US lawmakers reject 700-billion-dollar bailout

WASHINGTON, September 29, 2008 (AFP) - The US House of Representatives Monday dramatically rejected a 700-billion-dollar Wall Street bailout, sending stocks crashing to their worst single day loss ever and deepening the US financial crisis.

As a palpable sense of fear ricocheted through Washington, President George W. Bush said he was "disappointed" that the bailout foundered, as Democrats accused Republican conservatives of killing the bill for ideological reasons.

The president immediately summoned top advisers to tackle the latest crisis "head on," and Treasury Secretary Henry Paulson was seen hurrying into the West Wing of the White House.Shockwaves reverberated through the presidential race and congressional campaigns just five weeks before the November 4 general election, and a blame game erupted between Republicans and Democrats on Capitol Hill.

Amid panic selling on Wall Street, the Dow Jones Industrial Average plunged 777.68 votes (6.98 percent) and the Nasdaq crashed 199.61 points (9.14 percent) to 1,983.73, its lowest since 2005.In scenes of suspense, tension and shock rarely seen on the House floor, Republican foes of the bill and rebel Democrats combined to doom the bill by 228 votes to 205, after Bush had pleaded for its passage.

House speaker Nancy Pelosi pledged to go back to work to pass a new bill, but a senior Democratic lawmaker said nothing would happen until at least Thursday as many members had gone home for the Jewish holiday of Rosh Hashanah.

The 15-minute vote was kept open for 40 minutes as Democratic and Republican leaders made desperate attempts to twist arms of lawmakers who voted no.One senior Democrat said Republicans had reneged on a pledge to get 50 percent of their caucus plus one member to vote for the bailout, pointing out that 60 percent of Democrats backed the plan.

Leading Democrat David Obey reacted bitterly, saying Republican leadership, including the president and Republican presidential nominee John McCain, "have lost total control over their own party."

"Evidently some of those guys would rather lose an economy than lose an election."House Republican Leader John Boehner blamed what he called a partisan speech to the House by Pelosi shortly before the vote.

"I don't know that we know the path forward from this point. We need everybody to calm down and relax and get back to work."

But Barney Frank, the top House Democrat in charge of negotiating the bill, dismissed such critics of Pelosi's speech as pure "pettiness" and said Republicans were trying to cover up their embarrassment over the split party.

"Give me those 12 people's names and I will go talk uncharacteristally nicely to them," he said.Democratic White House hopeful Barack Obama meanwhile appealed for calm, seeking to stablize global markets and show composure-in-a-crisis leadership credentials.

"I'm confident that we're going to get there but it's going to be a little rocky," he said in Colorado.
"It's important for the markets to stay calm because things are never smooth in Congress and to understand that it will get done," Obama said.

There was no immediate reaction from McCain, who had boasted that he had helped bring the rebel Republicans along to vote for the deal.

But his economic advisor Doug Holz-Eakin blamed Obama for politicizing the situation -- an identical charge McCain critics threw at the Arizona senator last week after he injected himself into the process.

"Barack Obama failed to lead, phoned it in, attacked John McCain and refused to even say if he supported the bill," Holz-Eakin said.

Republican Congressman Paul Broun from Georgia compared the bill to a "huge cow patty with a marshmallow stuck in the middle of it."

Indiana Congressman Mike Pence, also a Republican, warned that the bailout ran counter to the principles of American government.

"Economic freedom means the freedom to succeed and the freedom to fail," he said.

The bailout proposal would grant the Treasury secretary authority to buy up toxic mortgage-related assets in troubled banks in hopes of easing the flow of credit and reviving the moribund housing market.

The bill would have immediately released 250 billion dollars to enable the government to buy up troubled assets, and sets a ceiling for all purchases of 700 billion dollars.It also prohibits "golden parachutes" for CEOs or other executives who lose or leave their jobs at companies participating in the plan as long as the Treasury holds equity in those firms.

AFP

F1's future is in Asia, says Williams

The future of Formula One lies in Asia not Europe, according to Sir Frank Williams, who was hugely impressed by the Singapore Grand Prix.

The Williams team boss, who saw his driver Nico Rosberg finish second in the first-ever night race, said that with Asia's economic rise, led by China and India, the importance of Europe and the United States was diminishing.

"The future for F1 is absolutely in the Far East," he told the Today newspaper here. "Asia is big."
With Singapore now on the calendar, Asia and the Middle East have six Grand Prix races -- Australia, Bahrain, China, Japan and Malaysia being the others.

Abu Dhabi will make its debut next year, with South Korea coming on board on 2010 and India, initially expected to stage a race in 2010, now slated for 2011.

Their inclusion comes at the expense of Formula One's traditional base in Europe as the sport aims for a more globalised calendar.

Williams said Formula One "will put more of a sporting face on this nation," referring to Singapore, adding that it had "a good chance of challenging Monaco for being the jewel in the crown of Formula One."

"Like I said, empires go round and round, and I hope the Singapore Grand Prix will put more interest in Singapore and this part of the world."

Formula One supremo Bernie Ecclestone has long worked to steer the glamorous sport towards Asia and the Middle East, seeing the untapped markets as critical to maintaining sponsor and spectator interest.

The billionaire, who holds Formula One's commercial rights, said over the weekend that Singapore was an example to follow and would make people reconsider their opinions of Asia and its ability to host Grand Prix.

"When you think about it, most parts of Asia where people have visited, they sort of put everything in one basket," he told reporters.

"Singapore is the same as India, Malaysia and Thailand, that's how they feel because they don't know any better.

"But hopefully this will open people's eyes and they'll say, my God, Singapore really is alive and well."

Monday, 29 September 2008

Water-themed resort boosts Dubai's tourist aspirations

Dubai, home to the world's tallest tower and and other extravagant landmarks, boasts a new resort billed as unique in the Middle East: the ocean-themed Atlantis, where a night will cost up to 25,000 dollars.

Inspired by the legend of the lost continent, the resort offers "experiences that are new to the Middle East," said its president and managing director Alan Leibman, in line with the emirate's penchant for superlatives and drive to become a top tourist destination.

At Atlantis, this includes water thrills, a marine habitat and more than a dozen restaurants run by world-class chefs including Japanese sushi mogul Nobu Matsuhisa and Michel Rostang of France.

The first guests were welcomed this past week at the site on Palm Jumeirah, one of three palm tree-shaped man-made islands emerging off the coast of Dubai.

The opening even as construction work continues on Palm Jumeirah underscores Dubai's race to more than double the number of visitors to 15 million by 2015.

One of seven emirates making up the United Arab Emirates, Dubai already hosts one of the world's most exclusive hotels, the sail-shaped Burj al-Arab, dozens of other luxurious seafront hotels, and the "Burj Dubai," Arabic for Dubai Tower, the world's tallest skyscraper.

With a distinct desire to offer the tallest and biggest, Dubai will also have the world's largest shopping mall.

And the Atlantis fits right into the picture, as "an entertainment destination that is truly different to anything that exists in the resort category in the region," aid Leibman.

But that might not be for long. Scores of other ambitious ventures are underway or in the pipeline, including Dubailand, a series of billion-dollars entertainment and leisure projects touted as the Middle East's very own Orlando, which will include a Universal Studios theme park.

The "Palm" islands face competition on their own turf from "The World", a cluster of some 300 artificial islands looking like a blurred vision of the planet's nations.

Developed by Kerzner International as only the second such resort after the Atlantis-Paradise Island in the Bahamas, Atlantis-The Palm cost 1.5 billion dollars and has 1,539 rooms at rates ranging from 700 dollars to a staggering 25,000 dollars for some suites.

The hotel opened on schedule despite a recent fire which ravaged its lobby, though the pomp and ceremony have been put off until the formal inauguration in November.

According to the management, the hotel is nearly fully booked. But although Dubai has become a regional business and tourist hub, promoters said they are targeting the US, European and Asian markets and do not expect clients from the Middle East to fill up more than a quarter of the establishment.

"Aquaventure", a water playground of over 18 million litres of water, is accessible to visitors for prices ranging from 52 dollars for children to 60 dollars for adults. The waterscape features water slides with names such as "Leap of Faith", including two which catapult riders through shark-filled lagoons.

Atlantis' marine habitat will be stocked with thousands of marine animals and include a "Dolphin Bay".

But one of the main attractions which promoters are counting on to draw crowds faced with a wide choice of entertainment in Dubai are the resort's top-end restaurants run by world-class chefs.

"What I'm offering here is authentic French cuisine, not a bit of everything. I am a champion of tradition" in French cuisine, said the two-star Michelin chef Rostang of his French Brasserie.

China astronauts return after historic mission

Three astronauts who conducted China's first-ever space walk landed safely back on Chinese soil on Sunday, bringing an end to the latest historic mission by the country's young space programme.

The descent capsule of the Shenzhou VII spacecraft drifted down to a soft landing in northern China's Inner Mongolia region in footage broadcast live on state-run CCTV.

Within minutes, technicians reached the capsule by car and began helping Zhai and fellow crew members Liu Boming and Jing Haipeng out.

"I feel proud for the nation," commander Zhai Zhigang told a television crew that arrived at the site.

The trio were then quickly whisked away for medical checks.

Their return came a day after Zhai conducted the spacewalk, making China just the third country to perform the feat after the United States and the former Soviet Union four decades ago.

The mission has been hailed in China as a landmark in the country's quest to become a space power.

Under China's fledgling space programme, two more unmanned craft will be launched by 2010, as well as another manned spaceship with a crew of three to start work on building a lab or space station, according to state media.

After China sent its first man into space in 2003, it followed up with a two-man mission in 2005.

9/28/2008

Bush summons Obama, McCain for crisis economy talks

Warning "our entire economy is in danger," US President George W. Bush called unprecedented emergency talks for Thursday with the two men vying to succeed him, John McCain and Barack Obama.

Bush announced his summit with the presidential candidates and top congressional leaders in a prime-time televised speech Wednesday seeking public support for his 700-billion-dollar Wall Street rescue plan.

"We're in the midst of a serious financial crisis," Bush said in his 13-minute speech from the White House, after angry legislators on Capitol Hill declared the shock proposal dead on arrival.

"Without immediate action by Congress , America could slip into a financial panic," the president said. "Ultimately, our country could experience a long and painful recession."

Six weeks before the November 4 elections, and four months before he hands the battered US economy to a new president, Bush said inaction could wipe out banks, empty retirement nest eggs, send home values into freefall, and create millions of new jobless.

"We must not let this happen," he said.

Citing a rare "spirit of cooperation," Bush said he was inviting McCain, Obama, and senior Democratic and Republican leaders from the House and Senate for a 4 pm (2000 GMT) meeting at the White House.

Bush invited Obama in a personal telephone call 90 minutes before his speech on Wednesday, the White House said. The Democrat's chief spokesman, Bill Burton, confirmed in a statement that the Illinois senator would attend.

Obama has worked all week with senior lawmakers, Treasury Secretary Henry Paulson, and Federal Reserve chairman Ben Bernanke, Burton said.

"He will continue to work in a bipartisan spirit and do whatever is necessary to come up with a final solution," the spokesman added.

"We will discuss the progress we have made to improve the administration's deeply flawed plan to address this unprecedented crisis ," Democratic Senate Majority Leader Harry Reid said.

"As I have said throughout, tomorrow's meeting and future deliberations must be focused on solutions, not photo ops," Reid said, after other Democrats mocked McCain's decision to suspend his campaign over the crisis as a gimmick.

The Republican candidate announced he would return to Washington "until this crisis is resolved."

But House Financial Services Committee chairman Barney Frank, who has worked closely with Paulson and Bernanke in negotiating the bailout, expressed concern that McCain -- who suggested Thursday's White House crisis talks -- could be a distraction from attempts to secure a rescue package this week on Capitol Hill.

"We were making progress, and I hope the presidential politics that he is injecting don't stop it," Frank told Fox News.

The Washington Post quoted Frank saying Democrats had reached agreement on the main elements of a bailout bill that they would present to their Republican counterparts Thursday.

Opinion polls show the US public is angry at Wall Street but deeply divided about a remedy, with many ready to blame Bush and his Republican Party -- which itself has fissured over the plan amid fierce objections from conservatives.

They have expressed dismay over the massive government involvement in the economy, while Bush's Democratic foes have pushed for more government oversight and stronger consumer protection.

Defending his position, Bush said: "I faced a choice, to step in with dramatic government action or to stand back and allow the irresponsible actions of some to undermine the financial security of all."

9/25/2008

McCartney in Israel for 'peace' concert

Pop star Paul McCartney, one of two surviving members of the Beatles, arrived in Israel on Wednesday ahead of his first-ever concert in the Jewish state.

The British musician told journalists and fans who greeted him at Ben Gurion airport outside Tel Aviv that he wanted to bring "a message of peace and love" to the Middle East, according to Israeli public radio.

He will perform an outdoor concert in Tel Aviv on Thursday titled "Friendship First".

Over 40,000 tickets have been sold since they went on sale online on Tuesday, with regular seats selling for 150 dollars (100 euros) and VIP seats going for three times as much, according to the ticket office.

McCartney and his entourage will be occupying 21 rooms in a luxury hotel on the Mediterranean, where their bill is expected to exceed 100,000 dollars (66,000 euros), Israel's Haaretz newspaper reported.

The gig, part of a series of one-off concerts in places the 66-year-old musician has never visited before, comes after two previous unsuccessful attempts by McCartney to perform in the Jewish state.

The Beatles drew up plans to play in Israel at the height of Beatlemania in 1965, but they were cancelled after sponsors failed to raise enough money and members of parliament voiced concern they might corrupt young Israeli minds.

McCartney also nearly performed in Israel in the late 1970s, but concerts with his post-Beatles band Wings were cancelled due to problems with the venues, he said in comments posted on his website.

In January, Israel apologised for the cancellation of the 1965 concert in letters to the two surviving members of the Beatles -- McCartney and Ringo Starr -- and the families of deceased members John Lennon and George Harrison.

McCartney has played a number of one-off concerts this year, including the "Independence Concert" in Ukraine in June and a gig in Quebec City in July marking its 400th anniversary.

- 9/24/2008

Aso takes charge of Japan

Taro Aso took charge as Japan's new prime minister Wednesday, lining up his cabinet with like-minded conservatives to help his mission to revive the economy and win upcoming elections.

The divided parliament voted along party lines to install the flamboyant former foreign minister, who was expected to fly a day later to New York for the UN General Assembly.

Aso bowed four times and shook hands with fellow lawmakers after the more powerful lower house approved him.

"I truly feel the heavy responsibility of being prime minister," Aso told a news conference as he announced his cabinet.

"To make Japan a bright and strong nation -- that is my mission," he said.

Aso replaced Yasuo Fukuda, a mild centrist whose ratings dived after he raised medical costs for the elderly.

The ruling Liberal Democratic Party (LDP) picked Aso on Monday as its new leader by an overwhelming majority, placing its trust in a crowd-pleasing -- though gaffe-prone -- campaigner.

Analysts expect him to call a general election as early as late October in a bid to hold off gains by the rising opposition, which has pounded away at the LDP's traditional strongholds in the countryside.

"The final battle has begun. The autumn of elections -- the autumn to change the government -- is coming," said opposition chief Ichiro Ozawa, whose bloc controls one house of parliament.

The LDP has been in power for all but 10 months since 1955, but Aso will be its fourth prime minister in the past two years as the party struggles over a raft of scandals and, more recently, a faltering economy.

Aso said his first priority would be to pump stimulative spending into the economy, the world's second largest but teetering on the brink of recession , clashing with LDP free-market reformists who in recent years have pushed to tame a ballooning public debt.

Aso tapped as his finance minister Shoichi Nakagawa who, echoing the incoming premier, said he would make "full use of all sorts of policies" to invigorate the economy.

"Some people label us as freespenders or old-guard cronies as we say we are not hesitant on fiscal spending," Nakagawa , a former industry minister, wrote in a newspaper column. "But we do not intend to backtrack on reforms."

Nakagawa -- who was shunned by the more dovish Fukuda -- has raised controversy through strong criticism of China and calls for Japan, the only nation to have suffered atomic attack, to study developing nuclear weapons.

"This is the lineup aimed at avoiding any political scandals ahead of the imminent general elections," said Shujiro Kato, professor of politics at Toyo University.

"Nobody reported to be appointed as minister is a fresh face."

The foreign ministry went to Hirofumi Nakasone, the son of one of Japan's best-known premiers, Yasuhiro Nakasone, who led Japan in the 1980s and was a close ally in US president Ronald Reagan's anti-communist campaign.

Like Aso, Nakasone was uneasy with some of the free-market reforms during the 2001-2006 premiership of Junichiro Koizumi, who was popular with the public but blamed by some LDP members for alienating rural voters by cutting services.

However, in a bid to ensure party unity, Aso kept in place Fiscal and Economic Policy Minister Kaoru Yosano, who had challenged him for the top job arguing that Aso's economic policies were irresponsible.

Another rival, Shigeru Ishiba, was made farm minister, a position that has frequently been hit by scandal. Ishiba survived resignation calls as he managed crises as Fukuda's defence minister.

Aso promises a return both at home and abroad to some of the more flamboyant ways of Koizumi, who would regale summits by singing Elvis Presley songs, after a two-year gap of drier leaders.

Known for his love of comic books, as foreign minister Aso entertained summits by doing a Humphrey Bogart impersonation and dancing in the costume of a samurai.

- 9/24/2008

Gunman kills 10 then himself in Finnish school massacre

A masked student went on the rampage at a Finnish school Tuesday, methodically gunning down 10 people before killing himself, a day after police quizzed him over a chilling YouTube warning.

Young women screamed as the 22-year-old shooter stalked the corridors of the vocational college in a ski mask and black outfit letting off round after round at helpless students before starting several fires, witnesses and police said.

The massacre in Kauhajoki in southwestern Finland was the country's deadliest school shooting and the second in under a year.

"I heard the sound of shooting and hysterical girls' voices. Then two girls came towards my room and said a weird man was shooting," Jukka Forsberg, the janitor of the school, told AFP.

"I went to see and saw a guy leaving a big black bag in the corridor and going into classroom number three and closing the door.

"I looked through the window and he immediately shot at me," he said, adding, "Thank God I was not hit! He fired at me but I was running zigzag. I ran for my life."

Forsberg said he heard "horrible screams of pain" as he raced out of the building.

The shooter has been identified as second-year culinary arts student Matti Juhani Saari.

The head of the police investigation, Jari Neulaniemi, said the shooter had left a note in his apartment explaining his actions.

"In the note he said he hated mankind and the human race. And that he had been planning this since 2002," Neulaniemi said.

Finnish Interior Minister Anne Holmlund said police had questioned Saari the day before the attack over a video of himself at a shooting range he had posted on the Internet.

Investigators had deemed him not enough of a threat to withdraw his gun license, Holmlund said, adding that he obtained a temporary permit for a .22-caliber weapon earlier this year.

Another video clip on YouTube showed the same young man pointing a gun at the camera and saying "You will die next," before firing four shots.

Neulaniemi told the YLE public broadcaster that nine victims had been found in one classroom, while another had been discovered in a corridor.

Saari, who eventually turned the gun on himself, was found with serious head injuries in another corridor at the other end of the building.

He was taken to a local hospital but died later of his wounds, bringing the total death toll to 11, police told AFP.

The shooting started at 11:00 am (0800 GMT) and lasted for about an hour and a half, Ari Paananen, at the Kauhajoki mayor's office, told AFP.

Hours after the massacre, streets in the sleepy town of around 14,000 people were jammed with fire trucks, police vans and military vehicles.

Police wearing bullet-proof vests patrolled the school grounds and crowds gathered behind police barricades.

Fires had been set in several locations around the school during the rampage, a fire brigade duty officer said, but the blaze had been brought under control.

Thick smoke had however complicated the police investigation, and a forensic team had not been able to begin identifying bodies inside the building until hours after the attack.

"During the night we will try to identify the victims, but some of them have been severely burned so identifying them might take some time," Tuula Kyren, a spokeswoman for the National Bureau of Investigation told AFP.

One of Saari's neighbours told tabloid Iltalehti that the shooter had appeared to be a normal, quiet person.

"He was like one of us, quiet, but not a hermit," said the unnamed young female student.

Following a crisis meeting of the Finnish government, Prime Minister Matti Vanhanen expressed his cabinet's condolences to the victims and their families and said flags would fly at half staff across Finland on Wednesday.

Coming less than a year after another Finnish high school massacre in November 2007 that left nine people dead, Tuesday's shooting reopened a debate over gun ownership in Finland.

The country has one of the world's highest gun ownership rates, ranking third behind the United States and Yemen, according to a study last year by the Small Arms Survey of the Graduate Institute of International Studies in Geneva.

After the 2007 shooting Finland's cabinet had announced plans to toughen the country's gun laws but no changes had yet been introduced.

Finnish Prime Minister Matti Vanhanen said Tuesday: "We have to tighten the law significantly."

- 9/23/2008

Ancient Kabul garden in bloom again after years of ruin

Babur's Garden, on the slope of an arid mountain, is in flower again after years of desolation brought on by drought and war, an island of green in an Afghan capital oppressed by heat and dust.

Rehabilitated since 2002 by the Aga Khan Trust for Culture, the Persian-style garden now offers more than 11 hectares (27 acres) of space -- the largest park in the city -- for people to relax.

And they are coming in droves, especially on Fridays, the weekly day off.

On the lawns and under shaded groves, families picnic, teens gather -- boys on one side and girls on the other -- and children play.

Over Ramadan, when Muslims must fast during the day, the garden is more of a place of rest than activity, where men have a siesta, play cards or talk above the chatter of a transistor radio.

The garden was laid out in the early 16th century by Zahiruddin Muhammad Babur, founder of the Mughal Empire, conqueror of India and self-proclaimed descendant of Mongol emperor Genghis Khan.

He died in India in 1530, but his body was returned to this garden for burial under a gravestone of black and rose marble, behind a small mosque which, while renovated, still carries the shrapnel scars of a civil war that devastated the city after the retreat of Soviet troops in 1989.

It was at this time that the garden was destroyed: its hundreds of trees chopped down, its summer palaces torched, its beds planted with explosives.

"It was pretty bleak and had been neglected for a long time," says Jolyon Leslie, the head of the Aga Khan Trust for Culture in Afghanistan who has directed the restoration work.

"The irrigation had broken down, the pumps had been stolen and people had moved in and cut wood. The walls were crumbling and all the buildings had been burned out," he says.

In a country crushed by misery and war, the notion of spending the vast amount of money needed to revive the garden initially did not go down well.

"Attitudes have been a problem... there was a degree of incredulity that we should be doing it and a lot of cynicism," says Leslie, a 52-year-old South African who has lived for 20 years in Afghanistan.

To win support, the trust emphasised that the work would create jobs.

Close to five million dollars has been spent with the money coming from the Aga Khan, spiritual head of the Shi'ite Ismaelis, along with support from the German government, Leslie says.

A million dollars went towards paying hundreds of labourers, mostly locals.

The irrigation system has been renovated, compost laid down, and hundreds of plane, cherry, apricot and hazelnut trees planted.

A small marble canal feeds water that runs from the height of the terraced garden down through beds of roses before being pumped back up and re-used.

The key concept of the project was "water, water and more water," Leslie said.

At the foot of the garden, a caravanserai has been rebuilt with rooms for concerts, theatre performances and exhibitions.

In another corner, men used to hold cock fights although guards -- who ensure no visitor carries a weapon -- have discouraged the practise, according to a trust official.

The garden, enclosed by high walls, slopes up through gentle terraces towards the rocky face of a mountain on which traditional mudbrick dwellings perch precariously.

It attracts many visitors -- 50,000 to 60,000 a month during the summer -- even though they have to pay, says Leslie.

"My father would come here every morning to walk," says one of the guards, Shamsullah Mohammedi.

"Of course it's not like it was in the past when there were 300-year-old trees, but all that should grow back."

Mohammad Kassim, a 20-year-old student, has come to the garden with a friend to read a book. "It is beautiful and I really love picnicking here," he says.

"We can also see the girls who come in groups. But we can only look at them, we cannot talk to them."

China dairy firm knew of toxic milk for months: state media

The Chinese company whose tainted baby milk triggered a food safety crisis that has seen 53,000 children fall ill failed to report complaints about the product for months, state media said Tuesday.

Sanlu Group, the dairy firm first found to be selling melamine-contaminated goods, began receiving complaints of sick children as early as last December, state television said, citing a cabinet probe.

It also said Communist officials in the north Chinese city of Shijiazhuang, where Sanlu is based, delayed referring the matter to higher authorities for more than a month after Sanlu finally told them of the problem on August 2.

"In the eight months from December 2007 to August 2, 2008, Sanlu made no report to relevant authorities in Shijiazhuang and took no corrective measures, allowing the situation to worsen further," the report on state-run CCTV's news channel said.

"(Sanlu and Shijiazhuang officials) violated rules on reporting major incidents involving food safety," it added, quoting the cabinet probe.

The report appeared to be the first official confirmation of Chinese media reports that news of the risks posed by the milk products was deliberately suppressed.

Reports of tainted milk only emerged in state-run media earlier this month.

The chemical melamine, normally used in making plastics, was apparently added to milk supplies to give the appearance of higher protein levels.

Although it knew kids were falling ill last December, Sanlu Group did not even begin testing its milk for dangerous substances until June, the cabinet probe reportedly found.

The government has blamed tainted products for four deaths, and said late Sunday that 12,892 children remained hospitalised with kidney problems, 104 of them in serious condition.

Meanwhile the repercussions outside mainland China continued to mount, with Hong Kong authorities reporting a second child ill with a kidney stone after drinking contaminated Chinese dairy products.

The four-year-old boy was in stable condition, the Hong Kong Centre for Health Protection said in a statement.

A three-year-old girl who fell ill last week in the southern Chinese territory was the first such case outside the mainland. She is said to be in good condition.

The Philippines and Vietnam on Tuesday became the latest countries to take precautionary steps.

Authorities in Manila ordered an immediate ban on the import and sale of Chinese dairy products.

"What we are telling parents now, especially the mothers, is to avoid buying milk with 'made in China' markings," said Leticia Gutierrez, the head of the country's Bureau of Food and Drugs.

Vietnam has ordered melamine tests on dairy products and tighter inspections on "all milk products and materials in the market, especially those imported from China."

Bangladesh, Brunei, Burundi, Gabon, Japan, Malaysia, Myanmar, Singapore, Taiwan and Tanzania have already either barred Chinese milk products or taken some other form of action to curb consumption.

The scandal claimed its biggest political scalp so far on Monday with the resignation of China's product-safety watchdog chief, Li Changjiang.

Also sacked was Wu Xianguo, the top Communist official in Shijiazhuang. The city's mayor and several other government officials had been fired earlier.

Eighteen people have been arrested so far, including the sacked head of Sanlu Group, and dozens detained for questioning, according to state media.

China has been hit by a wave of embarrassing scandals in recent years over dangerous products including food, drugs and toys, spoiling its manufacturing reputation.

The China Daily quoted a food safety expert warning of further disasters.

"If the safety supervision mechanism is not reformed, it's likely that such a scandal would break out again," warned Chen Junshi, a senior researcher with China's National Institute for Nutrition and Food Safety.

Agence France-Presse - 9/23/2008 7:35 AM GMT

Hong Kong ship with 22 crew taken hostage off Somalia: watchdog

A Hong Kong-registered chemical tanker has been seized and its 22 crewmembers taken hostage by Somali pirates in the Gulf of Aden, a maritime watchdog said Tuesday.

The vessel was attacked by heavily armed Somali pirates late Monday while travelling through the area, said Noel Choong, head of the Malaysia-based International Maritime Bureau (IMB) Piracy Reporting Centre.

"The incident happened in the maritime security corridor that is patrolled by coalition naval forces," Choong told AFP.

"The situation (in the Gulf of Aden) is dangerous. We urge the UN and the international community with naval assets in the region to stop this menace," he said.

Since July, 12 ships have been hijacked by pirates plying the narrow waterway separating Yemen and Somalia, according to the IMB.

A German-registered ship was released last week but 11 vessels, including two Malaysian state-owned ships, are still in the hands of the pirates who are negotiating ransoms for their release.

Maritime experts say that many attacks go unreported along Somalia's 3,700 kilometres (2,300 miles) of largely unpatrolled coastline.

The pirates operate high-powered speedboats and are heavily armed.

In recent months, a multinational taskforce based in Djibouti has been patrolling parts of the Gulf of Aden and the Red Sea, where a pirate mothership is believed to be operating.


Agence France-Presse - 9/16/2008 9:28 AM GMT

North Korea conducts engine tests at new missile site: report

North Korea has carried out an engine ignition test for a missile believed to be capable of reaching the US west coast, a South Korean newspaper said Tuesday.

Chosun Ilbo, quoting intelligence sources, said the engine was presumed to be for the Taepodong-2 missile with a range of 6,700 kilometres (4,150 miles).

It said the test was conducted at a missile launch site being developed on the west coast whose existence was publicly reported last week.

"A US spy satellite, KH-12, spotted that rocket engine tests took place at Tongchang-ri this year," one source told Chosun, adding the site was near completion.

Another source told the paper the communist North had sporadically conducted engine tests in a continuing attempt to develop long-range missiles since its failed test-firing of a Taepodong-2 in July 2006.

North Korea has a separate site at Musudan-ri on the east coast which was used to launch a Taepodong-1 missile in 1998 over Japan. The Taepodong-2 missile was launched from there in 2006 but US officials said it failed after about 40 seconds.

The North conducted a nuclear weapons test in October 2006. It is not known whether it has the technical capacity to fit an atomic warhead to a missile.

Chosun said work began several years ago on the new site on the west coast in North Pyongan province opposite China and it would be completed next year.

The defence ministry and the National Intelligence Service refused to comment on the report.
Defence Minister Lee Sang-Hee told parliament on Thursday Seoul was closely watching the new missile launch site, which was 80 percent completed.

John Pike, director of research group GlobalSecurity.Org, told US reporters last week the new site was designed to support a significant flight test programme.

"It is significant because it indicates an intention to develop a capability of developing a reliable ICBM (intercontinental ballistic missile)," Pike said.

Pike said the new site was much larger, more elaborate and had better transport connections than Musudan-ri. "It is set up to do a launch three or four times a year, rather than every decade," he said.

He said the main launch pad on the west coast appeared a year or two away from completion.

Sabotage cited as toll in China baby formula scandal rockets

China on Monday reported a second baby dead from drinking tainted milk formula and said the number sickened had soared past 1,200 as it blamed private milk-collecting stations for the worsening scandal.

The New Zealand partner to the Chinese company Sanlu at the centre of the storm went further, blaming the contamination on "sabotage".

The two deaths came in the northwestern province of Gansu after the babies drank Sanlu brand formula tainted with the industrial chemical melamine, vice health minister Ma Shaowei told a news conference.

The first death was reported last week.

Ma also said the number of babies sickened nationwide had leapt to 1,253, more than double the 580 reported by state press earlier in the day, and that hospitals had been ordered to go all-out to save sick babies.

"Emergency medical treatment of affected infants must become our top priority," he said, adding that 53 children were in serious condition.

"We must use all our power to protect their health and safety... slow the rate of serious cases as much as possible, and prevent further deaths."

The state-controlled China Daily said all 19 people detained so far in a probe into the scandal were from the collecting stations, which pick up milk from dairy farmers.

"We believe the contamination is more likely to have occurred at milk-collecting stations," than at dairy farms, it quoted Li Changjiang, who heads the nation's quality-control watchdog, as saying.

Sanlu Group, however, has blamed dairy farmers, previous state media reports have said.

The Xinhua news agency said two brothers in northern China's Hebei province who were among those detained had been formally arrested for allegedly selling three tonnes of contaminated milk per day from their station.

Melamine, which is used for making plastics and glues, may have been added to make the milk appear that it contained more protein than it did, Chinese media have suggested.

The chemical has caused kidney stones, which are normally rare in babies and give rise to a range of infant health risks.

The two infant deaths occurred in May and July, the health ministry said.

Its medical department director, Wang Yu, brushed off suggestions the ministry had been slow to react.
"First, we received no reports of those cases at the time," he said.

"Second, it would have been very difficult to imagine at the time that they were due to (drinking contaminated milk formula)."

In Gansu province, Chinese inspectors found melamine in samples selected at random from Haoniu Dairy Co., a partner of Sanlu Group but which produces under the Sanlu trademark, according to Xinhua.

"The products of Haoniu have been sealed up," Gansu Vice Governor Xian Hui told the agency.
Sanlu, in which New Zealand dairy giant Fonterra has a 43 percent stake, is a relatively inexpensive brand favoured by poor rural women.

Millions of them leave their babies at home to seek work in cities and so are unable to breastfeed.

Fonterra's chief executive Andrew Ferrier blamed the contamination on third-party "sabotage" of milk supplied to Sanlu.

Speaking to New Zealand reporters by video from Singapore, he said Fonterra had known of the contamination in early August and pushed for an immediate recall but Sanlu had to abide by Chinese rules.

"We, together with Sanlu, have done everything that we possibly could to get the product off the shelf," Ferrier said.

Asked why Fonterra had not gone public earlier, he said: "We as a minority shareholder had to continue to push Sanlu. Sanlu had to work with their own government to follow the procedures that they were given."

New Zealand Prime Minister Helen Clark said her government learned of the contamination problem on September 5, then "blew the whistle" three days later by informing Beijing after local Chinese officials refused to act.


Agence France-Presse - 9/15/2008 11:31 AM GMT

Sex: Italian government agrees to ban public prostitution

The Italian government on Thursday agreed to outlaw prostitution in public places, recommending prison terms of up to 15 days and fines of up to 13,000 euros for prostitutes and their clients.

The new legislation is to "crack down hard" on prostitution as it encourages trafficking in women and sex slavery, Equal Opportunity Minister Mara Carfagna said.

The new law, which must still be adopted in parliament, does not ban prostitution altogether because it does not outlaw sex work as a private business.

Pimps responsible for under-aged prostitutes would face six to 12 years in prison and fines of between 15,000 and 150,000 euros (21,000 and 210,000 dollars).

Clients of under-aged sex workers can be sent to prison for between six months and four years with possible fines of up to 6,000 euros.

Sex workers under the age of 18 without Italian citizenship would meanwhile be sent back to their countries of origin.

An estimated 50,000 to 70,000 people, a third of them foreigners, are engaged in prostitution in Italy. Sixty-five percent are sex workers on public thoroughfares, and 20 percent are thought to be minors.

Agence France-Presse - 9/11/2008 12:12 PM GMT

South Korea on alert for North Korea shift after Kim's stroke

South Korea was on alert Thursday for possible political change in its nuclear-armed neighbour following the disclosure that longtime North Korean leader Kim Jong-Il suffered a stroke.

Defence Minister Lee Sang-Hee, who told parliament Kim had undergone surgery but is recovering, said a military plan is being drawn up for any contingency.

President Lee Myung-Bak told security ministers and aides Wednesday night that "thorough preparations should be made to minimise confusion over changes in North Korea's political circumstances."

South Korea is still technically at war with its hardline communist neighbour. The two forces face off across a heavily fortified border, with US troops backing up the South.

Kim "collapsed because of a brain problem and had surgery from which he is recovering," minister Lee was quoted by lawmakers as telling a closed-door session of the legislature's defence committee.

Officials said earlier on condition of anonymity that Kim, 66, was thought to have undergone surgery, but this was the first confirmation.

Seoul officials believe Kim is still in charge of affairs in North Korea, one of the world's most reclusive regimes . But analysts fear that the powerful military could assume more power in any post-Kim era and take an even harder line on nuclear disarmament and cross-border ties.

The defence minister, quoted by lawmaker Yoo Seong-Min, said no unusual troop movements have been detected in the North and South Korea's military is maintaining its customary alert level.

Asked if Seoul should revive a joint US-South Korean military contingency plan to prepare for sudden political change in the North, Lee said relevant agencies were in talks to develop such a plan.

"We are developing a plan in preparation for a (possible) limited provocation or a full-scale war," he said.

The intelligence agency told parliament Wednesday that Kim is still able to run the country and will recover. He is not fit enough for public activities but can speak without difficulty, they said.

News of the stroke emerged after Kim failed to attend a parade on Tuesday marking the 60th anniversary of the founding of his country, in which he is officially accorded almost godlike status.

Lee Chul-Woo, secretary of parliament's intelligence committee, said Thursday that Kim is "recovering fast," can stand if supported and has no problems communicating.

He said the Seoul government has been aware of Kim's health problems since mid-August. The North's state media has not reported any public appearances by Kim since August 14, when he inspected an army unit.

Attention is focusing on the succession should Kim die or become permanently incapacitated.
Lee Chul-Woo said a collective leadership was more likely should there be a sudden transition, but if Kim's condition improves, the succession would be determined later.

If the North's powerful military secured more power in a post-Kim era, "it will change toward a tougher line," he said.

"If technocrats in the administration get more power, it will then move towards inter-Korean reconciliation."

Kim's health has been the subject of intense speculation since he took over from his father, who died in 1994, in the communist world's only dynastic succession. He has not publicly nominated any successor.

His illness comes amid deadlock in a six-nation nuclear disarmament deal and fears the North intends to restart its atomic weapons programme.

The North promised to shut down the programme after testing a nuclear device in October 2006 for the first time.

But it has halted work to disable its plutonium-producing plants, and says it will start repairing them again because of the deadlock over how to verify its nuclear disclosures.

North and South Korea have remained technically at war since their 1950-53 conflict ended in an armistice, not a peace treaty.

Thailand : Thai PM, cabinet must resign over TV show: court

Thai Prime Minister Samak Sundaravej and his entire cabinet must resign over the scandal surrounding his TV cooking show, the Constitutional Court said Tuesday.

The court, which said Samak had violated the constitution by accepting payments for hosting the show, ruled he must stand down immediately.

His cabinet could remain as a caretaker administration for 30 days until parliament elects a new prime minister.

"The Constitutional Court unanimously agreed that Prime Minister Samak Sundaravej has violated the constitution, article 267 -- therefore his ministerial position has ended," the verdict read.

"As Samak's ministerial status has ended his entire cabinet must go but they have to stay as caretaker government until the new cabinet is formed," it added.

But despite the ruling by the nine judges, Samak is not barred from standing again for prime minister, and his party has already confirmed they would elect him back to the premiership.

The court accused Samak of lying in his testimony when he said he did not receive payment from television production house Face Media following his election to the premiership.

Tax records showed he continued to receive payment.

"The suspect has fabricated his evidence," the verdict said.

9/9/2008 10:35 AM GMT

Asif Ali Zardari sworn in as Pakistan president

Asif Ali Zardari was sworn in Tuesday as the 14th president of Pakistan, succeeding the former army general Pervez Musharraf who resigned under threat of impeachment last month.

"I will bear true faith and allegiance to Pakistan," he said, reciting the oath of office in a ceremony broadcast live to the nation as his three children looked on.

Zardari -- the widower of slain former premier Benazir Bhutto -- sat down to loud cheers of "Long live Bhutto," and "Bhutto is alive."

"Let it be known to all and sundry that Asif Ali Zardari has on this ninth day of September taken the oath as president of Pakistan," said an official proclamation read out at the ceremony.

9/9/2008 7:51 AM GMT

Iraq takes over Anbar from US forces

Iraqi forces Monday took over control of Anbar, once the most explosive battlefield in Iraq, from the US military, symbolising the growing security gains in the war-torn country.

The ceremony to transfer Anbar to local forces took place at the provincial governate building in Ramadi, the provincial capital.

It marks the handover of the 11th of Iraq's 18 provinces and the first Sunni province to be returned to the control of the Iraqi government.

"I would like to announce that the (Anbar) transfer from the US to Iraqi forces is done," said Muwaffaq al-Rubaie, Iraq's national security advisor at the handover ceremony.

"The province of Anbar which was one of the hottest regions in Iraq is today celebrating the receiving of the security file."

Police said tens of thousands of Iraqi and US troops were on alert across the vast desert province in western Iraq.

Majid al-Assafi, the provincial police chief, told AFP on Sunday that his forces were ready to accept security responsibility in Anbar, the country's largest province and home to about two million people.

The US military said the transfer of security was an "important milestone with regard to security" in the province.

But the "transfering of security does not necessarily mean that the security situation is stable or better," the military statement said.

"It means the government and the provincial authorities are ready to take the responsibility for handling it."

Martin Post, a top US commander in Anbar, said there would be some incidents but they "will be part of the normal life."

"Iraqi police have better intelligence than ours. They have more abilities than us to do the job," he added.

After the transfer, US forces will withdraw to their bases and will take part in military operations only if requested by the provincial governor.

Ahead of the handover, police tightened security and the US military stepped up patrols on the main streets of the provincial capital Ramadi, as locals prepared for the Muslim holy month of Ramadan.

Iraqi Sunnis began observing Ramadan from Monday. Shiites are to follow on Tuesday.
Sunni Arabs in Anbar were the first to turn against US forces after the toppling of Saddam Hussein's regime by US-led invasion forces in 2003, mounting a raging insurgency that tore through the world's most sophisticated military.

In the first years after the invasion, the country's biggest province became the theatre of a brutal war focused on the cities of Fallujah and Ramadi, while a string of towns along the Euphrates valley became insurgent strongholds and later safe havens for Al-Qaeda.

Around one third of US forces or 1,305 troops have been killed in Anbar which shares borders with Saudi Arabia, Jordan and Syria.

The most lethal threat to US troops, "improvised explosive devices" or makeshift bombs, first made their appearance in Anbar, causing more than 40 percent of American casualties between 2003 and 2006.

The brutal Al-Qaeda-led insurgency also killed around 6,000 civilians in the province, according to independent website Iraqbodycount.org.

The violence in Anbar began ebbing only after local Sunni Arab tribes -- weary of Al-Qaeda's extreme brutality -- revolted against the jihadists in September 2006 and sided with US forces.

Sunni tribes formed Sahwa (Awakening) groups which began fighting Al-Qaeda militants and within a year the province became the safest in Iraq.

The US military currently has 28,000 soldiers in Anbar, down from 37,000 in February, according to US army figures, while the number of Iraqi soldiers and police has grown to 37,000 from just 5,000 three years ago.

The military had planned to hand over Anbar on June 28 but cancelled the previous day -- citing a sandstorm as the reason.

Local chiefs said the delay was due to Sunni political infighting between Sahwa and the leading Sunni political group Islamic Party.

Monday's handover is expected to help the US military cut its overall troop level in Iraq at a time when there is growing pressure to beef up forces in Afghanistan, where the level of violence is higher.

About 144,000 US soldiers are currently deployed in Iraq, but those numbers could decrease in coming months.

General David Petraeus, the top US commander in Iraq, has said he will decide in the coming days or weeks whether to continue withdrawing troops, and at what pace.


AFP - 9/1/2008 8:58 AM GMT

Hurricane Gustav hits US coast

Torrential rain and intense winds blasted Louisiana as Hurricane Gustav neared New Orleans and the Gulf Coast Monday after forcing nearly two million people to flee.
New Orleans was locked down and the streets completely empty as emergency workers who remained behind hunkered down in safe buildings on high ground.
Power went out for many areas of coastal Louisiana, according to media reports, with rains that witnesses described as "horizontal". With landfall imminent, police and national guard deployed to New Orleans to prevent looting also pulled back off the streets for safety.
At 8:00 am (1300 GMT) the eye of the Category Two storm was just southwest of Grand Isle, Louisiana, and 80 miles (150 kilometers) south-southwest of New Orleans, pummelling the marshy Mississippi river delta coastline with winds of 110 miles (175 kilometers) per hour.
Despite a slight weakening of Gustav as it neared the coast, forecasters warned of an "extremely dangerous" surge of up to 4.2 meters (14 feet), not as high as earlier predicted but still enough to worry locals after Hurricane Katrina burst New Orleans' levees in 2005 and flooded the city for days.
Fearing a repeat of the Katrina disaster, thousands of troops, emergency workers and National Guard troops were positioned in New Orleans after what is being called the biggest evacuation in US history.
Three critically ill people were reported to have died as they were being moved from the danger zone.
Oil production in the crucial US oil-and-gas region was shut down, the Republican party suspended the start of its presidential election convention and President George W. Bush headed for Texas to monitor emergency preparations for Gustav, which has killed more than 80 people in Dominican Republic, Haiti and Jamaica.
Louisiana officials said there were about 750 National Guard troops in New Orleans if a new rescue operation was needed. Mayor Ray Nagin on Sunday ordered a curfew and vowed to throw looters into prison.
"This is a serious storm," Louisiana Governor Bobby Jindal said in a final appeal to the people who remained in New Orleans despite government warnings.
People in the state capital of Baton Rouge and other inland areas have been warned to watch for storm-spawned tornados.
Military and civilian disaster relief operations were prepared , with memories still fresh of the destruction wrought by Katrina and the government's botched response.
Katrina made landfall near New Orleans on August 29, 2005, smashing poorly-built levees surrounding the city and causing massive floods that destroyed tens of thousands of homes and killed nearly 1,800.
Mayor Nagin told local television that the city had become a "ghost town" after a massive evacuation campaign, and that only about 10,000 residents remained.
Some of those who left said they felt reassured.
"The mayor assured us our property will be safe," Wilson Patterson, 48, said as he prepared to board a bus with wheelchair-bound 84-year-old Earline Martin.

"We don't want to get caught up in the Katrina craziness," he said, recalling the lawlessness that swept New Orleans in 2005.

Jindal said rescue teams were in place.

"We will begin search-and-rescue operations as soon as we safely can. That would be when winds are below 140 miles per hour," he said, which probably will occur "late Monday."

"We've got... boots on the ground, eyes on the ground. So before that, even before we can get into the air, before we can get boats on the water, we do have people on the ground to make sure that we're doing everything that we can to save every single life."

Jindal told reporters there were unconfirmed reports that three critically ill patients died while being transported to safer ground.

"They had to weigh the risk between sheltering in place and evacuating and made the decision they thought was best for their patients," he said.

Agence France-Presse - 9/1/2008 2:41 PM GMT