or trade disputes. The history of the last century teaches us that dealing with the inevitable costs of globalization and working to maintain a peaceful world order are essential to all of us. Our generation has an opportunity to make great gains from a return to worldwide economic growth  but we must distribute the gains more fairly and work to build a cooperative international order. Our competitors are also our customers and our potential partners in a better world.

Federal Investigators Punt On Goldman Sachs Prosecutions

 

By 2006, Goldman Sachs traders knew that the investments packed with subprime home mortgages they had been selling at big profits for the last few years were more dangerous than they were letting on.Internally, they characterized these offerings as "junk,""dogs,""big old lemons" and "monstrosities." Nevertheless, the bank congratulated itself for successfully offloading the mortgage bonds onto others. The head of the bank's mortgage department extolled its success in reducing its subprime inventory, writing that his team had "‘worked their tails off to make some lemonade from some big old lemons.” These findings, included in the report released by the Financial Crisis Inquiry Commission nearly two years ago, helped inform at least one major regulatory enforcement action against the bank: a $550 million settlement with the Securities and Exchange Commission for misleading investors about the risks of a product known as Abacus. For a while, it seemed that a string of similar enforcement actions involving other mortgage investment products, whose eventual collapse in value brought down the housing market and very nearly the American economy, were imminent. On Thursday, Goldman Sachs announced in a regulatory filing that the SEC had dropped its investigation into a $1.3 billion mortgage bond known as Fremont Home Loan Trust 2006-E, even though it indicated earlier this year that charges were likely. Later in the day, the Department of Justice said it was ending its own Goldman investigation, launched after a congressional investigation chaired by senators Carl Levin (D-Mich.) and Tom Coburn (R-Okla.) issued a report that found Goldman Sachs sold investments "in ways that created conflicts of interest with the firm’s clients and at times led to the bank's profiting from the same products that caused substantial losses for its clients.”"The department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time," the Justice Department said in a statement late on Thursday. Reuters reported that David Wells, a spokesman for Goldman Sachs, said in an email, "We are pleased that this matter is behind us."The SEC did not immediately respond to a request for comment. For industry critics, the decisions to drop the investigations are the latest indication that the federal government's law enforcement response to the greatest financial catastrophe since the Great Depression will end with a whimper. "I'm shocked but not surprised," said Simon Johnson, a former chief economist at the International Monetary Fund, and a Huffington Post contributor. "It reflects a pattern of failing to hold these large institutions accountable. To not even try sends a double signal, that there are different standards for us and for Wall Street."Johnson said he still holds out some hope for a grand settlement that would provide some financial compensation for the homeowners most damaged by the inflated pricing that came as a result of the bubble built by Wall Street.Neil Barofsky, the former special inspector general for the Troubled Asset Relief Program, and a frequent critic of the Obama administration's handling of the financial crisis, said in an email that the announcements are "a stark reminder that no individual or institution has been held meaningfully accountable for their role in the financial crisis." "Without such accountability, the unending parade of megabank scandals will inevitably continue," Barofsky said. Of the two federal agencies, the record of the Department of Justice in pursuing financial crisis cases is the thinnest. So far, the Justice Department has brought just one case, which ended when a federal jury in 2009 acquitted two Bear Stearns hedge fund managers accused of lying to investors about the soundness of the securities they were selling. After that, the Justice Department decided not to pursue cases against two men whose actions most Wall Street observers agree brought on the crisis: Angelo Mozilo, the former head of the defunct mortgage giant Countrywide and Joseph Cassano, who ran the financial products division at AIG.The SEC's track record has been a bit better, at least in terms of dollar recoveries. The regulator won about $2 billion in penalties since 2008 in financial crisis-related cases, including a record $67.5 million from Mozillo. The agency has been dogged, though, by complaints including from federal judge Jed Rakoff that its penalties are too small, doesn't target individuals and doesn't require defendants to admit guilt as part of settlement agreements. In May, the SEC dropped its probe of Lehman Brothers, even though an independent examiner appointed by the bankruptcy court of the defunct bank concluded that there were "actionable claims" against senior Lehman officers for using an accounting tool known as Repo 105 to book billions of dollars in phony sales to disguise the true extent of the bank's financial woes. Financial cases of any stripe, especially those that involve complex transactions involving structured finance products, are difficult to prove, said Arthur Wilmarth, a banking law professor at George Washington University. Even so, he said, he believes the SEC could have brought additional cases against Goldman Sachs that involved conduct similar to the Abacus deal. The agency could prevail in civil penalty actions by showing that Goldman "intentionally or recklessly misled investors," he said. That, in essence, is the argument made by another regulator the Federal Housing Finance Agency which filed a lawsuit against Goldman over the Fremont investment and other offerings last year. Goldman bankers knew that Fremont, a subprime lender, was selling it mortgages certain to fail, the suit alleges.Goldman knew of the originators’ abandonment of applicable underwriting guidelines and of the true nature of the mortgage loans it was securitizing," the lawsuit claims. The decision to drop the Goldman Sachs investigation also comes on the heels of a disappointing loss for the SEC in one of the very few trials involving a Wall Street executive accused of misleading investors about a mortgage product. A few weeks ago, a federal jury acquitted Brian Stoker, a mid-level Citigroup executive, of wrongdoing over his role in selling a $1 billion mortgage bond. In an unusual move, however, the jury included a note with its verdict urging the agency not to give up. “This verdict should not deter the SEC from continuing to investigate the financial industry, review current regulations and modify existing regulations as necessary,” said the statement, which was read aloud by Judge Jed Rakoff.

NEWS,08.08.2012

Will Manufacturing Make China a Democracy?

 

The other day, I had lunch with an economist I respect and admire. I asked him, what would it take for China to become a modern democracy and build a strong middle class? OK. I didn't ask him that. I told him that China would need strong institutions of civil society, and a deeper sense of Social Contract to become a stable modern democracy with a dynamic middle class.In America's early history, we had strong institutions of civil society, such as free press, good education, and strong national identity. We wrote individual freedoms into our Constitution. We had respect for the rule of law, not much bribery, respect for science, and technical progress. We had social and economic mobility, opportunity and fairness. Well, at least for white males who owned property. But you see where I'm going with this. A robust civil society gives voice to workers, families and communities. It serves as a counter-balance to wealthy and powerful economic interests.China has a rich culture and strong national identity, but income inequality is growing in China, no free press, no unions, no environmental groups, and no real political system to make tough tradeoffs between wealthy powerful economic interests and the public good. Workers have no economic bargaining power. China's leaders have limited respect for the rule of law, and little willingness to enforce rule of law. China has done an exceptional job of acquiring the means of production. Not so much for human rights, labor rights, public health, or environmental protections. My economist friend told me, "No! Not buying it." China will modernize simply through economic transformation. I'm not sure what he meant, exactly. Maybe he meant that industrialization and democracy were the same thing, more or less. You get one with the other. My point was that you don't get one with the other. You might get a banana republic. You might get Egypt or something like Egypt, or Victorian England without a history of individual freedoms. Russians got plutocracy, corruption, murdered journalists, and a political system with zero credibility. You might get a lot of things, depending on what kind of civil society you have. National politics is really a contest between short-term investor interests and long-term public interests. Investors will act in their short-term interest. Public good often works in the long term. Market forces will not protect public good. For that, you need an effective political system. Colombia is a poster child for dysfunctional political and economic systems. Their culture and national identity are proud enough, but working Colombians are kidnapped, intimidated and killed routinely, as punishment for political involvement. Prosecutors, judges and justice ministers live in the shadow of violence. The last thing Colombia needed was a so-called Free Trade Agreement, which increases rights and powers for global businesses and weakens rights and powers for civil society. Now, Colombia faces worsening inequality and more social disruption. Japan, Germany, Korea, Singapore, Taiwan, and other modern democracies have strong social cohesion, strong institutions of civil society and strong middle classes. These outcomes are not accidental. They are the result of deliberate political choices these countries made. I asked my friend about China becoming a modern democracy. My real question wasn't about China, or Colombia, for that matter. I was really asking about America. What happens to our prosperity, our middle class, and our institutions of civil society? In the last 30 years, our civil society has weakened. Political and economic power are concentrating in the hands of the top 1%. Our respect for science has been replaced with ideology and denial. We disparage public education, and public employees. Our social cohesion is so weak that we envy our neighbors who still have pensions. Rule of law is becoming situational - it doesn'treally apply to big banks or foreclosure robo-signers. Political campaigns are so expensive that elected officials literally cannot afford to govern for the public good. They can only govern for the wealthy and powerful. Within this 30-year decline for civil society, our so-called free trade policy steadily lowers the bar for democratic political process, substituting global business interests for public interest.In his new book, Nobel laureate economist, Joseph Stiglitz, calls globalization, as we've managed it, "global governance without global government." In Western democracies, we solve tough social and political problems through a political process. However, in so-called free trade agreements, global businesses write the rules, then we send disputes to anonymous tribunals. Democratic problem-solving does not happen in the trade agreements. It won't happen in Colombia. I don't see how it will happen in China. It's becoming more difficult in America. This is really about political and economic power. In the conclusion to his book, Stiglitz offers two possibilities. One is that we in the 99%, can recognize our predicament and reclaim our political birthright. Alternatively, the 1% can recognize their "self-interest, properly understood," and lead the way back to a sustainable democracy. Stiglitz traces this back to Alexis de Tocqueville in 1835. Americans understood a basic fact: looking out for the other guy isn't just good for the soul - it's good for business. The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn't seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn.Yeah. That would be good.

 

Blair concerned about UK exit from the EU

Former British Prime Minister Tony Blair told a German newspaper he was "deeply worried" Britain might opt to leave the European Union in a referendum, particularly if too many powers were transferred to Brussels without democratic legitimacy.Talk of Britain leaving the EU was once far fetched, but the euro zone debt crisis and the prospect of the currency bloc forging a closer political union have convinced some senior UK politicians it is time to demand a new relationship with Brussels.Current Prime Minister David Cameron said last month it was a "perfectly honourable position" to call for an immediate referendum on Britain's EU membership - something polls show a majority of British people would vote to reject - but that he would never campaign for an "out" vote because leaving the EU would not serve British interests.Blair told Die Zeit it was clear that the euro zone crisis would lead to a "powerful political change of the EU", adding: "And on this point, I am deeply worried that Britain could decide by referendum to leave the whole process.""If more competences are transferred to the EU, then its democratic legitimacy must be built up too," he said, according to a German transcript of the interview which is due to be published on Thursday. "Britain must play a strong role in this. Because we need a balance between European institutions and the nation states.""If this is done wrongly, we could create a political crisis that could become just as a big as the euro crisis. People will not go along with the abolishment of the nation state."Cameron has tried to stave off demands for an immediate vote on Britain's EU membership by holding out the prospect of a referendum some time in the future and by promising a new relationship with the EU.He vetoed a new EU fiscal treaty in December, forcing euro zone states to set their new rules outside the formal EU structure, while using its institutions.Sceptics say EU regulations shackle Britain's $2.5 trillion economy and that leaving the 27-nation bloc would allow London to restore its sovereignty while saving billions of dollars in membership dues.However, supporters of membership argue Britain would lose influence if it left the EU, its biggest trading partner, and that its economy would still be influenced by rules made in Brussels anyway.

HK Airlines to quit London service

 

Hong Kong Airlines will end its service between Hong Kong and London due to poor demand, reports said on Wednesday, another blow to the carrier after authorities banned its expansion. "The last flight from London to Hong Kong will be on September 10," Hong Kong Airlines General Manager Albert Chan told Dow Jones Newswires, meaning the service will have run for just seven months. The airline uses three Airbus 330-200 planes for the flights which are fitted exclusively with business-class seats. The service costs around HK$10m ($1.3m) a month to run, the South China Morning Post newspaper reported. The airline did not immediately respond to requests for comment.The move followed an unprecedented aviation authority ban last month on the airline's expansion, limiting the types of aircraft the company can operate until the airline meets all safety requirements for operating a larger fleet.The airline said it supported the conditions, adding they were sensible for a company at their stage of growth."Given the profitability of our regional routes, we believe that we now have the optimal fleet to continue to build a business... focused on Asia Pacific," an HKA spokesperson told AFP on Monday.Hong Kong Airlines was established in 2006 and operates 21 aircraft flying to locations in mainland China and international destinations ranging from Tokyo to Bangkok.HKA flights were severely delayed and cancelled when a typhoon lashed Hong Kong last month, leaving hundreds of passengers stranded.

NEWS,28.07.2012

Olympics open with pageant for next generation

Queen Elizabeth declared the London Olympics open after playing a cameo role in a dizzying ceremony designed to highlight the grandeur and eccentricities of the nation that invented modern sport.Children's voices intertwining from the four corners of her United Kingdom ushered in an exuberant historical pageant of meadows, smokestacks and digital wizardry before an audience of 60,000 in the Olympic Stadium and a probable billion television viewers around the globe.Many of them gasped at the sight of the 86-year-old queen, marking her Diamond Jubilee this year, putting aside royal reserve in a video where she stepped onto a helicopter with James Bond actor Daniel Craig to be carried aloft from Buckingham Palace.A film clip showed doubles of her and Bond skydiving towards the stadium and, moments later, she made her entrance in person."In a sense, the Olympic Games are coming home tonight," IOC President Jacques Rogge told the crowd."This great, sports-loving country is widely recognised as the birthplace of modern sport."To underline the point, Bradley Wiggins, crowned five days earlier as Britain's first winner of the Tour de France and hoping to add more road cycling gold in London, tolled the world's largest tuned bell to begin the ceremony.In one moment of simple drama, the stadium fell silent as five giant, incandescent Olympic rings, symbolically forged from British steel mills, were lifted serenely out of the stadium by weather balloons, destined for the stratosphere.And at the climax of an evening that had children centre-stage, seven teenage athletes were given the honour of lighting the Olympic cauldron that will burn for the duration of the Games, in keeping with the theme of "Inspire a Generation".More than 10,000 athletes from 204 countries will compete in 26 sports over 17 days of competition in the only city to have staged the modern Games three times.Most of them were there for the traditional alphabetical parade of the national teams, not least the athletes from Egypt, Tunisia, Libya and Yemen competing in their first Olympics since their peoples overthrew autocrats in Arab Spring revolutions.Brunei and Qatar were led in by their countries' first ever female Olympians and so, along with Saudi Arabia, ended their status as the only countries to exclude women from their teams.At a reception, the queen spelled out the role played by her family after the Olympics were revived in Athens in 1896."This will be the third London Olympiad. My great grandfather opened the 1908 Games at White City. My father opened the 1948 Games at Wembley Stadium. And, later this evening, I will take pleasure in declaring open the 2012 London Olympic Games at Stratford in the east of London," she said."Over recent months, many in these islands have watched with growing excitement the journey of the Olympic torch around the United Kingdom. As the torch has passed through villages and towns, it has drawn people together as families and communities."To me, this spirit of togetherness is a most important part of the Olympic ideal. And the British people can be proud of the part they have played in keeping the spirit alive."The opening show, costing an estimated 27 million pounds, was inspired by William Shakespeare's play The Tempest, his late-life meditation on age and mortality.But it was children who set the tone, starting from the moment when live pictures of junior choirs singing in the landscapes of England, Scotland, Wales and Northern Ireland were beamed into the stadium's giant screens, four traditional songs woven together into a musical tapestry of Britain.Oscar-winning film director Danny Boyle began his sweep through British history by grassing over the arena in a depiction of the pastoral idyll mythologised by the romantic poet William Blake as "England's green and pleasant land".Idyll turned swiftly to inferno as the Industrial Revolution's "dark Satanic mills" burst from the ground, before those same mills forged the last of five giant Olympic rings that rose into the sky.At the end of a three-hour extravaganza, David Beckham, the English soccer icon who had helped convince the IOC to grant London the Games, stepped off a speedboat carrying the Olympic flame at the end of a torch relay that inspired many ordinary people around Britain.Past Olympic heroes including Muhammad Ali, who lit the cauldron at the 1996 Atlanta Games, and British rower Steve Redgrave, the only person to win gold at five successive games, welcomed the flame into the stadium.Yet it was not a celebrity but seven teenage athletes who lit a spectacular arrangement of over 200 copper 'petals' representing the participating countries, which rose up in the centre of the stadium to converge into a single cauldron.Moments later, a balloon-borne camera relayed live pictures of the earlier-released interlocked rings gliding through the stratosphere against the curved horizon of the planet below.The performance included surreal and often witty references to British achievements, especially in social reform and the arts, and ended with former Beatle Paul McCartney singing Hey Jude.Many sequences turned the entire stadium into a vast video screen made up of tens of thousands of "pixels" attached to the seats. One giant message, unveiled by Tim Berners-Lee, British inventor of the world wide web, read "This is for Everyone".Until the last few days, media coverage had been dominated by the security firm G4S's admission that it could not provide enough guards for Olympic venues. Thousands of extra soldiers had to be deployed at the last minute, despite the company's multi-million-dollar contract from the government.Suicide attacks that killed 52 people in London in July 2005, the day after it was awarded the Games, ensured that security would remain a worry. And this year the Games mark the 40th anniversary of the 1972 Munich massacre, when 11 Israeli Olympic team members were killed by Palestinian militants.Although no medals will be awarded until Saturday, the women's soccer tournament started on Wednesday, and on Friday South Korean archers set the first world records of the Games.Im Dong-hyun, who suffers from severe myopia and just aims at "a blob of yellow colour", broke his own 72-arrow world record with a score of 699 out of a possible 720, leading his two colleagues to a record combined score as well.The Games' first medals will be decided in the women's 10 metres air rifle final on Saturday, with the big action coming in the men's cycling road race, where world champion Mark Cavendish is favourite to become Britain's first gold medallist.In the evening, Americans Michael Phelps and Ryan Lochte are scheduled to line up for a classic confrontation in the men's 400 metres individual medley final.Phelps, competing in seven events after winning a record eight gold medals four years ago in Beijing, is bidding to become the first swimmer to win gold in the same discipline three times in a row."This is going to be a special race," said Gregg Troy, head coach of the American men's team. "I can't imagine a better way to promote our sport than a race like this on the first day."

 

Iran expands oil tanker insurance

Iran is expanding its insurance on its fleet of 47 oil tankers through a multi-billion-dollar line of credit as it seeks to get around EU sanctions crimping its crude exports, reports said on Saturday."Iran is ready to give total insurance for the transport of its oil... and the commitments by Iranian insurers are no different from those by Western insurers and therefore all risks and dangers are insured," Iran's Opec representative, Mohammad Ali Khatibi, was quoted as saying by the state-run newspaper Iran.The Fars news agency cited an "informed source" it did not identify as saying that the government had given the central state insurance agency, Bimeh Markazi, a line of credit worth several billion dollars to insure the tankers. It said 10% of the money had already been transferred.The measure, apparently aimed at any buyer of Iranian crude worldwide, expands on a promise of insurance for deliveries of its oil using Iranian tankers to major customers China and India. South Korea is also mulling joining the offer.Iran is suffering a cut in oil sales abroad of up to 40%, according to the International Energy Agency (IEA), because of an EU embargo on Iranian crude imports and a related ban on European insurers providing cover for deliveries of Iranian oil anywhere in the world.European insurers accounted for 90% of coverage for Iran before the EU sanctions took effect on 1 July.Iran, which is striving to maintain a semblance of business as usual over its oil exports, is attempting to fill the insurance gap itself, but it faces several obstacles.US sanctions targeting Iranian financial transactions make it unclear how Iran could pay out any claims arising from accidents involving its tankers.Oil tankers are typically insured for up to $1bn because of the risk of oil spills.A European analyst in Tehran noted that the 40 tankers in Iran's fleet owned by the NITC, formerly known as the National Iranian Tanker Company, each had a long-distance capacity of up to two million barrels of oil.Iran, before the EU sanctions, exported around 2.5 million barrels of oil per day. The IEA estimates that has now been cut to around 1.5 million barrels per day.Several of the NITC vessels were being used in June to store Iranian offshore crude that Tehran has not been able to sell because of the sanctions, according to industry specialists.Iran has announced plans to quickly expand its onshore storage capacity, which has been saturated, including by subcontracting to private firms. Tehran has also ordered 12 new supertankers from China and should receive the first in December.

Pass tax proposal - Obama urges

US President Barack Obama urged Republicans in the House of Representatives on Saturday to pass his proposal calling for extending tax cuts for everybody but the richest Americans."Now it comes down to this," Obama said in his weekly radio and Internet address. "If 218 Members of the House vote the right way, 98% of American families and 97% of small business owners will have the certainty of knowing that their income taxes will not go up next year."On 1 January, a tax cut adopted under former president George W Bush and extended under Obama is set to expire. But Democrats and Republicans strongly disagree over how to extend it.While Obama favours higher taxes for the rich, Republicans argue it would undercut the nation's fragile economic recovery.This past week, the Democratic-controlled Senate passed a tax cut extension for American families earning less than $250 000 a year, but Republicans in the House are staunchly opposed to this bill, arguing that all Americans, including the wealthy ones, should benefit from the extension.The president noted that he fundamentally disagreed with those who believed that the best way to create prosperity in America was to let it trickle down from the top."I know they're wrong because we already tried it that way for most of the last decade. It didn't work," Obama said."We're still paying for trillions of dollars in tax cuts that benefited the wealthiest Americans more than anyone else; tax cuts that didn't lead to the middle class jobs or higher wages we were promised and that helped take us from record surpluses to record deficits."The president said the country could not afford more of top-down economics. He said America needed policies that would grow and strengthen the middle class, help create jobs and make education and training more affordable.

NEWS, 31.05.2012.

 Spain debt woes spur flight from risk

 

Asian shares and commodities slid while the euro fell to its lowest in almost two years against the dollar on Thursday, as surging borrowing costs in troubled Spain raised fears that it could fail to rescue its banks and may need to seek a bailout. Investors fled from risk assets to US government bonds, with the benchmark 10-year Treasury yield falling below 1.6% in early Asian trade on Thursday, its lowest in at least 60 years. The 10-year Japanese government bond yield  hit a nine-year low of 0.810%. The dollar and the yen were also beneficiaries of escalating risk aversion although gold, a traditional safe-haven asset, struggled in the face of the greenback’s strength.     MSCI’s broadest index of Asia-Pacific shares outside Japan tumbled as much as 1.6%, and was set for its worst month in eight months with a drop of nearly 12%. The pan-Asia index was down 0.3% for the year.   The index was dragged down as some key Asian bourses - Hong Kong, Australia and Korea - temporarily fell to negative territory for t h e year. Japan’s Nikkei was down 1.4% on the day and  on track for its biggest monthly drop in two years. European shares were likely to tread lower, with spreadbetters predicting major European markets    would open down as much as 0.2%. US stock futures were nearly unchanged.   "The situation in Spain at the moment is untenable, not only is there concern over the state of its banking sector but there is little confidence its government will actually be able to bail them out,” said Michael Creed, an economist at the National Australia Bank. A caution by Spain’s central banker that Madrid will miss deficit targets for this year pushed Spanish 10-year yields  above 6.7%, close to 7%, a level seen as unsustainable and which could push Spain to seek a bailout just as Greece, Portugal and Ireland have done. The cost of insuring against a Spanish default scaled a record high near 600 basis points while Italy, which is also struggling with huge public debt, saw its 10-year yield  top 6% for the first time since January. Yields on all German bond maturities hit record lows on Wednesday, pushing the premium investors demand to hold Spanish debt over German debt to its highest since the launch of the euro at around 543 basis points. Firm dollar slams commodities Oil prices extended losses and copper hit 2012 lows near $7 422 a tonne on Thursday. US crude futures eased 0.3% at $87.59 a barrel and were set for their worst month since late 2008. Brent crude fell 0.3% at $103.15 a barrel, on track for its worst month in two years.     “Investors were already exposed to the problems in Spain, but what really disturbed the market were oil prices and US bond yields which broke out of range to hit long-period lows,” said Lee Seung-wook, an analyst at Kiwoom Securities. The dollar index, measured against a basket of major currencies, extended its rally to 83.11, its highest since September 2010.   The strong dollar and intensifying risk aversion sent the Thomson Reuters-Jefferies CRB index, a global benchmark for commodities, tumbling 1.7% to its lowest levels since September 2010 on Wednesday. A stronger dollar typically weighs on dollar-based commodities. The dollar index was on the verge of closing above its 100-month moving average at 81.82, which would generate a buy signal which in turn could spur a sustained period of dollar strength for the next couple of years to as high as 101.00-106.00, some analysts said. The index has in the past 30 years generated four successful buy signals which have resulted in significant dollar moves, they added.Euro under fire     The euro fell to a 23-month low of $1.2358 and a four-and-a-half month low against the safe-haven yen at ¥97.36. “There is no exit in sight currently for the euro to get out of this downtrend because there is no shortage of negative news,” said Hisamitsu Hara, chief FX manager at Bank of Tokyo-Mitsubishi UFJ. “Problems in Spain, a large eurozone economy, heighten fears while the risk of Greece leaving the euro bloc raises contagion concerns. The euro remains depressed, with players  cautiously testing the downside”. Hara added that the euro could weaken until support at the$1.19 level. The euro last dipped below $1.19 in June 2010. The yen rose to a three-and-a-half month high against the dollar at ¥78.71. Hara said wariness over Japanese authorities intervening to prop up the dollar was likely to prevent the US currency from falling sharply further.The European Commission threw Spain two potential lifelines, offering more time to reduce its budget deficit and offering direct aid from a eurozone rescue fund to recapitalise distressed banks. But any relief from the news was quickly offset by the latest Greece polls showing parties for and against a bailout neck-and-neck or very close to each another, ahead of a June 17 election that may decide whether Greece remains in the euro. Asian credit markets weakened, with the spread on the iTraxx Asia ex-Japan investment-grade index widening by 8 basis points.  

Oil prices extend losses

 

 Oil extended losses in Asian trade on Thursday, with prices hitting multi-month lows as Spain's banking woes intensified worries about the eurozone, analysts said.New York's main contract, West Texas Intermediate crude for delivery in July was down nine cents to $87.73 per barrel while Brent North Sea crude for July shed 29c to $103.18 in the afternoon.Prices had slumped Wednesday as the dollar rose to two-year highs against the European single currency, making dollar-priced oil more expensive and hurting demand.WTI crude had plunged $2.94 on Wednesday to its lowest level since October, while Brent declined $3.21, its lowest close since December 16."Right now, the market is wide open. There is still scope for more downside pressure on prices if the bearish sentiment about the eurozone's future keeps up," said Nick Trevethan, senior commodities strategist at ANZ Research.Spain's economic woes were sharply in focus as its 10-year borrowing rates approached the 7% mark considered too high for governments to be able to service their debts.Economists fear Madrid will have to seek an international bailout - following Greece, Ireland and Portugal - despite assurances from Prime Minister Mariano Rajoy.The European Commission weighed in on Wednesday, placing the debt-wracked country at the head of a critical list of 12 economies ordered to carry out sweeping reforms this year to try to stabilise the eurozone debt crisis."Concerns about a possible Greek exit and the risks of contagion from the periphery remain and in the absence of a policy response, oil prices are likely to remain under pressure," said Barclays Capital in a commentary.

NEWS,20.05.2012.

G8 seek ways to soothe financial markets

 

 

World leaders backed keeping Greece in the euro zone today and vowed to take all steps necessary to combat financial turmoil while revitalising their economies, which are increasingly threatened by Europe's debt crisis.In a bold statement of support for Europe, the Group of Eight leaders of the world's major economies meeting at the wooded Camp David in the Cactoctin Mountains of Maryland said the global economic recovery shows promising signs but "significant headwinds persist.""Against this backdrop, we commit to take all necessary steps to strengthen and reinvigorate our economies and combat financial stresses, recognising that the right measures are not the same for each of us," it said in a communique.The leaders said they welcomed discussions in Europe to balance debt reduction with measures to support growth and added: "We reaffirm our interest in Greece remaining in the euro zone while respecting its commitments."It was unusual for the often-bland G8 communique to single out a small nation. But fears that a political stalemate in Greece would lead to the tiny Mediterranean country leaving Europe's monetary union at unknown costs to the financial system have spooked global markets.US President Barack Obama and leaders from other major economic powers met to discuss the global economy and seek ways to soothe markets after worries about Spain's banking problems also played a role in sending world stock prices to their lowest levels this year.Earlier, a shirt-sleeved Obama opened the morning session, promising to seek ways to restore healthy growth and jobs and address concerns in Europe."All of us are absolutely committed to making sure that both growth and stability, and fiscal consolidation, are part of an overall package in order to achieve the kind of prosperity for our citizens we all are looking for," Obama said.British Prime Minister David Cameron, after an early morning treadmill workout with Obama at the Camp David gym, said he detected a "growing sense of urgency that action needs to be taken" on the euro zone crisis.London relies heavily on international finance and banking instability would strike a fresh blow to an economy already in recession."Contingency plans need to be put in place and the strengthening of banks, governance, firewalls - all of those things need to take place very fast," he told reporters.European leaders seemed keen to stress on Friday that they would stand firm in protecting their banks, after news of escalating bad loans raised the specter that rescuing Spain's banks would crash the euro zone's fourth largest economy."We will do whatever is needed to guarantee the financial stability of the euro zone," European Union President Herman Van Rompuy said.Earlier French President Francois Hollande suggested using European funds to inject capital into Spain's banks, which would mark a significant acceleration of EU rescue efforts.An Italian newspaper reported that Italian Prime Minister Mario Monti has proposed at the G8 summit creating a Europe-wide system of bank deposit insurance. Officials had no immediate comment.Obama, Monti, Hollande Beyond stabilising the financial system, a key issue on the agenda is how to balance a growth with efforts to lower government debt through fiscal belt tightening.Obama has aligned himself with Monti and the new French president in putting more emphasis on growth.That places pressure on German Chancellor Angela Merkel, who has pushed fiscal austerity as a the prime means of bringing down huge debt levels that are burdening European economies.Voters in euro zone countries have shown frustration with that approach, ejecting the Greek government. In France the conservative Nicolas Sarkozy was defeated by Hollande, a socialist, in the May 6 elections.A draft of the summit communique shown to Reuters will stress an "imperative to create growth and jobs."There are signs of softening in Germany's austerity stance.Germany's largest industrial union, IG Metall, struck its biggest pay deal in 20 years today. The 4.3% pay increase, more than double Germany's inflation rate, will boost worker buying power in the euro zone's richest nation and lift consumption - something the United States long has urged as a means to bolster overall growth throughout the world's second largest economic region.Obama, in the discussion on the global economy, advocated a balanced approach, saying there should be "no artificial boosts," G8 delegation sources said."We need a growth agenda while maintaining fiscal discipline," he said, according to sources.In the G8 group photo outside the presidential log cabin surrounding by lush green trees, Obama also sought balance. He stood with the leaders of Europe's two largest powers - France and Germany - to his right and his left respectively.An adviser to Hollande said France's growth message is winning supporters."The positions he has taken are seeing an extremely positive echo in Europe but also in the United States, Canada and Japan," the adviser said.Global security Also on the summit agenda are concerns about oil and food prices as well as Afghanistan, Iran, Syria and North Korea.Speculation has grown that Obama will use an energy session at the G8 to seek support to tap emergency oil reserves before a European Union embargo of Iranian crude takes effect in July.But with oil prices already sliding, a move by Obama to tap the Strategic Petroleum Reserve - alone or along with other countries - could expose him to criticism that the emergency supply should only be touched in a supply crisis.The Camp David summit kicked off four days of intensive diplomacy that will test leaders' ability to quell unease over the threat of another financial meltdown as well as plans to wind down the unpopular war in Afghanistan.After the Camp David talks wrap up later today, Obama will fly to his home town of Chicago where he will host a two-day NATO meeting at which the Afghanistan war will be the central topic.

NEWS,19.04.2012.

India tests missile capable of reaching China

India test-fired a long range missile capable of reaching deep into China and Europe, thrusting the emerging Asian power into an elite club of nations with intercontinental nuclear weapons capabilities.A scientist at the launch site said the launch was successful, minutes after television images showed the rocket with a range of more than 5,000 km blasting through clouds from an island off India's east coast."It has met all the mission objectives," S.P.Dash, director of the test range. "It hit the target with very good accuracy."The Indian-made Agni V is the crowning achievement of a now-mothballed missile programme developed primarily with a possible threat from neighbouring China in mind.Only the UN Security Council permanent members - China, France, Russia the United States and Britain - along with Israel, are believed to have such long-range weapons.Fast emerging as a world economic power, India is keen to play a larger role on the global stage and has long angled for a permanent seat on the Security Council. In recent years it has emerged as the world's top arms importer as it rushes to upgrade equipment for a large but outdated military."It is one of the ways of signalling India's arrival on the global stage, that India deserves to be sitting at the high table," said Harsh Pant, a defence expert at King's College, London, describing the launch as a "confidence boost".The launch, which was flagged well in advance, has attracted none of the criticism from the West faced by hermit state North Korea for a failed bid to send up a similar rocket last week.But China noted the launch with disapproval."The West chooses to overlook India's disregard of nuclear and missile control treaties," China's Global Times newspaper said in an editorial published before the launch, which was delayed by a day because of bad weather."India should not overestimate its strength," said the paper, which is owned by the Chinese Communist Party's main mouthpiece the People's Daily.India has not signed the non-proliferation treaty for nuclear nations, but enjoys a de facto legitimacy for its arsenal, boosted by a landmark 2008 deal with the United States.On Wednesday, NATO said it did not consider India a threat. The US State Department said India's non-proliferation record was "solid," while urging restraint.India says its nuclear weapons programme is for deterrence only.It is close to completing a nuclear submarine that will increase its ability to launch a counter strike if it were attacked.India lost a brief Himalayan border war with its larger neighbour, China, in 1962 and has ever since strived to improve its defences. In recent years the government has fretted over China's enhanced military presence near the border.

Thursday's launch may prompt a renewed push from within India's defence establishment to build a fully fledged intercontinental ballistic missile (ICBM) programme capable of reaching the Americas, though some of India's allies may bridle at such an ambition."Policy-wise it becomes more complicated from now on, until Agni V, India really has been able to make a case about its strategic objectives, but as it moves into the ICBM frontier there'll be more questions asked," said Pant.The Agni V is the most advanced version of the indigenously built Agni, or Fire, series, part of a programme that started in the 1960s. Earlier versions could reach old rival Pakistan and Western China."India can now deter China, it can impose maximum possible punishment if China crosses the red line," Srikanth Kondapalli, professor in Chinese studies at Delhi's Jawaharlal Nehru University told Reuters.The rocket is powered by easier-to-use solid rocket propellants and can be transported by road.

Too early to tell on Kim Jong-Un: Clinton

Washington - US Secretary of State Hillary Clinton offered some hope on Wednesday that North Korea's young leader, Kim Jong-Un, may yet change course despite the reclusive Communist state's recent rocket launch and the threat of a new nuclear test.Clinton said it was too early to tell what to make of the surprise remarks to soldiers on Sunday by the youngest son of the late Kim Jong-Il, who saw North Korea fall into deep poverty and developed a nuclear weapons programme during his 17-year rule.Without elaborating, Clinton said Jong-Un's speech was analysed as "some of the old - same old stuff" and "some possible new approach"."We really are waiting and watching to see whether he can be the kind of leader that the North Korean people need."If he just follows in the footsteps of his father, we don't expect much other than the kind of provocative behaviour and the deep failure of the political and economic elite to take care of their own people," Clinton said."But he is someone who has lived outside of North Korea, apparently, from what we know. We believe that he may have some hope that the conditions in North Korea can change. But again we're going to watch and wait," she said. Jong-Un is in his late 20s.North Korea said on Wednesday it was ready to retaliate in the face of international condemnation of last week's failed rocket launch, increasing the likelihood it will push ahead with a third nuclear test.The United States and others said the launch was a test for a long range missile, while North Korea has insisted it was meant to put a satellite into orbit.

NEWS,18.04.2012.

Angry North Korea threatens retaliation

A bristling North Korea today said it was ready to retaliate in the face of international condemnation over its failed rocket launch, increasing the likelihood the hermit state will push ahead with a third nuclear test.The North also ditched an agreement to allow back inspectors from the International Atomic Energy Agency. That followed a United States decision, in response to the rocket launch it says was a disguised long-range missile test, to break off a deal earlier this year to provide the impoverished state with food aid.Pyongyang called the US move a hostile act and said it was no longer bound by its February 29 agreement with Washington, dashing any hopes that new leader Kim Jong-un would soften a foreign policy that has for years been based on the threat of an atomic arsenal to leverage concessions out of regional powers."We have thus become able to take necessary retaliatory measures, free from the agreement," the official KCNA news agency said, without specifying what actions it might take.Many analysts expect that with its third test, North Korea will for the first time try a nuclear device using highly enriched uranium, something it was long suspected of developing but which it only publicly admitted to about two years ago."If it conducts a nuclear test, it will be uranium rather than plutonium because North Korea would want to use the test as a big global advertisement for its newer, bigger nuclear capabilities," said Baek Seung-joo of the Seoul-based Korea Institute for Defense Analysis.Defence experts said by successfully enriching uranium, to make bombs of the type dropped on Hiroshima nearly 70 years ago, the North would be able to significantly build it up stocks of weapons-grade nuclear material.It would also allow it more easily to manufacture a nuclear warhead to mount on a long range missile.The latest international outcry against Pyongyang followed last week's rocket launch, which the United States and others said was in reality the test of a long range missile with the potential to reach the US mainland.North Korea has insisted the rocket launch, which in a rare public admission it said failed, was meant to put a satellite into orbit as part of celebrations to mark the 100th birthday of President Kim Il-sung, whose family has ruled the autocratic state since it was founded after World War Two.The peninsula has been divided ever since with the two Koreas yet to sign a formal peace treaty to end the 1950-53 Korean War.Recent satellite images have showed that the North has pushed ahead with work at a facility where it conducted previous nuclear tests.While the nuclear tests have successfully alarmed its neighbours, including major ally China, they also showcase the North's technological skills which helps impress a hardline military at home and buyers of North Korean weapons, one of its few viable exports.The North has long argued that in the face of a hostile United States, which has military bases in South Korea and Japan, it needs a nuclear arsenal to defend itself."The new young leadership of North Korea has a very stark choice; they need to take a hard look at their polices, stop the provocative action," U.S. Secretary of State Hillary Clinton said at a news conference in Brazil's capital.The Swiss-educated Kim Jong-un, who is in his late 20s, rose to power after his father's death last December. The country's propaganda machine has since made much of his physical likeness to his revered grandfather, the first leader and now North Korea's "eternal president".But hopes the young Kim could prove to be a reformer have faded fast. In his first public speech on Sunday, the chubby leader made clear that he would stick to the pro-military policies of his father that helped push the country into a devastating famine in the 1990s.Kim is surrounded by the same coterie of generals that advised his father and he oversaw Sunday's mass military parade.He urged his people and 1.2 million strong armed forces to "move forward to final victory" as he lauded his grandfather's and father's achievements in building the country's military.

Russia creates 'police crimes' unit

Russia on Wednesday created a special unit to investigate crimes committed by the country's vast but corruption-laden police force.The powerful Investigative Committee's decision to form the unit follows a spate of reports of police torture in the country's prisons and a new focus on the problem in Russia's Kremlin-controlled media."The need to create such a special unit is based on objective reasons," the Investigative Committee said in a statement.It said investigators currently looking into police crimes run into "certain difficulties" because officers and their bosses often use their professional skills "to mislead the investigation and avoid criminal responsibility".Interior Minister Rashid Nurgaliyev was forced to report to parliament last week about a spike in reported police violence and other abuses.The recent death in custody of a petty crime suspect after being raped by officers with a champagne bottle has focussed attention on the problem which has dogged Russia for years.Investigators said they have received 65 complaints against the same police precinct in the central Russian region of Tatarstan since the case initially came to light last month.Russia's outgoing President Dmitry Medvedev had made police reforms one of the planks of his four years in power.But he was recently forced to admit that his campaign to improve the police force may take years.